To minimize the erosion of private health coverage.

SMALL BUSINESS TAX RELIEF ACT OF 2007

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of H.R. 976, which the clerk will
report.
The assistant legislative clerk read as follows:

A bill (H.R. 976) to amend the Internal Revenue Code of
1986 to provide tax relief for small businesses, and for
other purposes.

Pending:

Baucus amendment No. 2530, in the nature of a substitute.
Grassley (for Ensign) amendment No. 2538 (to amendment No.
2530), to amend the Internal Revenue Service Code of 1986 to
create a Disease Prevention and Treatment Research Trust
Fund.
Bunning amendment No. 2547 (to amendment No. 2530), to
eliminate the exception for certain States to cover children
under SCHIP whose income exceeds 300 percent of the Federal
poverty level.
Dorgan amendment No. 2534 (to amendment No. 2530), to
revise and extend the Indian Health Care Improvement Act.
Gregg amendment No. 2587 (to amendment No. 2530), to limit
the matching rate for coverage other than for low-income
children or pregnant women covered through a waiver and to
prohibit any new waivers for coverage of adults other than
pregnant women.

The ACTING PRESIDENT pro tempore. Under the previous order, there is
now 30 minutes of debate equally divided prior to a vote in relation to
amendment No. 2538.
Who yields time? The Senator from Nevada is recognized.
Mr. ENSIGN. Mr. President, the bill before us today would reauthorize
SCHIP for 5 years with a $35 billion expansion in spending. But because
of the way the budget gimmicks were worked in this bill, it is actually
an expansion of somewhere around $110 billion.
This expansion, or at least part of it, is going to be funded by an
increase in the Federal tobacco tax by 61 cents per pack and up to $10
per cigar. The problem with the funding mechanism in this bill, the way
I see it, is that for the funding to still be there, we actually need
to encourage people to smoke. Today, in our health care system, smokers
contribute to a lot of diseases and this imposes large costs. In the
future, as we raise the price of tobacco, fewer people smoking will
mean less revenue. The proposal to fund the SCHIP expansion will yield
diminishing returns. In the future, the tobacco tax will not adequately
pay for the spending that is provided for in this bill.
This bill greatly increases dependency on the Federal Government and
the dependency of the Federal Government on this tobacco tax revenue.
The expansions included in this bill will have little bang for the buck
in terms of reducing the ranks of the uninsured. As more money is
poured into expanding SCHIP, less of the new funds will go to providing
coverage to low-income children who currently go without coverage.
SCHIP expansion will only serve to coax individuals and families out of
the private insurance market and into Government coverage.
Undermining private health insurance coverage by creating more
Government dependence is not an effective way to address shortfalls in
coverage. We should have more of a comprehensive approach. This
approach should include fiscal discipline, not more taxes and higher
spending. We should be working to strengthen private sector health
insurance options and increase parental choice and responsibility.
My amendment, however, will not address taking a more comprehensive
approach to coverage. We will have other amendments during this debate
that will address more of a comprehensive approach to insurance
coverage.
I strongly believe in the role of Federal Government plays in
promoting basic research. Some have noted that an increase in the
tobacco tax should be used to fund the costs that tobacco imposes on
our society. I agree with that. My amendment would establish a trust
fund that will be known as the Disease Prevention and Treatment
Research Trust Fund. The revenue from increased tobacco tax rates in
the underlying bill will be transferred to this trust fund. From there,
the dollars will be made available to fund research on diseases that
are often associated with tobacco use.
I also believe the chronic underfunding of research in areas such as
pediatric cancer need to be addressed, so I have expanded the
permissible use of these funds to cover research on other diseases as
well. I urge my colleagues to support my amendment to help discover new
knowledge and treatments that improve and save lives.
Our current health care system is a sick care system. We do not spend
nearly as much money on prevention as we do on getting people healthy
once they are sick. This trust fund will fund research into areas to
keep people healthy, to make sure we are spending money on disease
research that actually keeps people out of hospitals, that keeps people
as healthy as possible for as long as possible throughout their lives.
I think this is a better use of taxpayers' dollars, especially when we
are going to be raising those taxes on people who smoke. Let's use that
money to fund disease research instead of taking people from the
private health market onto the Government-funded health market.
I reserve the remainder of my time.

[[Page S10538]]

The ACTING PRESIDENT pro tempore. The Senator from Montana is
recognized.
Mr. BAUCUS. Mr. President, it is important to look at what this
amendment actually does. It is a remarkable amendment. What does it do?
It would try to spend the same dollar twice, take a dollar from tobacco
taxes, spend it in the trust fund and spend it on CHIP--doing two
things at once. I don't think we can do that in the real world. It is
too good to be true. We can't do it. That is what the amendment says,
basically. I do not think the Senator wants to take money away from
kids, from the CHIP fund, the CHIP program. The amendment doesn't say
that. I am sure he doesn't intend to do that. But what the amendment
does say is the same dollars are going to be spent twice--one way we
spend it is for this trust fund, the other way is we spend it on kids.
I don't know how we do that; how in the real world we can do that. It
is fantasy land. We can't do it.
Again, surely the Senator does not want to repeal the entire
Children's Health Insurance Program. I am sure he doesn't want to do
that. He does not do that in this amendment. But he still sets up the
tension between the two, between research and all the good causes the
Senator talks about on the one hand, and children's health insurance on
the other, pitting one against the other. I don't think he wants to do
that. He does not do that directly but he does that indirectly by
trying to spend the same dollar twice. That might be possible in
Hogwarts; it might be possible in Harry Potter's world. But I don't
think it is possible in the real world.
Back here in the real world I want Senators to know this amendment is
a thinly veiled attempt to steal the funding from the children's health
care program. It is an attempt to undermine children's health care
coverage. That is what this bill does. It takes a dollar from the
tobacco tax--it is amazing--and that dollar is going to be spent on
this trust fund and that same dollar is going to be spent on children's
health care. We can't do that.
I urge my colleagues to reject the amendment.
I reserve the remainder of my time.
The ACTING PRESIDENT pro tempore. The Senator from Nevada is
recognized.
Mr. ENSIGN. Mr. President, our amendment clearly takes the money from
the increase in the tobacco tax, and instead of dedicating to the
expansion of SCHIP, puts it into a disease research trust fund. SCHIP
is still authorized; we don't do anything to the underlying program
that currently exists. We take the money out of the expansion, this is
tobacco tax money out of the expansion, and we apply it to the trust
fund to be used for disease research. That is what this bill does. That
is what the amendment does.
Mr. BAUCUS. Will the Senator yield for a question on that one point?
Mr. ENSIGN. Yes, but let me explain it.
Mr. BAUCUS. I will take it on our time.
Mr. ENSIGN. Let me explain it to you and then I will yield for a
question. It says:

There are hereby appropriated to the Disease Prevention and
Treatment Reserve Trust Fund--

which we are talking about here,

--amounts equivalent to the taxes received in the Treasury
attributable to the amendments made by section 701. . . .

That is the tobacco taxes. We are taking the tobacco taxes, which
would fund part of the increase the SCHIP expansion, and apply it to
the Disease Prevention and Treatment Research Trust Fund. We are not
taking money out of the trust fund; it is the revenues generated from
the expansion of the tobacco tax from which we are taking the money.
Mr. BAUCUS. So the Senator wishes to take all the tobacco taxes in
the underlying amendment, take all those dollars away from kids?
Mr. ENSIGN. That is not exactly right.
Mr. BAUCUS. It is exactly right.
Mr. ENSIGN. As you heard in my statement, pediatric cancer research
is underfunded.
Mr. BAUCUS. No, take it from the Children's Health Insurance Program.

Mr. ENSIGN. We are taking it from the expansion, which is not just
children. We are going to have other amendments to make sure the
prioritization is on low-income kids. Part of the expansion is in
States where the folks being covered are not just those under 200
percent of the poverty level. The expansion of SCHIP has been part of
the problem. I believe in actually covering everybody, but doing it in
a way that is different than the approach in the bill. What we want to
do is take the tobacco taxes and take those funds that are raised by
the tobacco taxes and dedicate those funds to disease research. The
budget gimmicks used in the SCHIP expansion are so phony that it is
ridiculous, some of the worst I have seen around here. These gimmicks
assume these folks are going away in a few years, that they are not
going to be on the program at the end of the 5-year reauthorization.
This is how they got the SCHIP expansion to meet pay-go requirements.
But we say let's take the money and put it in a trust fund and with
those real dollars that are in the trust fund, we are going to fund
disease research that will help children, that will help adults, that
will help all Americans.
Mr. BAUCUS. Will the Senator yield for another question again, again
on my time?
Mr. ENSIGN. Yes.
Mr. BAUCUS. I don't mean to be condescending here, but has the
Senator read the CBO analysis? I am sure he has. And, having read that,
isn't it clear that a large share of the dollars in this bill from the
tobacco tax are to maintain current coverage? That is, if we do not
provide the $35 billion in this bill, that is the funds from the
tobacco tax, that many kids are going to lose coverage? In fact, isn't
it true that CBO says about 1.4 million children will lose coverage--
not just maintain, but lose coverage if we do not have this bill?
Mr. ENSIGN. That is exactly why I believe in a comprehensive approach
to solve the problem we have in the country. You do not take care of
all of the children in America in this bill.
Mr. BAUCUS. Of course not.
Mr. ENSIGN. I believe in taking a more comprehensive approach that
actually doesn't increase the dependence on the Government. I am
addressing something different with this amendment. What I believe is
we should do this amendment to fund disease prevention research, but
then do a comprehensive approach that takes care of kids, that takes
care of those uninsured adults, that gets them into the private
insurance market. The more people, especially a lot of younger people,
healthier people who are currently uninsured, whom we get into the
private health insurance markets--the more the better. There are
several proposals out there, whether it is tax credits or tax
deductions; there is a blend of the two that has been talked about. We
need to explore those because if we are doing it in a way that will
take care of the uninsured, we bring in the folks who are healthier
which will bring down the cost of health care insurance for all
Americans.
That is the direction we should be going. SCHIP will take people out
of the private insurance market. The program, the expansion you have
done--and this is according to CBO--will take children who are
currently in the private health insurance market and it will move them
to Government programs. There will be a great incentive in the future
to do more and more of this.
The ACTING PRESIDENT pro tempore. The Senator from Montana is
recognized.
Mr. BAUCUS. Mr. President, I think it is important to talk about the
amendment, not all these other very important points with respect to
health care. The effect of this amendment, the way it is written, will
be to spend the same dollar twice. If the effect is what the Senator
says it is, and he intends it--although that is not the amendment--if
he intends to have all additional tobacco taxes go to the trust fund,
then the net effect of this amendment is about 1.4 million American
low-income kids will lose coverage. That is CBO. They will lose it, if
that is the intent of the amendment.
The actual effect of the amendment the way it is written is the
dollars have to be spent twice. We can't do that. I don't know how we
do that. But, again, if the intent of the amendment is dollars do not
go to kids, then the effect of the amendment is about 1.4 million

[[Page S10539]]

children will lose health insurance coverage; that is 5.7 million fewer
kids will be covered under insurance than under our amendment.
In the Senator's own statements, he admits it. He apparently does not
want to add dollars, he wants to take away the $35 billion raised by
the tobacco tax and the honest effect of that $35 billion is to help
prevent about 1.4 million kids from losing coverage as well as adding
additional coverage. It is both. If the amendment is what the Senator
wants it to do and says it is, then about 1.4 million kids will lose
coverage.
The ACTING PRESIDENT pro tempore. The Senator from Nevada is
recognized.
Mr. ENSIGN. Mr. President, to be clear, this amendment funds cancer
research, including:

. . . pediatric, lung, breast, ovarian, uterine, prostate,
colon, rectal, oral, skin, bone, kidney, liver, stomach,
bladder--

any kind of cancer you can think of.

Respiratory diseases . . . chronic obstructive pulmonary
disease--

We hear so much about that today.

--tuberculosis, bronchitis, asthma and emphysema. All the
related problems we see so much with smoking:
``Cardiovascular diseases''--a huge killer in the United
States with huge costs to our health care system. We are
going to fund a lot more research with this money. I think
this money is going to some very good things in America,
things that will benefit not just children but will benefit
all Americans. It doesn't spend the money twice as I pointed
out. It takes the money from the expansion and actually
spends it, I believe, in more appropriate areas. Then, later
in the bill, we are going to be offering some alternatives
that will make sure the kids are covered and we will be
looking at some other alternatives to do more comprehensive
care.

I urge my colleagues to support this amendment.
Have the yeas and nays been ordered?
The ACTING PRESIDENT pro tempore. They have not.
Mr. ENSIGN. I ask for the yeas and nays.
The ACTING PRESIDENT pro tempore. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. ENSIGN. Mr. President, I ask unanimous consent to have a letter
from Dr. Neal Birnbaum, president of the American College of Radiology,
printed at the end of my remarks on amendment No. 2538. The letter
expresses support for my amendment, which would use the tobacco tax
increase to fund research on diseases that are often associated with
tobacco use, including arthritis.
There being no objection, the material was ordered to be printed in
the Record, as follows:

August 1, 2007
Hon. John Ensign,
U.S. Senate,
Washington, DC.
Dear Senator Ensign: The American College of Rheumatology
greatly appreciates your leadership and amendment of the
Internal Revenue Code of 1986 to create a Disease Prevention
and Treatment Research Trust Fund (H.R. 976). This piece of
legislation is of vital importance to the rheumatology
community.
Arthritis currently affects over 46 million Americans,
including 300,000 children. It is the nation's leading cause
of disability and cost the U.S. economy approximately $128
billion annually in medical costs and lost productivity.
We appreciate your efforts in bring forth this amendment
that would use the tobacco tax increase to fund research on
diseases that are often associated with tobacco use such as
arthritis. This is a disease that has been chronically
underfunded.
We will send supporting materials in the coming days
regarding the increased prevalence of Rheumatoid Arthritis in
smokers.
Sincerely,

Neal Birnbaum, MD,

President,
American College of Rheumatology.

Mr. ENSIGN. I am willing to yield back time so we can get back on
schedule for a 10:30 vote, if that will be OK with the Senator?
The ACTING PRESIDENT pro tempore. The Senator from Montana is
recognized.
Mr. BAUCUS. I don't want to belabor the point. Some of the points the
Senator makes are very good. Sure, he wants to do more research, but
still the fact is the amendment takes dollars away from kids, away from
the Children's Health Insurance Program.
In the children's health care program, 1.4 million American children
will lose coverage under the Senator's amendment. That is CBO, that is
not me. That is CBO. I do not think we want to take away our current
coverage under the program.
One minor point that is not relevant to the amendment, but is
relevant to the bill, is the Senator talks a little about something
called crowd-out; that is, the number of kids who might not have
private coverage who move to the CHIP program. That happens in every
single program.
Do you know what the crowd-out estimate was with the Medicare
Modernization Act, Part D? It was 75 percent. That was the estimate on
how much crowd-out there would be for that legislation, which this body
strongly supported. It actually turned out to be much less than that.
When this program was initially enacted in 1997, the Children's
Health Insurance Program, CBO estimated crowd-out to be 70 percent. It
was much less than that. We have asked the CBO Director to design this
legislation to minimize crowd-out as well as we possibly can. And he,
in testimony before the committee, said: You have done a very efficient
job to minimize so-called crowd-out.
So we are cognizant of the point. But the main point is to get more
health insurance coverage for kids. That is what the underlying bill
does.
Mr. President, I yield back the remainder of our time.
The ACTING PRESIDENT pro tempore. All time is yielded back.
The question is on agreeing to the amendment.
The yeas and nays have been ordered.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Hawaii (Mr. Akaka), the
Senator from Delaware (Mr. Carper), the Senator from South Dakota (Mr.
Johnson), the Senator from Louisiana (Ms. Landrieu), the Senator from
Michigan (Mr. Levin), the Senator from Connecticut (Mr. Lieberman), the
Senator from Missouri (Mrs. McCaskill), amd the Senator from West
Virginia (Mr. Rockefeller) are necessarily absent.
I further announce that, if present and voting, the Senator from
Hawaii (Mr. Akaka), the Senator from Delaware (Mr. Carper), the Senator
from Louisiana (Ms. Landrieu), the Senator from Michigan (Mr. Levin),
the Senator from Connecticut (Mr. Lieberman), and the Senator from
Missouri (Mrs. McCaskill) would each vote ``nay.''
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Kansas (Mr. Brownback), the Senator from Oklahoma (Mr. Coburn),
the Senator from Minnesota (Mr. Coleman), the Senator from Arizona (Mr.
McCain), the Senator from Alaska (Mr. Stevens), the Senator from New
Hampshire (Mr. Sununu), the Senator from Ohio (Mr. Voinovich), and the
Senator from Virginia (Mr. Warner).
Further, if present and voting, the Senator from Minnesota (Mr.
Coleman) would have voted ``nay.''
The PRESIDING OFFICER. (Mr. Whitehouse). Are there any other Senators
in the Chamber desiring to vote?
The result was announced--yeas 26, nays 58, as follows:

[Rollcall Vote No. 287 Leg.]

YEAS--26

Allard
Barrasso
Bennett
Bunning
Burr
Chambliss
Cornyn
Craig
Crapo
DeMint
Dole
Domenici
Ensign
Enzi
Graham
Gregg
Inhofe
Isakson
Kyl
Lott
Martinez
McConnell
Sessions
Shelby
Thune
Vitter

NAYS--58

Alexander
Baucus
Bayh
Biden
Bingaman
Bond
Boxer
Brown
Byrd
Cantwell
Cardin
Casey
Clinton
Cochran
Collins
Conrad
Corker
Dodd
Dorgan
Durbin
Feingold
Feinstein
Grassley
Hagel
Harkin
Hatch
Hutchison
Inouye
Kennedy
Kerry
Klobuchar
Kohl
Lautenberg
Leahy
Lincoln
Lugar
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Roberts
Salazar
Sanders
Schumer
Smith
Snowe
Specter
Stabenow
Tester
Webb
Whitehouse
Wyden

NOT VOTING--16

Akaka
Brownback
Carper
Coburn
Coleman
Johnson
Landrieu
Levin
Lieberman
McCain

[[Page S10540]]

McCaskill
Rockefeller
Stevens
Sununu
Voinovich
Warner
The amendment (No. 2538) was rejected.
Mr. BAUCUS. Mr. President, I move to reconsider the vote.
Mr. GRASSLEY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Montana.
Ms. LANDRIEU. Will the Senator from Montana yield?
Mr. BAUCUS. I do.
The PRESIDING OFFICER. The Senator from Louisiana.

Vote Explanations

Ms. LANDRIEU. Mr. President, I missed the previous vote because we
were in a markup in committee. About six other Members did as well.
Could I please be recorded as having voted no? If I were here, I would
have voted no on the previous amendment.
Mr. WARNER. I was likewise in the committee when we were informed by
the chairman and ranking member that we had an extra minute to finish
the markup. But the best I can do is add, if I were present, I would
have voted no.
Mr. LEVIN. Mr. President, I was in a similar situation. I would have
voted no had I been here. I was also in the same committee meeting.
Mr. VOINOVICH. Mr. President, I had the same problem the other
Members had. If I were here, I would have voted no.
The PRESIDING OFFICER. Without objection, it will be so ordered.
Mr. COBURN. Mr. President, as a member of the Homeland Security
Committee, we were advised that we would be given leniency on this vote
through our chairman, through communication, I assumed, from leadership
staff. We did not come on a timely basis. I would like to be recorded
as aye. It will not make a difference in the vote.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COLEMAN. Mr. President, I was also in Homeland Security. We were
advised by the chair that we would be able to make the vote. Obviously,
we weren't. I would like to be recorded as voting no.
The PRESIDING OFFICER. The Senator from Missouri.
Mrs. McCASKILL. I also was in the Homeland Security markup where we
were informed that the vote would be held open so we could finish the
markup. Had I been in the Chamber, I would have voted no.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. LIEBERMAN. I am the chairman of the Homeland Security Committee.
I apologize to my colleagues for any misunderstanding. We had a very
busy agenda, important matters that we needed to get done today. I did
make a request that the vote be held open. It was the wisdom of the
Chair not to do so. I particularly express my regret to my colleagues,
for some of whom this was the first rollcall that they have missed.
Anyway, for myself, had I been here I would have voted in the negative.
It would not have altered the result.
The PRESIDING OFFICER. The Senator from Hawaii.
Mr. AKAKA. I also was detained. Were I here, I would have voted no.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. SUNUNU. Mr. President, I also was at the Homeland Security
markup. I am sure that anyone observing this is surprised that so many
Senators in one setting, having been notified by the cloakroom, were
put in a position where they missed a vote. Had I been here, like all
my other colleagues, I would have voted aye. As we see, given that so
many of our colleagues have to make this point to the Chair, we have
now exceeded by far any time that might have been saved by cutting off
the vote in an atypically short way.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I yield to the Senator from Delaware.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. CARPER. Mr. President, as did my other committee colleagues, I
missed the vote. Had I been present, I would have voted ``no.''
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I am very happy to see the Committee on
Homeland Security doing its work. I think the country is very pleased.
Thank you.
Mr. BYRD. Mr. President, let us have order in the Senate. May we have
order in the Senate, Mr. President.
Why all this consternation about this vote? Were Senators promised
they would have a chance to vote? They were. And we did not hold the
vote for them. Now, we ought to do what we promised Senators we will
do. Shame.
Mr. GREGG. Mr. President, will the Senator from West Virginia yield
for a question?
Mr. BYRD. Mr. President, I yield for a question.
Mr. GREGG. As one of the most leading Parliamentarians in the history
of the Senate, would it be appropriate by unanimous consent to reopen
that vote so that the----
Mr. BYRD. May I ask the Senator, what did he say?
Mr. GREGG. I ask the Senator if he feels it is appropriate to reopen
the vote so that vote could be reconsidered and Senators could----
Mr. BAUCUS. I would object to that.
Mr. REID. Mr. President, can I be heard?
The PRESIDING OFFICER. The majority leader.
Mr. REID. Mr. President, I am very sorry people missed the vote. We
waited almost 25 minutes for the vote. And I am sorry. Senator
Lieberman certainly did not do anything intentionally. He thought the
vote would be held open. I have checked with the very loyal staff we
have in the cloakroom, and there was a misunderstanding between the
cloakroom and Senator Lieberman.
But, regardless, I hope everybody understands we have to have some
semblance of order around here. We are doing our very best to save
people time. One of the things we are doing to save time is have a vote
start on time and end on time. A 15-minute vote is a 20-minute vote.
This vote was cut off approaching 25 minutes.
So I am sorry that people missed the vote. I had one Senator tell me
it was the first one they missed. It is a favor to that person. I say
the first vote I missed took a lot of the pressure off.
This vote passed, I think, 2 to 1. It is not a very difficult issue.
I am so sorry that people are disturbed about following the rules here.
That is what we are doing.
I appreciate my friend from Montana because if he had not objected, I
would have.
Mr. HATCH. Mr. President, will the leader yield?
Mr. REID. Yes.
Mr. HATCH. Mr. President, apparently this was a sorry situation.
Nobody's vote would be changed. Why can't we ask unanimous consent that
these votes be counted?
Mr. REID. Because I will object to it.
Mr. HATCH. You would object to it?
Mr. REID. Yes.
Mr. BYRD. What was the Senator's request?
Mr. HATCH. I was requesting that we should consider unanimous consent
that their votes be counted.
Mr. BYRD. No, Mr. President, we cannot do that.
Mr. HATCH. I understand.
Mr. BYRD. I thank the Senator. We cannot do that. I hope Senators
will pay a little more attention.
Mr. President, who has the floor?
Mr. BAUCUS addressed the Chair.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I had the floor, and I yielded to the
Senator from West Virginia.
Mr. BYRD. I thank the Senator for yielding.
I was caught in this situation a while back, and I have cast more
votes than any Senator in the history of this Republic, and it was
called on me. I regretted that.
Sometimes I think we get a little bit too hung up. The Senate is a
body in which we talk to one another, we talk with one another, we
think about one another, and we think of one another's problems. We can
get a little bit too hung up on the time on a vote. A vote is
important. The people send me here, the people of West Virginia--who
has the floor, Mr. President?
Mr. BAUCUS. Mr. President, I say to the Senator, you do.
The PRESIDING OFFICER. The Senator from Montana yielded time to the
Senator from West Virginia.

[[Page S10541]]

Mr. BYRD. I thank the Senator from Montana.
Now, the people send me here to vote. That is my right. Of course, I
ought to get here, be here on time. But the people expect Robert Byrd--
the people of West Virginia expect Robert Byrd--to vote. So let's do
not get hung up on 60 seconds or 30 seconds or whatever it is. Let's
have a little bit of accommodations to one another.
I hope I am not speaking out of turn. I hope I am not saying too much
or making too much of nothing. But I am sent here to vote, and I hope
we will accommodate one another. We Democrats ought to accommodate one
another, and we ought to accommodate the Republicans, too.
I thank the Senator.
Mr. REID. Mr. President, will the Senator from Montana yield?
Mr. BAUCUS. Mr. President, I yield to the Senator from Nevada.
Mr. REID. Mr. President, I say to all my colleagues, we have been in
this session now for 7 months. This is something we all decided would
be best for the institution. We all decided this. This is not something
we put into effect yesterday. And I say to my dear friend, the senior
Senator from Utah, I understand his compassion. He does not want to
miss votes. But if we decide to change it this time, then we will be
doing it every time people miss a vote.
Now, it would be different--I say to my friend, the ``Babe Ruth'' of
the Senate, Senator Byrd, this was not 60 seconds, a few seconds off.
We have a lot of work we need to do here. The vote was a 15-minute
vote. We waited almost 25 minutes. So I think we have been fair.
The one I feel worst for is my friend Joe Lieberman, because he felt
they had the time to get here. I have checked with the cloakroom, and
they emphatically said there was a misunderstanding, because they have
a time, they know when the vote is going to end. When everybody calls,
they say there is no extension, the time the vote will end is such and
such a time. They have been instructed to do this because one Senator
missed a vote Monday. So the cloakroom has instructions as to what to
do.

I am sorry people missed votes, but remember, this is not anything
that is new. It is something that has been going on for 7 months, and
we have a lot of work to do. I respectfully suggested to one of my
friends, who said: Well, we wasted all this time; we could have gone
ahead and waited for everybody--but while we are waiting for everybody
to come and vote, some people got here on time, and other people have
work they want to do, waiting for people to get here on time.
So I think it is best for the body that we stick to our 15 minutes,
plus 5 minutes. That is when the vote will be called. For those of us
who have had service in the House--many of us have--you do not have any
wiggle room in the House. That vote is over, and you are through. It is
done mechanically, and you are all through. We do not want it to be
like the House. This is the Senate, and we want it differently. That is
why we have a 5-minute leeway.
I appreciate everyone's thoughtfulness, but I am certainly trying to
do the right thing.
Mrs. HUTCHISON. Mr. President, will the distinguished leader yield
for one observation?
I understand totally that the leader has to have a firm principle.
And when it is one person who is late because they are off the Capitol
grounds or something such as that, I think that is totally legitimate.
This is something I have never seen since I have been here for 14
years, where a committee is meeting, with important business, and the
committee chairman gives people the comfort that the vote is going to
be held, and so you have around 12 people who have missed a vote.
I ask one more time for, just this once, a unanimous consent and will
propose a unanimous consent that we reopen this vote.
Mr. REID. Let me say this. I have heard everyone loudly and clearly
because we have spent a lot of time on this. Just so everyone has the
total, absolute understanding, in the future--Senator Leahy; Senator
Lieberman; Senator Baucus; Senator Kerry; Senator Dorgan; Senator Byrd,
on Appropriations--if Appropriations chairmen tell you there is more
time to vote, there is not any. Therefore, if the chairman is trying to
keep you there, and the time is running, walk out of there.
I ask unanimous consent that those Senators who missed the vote
because of the misunderstanding with Senator Lieberman be allowed to
cast their votes.
Mr. BYRD. No, Mr. President. That has never been done.
Mr. REID. Never been done. OK.
The PRESIDING OFFICER. That request is not in order and prevented by
the rules.
Mr. REID. We tried, Kay.
The PRESIDING OFFICER. The Senator from Montana is recognized.
Mr. BAUCUS. Mr. President, I suggest we get back to business.
The PRESIDING OFFICER. The Senator from Montana has the floor.

Amendment No. 2587

Mr. BAUCUS. Mr. President, I understand Senator Gregg is ready for a
vote with respect to his amendment, so I ask unanimous consent that
there be 2 minutes equally divided in the usual form for debate prior
to a vote in relation to the amendment, that no amendment be in order
to the amendment prior to the vote, and that upon the use of time, the
Senate proceed to vote in relation to the amendment, with no
intervening action.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. GREGG. Mr. President, I understand this is a 45-minute vote?
Mr. BAUCUS. It may be.
The PRESIDING OFFICER. Who yields time?
Mr. GREGG. Mr. President, can we have order.
The PRESIDING OFFICER. The Senate will be in order.
There are 2 minutes of debate equally divided on the Gregg amendment.
Who yields time?
Mr. GREGG. Mr. President, I will claim my time, but I want the Senate
to be in order before I begin.
The PRESIDING OFFICER. May we have order in the Senate for the
Senator from New Hampshire. Will the Senate be in order.
The Senator from New Hampshire.
Mr. GREGG. Mr. President, this amendment essentially says what the
bill is titled and represents to be, which is that the funds will go to
children, to help children get health insurance. This amendment says
that adults can continue to be insured by States at the reimbursement
rate, which is the Medicaid rate, should they so desire, but that a
higher rate should not apply to adults by putting adults under a
children's program.
The problem is very simple. States are gaming the system. They are
using the SCHIP program, which gives a higher reimbursement rate, to
bring into the system adults, and then they take that money and
basically use it in their general fund. This is not appropriate. It is
not appropriate, first, to have adults funded under a children's health
insurance program. Secondly, it is not appropriate to give States the
ability to game the system in this manner.
So I hope people will vote for this amendment, which essentially
keeps the program for children and actually expands the number of
children who can be covered by saving some money that is being spent on
adults.
Mr. GRASSLEY. Mr. President, there are legitimate issues being raised
about how adults are dealt with in this SCHIP bill. First of all,
adding adults to SCHIP should have never been allowed. It was wrong
when the Clinton administration started it. It was wrong when the Bush
administration continued it. Stopping it is the right thing to do.
However, I think this amendment goes too far, too fast, and I
encourage my colleagues to consider how the Finance Committee bill
deals with adults. Let me be clear, in some States, the problem is
extreme. Some States cover more adults than children. The even bigger
problem is that several States that cover large numbers of adults have
very high rates of uninsured children. This problem started under the
Clinton administration but the Bush administration made it worse. Both
the Clinton and the Bush administrations helped push Humpty-Dumpty off
the wall. Now, it is our job to try to put the piece back together.

[[Page S10542]]

Advocates for parent coverage under SCHIP argue that in order to get
kids covered, you have to cover the parents. I don't buy that argument;
too many States that are covering parents are still among the worst in
the country at covering kids. But the Congressional Budget Office does
buy the argument that covering parents will get a few more kids
covered. And they estimate that a reduction in parent coverage will
lead to a reduction in children covered, so we have to be cautious.
This amendment will lead to children losing coverage.
So what we have done in the Finance Committee bill is to say to
States covering parents: put up or shut up. You either cover the kids
or you get a far smaller Federal match for the parents you want to
cover.
The bill before us eliminates coverage under SCHIP for childless
adults by 2009. It eliminates the enhanced match for parents currently
covered under SCHIP and prohibits new state waivers for parents. CBO
estimates that it would reduce spending on adults by $1.1 billion.
Furthermore, the easiest way to put the emphasis back on lower-income
kids is to refocus the SCHIP program away from adults. The Finance
Committee bill redirects States' efforts to low-income children.
Our bill covers 1.7 million kids in Medicaid who are currently
uninsured. We are not talking about adults. We are not talking about
middle-income kids. We are talking about 1.7 million of the poorest
uninsured kids in this country.
As a former Governor, I am sure the Senator from New Hampshire can
appreciate that concept. If your States will only get a lower matching
rate for covering adults in SCHIP but significant financial incentives
for covering low-income kids, where will you direct your energies? The
parent policy in the Senate bill represents a reasonable compromise and
I urge my colleagues to oppose the Gregg amendment.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, four quick points. No. 1, we clearly want
to bring this program down for kids, and this legislation does that.
No. 2, the current expansion--not to point fingers anywhere--is
basically as a result of the waivers this administration has given to
States. That is the main reason for others. That is the main reason we
have expansion to cover adults in States. No. 3, we are addressing this
in this bill. We cut back on adults in this bill. But No. 4 is, we want
to draw the line here a bit, and not totally cut adults off cold
turkey, but, rather, childless adults would be cut back and zeroed out
after 2 years, but then parents are phased down. But CBO has said when
you do not cover parents, then you are also not covering some kids. The
goal is to cover kids. I think the legislation is a fair, good, solid
way to restrict coverage of adults, and I urge my colleagues, do not
support this amendment, which is too draconian and goes too far.
The PRESIDING OFFICER. All time has expired.
The question is on agreeing to the amendment.
Mr. GREGG. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from South Dakota (Mr.
Johnson), the Senator from Illinois (Mr. Obama), and the Senator from
West Virginia (Mr. Rockefeller) are necessarily absent.
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
The PRESIDING OFFICER (Mr. Casey). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 42, nays 53, as follows:

[Rollcall Vote No. 288 Leg.]

YEAS--42

Alexander
Allard
Barrasso
Bennett
Bond
Bunning
Burr
Chambliss
Coburn
Cochran
Conrad
Corker
Cornyn
Craig
Crapo
DeMint
Dole
Dorgan
Ensign
Enzi
Graham
Gregg
Hagel
Hutchison
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McCaskill
McConnell
Nelson (NE)
Roberts
Sessions
Shelby
Stevens
Sununu
Thune
Vitter
Voinovich
Warner

NAYS--53

Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Brown
Byrd
Cantwell
Cardin
Carper
Casey
Clinton
Coleman
Collins
Dodd
Domenici
Durbin
Feingold
Feinstein
Grassley
Harkin
Hatch
Inouye
Kennedy
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Pryor
Reed
Reid
Salazar
Sanders
Schumer
Smith
Snowe
Specter
Stabenow
Tester
Webb
Whitehouse
Wyden

NOT VOTING--5

Brownback
Johnson
McCain
Obama
Rockefeller
The amendment (No. 2587) was rejected.
The PRESIDING OFFICER. The Senator from Mississippi is recognized.

Amendment No. 2593 to Amendment No. 2530

Mr. LOTT. Mr. President, I send an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. Without objection, the pending amendment will
be set aside.
The clerk will report.
The legislative clerk read as follows:

The Senator from Mississippi [Mr. Lott], for himself, Mr.
McConnell, Mr. Kyl, Mr. Gregg, Mr. Cornyn, Mr. Bunning, Mr.
Coburn, and Mr. DeMint, proposes an amendment numbered 2593
to amendment No. 2530.

Mr. LOTT. Mr. President, I ask unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. LOTT. Mr. President, I thank the managers of the legislation for
allowing me to go forward with this alternative amendment at this time.
I think it is important on an issue of this nature that we have a full
discussion and amendments offered and debated and voted on. That helps
us get to a conclusion on a major piece of legislation such as this
without it turning into a late-night ugly session.
This alternative is intended to show we fully intend to be supportive
of the SCHIP program--the program for children's health insurance--and
we want it to be done in a responsible way and in a way that actually
increases funding to make sure the children it wants to cover are
actually covered.
This is an effort of good faith to come up with an alternative that I
think is better, in many ways, than the underlying Baucus and others
legislation. I have, on two previous occasions, indicated that part of
my big problem is the pattern of the coverage going up and up, to the
point where States that have waivers now, and under the underlying
bill, middle-income children would be covered, and that we are on a
steady march to say all children ought to be covered regardless of
income.
I think that is a mistake. I think it is unaffordable. It will lead
to disruptions, and it will lead to significant tax increases, or it
will start to put our children against the parents. The way the House
proposes to pay for this underlying bill is to go after funds in the
Medicare Program. At least this bill doesn't do that, but it does pay
for the increases with tax increases--yes, tobacco tax increases, but
still tax increases which, in my opinion, are not going to be
achievable and which will leave a huge hole in the funding.
So what we do in the alternative is to direct our attention at the
core mission, which is low-income children--not adults, not middle-
income children. We pay for it in a way that would equalize this
Medicaid coverage in our States. So I think overall it is a very good
alternative.
We have a number of Senators who are cosponsors of the legislation
and would like to speak on it as we go forward this morning and into
the afternoon.
Again, we all support reauthorization of the so-called SCHIP program,
and we want to ensure that children have access to good, quality health
care insurance. How you do it is the difference. We have come up with a
different alternative that does it better because it puts kids first.
It makes sure we take care of the kids, not an ever-growing list of
kids and not a lot of adults. I

[[Page S10543]]

think you have to do it in a fiscally responsible way so we don't have
huge holes develop in the outyears. One of the problems in the
underlying bill is that down the road, in 6 years or so--and before
that, in my opinion--the numbers are not going to add up. We will not
have the income we were going to have, and there will be an explosion
of the costs that are involved. So I think we should pay attention to
the impact not just next year, or in 5 years, but it will be the
situation in 7 or 8 years. That is what this bill does.
We have heard talk in the last couple of days from our friends on
other side of this issue that they are concerned about the insurance
for kids. I believe that, but that will be done in this bill. Let me
tell you why. Under the Kids First amendment we sent to the desk, 1.5
million more children will be covered under SCHIP in 2017 than under
the Baucus bill. Yes, that is a long way down the road, but the truth
of the matter is we need to look at these programs over a 10-year
period, not just the 5 years, because the commitments we make in that 5
years will continue to go up. We need to think about what is going to
be the impact. You heard it right. It would cover actually more
children in 2017. The Kids First bill will cover 3.6 million children.
The Baucus bill will cover 2.1 million children in the SCHIP program.

The Kids First bill actually spends more money than the Baucus bill.
You heard that right. We increase SCHIP spending by $9.3 billion over
the next 5 years, expanding coverage to 1.3 million new children.
Because the Kids First Act doesn't rely on any kind of budget gimmicks,
as the underlying bill does, we can actually spend more on SCHIP over
the budget window than the underlying bill does. I think it is
important we focus on honest budgeting.
I realize honest budgeting is quite often in the eye of the beholder,
but I don't think anybody would deny there are budget problems with the
underlying bill. The Baucus bill has a long-term budget point of order
against it, meaning that over the long-term it will significantly
increase the budget deficit. The reason for this is the budget bill
relies on the declining revenue. When you have the amount of increase
on tobacco products included in the underlying bill--61 cents a pack
for cigarettes and, of course, the same application to other tobacco
products, including cigars--you are going to get less revenue than you
project. People will not be able to afford it. They are going to change
their habits. Some people would say that is going to be good for
health. OK. I am not a big advocate of smoking, even though I smoke a
pipe privately. Nobody here has ever seen me do that.
I think we have to be honest about what is going to be the impact the
next 5 years. This will also contribute to an increase in Medicaid
costs because the Baucus bill reduces SCHIP funding in those outyears,
and CBO assumes those kids will have to be moved to Medicaid. That is
part of what is going to be happening. More children will be under
SCHIP under the bill and more children will be on Medicaid and more
children will be coming off private health insurance. I don't think we
want to do at least two out of those three things.
So I think it is important we cover the children in the low-income
area and that we cover more children. That is what this alternative
does. This amendment doesn't have a dime in tax increase to pay for it.
It would not be subject to a point of order. Then it does a couple of
other very important things. Unfortunately, last year, we never could
get action on the associated health plans, the small business health
plans.
We were so close, and yet because of some objections, perhaps
legitimately, that the sponsors could not agree on, we did not give
this opportunity to small business women and men to cover more of their
employees, and they would like to. I talk to small business men and
women. They don't understand why they cannot form groups and provide
coverage to these low-income, entry-level workers, a lot of times unwed
mothers, high school dropouts.
For the life of me, I cannot understand why we do not give that
option. It would probably be a way that 10 to 20 million more working
adults could get coverage. We do include in the bill the small business
health plans.
We also include important health savings accounts reforms and provide
for a study of ways to increase health insurance coverage through
reforms to our Tax Code to enhance tax equity.
The Kids First Act is an amendment that all my colleagues,
Republicans and Democrats, should support. The amendment enrolls
millions more kids in SCHIP than the underlying bill and does it in a
fiscally responsible way and avoids budget points of order. It will not
expand Medicaid spending.
I urge my colleagues to actually take a look at this legislation. We
have spent a long time coming up with it. I actually thought this was
probably the bill that would come out of the Finance Committee when we
started. We had bipartisan meetings. We talked about, OK, do we want to
do this health insurance program for children? Yes, we do. How much do
we want to do, and how are we going to pay for it? Of course, there
were those in the beginning who said: No, we need a lot more than this.
We need an increase of $50 billion or more.
I know the Senator from Massachusetts, Mr. Kerry, feels strongly
about that point. He made his point legitimately. He said: Should we
just decide how many we want to cover and don't worry about the cost
and just do it? No, I think we also have to worry about the cost of
these programs and how it is going to be paid for, who pays for it.
One of the things that worries me because we have this gap in the
outyear funding--we have had pictures of children on the floor of the
Senate. I have some grandchildren I worry a lot about--a 9-year-old
grandson and two little girls, just under 6, and one 3. My daughter is
a working mom full time, partially so her family can have insurance
coverage, and her husband is a small businessman, an entrepreneur. It
is not easy working full time as a mom, having two children, and
dealing with other issues she really cares about, such as charitable
activities. I worry about them. She is working to make sure they have
this coverage, but I am worried they are going to be saddled with the
cost of this extra coverage.
So let's do what we can affordably while complying with the
underlying core mission of making sure that low-income children have
access to this coverage. Generally speaking, my daughter and her
husband would be considered middle-income Americans. That is what they
would consider themselves. Yet they are having to work to get the
coverage they want and barely making it so that others can have
coverage who are making probably almost as much money as they are. I
don't know, the way things are going, they might be eligible for this
program. I don't think they should be.
Common sense is what is called for. We have a long way to go. There
is no question the House bill is going to be much larger and funded in
a much worse way. By putting down this marker, giving Members a
legitimate alternative that a lot of Senators have been involved in, is
a good way to go.
I urge Members to support this alternative.
I yield the floor.
Mr. McCONNELL addressed the Chair.
Mr. LEAHY. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The Republican leader is recognized.
Mr. LEAHY. I suggest the absence of a quorum.
Mr. McCONNELL. Mr. President, have I been recognized?
The PRESIDING OFFICER. I recognize the Republican leader.
Mr. LEAHY. Will the Republican leader yield for a moment?
Mr. McCONNELL. Would the Senator from Vermont like to ask the Senator
from Kentucky a question?
Mr. LEAHY. I said, will the Senator from Kentucky yield for a
question?
Mr. McCONNELL. I will be happy to yield.
Mr. LEAHY. Mr. President, the distinguished majority leader wishes to
be on the Senate floor, and I ask the Senator from Kentucky if he will
yield for a brief quorum call so that the distinguished majority leader
can be on the floor.
Mr. McCONNELL. Mr. President, I will be happy to accommodate that
request. It was my understanding that

[[Page S10544]]

the majority leader was on the way, and I thought I would get started.
But I will be happy to wait until he walks through the door, if that is
the request of my good friend from Vermont.
Mr. LEAHY. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCONNELL. Mr. President, is the Lott amendment the pending
question?
The PRESIDING OFFICER. It is the pending question.
Mr. McCONNELL. I ask unanimous consent that it be temporarily set
aside.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 2599 to Amendment No. 2530

Mr. McCONNELL. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Kentucky [Mr. McConnell], for himself and
Mr. Specter, proposes an amendment numbered 2599 to amendment
No. 2530.

Mr. McCONNELL. Mr. President, I ask unanimous consent that the
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To express the sense of the Senate Judge Leslie Southwick
should receive a vote by the full Senate)

At the end of the substitute, insert the following:

SEC. ___. SENSE OF THE SENATE REGARDING THE NOMINATION OF
JUDGE LESLIE SOUTHWICK.

(a) Findings.--The Senate makes the following findings:
(1) Judge Leslie Southwick served on the Mississippi Court
of Appeals from January 1995 to December 2006, during which
time he was honored by his peers for his outstanding service
on the bench.
(2) The Mississippi State Bar honored Judge Southwick in
2004 with its judicial excellence award, which is awarded
annually to a judge who is ``an example of judicial
excellence; a leader in advancing the quality and integrity
of justice; and a person of high ideals, character and
integrity''.
(3) The American Bar Association has twice rated Judge
Southwick well-qualified for Federal judicial service, its
highest rating. As part of its evaluation, the American Bar
Association considers a nominee's ``compassion,'' ``open-
mindedness,'' ``freedom from bias and commitment to equal
justice under law''.
(4) In 2006, the President nominated Judge Southwick to the
United States District Court for the Southern District of
Mississippi.
(5) Last fall, the Senate Judiciary Committee unanimously
reported Judge Southwick's nomination to the full Senate for
its favorable consideration.
(6) In 2007, the President nominated Judge Southwick to the
United States Court of Appeals for the Fifth Circuit.
(7) The Administrative Office of the Courts has declared
the Fifth Circuit vacancy to which Judge Southwick has been
nominated a ``judicial emergency'' with one of the highest
case filing rates in the country.
(8) Judge Southwick is the third consecutive Mississippian
whom the President has nominated to address this judicial
emergency.
(9) Both Senators from Mississippi strongly support Judge
Southwick's nomination to the Fifth Circuit, and they
strongly supported his 2 predecessor nominees to that
vacancy.
(10) The only material change in Judge Southwick's
qualifications between last fall when the Senate Judiciary
Committee unanimously reported his district court nomination
to the floor, and this year when the Committee is considering
his nomination to the Fifth Circuit is that the American Bar
Association has increased its rating of him from well-
qualified to unanimously well-qualified.
(11) While on the State appellate bench, Judge Southwick
has continued to serve his country admirably in her armed
forces.
(12) In 1992, Judge Southwick sought an age waiver to join
the Army Reserves, and in 2003, he volunteered to serve in a
line combat unit, the 155th Separate Armor Brigade. In 2004,
he took a leave of absence from the bench to serve in Iraq
with the 155th Brigade Combat Team of the Mississippi
National Guard. There he distinguished himself at Forward
Operating Base Duke near Najaf and at Forward Operating Base
Kalsu.
(b) Sense of Senate.--It is the sense of the Senate that
the nomination of Judge Leslie Southwick to the United States
Court of Appeals for the Fifth Circuit should receive an up
or down vote by the full Senate.

Mr. McCONNELL. Mr. President, in 1992, a Mississippi lawyer named
Leslie Southwick wanted to serve his country in the Armed Forces. At
42, he was too old to do so, but service to others is a duty that
Leslie Southwick has always taken very seriously, whether in the
Justice Department or on the State bench or with Habitat for Humanity
or in doing charity work for inner-city communities. So in 1992, 42-
year-old Leslie Southwick sought an age waiver to join the U.S. Army
Reserves. The country had the good sense and the good fortune to grant
his request.
Leslie Southwick continued to serve in the Armed Forces after he was
elected to the State court of appeals in 1994. He conscientiously
performed his military and judicial duties, even using his vacation
time from the court to satisfy the required service period in the
Mississippi National Guard.
In 2003, Lieutenant Colonel Southwick volunteered for a line combat
unit--this is 2003--a line combat unit, the 155th Separate Armor
Brigade. His commanding officer, MG Harold A. Cross, notes that his
decision ``was a courageous move, as it was widely known at the time
that the 155th was nearly certain to mobilize for overseas duty in the
near future.''
Colleagues such as attorney Brian Montague were not surprised. This
is what Brian Montague had to say: ``Despite love of wife and
children,'' Leslie Southwick volunteered for a line combat unit over a
safer one ``because of a commitment to service to country above self-
interest.''
In August of 2004, Leslie Southwick's unit mobilized in support of
Operation Iraqi Freedom. His commanding officer states that he
distinguished himself at forward operating bases near Najaf. Another
officer, LTC Norman Gene Hortman, Jr., describes Southwick's service in
Iraq as follows:

Service in a combat zone is stressful and challenging,
oftentimes bringing out the best or the worst in a person.
Leslie Southwick endured mortar and rocket attacks, travel
through areas plagued with IEDs, extremes in temperature,
harsh living conditions--the typical stuff of Iraq. He
shouldered a heavy load of regular JAG officer duties, which
he performed excellently. He also took on the task of
handling the claims of the numerous Iraqi civilians who had
been injured or who had property losses due to accidents
involving the U.S. military. . . .This involved long days of
interviewing Iraqi civilian claimants, many of whom were
children, widows, and elderly people, to determine whether
the U.S. military could pay their claims. Leslie always
listened to these Iraqi claimants patiently and treated them
with the utmost respect and kindness. He did this not just
out of a sense of duty, but because he is a genuinely good
and caring person. His attitude left a very positive
impression on all those that Leslie came in contact with,
especially the Iraqi civilians he helped. This in turn helped
ease tensions in our unit's area of operations . . . and
ultimately saved American lives.

Lieutenant Colonel Hortman concludes that Leslie Southwick ``has the
right stuff'' for the Fifth Circuit Court of Appeals--``profound
intelligence, good judgment, broad experience, and an unblemished
reputation.'' Lieutenant Colonel Hortman added:

I know him and can say these things without reservation.
Anyone who says otherwise simply does not know him.

Stuart Taylor writes in the National Journal that Leslie Southwick
``wears a distinctive badge of courageous service to his country,'' and
that he ``is a professionally well-qualified and personally admirable''
nominee for the Fifth Circuit Court of Appeals.
Judge Southwick does not seek thanks or notoriety or charity for his
military and other civic service. He asks to be judged fairly--to be
judged on the facts, to be judged on his record. It is the same
standard he has applied to others as a judge, a military officer, a
teacher, and a mentor.
It is a standard for which he is well known and admired. By that
standard, he is superbly fit to continue to serve his country, this
time on the Fifth Circuit Court of Appeals.
His colleagues know this, as do his home State Senators. His peers
within the State bar know this. They honored him as one of the finest
jurists, declaring him ``an example of judicial excellence; a leader in
advancing the quality and integrity of justice; and a person of high
ideals, character, and integrity.''
The American Bar Association knows this as well. It has twice given
him its highest rating, ``well qualified,'' and in so doing found him
to be exemplary in

[[Page S10545]]

the areas of compassion, open-mindedness, freedom from bias, and
commitment to equal justice under law.
Even Democrats on the Judiciary Committee know this because just last
fall, all of them--again, all of them--looked at his record and
approved him for a lifetime position on the Federal bench.
But it appears that Democrats on the committee may now apply a
different standard to Judge Southwick. A member of the Democratic
leadership who serves on that committee states that what is
``determinative'' is whether a judicial nominee is perceived to be
fair.
The notion that perception, rather than reality, will be dispositive
in evaluating a nominee is at odds with the principle of the rule of
law. And it is not fair to manufacture a false impression of someone
through insinuation and innuendo, and then use that falsehood to defeat
him. In the case of Judge Southwick, the sudden ``perception'' about
his fairness is driven by those who do not even know him, and it is
disproved by his long record by those who know him very well.

All nominees deserve to be treated with dignity, but a selfless
public servant and veteran such as Leslie Southwick deserves to be
treated with respect as well. It is disrespectful for the same members
of the Judiciary Committee who unanimously supported his nomination
last fall to now turn around and unanimously oppose him. There is only
one change in Judge Southwick's credentials between last year and now.
The ABA, hardly a bastion of conservatism, has actually increased--
increased--its rating for him from ``well qualified'' to ``unanimously
well qualified.'' Now what that means is that every single member of
the ABA committee evaluating Judge Southwick's credentials for the
Fifth Circuit, every single one of them gave him the highest possible
rating--a unanimous ``well qualified'' rating.
A party-line committee vote would not be a ``perceived'' flipflop or
a ``perceived'' injustice but an actual one. This is not a question of
perception; this is a question of actually ignoring the reality of this
man's record. It would make clear that despite the promise of a new
start on judicial nominations that the Senate majority leader and I
have been hoping for all year, when push comes to shove, we will treat
nominees unfairly based upon a manufactured perception.
This sad standard is not only unjust, but it is actually unwise. As
we all know, once established, precedents in the Senate are extremely
difficult to undo. Establishing a third-party perception standard on
the Southwick nomination will be bad for this Congress and really, more
importantly, I will say to our colleagues on the other side of the
aisle, bad for future Congresses regardless of who is in the White
House and which home State Senators support a nomination. The standard
we set now with a Republican in the White House and a Democratic Senate
might well be the standard applied in a future Congress if, for
example, it were a Democrat in the White House and a Democratic Senate.
Because such a decision will affect us all, and for the worst, it is
appropriate for the Senate collectively to express its view on whether
it wishes to go down this path, whether it wishes to undo the good work
and good will that brought us back from the precipice just a few years
ago. It is for that purpose that I have offered the sense of the Senate
on the Southwick nomination. I encourage my colleagues to review it, to
review the record, and to think long and hard about whether we want to
deny this good man an opportunity for a vote here in the Senate.
Again, Mr. President, at the risk of being redundant, let me just say
that the majority leader and I have been working hard all year to try
to improve the confirmation process. I think that is a very wise thing
for the majority to do because someday they may have the White House
again, in spite of the best efforts of people like me. Once we
establish an unrealistic standard for the treatment of qualified
judicial nominees for the circuit court, there will be a great
temptation on the part of the other side of the aisle to apply the same
standard in the future.
There are plenty of grievances from the past. We have had Republican
complaints about Democrats and Democratic complaints about Republicans.
I guess the fundamental question is, When do we stop it? When do we
stop it? For the sake of the institution, for the sake of the country,
and for the sake of the party that may not currently occupy the White
House, when do we stop?
It strikes many of us that the Leslie Southwick nomination is a good
time to stop it because we all know he is extraordinarily well
qualified. There is really no serious argument otherwise. And if we
can't stop it now, Mr. President, when will we stop it?
So I think this will give us an opportunity to let all of the Senate
express themselves, rather than just a few in one committee, on the
appropriateness of this nominee.
With that, I yield the floor.
Mr. REID. Mr. President, it is my understanding the distinguished
Senator from West Virginia is going to be recognized now; is that
right?
The PRESIDING OFFICER. That is correct.
Mr. BYRD addressed the Chair.
Mr. REID. Mr. President, if I can interrupt my friend for a minute,
will the Senator yield to me to make a brief statement regarding the
statement made by the distinguished Republican leader, to be followed
by 5 or 6 minutes by the Senator from Vermont, the chairman of the
Judiciary Committee, and then the Senator from West Virginia would, of
course, have all of his time?
Mr. BYRD. Yes. Yes, I will do that.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, it appears at this time that we will move to
table this sense-of-the-Senate resolution offered by my friend, the
distinguished Republican leader. I appreciate his advocacy for Judge
Southwick. Some of us have a different opinion about Judge Southwick,
and that has been made a part of the record already. I would refer to
the Congressional Record of July 20, where I gave an extended statement
on Judge Southwick and why I thought he should not be confirmed, but
there will be more time to talk about this.
We have done a very good job, working with Senator Leahy, in clearing
judges. We have a bump in the road with this one, there is no question,
and the bump is still there. I admire and appreciate the work done by
the Senator from Vermont because we have been through some difficult
times in recent years with the Judiciary Committee. Senator Leahy will
make a brief statement about some of the travails we have had.

Judge Southwick has had a hearing. It is up to the Republicans--
namely, Senators Lott and Cochran--whether they want to vote in that
committee. That is so much more than was given to Senator Clinton's
nominees, where about 70 never even had a hearing.
So we will have more time to debate this at a subsequent time, and
sometime later today I will confer with my distinguished Republican
colleague, the minority leader, to determine when I will offer a motion
to table or Senator Leahy will offer a motion to table.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. First, Mr. President, I thank the distinguished Senator
from West Virginia for his usual courtesy and giving me some time to
speak. I have had the privilege of serving almost 33 years--a third of
a century--with the distinguished Senator from West Virginia. Of
course, I know my 33 years pale in comparison with the time he has
served.
While the distinguished Republican leader is on the floor, he and I
have worked closely together on many things. I will not make comments
about crocodile tears and all that, but it is interesting that he spoke
of Judge Southwick being passed out unanimously last year. He forgot
the fact that when he was being cleared for a vote by the Republican-
controlled Senate, a Republican objected.
The Republican leader has forgotten that the Senate has confirmed 25
nominations for lifetime appointments this year--more than were
confirmed, for example in all of 2005 with a Republican chairman and a
Republican majority.
The leadership over there has forgotten that we Democrats--we
Democrats--have confirmed more of President Bush's nominees for any
given period of time while we have been in

[[Page S10546]]

charge than the Republicans did. We have had three different
leaderships in the Senate Judiciary Committee and the Senate itself
during the time President Bush has been in office. During the time that
the Democrats have been in charge, we have actually confirmed more of
President Bush's nominees than the Republicans did.
The weeping and gnashing of teeth going on makes me think that
congressional Republicans love to shut down the Government and seem
intent on manufacturing excuses to do so. In 1995 Newt Gingrich was so
upset by the door he had to use on Air Force One--most people would be
thrilled to fly on Air Force One--that he shut down the Government.
When they were in the Senate majority a few years ago, Senate
Republicans insisted on a 40-hour debate on their own President's
court-packing scheme. And then we found out that during that time they
were stealing our computer files. The then Republican leader had to
fire one of his own aides for stealing computer files from the
Democrats. So the weeping and gnashing of teeth that is going on leaves
a little bit to be thought about.
The Senate has confirmed 20 circuit court nominations and 125 Federal
judicial nominees during the 2 years I have been Judiciary Committee
chairman. Compare that to the numbers of the Republicans. During the
Bush presidency, more circuit judges, more district judges and more
total judges have been confirmed, in less time, while I served as
Judiciary Chairman than during the longer tenures of either of the two
Republican Chairmen working with Republican Senate majorities. Yet you
would think that somehow we are holding up everybody.
I would point out that it was the Republicans who pocket-filibustered
over 60 of President Clinton's nominees. I think we have stopped two or
three of President Bush's. Sixty-one. The distinguished Republican
leader said he hoped all this would stop. Well, we are not going to do
what they did. Incidentally, 17 of those were circuit nominees. Let me
mention their names for those that have short memories: Barry Goode,
Helene White, Alston Johnson, James Duffy, Elena Kagan, James Wynn,
Kathleen McCree Lewis, Enrique Moreno, Allen Snyder, Kent Markus,
Robert Cindrich, Bonnie Campbell, Stephen Orlofsky, Roger Gregory,
Christine Arguello, Andre Davis, and Elizabeth Gibson. These are just
some of the ones they pocket-filibustered.
Now, on Judge Southwick, I had him on the agenda. I took him off the
agenda at the request of the Republicans. We actually had him on one
time, and we did not get enough Republicans to show up to make a quorum
to vote on him. I took Judge Southwick's nomination off the agenda at
the request of Republican Senators. Neither the junior Senator from
Mississippi nor the senior Senator from Mississippi nor the
distinguished Republican leader has asked me to put him back on the
agenda.
I am growing somewhat tired of the statements being made publicly
about delay, many of which I do not attribute, of course, to my
colleagues, so I put Judge Southwick's nomination back on the agenda
for tomorrow.
I must say--and I will close with this--this makes me think about the
first time I was chairman of this committee in the first Bush
administration, knowing that we come from a time when the Republicans
had pocket-filibustered 61 of President Clinton's nominees and one they
had voted out almost unanimously from the committee whom they then
ambushed on the floor, the distinguished James Graves, an African
American who then became chief justice of the Missouri Supreme Court,
the distinguished African American whom they humiliated by voting him
out of committee, with no real objections, and then, in lockstep, with
no notice, voted him down on the floor of the Senate. One of the most
distinguished African-American jurists in the country, the Republican
leadership decided to vote him down. But notwithstanding that, I tried
to change that.
I remember when the Republicans asked me to have a hearing on a
controversial nominee of theirs. They were very concerned about it. I
actually came back from Vermont, which is not an easy thing to do in
August, to leave that beautiful State--it is like leaving the beautiful
State of West Virginia during the month of August, one of our prettiest
times--but I left Vermont, came back, and held a hearing on that
nominee so we could arrange in the first week of September to get him
passed. Do you know what happened, Mr. President? Do you know what the
reaction of the Republicans was? They trotted out a member of their
leadership to tell the press how terrible it was that I held a hearing
during August, even though that was the only way they were going to get
their nominee through. That was hypocrisy.
Mr. President, with that, I will just point out again that there is
no question of the numbers. The Democrats have moved more of President
Bush's nominees more quickly than his own Republicans have when they
have been in charge. If we are able to confirm just the five
nominations for lifetime appointments to the federal bench currently on
the Senate's executive calender, I will have presided over the most
productive 2-year period for judicial confirmations in the last 20
years, with 130 confirmations. Let us stop the crocodile tears. Let us
stop the hypocrisy. Let us stop the grandstanding and worry about what
is best for the courts. This administration has played politics with
the judiciary more than any of the six administrations I have served
with--not for but with--and I think one example of their knowing what
is best for law enforcement, what is best for the judiciary, is this
administration's strong support of the current Attorney General.
With that, I yield the floor.
The PRESIDING OFFICER. Under the previous order, the Senator from
West Virginia is recognized.

Iraq

Mr. BYRD. Mr. President, it was 122 degrees in Baghdad today. The
Iraqi Parliament thinks it is too hot to work and has gone on vacation.
Our soldiers don't have that luxury. Our brave men and women continue
to patrol the hot streets of Baghdad in full battle gear. They will get
no vacation. They continue to risk their lives in the sand and in the
heat, supposedly to give the Iraqi politicians ``breathing room'' to
build a political consensus. Those politicians are now on vacation.
A majority of Iraqis now say that we are doing more harm than good by
staying in their country. Perhaps I should say that again. A majority
of Iraqis now say that we are doing more harm than good by staying in
their country.
Every day brings more terrible news of American casualties. What has
the response from this administration been? ``Wait. Wait. Give us more
time.'' Our President has been saying that for the last 4 years, and it
is clear that he will keep on saying it for as long as we keep on
accepting it. So I am angry. This is my 49th year in the Senate. I
believe it is the first time I have said that. I am angry. Every Member
of this body should be angry, angry that the Iraqi Government is on
vacation while our troops, American troops, U.S. troops--your troops,
my troops, our troops--fight and die in their civil war.
Everyone, including General Petraeus, agrees that there is no
military solution in Iraq. None. Iraqis will have to make the hard
political compromises necessary to force a national consensus. Nothing
the U.S. military does can force them to make those compromises. But,
rather than work to craft a political solution, the Iraqi Government
decided to take the entire month of August off.
And where has our Congress been? I am deeply disappointed that the
Senate has once again failed to have a real debate on the issue of the
war in Iraq. There is no issue currently facing our Nation that more
deserves the attention of this body, and yet we continue to have empty
procedural votes instead of passing legislation that would mandate a
change of course, as a large majority of Americans want. We are, in
fact, charged by the Constitution to have that debate, and yet we wait.
``Wait until September,'' the critics say. ``Wait until the new
report.'' How many reports must this Congress read before we see the
handwriting on the wall? I, for one, am tired of waiting. The American
people are tired of waiting. Our brave soldiers and their families are
tired of waiting.
The President and his supporters in Congress are fond of painting a
picture of what would happen following a precipitous withdrawal from
Iraq, and they paint with a pallet of fear. But

[[Page S10547]]

their picture is not reality. It is easy to win an argument against a
straw man, but we are not calling for a precipitous withdrawal. The
proposal that 53 Senators voted in favor of recently called for a
phased redeployment of troops to focus on the threats that truly face
us, not a hasty and radical complete pullout.
I opposed this terrible war from its beginning, but I recognize we
are there now and some actions can't be so simply undone. Our first
priority must be that of protecting U.S. interests, and the simple
truth is that we do have vital interests in the region. The question is
how to best protect those interests.
The President of the United States, President Bush--and I say this
most respectfully--the President says that al-Qaida wins if we leave
and that if we pull out the terrorists will follow us home. Let me say
that again. The President says that al-Qaida wins if we leave and that
if we pull out the terrorists will follow us home. Al-Qaida is our
enemy, but are we really defeating them by trying to referee a
sectarian civil war between Shia and Sunni that has been going on for
over 1000 years? The President's own advisers now admit that al-Qaida
is as strong today as it was before 9/11.
Al-Qaida is resurgent in Pakistan and Afghanistan. When the President
of the United States took his eye off the ball and diverted our
national attention from Osama bin Laden and his terrorist training
operation in Afghanistan, the President dealt the security of the
people, the American people, a major blow.
Iraq did not attack the United States on 9/11. No Iraqi, not one--not
one--was involved in those attacks. Al-Qaida may now be in Iraq. But it
was not there before we went in and handed them a new training ground
for fresh recruits.
More importantly, al-Qaida is not the core of the problem in Iraq.
Al-Qaida is not the core of the problem in Iraq, no matter how often
the President says that it is. Former Secretary of State Colin Powell
said recently that al-Qaida was only 10 percent of the problem in Iraq.
The real problem in Iraq is not al-Qaida, the real problem is the
multiple civil wars that are raging: Shiia versus Sunni, Shiia versus
Shiia, Sunni versus Kurds.
The argument that if we lose in Iraq, they will follow us here is
pure hogwash. Nonsense. Did you hear me? I say, did you hear me? Let me
say it again. The argument that if we lose in Iraq, they will follow us
here is pure hogwash. H-o-g-w-a-s-h. Hogwash.
I have heard that time and time again. If we lose in Iraq, they will
follow us here. That is absolutely hogwash. Nonsense. What is keeping
terrorists from coming here now? Tell me. So we heard the argument: If
we lose in Iraq, they will follow us here. Well, what is keeping the
terrorists from coming here now? Certainly not the fact that our
military is in Iraq. Our military was not in Iraq when hijackers with
box cutters flew planes into the Pentagon and the World Trade Center.
Have we such short memories? I saw those planes attack the World Trade
Center. I have not forgotten it.
Keeping our troops in Iraq is not what is going to keep a terrorist
attack from happening again. So I repeat that. Keeping our troops in
Iraq is not what is going to keep a terrorist attack from happening
again. The real threat, the real threat, the real threat is in Pakistan
and Afghanistan, as the President's own advisers admit.
Principled people in this country, let me say that again, principled
people--in other words, people of principle in this country and in the
Congress are calling for a change in strategy, not because they are
weak, not because they are scared, not because they are callously
political, they are calling for a change because it has become patently
obvious that what we are doing is not making us safer, it is making us
less safe.
They are calling for a change because it has become patently--p-a-t-
e-n-t-l-y--obvious that what we are doing is not making us safer, it is
making us less safe.
Now, as U.S. officials absolutely wake up to the resurgence of al-
Qaida in Afghanistan and urge President Musharraf's Government to crack
down in Pakistan, we confront great anger in the region. I think that
statement is entitled to a rehearing.
Now, as U.S. officials slowly wake up to the resurgence of al-Qaida
in Afghanistan and urge President Musharraf's Government to crack down
in Pakistan, we confront great anger in the region.
Our continuing occupation of Iraq has damaged our credibility and
aroused suspicions about the depth of the U.S. commitment to the
sovereignty of other nations. There is a lesson here. It is this: If
you are marching in the wrong direction or if you are fighting the
wrong fight, unflinching persistence is not a sign of strength, it is a
sign of stupidity.
If you are marching in the wrong direction or fighting the wrong
fight, unflinching persistence is not a sign of strength, it is a sign
of stupidity. Yet amazingly we hear plans of continuing for 2 more
years our pointless, senseless occupation in Iraq.
I said it was wrong in the beginning. It was wrong from the start. It
amazes me when we hear plans of continuing for 2 more years our
pointless, costly, senseless occupation in Iraq.
The seas are rising and our present course is headed for an iceberg.
Turn around. Turn around, Mr. President. Turn around.
I yield the floor.
The PRESIDING OFFICER (Mr. Menendez). The Senator from Florida is
recognized.
Mr. MARTINEZ. Mr. President, I wish to speak on the current health
care discussion on the floor and take a few minutes to address this
very important issue.
SCHIP is a great program that is called Kid Care in the State of
Florida, where it has very successfully, over the past many months,
been a good program in reducing the amount of children without health
insurance.
I support its reauthorization as proposed in the McConnell-Lott
amendment. I support a straight reauthorization because the
alternative, the Democratic bill before us, greatly steers the program
away from the original intent. The intent of this program is to provide
health care for low-income children.
Instead, the underlying bill redefines SCHIP. It redefines the
program to make SCHIP cover more adults and people well outside
poverty. This bill will make families make a choice. A family of four
making $82,000 a year could remain on private insurance, paid out of
pocket, or they could take public-funded insurance.
That kind of choice will cost Americans about $37 billion a year by
the year 2012. This kind of expansion of Government-controlled health
care is counter to any effort to reform our health care system. The
question comes: Why are we considering this expansion? Why take the
focus away from the children SCHIP was intended to serve? SCHIP has
successfully achieved what it set out to do and has significantly
reduced the number of uninsured children.
Last year, 6.6 million children received health insurance through
SCHIP. Rather than change the purpose of the program, as Democrats have
proposed, we should refocus SCHIP on finding and covering the low-
income children who are eligible for the program but are not yet
enrolled.
The McConnell-Lott bill turns the focus to the original purpose,
helping ensure children from low-income families have health insurance.
Instead of an expansion toward Government-run health care, the
Republican alternative authorizes the program to keep the focus on
children and invests an additional $14 billion into the program.
Additionally, the Republican alternative provides important practical
and easily implemented reforms to make health insurance more affordable
for the uninsured. Part of the problem with SCHIP right now is we can't
find all the kids who need it. The Republican alternative commits $400
million over the next 5 years for improved outreach programs. This
money targets enrolling low-income children. These funds target the
low-income children SCHIP was meant to help. We have a problem when we
have children who have no health insurance but yet we have not reached
out and touched them. This new reauthorization will put the funds
behind going out and doing the outreach necessary to ensure that all
children who are uninsured

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who could be covered under this program are reached.
The Congressional Budget Office projects that the Baucus plan will
cover 600,000 new uninsured individuals at higher income levels, but
then the plan would also cause 600,000 privately insured individuals at
these income levels to drop their private coverage. Ironically, the
Baucus bill drives people out of private insurance and into Government-
sponsored health care. Under the Baucus plan dependency on government
health care will increase significantly. In total, CBO says that 2.1
million individuals will move from private coverage to Government
dependency if the Baucus plan is implemented. This isn't the health
care reform Americans want. This isn't in the best interest of our
country.
Before we take this step of moving people on to Government plans,
let's have a broader debate. Let's think about the ramifications and
the opportunities. We can do better by providing Americans with more
individual freedom and more choice while increasing health care
coverage and security. We can help more Americans to own their own
health care, take it with them from job to job, and partner with States
to make that policy more affordable. That is why some of my colleagues
and I have introduced the Every American Insured Health Act.
The principles for health care reforms our bill addresses include tax
equity. It is indefensible that Americans who buy insurance on their
own are treated differently than those who buy insurance through their
employer. Our bill amends the Tax Code to treat all Americans equally
when it comes to the purchase of health insurance. The effect will be
that health care will be accessible and affordable whether an employer
offers coverage. As the name implies, the Every American Act provides
everyone in America, regardless of income or employer, refundable flat
tax credits--$2,160 per individual or $5,400 per family. The Wall
Street Journal wrote in a recent editorial that restoring the tax
parity of health in dollars would go a long way to improving the system
and increasing access and affordability for everyone, including the 16
percent or so who today find themselves uninsured. It would also allow
individuals to buy policies themselves rather than rely on their
employers and take those policies with them wherever they work.
The flexibility the bill we propose is founded on the belief that
Government's role should be to organize the health care marketplace and
then let consumers make choices. We provide the opportunity for every
individual family to choose the health care policy that best meets
their needs. When you have a competitive marketplace, you get more
choices, better care, and lower prices.
To get that market, our bill improves health insurance affordability
in State marketplaces. It gives incentives, not mandates, for State
insurance marketplace reform to create more options and more
competition. The bill provides States the incentive to make health
insurance more affordable and accessible by establishing a process to
assist States in ensuring competitiveness. States will be given a menu
of choices such as the incentive to establish a statewide insurance
pool or establish high-risk mechanisms such as high-risk pools or
reinsurance and improve their markets to enable insurance plans to
offer at least one affordable policy valued at 6 percent of median
income. This approach achieves the goals of universal coverage in a way
that is truly American, by decreasing the number of uninsured
Americans, thereby lowering health care costs for all Americans. This
provides every American the right to choose their own health insurance
plan.
Finally, our approach authorizes incentives for States to reform
their health insurance markets to ensure the availability of
affordable, high quality health insurance for individuals and for
families. For too long Congress has skirted the real issue that affects
Americans and their health insurance. It is time to start finding
solutions to the problems instead of putting Band-Aids on programs and
systems that are truly failing all Americans.
I ask my colleagues to reject the Baucus amendment, reject efforts to
redefine and socialize our health care system. I ask my colleagues to
support the McConnell-Lott amendment because it helps ensure that
children in SCHIP continue to be served by the system and the program
that was intended to serve them, broadening those who today could
benefit from the program but are not there utilizing the opportunity
before them because we have not reached out to them, and then also, as
we do this, let's broaden the debate over fixing our entire health care
system. It is a debate that is long overdue. It is a debate America
yearns for. I look forward to engaging in that debate, how we continue
to provide America the best and most sophisticated health care in the
world but to make sure that every American participates in the
opportunity to receive that best of health care we have to offer
anywhere in the world.
I yield the floor.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, Senator Cantwell is on her way to speak.
She is not here. I see the Senator from Pennsylvania on the floor. I
know he desires to seek time. I urge the Chair recognize the Senator
from Pennsylvania who I think is going to speak about 8 to 10 minutes.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. SPECTER. I thank the distinguished chairman.

Amendment No. 2599

I have sought recognition to speak briefly on the nomination of Judge
Leslie Southwick to the Court of Appeals for the Fifth Circuit. I have
spoken extensively about Judge Southwick in the past, but I do want to
address a few remarks on the pending amendment offered by Senator
McConnell and myself on the sense of the Senate that Judge Southwick
ought to have an up-or-down vote on the floor of the Senate. It is my
hope that we will proceed on judicial confirmations in a spirit of
bipartisanship. Senator Leahy, chairman of the Judiciary Committee, and
I have worked very closely on that in this Congress, as he and I did in
the 109th Congress when I was chairman and he was ranking member.
This body has seen some very controversial moments: in 2005, with
filibusters against President Bush's nominees and the threat at that
time to invoke the ``nuclear'' or ``constitutional option'' which would
have brought the Senate to a standstill. We avoided that showdown and
then worked harmoniously, in a dignified way, with Supreme Court
nominations in 2005 and 2006. It is my hope we will find a way through
on the Southwick nomination. I hope we do not have this vote degenerate
back to a party-line vote without the kind of independent thought the
Senate ought to exercise in evaluating the question which is whether
Judge Southwick ought to have an up-or-down vote.
Judge Southwick has an extraordinary record. I do not use that word
lightly. He served on the Mississippi State appellate court for some 12
years. He has been a party to some 8,000 decisions. He has written 985
opinions himself. He is rated unanimously well qualified by the
American Bar Association. He passed out of the Judiciary Committee,
unanimously, for a district court judgeship. He has been an adjunct
professor at a law school. He was clerk of the Court of Appeals for the
Fifth Circuit, so he has experience there. In a very unusual way, in
his fifties, he volunteered for the Judge Advocate General's Corps,
volunteered to go to Iraq and served there in a heavy combat zone.
I have had occasion to talk to him at great length, and he is a
scholarly, intellectual, experienced lawyer, an experienced jurist. I
have put into the Record detailed statements about many of his
decisions where he has found in favor of the so-called little guy,
finding in favor of people who have tort claims for injuries sustained,
in favor of employees in employment cases.
The only two situations which have been brought up in opposition to
Judge Southwick are two cases where he concurred in an opinion, two
opinions which he did not write. In one of the opinions, it was a
custody case, and the court found in favor of the father. There was a
reference to the ``homosexual lifestyle'' of the mother which is a term
that is used with some frequency. I think there could be more
discretion in that language, but the

[[Page S10549]]

court found in favor of the father because of his community roots,
because of the home he could provide for the child, and because of the
father's income. The important thing about that case was its procedural
posture. That was the sum and substance of that matter.
There was a second case where the issue involved a racial slur which
admittedly was reprehensible. It was said by an individual, a public
employee, about a fellow worker who was not present at the time. The
subject did not hear the slur. There was an immediate apology. There
was no workplace disturbance. The issue then came before an
administrative review board that found that although the comment was
reprehensible, under these facts it was not sufficient to support
termination of employment. That issue then came back before the
appellate court on a very narrow question. The question was whether the
decision by the administrative board was arbitrary and capricious,
which is lawyer talk for whether there was any evidence to support the
board's ruling. The court felt that there was evidence to support the
conclusion that there was not sufficient grounds for firing. The case
then went to the State Supreme Court, and the State Supreme Court
remanded on the limited question about having more detailed factual
findings. But the Supreme Court of Mississippi agreed that the incident
was not sufficient to warrant a permanent firing.
That is the sum and substance of the objections. When you look at the
full record, you see that Judge Southwick ruled in a case where the
trial judge had excluded evidence that the victim of a crime was gay,
and Judge Southwick upheld the ruling that that would have been
prejudicial, defense counsel should not have been permitted to ask that
of a victim, seeking only to prejudice the jury. It did not having any
bearing on the issue involved in the case. This supports the conclusion
that Judge Southwick, in the custody case to which I referred, did not
have any demonstrate traits or indications that he was biased or
prejudiced or unjudicial in his approach to that particular issue.
It is my hope we will take a careful look at Judge Southwick's record
before casting votes. I understand there will be a tabling motion. We
should look at the underlying merits.
When we had the controversy in 2005, I urged my colleagues in the
strongest terms to take a look at whether they thought individually
filibusters were warranted against Priscilla Owen and Bill Pryor and
Janice Rogers Brown. I asked my Republican colleagues to take a look on
the merits as to whether it was warranted to talk about a ``nuclear''
or ``constitutional option.'' I make the same plea here today. Let's
not be bound by a party-line vote, ignoring the merits.
There have been comments on the floor today, as there have been in
the past, about President Clinton's nominees being improperly treated.
I agree with that today, and I agreed with that when it happened, and I
crossed party lines. I have crossed party lines to vote for President
Clinton's judicial nominees when they were qualified. I hope we will
come in the Senate, take a look at the individuals, take a look at the
merits, and not move for a party-line consideration, and not avoid a
vote, to have the man bottled up in committee. That smacks of the days
of Senator Jim Eastland, when the Judiciary Committee bottled matters
and prevented the Senate from voting on them.
I can understand there are some Senators who do not want a vote on
Judge Southwick, but that is what we are here for. That is the pay
grade--to vote. So I urge my colleagues to look at this matter on the
merits. I hope we do not have our actions disintegrate to the kind of
controversy we had a couple years ago, but that we can move beyond this
to the kind of bipartisanship which Senator Leahy and I have been able
to muster for the Judiciary Committee.
I thank the Senator from Montana for allowing me to speak. I know the
Senator from South Carolina, Mr. Lindsey Graham, has a few comments. I
expect he will be very brief on the subject.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I might inquire of the Senator from South
Carolina, how long does he wish to speak? We have been trying to go
back and forth.
Mr. GRAHAM. Mr. President, I say to the Senator, about 5 minutes.
Mr. BAUCUS. Because that will be three on your side in a row before
we go back to this side. Is the Senator speaking on the same subject?
Mr. GRAHAM. Yes.
Mr. BAUCUS. I urge the Presiding Officer to recognize the Senator
from South Carolina.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. GRAHAM. Mr. President, I will try to be brief. I appreciate the
recognition. I wish to speak very briefly on the matter pending before
the Senate.
The whole idea of the confirmation process of judges has taken a kind
of wrong turn for many years now. There is plenty of blame to go around
from both parties. But one thing I wish to have happen in the Senate--
for the good of the country--is to make sure when well-qualified people
come before this body, they are put through their paces about their
qualifications, their abilities, their disposition, their demeanor,
inquiring as to how they think and what drives their thinking, but, at
the same time, understanding that our job is to confirm people who are
sent over by the President--elections do matter--and that when we look
at a nominee, we part the politics of the last election, of the next
election, and focus on the individual who will serve for a lifetime.
It is important to understand the nominee before this body, Mr.
Southwick, has been serving as a judge in Mississippi since 1995. As
Senator Specter indicated, he has been involved in thousands of
decisions in a concurring role, and he has offered hundreds of
decisions.
He joined the military, and volunteered, as a lieutenant colonel to
go serve in Iraq at the age of 52.
The American Bar Association unanimously considered him well
qualified, saying very glowing things about his temperament, his
disposition. This is someone who has been looked at by people outside
of politics and found to be extremely well qualified.
Mr. DURBIN. Mr. President, will the Senator from South Carolina yield
for a question?
Mr. GRAHAM. Yes, sir.
Mr. DURBIN. I want to ask the Senator two or three questions about
this nominee after he completes his remarks. I would be glad to wait
until the Senator finishes.
Mr. GRAHAM. Absolutely. I will be glad to.
I do not want to infringe on the 5 minutes. But the bottom line, I
guess to my good friend from Illinois, is, I do not think this is about
qualifications at all. I think this man has lived a good life in the
law and seems to be a good person, from what I understand from everyone
who has spoken on his behalf. It is not a question about a character
flaw or a lack of legal ability. It is about two cases.
As Senator Specter said, one case involved a racial slur that is a
horrible term. The administrative review board, which took up that
matter--should the person be fired because of this racial slur--found
it was not a repeated event--under Mississippi law, it has to be more
than an isolated event--it did not disrupt the workplace, there was an
apology made and accepted, and the board found that this was not
sufficient to terminate the person.
It went to the Mississippi Court of Appeals, and they, under
Mississippi law, had to determine whether the administrative review
board made an arbitrary and capricious decision, whether there is any
evidence to support the court's finding, and they upheld the court's
determination.
Judge Southwick, in that case, commented many times about how
offensive the word was, and there is no place in society for this word
to be used without it being considered to be offensive. But judges have
to apply the law, not emotions.
I guess the question I have is, is there any belief on anyone's part
that his concurrence in this upholding of the administrative review
board suggests that he, as a person, is racially biased? Does this
suggest he is defective as a person, that he harbors animosity against
one group or another? I

[[Page S10550]]

do not think anybody can reasonably conclude that.
Judges sometimes have to be involved in emotional decisions. If
people want to march through Jewish communities holding the Nazi flag,
that is horrible, but under the law that is allowed on certain
occasions.
The second case is about the term ``homosexual lifestyle.'' It was a
custody case, and he was in an appellate review situation. That term
was used in the underlying decision by the judge in terms of custody,
but that term has been used in many other cases throughout the country
in different jurisdictions.

I guess my question is, do you take these two cases, where he
concurred, to say there is something wrong with him? Did he do
something out of the mainstream of the law? And does it show that he,
Judge Southwick, is somehow not the type person you would want to sit
in judgment of your case or your family?
I think what we are doing to him is incredibly unfair. There is no
real evidence at all this man, as a person, harbors animosity against
one group versus the other. Quite to the contrary, from everything I
see in the record, he has been a very decent, scholarly man who has
applied the law in an admirable fashion.
So I wish we could allow an up-or-down vote on this fine fellow.
I will yield for a question.
Mr. DURBIN. Mr. President, if the Senator from South Carolina will
yield for a question.
Mr. GRAHAM. Yes.
Mr. DURBIN. Under the previous administration of President Clinton,
there was considerable controversy in the Judiciary Committee about
whether President Clinton's nominees would receive a hearing and a
vote. In scores of instances, nominees were given neither.
Can the Senator from South Carolina put in the Record now whether
Judge Leslie Southwick was given a hearing before the democratically
controlled Senate Judiciary Committee?
Mr. GRAHAM. I believe he was, yes. I believe so.
Mr. DURBIN. I say to the Senator, he did receive such a hearing.
Mr. GRAHAM. Yes.
Mr. DURBIN. I attended the hearing. I thought it was very fair at
allowing both parties to ask Judge Southwick questions.
Mr. GRAHAM. All right.
Mr. DURBIN. Since the sense-the-Senate resolution before us suggests
Judge Southwick's name be removed from the Senate Judiciary Committee
and brought directly to the floor, I wish to ask the Senator from South
Carolina, has there been any effort by any Democrat on the committee to
stop Senator Specter or any Republican from calling Judge Southwick's
name for a vote in the committee?
Mr. GRAHAM. As I understand it, the problem with Judge Southwick is
that it appears there has been some effort to try to get the
Mississippi Senators to nominate someone else. And there has been the
suggestion he could be a district judge but we want someone else to be
the court of appeals nominee. I do not think that is a process we
should engage in. So there are a lot of politics behind this
nomination. We should not allow that to happen. We should not basically
hold hostage the ability of the Senators from Mississippi and the
President to put someone forward. If we think they are not qualified,
vote them down. But playing politics, trying to change the nominating
process, I do not think is kosher. And I think that is what is going
on.
Mr. DURBIN. My question directly is this: Is the Senator aware of any
effort to stop Senator Specter or any Republican Senator from calling
Judge Southwick's nomination for a vote in the Senate Judiciary
Committee?
Mr. GRAHAM. No. But I am aware of an effort to get Judge Southwick
replaced with another person more acceptable to the Democratic majority
and, basically, to take away from the President the ability to nominate
a well-qualified person for this slot and, basically, neutralize the
two Mississippi Senators, who I think have chosen wisely. I think that
is politics that is dangerous for us to play, and I wish we would not
do it.
Mr. DURBIN. I am going to ask the Senator to yield for a question. I
see Senator Leahy has come to the floor.
I can say for the record--he can back me up--not only was Judge
Southwick given a hearing--which many nominees in the previous
administration were not given a fair hearing, I believe; and I think
all present would say--there has been no effort to stop Senator Specter
or any Republican from calling this nomination for a vote.
I wish also to ask the Senator from South Carolina, is he aware of
the fact that the only African-American Congressman from the State of
Mississippi, the Magnolia Bar Association, which represents most
African-American attorneys in Mississippi, and the major civil rights
group have expressed their opposition to the nomination of Judge
Southwick?
Mr. GRAHAM. Yes, I understand there is some opposition from African-
American elected officials. What I would say to that is, being a son of
the South, I am very sensitive to all of this. I have lived all my life
in South Carolina, and I understand the sins of the past. They are very
real. I can remember growing up. My dad owned a bar where African
Americans came into our bar and they had to buy their products to go. I
remember that very well as a young man. I see things changing for the
better, and we have a long way to go.
But what I see here, I say to my good friend from Illinois, is a man
who has lived his life very well, who has been part of the solution,
not the problem, who has never used the robe to impose arbitrary
justice, who is trying to be a constructive member of the Mississippi
judicial community, who has worked hard to make something of himself,
and he is being accused of something he is not.
I do not care where the criticism comes from. What I am going to
evaluate is what the facts are about this man. This is a good man, who
has been a good judge, who is well qualified, and who is being unfairly
labeled based on two cases that are being turned upside down. We are
going to ruin the judiciary if we continue to play this game.
Mr. LEAHY. Mr. President, will the Senator yield for another
question?
Mr. GRAHAM. Absolutely.
Mr. LEAHY. Mr. President, is the Senator aware of the fact that,
formerly, when Judge Southwick was on the calendar as a nominee to be a
district judge--Republicans were in charge--that when he was up for a
vote, agreed to by the Democrats, he did not get a vote because of a
Republican objection to a slate of judges? Is he aware of that?
Mr. GRAHAM. No, I was not. It is my understanding there was no
objection on your side about him being a district court judge. Is that
correct?
Mr. LEAHY. To answer that question, he was voted out for a district
court judgeship, an entirely different type of judgeship than a court
of appeals judgeship. It was in a package to be confirmed, I guess by
unanimous consent, with the Republicans in leadership, and a Republican
Senator from Kansas objected to one of the nominees, and, of course, it
brought down the package.
If I understood the Senator correctly, he was worried about political
actions. Was he aware--I know he was not able to make a couple recent
markups of the Senate Judiciary Committee, although he is a member. Is
he aware of the fact that Mr. Southwick is on the agenda for tomorrow's
markup?

Mr. GRAHAM. Yes, I believe I am aware of that.
Mr. LEAHY. Was he aware of the fact that he was taken off the agenda
earlier at the request of the Republicans?
Mr. GRAHAM. Yes, I am, because it is my understanding, if I could
reclaim my time--and I am sorry to run over, I say to my good friend
from Ohio--here is what I think is happening. I think everybody was OK
with him being a district court judge, except maybe somebody on our
side, and if the problem with this man is he has associated himself in
a way that disqualifies him because of a racial problem, why should he
be a district judge? If his problem is that he is against people
because of sexual orientation unfairly, why would he ever be a district
judge? So the point is that if he was good enough for a district judge
based on his qualifications, why shouldn't we give him an up-or-down
vote in a fair way in terms of the court of appeals?
So I think what is going on here is that we are trying to replace the
discretion of the President and the two

[[Page S10551]]

Senators from Mississippi to play with a court of appeals nomination of
Mississippi in a way that will come back to haunt all of us, and I just
wish we wouldn't do it. Give this man an up-or-down vote on the floor.
Mr. LEAHY. Mr. President, if the Senator would yield on that point,
when the Republicans were in charge of the responsibility of bringing
forth his record, they never brought forth either the sexual or the
racial issues that have been raised when he was up for district court
judge. But we will discuss this tomorrow. I hope the Senator will be
able to join us at the markup tomorrow. We have had a couple of
occasions when the President's nominees for judges have been on our
agenda and Republicans did not show up to make a quorum. I don't know
if this helps to keep their numbers--I remind the Senator, however,
that with the Democrats in charge, the time the Democrats have been in
charge, President Bush's judges have been confirmed at a far more rapid
pace and in greater numbers--in greater numbers--than they have been
under a Republican-controlled committee or Senate.
Mr. GRAHAM. Mr. President, we will be there at the committee
tomorrow, and I will yield the remainder of my time so we can get on
with other business.
The PRESIDING OFFICER. The Senator from Montana is recognized.
Mr. BAUCUS. Mr. President, we now have had three speakers from the
Republican side of the aisle, three in a row, so I ask unanimous
consent that the following speakers be recognized: Senator Harkin
immediately, and following Senator Harkin, Senator Cantwell will speak,
and that would be the request at this point.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. BAUCUS. I thank the Chair.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. HARKIN. Mr. President, in the decade since it was first
authorized, the Children's Health Insurance Program has been an
extraordinary success story. It has reduced the number of uninsured
low-income children by a third, providing basic health insurance to 6.6
million children whose parents cannot afford private insurance but who
do not qualify for Medicaid.
In my State of Iowa, the Children's Health Insurance Program has
brought health insurance to nearly 50,000 children. Think about that:
50,000 kids who otherwise have had no health insurance have had access
to regular checkups and prompt treatment of illnesses and injuries. By
any measurement, this is a stunning success.
Let me introduce to my colleagues one of those 50,000 success
stories. Her name is Jenci Ruff. She lives in Knoxville, IA. When she
was in the third grade, she began having trouble seeing the blackboard.
The school nurse recommended that she have her eyes tested, but her
parents couldn't take her to a doctor; they were living paycheck to
paycheck; they had no health insurance. By fourth grade, Jenci still
couldn't see the blackboard and she began having headaches.
Fortunately, Mrs. Ruff learned about the Children's Health Insurance
Program. She enrolled Jenci and her little brother. Jenci was referred
to an eye specialist and received treatment. A year and a half later,
her vision has greatly improved and her headaches have gone away. Mrs.
Ruff believes that the treatment made possible by the Children's Health
Insurance Program saved her daughter from going blind. In addition,
Jenci's brother, prior to starting school, was able to get the
necessary shots and physicals he needed.
As Mrs. Ruff told the Des Moines Register:

Before, Jenci was having such a hard time to get through
her reading. Her grades have improved. Her attitude about
school has improved. But if she hadn't had this program--

The Children's Health Insurance Program--

we never would have made it to a specialist.

I am very happy for Jenci Ruff and her brother and her family. But I
have to ask, Don't we owe it to all of America's kids? Surely, in a
humane, decent society, no child should go uninsured. No child should
go without regular checkups and prompt treatment of illnesses and
injuries.
That is why it is incomprehensible--incomprehensible--to me that
President Bush is pledging to veto this bill because it would extend
coverage of the CHIP program to too many kids. How could we extend it
to too many kids? Instead, the President proposed $4.8 billion in
additional funding over the next 5 years. That is less than what is
needed just to maintain current enrollments. According to the
Congressional Budget Office, the President's proposed funding would cut
1.4 million children and pregnant women from the Children's Health
Insurance Program. How could anyone say that Jenci Ruff should have
been cut from the children's health program? It saved her. It saved her
from going blind. Yet we are told we don't have the money for this?
Nonsense. Just think what it would have cost society if Jenci had gone
blind, God forbid. What would the cost to society have been for her
lifetime of special education, special schools, seeing-eye dogs, and
all of the other things? How much more productive is she going to be
now? Talk about penny wise and pound foolish.

The President just doesn't get it. Sometimes, when people are born
with a silver spoon in their mouths and they have had all the
accoutrements, they have had all the wonderful hospitals and doctors
all their lives, they somehow--and I don't say this of everyone, but
some people just can't imagine that everyone is not like them. Well,
there are a lot of people who do not have the kind of wherewithal you
may have had growing up.
So it is not just a public policy choice. I think the choice we have
is a very moral choice: Do we go forward and extend health insurance to
more kids from low-income families or do we cut these children from the
rolls, condemn them to a childhood without checkups, without decent
health care, without necessary medical treatment--that is, until they
show up in the emergency room.
We all know too well what it means when a child does not have health
insurance, when they don't even have access to basic medical care.
Earlier this year, the Washington Post reported on 8-year-old Deamonte
Driver of Prince George's County, MD. Deamonte was suffering from an
abscessed tooth, but his mother could not afford to take him to a
dentist. Eventually, the abscess spread to Deamonte's brain. He was
taken to an emergency room, but tragically, after two operations and
more than 6 weeks of hospital care costing upwards of $250,000,
Deamonte--this young guy right here, Deamonte Driver--died. He died
from an abscessed tooth. In the 21st century in the United States of
America, this child died because he had an abscessed tooth because he
is so low-income, he didn't have health care and mom didn't have any
money. Not until he got so sick that they rushed him to the emergency
room, and he died.
Why in the world would President Bush want to cut more than a million
children from the rolls of the Children's Health Insurance Program and
put them in jeopardy--the kind of jeopardy that took Deamonte's life?
What is the real cost of denying children access to basic health care?
Well, in the case of Deamonte Driver, if you want to know just in money
terms, a quarter of a million dollars in emergency hospital bills, and,
most importantly, it deprived Deamonte of his life and a very happy
future.
So you compare the positive fate of Jenci Ruff, who is covered by the
Children's Health Insurance Program, to the tragic fate of Deamonte
Driver, who was not. This is not just a tale of two kids and two very
different outcomes; it is the tale of two choices, the two choices we
have to make. So we must make the right choice. Surely some things are
beyond partisan disputes and ideological obsessions. Surely we can come
together here to support extending health insurance to more kids in
low-income families.
Some have argued that the President's pledge to veto this Children's
Health Insurance Program is the death knell of compassionate
conservatism. We have all heard about compassionate conservatism. Well,
I would just point out that the President's threat of a veto is
disappointing. But I would like to note on the positive side that this
bill enjoys the strong support of a large number of conservatives,
moderates, and liberals here in the Senate and in

[[Page S10552]]

the other body, and it has no more outspoken champion than my
distinguished senior colleague from the State of Iowa, Senator
Grassley, who I see just arrived on the floor. So, as I said, this cuts
across ideological lines. This is no conservative, liberal, moderate,
up, down, sideways kind of issue; it is a basic moral issue that we
have to confront.
I would say on behalf of my colleague from Iowa and so many
Republicans who are supporting the Children's Health Insurance Program
that compassion and common sense is alive and well with these
Republicans. I applaud them for it. With their support, we intend to
move forward with a bill that is not only strongly bipartisan but that,
according to a recent Georgetown University poll, is supported by 9 in
10 Americans, including, I might add, the poll said 83 percent of self-
identified Republicans. So again, this is not a partisan issue. Now, it
may be an issue with this President and his ill-conceived notions, but
it is not a partisan issue.
Lastly, this program has been a Godsend to my State of Iowa. As I
said earlier, 50,000 kids in Iowa are covered who obviously would not
have been. We call it the HAWK-I Program in Iowa, the Healthy and Well
Kids in Iowa--the HAWK-I Program. The top income limit for Iowa
families is 200 percent of the Federal poverty level, which comes to
about $34,000 for a family of three, and, along with Medicaid, provides
primary and preventive services to 3 out of every 10 Iowa kids. Yet,
even with these programs I am talking about--Medicaid and HAWK-I--even
with those two, an estimated 30,000 to 55,000 Iowa children remain
uninsured. With the new funding provided in this bill, Iowa could cover
nearly 15,000 more children over the next 5 years.
Expanding this program to cover more low-income kids is not only the
right thing to do, it is the smart and cost-effective thing to do. We
know when children get access to preventive and primary care services,
good things happen. Kids get better health outcomes. They stay out of
the emergency room. They get better grades. They do better in school.
One dollar spent on the CHIP program can save many more dollars in
health care expenses.
When an asthmatic child is enrolled in the program, the frequency of
attacks declines by 60 percent and the likelihood that they will be
hospitalized for that condition declines by more than 70 percent. If
anybody has been paying attention, you know that kids' asthma has been
on a huge increase in this country, especially among poor kids. Well,
this is one way of keeping them out of the hospital. It is providing
them with this kind of preventive coverage.
I might also add that the Children's Health Insurance Program is
vitally important to rural Americans--rural States such as Iowa. The
simple fact is that rural kids are more likely to be poor. In the most
recent survey, 47 percent of rural children--47 percent--live in low-
income families. So they are not only more likely to be poor, their
parents are less likely to have any access to an employer-based health
insurance program. So in the absence of the CHIP program and Medicaid,
millions of low-income rural families have no other health insurance
option, period. They live in small towns. They work for small
employers,--mom-and-pop places that employ two or three or four or five
people. They don't have the wherewithal to provide employer-based
health insurance. They don't pay a lot of money. But these people are
hard-working. They go to work every day and they work hard; they just
don't make a lot of money. They live in a rural area, so they don't
qualify for Medicaid, but they don't have enough money to buy health
insurance. That is why this program is so important to rural America.
Experience shows that rural children are also difficult to enroll in
the Children's Health Insurance Program, even when they are eligible.
Again, low-income parents are often required to travel long distances
to enroll their kids. In addition to high travel costs, there are
language and sometimes cultural barriers. For these reasons, I am
pleased that this bill would establish a new grant program to finance
outreach and enrollment efforts targeted to rural areas.
So not only has the Children's Health Insurance Program been a great
success, it is more important today than ever. In the decade since the
program was created, we know the cost of insurance has skyrocketed and
the number of Americans covered has fallen dramatically. But this has
been a safety net for millions of low-income American families.
The bill before us would maintain coverage for the 6.6 million
children currently covered and would extend coverage to more than 3
million more low-income, uninsured children over the next 5 years. That
is a good and noble goal.
Obviously, if I had my druthers, I would say we ought to cover all
kids--every child in America whose family does not qualify, does not
have employer-based insurance, and whose income is such that they
cannot afford private insurance. They ought to be covered by this
program. They said this would cost $50 billion over the next several
years. Well, then they made an agreement to make it $35 billion instead
of $50 billion. OK, fine. I understand compromise around here. But that
doesn't remove the fact that, even with this bill, millions of low-
income kids will still be left without health insurance coverage. That
is our task--to fill that gap. We may not get it done this year, but at
least we can get this done this year and, hopefully, we can finish the
job next year and cover every kid in America with health insurance.
It is time to put partisanship, ideology, and politics aside and pass
this bill. Hopefully, the President will see more clearly his
obligation to sign it and not veto it.
The PRESIDING OFFICER. The Senator from Washington is recognized.
Ms. CANTWELL. Mr. President, I rise to talk about the Children's
Health Insurance Program and why we need to reauthorize the program
that is about to expire in September. I thank Chairman Baucus and
Senators Grassley, Rockefeller, and Hatch for their countless hours of
meetings before the Senate Finance Committee, which met to mark up this
bipartisan package. The fact that the bill passed out of committee with
such a bipartisan effort shows people are working on both sides of the
aisle to make children's health care a priority.
While my colleagues have talked a lot about what the administration
has threatened to do in vetoing this legislation, in fact, as my
colleague from Iowa mentioned on the floor, the President's own budget
request doesn't put enough money on the table to take care of those
currently enrolled in the Children's Health Insurance Program. In a
bipartisan effort in the Senate, we are working across the aisle to say
we want to do more, we want to cover about 3.2 million more children.
I thank my colleagues and their staff for coming up with this
comprehensive bill and moving us further down the way to covering more
children in America, as it is such a priority.
Some of my colleagues have mentioned why this is such important
timing, and many have mentioned the fact that the bill's authorization
is expiring in September. I think there is a more important reason. The
important reason is we are seeing the cost of health care continue to
rise; the fact that premiums have doubled, probably, in the last 5 to 6
years; the fact that insurance now is somewhere between $12,000 and
$14,000 a year. A family who is at an income of $40,000 a year for a
family of four is finding it very hard to keep pace. Those premiums may
have doubled, but I guarantee you their wages and salaries have not
doubled. So more and more people are finding themselves in the
unfortunate situation of not being able to provide health care for
their children.
I can tell you, in talking to people from all over Washington State,
there is nothing more concerning to the parents than the health of
their child and nothing more scary than to think they may not be able
to get the health care attention their child needs.
So for us, we have a choice--a very smart choice. This is a cost-
effective bill. If you think about the costs of providing children's
health insurance under this proposal, we are helping families who
cannot afford private insurance, or cannot find it available in the
marketplace, or maybe their employer is not providing it. Now, under
this program, with State and Federal

[[Page S10553]]

matching dollars, these families can provide health insurance for
roughly $2,000 a year per child--maybe a little more or a little less,
in some instances, for those currently on the program to the new
enrollees.
Think about that. Think about the fact that if you don't have health
insurance and a child is delayed in getting that health care or has to
wait until the last minute to go into an emergency room, I guarantee
the cost of a child's visit to an emergency room is probably going to
be at least $3,000. The fact that we can make this prudent investment
for 3.2 million more children; not only is this about their health and
safety for the future, but it is about a plan that helps us in making
sure we have an efficient health care system, giving those children
their due need.
Too many families, as I said, are being forced to go without this
coverage. What does that mean? We talk about preventive care and
maintenance care. It means that these children are going without
regular checkups, that they are missing more school than other
children, and that they have to wait in the emergency room to get an
answer about something that is a basic illness. It means that if simple
infections--such as an ear infection or cavities or asthma or
diabetes--go untreated and they spiral out of control, that child may
fall further and further behind in their academic career. I believe no
child should be forced into a special education program because their
health care needs haven't been provided for.

This bill provides better coverage so we can treat things such as
injuries and infections, detect far worse things such as chronic
illnesses and make sure we are managing the conditions of children
before they get out of control.
I know it is upsetting to my colleagues to read things such as:
Uninsured children are four times more likely to delay their health
care or that uninsured children are four times more likely to go
without a doctor visit for 2 years or that uninsured children admitted
to hospitals due to injuries are twice as likely to die while in the
hospital as their insured counterparts.
Those are horrible statistics that point to the dilemma of not
providing health care coverage for children.
I know my colleagues have been out here on the floor debating this
issue as it relates to fairness and geography. I tell you, no child
knows they are somehow prohibited from getting access to health
insurance because of geography. Nor should the Senate make the mistake
in thinking we are making geographic choices.
This bill is about flexibility. It starts with the flexibility of
individual States because this is a partnership between the States and
Federal Government in deciding what percentage of the Federal poverty
line they are going to cover.
You can see on this chart the States in white have been more
aggressive in covering a higher percentage of the Federal poverty line,
and those in the gold color are obviously below 200 percent of the
Federal poverty line. It doesn't take a genius to figure out why
certain States are more aggressive or active in covering their area. If
you look at the income and cost of living in these areas, they are
challenged by what it takes to maintain a household, to put their
children in school, and to take care of their health care needs. For
example, there are parts of the country such as New Jersey, which the
Presiding Officer is from. If you look at what it takes to provide the
same goods and services in New Jersey and compare that with someplace
like Arkansas, you are talking about a $13,000 difference in what it
costs to provide the same services. In Little Rock, it may cost $30,000
for those goods and services, compared to $43,000 in New Jersey. That
is why this flexibility is so important in the program. The fact that
we allow States to determine its costs and we match that with Federal
dollars.
The second thing we have not focused enough on is the fact that we
also have disparity in insurance costs. Look at what it costs to
provide insurance. For example, it is expensive to provide health
insurance in Seattle, which costs about $13,000 a year. If you look at
New York, it is $16,542. So the notion that somehow New York or New
Jersey are getting a better deal because they live in a high-expense
area of the United States and somehow, even with that extra cost of
insurance, we should prejudice legislation from serving those children,
I say that is a mistake. Every child in America who is covered by this
health insurance program will be healthier, and every child who is
covered and healthy will not only be a more contributing citizen to our
society, but also we are going to reduce our own health care costs in
the future.
So it is a wise and prudent plan to have such diversity in this
proposal. I ask my colleagues, before they come out and look at
formulas and offer amendments that basically cut States from having the
flexibility in these formulas, to consider the geographic disparity and
the challenges those individual States face.
I believe the Children's Health Insurance Program provides a critical
backstop to families. They would rather be in a situation where they
could provide the health insurance and care, I am sure, for themselves.
I have certainly met Washingtonians who have given up their own health
insurance to provide health insurance for their children.
We need to prevent the number of uninsured children in this Nation
from growing, and this bill, the Children's Health Insurance Program,
should be reauthorized and expanded to make sure we do stop the number
from growing and that we attach our principles of covering at least 3.2
million now and, as we see brighter budget days coming back, covering
the rest of the children in America.
I yield the floor.
The PRESIDING OFFICER. The Senator from New York is recognized.
Mrs. CLINTON. Mr. President, I thank my colleague from Washington for
her usual very thorough and persuasive statement on the floor about the
need for flexibility in this important program and the recognition that
health care, similar to everything else, costs differently depending
upon where you are in the country. I thank the Senator from Washington
for reinforcing that important point.
The larger point is that today, in this Congress, we are on the verge
of providing the greatest expansion of health coverage for our children
since the creation of the Children's Health Insurance Program a decade
ago. I believe--and I don't imagine anybody in this Chamber would argue
with this belief--that every child deserves a healthy start in life.
Certainly, we try to provide that healthy start for our own children,
and we give a lot of lip service to the idea that we should provide it
for all children. Yet far too many children in our Nation--more than 9
million--do not have health care.
I was very proud to help create the State Children's Health Insurance
Program during the Clinton administration, working on this legislation
during my time as First Lady. After the bill passed, I worked to get
the word out to try to help more children and their parents understand
what this new program could mean for them and encourage them to sign up
in the first few years. In the Senate, I have continued that effort,
fighting to ensure that health care for children has the priority in
our budget that it deserves.
Today, thanks to the work of so many, CHIP provides health insurance
for 6 million children. In New York alone, almost 400,000 children
benefit from this program every month. With the legislation that
Chairman Baucus and Senators Grassley, Rockefeller, and Hatch helped to
craft, an additional 50,000 children in my State of New York will have
access to health insurance coverage.
This legislation will also help enroll many of the 300,000 children
in New York who live in families who are already eligible because their
families make less than $52,000 a year, 250 percent of the poverty
level for a family of four.
In total, across our country, 3.2 million children who are uninsured
will gain coverage. That will reduce the number of uninsured children
by one-third over the next 5 years.
If we can afford tax breaks for companies that ship jobs overseas and
tax cuts for oil companies that are making record profits, I certainly
think we can find it in our hearts and our budget to help cover
millions of children who deserve a healthy start.
I want to be clear. If the President vetoes this bill, he will be
vetoing

[[Page S10554]]

health care for more than 3 million children. And, once again, the
President will have put ideology, not children, first.
Earlier this year, I was proud to introduce legislation with
Congressman John Dingell to reauthorize and expand CHIP, and I am very
pleased that a number of the ideas in our bill are included in this
legislation, such as cutting the redtape and bolstering incentives to
get eligible children into the program.
The legislation also improves access to private coverage and expands
access to benefits, such as mental health and dental coverage.
This is so important, and I applaud the Finance Committee, under
Chairman Baucus's leadership. Mental health and dental coverage are too
often left out when we talk about health care.
Not far from where I am standing, in the State of Maryland last year,
a young boy, Deamonte Driver, had a toothache. His mother sought help
for him to get dental care. She called dentists, but they were not
taking any more children on Medicaid or on CHIP. Then she got help from
a legal aid group that helped poor families. They called around. I
think they called 27 or 28 dentists who said: Look, our quota for poor
kids is filled.
Deamonte Driver's toothache turned into an abscess, and the abscess
burst, infecting his bloodstream, and he ended up in the hospital where
doctors valiantly tried to save his life from the brain infection that
resulted from the abscessed tooth that had not been treated. This young
man died.
When one thinks about the loss of a child over something that started
as a toothache, it is heartbreaking, but it is not by any means an
isolated case. At the end of Deamonte's life, the State of Maryland and
the U.S. Government ended up paying hundreds of thousands of dollars
for emergency care, for intensive care, for life support, to no avail,
for want of $80 to $100 to find a dentist who would care for Deamonte.
I commend the authors of this bipartisan bill for their work and for
bringing forward a practical, fiscally responsible compromise that will
allow us to reauthorize this important program and expand coverage. I
am eager to see that it is signed into law.
I am disappointed, however, that the bill we are considering this
week fails to include the Legal Immigrant Children's Health Improvement
Act, which I introduced with Senator Snowe. Senator Snowe and I have
been working on this legislation for a number of years. This bipartisan
bill would give States the flexibility to provide the same Medicaid and
CHIP coverage to low-income legal immigrant children and pregnant women
as is provided to U.S. citizens. I underscore that. We are talking
about legal immigrant children and legal pregnant women.
I believe we should provide this flexibility to States because the
current restrictions prevent thousands of legal immigrant children and
pregnant women from receiving preventive health services and treatment
for minor illnesses before they become serious. Families who are unable
to access care for their children have little choice but to turn to
emergency rooms, and this hurts children and pregnant women, plain and
simple.
I urge my colleagues to support my amendment to lift the ban on
Medicaid and CHIP coverage for low-income legal immigrant children and
pregnant women.
I also am disappointed that some of my colleagues have expressed
concern about States, such as New York, New Jersey, and others, that
have chosen to cover children above 300 percent of the poverty level.
The legislation we are considering on the floor of the Senate would
allow New York to continue doing this and receive the CHIP matching
rate. We should not punish children and their families who live in
high-cost areas and who need health care coverage.
I encourage my colleagues to vote against any effort to undermine the
extension of health care in high-cost States where it costs more, as we
heard from Senator Cantwell in her statement on the floor, to provide
the same coverage and treatment one would get elsewhere in our country.
I am proud we are debating a bill to expand health care to 3.2
million children, but the fact is, there should be no debating the
moral crisis of 9 million children without health care, no debating the
moral urgency of strengthening our health care system for children and
all Americans.
Ultimately, the answer will be in a cost-effective, quality-driven,
uniquely American program that provides health care to every single
man, woman, and child in our country. But until we get to that point,
it is imperative that the Congress pass this bill before we go out for
recess and send it to the President, with the hope that he will sign it
into law.
I also wish to mention another issue we urgently need to address.
Last week, the bipartisan Commission on Care for America's Returning
Wounded Warriors, chaired by former Senator Bob Dole and former
Secretary of Health and Human Services Donna Shalala, issued its final
report on the need to reform the medical care that our troops and
veterans receive.
The Commission found in an excellent report--it is not one of these
commission reports that just takes up a lot of space on the shelf. It
is very pointed, with six specific recommendations, and it found that
one of the most important ways to improve care for injured
servicemembers is to improve support for their families. That is why I
introduced a bipartisan bill, the Military Family and Medical Leave
Act, with Senators Dole, Mikulski, Graham, Kennedy, and Brown, to
implement a key recommendation of the Commission. We have offered this
as an amendment to the CHIP legislation.
The Family and Medical Leave Act was the first bill signed into law
under the Clinton administration. It came about because of a lot of
hard work, led by Senator Dodd in the Senate, and others, and it has
proven to be enormously successful, helping more than 60 million men
and women who try to balance the demands of work and family.

I believe it is time to strengthen the act for military families who
find themselves in a very difficult situation. They should be given up
to 6 months of leave to care for a loved one who has sustained a
combat-related injury.
Currently, these spouses, parents, and children can receive only 12
weeks of leave under the Family and Medical Leave Act. All too often,
this is just not enough time, as injured servicemembers grapple with
traumatic brain injuries, physical wounds, and other problems upon
returning from Iraq, Afghanistan, and elsewhere. In fact, 33 percent of
active duty, 22 percent of reservists, and 37 percent of retired
servicemembers reported to the Commission that a family member or close
friend had to leave their home for extended periods of time to help
them in the hospital. About 20 percent said family or friends gave up
jobs to be with them to act as their caregiver. This is a step that we
can take immediately that will make a real difference.
Many of us have been to hospitals in our own country--Walter Reed,
Brook Army Medical Center--and other places in the world, such as
Landstuhl in Germany, where we have seen our wounded warriors. There is
absolutely no doubt that having the support, assistance, and comfort of
a family member during that process when a young man or woman who has
served our country is brought from the battlefield to the hospital
makes a big difference in recovery and rehabilitation.
I think all of us agree that not only do our men and women in uniform
make tremendous sacrifices on our behalf, so do their families. As a
nation, we have a duty to provide them with the support they deserve.
Expanding access to health care for children and providing better
support for our military families comes down to basic values that we as
Americans hold dear. I think we all agree every child deserves a
healthy start and every man or woman who wears the uniform of our
country deserves more than words of support. The promise of America is
rooted in these values, and I am very proud to support the bipartisan
legislation expanding health care for children, and I urge my
colleagues to join me and Senators from both sides of the aisle who are
supporting our military families who are caring for those who have been
injured in service to our country.
Finally, we hope on the other end of Pennsylvania Avenue there will
be a

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change of heart; that the President will decide to sign this
legislation and relieve the burdens of ill health and inadequate access
to health care that haunt the lives of so many American families.
Mr. President, please support this effort in every way possible by
signing the legislation that will be sent to you.
I yield the floor.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I know Senator Hatch wishes to speak on
the underlying bill, the Children's Health Insurance Program. He is on
his way to the floor. In the meantime, I see the Senator from Michigan
is here, a very valuable member of the Finance Committee. She works
very hard. She would like to speak on this bill. I thank her for coming
to the floor. I urge the Chair to recognize the Senator from Michigan.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Mr. President, again, as I said when we first took up
this bill on Monday evening, I thank the chairman of the committee for
his passion in bringing us to this point, he and the ranking member,
Senator Grassley, as well as, of course, Senator Rockefeller with his
deep commitment, and Senator Hatch as well.
This is a truly bipartisan effort. It is the way we should be
legislating--coming together. It is a compromise. If I were writing a
bill by myself, I would add more dollars. There are Members on the
other side of the aisle who would, in fact, do less. But it is a real
compromise.
I start out today speaking to the fact that it is a compromise. As a
member of the Budget Committee, having worked with our chairman and
members very hard to produce a budget resolution that really does
reflect a new direction in values and priorities, I worked very hard to
have us achieve a set-aside of $50 billion for children's health care
in the budget resolution.
In my heart of hearts, that is where I want to be. I also know that
any significant expansion is a victory not only for us and for the
Senate but, most importantly, for children and their families.
I know there will be an effort to expand to the full amount that we
all wish to do--I think on this side of the aisle, certainly, that is
where we want to be, and our House colleagues have focused on that as
well. But I also know that we have a President of the United States who
shockingly has said that he will veto providing children's health care,
an expansion of more than 3.3 million children to receive health care,
children of working parents. The vast majority of them have a mom or a
dad working one job, two jobs, maybe three jobs trying to make ends
meet, but who can't afford health insurance, don't qualify for
Medicaid, but find themselves desperately wanting to make sure their
children have all that they need, as all of us want as parents.
So we are in a situation where the President of the United States has
indicated he does not share that view. His budget, in fact, is a budget
that he proposed to us that would cut children. It would cut children
who are currently being provided health insurance. It would eliminate
their health insurance. So on the Finance Committee, we came together
under very strong bipartisan leadership to find a common ground, the
middle ground, to be able to increase the number of children who
receive health insurance and be able to make sure that the 6 million
children who currently have health insurance are allowed to maintain
that insurance. We have come to a compromise, and it is a compromise I
support.

As we face a potential veto from this President, it is critical that
we have the strongest possible bipartisan vote coming from the Senate.
If in fact the President follows through and vetoes this, I hope we
will have enough votes to override that veto in a strong bipartisan
spirit, the spirit that brought us together originally when the
Children's Health Insurance Program was originally passed. I urge
colleagues to support the Finance Committee version and what we have
done as the best way to get us real health care expansion for children.
Then we will come back, and I will be right back as a member of the
Budget Committee next year, proposing again that we expand what we are
doing to make sure that every child who does not have health insurance,
whose family is working hard but doesn't qualify for Medicaid and
doesn't have the ability to get private insurance, has the health care
they need.
We have, I understand, another proposal in front of us, an amendment
that would take us backward. I understand Senator Lott has offered an
amendment that has actually been dubbed the CLIP amendment, instead of
CHIP--Children's Health Insurance Program--CLIP meaning ``Children
Losing Insurance Program.'' Again, we don't need anything that is going
to take us backward and have fewer children receiving health insurance.
I want to see us make a major commitment to universal health
insurance in the greatest country in the world so that everyone has the
opportunity to be able to receive the health care they need. We should
be striving to achieve nothing less than that.
The Lott amendment, first, will cut children's health care and take
us down the road of debating the number of policies individually that
Members may support, policies I find great concern about, and policies
that will actually increase the number of uninsured, such as expanding
the health savings accounts. I urge colleagues to oppose the Lott
amendment because it takes us in absolutely the wrong direction if we
want to cover children of low-income working families, and if we want
to make sure they have what they need to be able to grow up and be
successful in America.
I have also heard debate about the cost of this legislation, and it
is important to look at what we are talking about in terms of our
values and priorities when we debate any piece of legislation.
Everything we do here is about values and priorities. Right now, every
month, we are spending $12 billion in Iraq--$12 billion. Regardless of
how any one individual feels about the war in Iraq, we are spending $12
billion--not paid for, not a part of the budget--$12 billion a month.
This bipartisan effort to provide health insurance for more than 3
million more American children in this country is a cost of $7 billion
a year--a year; less than what we are spending in 1 month in Iraq. That
is the right value and the right priority. This is paid for, it is
responsible and, most importantly, it is the moral thing to do in the
greatest country in the world, in my opinion. This is not too much to
invest in the future generation of America.
Yesterday, the chairman and I, a number of us, had an opportunity to
be with a wonderful woman, Kitty Burgett, from Ohio, who spoke about
the importance of children's health care in her family. I know it was a
very moving experience to hear her, and I wanted to share her story. I
have certainly other stories from Michigan as well, but Kitty came to
the Nation's capitol to share what the Children's Health Insurance
Program has meant to her and to her family.
Kitty is a widow whose husband died in 1990, leaving Kitty and her
two young children without income or insurance. She had Social Security
survivor's benefits, but even that little income put her and her
children over the Medicaid eligibility levels, so they didn't qualify
for low-income health insurance because of their survivor benefits. She
started working but earned very little. Nonetheless, she purchased
insurance for her children, because like all of us who are parents, she
wanted to make sure her children had what they needed. She wanted to
make sure if they were sick, she was able to care for them with health
insurance. So she purchased that insurance, but the cost rose every 6
months, and she finally had to drop it because of the cost. That is an
uncommon story in America today.
Then along came the Children's Health Insurance Program. Kitty
immediately enrolled her children. She had a daughter who was 12. Her
son was a bit younger. Her daughter then began to develop problems,
and, ultimately, at age 15, was diagnosed with bipolar disorder. She
was ill. She was hallucinating and she had major mood swings--as those
of us who are familiar with that disease understand--from depression to
highs and hallucinations. She couldn't concentrate at school. The
Children's Health Insurance Program was there so Kitty could get her
daughter some help. It covered her medications and therapy and
eventually some new medicines that brought

[[Page S10556]]

her illness under control. Her daughter is now 22 years old. She is
married, she is working, and she is insured. She has an 18-month-old
daughter named Scarlet. Kitty says the Children's Health Insurance
Program kept her daughter from a lifetime of institutionalization, and,
instead, she is a productive, contributing member of society and a
loving mother to Scarlet.
That is what this is all about, giving people in America--parents,
the vast majority of whom are working--the ability to provide their
children with the health care they need so they can go on to be
successful, thriving, contributing adults in America.
I might also mention I am very pleased that the bill in front of us
expands the opportunity for what is called mental health parity, so
that if there is insurance provided, mental health care will be a part
of that. I congratulate Senator Kerry and Senator Smith, who have led
that effort to expand us into the area of more adequately covering
mental health care for children.
This program covers children all over the country. It is interesting
to note that there are more children uninsured in rural areas than in
urban areas. This will make sure that, in fact, all of the children who
qualify under this program are able to receive the health care they
need. Right now, in Michigan, we have about 60,000 children who are on
the Children's Health Insurance Program and another 90,000 who are
eligible--who qualify right now under the program we wrote--but because
funds aren't available for outreach, funds aren't available to do what
is necessary, we are not able to provide those families, those
children, with health insurance. This bill goes a long way to making
that happen.

I have heard so many stories from Michigan, and it touches your heart
when you think about the way families are struggling to be able to care
for their children at the same time costs are going up at every turn.
We have folks who are working harder than ever: They turn around and
gas prices go up; they turn around and their insurance premium goes up;
they turn around again and look at the cost of college, and those costs
have gone up. We addressed the cost of college last week. Those things
go right to middle-income families--student loans and Pell grants and
those programs that allow more people to have the opportunity to go to
college and send their children to college.
The reality is that on every side families are feeling squeezed--
working harder and costs going up and up and up. Children's health care
is one way, another critical way, we can help families. I think of
Chad, a gentleman in Michigan. He and his wife have two young children.
He works for a small landscaping business with an ``off season'' of 3
to 4 months in the winter when he is not working. If the couple
purchased insurance through Chad's employer, it would be an additional
$300 a month, which for them is not affordable. Through MIChild, which
is our children's health program, both his sons are able to get the
inhalers they need for their asthma. How basic, in America, in the
greatest country in the world, to make sure that children can handle
their asthma.
I also heard from Pam, who is a full-time preschool teacher and
mother. Her monthly premiums of $384 a month, or over $4,500 a year,
take up over one-fifth, or 20 percent, of her pay. Through the MIChild
program, she was able to get the specialized care she needed for her
youngest daughter, who suffers from a rare seizure disorder.
I could go on and on, but I will not. We all have stories of families
who are wanting the best for their children, who want the American
dream. They do not want to go to bed at night and have to say, please,
God, don't let the kids get sick, don't let something happen tonight or
tomorrow because I don't know what I am going to do--we don't have
health insurance. We are the greatest country in the world and there is
no excuse for any family finding themselves in that situation.
We have in front of us a bill that is a true bipartisan compromise.
For me, it is a step in the right direction to universal care, and an
opportunity to come up with a uniquely American way to provide
universal health care for everyone in America. I believe health care is
a right, not a privilege, in the greatest country in the world, and we
should act like that. This important legislation is part of keeping
that promise.
We started down the road with covering children whose parents are
working, who do not qualify for low-income help through Medicaid
because they are just above that limit, but aren't able to get the
insurance they need for their families. We have children who qualify
today but, because the resources aren't there, they are not able to get
the health insurance they need. This legislation will say that more
than 3 million more children--families--in this country will not have
to go to bed at night worrying about whether their kids are going to
get sick tomorrow.
Finally, I say again that this is about values and priorities. Always
it is about values and priorities. This is the right thing to do. It is
the moral thing to do. When we find ourselves in the situation of
spending $12 billion a month on the war in Iraq, not paid for, and in
front of us we have the ability with $7 billion a year to cover over 3
million more children with children's health care, the 6 million who
have insurance now and over 3 million more in America, responsibly done
and paid for, this is the right thing to do. It is the moral thing to
do.
This is a great success story, and I am very hopeful we will see a
very strong bipartisan vote when this comes before the Senate for a
vote.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from North Carolina.
Mrs. DOLE. Mr. President, I ask unanimous consent that the pending
amendment be temporarily set aside in order that I may offer an
amendment.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered. The Senator may proceed.

Amendment No. 2554 to Amendment No. 2530

Mrs. DOLE. Mr. President, I call up amendment No. 2554, now pending
at the desk, and ask for its immediate consideration.
The ACTING PRESIDENT pro tempore. The clerk will report.
The legislative clerk read as follows:

The Senator from North Carolina [Mrs. Dole] proposes an
amendment numbered 2554 to amendment No. 2530.

Mrs. DOLE. Mr. President, I ask unanimous consent that the reading of
the amendment be dispensed with.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The amendment is as follows:

(Purpose: To amend the Congressional Budget Act of 1974 to provide for
a 60-vote point of order against legislation that includes a Federal
excise tax rate increase which disproportionately affects taxpayers
with earned income of less than 200 percent of the Federal poverty
level)

On page 217, after line 25, add the following:

SEC. __. BUDGET POINT OF ORDER AGAINST LEGISLATION THAT
RAISES EXCISE TAX RATES.

Title III of the Congressional Budget Act of 1974 is
amended by adding at the end the following:

``POINT OF ORDER AGAINST RAISES IN EXCISE TAX RATES

``Sec. 316.  (a) In General.--It shall not be in order in
the Senate to consider any bill, resolution, amendment,
amendment between Houses, motion, or conference report that
includes a Federal excise tax rate increase which
disproportionately affects taxpayers with earned income of
less than 200 percent of the Federal poverty level, as
determined by the Joint Committee on Taxation. In this
subsection, the term `Federal excise tax rate increase' means
any amendment to any section in subtitle D or E of the
Internal Revenue Code of 1986, that imposes a new percentage
or amount as a rate of tax and thereby increases the amount
of tax imposed by any such section.
``(b) Supermajority Waiver and Appeal.--
``(1) Waiver.--This section may be waived or suspended in
the Senate only by an affirmative vote of three-fifths of the
Members, duly chosen and sworn.
``(2) Appeal.--An affirmative vote of three-fifths of the
Members of the Senate, duly chosen and sworn, shall be
required in the Senate to sustain an appeal of the ruling of
the Chair on a point of order raised under this section.''.

Mrs. DOLE. Mr. President, nearly every Senator in this body agrees we
should not increase the tax burden on low-income individuals and
families. Unfortunately, the bill before us would do that by raising
the tobacco tax by 156 percent. No other Federal tax hurts the poor
more than the cigarette tax, according to the Tax Foundation. Of

[[Page S10557]]

the 20 percent of the adult population that smokes, around half are in
families earning less than 200 percent of the Federal poverty level.
Furthermore, a massive and highly regressive tax increase on an already
unstable product is a terribly irresponsible way to fund the State
Children's Health Insurance Program.
My amendment is very simple. It creates a 60-vote point of order
against legislation that includes a Federal excise tax increase that
would disproportionately affect low-income individuals, defined as
taxpayers with earned income less than 200 percent of the Federal
poverty level.
A majority of my colleagues say they oppose increasing the tax burden
on lower income families, or even oppose tax increases outright. I,
therefore, would expect that this commonsense amendment would receive
tremendous support in the Senate.
I ask unanimous consent that my amendment now be laid aside, with the
understanding we will return to it at a later time.
I yield the floor.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The Senator from Montana is recognized.
Mr. BAUCUS. Mr. President, I understand the Senator from
Massachusetts, Mr. Kerry, is about to speak. As he gets ready to speak,
there are a couple of points I wish to make. We are still working the
numbers on the McConnell-Lott amendment. I wish to point out a couple
of points.
No. 1, the McConnell-Lott amendment, although it is advertised to do
this, does not put kids first. Despite prohibiting coverage of
nonpregnant adults and limiting all State income disregards, this
legislation does not cover substantial numbers of additional children.
On the surface, they think they may cover 700,000 additional kids,
but we are trying to get the numbers from CBO and trying to determine
the actual effect; whereas, the Finance Committee bill the CBO has
analyzed very carefully it will cover an additional 4 million children.
About two-thirds of those will be on Medicaid, and roughly a million
will be under the Children's Health Insurance Program.
The big difference is the different effects between the Finance
Committee-passed bill and the McConnell-Lott bill on uninsured
Medicaid-eligible children; that is, children today who are not on
Medicaid but are eligible--what is the effect of the two various
approaches on those low-income kids.
Again, I give the caveat we do not have all the actual language and
do not have all the numbers exactly crunched by CBO, but a first
analysis essentially looks like this. It looks basically like the
McConnell-Lott bill will not add many new kids to be covered under
Medicaid; whereas, the Finance Committee bill has about 1.7 million
children now not covered under Medicaid who will be covered.
It is complex legislation we are considering. This is a Children's
Health Insurance Program. But as we work to get more kids covered under
the Children's Health Insurance Program, by definition there are going
to be more kids also covered under Medicaid--that is children whose
income levels are so low they are covered under Medicaid as opposed to
the Children's Health Insurance Program.
There is a huge difference there. It looks like the McConnell-Lott
bill will not help the very low-income kids who are currently eligible
under Medicaid to be covered. In fact, the Finance Committee bill
covers at least five times more.
I might say a word about the so-called crowding out. Senators are
concerned this legislation will have the net effect of encouraging some
children, now under private health insurance, to drop their private
health insurance coverage to take advantage of the Children's Health
Insurance Program expansion. There are a couple of points about that.
No. 1, under the McConnell-Lott amendment, it looks like their so-
called crowd-out ratio is even more adverse from their perspective than
the crowd-out ratio under the Senate Finance Committee bill. I don't
wish to belabor the point. It is roughly the same, roughly 30 percent,
but their crowd-out rate is a little greater on a percentage basis as
to how many kids are there who will drop private health insurance for
the Children's Health Insurance Program. But theirs is no better in
fact a little worse, from that perspective.
Also, it is important and worth noting that when Congress passed the
Medicare Modernization Act a few years ago and it provided for the Part
D benefits for senior citizens, CBO said the crowd-out rate for that
program would be much higher--and it was. I think there is one estimate
beginning at 75 percent. I think it dropped to around 40 percent. I
might not be entirely accurate on those numbers, but it is much higher
than the 30 percent predicted under the Finance Committee CHIP bill and
also about the same under the McConnell-Lott substitute.
In addition to that, we on the Finance Committee wanted to reduce the
so-called crowd-out as much as we possibly could. We asked the
Congressional Budget Office, especially the Director of the Budget
Office, Peter Orszag, to tell us on the committee what did we have to
do on this legislation; tell us how we should write it to minimize
crowd-out as much as we possibly can, be as efficient as we possibly
can. He told us what to do and we did it.
In the Finance Committee markup, when asked about crowding out; that
is, kids moving from private health insurance coverage over to the
Children's Health Insurance Program, he said you have done it
efficiently. You have done it as well as you can do it.
I wish to make the point very clear. While we are helping children,
while we are helping low-income kids get health insurance--as we
clearly should--we also do not want to disrupt the private industry any
more than need be.
It is important to remember that States are given power to decide how
they want to administer the Children's Health Insurance Program. It is
up to the State. Some States add it to Medicaid. Some States have
separate programs. Most States use health insurance companies to
administer the health insurance program, the Children's Health
Insurance Program, with copays and deductibles, and so forth. So those
who on the surface might be concerned if their ideology is it should be
private health insurance, not the Children's Health Insurance Program,
should not be too concerned, frankly, because we have gone the extra
mile to make sure that so-called crowd-out is minimized as much as we
possibly could.

I will have other points to make later on about the McConnell
substitute. Basically, I wish to say it states that if you are at 200
percent poverty or a little above 200 percent of poverty, despite what
we anticipated when we passed this legislation in 1997, I am sorry, you
can't go above 200 percent if you want to have the benefit of the
Children's Health Insurance Programs match rate, which is a little more
beneficial to the States than the Medicaid match rate. That is not
right. So many States are at least above 200 percent of poverty. I
think that is wrong.
The other major thrust of the McConnell substitute is if you are
above 200 percent of poverty, you have to go into the private market.
That encourages them very strongly. That is not right either.
Fundamentally, the Children's Health Insurance Program was written
first, in 1997--again, it is a block grant program that gives States
flexibility and recognizes that every State is different.
So often Senators say we should not enact one size fits all. I have
heard that 100 times around here. Basically, that is correct--not
always but basically. Senators who are advocating McConnell-Lott say
one size fits all, basically, not recognizing that different States
have different costs of living, some States are much more expensive to
live in than others.
I saw a chart the other day that showed if you take 200 percent of
poverty and matched that against the cost of living in various States
in our country, in some States, the parity level would be maybe down
around, oh, say, 150 percent of poverty. But there is one State that
was 300 percent. If you translate the 200-percent nationwide figure to
what the cost of living is in that State, it comes out to 300 percent.
I think that is fair because different States are so different.

[[Page S10558]]

I ask unanimous consent, now, that the pending amendment also be
temporarily laid aside so Senator Kerry may offer an amendment.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The Senator from Massachusetts is recognized.

Amendment No. 2602 to Amendment No. 2530

(Purpose: To provide sufficient funding and incentives to increase the
enrollment of uninsured children)

Mr. KERRY. Mr. President, I call up amendment No. 2602.
The ACTING PRESIDENT pro tempore. The clerk will report the
amendment.
The assistant legislative clerk read as follows:

The Senator from Massachusetts [Mr. Kerry], for himself,
Mr. Bingaman, Mr. Sanders, Mr. Casey, Mr. Menendez, Mr.
Durbin, Mr. Reed, Mr. Brown, and Mr. Whitehouse, proposes an
amendment numbered 2602 to amendment No. 2530.

Mr. KERRY. I ask unanimous consent the reading of the amendment be
dispensed with.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. KERRY. Mr. President, let me begin first of all by thanking the
distinguished chairman of the finance committee on which I have the
pleasure of serving, whose leadership has been critical in bringing
this bill to the floor. He and Senator Grassley, Senator Rockefeller,
and Senator Hatch deserve the thanks of children all across America, of
all those advocacy groups fighting for children's health care, and
certainly of our colleagues who care about it and have been fighting
for it for a long time. They have shown real leadership in bringing
about an important compromise by fashioning a bill that was reported
out of committee with bipartisan support.
We all understand how difficult that can be, sometimes. Sometimes the
negotiations in our committee are out of balance because of the
membership of the committee and you may have a different feeling when
you finally get to the floor. So I applaud the Senator from Montana. I
will say up front, I know that if he had his druthers, he would vote
for this on the floor of the Senate now. I also know when you are the
chairman and you fashion a compromise in your committee, you have to
stick with your compromises. Everybody here understands how that works.
So I recognize that this is an amendment that is difficult for him in
the context of this overall bill.
But I ask my colleagues to think about this amendment outside of the
inside game of the Senate. I ask my colleagues to think about this
amendment outside of the parliamentary agreements that have to be made
in order to get something out of the committee and actually get it to
the floor so we can all consider it. But I also ask my colleagues to
remember that when it gets to the floor, we have a chance to vote as
Senators, all of us--not as members of the committee. Certainly, the
vast majority of the Senate is not bound by what happened in a
committee. We are bound by our responsibility, each and every one of
us, to our constituents in our States and to our beliefs about what is
best for the country.
I believe, first of all, the legislation that the Senator from
Montana and the Senator from Iowa, Senator Grassley, have brought to
the floor is important for the country. I think everybody agrees on
that. I think this bill is going to pass with a pretty significant
vote, ultimately, at its current $35 billion level. But as we debate
the future of health for our children, I think we have a responsibility
to think about it above and beyond the compromising process of the
Senate.
I believe we have to think about it in macro policy terms and also--I
know the word gets bandied around here on the floor, and it doesn't
always have a lot of meaning anymore--in ``moral'' terms. We have a lot
of difficulty sometimes translating what is moral in most people's eyes
into legislation. But the fact is I heard Senators on both sides of the
aisle, and particularly some of those most responsible for helping to
negotiate this on the other side of the aisle--I have heard them say we
have a moral imperative to take care of children's health care. I have
heard them say we ought to be covering all children.
Of course, we ought to try to cover all children, but isn't it a
shame that we can't seem to do that because it costs too much. The
Senator from Mississippi came to the floor and spoke about this. He
talked about how some want an increase of $50 billion or more and
suggested that I approach this purely with an attitude where I say
let's decide how many kids we ought to cover, and it does not matter
what it costs, let's go pay for it. Well, that is a little bit of a
misinterpretation of what I have actually said about it. I have said we
ought to decide if we think it is worthwhile to cover all children, and
then see if we can pay for it. I did not say pay for it no matter what.
See if we can pay for it, but at least decide what your priority is.

If your priority is to cover children which is an important moral
imperative, it has a value to our society, it makes a difference to the
lives of children, to the lives of the community, the cost of
hospitals, the cost of health care, the ability to learn, the ability
to grow up and be a full citizen, you measure those and you come to the
conclusion hey, this is a good idea, we ought to do this for all kids.
Then, you have an obligation to begin to weigh where the money comes
from and what the choices are with respect to what you spend money on.
The Senator from Mississippi suggested we have to worry about the
cost of the program and who pays for it. Yep, we do, I say to my
friend. And he is a good friend, the Senator from Mississippi. We do
have to worry about it. But let's measure what people appear to be
worried about. Let's measure about why children's health care is a
priority.
First, I want to do the ``why.'' What we do here with respect to
children is not a Democratic priority or Republican priority. It ought
to be the priority of every single Senator. I know most of the Senators
here have families, have children, and are deeply concerned about kids
and understand these issues.
The real face of this debate does not belong to Senator Baucus or
Senator Grassley or Senator Rockefeller or Senator Hatch or anyone else
who is here arguing about this. The real face of this debate belongs to
young kids all across our country who suffer enormous debits on a
lifetime basis because they do not have health care.
The face of this is somebody like 9-year-old Alexsiana Lewis and her
mother, Dedra, who come from Springfield, MA. Senator Kennedy--
incidentally, I honor Senator Kennedy's work in this, as we all ought
to, because it was his visionary leadership that helped to create the
S-CHIP program in 1997. He has constantly been working to build bridges
to bring people together to try to sustain and expand the program ever
since.
Senator Kennedy and I went to the Children's Hospital in Boston, a
famous hospital where kids come from all over our country. And the
stories of curing and caring that are exhibited in that hospital on a
daily basis are just extraordinary. Well, we met there Alexsiana Lewis
and her mother. Alexsiana, 9 years old, was losing her vision due to a
very rare eye disease. Her mother, Dedra, had lost her health
insurance, like millions of Americans. We have about 45 to 47 million
Americans who have no health care at all right now; 9 million of them
are children.
Dedra lost her health insurance. Why did she lose her health
insurance? She lost her health insurance because she cut back on the
hours she was working in order to be able to take care of her child who
had this rare disease. And here is what she said at that meeting with
Senator Kennedy and myself.
She said: ``If I did not have Mass Health right now''--that is the
Massachusetts health program we have in place now funded by S-CHIP--
``my daughter would be blind.''
So my question to my colleagues in the Senate is very simple:
Somewhere in your States all across this country there is another
Alexsiana Lewis, or there is another Dedra who is cutting back on her
job. There are going to be about 5.7 million children who do not get
any coverage when we finish passing this legislation.
Now, my question is, is that the choice of the Senate measured
against

[[Page S10559]]

the other choices that we could make? Is it our choice that it is OK
for an Alexsiana to go blind? Is it OK in your State for some child to
have a chronic ailment who will not get the early intervention, the
early care, and as a result will probably wind up with a lifetime
impairment that will require that child to have special needs education
for the rest of their life?
I went out to the State of Washington a couple of years ago. I had
recently introduced my Kids First Health Care Plan. And we had about
1,200 people show up. The chief pediatrician for the State of
Washington came to this event in Seattle. She stood up and told the
story of a 12-year-old child who was disruptive in the classroom.
Ultimately, they kicked the child out of the classroom because the
child was disruptive. They thought the child was just acting out.
Ultimately, that child finally, for the first time, got to a doctor and
they found that the child was suffering, not acting out. The child had
a chronic infection which spread to the eardrum, and this chronic
infection was creating such pain that the child was acting out due to
the pain. Now, at the final moment where they diagnosed what was wrong,
they found out that child indeed would have a hearing impairment for
the rest of that child's life. No health insurance and acting out in
class leads to teacher responding and the child finally gets diagnosed
as hearing impairment and will require special needs education. What is
the rationale? What is the rationale for saying all we can afford is
$35 billion over five years, at a moment when people across this
country are losing faith in the ability of Washington to be responsible
and make responsible choices on their behalf?
I think it is important that we answer that question properly. And I
will tell you, when I look at some of the choices we have, it is pretty
hard to answer how we are answering it properly. Let me give a few
examples to my colleagues. This is a choice the Senate is going to
make. If the alternative minimum tax relief is extended, as everybody
expects it will be, tax cuts for those earning over $1 million a year
will cost $43 billion in 2007 alone. Think about that.
We are saying we cannot afford to cover children to the tune of an
additional $15 billion over 5 years, but we can give $43 billion of tax
cuts next year to people earning more than $1 million a year. That is
obscene. It is ridiculous. It has absolutely no basis in economic
argument, and it certainly has no basis in any kind of moral or decent
argument.
If you were simply to restore the tax cut to the level before 2001,
to only taxable income above $1 million, you would have $44 billion and
you could insure children. You would be affecting 0.21 percent, of all
taxpayers with positive tax liability in the United States. That is one
choice.
Here is another choice Congress seems to be content to make.
Currently, major integrated oil and gas companies are eligible for the
domestic manufacturing deduction, which reduces their corporate tax
rate. In other words, we know fossil fuel is contributing to global
warming, but we nevertheless are willing to continue our own dependency
on it and give a tax break that encourages people to be able to do what
they are going to do anyway because the marketplace is showing that the
price of energy is such. These are some of the most profitable
companies in the world.
But oh, boy, give them a tax break instead. There is absolutely no
valid reason whatsoever that the most profitable oil companies in the
world ought to be receiving a subsidy, a deduction, at this time when
they are reaping record profits. But guess what, the Finance Committee
tried to repeal it and the rest of the Senate did not agree. This
deduction cost $9.4 billion over the next 10 years, but we do not have
enough money for children.
We didn't close a loophole in our Tax Code for the poor fuel
economy--we actually reward gas-guzzling SUV manufacturers. They get
$13 billion worth of tax breaks to produce the most gas guzzling cars
on the road, the worst fuel efficiency of any car, and we are
subsidizing that over children. I do not get it.
I think most Americans, if they had a list of the things that the
U.S. Congress gives to big business over children, would laugh at the
language they hear when they hear people say: Oh, we have to cover
children. There is a real value to covering all of these children.
Here is another one. Most American families do not get this one. If
you are a company, you can defer paying U.S. taxes on any foreign
income. So you can be an American company and just keep your income
drawing offshore, and you do not pay any tax. It can accrue year to
year. And repeal of this provision is about $53 billion over 10 years.
Also, it is a huge incentive for companies to take their, you know,
subsidiaries and other companies offshore and just grow their profits
offshore at the expense of American jobs.
There is a long list of choices, similar choices: $12 billion a month
in Iraq, going into the sixth year of the war in Iraq; now we are in
the fifth year of the war, now a policy that everyone in the world
understands is not working. I believe there is a better proposal.
Now, again, I say $35 billion, of course, is better than nothing. But
it is incredible to me that we are in this position where the
administration is talking about vetoing $35 billion, and we are not
willing to do what is necessary to really get the job done.
Let me say that I am pleased that there is a provision that I
authored with Senator Smith and Senators Kennedy and Domenici to ensure
that there is mental health parity in this State Children's Health
Insurance Program. And parity for mental health treatment is a very
significant and very much needed improvement in SCHIP.
Instead of discriminating against mental health, which is effectively
what we are doing today, we can offer services that actually improve
children's performance in school, that keeps them out of trouble in the
juvenile justice system, and helps them lead better lives, filled with
a lot more opportunity and promise.
But $35 billion over 5 years, let me ask colleagues to measure that.
Why have we decided to spend $35 billion at all? Why do we have a
program called the Children's Health Insurance Program? If it is worth
spending $35 billion, doesn't the same rationale apply to the rest of
the children who do not have health insurance?
Where is the big hand of God coming down and saying: You all over
here, you get health insurance; and you over here, you do not because
we think it is more important that millionaires get a tax cut. We think
it is more important that gas-guzzling vehicles get a tax break, and we
think it is more important that oil companies with the biggest profits
in the country get their money. That is the choice. That is what is
happening.
We have some colleagues who just do not want to bend. That is why
this agreement had to be reached. I understand the Senator from Iowa--I
am not blaming Senator Grassley from Iowa. I respect what he has tried
to do. He held the line to get the $35 billion.

I respect what Senator Baucus had to do because we are struggling to
get votes. If you don't get over 60 votes, you can't do something. But
I think some of those folks who are reluctant to sort of embrace
reality ought to step back and question this.
Let me come to another point. I have told my colleagues how we pay
for this. First of all, the $35 billion is paid for with a cigarette
tax. The cigarette tax I am in favor of, but we know, unfortunately, it
is also regressive in a certain way, though hopefully it deters people
from smoking. But a whole bunch of poor folks and folks moving to the
middle class or folks in the middle class are stuck with their habit
and smoke, and they are going to pay a lot of that tax. We would love
it if it stopped them from smoking, but we all know that is not going
to happen automatically. So here we are looking at how else could you
get more kids covered.
What is important about my amendment is that it covers the kids who
are eligible for Medicaid. It has a more efficient avoidance of the
topic we have heard debated, the crowd-out. People are talking about
not encouraging people who currently have private insurance to drop the
private insurance to get covered by the State insurance. We obviously
don't want that to happen. The fact is that my amendment targets the
coverage toward those at 200 percent of poverty or below. So you are
mostly targeting Medicaid-eligible children. It is astonishing to me
that those are the kids most in need of it, and they are still left out
if we don't

[[Page S10560]]

pass this amendment. We are trying to get the poorest of the poor. We
are trying to get the kids on Medicaid. We still don't fully cover the
kids on Medicaid with the $35 billion, even though, obviously, it is an
improvement. I will vote for the improvement, and I will vote for the
bill. But I still believe we ought to be doing more.
I just went to Fall River, MA, the other day to visit a bunch of
workers. We have 900 workers there who have been laid off permanently,
let go from a plant, Quaker Fabric, that closed. It closed,
incidentally, on a weekend's notice, despite the fact that we have a
law about plant closings. They are supposed to let workers know ahead
of time what is happening. I went to visit with these people. The
biggest single question on their minds was: What am I going to do about
my health care? How am I going to cover my kids? What am I going to do?
I met people who worked there for 35 years, 27 years, 25 years, all at
the same place. They were loyal to the plant, and their 2-week vacation
started on a Friday. On Monday, they got a call and they were told: The
plant is closing. Sorry. That is it. What is more important--covering
their children or making sure people who earn more than $1 million a
year get $43 billion worth of tax cuts?
Astonishingly, the President of the United States is threatening to
veto new money for this program. Even at $35 billion, he is threatening
that. That means the choice the President wants to offer is either
Congress can do not enough or do nothing at all. I don't think that is
the appropriate choice.
The President has also initiated a disinformation campaign--I guess
disinformation campaigns are not new, but it is another disinformation
campaign--to denounce this bill as a larger Democratic strategy or plot
to somehow massively federalize medicine. I understand the President
offered to veto it before he had even read it. Confronted with a
bipartisan compromise to extend health coverage to half of the 9
million American children without insurance today, the President
apparently only sees some sort of a leftwing conspiracy to try to
federalize health insurance. It is almost laughable. I don't think
anybody really believes that is what is about to go on, but it sure is
one of those scary phrases that create a knee-jerk response in certain
sectors of the body politic.
The SCHIP program is, like Medicaid before it, a Federal-State
partnership. It is not a Federal program; it is a Federal-State
partnership. Ironically, it happens to use private providers as the
principal people involved to provide the service. So it is a Federal-
State-private sector partnership. It is very hard to understand how the
specter of ``federalism'' somehow can get in the way of that.
Another misleading statement we have heard is that SCHIP is a
Democratic Trojan horse for socialized medicine. I have to laugh at
that. I was here when we did the 1994 debate on health care. I did not
sign on to the plan that was offered by the White House in 1994. There
were a number of problems. It doesn't matter what they were. I didn't
sign on. I worked hard with Senator Bill Bradley, with Senator John
Chafee, Senator Bob Dole, and others. We had a compromise that, in
fact, if it had been adopted, it had a back-end mandate with the
private sector being tapped to provide additional health insurance to
Americans. I believe we could have passed it, but there wasn't the mood
for a compromise at that point in time. Had it passed 4 years ago, we
would have been at about 99 percent of Americans covered by health
insurance. That was the opportunity which was missed.
But one thing I learned, you ain't going to see socialized,
Government-run health care in America probably during our lifetimes. It
is just not in the makeup. There are plenty of ways to put health
insurance out there that are more affordable. I offered one of those
ways in 2004. That is as viable and as urgent today and, frankly, as
compelling today as an approach where you can reduce the cost of all
premiums, take catastrophic health insurance off the backs of
businesses and Americans, and lower the cost of health insurance,
provide unbelievable streamlining of the delivery of the system, and
let every American choose where they want to go. It is far more
efficient than what we have today.
This red herring, phony debate, straw debate is inappropriate to the
cause of children. It doesn't do justice to any of us.
It also is ironic that some of the most significant efforts to expand
the Children's Health Insurance Program have come from Republican
Governors. The President's former budget director, Mitch Daniels, the
current Governor of Indiana, has recently expanded eligibility for
children's health insurance to 300 percent of the Federal poverty level
or roughly $60,000 for a family of four. Something is seriously wrong
when as good a numbers-cruncher as Mitch Daniels and as tough a budget
critic, as we all know, can go out to Indiana, which is a pretty
centrist conservative State, and wind up expanding health insurance for
kids up to 300 percent of poverty. There is a real disconnect in this
debate.
The President likes to claim the new program is somehow going to push
families like those from private insurance to government health care.
But Governor Daniels and a lot of Governors like him understand that is
not the case. With the cost of private insurance for that same family
approaching $12,000 a year, the real choice for most American families
today is either SCHIP or no health care at all because of the current
rise in costs. In fact, the National Governors Association this past
week sent yet another bipartisan letter to the President stating their
support for the bipartisan reauthorization bill that provides increased
funding for SCHIP now moving through the Senate.
Finally, SCHIP is not Government run. The vast majority of SCHIP and
of Medicaid enrollees receive their coverage through private insurance
plans working under contract with the States to administer benefits.
So, far from socialized medicine, it represents the kind of commonsense
public-private partnership that ought to be a model for greater health
care reform.
A lot of families I have met all across the country are scared they
will not have adequate health care for their kids. The President's
response to that was--I think about a week ago--Well, they have health
care. They can just go to the emergency room. I don't know how many
Senators have been to emergency rooms lately. First, they are all
overcrowded. I know that at Mass General, which is one of the best
hospitals in America, in Boston, sometimes it is so crowded it takes
hours to get people processed except for the most traumatic who come
in. You have people on gurneys in the halls of hospitals all across
America, different waiting periods. It is extraordinary what has
happened. The degree to which emergency rooms have become the primary
care facility for Americans is shocking. Hospitalized children--this is
important--without health insurance are twice as likely to die from
their injuries as those with coverage. Uninsured kids are only half as
likely to receive any medical care in a given year.
We all go to schools and talk to teachers, and we go into
communities. We have townhalls, and we listen to voters. I can't tell
my colleagues how many times I have heard a teacher tell me how
difficult it is to teach a whole class of kids, which is usually an
overcrowded class of kids, where many of those children don't have
health care. We know that kids who have health care do 68 percent
better in school. Here we are, a country that is struggling with an
education system that is not keeping up with competitors around the
world. We don't graduate enough scientists or engineers, researchers,
and so forth. One of the things it is related to, in terms of the
choices children have in their long-term education, is whether they get
health care and screening early.
Someone who has health care is more likely to get an early diagnosis
of whatever the problem is. If you are a child and you have an
irregular heartbeat or a hole in your heart or you have some other
disorder, early diabetes onset or even autistic tendencies, if you
don't get to a doctor and the parent doesn't see those indices and
isn't able to understand them for what they might be and get somewhere
to get the care, the odds are that child is going to wind up costing
everybody a lot more, not to mention what is going to happen to that
child's life.
I hope my colleagues will take a hard look at this. I hope the
President will

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reconsider his decision to veto it. I know Senator Baucus and Senator
Rockefeller have negotiated the best bipartisan package they could.
Again, I commend them for doing so. But here on the floor of the
Senate, we have an opportunity to work our will as a Senate. We have an
opportunity to make a different statement. I believe we ought to be
investing at least $50 billion. The Senate passed in its budget--this
is in the budget today--$50 billion for children's health care. The
only reason it has come to the floor at $35 billion is because some
people refuse to let it come out of committee or take any shape other
than that at this moment in time.
The best way to finance that $15 billion is to do what is fair and to
make one of those choices we are called on to make. There are countless
choices in this budget. We have 27,000 pages or so--I think more than
that now--of Tax Code that fill volumes. Most of those pages do not
apply to average Americans. Most of those pages apply to those who have
been able to lobby Washington, to those who have been able to bring
their cause to this city.
These are children. Children's lobbies reflect a lot of different
organizations, but it seems to me we have an opportunity to enroll the
lowest income of uninsured children by increasing the bonus payments
available to States so they meet or surpass their targets. We don't
mandate them to do so. We leave the discretion up to the States. They
have wide discretion with the waivers they have today as to how they
administer the programs. They have proven themselves very capable and
very creative in doing so.
I hope, as a matter of priority, we make a bipartisan down payment of
no less than $50 billion toward health care coverage for all our
children. The only excuse for not spending more is saying: Oh, we
cannot afford that. When somebody says we cannot afford that, then you
have to look at what we are choosing to afford. That is the real test
of the balance of what we care about and of where we are willing to put
our votes.
I yield the floor.
The PRESIDING OFFICER (Mr. Sanders). The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I rise for two reasons: one, to give the
compromise that is before the Senate a defense against Senator Kerry's
amendment; and then to comment on the bill generally, and mostly to
comment to some of my fellow colleagues on the Republican side of the
aisle in relation to what I consider unfair criticism of this
compromise.
I do not rise to find fault with the goals Senator Kerry has put
forth. I do not even find fault with some of his arguments about
loophole closings. I might feel compelled to argue against the marginal
tax increases he might want to have, but right now I will concentrate
on his view of expanding this compromise, not questioning his motives,
and not raising any question about the sincerity of his wanting to do
more--except reflecting on the 4 or 5 months Senator Baucus and I have
been putting this bill together, we have all had some rude awakenings.
Those rude awakenings are that what we put together as a $50 billion
package, when it was first scored came back much higher than $50
billion. So to get everything everybody wants in $50 billion is very
difficult. The other thing is a philosophy I had, that somehow with
something less than $50 billion we would be able to cover every kid
under 200 percent of poverty, and we found out that was not possible.
I am sure we both--from Senator Kerry's point of view and from my
point of view--went into this whole discussion with a great deal of
good intent and finding out that it may be a little more difficult than
we anticipated.
So only with that caveat I ask Senator Kerry to consider, I now want
to say why we ought to defend the compromise that is before the Senate.
I appreciate Senator Kerry's goal of covering more kids. The bill we
have today insures 3.2 million kids who do not have coverage today. I
am very proud of that effort, and I am not going to warm to any
suggestion that we have not done enough. The Finance Committee bill
does so through a new incentive fund, and it is a proposal both sides
of the aisle support. It is a compromise.
The incentive fund is a product of months of work. We built on ideas
that were formed by another bipartisan couple--Senator Rockefeller on
one hand for Democrats, Senator Snowe on the other hand for
Republicans. We took those ideas that Senator Rockefeller and Senator
Snowe had and reshaped them into what we think represents a very
efficient and cost-effective way to increase coverage for children.
As Senator Kerry may recall, during the markup of the Senate Finance
Committee, the Congressional Budget Office Director Peter Orszag
characterized the incentive fund ``as efficient as you can possibly get
per new dollar spent.''
Simply throwing money at States is not an effective strategy for
covering more kids. Cost is an object. The bill that is moving in the
House does cover 1 million more kids who are not currently covered than
the Senate bill. But they do so while spending $12.2 billion more than
we do--getting back to the efficiency and effectiveness statement of
the CBO Director Peter Orszag. I will leave it to my colleagues to
decide for themselves whether they think $12.2 billion for a million
kids is cost effective. But I can assure you, the cost will leave us
then--if we do that--without a bipartisan bill, and maybe not the
chance of getting anything through, other than an extension. It has
been stated, even from our Republican colleagues who do not like the
waiver process, that is bad policy.
The Finance Committee bill then--I am begging Senator Kerry to
understand--is the best of the possible. The left wants more; the right
wanted a lot less. We can make speeches or make legislation. Making
speeches does not get any kids covered. Making legislation does. Our
compromise does that.
I urge my colleagues to keep on the right track for making
legislation; that is, doing the art of the possible. I oppose this
amendment and urge my colleagues to do the same.
Now, Mr. President, I would like to speak on the bill. I start out by
referring to a chart that I hope we have in the Chamber that has been
used by a lot of Republican colleagues over the last 2 or 3 days. This
was in relation to speeches that were given yesterday by many of my
colleagues who are sincere in their approach.
They refer to this as the ``cliff chart.'' Everything to the right of
the green is after this legislation expires. They want you to believe
we do not take into consideration anything about the future. They are
making out this is an unrealistic proposal we have before you, because
following that red line up into the future, they maintain it is going
to cost more than we can afford. I want to say how this approach is
intellectually dishonest.
I have a tremendous amount of respect for the Senators who have been
giving these speeches, and I can identify a couple. There are probably
more who have been giving these speeches, but I want my colleagues to
know I respect Senator Gregg, the ranking Republican on the Senate
Budget Committee. The Senator from Mississippi, Mr. Trent Lott, our
assistant minority leader, I think has referred to it. I respect his
views. But I think everybody ought to take into consideration what we
are going to do. I have a chart that is going to lay this out.
In this particular instance, we clearly are on different sides of
this argument. There has been a lot of talk around here about how the
Senate Finance Committee bill is funded. This chart was used in that
discussion. Taking a hard look at how bills are financed is a good
thing. Maybe we do not do that often enough. So let me focus on the
criticism that has been made about how this SCHIP bill is financed. We
need to step back and look at the whole picture. That is what I am
begging my colleagues to do. The SCHIP program is a pretty small part
of that picture.
The thing about SCHIP is that it is not like Medicaid or Medicare.
How many times have you heard the people using this chart refer to it
as if it is an entitlement? It is not an entitlement we are discussing
today. Or maybe if people do not understand the term ``entitlement''--
it is not a permanent program, such as Medicare and Medicaid because
they are entitlements. SCHIP is not. So when the program expires, it
truly ends. The day after the authorization ends, poof, there is no
more SCHIP program. That is true of any program that sunsets. But
Medicare

[[Page S10562]]

and Medicaid do not sunset. They are entitlements. SCHIP is
reauthorized for 5 years. That is 5 years on top of the original 10
years it was authorized. So this year it is sunsetting. That is not an
entitlement. It is an expiring program.

While I know most of us in this Chamber would no sooner let the
Department of Defense expire than we would let SCHIP expire, that is a
simple fact. And because it is an expiring program, it is subject to a
very particular budget rule. That budget rule does not fit this chart.
That budget rule says the Congressional Budget Office must score future
spending for the program based upon the last year of the program's
current authorization. So the baseline for SCHIP for the next year is
$5 billion. That is under existing law. If we pass this legislation,
that would not be true. But for what is law right now, in the future,
they are going to score that at $5 billion. For the next 5 years, the
baseline--let me say again--is $5 billion. For the next 10 years, the
baseline for SCHIP is $5 billion. It is actually $5 billion a year
forever.
Does anyone in this Chamber think the budget rule governing SCHIP is
realistic? Well, of course it is not realistic. But that is the way the
budget process and the Budget Office must work under existing law. So I
am not here to kid anybody.
According to the Congressional Budget Office, 1.4 million children
would lose coverage if we simply reauthorized SCHIP at the baseline of
$5 billion into the future. Who among us would go home and tell our
constituents that we individually voted to reauthorize the SCHIP
program--reauthorize it, yes. If you stopped there, they would think:
Well, you did a good thing. What you are doing right now, you continue
to do. But if you did that, what you would be doing, without telling
them--but they would soon find out; you do not fool the American
people--1.4 million kids would lose coverage.
So when the Finance Committee went to work to reauthorize this bill--
Senator Baucus and I, with the help of Senators Hatch and Rockefeller--
we had this problem: The baseline only assured $5 billion a year in
spending into the future. It was unrealistic.
Let me digress and point to a problem the Agriculture Committee has
this year exactly the same way. We did not spend all the money in the
agriculture bill last year, so we are working on a baseline that is $15
billion less than it was in 2002, the last time we wrote a farm bill.
So this is not just the case of health care for kids. A lot of
committees get caught this way.
But we do have the realistic fact that costs continue to increase in
SCHIP, even though the $5 billion was frozen in the baseline because of
the budget rules.
So what did we have to do? We had to come up with the money to keep
the current program afloat. That meant we had to find at least $14
billion to keep the current program afloat. That is right, of the $35
billion in funding in this bill, $14 billion is put into SCHIP to
maintain the current program. That is $14 billion to maintain coverage
for kids who are currently enrolled.
Do you know what the White House wanted us to believe all this year
since they submitted their budget? That you could do that $14 billion--
maintaining the current program--for the $5 billion they put in their
budget.
Now, those people down at OMB have to be smart enough in advising the
President that you cannot do for $5 billion a policy of doing what we
are doing now, and even expanding a little bit, for $5 billion when, in
fact, it costs $14 billion. To a very real extent, this is the same
kind of situation my good friend from New Hampshire, Senator Gregg--
when he was speaking--was complaining about. The current baseline was
not realistic. That created a hole in the budget we had to fill. In our
case, it was a $14 billion hole to fill, if you want to maintain
current policy.

So what did we do? Well, we did what you have to do if you are
responsible and deliver on what you say you are going to do. We filled
it. It is that simple. We had to comply with the budget rules.
What people forget around here is the Director of the Congressional
Budget Office is like God, and everybody who works in the Budget Office
can also be little Gods because what they say has to be followed, and
if you don't follow it, you know what you have to do? You have to do
almost the impossible around here. You have to have 60 votes to get
around it. Should they have that much power? Well, if you are going to
have any budget discipline, they have to have that kind of power. But
it is that simple. We had to fill that hole. We had to comply with the
budget rules, so we did. Do those budget rules make sense? Well, I
think I have indicated they probably don't, but that is a question for
the Budget Committee to answer, Senator Gregg's committee, Senator
Conrad's committee, not the Finance Committee. We have to abide by it.
There is another budget rule that the Finance Committee was required
to follow. That rule is called pay-go, which people around here know is
short for pay-as-you-go financing. It means the bill needs to cover its
6-year costs and 11-year costs, and that makes sense after all. This
bill proposes new spending, and because it proposes new spending, you
have to pay for it, or have 60 votes. This bill does pay for it. This
bill complies with the budget rules. It complies with the pay-go
requirements.
Now, the SCHIP reauthorization we are debating is only a 5-year
authorization. That means 5 years from now it will sunset. Congress
will have to go through the process of reviewing it. To remind people
it is not an entitlement, Medicare and Medicaid doesn't get a review
every so often forced upon them. They may get a review by Congress but
instituted by Congress, not forced upon Congress by a sunset.
As I think everyone knows, this bill is paid for with an increase in
the tobacco tax. This is similar to the original SCHIP bill when it was
created under the Republican-controlled Congress in 1997. Now, similar
to 1997, when the Republicans did it, we had a problem with how the
tobacco tax works. The revenue from the cigarette tax is not growing as
fast as health care costs, so that means the revenue-raiser is not
going to grow as fast as the cost of health care, generally, and
specifically in this instance, the costs associated with the Children's
Health Insurance Program.
So the Finance Committee did what was required to do to comply with
the pay-go budget rule. The Finance Committee bill reduces SCHIP
funding to just below the funding that is in the current baseline. That
means the Finance Committee in 5 years will have the same problem we
face in putting this bill together today. They will have to come up
with the funds to keep the program running because the tobacco tax over
the years is not going to bring in enough revenue to keep up with the
increased costs of health care. That is just like the $14 billion we
had to keep and find to keep the current program running with no
changes.
It is true we are covering even more low-income kids in this bill.
That is a good thing. But it also means the Finance Committee in 5
years will have a bigger job to keep the program running at that rate.
They will have more kids to keep covering and health care costs will be
even higher than they are today. This is for the Finance Committee to
face in the next 5 years. Of course, during that 5-year period of time,
I hope we get a lot of reform of health care in the United States that
reduces costs, gets the uninsured covered, so we are not just dealing
with SCHIP. Of course, what we have to face in 5 years is similar to
the job the Finance Committee had today to continue the SCHIP program.
So it is nothing new. But I think some are getting the impression from
some of my colleagues who use this chart that this is something new--
some gimmick to get around budget rules. But my good friend from New
Hampshire, Senator Gregg, has expressed serious concern about the bill,
and I think we should at least take a moment and look at his concerns
in proper perspective.
So I go back to one of the charts Senator Gregg has used. Here is the
chart used to raise the issue. It shows only the funding in the Finance
Committee bill. I think looking at it like this paints a distorted
picture. As we all know, the SCHIP program was created to supplement
the Medicaid Program. The goal of the program was to encourage States
to provide coverage to uninsured children with incomes just above
Medicaid eligibility. So to put my colleagues' concerns in perspective,
we

[[Page S10563]]

should look at SCHIP spending as it relates to Medicaid spending. So I
would like to draw my colleagues' attention to a new chart that
represents figures for the future from SCHIP, as well as from Medicaid,
so everyone can fully appreciate the consequences of our SCHIP bill in
the context of the Medicaid Program, which SCHIP supplements. So take a
closer look.
Let's start with this little green line at the bottom. That is
current law, the green line that goes along the very bottom of the
chart. It is a pretty straight line across the chart. The green line
represents the SCHIP baseline under current law. As I have already
discussed, it is $5 billion each year for the next 10 years and as far
into the future as you can go. If you don't change the law, that is the
way it is.
Now let's look more closely and honestly at the actual problems we
are facing. The massive orange area, as indicated, above the green line
is Medicaid. This is the projected Medicaid spending for the next 10
years. It is a lot bigger than SCHIP. Then, on top of that, we are
looking to add new spending for the SCHIP bill, and that is the blue
line above the Medicaid indicated by the orange. Again, it is not very
big. It is quite obvious it is not very big. As you can clearly see,
costs are growing at a rapid pace overall. The overwhelming driver of
the costs is what? It is Medicaid. We have a very big problem.
Entitlement spending is growing, and in future years we are going to
struggle to keep these programs afloat. That is why I would not agree
to do a $50 billion SCHIP bill. I thought it was too much spending. I
am not particularly happy with spending $35 billion, but as I have
said, this bill is a compromise, and it is $15 billion less than what
the Democratic budget approved.
So let's focus on the total obligations of the Federal program. This
chart, when you look at the whole picture, puts things in perspective.
Now, remember, all that fire and brimstone about the awful cliff that
was on the previous chart, the awful cliff that this bill brings before
the Senate, where is that cliff, you might ask, on the chart I put
before my colleagues. If you look closely, right here where the blue
line on top goes down gradually to beyond the green line, if you look
at the blue there where it dips down a little bit, that little dip to
the right of the dotted vertical line is what my good friend from New
Hampshire is so exercised about. So this little blue line is what the
debate is all about. The little blue line is this legislation before
us. The little blue line is creating all this rancor. But it looks a
little bit different here, doesn't it, than it did on that cliff chart
I showed you ahead of time.

Let me tell my colleagues then what the Finance Committee bill--this
little blue line--is not; not what it is but what it is not. Looking at
this dip, this is not a government takeover of health care. Looking at
this dip, this is not bringing the Canadian health care system to
America. Looking at this dip in the blue line, this is not the end of
the world as we know it.
While I concede that allotments under our bill in the years beyond
the 5-year reauthorization do not behave as described in my friend's
chart, I don't think it warrants the heated rhetoric we are hearing
during this debate yesterday and today and probably tomorrow. SCHIP is
not the real fiscal problem we have. The problem is the big orange
area. That is Medicaid. The ranking member and I worked together--I am
referring now to Senator Gregg, the ranking member of the Budget
Committee. He and I worked together last year on the Deficit Reduction
Act to try to rein in Medicaid, and I am proud of the work we did. We
also found out how hard it is to dial back entitlement spending, even
in a Republican-controlled Congress and even with special procedural
protections we call reconciliation. We only succeeded in shaving $26
billion over a 10-year period on Medicaid spending.
The problem of entitlement spending is still there, and SCHIP is a
pebble next to the boulders of Social Security, Medicare, and Medicaid.
Do we have a funding issue? Yes. There is no denying that. We had one
today that was the $14 billion hole that we had to fill if we were
going to do what the President said he wanted to do with $5 billion.
The Republican Congress created that hole in 1997, I am sad to say, but
the Finance Committee filled that hole and produced a bill that
complies with the budget rules. I am confident the Finance Committee in
5 years will do the same thing.
I think it is also important to point out we have so many far bigger
problems in health care today that we need to deal with. If I am
supposed to infer from Senator Gregg's speech that this is supposed to
be the opportunity to do something about the problems of entitlement
spending, I should point out the obvious: The substitute we expect to
vote on does absolutely nothing about the entitlement spending but make
a big deal out of it.
So I appreciate Senator Gregg's remarks. They are not without some
merit, but you have to put them in context. I don't think they fit the
crime we are accused of committing.
I yield the floor.
The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
Mr. REED. Mr. President, I request time from the Democratic side.
The PRESIDING OFFICER. There are no controlled time limits at this
time.
Mr. REED. Mr. President, first let me begin by commending Senator
Baucus and Senator Grassley and their colleagues, Senator Hatch and
Senator Rockefeller, for extraordinary work. This effort represents
great legislating based upon principled compromise to achieve a noble
objective, which is to provide health coverage to the children of
America. I can't think of a more laudable effort than that which has
been led and spearheaded by both Senator Baucus and Senator Grassley.
They deserve our praise and our support.
I am here today to lend my support to the expansion of the CHIP
program, the Children's Health Insurance Program, to support this
endeavor which is so critical to the health of the country, literally
and figuratively. It is not only a sensible policy in terms of
investing in children, it is also morally compelling.
What more lofty objective can we have than to give children access to
health care, to be able to grow up in this country knowing they can
receive medical attention when they need it?
We are in a situation now where, remarkably, the Nation's level of
poverty is growing. It is higher now than it was in 1970. We have not
had a President since Lyndon Johnson try to tackle this issue head on.
This bill recognizes that there are families who don't have the
resources to buy health insurance, but they have a claim as Americans
and as citizens to at least have their children covered. I hope we can
do that by passing this legislation.
It is estimated there are 37 million Americans in poverty, 13 million
of whom are children. These are not merely statistics; they are our
neighbors in every State in the Union. They are youngsters who we hope
one day will grow up healthy and strong to participate not just as
workers in this economy but as productive citizens of this great land.
To do that they need access to health care.
We also know that children without access to health care fare very
poorly in school and have difficulties. These difficulties become more
and more complex, and they compound over the years. In fact, one of the
strongest arguments for this legislation is that it makes sense as an
investment. It is better to pay now rather than later, in terms of
social disruption and serious health problems. That is something I hope
even the most hard-nosed colleague in the Senate will appreciate.
One of the consequences of this issue of growing poverty and the
bifurcation of income between the rich and the rest of us in what we
all consider to be the ``land of opportunity,'' sadly, is that
opportunity is not as evident or as palpable as it was in the past. One
of the great engines of opportunity for any individual, in addition to
education, is health and the ability to seize these opportunities--
work, education, and service to others.
Again, I think this is an incredibly important piece of legislation.
We have to do more. We have to recognize there are families who are
working two jobs--mothers and fathers working 50, 60, 70 hours a week--
and still they don't have the resources necessary to pay for the
increasing cost of health care for their children or themselves. They
are squeezed between paying the rent, providing food for the family,
and

[[Page S10564]]

are looking, many times, for ways to cover the cost of health care for
their children.
I am very proud to have been one of the original cosponsors of CHIP
in 1997. We were fortunate in Rhode Island to have on the Finance
Committee Senator John Chafee, who was one of the leading advocates of
the program. As Senator Grassley suggested, this program was crafted
with a bipartisan effort in 1997, and one of the great leaders in that
was John Chafee. In many respects, we are here today--both of us--to
renew his commitment to the children of America.
Over the past decade, this program has been an unequivocal success.
It has reduced the number of low-income uninsured children in this
country. It has done what it said it would do, and it has done it well.
In Rhode Island, we have a combined Medicaid/CHIP program called
RIteCare. Our program has been instrumental in reducing uninsured
children, and it made a difference for hard-working families in my
State. While this program made great strides, there is still much more
work to be done.
I want to take a few moments to address some of the issues raised
about the Senate Finance Committee agreement and talk to some of the
points raised in this Chamber criticizing that agreement. I believe
this agreement is not only sound policy, but it addresses a major
concern in the country. The proposal before us would achieve several
key objectives supported by the overwhelming majority of Americans.
First, it preserves coverage for all 6.6 million children presently
covered under the CHIP program. Second, it renews the original intent
of the program by making a real commitment to cover an additional 3.2
million children who are eligible for coverage but not enrolled. These
two important goals are achieved by allocating $35 billion over 5
years. The original program was financed through the Federal cigarette
excise tax, and the proposal before us continues to use this mechanism.
The bill also addresses a problem with the formula that was beginning
to plague a growing number of States, including my State of Rhode
Island. Last December, I joined a number of my colleagues in crafting
an agreement to redistribute unexpended funds from some States and
redirect them to States, such as Rhode Island and Georgia and New
Jersey, that were rapidly approaching budget shortfalls because they
exceeded their CHIP allotment.
The Finance Committee, recognizing this issue, has made a proposal
that institutes needed changes in the formula used to calculate State
CHIP allotments so Congress is not required to resort to eleventh hour
deals to shift money from one State that hasn't used it to other
States. That is an important change to the legislation. The bill sets
aside a portion of funds in case of contingencies, such as what was
experienced during Hurricane Katrina.
Lastly, the bill tackles a challenge that States have been struggling
with since the CHIP program began 10 years ago; that is, reaching
children who are uninsured and eligible for coverage but are not
enrolled. The bill provides incentive funds and flexibility for States
to overcome the many economic, social, and geographic barriers that
hinder millions of uninsured children who deserve health insurance
coverage.
My home State of Rhode Island is a perfect case in point. While Rhode
Island ranks 10th nationally in the lowest number of uninsured
children--we are very proud of that; in fact, we would like to move up
in the ranking from 10 to 1--a recent report by Rhode Island Kids Count
indicates that of the estimated 18,680 uninsured children in the State,
11,275 of them were eligible for children's health insurance coverage
but were not enrolled. We should enroll all eligible children; that
should be our goal. We have to reach these children and, frankly, this
legislation will help States become more proactive and successful in
enrolling children.

There has been criticism directed at the bill. Let me take a moment
to respond to some of the criticism. There has been concern about the
cost of the package. I understand that alternative versions of the
Children's Health Insurance Program reauthorization will be offered by
others in the Chamber during this debate. Some of these bills will have
very enticing names, like Kids First, but we should not be fooled by
it. The substance of these amendments does everything but put kids
first. It won't even maintain the minimum coverage that we have today.
Some of the 6.6 million children who are enrolled today will lose out
in these alternatives. Rather than expanding coverage, it will contract
coverage. We don't want to head in the other direction; we want to move
forward.
Similarly, others have balked about the $35 billion price tag. I
remind my colleagues that our Senate budget resolution allocated $50
million for children's health insurance coverage. The Senate Finance
Committee, the chairman and ranking member, labored mightily and came
up with the best possible proposal they could get through the
committee, and it is a principled proposal. I salute it. But I was
disappointed that the committee left on the table $15 billion that
could have been used to insure more children. I have joined Senator
Kerry in his amendment to restore it. Again, in terms of our budget
priorities, the proposal before us today is even less than what was
supported in the budget resolution. For those who say it is too
expensive, that suggests this hasn't been very carefully considered and
indeed it was, unfortunately, somewhat winnowed down.
Perhaps the most poignant reference is that, while we were talking
about $35 billion over 5 years for children's health, we are spending
$10 billion a month in Iraq. That says a lot about how we have to begin
to reshape our priorities. I don't believe we are spending too much on
children when it comes to this particular legislation.
Some have expressed displeasure over using the Federal cigarette
excise tax to finance the package. The bill would gradually raise the
tax 61 cents, up to $1, over a 5-year period. This is consistent with
the original financing mechanism for the Children's Health Insurance
Program in 1997. But there is something else interesting here.
Cigarette smoking has been identified for decades as one of the chief
public health problems in this country, particularly when children
start doing it. It is a threat to the health of the Nation, and I doubt
if there is anyone in this Chamber who has not had at least one family
member's health affected adversely by smoking. I listened to Senator
Enzi speak passionately in the Senate Health, Education, Labor and
Pensions Committee last week about his father's smoking, which led to
his demise, and it also affected his mother.
When you raise the price of a product, you curtail the amount of it
that is purchased. We are using market forces to help us do something
that we should do: reduce the rate of cigarette smoking. Using market
mechanisms in this way, not only to raise resources for health
insurance for children, but to lower the number of people who engage in
smoking will save public health dollars that are being spent to care
for people who have lung cancer, emphysema, and other respiratory
diseases caused by smoking.
There is another concern that has been raised, which is that the
agreement grossly expands the CHIP program to parents and childless
adults, when in fact the bill does quite the opposite. The bipartisan
agreement actually ends the administration's practice of providing
States waivers to cover parents and childless adults. To date, 14
States have received waivers to cover parents and childless adults,
including my State of Rhode Island. In fact, Secretary Leavitt just
approved a 3-year extension of Wisconsin's waiver allowing adult
coverage. Frankly, I believe that States deserve the ability to take
these steps. I am disappointed that more States won't be able to do it.
This bill acts as a check on that administrative authority. It
deliberately, at this time, restricts the number of parents and
childless adults who can join this coverage.
As my colleague, Senator Menendez, mentioned earlier, research shows
a strong correlation between parental coverage and the enrollment of
eligible children. Once again, the policy behind enrolling parents is
sound. But this bill, rather than grossly expanding parental coverage,
begins to restrict that coverage. Under the agreement, States with
existing coverage expansion waivers will be given a period of
transition, and no new States will be granted the opportunity to extend
coverage under CHIP. This seems like a reasonable response to these
concerns, but I hope as

[[Page S10565]]

we go forward we might be able to look at the logic behind parental
coverage policies as a way to ensure that the whole family--
particularly children--are covered.
The proposal also rightly grants States the option to cover pregnant
women. Good prenatal care is essential to overall child health and
well-being, as well as reducing the number of low birth weight and
premature babies. Given the fact that the United States is actually
behind most developed countries, and even some developing countries, in
terms of these indicators, this step is certainly warranted and
overdue.
Finally, Members seem to have great consternation over the fact that
children's health coverage produces some level of crowding out of
private insurance coverage, and the bill is a giant step toward
Government-run health care. Again, the rhetoric seems to be at odds
with the reality of what is in this bill. I note that most enrollees in
public insurance are actually covered through private plans, where
States take the money and reimburse the private insurer. The Finance
Committee proposal takes the additional step of including something
called premium support. It essentially gives States the ability to
offer subsidies for children who are eligible for CHIP coverage but
have access to employer-sponsored coverage.
In my State, we have had this experience. We have a program called
RIteShare. The program has enabled thousands of Rhode Island families
who otherwise could not afford to remain in private insurance coverage
to do so with a little help from the State. It is a marginal
contribution to their private health insurance, which allows them to
stay in the private market. This proposal, again, goes a long way
toward addressing the issue of potential crowding out.
I believe this bipartisan agreement represents a very strong step
forward to facilitate outreach and enrollment of low-income children.
It is not a perfect legislative proposal, but it is an important one
based on principled compromise. It reinforces our commitment to
children's health. I am amazed the President is already suggesting he
might veto it, despite overwhelming public support, and despite the
compelling economics that are behind investing in children's health.
I hope that we will by our votes demonstrate that this is a bill
which should not be vetoed but should be passed quickly so children can
continue to enjoy access to health care in our country.
We all understand that our future is really about our children. They
will be the leaders years from now, and we all hope and wish that they
will grow up strong, able to seize the opportunities of this Nation.
Beyond hoping and wishing today, we can help make that a reality by
voting for this important legislation. I urge all my colleagues to join
me in doing so.
Finally, I would like to take another moment. As colleagues, we come
to the floor, we debate issues and legislation we have sponsored, but
the details are worked out by staff members long into the wee hours of
the morning. We read speeches prepared by very dedicated staff members.
I have the rare privilege of saluting someone who has worked with me
for so many years. Lisa German Foster has been with me since January
1996 when I joined the Senate. She is leaving to pursue other
endeavors.
She started in my office as an unpaid intern and has become
recognized here as one of the preeminent staffers with respect to
health care issues and one of the most decent and humane individuals
one will ever meet. I salute her for her work on this bill, on child
health and immunization, on the bone marrow registry, on tobacco
legislation.
She is a native of my home State of Rhode Island, in Narragansett,
but I think she is firmly ensconced in Washington, DC, with her husband
Bill and children Aidan and Brady.
Lisa, on behalf of all of us here, thank you for your good work.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, I join with those who assert that
working Americans are carrying too difficult a burden when it comes to
health insurance, that the governmental supplements and assistance we
provide to help people get health insurance are aberrational,
unprincipled, counterproductive, bureaucratic, and often just unfair.
A person's health care is more dependent on where he or she works
than anything else. If you happen to work for the Government, you are
in pretty good shape. If you work for some big company, you are in good
shape. But people live in fear that they might lose their job, and more
than just losing their job, they may lose their health care. They don't
like that. Families are worried about it. People sometimes refuse to
take better jobs because of fears that they will lose their health
insurance.
Prices are exceedingly high for people who are not part of big plans,
Government programs and policies, and big company plans. That is just a
fact. The same person can end up paying twice as much if they run a
small business or work for a small business that doesn't provide
insurance, and you cannot be guaranteed you will even get it. Sometimes
the premiums are more than twice as much.
The President talked about this issue in his State of the Union
Address when he talked about tax credits and ending the disparity we
now have in health care. It is an absolute problem.
I was pleased to support the program offered by Senator Enzi, the
small business health plans, the so-called associated health plans that
would help small businesses to pool their resources and get cheaper
rates. This could add 1 million people to our insured rolls without any
increases in taxes.
We have a problem out there, we really do. So, sure, there is no
doubt SCHIP is helping children in need, and there is no doubt our
current system is not working fairly and something must be done to fix
it. But just adding to this bureaucratic program without any principled
fix in the abuses that are contained in it strikes me as very odd. I do
not approve of it. I just do not approve of that at all.
It is a system that is brutal on the self-employed, brutal on the
person who works for a small business that does not provide insurance.
It is not legitimate, it is not right, and we absolutely need to do
something to fix it. This odd program that came together some years ago
was never, in my view, a particularly sound program. It is just maybe
an attempt to fix something that won't work.

What we really need, if my colleagues want to know the truth, is a
program to allow all Americans to have an insurance policy that is not
dependent on where they work. We should allow them to pay tax-free
dollars just like employers can. If they have lower income, the
Government helps them make the premium payments and they keep that
policy whether they are working or they are not working. They take it
with them, and they are not being terrorized all the time by the fear
of losing their health insurance.
We can do that. Senator Coburn has talked about this idea, I know,
and Senator Corker, Senator DeMint all those who worked on this issue.
The Department of Health and Human Services worked on it. We ought to
be doing that. That is what we ought to be thinking about and talking
about instead of putting new wine in old wine bottles, trying to
reinvigorate a program that has some fundamental problems and, as I am
going to point out, is unprincipled and counterproductive in a number
of ways.
I believe we absolutely could have a portable plan of health
insurance which would be something that would excite all Americans and
make people feel so much more comfortable with their health insurance.
That is what I would like to see us move to.
It is said that this is not an entitlement, but it is close to an
entitlement. If we are not making needed reforms to preserve this
benefit for those in need, why isn't it an entitlement? Who is going to
cut and eliminate health care for children and those in need? We are
missing an opportunity to have real reform now.

I know one can argue this case a lot of different ways, but I will
just say, when we have my wonderful colleague, Senator Grassley, whom I
admire so much and who is personally a very frugal person, saying:
Well, this chart which Senator Gregg, the former chairman of the Budget
Committee, produced showing that when it is

[[Page S10566]]

scored out here, there is no money for it after the fifth year, as if
it is going to drop to virtually zero--we know that is not going to
happen, and, in fact, Senator Grassley said we will have to find the
money 5 years from now. But they wrote the bill in that way so it
wouldn't score as costing as much as it is really going to cost. It is
a gimmick. It is a classic gimmick, that is exactly what it is. It is a
bit discouraging, I have to tell my colleagues, when I have a colleague
I admire as much as Senator Grassley taking that position on the bill.
Let me ask a few questions about this legislation that point out some
of the failures in principle and good policy.
If this is a children's health insurance program, why does it cover
adults? There is no ``A'' in it; it is SCHIP; it doesn't say adults.
Clearly, SCHIP has been abused by some States that have expanded the
program to cover adults when the goal of the program from the beginning
was to cover children. That is what people talk about. In fact, there
are 670,000 adults participating in SCHIP. Some States are spending
over half of their SCHIP money on adults, including adults without
children. One-third of covered adults are not even parents.
One might say: Why do you care that the State has this program?
Because the Federal taxpayers are paying 65, 70, 80 percent of it. It
is a federally conceived program and substantially federally funded
program.
Fourteen States provide health insurance through SCHIP, the State
Children's Health Insurance Program, for adults. The Government
Accountability Office--that is our watchdog analysis group--reports
that nearly 10 percent of SCHIP enrollees nationwide are adults. In
Wisconsin, 66 percent of enrollees are adults. Seventy-five percent of
the SCHIP funds are spent on adults, and we pay the bulk of that money.
Sixty-one percent of the funds are spent on adults in Minnesota, where
87 percent of enrollees are adults, according to the Heritage
Foundation. Illinois spends 60 percent of their money on adults; Rhode
Island, 57 percent; and New Jersey, 43 percent.
This year, 13 percent of all SCHIP funds will go to adults who are
not expectant mothers. About 30 percent of these adults are not even
parents. Of the 14 States projected to spend more than they were given,
allocated in 2007, 5 cover children not considered low income, and 5
cover adults other than expectant mothers.
The CMS goal and HHS goal was to end the adult waivers by 2009, but
this bill basically blocks the ability for that to happen.
No. 2, I ask this question: If this program was created to help lower
income children, why are some States covering middle- and high-income
children and adults? Isn't this an indication that the program has gone
far beyond what its original concept was? Isn't this typical of big
Government programs, how they grow and take over more and more, and
pretty soon become a Government-dominated system?
I don't think that is the way for us to go. Rich States are getting
richer under this program. States are not stupid; they have figured out
how to make the program work to their advantage. If they have the
money, they make it work to their advantage, if they can make their
match. The definition of low income, therefore, has been manipulated.
The SCHIP statute defines a low-income child--this is what it says:

A child whose family income is at or below 200 percent of
the poverty line for a family of the size involved.

So it is supposed to be for, and was created in the fundamental
statute to be for, those at or below 200 percent of poverty. I will
talk about what that means in a minute. That is a pretty decent income,
but we are going way above that. However, States are allowed to
disregard parts of a family's income. They can just disregard it. These
income disregards can mean, for example, that $50,000 of a family's
income simply doesn't count, making many more children and adults
eligible who are not low-income people.
New Jersey disregards all income between 200 and 350 percent of the
poverty level. How do they do that? I am not sure. They got a waiver,
apparently. Senator Allard presented an amendment to fix the problem of
income disregards. It was defeated, of course. New Jersey just
disregards the income between 200 and 350 percent of the poverty level.
Ten States and the District of Columbia now cover children in
families with incomes of up to 300 percent of the Federal poverty
level. In those States, SCHIP provides health insurance for children in
a family of four earning up to $61,950. That is a pretty good
income. The program, in its current form, provides health insurance for
children in those families. New Jersey has extended eligibility to
$72,000 for a family of four--350 percent of poverty level. New York
recently voted to extend eligibility to families of four earning up to
$82,000--400 percent of poverty level.

This is supposed to be a program for the poor. It basically is a
program for the poor in most States--it is in my State. Some
legislative proposals on SCHIP would allow all States to expand SCHIP.
Some of these proposals we are floating around here would allow all
States to go to 400 percent of poverty level, which would make 71
percent of all American children eligible for public assistance through
Medicaid or SCHIP.
This bill will allow New York to cover people at 400 percent of the
poverty level. Now, the bill says 300 percent, and that is what they
will say here on the floor, that it is 300 percent, but the
grandfathered-in program covers New York, and they are at 400 percent,
which means we will be subsidizing that.
Mr. BAUCUS. Will the Senator yield for a question?
Mr. SESSIONS. Yes, I would be delighted. I hope I am wrong.
Mr. BAUCUS. Are there any States that cover 400 percent of poverty?
Mr. SESSIONS. That do what?
Mr. BAUCUS. That cover children at 400 percent of poverty.
Mr. SESSIONS. I understand New York has passed a law that would do
that.
Mr. BAUCUS. No, that is not correct.
Mr. SESSIONS. It hasn't taken effect yet, but I understand they have
passed it.
Mr. BAUCUS. No. Is it true if a State wants to cover, say, above 300
percent of poverty, is it true the State has to get concurrence with
the Secretary of HHS?
Mr. SESSIONS. Yes.
Mr. BAUCUS. Has New York received that concurrence?
Mr. SESSIONS. My understanding is that under the current law, the
Department of Health and Human Services believes it may have to grant
that waiver, and nothing in this bill would prevent it; is that not
correct?
Mr. BAUCUS. Actually, I would not say it is 100 percent incorrect,
but HHS has discretion, as HHS had discretion granting other waivers
which the Senator is concerned with, and, frankly, this Senator is
concerned with. As the Senator knows, this bill is designed to crack
down on the effect of those waivers and prevent any future waivers with
a lot of the adults I know the Senator is concerned about.
I wished to make the point that no State covers at 400 percent of
poverty today. Secondly, if New York does seek 400 percent--if any
State seeks 400 percent, it has to get the concurrence of the Secretary
of HHS.
Mr. SESSIONS. Well, I will say this without doubt, Mr. President.
Amendments have been offered, I believe already and will be offered, to
make sure New York would not be able to get the 400 percent. Because
the Federal taxpayers in my State of Alabama, where we provide SCHIP to
children under 200 percent of poverty, we are going to be subsidizing
that, and I don't see any reason for us to do that. But under this bill
it can continue, if Health and Human Services is correct, and their
lawyers tell them they can't deny this request.
I will agree they probably should have been more aggressive in
denying some of these things and litigating, if need be.
Mr. BAUCUS. Will the Senator yield for another question?
Mr. SESSIONS. I will do my best to answer the Senator's question.
Mr. BAUCUS. I appreciate the willingness of the Senator to engage in
a dialogue. Is it true, first, that the match rates States are getting;
that is, the Federal proportion and the State proportion, are more
favorable to States under the CHIP program than it is under Medicaid?

[[Page S10567]]

Mr. SESSIONS. I believe that is correct.
Mr. BAUCUS. The Senator is correct. That is correct. Is it also true
that, on average, the differential is about 30 percent? That is, the
match rate that States get under the Children's Health Insurance
Program is about 30 percent better, from the State's perspective, than
the State gets from Medicaid; is that also true?
Mr. SESSIONS. I believe so.
Mr. BAUCUS. It is true.
Mr. SESSIONS. I know the distinguished committee chairman probably
knows that pretty well.
Mr. BAUCUS. It is true it is about 30 percent. Is it also true that
different States have different costs of living?
Mr. SESSIONS. That is correct.
Mr. BAUCUS. And so some States--
Mr. SESSIONS. Although as the days and years go by, less and less
perhaps.
Mr. BAUCUS. Different States have different costs of living. Some are
more expensive to live in than other States.
Although the Senator is correct that States have set their
eligibility rates at 300 percent of poverty, that actually, at that
point, States no longer receive the Children's Health Insurance Program
match rate, which is 30 percent higher on average than they receive in
Medicaid. They can go to 300 percent or above 300 percent, but if they
do--if they do--isn't it also true they get a much lower match rate
than they receive today; that is, at the CHIP rate rather than the
Medicaid rate?
Mr. SESSIONS. My understanding is the Senator is correct; that is, at
least in Medicaid those rates, as you cover certain extras, you get a
lower percentage rate. I am unsure of the exact details about how that
is applied in SCHIP, but I understand there is a differential.

I would suggest to my colleague, though, that what we have done is
created a system that incentivizes States to spend because they are
getting a very substantial--65 to over 80 percent--match to cover
things they wouldn't otherwise cover because it is money given gratis
from the Federal Government; is that not correct?
Mr. BAUCUS. Well, if the Senator is asking me the question, that is
true, as in the case of Medicaid but reminding us that we are talking
about very low-income kids here.
Mr. SESSIONS. Well, reclaiming the floor, the GAO did a study that
criticized this aspect of Medicaid some time ago, and it made some
news; that the net effect of all this is that, on a percapita basis,
people in higher income States are getting more out of Medicaid than
they are in poorer States, on a fairly substantial basis. They have
criticized that policy. Some of those same policies based on that
unprincipled approach to health care are at work in this bill.
Again, the Federal Government would pick up a substantial percentage
of what New York may get if they go to 400 percent. But 350 and 300
percent is, I think, a bit much anyway. For example, about 70,000
upper-middle-class-income families who pay the alternative minimum tax
would also qualify for SCHIP under this bill. The program, I think, as
a matter of policy, encourages irresponsible spending.
Think about this: States who use up all their allotment, many of
which obviously are those giving out their richest benefits, profit
from States such as Alabama, who are very careful with their spending
and stay within their allotments. In years past, if Alabama didn't use
all the allotment given to them--and they have to match a portion of it
to get that money--that money was redistributed to States who spent
more. This is, I think, unfair and not good, sound policy. It has
encouraged States to overspend while punishing States who have been
conscientious about controlling spending.
Of the States which exceeded their allotment and that have asked for
bailouts, adults accounted for 55 percent of those States' enrollees,
according to the Government Accountability Office. Those States that
have exceeded their allotment, that have reached back into the pool and
have gotten more money, the GAO has found that about 55 percent of what
they pay out goes to adults. Not to children--adults. This bill does
not stop that in an effective way. It had an opportunity to, and it did
not.
Of the 18 States projected to have shortfalls for 2007, 7 have SCHIP
eligibility that is above 200 percent of the poverty level. So the 18
States who were projecting they were going to spend above their
eligible amount, they are the ones that have the highest eligibility
rate. Four of those States--Maryland, Massachusetts, Missouri, and New
Jersey--are at or above 300 percent of the poverty level, so you are
talking about subsidizing health care for a family of four earning
$60,000 per year.
In addition to taking leftover money from fiscally responsible States
such as Alabama, some States that have expanded their programs beyond
the scope of the original program have asked the Government to bail
them out with new money. In other words, there is not enough leftover
money. Not enough leftover money now that they can scoop up from frugal
States such as Alabama to take care of their spending, so now they are
asking and demanding more money from the Federal Government to match
whatever they want to do.
It is a classic example of an out-of-control Federal program running
amok. I have to tell you that is not good policy.
Five States have taken 83 percent of Government bailout funding for
2006 and 2007, and 14 States received part of this funding. This is the
extra money Congress has appropriated to fill their deficits. Only 5
States have gobbled up 83 percent of these funds, with 14 States
receiving part of this funding. But out of $720 million, Illinois
received $237 million, New Jersey $164, Rhode Island--small Rhode
Island--$84 million--high-income State, that is--Maryland $31 million,
and Massachusetts $77 million.
So it is the high-benefit, high-tax States that are sucking up money
out of the fund, and they want more and more. This bill does not deal
with that.
The bill only worsens the problem of States who are overspending as
it creates a contingency fund. Now, the contingency fund is
specifically designed to provide this additional funding to States that
run out of money because they have covered too much and there is not
enough Federal matching money for them. I think we better name this
contingency fund the ``Federal Fund to Encourage SCHIP Overspending.''
Maybe that would be the right title for it.
As Secretary Leavitt has said, this section indicates that either the
allocation formulas that determine how much money States get are wildly
inaccurate or we do want States to overspend. It seems like that is our
goal. That is why people are suggesting this is a subtle way to have
the Federal Government take over a larger and larger portion of health
care in America.
A further example of bad SCHIP policy is federally subsidizing
infrastructure for States to develop government-sponsored universal
health care. Many States, such as Pennsylvania and Vermont, have
already begun the process of instituting a universal health care
program. I think it is unfair to tax people in the frugal States to pay
for rich health care plans for the wealthy in other States. That is not
a good policy.
About 45 percent of American children are currently enrolled in
Medicaid or SCHIP, though only 37 percent are in families earning less
than 200 percent of the Federal poverty level.
This is the third question I would ask. CBO estimates that about half
of new SCHIP enrollees from this legislation now have private
insurance. So my question is: Why would we spend taxpayers' money to
insure people who are already insured? This bill would decrease private
health insurance coverage. It would encourage people to leave their
plans. It seeks to take kids away from private coverage and move them
to government-run health care. Parents would be financially motivated
to take their children off private, usually employer-sponsored plans,
and put them on a taxpayer-supported plan. Those children would then
have to be supported by the taxpayers; whereas, before they were
covered by their own private insurance plan.
A recent report by CBO estimates that SCHIP has reduced the uninsured
in the target population--those we wanted to reach who are uninsured,
low-income children--by only 25 percent. That is the CBO saying that.
The target group that was uninsured--low-

[[Page S10568]]

income children--we have reduced those uninsured by only 25 percent. I
think this is because a lot of children now in SCHIP, and in many
States adults, are people who used to be on private health
plans. Between 50 percent and 75 percent of Medicaid expansion funds in
the 1990s were spent on people who would have been privately insured,
according to the economist Jonathan Gruber. That is a big number. I
don't know if it is accurate, but that is what he concluded--between 50
percent and 75 percent of Medicaid expansion funds--were spent on
people who would have been privately insured.

One study found that 60 percent of the children who became eligible
for SCHIP had private coverage in the year before the SCHIP plan began.
That is a stunning number; 60 percent of the children who became
eligible for SCHIP had private insurance the year before. CBO found
that among newly eligible populations--the higher income families who
would be covered by this bill--one child will drop private coverage for
every new uninsured child who is enrolled in the public program. That
is a stunning number.
Overall, for every 100 children whom this bill would enroll in SCHIP,
50 of those children would come from private insurers. So half of the
children we are going to be covering would be coming from private
insurance plans. I don't think that is good policy, unless it is your
goal to diminish private insurance and further take over the private
sector with Federal plans.
These are conservative estimates, since the studies failed to
calculate the crowd-out effect for adults who switched to Government
plans. A recent study----
Mr. BAUCUS. Will the Senator yield on that point for a question?
Mr. SESSIONS. I will be pleased.
Mr. BAUCUS. A question designed for Senators to have more information
about the basic point the Senator was talking about, crowd-outs, which
the Senator understands is people on private insurance leaving private
health insurance to go to the program that Congress may have enacted.
Does the Senator have any idea--I found this very interesting--when
Congress passed the Medicare Modernization Act, which included Part D
drug benefits--I don't know whether the Senator voted for that bill. I
assume the Senator voted for that.
Mr. SESSIONS. I did vote for that.
Mr. BAUCUS. Does the Senator know at that time what the so-called
crowd-out was? In fact, put it this way: Does the Senator know what
percent of people who at that time were on private health insurance who
might then have gone to a program the Government offered? Does the
Senator have any idea--I am not saying the Senator should know. Does
the Senator have any idea what was estimated at that time when we
passed that bill what the crowd-out would be?
Mr. SESSIONS. Responding to the question of the Senator, I do know
that you, as one of the authors of that bill which I did support, did
create provisions to minimize that and deliberately took steps to
reduce the amount of crowd-out that would occur.
Mr. BAUCUS. The Senator is correct.
Mr. SESSIONS. I am sure some would occur. Of course there was a
feeling and observation on that from the beginning that this was a
trend in the country.
Mr. BAUCUS. Correct. There is no real official conclusion of what the
actual crowd-out has been. But does the Senator know the basic
unofficial statistic is about 66 percent; there was about a 66-percent
crowd-out under the Medicare Modernization Act?
Mr. SESSIONS. I am not aware of that. I know my mother didn't have
any coverage. She was glad to get the prescription drug benefits.
Mr. BAUCUS. I want to ask another question. Does the Senator know
what the anticipated crowd-out was when this Children's Health
Insurance Program was originally enacted in 1997? What was the
estimated crowd-out then, when we passed this bill in 1997?
Mr. SESSIONS. I am curious. I don't know.
Mr. BAUCUS. It is about 40 percent. And does the Senator know what
the actual experience has been? About between 25 and 50 percent are the
best numbers we can get.
Mr. SESSIONS. That is not so much--
Mr. BAUCUS. Between 25 and 50.
Mr. SESSIONS. I am pretty close to the estimate.
Mr. BAUCUS. You are close. Does the Senator know that when we wrote
this bill we asked the CBO Director, Peter Orszag, to tell us in the
Finance Committee what we have to do to minimize the phenomenon of
crowding out? Of course the Senator doesn't know we asked him, but does
the Senator know when we asked Peter Orszag during the markup--it is on
the public record--were we extremely efficient and minimized the crowd-
out as much as we possibly could, does the Senator know Mr. Orszag
said, Yes, we were extremely efficient and minimized crowd-out as much
as we possibly could?
Mr. SESSIONS. I didn't. But I will respond by asking this question:
If we have crowded out prescription drug coverage for seniors, if we
crowd out private insurance in Medicaid for low-income people, if we
crowd out regardless of income concerns in general Medicare, and if we
now crowd out more children and even adults under a children's plan,
who is going to be left in private coverage?
Mr. BAUCUS. Let me answer that question by asking this question in
return: Would the Senator want even more crowd-outs under a different
approach? All experts say if we try to address more coverage for low-
income kids through private coverage that the crowd-out would be even
greater. Would the Senator want that greater crowd-out to occur,
compared with the Children's Health Insurance Program?
Mr. SESSIONS. I would respond with this question: Isn't it true, if
you are setting eligibility at 400 percent of poverty, or 350 percent,
or 300 percent of poverty, you are going to crowd out more people with
insurance than if you are actually taking care of poor people who are
less likely to have insurance?
Mr. BAUCUS. I respond to the Senator, I have forgotten the exact
statistic, but intuitively the answer is the one the Senator is
suggesting, but actually the fact is, as we established earlier, no
State has 400 percent of poverty. No State does. No State does. But for
those States above 300 percent, the kids who are actually covered, the
greatest preponderance of kids covered is still low-income kids. I say
of all the beneficiaries to date under the Children's Health Insurance
Program today, 91 percent are children at or below 200 percent of
poverty.

This program is for kids. I know all this concern about adults and I
share the Senator's concern about adults. I share it very strongly. We
worked very hard on this bill to cut down adults, as the Senator knows.
Childless adults are phased out after 2 years and parents are much
lower--get a poorer rate. The third category of adults, pregnant women,
there is a State option.
But the biggest concern, I am sure, of the Senator from Alabama is
childless adults. This is supposed to be a kid's program, not an
adult's program. We say, OK, after 2 years you are off. As the Senator
also knows, back in the Deficit Reduction Act, when that was passed, we
prevented HHS from granting any waivers for childless adults in the
future.
Mr. SESSIONS. I thank the distinguished chairman for his insights. It
has been a good dialog. I would go back, fundamentally, to the remarks
I made at the beginning. Our present health care system is not working
well. I believe a simpler system, if taken as part of the idea of
equalizing tax deductions and tax credits for all Americans--and it
would require spending from the Government to do that--if we did that
in an effective way, every person could then choose their own insurance
policy covering themselves as they wish. I think it would be a far more
preferable way than taking a children's program and expanding it in a
significant way.
There is no doubt. CBO has scored that for every child who is in this
bill who would be enrolled in SCHIP, 50 percent of those children would
come from private insurance coverage. That is a conservative estimate.
It is a big deal. Fifty percent of the people who would be picked up
under this plan would come from families where they are already
covered.
The National Bureau of Economic Research, an independent group,
estimates the crowd-out rate for SCHIP to be as high as 60 percent. Of
10 million children, about 50 percent of the children in families with
incomes below 200 percent of the poverty line have insurance. This is
the number for the lowest

[[Page S10569]]

income group. We would normally expect and do expect that higher income
levels would have higher crowd-out effects. In fact, CBO--our own
Congressional Budget Office--the one we have to rely on for
information, estimates that 77 percent of the children in families at
200 percent to 300 percent of the poverty level already have private
coverage. How about that? And 89 percent of children in families with
incomes between 300 percent and 400 percent of poverty have private
coverage, as do 95 percent of children in families above 400 percent of
the Federal poverty level, according to our own Congressional Budget
Office, which I assume our distinguished chairman does not disagree
with. I mean he doesn't dispute those numbers.
Our goal should not be to take insurance away.
I will conclude. I know others are here prepared to speak. I have
enjoyed the dialog.
I am not comfortable with the some of the ways we are proposing to
take care of children and the way we are taking care of adults in a
children's program and the way we are dealing with a broken Federal tax
policy with regard to the uninsured. I was on a task force appointed by
former majority leader Bill Frist, Dr. Bill Frist, to deal with the
uninsured. We wrestled with it a number of ways. One of the ways we
could have gotten a million people covered was through the association
health plans, the small business health plans that my colleagues on the
other side of the aisle managed to block.
Now we are moving more money, more, I guess, new wine in old wine
bottles here. I think we need to break out of this mentality and create
a system where you own your health insurance policy and you take it
with you if you change jobs. I would note that the average American
worker has had nine jobs by the time he or she is 35. Likewise, we
ought to have savings accounts that people can take with them whenever
they move from job to job and provide as much security and stability
and assurance as we can possibly provide the working American families
today.
Middle-class families are getting hit at both ends here. They are
required to pay more taxes. They are not getting the benefits. They are
working hard. If they are not working for a big company or the
Government, they are paying a very high price for their health
insurance.
We ought to work on these things, and if we did so, we might be
surprised how many people might come on the insured rolls.
I yield the floor.
The PRESIDING OFFICER (Mrs. McCaskill). The Senator from Montana.
Mr. BAUCUS. I am not going to belabor this crowd-out issue. A lot of
people watching are probably asking what in the world is crowd-out. For
those wondering what in the world crowd-out is that we are talking
about here, basically it is how many people of those this legislation
covers--how many people would be crowded out of private health care
insurance. That is, if they are on private health care insurance today,
how many would leave private health insurance to go to the Government
program.
A couple of points here. No. 1, those who might be inclined to vote
for the McConnell substitute know this, but actually the so-called
crowd-out is greater in the McConnell-Lott proposal than it is on a
percentage basis under my bill. On a percentage basis, under the
McConnell-Lott bill, more people would be leaving private health
insurance to go to the Children's Health Insurance Program.
Second, the figure we hear is 1 to 1. That is not accurate. That is
selective use of the tables. If you look at the real facts, at the
bottom line under CBO's estimates, they actually say it is more in the
neighborhood of--it is not 50 percent that is represented here, but
actually it is about 30 percent.
It also has been represented here that maybe under tax credits, which
is a better way to go to cover health insurance, the implication is
there will be less crowd-outs. Well, let me just point out that there
is a fellow named John Gruber, and he is an MIT professor, a health
economist. He is often quoted by the President. Professor Gruber is
often quoted by President Bush in this general area. What does
Professor Gruber say? He says that the tax credit crowd-out is, in his
estimate, 77 percent. Much higher.
So for those concerned about the so-called crowd-out, I would think
they would like the underlying bill because of all of the approaches we
have discussed here, there is less crowd-out in the underlying bill
than in the substitute or under the Kyl-Lott amendment and much less
than would be the case under a tax credit approach to help low-income
kids. I think the record should show that so Senators have full
information and those watching this debate, wherever they may be, also
have the facts before them.
Madam President, I suggest that the Chair recognize Senator Murray.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, all children should be able to see a
doctor when they are sick, and all children should be able to get the
medicine they need to make them better. When a kid gets a cut or
requires stitches or comes down with a fever or an earache or with any
imaginable problem, they should be able to get help, period.
Unfortunately, today in America, the richest and most successful
country ever, that is not the case. In fact, millions of American
children do not have health insurance today, which means millions of
American children cannot see a doctor when they are sick and millions
of American children do not get the medicine they need to get better.
As wages remain stagnant, as the cost of living--heat, food, clothing,
college tuition, doctor's visits--increases, more and more parents
today are unable to afford health care, and the ranks of uninsured
children are growing.
This tragedy can only be described as a shame. It is unquestionably
our moral obligation as Americans to correct it. It does not matter if
you are Republican or Democrat, progressive or conservative--making
sure our children get health care is the moral thing to do. Now, most
of us in the Senate know this, and we are working now to do the moral
thing--support reauthorizing and improving the Children's Health
Insurance Program, or CHIP, which takes massive steps forward to giving
our kids better health insurance in this country.
This bill will ensure that the 6.6 million children who are enrolled
in CHIP continue receiving care, and it provides 3.2 million uninsured
children with coverage. As a result, over the next 5 years, the number
of uninsured children in America will drop by more than a third. It
also strengthens the program by increasing funding for States that need
the most help. You know, in recent years under President Bush's watch,
many of our States have faced funding shortfalls, jeopardizing the
coverage of countless children.
This bill also provides an emergency fund to cover unexpected
shortfalls arising from economic downturns or emergencies. In fact, the
Congressional Budget Office, which is a nonpartisan group of experts,
predicts that 800,000 children now covered by CHIP or children's health
insurance will lose coverage over the next 5 years unless there is an
increase in funding above the base amount required.
This legislation which is before the Senate today provides $100
million as well for outreach and enrollment efforts that increase the
participation of children in the Children's Health Insurance Program.
It includes a national campaign to help raise awareness of the
Children's Health Insurance Program and the targeting of our children
in rural areas with high populations of eligible but unenrolled
children today. Another outreach effort will provide funds for
translation and interpretation service for CHIP, so minority children,
especially Native Americans and Hispanics, will become more aware of
this program.
Finally, this authorization plan provides my home State of Washington
with the funding and flexibility we need to provide more children with
quality health care.
This bill is a big win-win for Washington State and the many families
who struggle to provide care for their children today. One of the
smartest parts of this plan is that the money for these initiatives--
$35 billion over 5 years--comes solely from a 61-cent excise tax
increase on cigarettes and

[[Page S10570]]

other tobacco products. No other programs are cut; Social Security is
not raided; the deficit will not be increased.
Not only will this bill provide millions of American children with
health care, but it is estimated that it will lead 1.7 million adult
smokers to quit smoking, and that will cause a 9.2-percent decline in
youth smoking and will prevent over 1.8 million kids from becoming
smokers. So when you provide health care to millions of children and
lead millions of young people to stop smoking or to never pick up a
cigarette, this bill is a win-win for our country and for our children.
I think it is very important that I thank my colleague, Senator Max
Baucus, for his tireless work on this issue and for all of America's
children. Without his determination, we would not be so close to
providing more of our kids with health care.
It is also important to note that this bill is bipartisan. Senator
Grassley has worked very hard, along with Senator Baucus, in creating
this legislation. It was passed out of committee on a commendable
bipartisan basis.
Another big supporter of this bill on the floor has been Senator
Hatch, who was a cosponsor, actually, of the original 1997 bill.
I listened to him as he recently said:

We are trying to do what is right by our children who are
currently not being helped by our health care system. If we
cover children properly, we will save billions of dollars in
the long run. Even if we did not, we should still take care of those
children.

Senators Grassley and Hatch are not alone on their side of the aisle.
Many of our colleagues realize that supporting this legislation is the
moral thing to do. Unfortunately, however, President Bush does not
agree, and he has, amazingly, threatened to veto this bill. Now, he is
going to be out there giving his reasons for the veto. He is going to
make complicated arguments and throw some numbers around. But the
bottom line is, the moral line is that vetoing this bill will endanger
coverage for millions of children who are currently enrolled in our
Children's Health Insurance Program, and a veto will deny millions of
kids who would become covered under the bill a chance to see a doctor
when they are sick. It seems, sadly, the moral light President Bush
says guides his decisions has dimmed.
I wish to share the following story with President Bush and with any
Senators who might be thinking about voting against this bill.
This is Sydney. Sydney and her mom Sandi DeBord live in Yakima, WA.
Sydney has cystic fibrosis. Sydney's mom recently wrote to me. She
talked about her daughter and the importance of the Children's Health
Insurance Program, which allowed Sydney to get the care she needed,
which extended her life and allowed her to live her short life to the
fullest.
Mrs. DeBord wrote to me, and I want to read to you what she said.
These are her words:

My daughter has a life-shortening genetic condition called
Cystic Fibrosis. With quality health care I believe her life
has been extended and she has been able to enjoy 9 years of
quality life.
Of course, she spent many weeks in the hospital on life-
saving IV antibiotics during those 9 years, and not a day
goes by that she does not have to endure taking a bucket full
of medicine. But despite the obstacle in her way, she is a
happy child living life to the fullest.
She is active, she does well in school, has many friends,
and loves to sing and dance. However, none of that would be
possible if it was not for the quality health care she
receives as part of the CHIP health care. I know for a fact
that without this bit of assistance, her life would end much
sooner due to the inability to afford quality health care for
her.
As her parent, it frightens me to even think some day she
may be without health care coverage if programs like CHIP are
no longer available.

She said:

I write to ask you to reauthorize the State Children's
Health Insurance Program and ensure the program is adequately
funded to provide high quality health care for children with
Cystic Fibrosis.

I hope President Bush and opponents of this bill will listen to this
story. I hope they take a chance to look at Sydney and the life in her
eyes and the life she has been able to live. I know Mrs. DeBord hopes
they are listening as well.
It is our moral duty as Americans to ensure our kids can see a doctor
when they are sick. The bill in front of us today fulfills that duty.
It ensures that children covered by CHIP remain covered, and it ensures
that millions without insurance today are going to get it.
I strongly urge my colleagues to do the moral thing and support the
reauthorization of this Children's Health Insurance Program.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Madam President, as everybody knows, I have been in the
CHIP battle since the beginning. I just want to pay a great deal of
tribute to the distinguished chairman of the committee, Senator Baucus;
the distinguished ranking member, Senator Grassley; and, of course,
Senator Rockefeller.
In the beginning instance of CHIP, my good friend, Senator Kennedy,
and also Senator Snowe, my dear friend--all of these people had a lot
to do with the CHIP bill from the beginning. And I have to say that the
original Hatch-Kennedy bill became the CHIP bill back in 1997, and, of
course, it has come all of this way to today where we are looking for
renewal.
There are some facts that really ought to be put into the equation
here today, and I thought I would just spend a few minutes on some of
the facts regarding CHIP.
No. 1: The Children's Health Insurance Program reauthorization is not
full of budget gimmicks. The Senate Budget Committee has certified that
this legislation complies with pay-go rules of both the 6- and 11-year
base under the pay-go rule. The Congressional Budget Office has
reviewed its 5-year and 10-year expenditures and revenue raisers and
believes they are balanced on an on-budget basis. This bill is a 5-year
authorization and is fully paid for with offsets. This bill is not a
10-year reauthorization, and that is an important point to remember.
The CHIP program must be reauthorized in 5 years.
Fact two: Some have indicated that the Children's Health Insurance
Program reauthorization imposes up to a $10 tax on a cigar. Well, the
tobacco tax included in our bill prorates tobacco rates or taxes on
cigars. The tax imposed on cigars is based on the price of a cigar. In
very few instances will an individual cigar be taxed at $10.
Another fact: The Children's Health Insurance Reauthorization Act
does not increase the crowd-out rate. There is crowd-out because there
is always going to be crowd-out when you try to solve some of these
very serious problems. Although, because we are covering more children,
some have concern that the crowd-out rate will increase, according to
CBO, the fact is that the crowd-out rates will not increase.
Another fact: The Children's Health Insurance Reauthorization Act
prohibits the Federal Government from granting future State waivers to
cover nonpregnant adults through CHIP. Our bill puts the emphasis back
on low-income, uninsured children. Simply put, our bill puts an
immediate stop to States being granted future waivers to cover
nonpregnant adults.
Let me give you another fact: The Children's Health Insurance Program
Reauthorization Act eliminates enhanced Federal matching rates for
nonpregnant adults. At the beginning of fiscal year 2009, States will
receive lower Federal matching rates for childless adults, and in
fiscal year 2010, childless adults will not be covered under CHIP. At
the beginning of fiscal year 2010, only States with significant
outreach efforts for low-income uninsured children will receive
enhanced match rates for parents; others will receive the lower
Medicaid match rate, or FMAP, for adults.
Starting in fiscal year 2011, all States will receive a lower Federal
match rate for parents. Those States covering more lower income kids
will receive REMAP--that is the mid-point between the CHIP matching
rate and the lower Medicaid matching rate. Other States will receive
FMAP for CHIP parents.
Another fact: The Children's Health Insurance Program Reauthorization
Act provides lower matching rates to States for those individuals 300
percent of the Federal poverty level and above who are covered under
CHIP, thus penalizing States that want to cover higher income children.

[[Page S10571]]

Under the current CHIP bill, States receive an enhanced Federal
matching rate for all income levels. Our bill discourages States from
covering higher income individuals in the CHIP program. After enactment
of our bill, States that have new waivers approved to cover 300 percent
of the Federal poverty level and above would only receive a lower FMAP
payment for higher income individuals.
Let me give one more fact, and then I will make some other points.
The Children's Health Insurance Program Reauthorization Act is an
effective children's health program and a small part of the overall
cost of health. CHIP is not an entitlement program. That is something a
lot of people don't understand. We drafted it that way because I didn't
want it to be an entitlement program. Now some say we will never be
able to stop it. That may be because it works. It has saved literally
millions of children. It is a capped block grant program, where States
are given flexibility to cover their low-income uninsured children.
According to CMS, the agency that has a lot to do with health care,
in 2005, we spent a total of $1.98 trillion on our Nation's health care
system. Private expenditures were $1.08 trillion. The Federal
Government's expenditures were $900 billion. Total Medicare spending
was $342 billion in 2005, according to CMS, and Medicaid was $177
billion in Federal dollars. Our bill today funds CHIP at $60 billion
over 5 years. That is the $25 billion base figure and an additional $35
billion to cover more children. This is a fraction of the total cost of
health care in our country to provide care for low-income, uninsured
children. Covering these children is worth every cent. We spend almost
$2 trillion on health care, and the equivalent of $12 billion a year is
what this program will cost, out of $2 trillion in health care, $900
billion of which happens to be Federal dollars. Only $12 billion goes
to these kids, mainly children of the working poor who earn enough that
they don't qualify for Medicaid but don't have enough money to buy
private health insurance.
That is what a lot of people don't seem to understand. The CHIP bill,
up to now, has worked quite well in spite of the waivers, which I
believe should not have been granted in many respects by the last two
Administrations. But I have to say this program has worked very well.
I also wish to let everybody know that I support S. 1893, the
Children's Health Insurance Program Reauthorization Act. Over the past
few days, I have been listening to the floor debate on the bill being
considered on the Senate floor this week. I have to admit, at some
points during the debate, the descriptions I am hearing don't even
sound like the bill I introduced with Senators Baucus, Grassley, and
Rockefeller. Indeed, I believe there have been many allegations by
opponents of S. 1893 that are not accurate. Therefore, I would like to
take a few minutes to correct the record so my Senate colleagues hear
from both sides before making a final decision on how to vote on this
bill later this week.
First, I take issue with the point that our legislation is full of
budget gimmicks. I made that point before, but I will remake some of
these points. The Senate Budget Committee has certified this
legislation does comply with pay-go rules on both the 6-year and 11-
year bases under the pay-go rule. In addition, the Congressional Budget
Office Director, Dr. Peter Orszag, told us in last week's Finance
Committee markup that CBO reviewed the bill's 5-year and 10-year
expenditures and revenue raisers, and CBO believes they are balanced on
an onbudget basis. In addition, this bill is a 5-year authorization
that is fully paid with offsets. This is how our rules operate. Those
who talk about its 10-year impact fail to note this bill is not a 10-
year reauthorization. That is an important point to remember. They
argue that it will be very expensive in 10 years. Who knows? I can't
tell you what it is going to cost in the remaining 6, 7, 8, 9, 10 years
not covered by this bill, but we should all be working to try and keep
costs down. We have to look at the CHIP program again in 5 years and
reauthorize it.
I assure my colleagues that when writing this bill, we did everything
possible to comply with the budget rules, and any assertion to the
contrary is plain false. Further, I wish to remind my colleagues that
when CHIP was established in 1997, we had a set amount of money and, as
a result, the budget baseline did not assume any rate of growth for the
CHIP program. Additionally, the budget rules did not consider the fact
that health care costs are rising by 9 percent each year. That is not
CHIP's fault. In many respects, that is our fault in the Congress due
the way we run things around here.
Some would say that is why we shouldn't have CHIP. I guess that is
why we shouldn't have any Federal programs, if that is the argument.
The fact is, CHIP has worked abundantly well to help the most
vulnerable people in our society, our children. I want to see that
continue.
The budget rules also did not consider the increasing number of
children enrolling in the CHIP program. Therefore, there is only $5
billion per year for the CHIP program in the budget baseline. To me,
this number is unrealistic, and I think anybody who looks at it would
agree. It creates a situation which is extremely frustrating because
health care costs continue to increase in the CHIP program just like
every other health care program is going up 9 percent a year. That is
somewhat of a victory because it used to go up 13 percent a year. As a
result, we had to come up with the money to keep the current program
functioning, not to mention additional sums for providing coverage to
uninsured, low-income children without health care. There are many
incidents of young children who don't have health care beyond the CHIP
program or that haven't been covered by the CHIP program.
To keep the program running as it currently exists, it will cost the
Federal Government $14 billion. We fixed the problem by addressing the
shortfall. Simply put, we had to comply with the budget rules in this
bill, and we did. So in 5 years, the Congress will have to come up with
money to keep the program operating, similar to the challenge we are
facing with our $14 billion deficit right now.
We need to be realistic. Since CHIP is not a permanent program and
not an entitlement program, we in Congress have an even bigger job to
keep the program running efficiently in the next 5 years. The current
budget rules do not include a realistic rate of growth after the
program expires. I can only conclude, then, with this bill, we are
doing the best we can under very difficult circumstances for some of
the most vulnerable people in our society, our children, the ones left
out of the Medicaid process and whose parents don't earn enough money
to buy insurance.
Another issue I have heard being raised is that our legislation will
raise tobacco taxes on cigars to $10 a cigar. Let me make one thing
perfectly clear. The Children's Health Insurance Program
Reauthorization Act does not impose a $10 tax on each cigar. In fact,
the tobacco tax included in our bill prorates tobacco taxes on cigars.
The tax imposed on cigars is based on the price of the cigar. In very
few instances will an individual cigar be taxed at $10, and those who
can afford that kind of cigar can afford the taxes.
I know Senators are concerned about what some term ``crowd-out.''
Crowd-out is having individuals who are currently covered by private
health insurance drop their private health insurance to be covered by a
government program.
This was my concern, as it was for Senator Kennedy, when we enacted
CHIP originally. It is a valid concern today as well. But allegations
that this bill increases the crowd-out rate are untrue. According to
CBO, the fact is, the crowd-out rate will not increase for the basic
CHIP program. While crowd-out does remain a serious problem, the crowd-
out rate is not worsened by our bill. People will turn to whatever is
better for them. If the CHIP bill is better for these kids, they are
going to turn to it. I don't think we can blame them for that. Of
course, the argument is that this is the camel's nose under the tent
for one-size-fits-all socialized medicine. No, it isn't. But some want
to make it that type of a program. I believe the House may be well on
its way to trying to make it that, but we don't in this bill.
In fact, during the Senate Finance Committee markup last week, CBO
Director Peter Orszag told us the crowd-out rate for this bill is the
same as the

[[Page S10572]]

crowd-out rate for the original CHIP program. In addition, the CBO
Director told us that in the absence of a mandate, this approach is as
efficient as you can possibly get per dollars spent to get a reduction
in the number of uninsured children, the goal of the CHIP program. This
is because the incentive fund which was created in this bill to reward
States for lowering the number of uninsured, low-income kids is
designed so it provides a payment per child only for new Medicaid
children as opposed to new CHIP children. This is helpful with crowd-
out, first, because Medicaid is for lower income kids who are less
likely to have the option of private coverage, so tilting toward
Medicaid is beneficial. Second, the payments for the incentive fund
payments are graduated. In other words, they are not based on random
noise. The combination of these two is an efficient outcome.
According to CBO, the approach we take in our bill is probably the
most efficient way to have new dollars spent to reduce the number of
uninsured children.
Another issue that continues to be raised is adult coverage under
CHIP. Unfortunately, the opponents of the bill have not been very clear
about how adults are treated under this legislation. If I were the only
one drafting the bill, which obviously I am not, I would like to see
all adults removed from the CHIP program today, or tomorrow, to be a
little more precise. I don't think they have any business receiving
health care through a program created for low-income, uninsured
children. In fact, I am very disappointed with our administration for
continuing to grant Federal waivers to States to cover adults through
CHIP. This has been extremely frustrating to me. Of course, our
original language allowed them to do it, but we never dreamed for a
minute they would allow some States to have more adults on this program
than children. Not only is that ridiculous, that was never
contemplated. But that is what has happened.
This legislation addresses this matter by phasing childless adults
off the CHIP program and lowering the Federal matching rate for parents
and States who currently are covered under the CHIP program. Recently,
Senators Grassley, Roberts, and I wrote both the President and my good
friend, Health and Human Services Secretary Mike Leavitt, urging the
administration to stop granting States any new adult waivers. I was
pleased to hear back from Secretary Leavitt regarding adult waivers. I
truly believe the letter Senators Grassley, Roberts, and I sent to the
President and Secretary Leavitt, along with the CHIP reauthorization
bill we drafted, made some impact with the administration. I am
encouraged that the administration says it does not intend to approve
any new adult waivers or renew any waivers for adults. I am also
encouraged to see the administration is making progress toward removing
adults from the CHIP program. However, these decisions should have been
made a long time ago. I take issue with the point that our legislation
will actually reverse the progress the administration is making with
the States. I truly believe that one of the reasons the administration
is finally moving forward on this is due to the pressures it has
received from Congress to remove adults from the program. I look
forward to working with the administration to make this a reality.
To be fair, most of these waivers were granted before Secretary
Leavitt took over at that position. I don't want to particularly blame
him, but some waivers have been approved afterwards as well. I think
the same crowd down there has been doing it and, of course, Secretary
Leavitt has been the one who some would blame, although I think
unjustifiably.
The Children's Health Insurance Program Reauthorization Act prohibits
the Federal Government from granting future State waivers to cover
nonpregnant adults through CHIP once and for all. Simply put, our bill
puts an immediate stop to States being granted future waivers to cover
nonpregnant adults. Our bill puts the emphasis back on low-income,
uninsured children. As one of the original authors of the CHIP program,
I am here to tell Senators we did not create CHIP for adults. I wish we
could do more for the working poor adults, but we do not have the
money, and this program was not created for adults. We created CHIP for
low-income uninsured children.

On a related matter, our legislation also eliminates enhanced Federal
matching rates for adults, with the exception of pregnant women.
Today, under CHIP, States receive an enhanced Federal matching rate
for those covered under CHIP. The Medicaid Federal medical assistance
percentage, known as FMAP, ranges between 50 percent and 76 percent in
fiscal year 2006; the CHIP FMAP ranges from 65 percent to 83.2 percent.
At the beginning of fiscal year 2009, States will receive lower
Federal matching rates for childless adults, and in fiscal year 2010,
childless adults will no longer be covered under CHIP. With regard to
parents, at the beginning of fiscal year 2010, only States that have
covered more low-income uninsured children or have undertaken
significant outreach efforts for low-income uninsured children will
receive enhanced match rates for parents; the others will receive the
lower Medicaid match rate, or FMAP, for adults.
Starting in fiscal year 2011, all States will receive a lower Federal
matching rate for parents. Those States covering more lower income kids
or with significant outreach efforts will receive REMAP. That is the
midpoint between the CHIP matching rate and the lower Medicaid matching
rate. The other States will receive FMAP for CHIP parents.
Many have also raised concerns about the income eligibility level of
those covered by CHIP.
The Children's Health Insurance Program Reauthorization Act provides
lower matching rates to States for those individuals with incomes at
300 percent of the Federal poverty level and above who are covered
under CHIP, thus penalizing States that want to cover higher income
children.
I might add, the original bill had us at 200 percent of the Federal
poverty level, and approximately 90 percent of the children covered by
CHIP were 200 percent of the federal poverty rate and below.
Today, States receive an enhanced Federal matching rate for all
income levels. Our bill discourages States from covering higher income
individuals in the CHIP program. Once our bill is enacted, States that
have new waivers approved to cover individuals 300 percent of the
Federal poverty level and above would only receive the lower FMAP
payment for these higher income individuals.
To me, this is dramatic improvement over current law which allows
higher income individuals to receive the same Federal matching rate
provided to States for covering low-income children through the CHIP
program.
Finally, I emphasize that the CHIP program is an effective children's
health program and a small part of overall health care costs. I make
that point one more time. CHIP is not an entitlement program. It is a
capped, block-granted program where the States are given flexibility
and control, to cover their low-income uninsured children. It is
totally voluntary on the part of a State to participate and offer CHIP
program benefits to its residents.
According to CMS, in 2005 we spent a total of $1.98 trillion on our
Nation's health care system. Private expenditures were $1.08 trillion,
and $900 billion in Federal dollars. Total Medicare spending was $342
billion in 2005, and Medicaid was 177 billion in Federal dollars.
Our bill today funds CHIP--for 5 years--at $60 billion over the 5-
year period. It is a fraction of the overall health care costs. If you
want to divide it by 5, it is $12 billion a year out of a $2 trillion
expenditure in this country for total health care, and out of a $900
billion Federal expenditure for health care. This $12 billion per year
is a fraction of the cost, or should I say, this $60 billion over 5
years is a fraction of the cost to provide care for low-income
uninsured children.
Now, I think it is pathetic for people to argue that this is running
out of control when we are trying to cover kids who have not been
covered, as well as those who have--when it costs, like I say, $12
billion a year out of $900 billion spent by the Federal Government. I
wish we had a better system in the sense that the private sector could
take care of everybody. I think part of

[[Page S10573]]

our problem is we have too much Federal Government involvement. But the
fact is, for the CHIP program to be reauthorized, it is a very
minuscule amount of money compared to the $900 billion, every year, the
Federal Government pays for health care coverage.
Covering these children is worth every cent. If we do not take care
of these children, these low-income uninsured children, these kids are
going to have serious health care problems in the future, and it is
going to cost the federal government a lot more than what reauthorizing
the CHIP program is going to cost us. We have to look forward to the
future and do everything in our power to help these children.
It is my hope that I have cleared up some of the misconceptions that
my colleagues may have regarding the bill the Senate is considering
this week.
Mr. President, I will yield the floor. I apologize that I have taken
so long, but I wanted to clear up some of these misconceptions about
the CHIP bill that have been stated on the floor by some of my
colleagues. I know they are very sincere, and I know they want to be
fiscally responsible. But to argue that $12 billion a year or $60
billion over 5 years is too much money to pay for our children--when we
are spending $2 trillion on health care--I think that makes our point,
the distinguished Senator from Montana and I have been trying to make,
even more resilient and effective.
The PRESIDING OFFICER (Mr. Obama). The Senator from Montana.
Mr. BAUCUS. Mr. President, first, I thank Senator Hatch. He has been
very hardworking and dedicated to the goal of trying to find a
balanced, bipartisan solution to help expand the Children's Health
Insurance Program. I compliment him very deeply for all of his terrific
work.
Mr. HATCH. I thank my colleague.
Mr. BAUCUS. He has just gone above and beyond. Senators and the
people from the State of Utah, I think, should know that. He has done a
super job.
I know a number of Senators have been seeking to speak, and I want to
protect them. So I ask unanimous consent that the following Senators be
recognized in the following order: first, Senator Nelson of Florida,
then Senator Thune of South Dakota, and then Senator Lautenberg of New
Jersey.
Mr. KERRY. Mr. President, reserving the right to object.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KERRY. I will not object. I would just like to ask if I might be
recognized first to simply make a unanimous consent request on a
modification and send it to the desk. I will not speak.
The PRESIDING OFFICER. Are there any objections?
Without objection, it is so ordered.

Amendment No. 2602, as Modified

Mr. KERRY. Mr. President, I ask unanimous consent that my amendment
No. 2602 be modified, as sent to the desk, and that be the pending
amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment, as modified, is as follows:

At the end, add the following:

TITLE IX--IMPROVED INCENTIVES TO ENROLL UNINSURED CHILDREN AND PROTECT
EXISTING COVERAGE OPTIONS

SEC. 901. IMPROVEMENTS TO THE INCENTIVE BONUSES FOR STATES.

Paragraphs (2) and (3) of section 2104(j), as added by
section 105(a), are amended to read as follows:
``(2) Payments to states increasing enrollment.--
``(A) In general.--Subject to paragraph (3)(D), with
respect to each of fiscal years 2008 through 2012, the
Secretary shall make payments to States from the Incentive
Pool determined under subparagraph (B).
``(B) Amount.--The amount described in this subparagraph
for a State for a fiscal year is equal to the sum of the
following amounts:
``(i) First tier above baseline medicaid enrollees.--An
amount equal to the number of first tier above baseline child
enrollees (as determined under paragraph (3)(A)(i)) under
title XIX for the State and fiscal year multiplied by 6
percent of the projected per capita State Medicaid
expenditures (as determined under paragraph (3)(B)) for the
State and fiscal year under title XIX.
``(ii) Second tier above baseline medicaid enrollees.--An
amount equal to the number of second tier above baseline
child enrollees (as determined under paragraph (3)(A)(ii))
under title XIX for the State and fiscal year multiplied by
35 percent of the projected per capita State Medicaid
expenditures (as determined under paragraph (3)(B)) for the
State and fiscal year under title XIX.
``(iii) Third tier above baseline medicaid enrollees.--An
amount equal to the number of third tier above baseline child
enrollees (as determined under paragraph (3)(A)(iii)) under
title XIX for the State and fiscal year multiplied by 90
percent of the projected per capita State Medicaid
expenditures (as determined under paragraph (3)(B)) for the
State and fiscal year under title XIX.
``(3) Definitions and rules.--For purposes of this
paragraph and paragraph (2):
``(A) Tiers above baseline.--
``(i) First tier above baseline child enrollees.--The
number of first tier above baseline child enrollees for a
State for a fiscal year under title XIX is equal to the
number (if any, as determined by the Secretary) by which--

``(I) the monthly average unduplicated number of qualifying
children (as defined in subparagraph (C)) enrolled during the
fiscal year under the State plan under title XIX; exceeds
``(II) the baseline number of enrollees described in clause
(iv) for the State and fiscal year under title XIX,
respectively;

but not to exceed 2 percent of the baseline number of
enrollees described in subclause (II).
``(ii) Second tier above baseline child enrollees.--The
number of second tier above baseline child enrollees for a
State for a fiscal year under title XIX is equal to the
number (if any, as determined by the Secretary) by which--

``(I) the monthly average unduplicated number of qualifying
children (as defined in subparagraph (C)) enrolled during the
fiscal year under title XIX, as described in clause (i)(I);
exceeds
``(II) the sum of the baseline number of child enrollees
described in clause (iv) for the State and fiscal year under
title XIX, as described in clause (i)(II), and the maximum
number of first tier above baseline child enrollees for the
State and fiscal year under title XIX, as determined under
clause (i),

but not to exceed 7 percent of the baseline number of
enrollees described in clause (i)(II), reduced by the maximum
number of first tier above baseline child enrollees for the
State and fiscal year under title XIX, as determined under
clause (i).
``(iii) Third tier above baseline child enrollees.--The
number of second tier above baseline child enrollees for a
State for a fiscal year under title XIX is equal to the
number (if any, as determined by the Secretary) by which--

``(I) the monthly average unduplicated number of qualifying
children (as defined in subparagraph (C)) enrolled during the
fiscal year under title XIX, as described in clause (i)(I);
exceeds
``(II) the sum of the baseline number of child enrollees
described in clause (iv) for the State and fiscal year under
title XIX, as described in clause (i)(II), the maximum number
of first tier above baseline child enrollees for the State
and fiscal year under title XIX, as determined under clause
(i), and the maximum number of second tier above baseline
child enrollees for the State and fiscal year under title
XIX, as determined under clause (ii).

``(iv) Baseline number of child enrollees.--The baseline
number of child enrollees for a State under title XIX--

``(I) for fiscal year 2008 is equal to the monthly average
unduplicated number of qualifying children enrolled in the
State plan under title XIX, respectively, during fiscal year
2007 increased by the population growth for children in that
State for the year ending on June 30, 2006 (as estimated by
the Bureau of the Census) plus 1 percentage point; or
``(II) for a subsequent fiscal year is equal to the
baseline number of child enrollees for the State for the
previous fiscal year under this title or title XIX,
respectively, increased by the population growth for children
in that State for the year ending on June 30 before the
beginning of the fiscal year (as estimated by the Bureau of
the Census) plus 1 percentage point.

``(B) Projected per capita state medicaid expenditures.--
For purposes of subparagraph (A), the projected per capita
State Medicaid expenditures for a State and fiscal year under
title XIX is equal to the average per capita expenditures
(including both State and Federal financial participation)
for children under the State plan under such title, including
under waivers but not including such children eligible for
assistance by virtue of the receipt of benefits under title
XVI, for the most recent fiscal year for which actual data
are available (as determined by the Secretary), increased
(for each subsequent fiscal year up to and including the
fiscal year involved) by the annual percentage increase in
per capita amount of National Health Expenditures (as
estimated by the Secretary) for the calendar year in which
the respective subsequent fiscal year ends and multiplied by
a State matching percentage equal to 100 percent minus the
Federal medical assistance percentage (as defined in section
1905(b)) for the fiscal year involved.
``(C) Qualifying children defined.--For purposes of this
subsection, the term `qualifying children' means, with
respect to this title or title XIX, children who meet the
eligibility criteria (including income, categorical
eligibility, age, and immigration status criteria) in effect
as of July 1, 2007, for enrollment under this title or title
XIX, respectively, taking into account criteria applied as of
such date under this title or title XIX, respectively,
pursuant to a waiver under section 1115.''.

[[Page S10574]]

SEC. 902. OPTIONAL COVERAGE OF OLDER CHILDREN UNDER MEDICAID
AND CHIP.

(a) Medicaid.--
(1) In general.--Section 1902(l)(1)(D) (42 U.S.C.
1396a(l)(1)(D)) is amended by striking ``but have not
attained 19 years of age'' and inserting ``but is under 19
years of age (or, at the option of a State, under such higher
age, not to exceed 21 years of age, as the State may
elect)''.
(2) Conforming amendments.--
(A) Section 1902(e)(3)(A) (42 U.S.C. 1396a(e)(3)(A)) is
amended by striking ``18 years of age or younger'' and
inserting ``under 19 years of age (or under such higher age
as the State has elected under subsection (l)(1)(D))'' after
``18 years of age''.
(B) Section 1902(e)(12) (42 U.S.C. 1396a(e)(12)) is amended
by inserting ``or such higher age as the State has elected
under subsection (l)(1)(D)'' after ``19 years of age''.
(C) Section 1905(a) (42 U.S.C. 1396d(a)) is amended, in
clause (i), by inserting ``or under such higher age as the
State has elected under subsection (l)(1)(D)'' after ``as the
State may choose''.
(D) Section 1920A(b)(1) (42 U.S.C. 1396r-1a(b)(1)) is
amended by inserting ``or under such higher age as the State
has elected under section 1902(l)(1)(D)'' after ``19 years of
age''.
(E) Section 1928(h)(1) (42 U.S.C. 1396s(h)(1)) is amended
by striking ``18 years of age or younger'' and inserting
``under 19 years of age or under such higher age as the State
has elected under section 1902(l)(1)(D)''.
(F) Section 1932(a)(2)(A) (42 U.S.C. 1396u-2(a)(2)(A)) is
amended by inserting ``(or under such higher age as the State
has elected under section 1902(l)(1)(D))'' after ``19 years
of age''.
(b) Title XXI.--Section 2110(c)(1) (42 U.S.C. 1397jj(c)(1))
is amended by inserting ``(or, at the option of the State,
under such higher age as the State has elected under section
1902(l)(1)(D))''.

SEC. 903. MODERNIZING TRANSITIONAL MEDICAID.

(a) Four-Year Extension.--
(1) In general.--Sections 1902(e)(1)(B) and 1925(f) (42
U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended by
striking ``September 30, 2003'' and inserting ``September 30,
2010''.
(2) Effective date.--The amendments made by this subsection
shall take effect on October 1, 2007.
(b) State Option of Initial 12-Month Eligibility.--Section
1925 (42 U.S.C. 1396r-6) is amended--
(1) in subsection (a)(1), by inserting ``but subject to
paragraph (5)'' after ``Notwithstanding any other provision
of this title'';
(2) by adding at the end of subsection (a) the following:
``(5) Option of 12-month initial eligibility period.--A
State may elect to treat any reference in this subsection to
a 6-month period (or 6 months) as a reference to a 12-month
period (or 12 months). In the case of such an election,
subsection (b) shall not apply.''; and
(3) in subsection (b)(1), by inserting ``but subject to
subsection (a)(5)'' after ``Notwithstanding any other
provision of this title''.
(c) Removal of Requirement for Previous Receipt of Medical
Assistance.--Section 1925(a)(1) (42 U.S.C. 1396r-6(a)(1)), as
amended by subsection (b)(1), is further amended--
(1) by inserting ``subparagraph (B) and'' before
``paragraph (5)'';
(2) by redesignating the matter after ``Requirement.--'' as
a subparagraph (A) with the heading ``In general.--'' and
with the same indentation as subparagraph (B) (as added by
paragraph (3)); and
(3) by adding at the end the following:
``(B) State option to waive requirement for 3 months before
receipt of medical assistance.--A State may, at its option,
elect also to apply subparagraph (A) in the case of a family
that was receiving such aid for fewer than three months or
that had applied for and was eligible for such aid for fewer
than 3 months during the 6 immediately preceding months
described in such subparagraph.''.
(d) CMS Report on Enrollment and Participation Rates Under
TMA.--Section 1925 (42 U.S.C. 1396r-6), as amended by this
section, is further amended by adding at the end the
following new subsection:
``(g) Collection and Reporting of Participation
Information.--
``(1) Collection of information from states.--Each State
shall collect and submit to the Secretary (and make publicly
available), in a format specified by the Secretary,
information on average monthly enrollment and average monthly
participation rates for adults and children under this
section and of the number and percentage of children who
become ineligible for medical assistance under this section
whose medical assistance is continued under another
eligibility category or who are enrolled under the State's
child health plan under title XXI. Such information shall be
submitted at the same time and frequency in which other
enrollment information under this title is submitted to the
Secretary.
``(2) Annual reports to congress.--Using the information
submitted under paragraph (1), the Secretary shall submit to
Congress annual reports concerning enrollment and
participation rates described in such paragraph.''.
(e) Effective Date.--The amendments made by subsections (b)
through (d) shall take effect on the date of the enactment of
this Act.

SEC. 904. REPEAL OF TOP INCOME TAX RATE REDUCTION FOR
TAXPAYERS WITH $1,000,000 OR MORE OF TAXABLE
INCOME.

(a) In General.--Section 1(i) of the Internal Revenue Code
of 1986 (relating to rate reductions) is amended by
redesignating paragraph (3) as paragraph (4) and by inserting
after paragraph (2) the following new paragraph:
``(3) Exception for taxpayers with taxable income of
$1,000,000, or more.--
``(A) In general.--Notwithstanding paragraph (2), in the
case of taxable years beginning in a calender year after
2007, the last item in the fourth column of the table under
paragraph (2) shall be applied by substituting `39.6%' for
`35.0%' with respect to taxable income in excess of
$1,000,000 (one-half of such amount in the case of taxpayers
to whom subsection (d) applies).
``(B) Inflation adjustment.--In the case of the dollar
amount under subparagraph (A), paragraph (1)(C) shall be
applied by substituting `2008' for `2003' and `2007' for
`2002'.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
(c) Application of Egtrra Sunset.--The amendment made by
this section shall be subject to title IX of the Economic
Growth and Tax Relief Reconciliation Act of 2001 to the same
extent and in the same manner as the provision of such Act to
which such amendment relates.

Mr. KERRY. I thank the Chair and thank my friend.
The PRESIDING OFFICER. The Senator from Florida.
Mr. NELSON of Florida. Mr. President, first of all, before the
Senator from Utah leaves the Chamber, I want to say that I listened to
him, and I appreciate his leadership. This is one of the most important
programs. It was created back in 1997, when the Senator from Utah took
a leading role, along with the Senator from Montana. It is truly a
bipartisan program, and it is one that has met with great success.
As it was created in 1997, this Senator happened to be the elected
State treasurer and insurance commissioner of Florida, of which in that
position I chaired the health insurance program for children that had
been set up separate from this program. This program just all the more
enabled us in Florida to add that many more children to receive health
care, particularly health care at a time that is so important in their
lives, when those little minds are beginning to learn and those little
bodies are beginning to build.
So I just want the two Senators on the floor to know how much I
appreciate it.
Since 1997, even as the percentage of uninsured adults has increased,
the rate of low-income uninsured children has decreased by over a
third. As a result, these insured children, in large part because of
this program, have been afforded better access to primary and
preventive care, better quality of care, improved health, and even
improved school performance.
In our State, over 300,000 children received health insurance through
Medicaid or CHIP last year, and those children were able to enjoy these
benefits. But over 700,000 children in Florida remain uninsured. This
legislation before us is the best opportunity to expand coverage to a
significant portion of those 700,000 children in Florida and millions
of low-income uninsured children throughout the country.
We have seen how successful this program can be, and we are aware of
how many more children should be allowed to participate. So 10 years
after the creation of the program, now we have the opportunity to pass
this bipartisan bill that reauthorizes and further strengthens this
very popular program.
This legislation is bipartisan. It is going to bring health care to
millions of children. While many of us in this Chamber have supported
an additional $50 billion for this program, I believe the $35 billion
allocated in this legislation is a fair compromise. With that money, we
can still accomplish an increase of more than 3 million children newly
insured under the program.
I also support the inclusion of legal immigrant children and pregnant
women in the program, and I was disappointed to see it was not included
in this legislation. Under current law, legal immigrants who have been
in this country for less than 5 years are not eligible to participate
in Medicaid or CHIP, despite the fact they pay taxes to support those
programs. As a result, the preventive effects of health insurance are
not being realized for them. I am concerned, as so many of us are, that
we are going to end up paying much more in the future for health
problems that could have been treated

[[Page S10575]]

early on. I understand there will be an amendment that will be offered
to include legal--legal--immigrants in this reauthorization, and I am
going to support that amendment.
Now, another concern I have is a portion of the tobacco tax. It is
not the tobacco tax. If you have to find a source of revenue, then this
is the place to do it. But I want to emphasize the increase in the
tobacco tax, as a whole, is quite appropriate as a funding mechanism
for this legislation. It is going to have significant, positive impacts
on health. It is going to save billions of dollars in health care
costs, and it is going to reduce the prevalence of smoking among kids,
whom this bill is designed to protect. But there is a portion that is
not fair, and that is the tax that is applied with some inequity across
product lines. Unbeknownst to most people, Florida is the largest cigar
manufacturing State in the country and serves also as the main port of
entry for premium handmade cigars into the United States. There are
approximately 30 cigar manufacturers and importers based in Florida
which employ 4,000 workers and thousands more in support industries. I
hope some of these problems with the tax which cause many multiple
thousands of a percentage increase in the tax on those cigars is going
to be addressed in this bill, and what is not addressed in this bill
can be addressed in conference.

Despite some concerns, this bipartisan legislation is a strong bill
with much to its credit. It will institute a more streamlined funding
process and it will provide for improved child health quality measures,
and will give States such as ours important opportunities for
expansion.
We have the opportunity to do something that is morally unassailable,
and that is to expand access to health care to a significant number of
low-income children. I believe this bipartisan legislation is the best
way forward, and I look forward to casting my vote in favor.
Thank you, Mr. President.
The PRESIDING OFFICER. The Senator from South Dakota.

Modification to Amendment No. 2593

Mr. THUNE. Mr. President, I ask unanimous consent that the Lott
amendment be modified with the changes at the desk.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The modification is as follows:

modification to lott amdt. no. 2593

Strike TITLE III.

Amendment No. 2579 to Amendment No. 2530

Mr. THUNE. Mr. President, I ask unanimous consent to call up
amendment No. 2579.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The legislative clerk read as follows:

The Senator from South Dakota [Mr. Thune], for himself, Mr.
Lott, Mr. Cornyn, and Mr. DeMint, proposes an amendment
numbered 2579 to amendment No. 2530.

Mr. THUNE. Mr. President, I ask unanimous consent that the reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To exclude individuals with alternative minimum tax liability
from eligibility for SCHIP coverage)

At the end of title VI, add the following:

SEC. ___. EXCLUSION OF INDIVIDUALS WITH ALTERNATIVE MINIMUM
TAX LIABILITY FROM ELIGIBILITY FOR SCHIP
COVERAGE.

(a) In General.--Section 2102(b), as amended by this Act,
is amended by adding at the end the following new paragraph:
``(6) Exclusion of individuals with alternative minimum tax
liability.--Notwithstanding any other provision of this
title, no individual whose income is subject to tax liability
imposed under section 55 of the Internal Revenue Code of 1986
for the taxable year shall be eligible for assistance under a
State plan under this title for the fiscal year following
such taxable year.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

Mr. THUNE. Mr. President, I am pleased to be here today in support of
the Kids First Act, which is being referred to as the McConnell-Lott or
Lott-McConnell alternative, which will in the long run, in my view, do
more to lower health care costs and help the underlying expansion bill
we are debating here today. Let me say also it is frustrating that
instead of debating a reauthorization of a very popular program--the
SCHIP program--Members on both sides of the aisle are being asked to
support a new program, a brandnew program, that will cover children and
adults at 300 percent of the poverty level--and some at even higher
levels.
Let me tell my colleagues a little bit about the makeup of the
uninsured population in my State of South Dakota. Right now,
approximately 2.6 percent of the children in my State are uninsured, or
approximately 5,000 children. This percentage does not include the
approximately 5,000 Native American children who receive their health
care from the Indian Health Service. It is very important to break down
these statistics in each State since the needs vary greatly in each
State and from region to region.
For example, of the approximately 5,000 uninsured children in South
Dakota, a number of these children are currently eligible but not
enrolled in Medicaid or SCHIP. In other words, in my State, a number of
our uninsured children are actually at or below 200 percent of the
Federal poverty level. This SCHIP expansion bill under consideration
doesn't focus on these children. Instead, it channels more money to
cover children from families at higher incomes.
I mention these facts because I am concerned that the underlying bill
misses the most key problems in my State for the uninsured, and it
misses the basic goal to make sure that eligible low-income children
are able to take full advantage of our safety net health care programs.
If our goal is to simply put all children--or even all families, for
that matter--in South Dakota, insured or uninsured, into Government
health insurance, and make thousands more families in my State
dependent on the Government for their health care, and limiting more
choices for families and parents in my State, then that is an entirely
different goal, and it is a goal I don't share.
Let me expand on that a little bit, if I might, to give an idea of
what the uninsured problem is in its totality in South Dakota.
Currently, according to our State, there are approximately 61,000
uninsured individuals--an uninsured rate of the adult population of
about 9 percent. I have already discussed the statistics for children,
so let me do so for adults. In a recent survey done by the State of
South Dakota, the adult uninsured population breaks down in the
following way: Of the total number of uninsured adults--approximately
53,390--13,401 are not employed. That amounts to about 25 percent. This
means that approximately 70 percent of the uninsured adults in my State
are actually working. If you break down that number even further, most
of that number--31,000 out of 37,000--are employed, working 30 or more
hours a week. They are not part-time workers.
About 10,500 of these employed and uninsured individuals are self-
employed. We happen to have a large number of self-employed farmers and
ranchers and business owners in my State who simply cannot afford
health insurance.
But the uninsured population in my State could purchase insurance if
it were more affordable. There are huge steps we could take to bring
down the cost of insurance in my State for all of those small business
employees and self-employed and cover even more uninsured, and without
expanding a government program with tax increases.
Also, the cost to insure a child or adult under the SCHIP program is
three to four times the cost of insuring a child with private
insurance. That is an inefficient way of covering people who are
uninsured. Already today, about half of our country's children are on
public insurance. That is not sustainable, and it makes it nearly
impossible in the State of South Dakota--a very rural State--already
with more limited options than others when it comes to health care
access to have a vibrant health care insurance market.
I was in the House of Representatives when the current SCHIP bill
passed in the Balanced Budget Act of 1997. I voted for that. I voted
for other reforms as a Member of the House of Representatives and since
coming to the Senate. Frankly, I think the debate over health care
needs to be engaged in this country, because we have way too many
people who are uninsured. Our

[[Page S10576]]

health care costs in this country now are a couple billion dollars--we
have heard that repeated throughout the debate on the floor today--or
about 16 to 17 percent of our gross domestic product. That is an
enormous amount of money that is spent on health care in this country.
I think we have to ask ourselves: What can we do to make reforms in
the health care system that will lower costs, make health care more
accessible to more people in this country, and make sure that the ranks
of the uninsured decrease rather than increase?
One of the things I supported as a Member of the House of
Representatives is small business health plans--expanding access to
tax-advantaged accounts that allow people to own and take control of
their own health care, such as health savings accounts. In fact, small
businesses make up most of the employers in my State. In 2003,
according to the Small Business Administration, there were 20,400
employer firms with fewer than 500 employees, which represented 96.9
percent of employer businesses in my State and employed approximately
63 percent of the nonfarm private workforce. The alternative I referred
to--the McConnell-Lott alternative that will be offered--will allow for
small business health plans, a proposal that will do much more for my
State in the long run and strengthen our private health insurance
market in the future. Small business health plans would allow small
business associations to band their members together to purchase more
affordable insurance, which increases their bargaining power to get
better benefits at better prices such as big businesses currently get.
This proposal also gives small business health plans the flexibility
to provide a variety of uniform benefit packages across State lines,
which is the only way small business associations could provide new
options affordably. As a result, this proposal would reduce the cost of
health insurance for small employers by about 12 percent, or $1,000 per
employee, according to a respected actuarial firm. The bill would also
cover more than 1 million uninsured Americans and working families or 1
out of every 12 people who live in a family headed by someone who works
for a small company. The Congressional Budget Office states that three
out of every four small business employees would pay lower premiums
under the McConnell-Lott alternative than under current law.

What I want for South Dakota is for more people to have control over
their health care, more options for their care, and more competition in
the insurance market to help bring prices down. In fact, last week I
introduced a bill to expand access to private long-term care insurance
by allowing individuals with IRAs or 401(k)s to withdraw funds penalty
free to pay for long-term care premiums. This is extremely important in
South Dakota and across the country where many seniors have to spend
down their life savings to pay for long-term care or to qualify for
Medicaid.
Mr. REID. Mr. President, could I ask the distinguished Senator from
South Dakota if I could interrupt for a unanimous consent request?
Mr. THUNE. I yield to the majority leader.
Mr. REID. I yield a couple of minutes to Senator Baucus for the
unanimous consent request.
The PRESIDING OFFICER. The Senator from Montana is recognized.
Mr. BAUCUS. Mr. President, I ask unanimous consent that at 6 p.m. the
Senate vote in relation to Senator Dole's amendment No. 2554; that
following that vote the Senate vote in relation to Senator Bunning's
amendment No. 2547; that following that vote the Senate vote in
relation to Senator Lott's amendment, as modified, No. 2593; and
following that vote the Senate vote in relation to Senator Kerry's
amendment No. 2602, as modified; that there be 2 minutes for debate,
equally divided, prior to each vote; that no other amendments be in
order prior to these votes; that any amendment not disposed of remain
debatable and amendable, and that the time between now and 6 p.m. be
equally divided between the two leaders or their designees.
The PRESIDING OFFICER. Is there objection?
The Senator from Idaho is recognized.
Mr. CRAIG. Reserving the right to object, I only want to speak to the
division of the time between now and the proposed schedule of votes. I
had come to the floor hoping to gain 10 minutes, and I wonder--the
Senator obviously who is speaking now and the other Senator who has
time reserved, if we could have some understanding in the allocation if
it is possible for me to be able to speak for up to 10 minutes?
Mr. BAUCUS. First, Mr. President, I modify the unanimous consent
request to say that after the first vote, there be 10 minutes between
votes--that they be 10-minute votes.
The PRESIDING OFFICER. Is there objection?
Mr. BAUCUS. Mr. President, I will do my best to allocate time from
one of the remaining speakers so that the Senator from Idaho could
speak as much as he can. We are trying to use the time as best we can
between now and 6 o'clock.
Mr. REID. Mr. President, if I could interrupt, Senator Thune was
speaking and I would ask, how much more time does the Senator need?
Mr. THUNE. I say to the majority leader that I can wrap up my remarks
speaking to the amendment specifically, but I am sure within the next
10 minutes.
Mr. REID. How much time does Senator Craig need?
Mr. CRAIG. I would hope to have somewhere near 10 minutes, if
possible.
Mr. LAUTENBERG. Mr. President, I would ask whether it is understood
that I would have up to 15 minutes, and I don't think I will need that
long, but I do make that request.
Mr. BAUCUS. Mr. President, the order has been Senator Nelson and
Senator Thune--excuse me, the Senator from Florida, Senator Thune, and
Senator Lautenberg. I think given the time, if the Senators understand
the three remaining speakers have a total of a half hour, we can work
that out. The Senator would get at least 10 minutes, and depending upon
the length of time other Senators speak, he may get more. Senator Thune
still has the floor.
The PRESIDING OFFICER. Is there objection?
Mr. LAUTENBERG. Reserving the right to object, Mr. President, I
thought we had carved out an understanding.
The PRESIDING OFFICER. Under the current agreement, Senator Thune has
the floor, and the Senator from New Jersey, Senator Lautenberg, will
follow. We are free to modify that agreement if there is no objection
to add the Senator from Idaho for additional time.
Mr. CRAIG. Mr. President, I will not object. Let's get these Senators
talking so we don't burn up any more slack time.
The PRESIDING OFFICER. Is there objection to the request, as
modified?
Without objection, it is so ordered.
The Senator from South Dakota may proceed.
Mr. THUNE. Mr. President, let me again pick up where I left off in
regard to the cost of health care, both health care in the sense that
we all need it, and as we get into retirement age, Medicare, but I was
also making reference to long-term care in some legislation I
introduced recently with regard to that.
It is important that affordable, long-term care insurance allow
individuals to plan for their later years as well. More competition in
the long-term care insurance market would mean more options for South
Dakota's families and seniors, not to mention reductions in Federal
spending. So putting the politics of Government on health care versus
private insurance aside--and again, I believe that is a debate this
Senate is going to have to join in the not too distant future, because
I believe this is where the debate actually today is taking us. We are
growing the amount of Government health care out there, pushing aside
the options for private health care insurance. Frankly, I believe the
thing that differentiates our country from those around the world and
why people come here for health care rather than going to other
countries is because we have the best health care in the world.
We have a robust free market-based system that allows for innovation
and for research and comes up with literally the best therapies in the
world.

[[Page S10577]]

I want to continue to make that market work. I don't want to make it
harder for citizens in my State to get health insurance in the private
marketplace. I fear that as we go down this road, we are starting to
look at what, in effect, will be a major debate raging; it is raging
across the country, but it will ultimately be dealt with here, and we
will decide whether we want to have a government-run, bureaucratic
health care system or whether we want to preserve the market-based
system that has worked so well for us in the past. I don't want to make
it harder for citizens in my State to choose and afford the insurance
plan that is best for them.
Finally, I don't want to support doubling the size of this particular
program, which, after 5 years, is going to have to be paid for with
substantial tax increases on all Americans, because I think as we all
know when you reach 2013, there is a cliff there, and at some point
that issue is going to have to be dealt with because there is a huge
funding shortfall under the proposal that is on the floor before us
today.
I support the McConnell-Lott alternative, which reauthorizes the
current SCHIP program and also helps lower health care costs for all
Americans and because it allows for small business health plans and
other types of alternatives that can be used by allowing South Dakotan
small businesses to pool together to purchase more affordable health
insurance and make further needed improvements to the underlying SCHIP
program for children, as well as providing long-term solutions for
lowering the cost of health care for all Americans.
I also wish to speak on amendment No. 2579, which I offered. Under
this bill, the Congress will be making it possible, as my colleague
from Montana pointed out earlier--it is not the case today, but there
are some States around the country where this bill expands the
underlying amount, or income eligibility, up to 300 percent of the
Federal poverty level. But there are States which have waiver requests
that would allow them to go to 400 percent of the poverty level. There
is not anything in the underlying bill that prevents that from
happening. That would make it possible for people to be put on the
rolls of the SCHIP program for health care who are not only low income
but who at the same time are subject to the alternative minimum tax, or
the AMT, which is a tax intended for individuals and families who are
wealthy.
Let me repeat that. Under the bill, individuals eligible for SCHIP--
one of our Nation's safety net health insurance programs--may also be
hit with the alternative minimum tax, which is meant to ensure that the
wealthy in our society are paying their fair share of taxes.
Effectively, the Federal Government could consider you poor under the
SCHIP program for the purpose of providing you free health insurance,
while at the same time the Internal Revenue Service considers you
wealthy because of the level of income you make, so that you would have
to pay higher taxes.
My amendment is pretty straightforward. It simply says that if a
family finds out when they file their taxes that they are subject to
the AMT, then the State in which they reside has to remove them from
its SCHIP program by the following fiscal year. In other words, you
cannot be eligible for both. You cannot be both rich and poor at the
same time.
The SCHIP program should be preserved as a program for low-income
children, for those who need it. This amendment is simply intended to
ensure we continue focusing on that fact.
I remember, as I said, this debate from 1997, when we decided to
create the SCHIP program. I was in the House at that time, and I
supported the creation of this program to help the uninsured who have
incomes too high to qualify for Medicaid. But I also remember the
concerns of my colleagues that down the road we would be faced with
pressure to expand the program. That is what has happened for decades
with entitlement spending in this country. We know we are facing a
fiscal crisis already in Medicare and Medicaid that cannot be solved
with more Government expansion. Yet here we are today debating how much
to expand a government safety net program for the uninsured, which
originally was supposed to serve only low-income children.
Of course, my amendment today also points out the fallacy of the
alternative minimum tax. Under current law, if we don't enact another
``patch'' or comprehensive AMT reform, middle-income families
everywhere will be hit with this tax, and some people on SCHIP might
even hit both. This amendment is not simply to point out we have a
looming AMT problem, which we all know must be paid for, my amendment
points out the mixed intentions of the underlying bill. If you want to
make this debate about low-income children, let's do that, but if we
want to expand eligibility for SCHIP for families making up to $62,000
or $82,000 for a family of four, if waivers are granted, then let's
have a debate on the uninsured. Let's not kid ourselves that this bill
doesn't take us closer to government-run, government-dominated
universal health care for lower, middle, and upper income families.
I welcome the debate on the uninsured. There are so many things we
can do to help lower the cost of prescription drugs and increase
competition and portability in the health insurance market and help our
small businesses and the self-employed in our States afford their
health insurance. It is these ideas we need to discuss in a debate in
this Chamber--an open and honest debate on the merits of a government-
run system or one with competition, choice, and affordability. The
estimated 61,000 uninsured adults and children in my State and the over
40 million uninsured around the country makes it imperative to this
Congress to have that debate.
The amendment I offered, amendment No. 2579, would make it very clear
under this bill that if somehow someone gets to an income level where
they are running afoul of the alternative minimum tax or are considered
wealthy or rich in this country, they are not also then considered poor
in a sense that they qualify for the SCHIP program. That seems to be an
inherent contradiction in this particular legislation.
I hope the Members of the Senate will support my amendment. It will
improve the underlying bill.
I yield back the remainder of my time.
Mr. BAUCUS. Mr. President, I know the Senator from New Jersey wishes
to speak. He has a very deep interest in one of the amendments. He
wants to speak for 15 minutes. Maybe he can speak a little less than
that. I would appreciate it.
Mr. LAUTENBERG. I will try to do that.
The PRESIDING OFFICER. The Senator from New Jersey is recognized.

Amendment No. 2547

Mr. LAUTENBERG. Mr. President, we are going to soon be voting on an
amendment proposed by Senator Bunning. I rise to register my opposition
to that amendment, and I hope my colleagues will follow me.
I come to the floor to defend the health and well-being of 3,000
children in the State of New Jersey who would have their children's
health insurance stripped away from them by the Bunning amendment.
Our mission this week is to pass a bill to expand health coverage for
our Nation's children. But instead of focusing on providing more
coverage for children, the Senator from Kentucky has targeted 3,000
children in my State to take their coverage away.
None of us has any asset we treasure more than our children. None of
us enjoys anything more than the smiles of our kids when they are
feeling good and are in good health. That is why, when we see an
attempt to remove health care from a modest-income family's children,
who care so deeply about them, I wonder what it is that we are truly
about.
This amendment is an assault on children from working families who
require health care coverage. To think that while we spend $3 billion
each and every week on the Iraq war, there is an unwillingness to
provide the necessary funding to keep all our kids healthy regardless
of their income situation. This one focuses on modest-income people. It
is amazing that while we pledge to protect our people from harm, we
shun the opportunity to shelter our children.
I wish to make our request clear to my colleagues, and I want them to
recognize that we in New Jersey always

[[Page S10578]]

pay our way fully; we more than pay for the incredibly high cost of
living in New Jersey. Our health care costs are among the highest in
the Nation. Keeping our people healthy is a primary mission in our
State. We have had stem cell research going back decades. Our
pharmaceutical companies constantly research for new medicines to
benefit the well-being of people across this country and the world.
The Bush administration has recognized the higher costs in New Jersey
and explicitly granted our State the right to provide health care to
children at the level it currently does. New Jersey is not trying to
beat the system or get health coverage for its children in a way that
is unfair to other States--not at all. The State of New Jersey is
legitimately trying to provide health insurance to children,
recognizing the distinct economic characteristics of our State.
The Bunning amendment is particularly discouraging, given New
Jersey's support when it comes to helping other States in need. We know
that other States have different needs than we do, and we have unique
challenges we face as well. Time and again, New Jersey taxpayers are
asked to shoulder the burden and help other areas of the country that
are in need. In fact, for every dollar New Jersey gives to the Federal
Government, we only get back 55 cents in Federal spending programs.
Compare that with States such as Kentucky, for example, which for every
dollar paid gets $1.45 back. Some States get up to $2 back for each
dollar they pay.
Whether it is the universal service fund for telephones, essential
air service in aviation or other programs, New Jersey gives far more
than it gets back.
I want to be clear. I support many of these programs for other
States. I recognize this occurs because New Jersey is a State with a
higher-than-average income and higher-than-average costs compared to
other States.
But we care as much about our children as other people do across the
country. More than anything, we want our kids to be healthy.
There are 3,000 children in New Jersey who are depending on Senators
to oppose the Bunning amendment--3,000 children who are looking to all
of us to let them continue to have health care.
The Bunning amendment is contrary to everything we are trying to
accomplish on the floor this week. If that amendment is adopted, this
bill will be tainted with the legacy of taking health insurance away
from children who need it but whose families cannot afford to supply it
on their own.
I have many families who come in to see me and bring their children
with them. I welcome them with open arms. There is nothing I find more
satisfying than to see parents and their children together. They come
in often with diseases that are difficult, such as autism, diabetes,
and asthma. Not only do these children require a lot of love,
affection, and attention but, unfortunately, very often it is at a cost
that few families can bear. I want to help those kids, those families,
and I reach out to them in any way I can. I want stem cell research to
be available. I want more money spent on general health research.
I hope my colleagues will reject this amendment on a bipartisan
basis. I commend the chairman of the Finance Committee and the ranking
member for the work they did. They overwhelmingly rejected the
amendment of the Senator from Kentucky on a bipartisan vote. This
amendment that has been authored by the Senator from Kentucky flies in
the face of the good judgment of the Finance Committee. I hope my
colleagues will reject this amendment, the Bunning amendment, once
again when it gets to the Senate floor.
I am pleased to yield the floor.
The PRESIDING OFFICER. The Senator from Arizona is recognized.

Amendment No. 2593

Mr. KYL. Mr. President, I will speak briefly to the Republican
alternative--the amendment that will be voted on later as a
comprehensive alternative to the bill. Unlike the Finance Committee
bill, the Republican alternative achieves the following goals:
First, it reauthorizes SCHIP and preserves health care coverage for
millions of low-income children.
Secondly, it adds 1.3 million new children to SCHIP coverage.
Third, it provides $14 billion in new SCHIP allotments over the $25
billion baseline over the next 5 years.
Fourth, the offset is with no new tax increases and, importantly, in
contrast in the committee bill, no gimmicks to meet the budget
considerations.
Next, it includes funds for SCHIP coverage from fiscal year 2013 to
2017. This is important because the Finance Committee bill, in
comparison, uses a budget gimmick to reduce the SCHIP funding spending
over that critical period of time. As a result, the Republican
alternative includes more money for SCHIP over 10 years--$85.1 billion
as compared to the Finance Committee bill of $81.7 billion.
Next, it minimizes the reduction in private coverage by targeting
SCHIP funds to low-income children. It doesn't provide the coverage for
the adults or children for higher income families who may have access
to private health care insurance, as does the committee bill. In fact,
I note that according to CBO, for the newly eligible people to be
covered, there is a one-for-one crowd-out effect by the committee
product. That is to say, for every new family brought on for SCHIP
coverage, there is one that goes off private health insurance coverage.
That is not a goal to which we should be aspiring.
Next, the Republican alternative promotes market-based health
reforms, such as small business health plans and health savings
accounts.
Finally, it requires a Treasury Department study on ways to make the
tax treatment of health care more equitable, something the President
raised in his State of the Union speech earlier this year and which we
do need to study to come up with a more equitable tax system.
For all these reasons, I urge my colleagues to support the Republican
alternative. I note that it is very simple in terms of the two choices
that confront the Senate: one, a budget buster that does not protect
SCHIP coverage over 10 years and represents an open-ended financial
burden on American taxpayers and takes a significant step toward
Government-run health care, or a fiscally responsible SCHIP
reauthorization that preserves coverage for millions of low-income
children that is fully offset without budget gimmicks or tax increases
and promotes market-driven health reforms.
To me, the choice is very clear. The Republican alternative is the
right solution for everyone. I urge its adoption by my colleagues.
The PRESIDING OFFICER. Who yields time? The Senator from Vermont.

Amendment No. 2602

Mr. SANDERS. Mr. President, I will be very brief. I rise in support
of the Kerry amendment. I do so for two reasons. No. 1, while I applaud
Senator Baucus and Senator Grassley for their work on expanding health
insurance to 3.2 million more children, we should be aware that
expansion only increases coverage for one-third of children in this
country who are uninsured. This is the United States of America, and we
should not continue to be embarrassed by the fact that we remain the
only country in the industrialized world that does not provide health
insurance for all of our children. Going forward for 3.2 million
children is undoubtedly a step forward. We have, however, a long way to
go, and the Kerry amendment would take us closer.
The second point I wish to make deals with national priorities and
the direction in which we believe our country should go.
I hear that a lot of my friends are talking about the expense
involved in providing health insurance to our children. This particular
bill would cost us $35 billion over a 5-year period. Is $35 billion a
lot of money? It is. Is it worth spending that money to cover 3.2
million children? It is. Yet I find it ironic that the President of the
United States and others are telling us we cannot afford this
expenditure at the same time that many--the President, certainly--are
telling us we need to repeal completely the estate tax, which only
applies to the wealthiest two-tenths of 1 percent of our population. If
we were to repeal the estate tax, one family, the Walton family who
owns Wal-Mart, would receive tax breaks worth $32.7 billion for one
family. So the debate today is whether we spend $35 billion to

[[Page S10579]]

cover, over a 5-year period, 3.2 million children or, as the President
and others would have us do, give $32.7 billion in tax breaks to one
family. This is an issue of national priorities.
Very briefly, because I see my friend from Iowa standing, it seems to
me we have to move not only to provide health insurance for all our
children, but, in fact, we need to move to a national health care
program that guarantees health care for every man, woman, and child in
this country, and we can.
I conclude on that note. This is a moral issue. We have to cover our
children. This is an issue of national priorities. For all of those who
think we are spending too much money, they may want to think twice
about the hundreds of billions of dollars in tax breaks they have given
to the wealthiest 1 percent and the ideas they have for the future.
I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, if it is OK, I yield to the Senator from
Idaho.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, this week the Senate is engaged in an
extremely important debate about the direction we as a Congress want to
take in ensuring health care for all Americans.
I recognize that the bill we are debating this week is literally one
that focuses on children's health. But, I believe the design of this
legislation and who we are targeting tells us something about how the
majority in the Senate believes we should provide health care for all
of our citizens.
This bill lays out one way to provide health care coverage in this
Nation. It says ``increase taxes, increase government spending, and
have the Government provide all health care plans.''
That is a failing formula. And now we are going to use that tax-and-
spend formula to move further down the road towards socialized
medicine.
Under this bill, middle-class taxpayers in Idaho will be supporting
health insurance for some families making more money than they are.
I strongly oppose the Finance Committee legislation. Instead, I will
vote for the McConnell-Lott alternative bill.
Let me make it clear that I support reauthorizing the SCHIP program
to ensure that low-income children have health insurance. No one should
conclude that my vote against this bill is a vote against insuring poor
children. My vote is a vote against massive tax increases and out-of-
control spending. It is against a tax-and-spend policy that more than
doubles the cost of a program for poor children so we can cover those
with higher income. And it is against a budget gimmick that leaves an
unfunded liability of $40 billion in just 5 years.
A little history and few facts are in order.
When a Republican Congress and a Democratic President set out in 1997
to insure low-income children, we talked about 10 million uninsured.
At that time, there were about 20 million children on Medicaid. So we
needed to cover about 10 million kids with the SCHIP program or
Medicaid.
Today, there are 36 million children enrolled in either Medicaid or
SCHIP. Sounds like we achieved our goal and more.
Yet some of my colleagues on the other side of the aisle say we are
still 9 million short. Somehow, we insured 16 million more kids in the
last 10 years and we have made no dent in the problem? Or have we moved
the goal post? I think we have moved them.
That is why I am pleased that Senators McConnell, Lott, and others
have offered an alternative that keeps this program focused on the
group it was created to serve--low-income children.
The Republican alternative will reauthorize the SCHIP program for
another 5 years. Again, all of us favor providing health insurance to
low-income children. It will also correct some of the policy problems
with the current program and make some changes to the Finance Committee
approach.
First and foremost, the Republican alternative will provide, coverage
for all children at or below 200 percent of the Federal poverty level.
That is the goal of the Children's Health Insurance Program.
The Finance Committee bill will increase the coverage allowance to
300 percent of the poverty level and, in some cases, allow coverage of
even higher incomes than that.
In addition, the Republican alternative will stop the waivers that
have led to the current situation where a children's health insurance
program covers about 700,000 adults.
Also, the Republican alternative will provide $400 million in
outreach funding. This funding represents the key to the philosophical
difference between the Republican bill and the Finance Committee bill.
Our bill demands that Government stay focused on the population in
need. We shouldn't just raise the coverage ceiling. Let's go out and
find the one's who are already eligible and have no insurance. And then
let's enroll them.
Further, the Republican alternative would make sure that we have a
consistent definition of income. No longer can States simply
``disregard'' all kinds of income in an effort to enroll higher income
people. Frankly, the practice of disregarding income so that nonpoor
citizens qualify for poverty programs is fairly offensive.
The other important aspect of the Republican alternative is that it
addresses health care coverage in a larger context.
Let's face it, uninsured children are just the tip of the health
insurance problem in this Nation.
We are once again tinkering around the edges rather than taking on
systemic reform. The Democratic tinkering moves us in the direction
they want for the Nation--socialized medicine.
Republicans have a better idea.
The bill will provide much needed relief to small business to allow
them to provide health care benefits to their employees.
Nearly 60 percent of the 45 million uninsured Americans today are
employed by, or reliant on, small business. In other words, if we can
help small business insure their employees, then we can make a
significant dent in the total number of uninsured Americans.
I just do not see how we can take up the issue of health care and
health insurance and not talk about one way we can truly help insure
Americans. Of course, my colleagues on the other side of the aisle
don't want to do that because it doesn't take us further down their
road towards socialized medicine.
I don't want to go down that road. So I will vote for the Republican
alternative. It is fiscally responsible, it focuses the SCHIP program
on those it was created to help, and it takes a larger look at the
problem of health insurance for all Americans.
I urge my colleagues to support the McConnell-Lott amendment.
Mr. President, I ask my colleagues to support the McConnell-Lott
alternative so we do not begin a progressive march down a road toward
socialized medicine.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, the alternative Senator Craig just spoke
about is the amendment I wish to speak against. I am a Republican, but
I am part of the bipartisan effort to pass this SCHIP bill. So I will
tell my colleagues on both sides of the aisle why the Lott amendment,
or the Republican alternative, should not be accepted.
First of all, I commend the people who authored the alternative
because all ideas ought to be considered. It is creative, and it is
thoughtful. It certainly contributes to the debate. In reading through
it, I am struck by the similarities between this proposal and the
bipartisan bill before the Senate that I am backing. Both proposals
increase funding for State allotments. Both proposals largely base the
new allotments on State projections. Both proposals limit the
availability of allotments to 2 years. Both proposals restrict coverage
for nonpregnant adults. Both proposals prohibit new waivers for adult
coverage. Both proposals provide funds for outreach and enrollment
activities. Both proposals include additional State options for premium
assistance.
Lest my colleagues think I am attacking them with faint praise, I do
acknowledge there are significant differences in the approaches between
the Republican alternative and our bipartisan bill that is before the
Senate.

[[Page S10580]]

The position taken by the Lott amendment is that SCHIP has been a
successful small program that covers about 6 million kids in 2007 and
should not cover many, if any, more. The position of the Lott amendment
is that any increase in the enrollment of children should be limited to
the relatively better off SCHIP kids and not cover the poorer Medicaid
kids. That is a perfectly reasonable position for them to take, but
that is the biggest difference between the Lott amendment and the
bipartisan proposal that is referred to as Grassley-Baucus.
The difference is that the amendment supporters cannot claim that it
increases coverage for any of the 4 million uninsured children who are
eligible and entitled to Medicaid, the kids who need it most. In fact,
not only does the Lott amendment do virtually nothing to improve
coverage for the 4 million children eligible for Medicaid, but it adds
insult to injury by reducing the Medicaid Program by over $10 billion
to pay for an expansion of SCHIP.
Let me put this another way. The Lott amendment drains billions out
of the Medicaid Program, which is a program that covers the poorest of
the poor, and it redirects that funding to SCHIP, a program that covers
kids and families who make too much to qualify for Medicaid. It is the
old issue of robbing Peter to pay Paul. The Senate Finance Committee
bill, on the other hand, covers 1.7 million kids eligible for Medicaid
but not enrolled.
At this point, it is important to reiterate for colleagues that the
Senate Finance Committee bill does not expand Medicaid. The bill does
not change eligibility for Medicaid one single bit.
The Senate Finance Committee bill does include the very precise and
targeted incentive funds that Director Peter Orszag of CBO concluded is
``as efficient as you can possibly get per new dollar spent.'' This
incentive fund helps increase coverage of 3.2 million uninsured
children. The Lott amendment, however, does not increase coverage for
the lowest income children and actually causes some individuals,
including children currently enrolled in SCHIP, to lose coverage.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. BAUCUS. Mr. President, I yield whatever time the Senator from
Iowa desires.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRASSLEY. Mr. President, we simply, then, have an honest
disagreement on whether we want to cover additional low-income kids.
Some Members do; some Members do not. I am on the side that wants to
cover additional low-income children who are eligible for coverage. It
is as simple as that.
The other main difference is the income eligibility for children.
Right now, 91 percent of the SCHIP funds are being spent on kids at or
below 200 percent of poverty. Under current law, States have the
flexibility to adjust their income eligibility to respond to rising
health care costs and the cost of living within a particular State
because it differs so much between California and Iowa, to name two
States.
The Lott amendment imposes a ``Washington knows best'' mentality
regarding a State's ability to determine what income within that State
is most appropriate. And then it goes one step further: It reduces the
Federal match for covering kids above 200 percent of poverty. There are
18 States that currently cover kids above 200 percent of poverty. Under
this proposal, a State currently receiving the enhanced match under
SCHIP for coverage of eligible children would see that match reduced
for those very same children.
While I would prefer that all States focus on children at or below
200 percent of poverty, the fact remains that $42,000 a year for a
family of four is a lot harder to get by on in some States than in
other States. By imposing this new requirement that States limit
eligibility, the Lott amendment would cause kids to lose coverage. The
table CBO sent us on the Lott amendment confirms that. I am sorry, but
in a bill designed to cover kids, cutting them off is a step in the
wrong direction.
The Finance Committee bill takes a different approach. The committee
bill would lower the Federal payments to States that choose to cover
kids over 300 percent of poverty level. States that go above that limit
would only get the regular Medicaid match. Those States wouldn't get
the enhanced Federal match under SCHIP for these higher income kids. So
the Finance Committee bill creates a disincentive for States to go in
that direction.
Some have alleged that the Senate Finance Committee bill would permit
States to cover kids and families who make over $80,000. That is false.
What the Finance Committee bill does is allow States that have passed
State laws to increase eligibility to be grandfathered at the SCHIP
match as it is right now. There are no States that do that today. So it
is incorrect to say that the Finance package expands coverage for these
higher income kids. That just is not accurate.

Right now, the only State that is even proposing to go as high as 400
percent of poverty is New York, and their State plan amendment still
must be approved by the Bush administration. The Bush administration,
not Congress, has to decide whether to approve that coverage.
So let me repeat. The Senate Finance bill would only permit New York
to get an enhanced match for kids and families over 83 percent a year
if this administration approves their plan, and it gives my colleagues
on this side of the aisle who don't want that to happen a chance to
lobby the Secretary of HHS to make sure it doesn't happen.
Given the criticism they leveled against the Finance plan, I would be
shocked if they did approve it. I will wait and see, however, if their
actions match their rhetoric.
Wrapping up, let me just say again that the Lott amendment has many
similarities that I have delineated for the Senate--many similarities
to the Finance Committee package. I commend them for their work in
putting together this proposal, and I would hope that since their
amendment has so many similarities to the Senate Finance Committee
bill, perhaps they will take another look at the policies in our
bipartisan package. There are key differences in the two approaches,
however. I appreciate my colleagues' work in pointing out these
differences. I, for one, am happy to stand on the side of covering kids
rather than cutting them out, and I support giving States flexibility.

Amendments Nos. 2540 and 2541 to Amendment No. 2530

Madam President, I call up for consideration two amendments by
Senator Ensign, amendments Nos. 2541 and 2540.
The PRESIDING OFFICER (Ms. Cantwell). Without objection, the clerk
will report.
The legislative clerk read as follows:

The Senator from Iowa [Mr. Grassley], for Mr. Ensign,
proposes amendments numbered 2540 and 2541 to amendment No.
2530.

Mr. GRASSLEY. Madam President, I ask that further reading of the
amendments be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendments are as follows:

amendment no. 2540

(Purpose: To prohibit a State from using SCHIP funds to provide
coverage for nonpregnant adults until the State first demonstrates that
it has adequately covered targeted low-income children who reside in
the State)

On page 58, between lines 16 and 17, insert the following:
``(d) Cover Kids First Implementation Requirement.--
Notwithstanding the preceding subsections of this section, no
funds shall be available under this title for child health
assistance or other health benefits coverage that is provided
for any other adult other than a pregnant woman, and this
title shall be applied with respect to a State without regard
to such subsections, for each fiscal year quarter that begins
prior to the date on which the State demonstrates to the
Secretary that the State has enrolled in the State child
health plan at least 95 percent of the targeted low-income
children who reside in the State.''.

amendment no. 2541

(Purpose: To prohibit a State from providing child health assistance or
health benefits coverage to individuals whose family income exceeds 200
percent of the Federal Poverty Level unless the State demonstrates that
it has enrolled 95 percent of the targeted low-income children who
reside in the State)

At the end of title I, add the following:

SEC. 112. COVER LOW-INCOME KIDS FIRST.

Section 2105(c) (42 U.S.C. 1397ee(c)), as amended by
section 602, is amended by adding at the end the following
new paragraph:
``(12) No payments for expenditures for child health
assistance or health benefits coverage for individuals whose
gross family income exceeds 200 percent of the poverty line
unless at least 95 percent of eligible low-income children
enrolled.--

[[Page S10581]]

Notwithstanding any other provision of this title, for fiscal
years beginning with fiscal year 2008, no payments shall be
made to a State under subsection (a)(1), or any other
provision of this title, for any fiscal year quarter that
begins prior to the date on which the State demonstrates to
the Secretary that the State has enrolled in the State child
health plan at least 95 percent of the low-income children
who reside in the State and are eligible for child health
assistance under this State child health plan with respect to
any expenditures for providing child health assistance or
health benefits coverage for any individual whose gross
family income exceeds 200 percent of the poverty line.''.

Mr. GRASSLEY. Madam President, I yield the floor.
Mr. BAUCUS. Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. McCONNELL. Madam President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCONNELL. Madam President, I am going to proceed just for a few
moments on my leader time.
The PRESIDING OFFICER. Without objection, it is so ordered.

FISA Modification Effort

Mr. McCONNELL. Madam President, the ranking member of the
Intelligence Committee, Senator Bond, and I, will be introducing and
later placing on the calendar a bill related to the FISA modification
effort that has been underway on a bipartisan basis over the last few
weeks.
Senator Bond and I will be, as I said, placing in the Record, and
then subsequently doing a rule XIV placing it on the calendar, a
proposal that the administration thinks makes sense to deal with the
modifications that everyone seems to agree in principle need to be made
to the FISA procedure.
With that, I don't know that I can yield leader time to somebody who
isn't a leader, so let me just say that having given that notice, we
will be placing that on the calendar for later this evening.
Mr. REID. Madam President, just a brief comment on the distinguished
Republican leader's statement.
As we speak, there are meetings going on to see if we can resolve
this matter in a manner that is acceptable to Republicans and Democrats
in the Senate, and of course then we have to also be concerned about
the House. Senator McConnell and I were in a meeting early this morning
with individuals, including Admiral McConnell, and we hope something
can be worked out.
We waited a little longer than I wanted, waiting for Admiral
McConnell's papers to come here this afternoon, but they are here and
they are being reviewed. I spoke to Senator Levin just a few minutes
ago. There is nothing serious, but Senator Rockefeller has been with
his wife today on a minor problem, but it was necessary he not be here.
So we are trying to work our way through this.
Hopefully, we can resolve this. It is something important, we are
going to do everything we can, and we hope all sides will be
reasonable. At this point they have been. It is an issue we certainly
need to resolve, if at all possible, before we leave for our August
recess.
Mr. McCONNELL. Madam President, if I may, let me just commend the
majority leader on his observations. I know people on both sides of the
aisle are working intensely on this issue, and I, too, hope and believe
we will get it resolved by the end of the week.
I did, however, want all Members of the Senate to be aware of a
proposal that the administration feels very strongly would get the job
done in the hopes that it would enjoy bipartisan support. Senator Bond
and I will address the details of it after the votes, and I will rule
XIV it onto the calendar at that point.
I yield the floor.

Amendment No. 2554

The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes equally divided on amendment No. 2554, offered by the Senator
from North Carolina.
Mrs. DOLE. Madam President, increasing the tax on tobacco unfairly
burdens low-income Americans. My amendment is simple: It creates a 60-
vote budget point of order against any legislation that includes a
Federal excise tax increase that would unfairly affect low-income
individuals, defined as taxpayers with earned income less than 200
percent of the Federal poverty level.
According to the Centers for Disease Control report from 2003 to
2005, 28.5 percent of smokers were classified as poor--below 100
percent of the Federal poverty level--and 25.9 percent of smokers were
classified as near poor--between 100 and 200 percent of the Federal
poverty level. As these numbers clearly show, the tax increase proposed
in this bill unfairly falls on the shoulders of those who can least
afford it.
I am urging my colleagues to acknowledge that the proposed tax
increase is an irresponsible and fiscally unsound policy. I urge my
colleagues to support the fact that this has a negative impact and is
disproportionately hard on the poor.
Madam President, I ask for the yeas and the nays.
The PRESIDING OFFICER. Is there a sufficient second? There appears to
be.
The yeas and nays were ordered.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Madam President, I understand the Senator does not like
the way we are paying for this bill. The more appropriate response
would be for the Senator to offer an amendment to strike it or to find
some other way to pay for it. I do not think it is wise for this body
to enact another procedural hurdle as we consider legislation generally
here; that is, another hurdle that would block attempts for us to help
people in the States we represent. I don't think that is needed.
Secondly, this is the wrong time to consider changing Senate
procedure. The more appropriate time is during consideration of the
budget resolution, when the Senate has all the budget issues before it.
I don't think it makes any sense to put another procedural obstacle
before us to make it more difficult for Congress to respond to the
needs of the American people.
I encourage Senators to, therefore, not support the amendment.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from South Dakota (Mr.
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are
necessarily absent.
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 32, nays 64, as follows:

[Rollcall Vote No. 289 Leg.]

YEAS--32

Allard
Barrasso
Bond
Bunning
Burr
Chambliss
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeMint
Dole
Ensign
Enzi
Graham
Hagel
Hutchison
Inhofe
Isakson
Kyl
Lott
Martinez
McConnell
Nelson (NE)
Sessions
Shelby
Thune
Vitter
Voinovich
Warner

NAYS--64

Akaka
Alexander
Baucus
Bayh
Bennett
Biden
Bingaman
Boxer
Brown
Byrd
Cantwell
Cardin
Carper
Casey
Clinton
Coburn
Conrad
Corker
Dodd
Domenici
Dorgan
Durbin
Feingold
Feinstein
Grassley
Gregg
Harkin
Hatch
Inouye
Kennedy
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lugar
McCaskill
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Obama
Pryor
Reed
Reid
Roberts
Salazar
Sanders
Schumer
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Tester
Webb
Whitehouse
Wyden

NOT VOTING--4

Brownback
Johnson
McCain
Rockefeller
The amendment (No. 2554) was rejected.
Mr. BAUCUS. Madam President, I move to reconsider the vote.
Mr. GRASSLEY. Madam President, I move to lay that motion on the
table.
The motion to lay on the table was agreed to.

Amendment No. 2547

The PRESIDING OFFICER. Under the previous order, there will now be 2

[[Page S10582]]

minutes equally divided on amendment No. 2547 offered by the Senator
from Kentucky.
Mr. BUNNING. Madam President, my amendment is simple. It strikes the
exemption for New York and New Jersey to get Federal dollars for
covering families above 300 percent of poverty. No other State in the
country gets that kind of an exemption. New Jersey's SCHIP program
covers families up to $72,000 a year, 350 percent. New York is planning
on covering families making up to $82,000 a year. It has not yet been
approved by HHS.
Why should people in every other State subsidize Government health
care for families in New York and New Jersey at these higher incomes?
My amendment does not kick kids off SCHIP. The State can still cover
them at their Medicaid matching rate. It is the State's choice. If
people in these two States think this is a priority, then they should
be willing to pay more for this type of benefit. I am sure New York and
New Jersey are expensive areas to live. But those States have more
resources and a larger tax base than others. I urge a ``yes'' vote on
my amendment.
The PRESIDING OFFICER. The Senator's time has expired.
The Senator from New Jersey.
Mr. LAUTENBERG. Madam President, we listened to the comments from our
colleague from Kentucky about how much New Jersey or New York can
afford. But I will tell you this, New Jersey, for each dollar that it
sends down to the Federal Government, it gets barely half of it back.
But not in Kentucky. In Kentucky, if they send in a dollar, they get
$1.45 back. We cannot compare things. We cannot compare costs of
living. The poverty level for a four-person family is $20,000. That
means their income is about $5,000 a month. In New Jersey, after taxes,
housing, and other costs, they're left with about $865. And yet their
health care costs average above $2,000.
As a consequence, with $2,000 a month for health care costs, every
family is burdened up until almost the highest of incomes. So we ask
fairness. Here we are trying to expand health care for children, and
our colleague wants to take that away. This is not fair, it is not
right, and I hope we will defeat this soundly.
The PRESIDING OFFICER. The Senator's time has expired.
The Senator from Montana.
Mr. BAUCUS. Madam President, I move to table the Bunning amendment
and ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from South Dakota (Mr.
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are
necessarily absent.
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 53, nays 43, as follows:

[Rollcall Vote No. 290 Leg.]

YEAS--53

Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Brown
Byrd
Cantwell
Cardin
Carper
Casey
Clinton
Conrad
Dodd
Domenici
Dorgan
Durbin
Feingold
Feinstein
Grassley
Harkin
Hatch
Inouye
Kennedy
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
McCaskill
Menendez
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Salazar
Sanders
Schumer
Snowe
Stabenow
Tester
Webb
Whitehouse
Wyden

NAYS--43

Alexander
Allard
Barrasso
Bennett
Bond
Bunning
Burr
Chambliss
Coburn
Cochran
Coleman
Collins
Corker
Cornyn
Craig
Crapo
DeMint
Dole
Ensign
Enzi
Graham
Gregg
Hagel
Hutchison
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McConnell
Murkowski
Roberts
Sessions
Shelby
Smith
Specter
Stevens
Sununu
Thune
Vitter
Voinovich
Warner

NOT VOTING--4

Brownback
Johnson
McCain
Rockefeller
The motion was agreed to.
Mr. BAUCUS. I move to reconsider the vote and to lay that motion on
the table.
The motion to lay on the table was agreed to.

Amendment No. 2593

The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate equally divided on amendment No. 2593, as modified,
offered by the Senator from Mississippi.
Mr. LOTT. Madam President, the Baucus bill we have before us is a $35
billion increase over the current $25 billion, a $60 billion bill. Our
Kids First alternative amendment targets children. SCHIP does not have
an A in it. We should not move steadily toward more and more higher
income children and adults being included in the program. This one is
targeted to children. The cost is $9 billion above the $25 billion in
the baseline. It will cover an additional 1.3 million children over the
next 5 years. This 40-percent increase would maintain children
currently enrolled and insure 2.2 million more children by 2017 than is
in the underlying Baucus bill. It also includes the small business
health plans, which I believe would lead to the coverage of an
additional 10 or 20 million people who work for small businesses that
now cannot get coverage. There is no tax increase in this provision. It
is paid for by equalizing the State match for Medicaid administrative
expenses at 50 percent.
Mr. McCONNELL. Madam President, the State Children's Health Insurance
Program was created to target the health care needs of poor children
whose families made too much to be eligible for Medicaid but were still
in danger of not being able to afford private health insurance.
SCHIP is in many ways successful, as last year, 6.6 million children
had health care coverage thanks to it, including more than 50,000 in
the Commonwealth of Kentucky. From 1996 to 2005, the rate of children
living without health insurance in America dropped by 25 percent.
So as the Senate turned to debate the reauthorization of this
Federal/State partnership, I had hoped that all of my colleagues would
focus on SCHIP's true goal: covering children. Unfortunately, that is
not what the Finance Committee's bill does. This bill is a dramatic
departure from current SCHIP law that will significantly raise taxes,
increase spending, and lead to Government-run health care.
At a time when the people of America have made clear that they want
us to reduce Government spending, Democrats are going to spend $112
billion of the taxpayers' money. And part of this increase will go
toward people that SCHIP was never meant to cover, as this proposal
will allow more adults to piggyback onto a children's health program.
So Senators Lott, Kyl, Gregg, Bunning, and I have proposed an
alternative measure I hope all of my colleagues will consider. Our Kids
First Act will refocus SCHIP to help the people it was designed to
help: low-income children.
The Kids First Act will reauthorize SCHIP for 5 years and would
ensure that children enrolled in SCHIP stay covered by adding $14
billion in funding above and beyond the baseline SCHIP budget.
Our alternative will add 1.3 million new kids to the SCHIP program by
2012. By contrast, the Finance Committee bill actually begins reducing
kids' coverage in 2012 and results in fewer children having SCHIP
coverage in 2017.
Our alternative also provides $400 million over the next 5 years for
States to spend on outreach and enrollment for low-income children who
are eligible but not on SCHIP, so we can enroll them. This money will
help guarantee that SCHIP dollars go toward the low-income kids the
program is meant to help.
The Kids First Act takes several measures to make health insurance
more affordable and cost-effective. For

[[Page S10583]]

instance, it encourages premium assistance to aid parents in buying
private health insurance for their children.
It also includes the small business health plan legislation we
considered in the 109th Congress. Of the 20 million working Americans
who do not have health insurance, nearly half work in firms of 25 or
fewer.
Small business health plans would allow those firms to band together
across State lines, increase their bargaining power and afford better
health care coverage for their employees.
Finally, our alternative ensures that the taxpayers' dollars are
spent appropriately by decreasing the number of adults who can take
advantage of the program.
While considerably less expensive to the taxpayers than the Finance
Committee's bill, it is worth noting, that many States, including
Kentucky, would fare better next year under the Kids First Act than
under the committee bill.
Our plan is fiscally responsible and focuses Government assistance on
those who really need it. It reauthorizes and improves upon a program
that works instead of transforming it into a license for higher taxes,
higher spending, and another giant leap toward Government-run health
care.
It can receive a Presidential signature, and it deserves this
Senate's support.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Madam President, effectively, the Lott amendment is
actually going to cause in some States a reduction in kids who are
covered. It is very nominal, a slight increase overall. It does not
begin to address the 6.6 million kids we need to cover under CHIP, as I
think most of us want to. The basic point is, this amendment has lots
of other provisions in it which I do not think we should appropriately
consider at this point. The small business health plans, HSAs, is a
debate for another day. It has nothing to do with the Children's Health
Insurance Program. I don't think it is wise to put those battles on the
backs of kids. We should get this legislation passed. It helps kids. It
cuts back adults. It is moderate. It cuts back on some excessive
coverage in some States, but it is unwise to radically restructure
health insurance with the health insurance provision as well as HSAs.
Mr. LOTT. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be.
The question is on agreeing to the amendment. The clerk will call the
roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from South Dakota (Mr.
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are
necessarily absent.
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
The PRESIDING OFFICER (Mr. Casey). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 35, nays 61, as follows:

[Rollcall Vote No. 291 Leg.]

YEAS--35

Alexander
Allard
Barrasso
Bennett
Bunning
Burr
Chambliss
Coburn
Cochran
Corker
Cornyn
Craig
Crapo
DeMint
Dole
Ensign
Enzi
Graham
Gregg
Hagel
Hutchison
Inhofe
Isakson
Kyl
Lott
Martinez
McConnell
Sessions
Shelby
Stevens
Sununu
Thune
Vitter
Voinovich
Warner

NAYS--61

Akaka
Baucus
Bayh
Biden
Bingaman
Bond
Boxer
Brown
Byrd
Cantwell
Cardin
Carper
Casey
Clinton
Coleman
Collins
Conrad
Dodd
Domenici
Dorgan
Durbin
Feingold
Feinstein
Grassley
Harkin
Hatch
Inouye
Kennedy
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lugar
McCaskill
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Roberts
Salazar
Sanders
Schumer
Smith
Snowe
Specter
Stabenow
Tester
Webb
Whitehouse
Wyden

NOT VOTING--4

Brownback
Johnson
McCain
Rockefeller
The amendment (No. 2593), as modified, was rejected.
Mr. REID. I move to reconsider the vote.
Mr. DURBIN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The majority leader is recognized.
Mr. REID. Mr. President, I have spoken to the distinguished
Republican leader. I have spoken to the two managers of the bill. I
think it would be appropriate to announce at this time there will be no
more rollcall votes tonight. However, if people have a desire to offer
amendments, the managers are willing to talk to you about those
amendments. They need some idea of who else wants to offer amendments.
You can hear from them.
My main purpose in making this statement is announcing there will be
no more rollcall votes tonight, after this next vote, of course.

Amendment No. 2602

The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate equally divided on amendment No. 2602, as modified,
offered by the Senator from Massachusetts, Mr. Kerry.
The Senator from Massachusetts.
Mr. KERRY. Mr. President, in the underlying bill, we have made a
decision to insure some 3.3 million kids who are among the poorest in
the country. But we still have about 5.7 million kids who will not get
covered. So you have 9 million kids without coverage, and this bill
will seek to insure 3.3 million.
What my amendment seeks to do is recognize that if you have a
rationale that says it is worthwhile to insure all those kids, we also
ought to be insuring the additional 1 million kids who are Medicaid
eligible who will not be insured under this bill.
So my amendment seeks to do what we said we would do in the original
budget resolution, where we allocated $50 billion to insure children.
It pays for it by not granting to those earning more than $1 million a
year a continuation of their tax cut next year. That is how you pay for
it.
Mr. President, .18 percent of all Americans will be affected in an
effort to guarantee that the poorest of the poor children in America--
Medicaid eligible--will be eligible for health care coverage.
The PRESIDING OFFICER. The Senator's time has expired.
The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I am not going to speak to the substance
of the amendment but to the process. This bill is a bipartisan approach
where a lot of different points of view were brought together to a bill
that can pass this Senate. We have people on the left for whom $50
billion might not be enough money. We have people on the right for whom
anything over $5 billion was too much money. We have come out at $35
billion. This is a well-balanced, well-thought-out compromise.
Compromise is the essence of getting things done. You have to bring
people in the Senate to the center to get things done or nothing is
going to get done. In order to get this job done, we have to defeat
this amendment, regardless of the merits of it.
I yield back.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
Mr. KERRY. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from South Dakota (Mr.
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are
necessarily absent.
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 36, nays 60, as follows:

[[Page S10584]]

[Rollcall Vote No. 292 Leg.]

YEAS--36

Akaka
Bayh
Biden
Bingaman
Boxer
Brown
Cantwell
Cardin
Casey
Clinton
Collins
Dodd
Durbin
Feingold
Feinstein
Harkin
Inouye
Kennedy
Kerry
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murray
Nelson (FL)
Obama
Pryor
Reed
Reid
Sanders
Schumer
Tester
Whitehouse

NAYS--60

Alexander
Allard
Barrasso
Baucus
Bennett
Bond
Bunning
Burr
Byrd
Carper
Chambliss
Coburn
Cochran
Coleman
Conrad
Corker
Cornyn
Craig
Crapo
DeMint
Dole
Domenici
Dorgan
Ensign
Enzi
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Isakson
Klobuchar
Kohl
Kyl
Landrieu
Lott
Lugar
Martinez
McCaskill
McConnell
Murkowski
Nelson (NE)
Roberts
Salazar
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Thune
Vitter
Voinovich
Warner
Webb
Wyden

NOT VOTING--4

Brownback
Johnson
McCain
Rockefeller
The amendment (No. 2602), as modified, was rejected.
Mr. BAUCUS. Mr. President, I move to reconsider the vote.
Mr. GRASSLEY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Amendments Nos. 2558, 2537, and 2562, En Bloc

Mr. GRASSLEY. Mr. President, en bloc, I want to do for Senator Graham
and for Senator Kyl three amendments, and I call up en bloc amendments
Nos. 2558, 2537, and 2562.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The amendments are as follows:

amendment no. 2558

(Purpose: To sunset the increase in the tax on tobacco products on
September 30, 2012)

Beginning on page 218, strike line 5 and all that follows
through page 220, line 2, and insert the following:
(a) Cigars.--Section 5701(a) of the Internal Revenue Code
of 1986 is amended--
(1) by striking ``($1.594 cents per thousand on cigars
removed during 2000 or 2001)'' in paragraph (1) and inserting
``($50.00 per thousand on cigars removed after December 31,
2007, and before October 1, 2012)'',
(2) by striking ``(18.063 percent on cigars removed during
2000 or 2001)'' in paragraph (2) and inserting ``(53.13
percent on cigars removed after December 31, 2007, and before
October 1, 2012)'', and
(3) by striking ``($42.50 per thousand on cigars removed
during 2000 or 2001)'' in paragraph (2) and inserting
``($10.00 per thousand on cigars removed after December 31,
2007, and before October 1, 2012)''.
(b) Cigarettes.--Section 5701(b) of such Code is amended--
(1) by striking ``($17 per thousand on cigarettes removed
during 2000 or 2001)'' in paragraph (1) and inserting
``($50.00 per thousand on cigarettes removed after December
31, 2007, and before October 1, 2012)'', and
(2) by striking ``($35.70 per thousand on cigarettes
removed during 2000 or 2001)'' in paragraph (2) and inserting
``($104.9999 per thousand on cigarettes removed after
December 31, 2007, and before October 1, 2012)''.
(c) Cigarette Papers.--Section 5701(c) of such Code is
amended by striking ``(1.06 cents on cigarette papers removed
during 2000 or 2001)'' and inserting ``(3.13 cents on
cigarette papers removed after December 31, 2007, and before
October 1, 2012)''.
(d) Cigarette Tubes.--Section 5701(d) of such Code is
amended by striking ``(2.13 cents on cigarette tubes removed
during 2000 or 2001)'' and inserting ``(6.26 cents on
cigarette tubes removed after December 31, 2007, and before
October 1, 2012)''.
(e) Smokeless Tobacco.--Section 5701(e) of such Code is
amended--
(1) by striking ``(51 cents on snuff removed during 2000 or
2001)'' in paragraph (1) and inserting ``($1.50 on snuff
removed after December 31, 2007, and before October 1,
2012)'', and
(2) by striking ``(17 cents on chewing tobacco removed
during 2000 or 2001)'' in paragraph (2) and inserting ``(50
cents on chewing tobacco removed after December 31, 2007, and
before October 1, 2012)''.
(f) Pipe Tobacco.--Section 5701(f) of such Code is amended
by striking ``(95.67 cents on pipe tobacco removed during
2000 or 2001)'' and inserting ``($2.8126 on pipe tobacco
removed after December 31, 2007, and before October 1,
2012)''.
(g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is
amended by striking ``(95.67 cents on roll-your-own tobacco
removed during 2000 or 2001)'' and inserting ``($8.8889 on
roll-your-own tobacco removed after December 31, 2007, and
before October 1, 2012)''.

amendment no. 2537

(Purpose: To minimize the erosion of private health coverage)

At the end, add the following:

SEC. __. DELAY IN EFFECTIVE DATE.

Notwithstanding any other provision of this Act, this Act
and the amendments made by this Act shall not take effect
until the day after the date on which the Director of the
Congressional Budget Office certifies that this Act and the
amendments made by the Act, will not result in a reduction of
private health insurance coverage greater than 20 percent.

amendment no. 2562

(Purpose: To amend the Internal Revenue Code of 1986 to extend and
modify the 15-year straight-line cost recovery for qualified leasehold
improvements and qualified restaurant improvements and to provided a
15-year straight-line cost recovery for certain improvements to retail
space)

On page 217, after line 25, insert the following:

SEC. 61_. EXTENSION AND MODIFICATION OF 15-YEAR STRAIGHT-LINE
COST RECOVERY FOR QUALIFIED LEASEHOLD
IMPROVEMENTS AND QUALIFIED RESTAURANT
IMPROVEMENTS; 15-YEAR STRAIGHT-LINE COST
RECOVERY FOR CERTAIN IMPROVEMENTS TO RETAIL
SPACE.

(a) Extension of Leasehold and Restaurant Improvements.--
(1) In general.--Clauses (iv) and (v) of section
168(e)(3)(E) of the Internal Revenue Code of 1986 (relating
to 15-year property) are each amended by striking ``January
1, 2008'' and inserting ``January 1, 2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to property placed in service after December 31,
2007.
(b) Modification of Treatment of Qualified Restaurant
Property as 15-Year Property for Purposes of Depreciation
Deduction.--
(1) Treatment to include new construction.--Paragraph (7)
of section 168(e) of the Internal Revenue Code of 1986
(relating to classification of property) is amended to read
as follows:
``(7) Qualified restaurant property.--The term `qualified
restaurant property' means any section 1250 property which is
a building (or its structural components) or an improvement
to such building if more than 50 percent of such building's
square footage is devoted to preparation of, and seating for
on-premises consumption of, prepared meals.''.
(2) Effective date.--The amendment made by this subsection
shall apply to any property placed in service after the date
of the enactment of this Act, the original use of which
begins with the taxpayer after such date.
(c) Recovery Period for Depreciation of Certain
Improvements to Retail Space.--
(1) 15-year recovery period.--Section 168(e)(3)(E) of the
Internal Revenue Code of 1986 (relating to 15-year property)
is amended by striking ``and'' at the end of clause (vii), by
striking the period at the end of clause (viii) and inserting
``, and'', and by adding at the end the following new clause:
``(ix) any qualified retail improvement property placed in
service before January 1, 2009.''.
(2) Qualified retail improvement property.--Section 168(e)
of such Code is amended by adding at the end the following
new paragraph:
``(8) Qualified retail improvement property.--
``(A) In general.--The term `qualified retail improvement
property' means any improvement to an interior portion of a
building which is nonresidential real property if--
``(i) such portion is open to the general public and is
used in the retail trade or business of selling tangible
personal property to the general public, and
``(ii) such improvement is placed in service more than 3
years after the date the building was first placed in
service.
``(B) Improvements made by owner.--In the case of an
improvement made by the owner of such improvement, such
improvement shall be qualified retail improvement property
(if at all) only so long as such improvement is held by such
owner. Rules similar to the rules under paragraph (6)(B)
shall apply for purposes of the preceding sentence.
``(C) Certain improvements not included.--Such term shall
not include any improvement for which the expenditure is
attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component benefitting a common area,
or
``(iv) the internal structural framework of the
building.''.
(3) Requirement to use straight line method.--Section
168(b)(3) of such Code is amended by adding at the end the
following new subparagraph:
``(I) Qualified retail improvement property described in
subsection (e)(8).''.
(4) Alternative system.--The table contained in section
168(g)(3)(B) of such Code is amended by inserting after the
item relating to subparagraph (E)(viii) the following new
item:

(E)(ix)...........................................................39''.

(5) Effective date.--The amendments made by this subsection
shall apply to property placed in service after the date of
the enactment of this Act.

Mr. GRASSLEY. I yield the floor.
The PRESIDING OFFICER. The Republican leader is recognized.

[[Page S10585]]

Mr. McCONNELL. Mr. President, I thank the Senator from Maryland for
allowing me to proceed, and I will not be too long.
I ask unanimous consent that I be allowed to proceed as in morning
business, to be followed by Senator Bond.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.

Measure Read the First Time--S. 1927

Mr. McCONNELL. Mr. President, I understand that S. 1927 is at the
desk and I ask for its first reading.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:

A bill (S. 1267) to amend the Foreign Intelligence
Surveillance Act of 1978 to provide additional procedures for
authorizing certain acquisitions of foreign intelligence
information and for other purposes.

Mr. McCONNELL. I now ask for a second reading and, in order to place
the bill on the calendar under the provisions of rule XIV, I object to
my own request.
Mr. BAUCUS. Mr. President, I object.
The PRESIDING OFFICER. Objection is heard.
The bill will receive its second reading on the next legislative day.
Mr. McCONNELL. Mr. President, yesterday the Director of National
Intelligence came to Capitol Hill and implored Congress once again to
modernize the Foreign Intelligence Surveillance Act. He was echoing the
warnings of the entire intelligence community, which has told us that
current law--current law--prevents us from collecting a significant
amount of intelligence that could be vital in protecting us from
another terrorist attack.
The latest National Intelligence Estimate makes clear that the
greatest terrorist threat to the United States is al-Qaida. Their
intent to attack us is undiminished since 9/11. They have gained
recruits and strength in the Middle East. They continue to adapt and
improve their capabilities, and we must continue to adapt and improve
our ability to swiftly detect their movements and their plots.
One of the most effective tools we have had in doing this over the
last 6 years is our electronic surveillance program. The Foreign
Intelligence Surveillance Act gives us the legal framework for
monitoring terrorists electronically without impinging on the civil
liberties of Americans. But the law is badly out of date.
Since FISA was enacted, sweeping advances in technology have upset
the balance that Congress struck in 1978, and the law that was written
to protect Americans while ensnaring terrorists must be changed as
well.
The targeting of a foreign terrorist overseas should not require a
FISA warrant. That was never the intention of the original legislation.
Yet this is what the law, as written, currently requires. The
intelligence community has told us they are hamstrung by the existing
law, and in a significant number of cases, our intelligence
professionals are in the unfortunate position of having to obtain court
orders to collect foreign intelligence concerning foreign targets
located overseas.
The facts here are not in dispute. Our Nation faces an alarming
intelligence gap, a situation in which the intelligence community every
day is missing--missing--a significant portion of what we should be
getting in order to protect the American people here at home. We should
not adjourn until we have closed this gap. We must act quickly in a
bipartisan manner and let the appropriate committees come back and
review FISA and other matters related to the legislation in a more
comprehensive manner.
We should not return in September knowing that we have failed in our
duty, and we pray that we don't have cause to regret our inaction. Let
there be no doubt: If we had the foresight in August of 2001 to enact a
law that would have exposed the plot that was being hatched against us
then, the vote to approve that law would have been cast unanimously and
without hesitation--unanimously and without hesitation. None of us
would have shrunk from that duty. Six years later, the duty remains.
There is little we can do in the Senate from day to day that can
immediately and decisively improve the security of this country. But by
passing a FISA modernization bill that the President can sign before we
go home for recess, we will have done just that. We need to act on this
legislation now. We should not adjourn until we have closed this gap,
until we have fixed this outdated law.
I yield the floor.
The PRESIDING OFFICER. The Senator from Missouri is recognized.
Mr. BOND. Mr. President, I thank the minority leader because he has
brought to the attention of this body a measure of critical importance.
Right now, we are missing a very significant portion of the signals and
intelligence we could capture on al-Qaida and other terrorist
organizations threatening to do harm to the United States. The reason
is because the existing Federal Foreign Intelligence Surveillance Act
doesn't fit in with today's technology.
The Director of National Intelligence has asked us--begged us--to
make these changes. He submitted a proposal to the Intelligence
Committee in April, and then he came before our committee in May. He
came and briefed as many Members of the Senate who wanted to show up
last month, and 42 members did, and they understood the importance.
In my tenure as a member of the Intelligence Committee, I have spent
a considerable amount of time looking at issues regarding FISA
modernization. Since I became vice chairman, I have worked closely with
Chairman Rockefeller to ensure that our oversight of this measure and
this program has been comprehensive. We have held numerous hearings.
Most of us have gone out and watched how the protections are
implemented and where the information is collected at the NSA.
The DNI's proposal came up to us, and in April he warned that the
current text of FISA is causing significant intelligence gaps during a
period of increased threat. We all know that the threat of al-Qaida is
severe now. We cannot afford to go home, to leave this place, and not
take off the artificial barriers that prevent NSA from keeping our
country safe.
The DNI has now provided us with a bare-bones FISA modernization
proposal. It doesn't deal with all of the problems we in the
Intelligence Committee must deal with later on in this session. We must
do it.
Last night, we had a proposal delivered by Senator Rockefeller that
did not come from the members of the Intelligence Committee. It was a
counterproposal to provide what he argued was a temporary legislative
fix to FISA. Unfortunately, the counterproposal will not close these
significant intelligence gaps that the DNI has told us about. Instead,
it requires the Government to get a FISA order when a foreign target
communicates with a significant number of persons and calls into the
United States. That, to me, is going in the wrong direction. We don't
need to stop and get a court order to protect the privacy of a
terrorist who is making lots of calls into the United States. That is
moving in the wrong direction.
Our enemies are not naive. They understand our laws sometimes better
than we do. They would realize that all they had to do, if they wanted
to cover their tracks while a lengthy FISA court application procedure
was done, is make a whole lot of calls to people in the United States
to trigger the requirement.
It would be an unnecessary and enormous burden on the intelligence
assets and operators. We don't want people who play an essential role
in fighting terrorism to spend the bulk of their time processing stacks
of FISA applications on foreign targets. We want them to do the
intelligence work to keep our country safe.
Well, as a result of the proposal made by Senator Rockefeller, and
others, the DNI was able to accommodate a number of these proposals and
adopted their proposal for FISA court review of the procedures. They
put a 6-month sunset on it. They added the DNI, Director of National
Intelligence, to the authorizing process for acquisition of foreign
intelligence. This is what is before us. The minority leader has
presented it. I am proud to be a cosponsor.
The debate is about whether targeting foreigners overseas should
require a FISA order. That was never the intent of the FISA
legislation. It was intended solely to protect the fourth amendment
rights of persons inside the United States--not foreign targets.

[[Page S10586]]

FISA needs to be modernized. Technology has changed. It is now no
longer covered. The DNI's approach takes into account the changing
technology and has adopted the reasonable suggestions made in the
proposal made by Senator Rockefeller, and others.
Congress needs to act on this legislation, please, before we get out
of town. Don't leave town leaving the NSA deaf to significant terrorist
information that might save our country from attack.
I yield the floor.
The PRESIDING OFFICER. The Senator from Montana is recognized.
Mr. BAUCUS. Mr. President, I want to move things along here and set
an order of speakers. I ask unanimous consent that Senator Mikulski be
recognized to speak for 5 minutes; following that, Senator Chambliss be
recognized to speak for 5 minutes. Following him, Senator Brown be
allowed to speak for 8 minutes; following him, Senator Coburn, for 10
minutes; following that, Senator Webb be allowed to speak for 10
minutes.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Maryland is recognized.
Ms. MIKULSKI. Mr. President, I, too, rise to comment on the FISA
situation in which we find ourselves, because we want to be very clear
that patriotism, adherence to the Constitution to defend the Nation
against all enemies foreign and domestic, is not a partisan issue; that
as our distinguished colleague from Missouri has spoken to--and I know
the Senator from Georgia will--we are all on the Intelligence
Committee, and we know what the real deal is in the sense of a very
dangerous time facing our country.
We on this side of the aisle want to assure both our colleagues and
the American people that we want to make the reforms in FISA before we
go out as intensely as do our colleagues who are speaking tonight. We
want to make those reforms so that we, too, give the intelligence
community the power to go after and catch the terrorists and to be able
to pump for the information they need to protect us, rather than a
bureaucracy.
As a member of the Intelligence Committee, I feel it is my first duty
to make sure they have the tools they need to protect the Nation. That
means not only the financial resources to hire the best people and have
the best technology, but it also means they have the legal framework in
which to operate. But, indeed, a legal framework is what we need. We
believe that in functioning within a legal framework, we are able to
bring to bear all of the very important resources that are needed, both
from the private sector as well as from the public sector.
I agree with my colleagues that as we come into August, we have a
certain level of anxiety. All of us know, as we look back on 2001, that
if in fact we could have done something to protect or stop what
happened on that terrible day, September 11, we would have done it. We
know that right now, this minute, we have another rendezvous with
destiny and we will meet that. In meeting that rendezvous, we will
arrive at a legal framework that is constitutionally compliant, that
will enable the Intelligence Committee to be able to do what it needs,
without being shackled by more bureaucratic mandates. There are many
proposals. The details of why we would support them or raise a question
are better discussed in a more classified forum.
Should the approach be bipartisan? You bet. I have worked with the
Senator from Missouri. I know how he brings pragmatism, common sense,
and very sound legal analysis to the discussion. This is not about
politics. This is about the people and protecting the people we were
sworn to protect. So I believe we will be proceeding. I am prepared, if
necessary, to cancel my plans. But I believe if we work hard and are
inclusive and approach it with common sense, we will focus on what is
the end game here, which is to do the right thing to protect us.
Mr. President, I have fought for children's health care for a very
long time, going back to my days as a social worker and also as a young
House Member. This bill is what we hoped for and dreamed for--those of
us who worked in social work and foster care and child abuse--to make
sure kids had eyeglasses and hearing aids and so forth. And for all
those adolescents who need to discuss things with doctors, this would
be an open door. For all those handicapped children, this is what we
need.
I salute the chairman and ranking member on this bipartisan solution.
We have done this in a way that we can pay for it. At the end of the
day, over an additional 3 million children will have health care. I
salute my colleagues.
A few months ago, we had a little boy die in Maryland because he
didn't have access to dental care. He had an oral infection that spread
through his blood. So tomorrow when I vote, I vote for Deamonte, and
for all others like him. I support the bill.
The PRESIDING OFFICER. The majority leader is recognized.
Mr. REID. Mr. President, I ask the Senator from Georgia to yield so
that I may speak for a few minutes. I am sorry I wasn't on the floor to
listen to the speech of the Senator from Kentucky, the Republican
leader, dealing with FISA.
Let me say briefly, we got the bill and the rule XIV late this
afternoon. Ours is almost completed. We are working on it in my office,
and the Speaker has to sign off on some of these things. It could take
a little while before we are able to file this.
I so appreciate the Senator from Maryland. She is a woman who takes
tremendously difficult jobs as a Senator. She has been a valued member
on more than one occasion on the Ethics Committee, doing some of the
most difficult work we have had to do on ethics in the entire history
of the country. And then as far as her serving on the Intelligence
Committee, she has been exemplary. I depend on her for information on
what to do. A lot of times these meetings are held, and you need
direction as to what we need to do on the Senate floor because what
goes on in the Intelligence Committee is all secret. I admire and
respect her so much because she helped us get to the point where we
are.
We are going to come back with the proposal that we will file, a rule
XIV, as the Republicans did theirs. It is meeting the expectations of
the American people. One of the things we have going for us with this
repair of FISA is Admiral McConnell. We trust this man. He is a man who
speaks in a language we understand. He is direct and concise. Because
of that, I think we can work something out. I just spoke to the vice
chair of the Intelligence Committee, Senator Bond. We talked about the
fact that ours will be laid down, and theirs is already laid down.
Certainly, we should be able to work something out. We are all trying
to obtain the same goal: to be able to protect ourselves from the evil
people in the world who are trying to do harm to us as a country and
individually and others from around the world.
We are going to proceed in good faith to try to get this done, and
hopefully sometime in the next little bit, we will be able to file our
legislation and what we call rule XIV so we are matching what the
Republicans did this afternoon.
The PRESIDING OFFICER. The Senator from Montana.

Amendment No. 2557 to Amendment No. 2530

Mr. BAUCUS. Mr. President, if I may have the indulgence of the
Senator from Georgia, I ask unanimous consent that the pending
amendment be set aside, and on behalf of Senator Specter, I call up
amendment No. 2557.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will report.
The assistant legislative clerk read as follows:

The Senator from Montana [Mr. Baucus] for Mr. Specter,
proposes an amendment numbered 2557 to amendment No. 2530.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To amend the Internal Revenue Code of 1986 to reset the rate
of tax under the alternative minimum tax at 24 percent)

On page 217, after line 25, insert the following:

SEC. 61_. REDUCTION IN RATE OF TENTATIVE MINIMUM TAX FOR
NONCORPORATE TAXPAYERS.

(a) In General.--Clause (i) of section 55(b)(1)(A) of the
Internal Revenue Code of

[[Page S10587]]

1986 (relating to noncorporate taxpayers) is amended to read
as follows:
``(i) In general.--In the case of a taxpayer other than a
corporation, the tentative minimum tax for the taxable year
is--

``(I) 24 percent of the taxable excess, reduced by
``(II) the alternative minimum tax foreign tax credit for
the taxable year.''.

(b) Conforming Amendment.--Subparagraph (A) of section
55(b)(1) of such Code is amended by striking clause (iii).
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.

Mr. BAUCUS. I thank my friend from Georgia. I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia.

FISA Modernization

Mr. CHAMBLISS. Mr. President, I rise tonight to support the McConnell
legislation that has been submitted relative to FISA modernization and
say, first, that I associate myself with the remarks of the Senator
from Maryland. She has been a huge asset on the Intelligence Committee.
She does her homework, she works hard, she studies the issues. She is
exactly right. This is not a partisan issue by any means. This is truly
an American issue because it is an issue that allows us to continue to
protect Americans and allows us to do the best job we possibly can in
the intelligence community to ensure we do not suffer another attack on
American soil.
Unfortunately, we cannot guarantee that will not happen, but the fact
is, we need this updated, even though it is temporary, FISA modernized
to allow our intelligence community to gather the type of information
from the bad guys who are certainly out there getting up every day and
making plans to attack assets of America, whether they are abroad or
whether they are assets in the United States.
It is simply necessary that we take advantage of the technology that
is available today that was not available at the time the original FISA
statute was implemented and passed into law, and that we make sure we
are giving our intelligence community all the tools they need to do
their job in a very professional manner.
There is a threat out there. The Secretary of the Department of
Homeland Security has expressed recently that a threat exists, that he
has a gut feeling something may happen. There are a lot of factors
timewise and otherwise that make us feel that might be the case. Who
knows. We cannot step into the minds of the bad guys who are out there.
I will say one thing about this legislation. It does not invade the
privacy of any group except one, and that is the terrorists. We need to
invade the privacy of the terrorists. This bill is something that if it
had been in place, if the tools had been in place in 2001, who knows
whether we could have stopped the attack that took place on September
11. But what we do know is that certain phone calls were made by some
of the 9/11 hijackers, and if we had in place a program that we now are
operating under, it is very likely that we might have picked up on some
of those phone calls.
This legislation, again, gives our intelligence community tools which
they can use to gather information only from those people who are
making plans to carry out a terrorist attack against the United States
or against our allies or in some country where we have assets.
I appreciate the cooperative spirit that, obviously, we are seeing
from folks on the other side of the aisle. This is truly one of those
times we need to come together in a bipartisan way and, obviously, we
are going to make this fix to make sure our intelligence community can
do their job in a very professional way.
I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. BROWN. Mr. President, I begin by thanking Chairman Baucus for his
terrific work on perhaps the most important domestic legislation this
year, and that is the Children's Health Insurance Program. I thank the
Senator from Pennsylvania also, the Presiding Officer tonight, for his
terrific work leading our freshman class on this issue. We know how
important it is to the people, whether it is Montana, Pennsylvania,
Maryland, Georgia, or any of the States represented here tonight.
The children's health insurance bill meets the most basic need of
American families. Nothing should stand in the way of this bill moving
forward. Children too often suffer and some die because they do not
have access to health care. In a nation as wealthy as ours, that is not
just irresponsible, it is immoral.
Today we have the opportunity to do the right thing for American
families, for parents, for children. Without health insurance for their
children, parents too often face impossible choices--go to the doctor
when their child is sick or pay the grocery bill or the electric bill
or the rent. These are the choices that families are forced to make--
cruel choices.
In 1996, when Congress created the Children's Health Insurance
Program, with a Democratic President and a Republican Congress, there
were nearly 11 million uninsured children in the United States. In
Ohio, my State, there were roughly 305,000 uninsured children. Today,
thanks in large part to the Children's Health Insurance Program, those
numbers have been reduced substantially--fewer than 9 million
nationwide and roughly 236,000 in Ohio.
The Children's Health Insurance Program is directly responsible for
covering 6.6 million children across the country and more than 200,000
children in Ohio in Athens, in Ashtabula, in Warren and West Lake, in
Marion and Maple Heights. That is good, but it is not good enough. Mr.
President, 150,000 low-income children, most of whom have working
parents, in Ohio, do not have health insurance. This bill does the
right thing on mental health, requiring parity between mental and
physical health benefits.
I would like to share a story I heard yesterday that should remind us
of the importance of this provision. In 1990, Kitty Burgitt's husband
died suddenly, leaving her to care for her 5-year-old daughter and 2-
year-old son as a single mother in Canton, OH, a city in the northeast
part of my State. Her Social Security survivor benefits were considered
too much to qualify for Medicaid. Six years later, Congress created the
Children's Health Insurance Program. Kitty immediately enrolled her
children in that program.
Given the initial strict income eligibility provisions of the
program, Kitty was forced to turn down raises and refuse the additional
hours at work that she wanted to work to keep her children enrolled, to
keep them insured.
When her daughter was in the eighth grade, she started experiencing
mental health problems. Then her daughter became suicidal. The
Children's Health Insurance Program covered her treatment, which then
was extensive. Imagine what it would have been like for Kitty if she
had no way to help her daughter. No parent should ever feel that
helpless. No parent should ever be forced to watch powerlessly as her
child, or his child, suffers.

Thankfully, because of the Children's Health Insurance Program,
Kitty's daughter did receive the treatment she needed. Today her
daughter is healthy and happy. As Kitty herself wrote recently:

Today my daughter is 22, happily married with a beautiful
daughter of her own--

Kitty's granddaughter--

and has a good job as a restaurant manager.

If we do our job this week and pass this bill, we will hear more
success stories such as this one in the future.
Some of my colleagues raise concern over this bill's income
eligibility levels. I believe it is important, however, for each State,
with its own unique set of circumstances, to have the flexibility to
offer coverage to those it deems in need. The State makes that
determination.
In my State of Ohio, for instance, Governor Strickland and the State
legislature have taken it upon themselves to raise the eligibility
limit for the Children's Health Insurance Program to 300 percent of
poverty level. That 300 percent is not living in the lap of luxury. It
means a parent still cannot afford health insurance in a job where they
are 300 percent of poverty without some help from the Children's Health
Insurance Program.
This means little boys, such as Marco Rodriguez, will finally have
health insurance. Marco lives in Marion, 20 to 30 miles from where I
grew up. He is 9\1/2\

[[Page S10588]]

years old. His father died last year. His mother works full time. This
is Marco's mother. But her job does not offer health insurance. She
cannot afford private coverage. Her income is just over 200 percent of
poverty, roughly $24,000 a year. She works hard, is raising her child,
she is widowed, and she makes $24,000 a year. Of course she cannot
afford health insurance on that income. It is not enough to pay for
food, rent, and clothing--barely--and private health insurance.
So Marco, like all too many children, has been going without health
insurance. What if something happens? One major medical emergency for
Marco could mean financial catastrophe for his mother, his family--for
both of them.
If we do our job this week, Ohio will be able to cover Marco come
January 2008.
Others have voiced concern over the cost of this reauthorization. It
was a bipartisan initiative 10 years ago, with a Democratic President
and a Republican Congress and an overwhelming number of Democrats,
myself included, in the House of Representatives and Senate voting for
it. We all agree this program has been a success.
The investment we made in 1996 has proven to be a wise one. And still
too many of my friends on the other side of the aisle hesitate. They
hesitate about our Nation's children. They say: We like the program,
but it is too expensive or, We have other priorities. But this is about
priorities. And the questions are pretty simple.
Should Congress provide for billionaire tax breaks or health
insurance for our children? Should we provide for billions, literally
billions in no-bid contracts in Iraq or health insurance for our
children? Should we provide for Medicare privatization and oil company
subsidies or health insurance for our children?
It is time for Congress to get its priorities straight. We should
pass the Children's Health Insurance Program.
I yield the floor.
The PRESIDING OFFICER. The Senator from Virginia.

Amendment No. 2618 to Amendment No. 2530

Mr. WEBB. Mr. President, I ask unanimous consent that the pending
amendment be laid aside in order that I might bring up my amendment No.
2618 to the bill.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will report.
The assistant legislative clerk read as follows:

The Senator from Virginia [Mr. Webb] proposes an amendment
numbered 2618 to amendment No. 2530.

Mr. WEBB. Mr. President, I ask unanimous consent that the reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To eliminate the deferral of taxation on certain income of
United States shareholders attributable to controlled foreign
corporations)

At the end of title VII, insert the following:

SEC. __. ELIMINATION OF DEFERRAL OF TAXATION OF CERTAIN
INCOME OF CONTROLLED FOREIGN CORPORATIONS.

(a) In General.--Section 952 (relating to subpart F income
defined) is amended by adding at the end the following new
subsection:
``(e) Special Application of Subpart.--
``(1) In general.--For taxable years beginning after
December 31, 2007, notwithstanding any other provision of
this subpart, the term `subpart F income' means, in the case
of any controlled foreign corporation, the income of such
corporation derived from any foreign country.
``(2) Applicable rules.--Rules similar to the rules under
the last sentence of subsection (a) and subsection (d) shall
apply to this subsection.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of controlled foreign
corporations beginning after December 31, 2007, and to
taxable years of United States shareholders with or within
which such taxable years of such corporations end.

Mr. WEBB. Mr. President, I strongly support this bill. As an initial
matter, I express my thanks to Senators Baucus and Grassley for their
hard work on this bipartisan bill which will help provide health
insurance to millions of children nationwide and hundreds of thousands
of children in my home State of Virginia.
For too long in this country, low-income families have been unable to
afford health insurance for their children. Reauthorizing this program
helps meet this urgent need. But, unfortunately, this bill does so by
singling out one form of conduct, tobacco smoking, and then taxing many
of the very same people the program is intended to assist.
Not only are lower income workers more likely to smoke, they spend a
greater percentage of their income on tobacco when they do because an
estimated half of American smokers come from the same income groups as
those families who are eligible for this program. In my view, this
amounts to robbing Peter to pay Paul.
Additionally, the very form of conduct that we are supposedly
attempting to discourage has become the same form of conduct that we
are implicitly hoping will continue to finance this program. I find
this logic odd. At some level, I find it counterproductive to the very
goals of the legislation that is before us.
And here is another problem. This is a targeted tax on commercial
transactions that are disproportionately engaged in by people with
lower incomes. At the same time, our country is experiencing a vast
accumulation of wealth amongst our highest income earners.
Income disparities in this country are at levels that we have not
seen for at least 70 years. Moreover, corporate profits are at an all-
time high as a percentage of our national wealth, while wages and
salaries on our working people are at an all-time low.
There is, in my view, a better way, a fairer way to pay for this
program. That is why I have offered this amendment.
Under the Federal Tax Code, American corporations are allowed to
defer payment of American taxes on the profits earned by their overseas
subsidiaries. Under current law, taxes on the business income of
foreign subsidiaries are not payable until the profits are repatriated
back to the American parent corporation and, in reality, this means
they are not going to be paid at all.
Companies can defer ever paying taxes in the United States by keeping
their income overseas and making money from it indefinitely. The Tax
Code, in other words, creates an incentive to move jobs overseas, to
not invest in American operations, and also provides a method to
shelter overseas profits from fair taxation.
In just one recent example reported by the New York Times, a major
biotech corporation--Amgen--with offshore subsidiaries used American
tax laws to escape hundreds of millions of dollars in taxes, taxes that
should have gone into the American treasury. Although this corporation
reported that 80 percent of its billions of dollars of sales occurred
in the United States, it paid only 22 percent of American taxes on its
profits. This corporation got away with this specifically because of
American tax policies, like many other corporations do today.
My amendment would eliminate this deferral provision in the Tax Code.
This critical reform would discourage these companies from moving
American investments and jobs to foreign tax havens and raise the
revenue necessary to expand the Children's Health Insurance Program.
This reform also would protect American workers by reversing the
consistent flow of American jobs that corporations are outsourcing
abroad.
I have been unable at this point to receive an official estimate of
the revenues this amendment would raise, but I have consulted multiple
credible sources and have no doubt this amendment would raise the new
funds needed under the new policy, which are approximately $7 billion a
year. These sources include the Joint Committee on Taxation, which
estimated last year that deferral would raise $6.4 billion in 2008 and
rise to $7.5 billion by 2010. It also includes the President's own
budget proposal for fiscal 2008, which estimates that tax expenditures
for the deferral of income of this sort would be $12.8 billion in 2008
and rise to $16.7 billion in 2012.
Opponents of this amendment would argue that deferral is needed to
avoid corporate exposure to double taxation. However, in my view, that
is a disingenuous argument. American corporations investing overseas
currently receive a tax credit, a Federal tax credit, for their payment
of foreign taxes of

[[Page S10589]]

up to 35 percent. My amendment does not affect the availability of this
credit and therefore would not result in double taxation, nor does my
amendment affect in any way the current provisions regarding allocation
of corporate expenses, which are related but separate.
Some opponents might contend this is a new tax. But this is not a new
tax. This is a way to reclaim monies that already should have been paid
into the National Treasury by companies earning skyrocketing profits.
This amendment closes a loophole.
The Children's Health Insurance Program is probably the greatest
achievement of our Congress in terms of health care insurance in the
past decade. It has provided cost-effective health coverage to more
than 137,000 children in Virginia in 2006 and millions of children
across the country, reducing the number of uninsured children by one-
third. We must, however, further strengthen our investment in
children's health coverage. Millions of children remain uninsured. That
is why this legislation is important.
I urge my colleagues to seize this opportunity to help children from
America's low-income families, but I respectfully argue that we need to
do so not with a regressive tax on people who have little ability to
pay but, instead, by eliminating a corporate tax provision that would
be one small step toward restoring fairness in our society and
reinforcing the proper notions of how our Government should operate.
I ask my colleagues to support this amendment.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Cloture Motion

Mr. REID. Mr. President, I send a cloture motion to the desk.
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The assistant legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on the substitute
amendment No. 2530 to Calendar No. 58, H.R. 976, the Small
Business Tax Relief Act of 2007.
Harry Reid, Max Baucus, Bernard Sanders, Jeff Bingaman,
Ted Kennedy, Maria Cantwell, B.A. Mikulski, Barbara
Boxer, Daniel K. Inouye, Christopher Dodd, Patty
Murray, Benjamin L. Cardin, Barack Obama, Kent Conrad,
Dick Durbin, Ken Salazar, Blanche L. Lincoln, Jack
Reed.

Cloture Motion

Mr. REID. Mr. President, I send a cloture motion to the desk.
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The assistant legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on Calendar No. 58,
H.R. 976, the Small Business Tax Relief Act of 2007.
Harry Reid, Max Baucus, Bernard Sanders, Jeff Bingaman,
Ted Kennedy, Maria Cantwell, B.A. Mikulski, Barbara
Boxer, Daniel K. Inouye, Christopher J. Dodd, Patty
Murray, Byron L. Dorgan, Barack Obama, Kent Conrad,
Dick Durbin, Ken Salazar, Blanche L. Lincoln, Jack
Reed.

Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KYL. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER (Mr. Salazar). Without objection, it is so
ordered.

Amendment No. 2537

Mr. KYL. Mr. President, I know the majority leader is going to be
coming here shortly to conclude today's activities. Prior to that, let
me comment a little bit on an amendment that has been offered on my
behalf by Senator Grassley, amendment No. 2537. It is an amendment
which deals with the so-called crowd-out effect of the Finance
Committee bill.
The crowd-out effect has to do with the people who are covered by
private insurance today who would be crowded out of private insurance
and going onto the SCHIP program, the Government program under the
bill. The problem is that under the bill, all of the newly eligible
people under the program are replaced literally one for one from
private insurance to the Government program. In other words, a child or
a family who is on private insurance today, for every one of those
children or families who is on private insurance, when the Government
program is expanded, they will leave the private insurance market. It
is a one-for-one transfer. We should not be offering more Government
benefits for insurance to cover children or anyone else when the effect
of that is for every new person covered to have somebody leaving the
private insurance market. The object here is to cover people with
insurance, to allow them to have access to good care through insurance.
We do not solve any problem at all when we take somebody who already
has insurance and bring them into a new program.
The CBO estimates that between 25 percent and 50 percent of all the
eligible SCHIP recipients are crowded out of the private insurance
market. In other words, for every 100 people on private insurance
today, between 25 and 50 of them will leave private insurance to go to
the SCHIP program as it is expanded. As I said, for the newly eligible,
it is a one-for-one transfer. Why is that a good idea?
This amendment which I have offered says that if the effect is more
than 20 percent in the crowd-out, that is to say that through this
program, more than 20 percent of the people who are covered leave
private insurance to be covered by this new program, then it does not
go into effect. But it does go into effect if the so-called crowd-out
effect is less than 20 percent.
For the life of me, I don't know why we would spend an additional $35
billion to replace people who are already covered. That does not
represent a sound and efficient use of taxpayer dollars.
Let me make it clear that I support the reauthorization of SCHIP. I
have supported the Republican alternative. But I believe the Finance
Committee bill represents not just a reauthorization but an expansion
of the program which, as the chairman himself acknowledged, is another
step toward universal coverage.
We do not need to be taking people off private insurance to enroll
them into this program. The problem, and I will be very brief, is that
the people who are added are people generally of higher income, and we
are adding a group of adults as well. Those are people who generally
are more covered by insurance today. So it is logical that, as CBO
says, for every one person who is covered today, one person leaves that
coverage to go to the SCHIP program under the committee bill. It is
estimated that there will be about 600,000 in this category. In fact,
CBO shows that a one-for-one replacement means that for 600,000 newly
insured individuals, 600,000 individuals go off their private coverage.
As I said, that simply makes no sense. It seems to me what we should
be doing instead is providing coverage for people who do not have
private insurance coverage. That would be a much better use of taxpayer
dollars.
To conclude the point, there are two reasons why this is happening
that are not problems with the alternative, the Republican alternative
that was voted on that failed. But they are problems with the Finance
Committee bill. The first one is that the Finance Committee bill allows
States to enroll children from higher income families, the very ones
who have greater insurance coverage today. We have already talked about
the New Jersey experience, for example, and the New York experience, in
that regard--people at 350 percent to 400 percent of the poverty level,
between $60,000 and $80,000 in income for a family of four. Those
people, by and large, are already covered by insurance. Not only is
there no reason to provide them SCHIP coverage, but we are simply
crowding people out of the private sector into this program.
If my colleagues want to avoid the crowding-out effect, it seems to
me we

[[Page S10590]]

should be focusing on the truly needy, the low-income children, not
children from higher income families.
Second, the Finance Committee bill allows States with existing
waivers to continue enrolling parents. CBO stated:
No studies have estimated the extent to which SCHIP reduces private
coverage among parents so the available estimates probably
underestimate the total reduction in private coverage.
According to CBO's own numbers, this is a big problem. It seems to me
we should be focused on solving that problem rather than simply adding
to the problem as the Finance Committee does. If we are serious about
minimizing the erosion of private coverage, then we should direct SCHIP
funds to low-income children and not add adults; as the Budget
Committee chairman said not too long ago, there is no ``A'' in SCHIP.
Otherwise, CBO estimates that over 2 million individuals will go off
private coverage under the Finance Committee bill.
Let me state that again: 2 million individuals who currently have
private insurance will go off that private insurance onto this new
program or onto the program that is added to by the Finance Committee
bill. Why would we do that? It doesn't make sense.
My amendment will be dealt with tomorrow. We will have a chance to
further debate it and, as I said, all it provides essentially is if
more than 20 percent of the people who are enrolled come from the
private insurance sector already, then the program would be in abeyance
until that number is reduced below 20 percent.
I also note there were several articles recently written that I think
describe the general problem as well as this specific problem. There
are three in particular I would like to have printed in the Record at
the conclusion of my remarks.
I will ask unanimous consent that the following pieces be printed in
the Record. One is a piece by John Goodman called ``Insurance Folly,''
in the Wall Street Journal; another is a Wall Street Journal opinion in
the ``Review & Outlook'' section, dated July 30, called ``The Newest
Entitlement,'' and third is a column in my hometown newspaper, the
Arizona Republic, an editorial, August 1, by Bob Robb, which I think
correctly notes the problem I have discussed and issues with the
Finance Committee bill.
I ask unanimous consent these three published items be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Wall Street Journal]

Insurance Folly

(By John C. Goodman)

The State Children's Health Insurance Program (Schip) was
originally a Republician program to provide health insurance
to children in near-poor families who did not qualify for
Medicaid. Democrats now want to expand Schip to children of
the middle class.
Their efforts to do so are rightly being resisted by the
White House, but Senate Finance Committee Republicans have
already caved on an unwise compromise to make more people
eligible for Schip.
On the surface, congressional Democrats appear to be
rescuing children from the scourge of uninsurance. The
reality is quite different. If they get their way, millions
of children will have less access to health care than they do
today, and the same will surprisingly be true for many low-
income seniors.
Studies by MIT economist Jonathan Gruber show that public
insurance substitutes for private insurance and the crowd-out
rates is high. In general, for every extra dollar spent on
Medicaid, private insurance contracts by 50 cents to 75
cents. For Schip, depending on how it is implemented, private
insurance could contract by about 60 cents.
These findings make sense. Why pay for something if the
government offers it for free? Under congressional proposals
to expand Schip, the crowd out would likely be much worse.
The reason: Almost all the newly eligible beneficiaries
already have insurance.
The Senate bill would expand the eligibility for coverage
under Schip to families with incomes 300% above the federal
poverty level ($62,000), from its present ceiling, 200% above
the poverty level. House Democrats want to push coverage to
400% ($83,000 annual income).
Yet almost eight of every 10 children whose parents earn
from 200%-300% more than the poverty level already have
private health-care coverage, according to the Congressional
Budget office (CBO). At incomes between 300% and 400% more
than poverty, nine of every 10 children are already insured.
What about the eight to nine million children currently
uninsured? Nearly 75 percent of them are already eligible for
Medicaid or Schip, according to the CBO. So the main result
of the Democrats' proposal to expand Schip will be to shift
middle-class children from private to public plans.
Why is that bad? One reason is that most Schip programs pay
doctors at Medicaid rates--rates so low that Medicaid
patients are having increasing difficulty getting access to
health care. Anecdotal evidence suggests that U.S. Medicaid
patients already must wait as long for specialist care and
hospital surgery as in Canada.
Many doctors won't see Medicaid patients. Among those that
do, many will not accept new patients. As a result, children
who lose private coverage and enroll in Schip are likely to
get less care, not more.
There is also the issue of who exactly will be covered.
Republicans want to restrict Schip to children. The Democrats
want adults covered as well. Even under the current system,
children's health insurance is increasingly a ruse to cover
adults. Minnesota spends 61% of Schip funds on adults.
Wisconsin spends 75%.
Seniors will suffer from Schip expansion too. When millions
shift from private to public coverage, not much happens to
the overall rate of uninsurance. But the government's cost
soars. Where's the money to come from? One idea popular with
some House Democrats is to reduce federal payments to
Medicare Advantage plans. These plans provide comprehensive
coverage to low-income seniors who can't afford supplemental
insurance to fill all the gaps in Medicare. One in five
seniors has enrolled in these plans and one in four of those
is a minority. In the House of Representatives, health care
for this group is a great risk.
The proposal to expand Schip comes at a time when health-
care spending already poses a serious threat to the federal
budget. The Medicare trustees tell us that the program's
unfunded liability is six times that of Social Security. The
CBO predicts that on the current course income tax rates paid
by the middle class will reach 66% by midcentury and the top
marginal rate will reach 92%.
So what do congressional Democrats plan to do about this
problem? Ignore it.
A key provision of the 2003 Medicare Modernization Act says
that when Medicare's finances deteriorate to a certain level
(that level is already reached), the president must propose
an appropriate reform and Congress must fast-track the
proposal. Yet one senior Democratic legislator--as yet
unidentified--wants the Schip bill to repeal that provision.
In a way, repeal makes a certain sense. If the ship is
going down anyway, why spoil the fun?
____

[From the Wall Street Journal, July 30, 2007]

The Newest Entitlement

The State Children's Health Insurance Program sounds like
the epitome of good government: Who could be against health
care for children? The answer is anyone who worries about one
more middle-class taxpayer entitlement and a further slide to
a government takeover of health care. Yet Schip is sailing
toward a major expansion with almost no media scrutiny, and
with Republicans in Congress running for cover.
Schip was enacted in 1997 to help insure children from
working-poor families who make too much to qualify for
Medicaid. In the intervening years, the program reduced the
rate of uninsured kids by about 25% but has also grown to
cover the middle class and even many adults--and it gets
bigger every year. Schip expires in September without
reauthorization, and Congressional Democrats want to enlarge
its $35 billion budget by at least $60 billion over five
years.
State Governors from both parties are also leading the
charge--and for their own self-interested reasons. Schip
money is delivered as a block grant, which the states match
while designing their own insurance programs. All cost
overruns, however, are billed to the federal government,
which is on the hook for about 70% of Schip's ``matching
rate.'' This offers incentives for state politicians to make
generous promises and shift the costs to the feds, or to toy
around with costly universal health-care experiments. And
since the states only get 57 cents on the dollar for
Medicaid, they are working hard to transfer those recipients
to Schip.
This self-interest explains a recent letter from the
National Governors Association demanding ``urgent action'' on
Schip, which got lots of favorable play in the press. Yet
these are the same Governors who have been moaning for years
about rising entitlement burdens, which is what Schip will be
soon enough. Particularly egregious was the signature on the
letter of Minnesota Governor Tim Pawlenty, a Republican who
regards himself a conservative health-care maven and should
know better.
This ``bipartisan'' cover is serving Democrats in Congress,
who want to liberalize Schip eligibility as part of their
march to national health care. The Senate Finance Committee
has voted 17-4 to increase Schip spending to at least $112
billion over 10 years. Not only does it use a budget trick to
hide a payment hole of at least $30 billion, it proposes to
offset the increase by bumping up the cigarette tax by 61
cents to $1 pack.
House Democrats are putting the finishing touches on their
own plan, making the cigarette tax somewhat lower to win over
tobacco state members. Instead, the House is proposing to
steal nearly $50 billion from Medicare Advantage, the
innovative attempt

[[Page S10591]]

to bring private competition to senior health care.
Michigan's John Dingell explains that ``these are not
cuts'' but ``reductions in completely unjustified
overpayments''--which will come as news to insurers that
offered coverage plans based on certain funding expectations.
The ``overpayments'' he's referring to were passed expressly
as an incentive for companies to offer Medicare Advantage in
rural areas with traditionally fewer insurance options--and
are intended to be phased out over time. Democrats apparently
want to starve any private option for Medicare.
In any case, the actual costs of Schip will overwhelm these
financing gimmicks. Like all government insurance, Schip is
``covering'' more children by displacing private insurance.
According to the Congressional Budget Office, for every 100
children who are enrolled in the proposed Schip expansion,
there will be a corresponding reduction in private insurance
for between 25 and 50 children. Although there is a net
increase in coverage, it comes by eroding the private system.
This crowd-out effect is magnified moving up the income
scale. In 2005, 77% of children between 200% and 300% of the
poverty level already had private insurance, which is where
the Senate compromise wants to move Schip participation. New
York State is moving to 400% of poverty, or some $82,000 in
annual income. All of this betrays the fact that the real
political objective of Schip is more government control--
HillaryCare on the installment plan.
We'd have thought Capitol Hill Republicans would understand
all this, especially with the White House vowing to veto any
big Schip expansion. But we hear the GOP lacks the Senate
votes for a filibuster and perhaps even to sustain a veto.
GOP Senators Mitch McConnell and Jon Kyl are backing an
alternative to account for population growth and reach the
remaining 689,000 uninsured children that Schip was intended
to help. Republicans would be wise to support this version,
or they'll take one more step to returning to their historic
minority party status as tax collectors for the welfare
state.
____

[From the Arizona Republic, Aug. 1, 2007]

Dem Health Plan a Burden on Poor

(By Bob Robb)

The reauthorization of the State Children's Health
Insurance Program illustrates the difficulty of having a
sensible policy discussion in the context of American
politics, as currently practiced.
According to congressional Democrats, opposition to their
reauthorization proposals means support for allowing low-
income children to go without health care.
According to Republicans, the Democrats are proposing
socialized medicine on the installment plan.
A sensible policy discussion begins with what the debate
isn't about: health insurance coverage for low-income
children.
SCHIP was intended to provide federal subsidies to insure
children up to 200 percent of the federal poverty level, or a
family income of about $40,000 a year. The program expires
this year and needs to be reauthorized.
No one opposes reauthorization for its intended purpose.
The Bush administration has proposed reauthorization for this
targeted population with an extra $5 billion in funding over
the next five years, over the current base of $25 billion.
The problem is that SCHIP has expanded beyond its original
scope, as so often happens with federal programs. In the
early years, many states couldn't use all their SCHIP money,
so the feds permitted excess funds to be used by other states
to extend coverage to children beyond 200 percent of the
poverty level and even adults.
In Arizona, the SCHIP plan is called KidsCare. A Government
Accountability Office study found, however, that 56 percent
of the people enrolled in ``KidsCare'' were actually adults.
Fifteen states now provide SCHIP coverage for children
above 200 percent of the federal poverty level, and 14 states
cover adults.
Congressional Democrats propose not only to fund these
existing expanded programs but provide enough funding for
other states to substantially expand eligibility, as well. In
all, Democrats are proposing to more than double SCHIP
funding, allowing universal coverage up to 300 percent of the
federal poverty level, as Gov. Janet Napolitano has proposed
for Arizona.
That would provide coverage up to a family income of about
$60,000 a year. Since the median family income in the United
States is just over $46,000, this reaches well into the
middle class.
Here, a confusion surfaces between the issues of universal
access and federal subsidies. There are a lot of middle-class
American families that have difficulty obtaining health-
insurance coverage. Every state, however, can provide
universal access by allowing buy-ins to its Medicaid program.
The question SCHIP reauthorization poses is whether the
federal government should be subsidizing the health insurance
of middle-class families. There doesn't seem to be any
justification for it, particularly funded the way
congressional Democrats are proposing.
To pay for the SCHIP expansion, Democrats are proposing to
raise tobacco taxes by up to 61 cents a pack.
Tobacco taxes are highly regressive. So, basically,
Democrats are proposing to tax the poor to pay for the health
care of the middle class.
Tobacco taxes are also highly uncertain. Health-care
advocates like them because the evidence is that they do
reduce consumption. However, states and the federal
government have already loaded up various programs, many
involving health care and children, on their backs. The odds
are very strong that tobacco taxes will not produce the
revenues being obligated.
Now, Republicans are making these points. But they also are
employing a scare tactic of their own, that Democratic
proposals are basically socialized medicine on the
installment plan.
However, government programs to provide subsidized access
to what is still a private system of health-care providers
are very distinct from European-style national health-care
systems. Moreover, federal tax policy also heavily subsidizes
private, employer-provided health insurance. So, this is not
a clean choice between public and private approaches.
At the end of the rhetoric, however, congressional
Democrats aren't proposing to reauthorize a program to insure
low-income children. Instead, they are proposing a massive
expansion of subsidized health care to middle-class families,
funded by a large increase in heavily regressive tobacco
taxes.
That's an unwise, unfair and fiscally risky scheme.

The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. CASEY. Mr. President, we are going to close for the night. I do
wish to make a couple references to my friend from Arizona on this
issue. I know he will be offering his amendment tomorrow. We will
discuss and debate it more. But I have to say we have been hearing a
lot of these arguments all week about crowd-out. I would say,
respectfully, a lot of Americans feel crowded out right now because
they have no health insurance. It is a terrible crisis in the life of
too many Americans. We can debate this, and I think the numbers show
there is a lot more crowd-out in Medicare Part D, and that was voted
overwhelmingly by the last Congress.
I think there is still a lot of debate to go on this, but I have to
say there are still some people on the other side of the aisle who have
been debating different points of this legislation all week--but they
have their insurance. They are called Senators and their families. They
have insurance. I do, the Presiding Officer does, the Senator from
Arizona has insurance as a Member of the Senate. I am tired of some of
the arguments we have heard. I do not attribute them to this Senator,
but too often arguments have been made all during this week as a way to
block this legislation from going forward. I think it is about time we
got to a vote.
Too often, in the last couple days, all we have heard are ways to
slow this down, to impede the progress. We have heard misinformation
about poverty level numbers, that people above 300 percent of poverty
are getting children's health insurance right now. That is not true
under this program.
I think we will have more time to debate this, but we have seen a lot
of crowding out already. The American people have had to suffer. I
think it is a question worthy of debate. But I hope when all the
debating is over, all the speeches and all the debates on both sides
lead to what the American people expect from this legislation, which is
that we cover 3.2 million more American children. That is the question
before the Senate. We are either going to do that or not.
Unfortunately, there are some people here who want to agree with the
President. If the President's proposal on children's health insurance--
make no mistake; if we rubberstamp the President, 1.4 million American
children will lose their health insurance. That is the choice. That is
the choice for people on both sides of the aisle.
I am pleased that in the Finance Committee we had consensus, a 17 to
4 vote. The choice is very clear: Support the President's proposal, 1.4
million kids lose their coverage; support the bipartisan children's
health insurance initiative, 3.2 million children more than the 6.6 are
covered. That is the way to go for America.
We can have a debate tomorrow about a couple of points. But this
debate is going to end this week, and we better leave this town having
supported 3.2 million American children getting their health insurance.
Mr. SPECTER. Mr. President, I voted against Senate amendment 2538 to
the State Children's Health Insurance Program reauthorization because
of the critical need to provide health insurance to 3.3 million
additional children

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under this program. This vote should not be misconstrued as a vote
against National Institutes of Health, NIH, funding but as recognizing
the need to provide health insurance to children.
This amendment would transfer the additional $35 billion for
children's health insurance into a fund for NIH to increase medical
research. As ranking member and chairman of the Labor, Health and Human
Services, and Education Appropriations Subcommittee, I have ardently
supported doubling funding for NIH. The fiscal year 2008 Senate Labor,
Health and Human Services, and Education appropriations bill provides
$29.9 billion for NIH.
While I support an increase in NIH funding, it cannot be at the
expense of providing much needed health care to America's children.
I yield the floor.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CASEY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

____________________