Medicare Rural Home Health Services Improvement Act of 2004

Mr. President, I am pleased to be joined today by Senators Lott, Graham of Florida, and Snowe in introducing legislation to create an independent National Security Classification Board. We believe it is time to clear the fog of secrecy by creating an independent board to review current and make recommendations for new standards and procedures for the classification of information for national security purposes.

Our Founding Fathers believed in the idea that democracy works best with the full disclosure of accurate information. Today, some might find that notion quaint. But it is one that bears consideration-- because the principle of open government so dear to America's founders is being tested today as never before. The culture of secrecy that grew out of the Cold War has now become woven into the very fabric of our daily lives.

Information that the American people have a right to know--indeed, information that the American people need to know to make informed decisions about the kind of government they want and the kind of country this should be--is being withheld by the Federal government. It is being buried in a virtual bunker marked ``do not enter,'' sealed off from public view with a big red stamp--marked ``Classified.'' And too often that big red stamp is used not to hide state secrets, but to protect political backsides at great cost to our open and democratic society.

A very revealing speech was delivered three weeks ago by the head of the Information Security Office, which oversees classification and declassification policies, Mr. William Leonard. Known

sometimes as the ``secrecy czar,'' he complained that the classification system for national security has lost touch with the basics; that some agencies don't know how much information they classify, or whether they are classifying more or less than they once did; whether they are classifying too much or too little. He called today's classification system ``a patchwork quilt'' that is the result of a hodgepodge of laws, regulations and directives. ``In reality,'' he said ``the Federal Government has so many varieties of classification that it can make Heinz look modest . . .''

Two important reports confirm Mr. Leonard's argument that the classification system is out of control. The reports, the forthcoming 9-11 Commission report and last week's Senate Intelligence Committee on Iraq, show the Administration's determination to blanket the Federal government in secrecy. Even more important than the information that is published in these reports is the information withheld from the public and redacted from the reports.

These reports demonstrate a serious imbalance of power between the public and the officials who wield the ``top secret'' stamp. They raise troubling questions about whether those who control the classification of information for national security purposes have misused this authority to shield officials from the glare of public accountability and to stifle public debate about politically sensitive parts of the war on terrorism.

This is not the first time our country has grappled with the trade- offs between the need to protect the public and the public's need to know. But the automatic default to secrecy rather than public accountability is not part of our history. Scholarly studies about which material should be classified and at what level fill libraries. According to the late Senator Daniel Patrick Moynihan, an expert on secrecy in government, the first real Congressional debate about protecting national secrets occurred during consideration of the Alien and Sedition Acts of 1798, passed to silence opposition to war with France. ``It was,'' as Senator Moynihan wrote in Secrecy, ``our nation's first experience with how war or the threat of war changed the balance between private liberty versus public order, an instability that was eerily reenacted 119 years later.'' ``Indeed, much of the structure of secrecy now in place in the U.S. government took shape in just under eleven weeks in the spring of 1917, while the Espionage Act was debated and signed into law.'' Eighty years later, Senator Moynihan would note that 6,610,154 million secrets were created in one year alone. In fact, only a small portion, or 1.4 percent, were created pursuant to statutory authority, the Atomic Energy Act; Senator Moynihan labeled the other 98.6 percent ``pure creatures of bureaucracy,'' created via Executive Orders.

One of the ``creatures'' in the classification menagerie was set free to roam through the work of the 9-11 Commission and the Senate Intelligence Committee's report. The American people should not be fooled--pure bureaucracy refused to allow full public disclosure of the decisions and materials used by the 9-11 Commission to prepare its report. Pure bureaucracy also redacted nearly half of the Senate Intelligence Committee's review of Intelligence on Iraq. The ``creature'' has overreached.

Since President Roosevelt issued the first national security classification directive in 1940, the American people have often demonstrated a high tolerance for secrecy in military and foreign affairs, even in some cases where it has been abused. However, the rising tide of secrecy has reached the point where it threatens to drown our system of checks and balances, and calls out for a complete rethinking of the system used to classify information for national security purposes.

Today the Executive Branch exerts almost total control over what should or should not be classified. Congress has no ability to declassify material. There is no self-correcting mechanism in the system. Even if Members of Congress wanted to share information with their constituents, it's so complicated for Congress to release information to the public that nobody's ever tried to use the convoluted processes. The Executive Branch has a little known group that can review classification issues, but it is seldom used and open only to Executive Branch employees, not to Members of Congress or the public.

What does all of this mean in practice? It means that with the thump of a stamp marked ``secret,'' some bureaucrat in the belly of a federal building has prevented the families of the victims of 9-11 from knowing exactly what happened to their loved ones. It means the American people may never know who gave the orders dictating how prisoners at Abu Ghraib could be treated. It means these decisions cannot be appealed, even by Congress. It means there is no independent review of the classification decisions by the Executive Branch.

With no chance of unbiased review, classification decisions are ready and ripe for abuse. Agencies wishing to hide their flaws and politicians of both parties wishing to make political points can abuse the existing classification guidelines to their advantage. I want to change that.

President Kennedy said the time to repair the roof is when the sun is shining. In the realm of secrecy, storm clouds are approaching. The bureaucracies in our government that deal with secrets are by nature cautious when it comes to protecting information pertinent to our nation's security. They err on the side of caution and they are very territorial about it, treating secrets as if they are assets to be traded. This is an understandable impulse. But erring too far and too often on the side of caution keeps a lot of information hidden that could safely enlighten public debate. Even worse, overclassification of information is dangerous. If agencies and bureaucracies aren't sharing information among themselves, important clues can be missed. Their mission to keep citizens safe can be jeopardized by classification itself.

The tragedy of 9-11, the war on terrorism and the United States' invasion of Iraq have offered ample opportunity to argue for classification of just about any document on the grounds of national security. Additionally, there are those who feel that the current Administration took office with an unhealthy penchant for secrecy already firmly in place. In its first two years, Bush Administration officials made 44.5 million decisions to classify records and related documents, according to the Information Security Oversight office, part of the National Archives and Records Administration. This is about the same number of classification decisions made during the last four years of the Clinton Administration.

The Atlanta Journal reported recently that ``federal, state and local governments are shutting down access to public records in what some experts say is the most expansive assault on open government in the nation's history.'' The Bush Administration has even expanded the number of officials with the power to classify documents for purposes of national security beyond the 13 agencies that operated under the national security classification system to include the secretaries of agriculture, health and human services and the EPA Administrator.

I for one do not subscribe to the view that there is an inherent conflict between the Executive Branch's accountability to Congress and the American people on the one hand, and the Constitutional role of the President as Commander in Chief on the other.

I believe a balance can and must be struck between the public's need for sound, cleareyed analysis and the Executive's desire to protect the nation's legitimate security interests. I believe we can fight terrorism ferociously without sacrificing personal privacy. There is no room in this equation for the use of classification to insulate officials and agencies from political pressure. As a member of the Senate Intelligence Committee I have had lengthy discussions with my colleagues about how to achieve such a balance.

In my view this balance can be achieved only through a broad overhaul of the national security classification system. Legislation that I will be introducing shortly will accomplish this through the establishment of an Independent National Security Classification Board. The Board would be made up of three individuals, knowledgeable in national security classification, appointed by the President

with the advice and consent of the Senate.

The task of the Independent Board would be to review and make recommendations on overhauling the standards and process used in the classification system for national security information. The Board would submit proposed new standards and processes to both Congress and the Executive Branch for comment and revision, and then implement the new standards and process once they have had the opportunity to comment. The Board would then begin to implement the new system, reviewing and making recommendations on current and new national security classifications, subject to Executive Branch veto that must be accompanied by a public, written explanation.

The balance in this proposal assures that the public and Congress have access to an independent Board for national security classification matters while leaving undisturbed the Commander in Chief's constitutional prerogative in military and foreign policy matters through the power to appoint the Board and to veto the Board's classification decisions.

The Founding Fathers conceived of the Federal government to serve the American people. Sometimes that is done by keeping secrets, by securing information that could put Americans in harm's way if it became public. Information should be classified to protect the homeland. But when information is withheld to protect political careers and entrenched bureaucracies, that's not a service to the American people. It's a perversion of a policy intended to save lives, a perversion that weakens our democracy and could even endanger our people. It's time to throw open the curtains and let the sun shine in on American democracy and on the governmental process much brighter than it does today. That's what I intend to do with my legislation. The American people deserve no less.

I ask unanimous consent that the text of the bill be printed in the Record.

Madam President, I rise this morning to talk about our legislative priorities, and something I think this body needs to address before we adjourn next week. It is the issue of the reliability standards for our electricity grid and the fact that I think we are still putting the grid in jeopardy by not adopting reliability standards.

Even Enron activities in California, by its own admissions, jeopardized the reliability of the western electricity grid. That is certainly unacceptable. We need to have in place rules that explicitly ban market manipulation and rules that make reliability standards mandatory and enforceable.

In the documentation that has now been acquired through the Enron task force, federal agencies and organizations such as the Snohomish County Public Utility District, which is trying to get out of lawsuits and manipulated contracts that Enron is pursuing against it, it became clear that Enron continued to manipulate the market until its bankruptcy. Even in one scheme, called Get Shorty, Enron discussed in detail, and I quote from their comments and documents:

This [Get Shorty] is obviously a sensitive issue because of

reliability concerns. It would be difficult to justify our

position if the lights go out because ancillary services were

not available. The reason these services were not available

is because we were selling them without actually having them

in the first place.

In the Enron documentation and memos shared among various employees in the company about ways to scheme and make more money, they very well knew they were manipulating the market. They did not have these services, but sold them anyway at a higher cost, and thereby jeopardizing reliability.

Another summer is upon us and we have yet to take action on legislation that would move us forward in ensuring the integrity of the electricity grid by protecting consumers from these market manipulation schemes and putting regulatory standards in place for reliability.

Next month, in fact, will mark the first anniversary of the blackout in the Northeast and the Midwest that caused basically 50 million consumers and businesses in the Northeast and Midwest to lose power. In some cases that power was lost up to 4 days.

That blackout could have been avoided. When you think about not just the inconvenience to consumers but the fact it cost our economy $4 to $10 billion as a loss of economic activity, it is outrageous we are not stepping up and passing electricity reliability standards legislation as a stand-alone bill before we recess for the summer.

We know why the blackout occurred. A few months ago, in April, the U.S.-Canadian power system outage task force issued a report and the Department of Energy, together with the Canadian counterpart, convened a panel of experts that concluded this was something we could avoid if we put reliability standards in place. In fact, the No. 1 recommendation of that task force, which was reported to various Members of Congress and various committees, is to ``make reliability standards mandatory and enforceable, with penalties for non- compliance.''

That was the No. 1 recommendation out of that task force that investigated what happened in the Northeast and what happened in the Midwest.

So the question is, Why are we not passing reliability legislation before we adjourn, to make sure there are mandatory enforceable rules in place? After the task force's 7-month investigation was complete, Congress has been given an opportunity, many times on the floor, to pass reliability standards. Yet we have not done that. I think some of my colleagues are trying to get a larger energy bill passed first. There are many aspects of the comprehensive Energy bill this Senator would support and many I would not. But I guarantee you this, when this electricity reliability standards bill comes to the floor and is voted on, it will have unanimous support.

So the question is, why we are not peeling off something as important as reliability standards as we approach the summer's hottest months, to make sure businesses and utilities know they will have electricity supply and blackouts will not occur. What if the lights go out again this summer? What if they go out in August? God forbid they go out in September as many of my colleagues will be in New York doing their business and having meetings.

We know various Western States now, such as in Arizona, are putting in place programs to reduce demand because they have concerns. In a BusinessWeek article, FERC Chairman

Pat Wood basically described the summer as ``a rosary bead summer'' in California because he has concerns that region is going to have some close calls.

We also know, according to the North American Electric Reliability Council's own Reliability Assessment for 2004, New York City ``might be susceptible to reliability problems'' again this summer.

So folks across the country could be affected by the cascading outages that happen to them or in nearby areas. In the words of Michael Gent, who is the president of the North American Electric Reliability Council:

Whether legislation is adopted on a stand-alone basis or as

part of a comprehensive energy bill, passage is essential. If

reliability legislation had been enacted when first proposed,

I believe that the blackout would not have occurred.

Why is that? Because right now, while consumers may think there are standards by which supply needs to be on the grid and reliability maintained, there are actually no mandatory rules. What happened in the Midwest and in New York was the fact that people did not have the supply available at a time that the demand was really there, or the transmission available to move the power. So consumers were caught in the dark--many senior citizens, individuals in hospitals. A whole variety of things occurred that were very unfortunate circumstances.

Now, we in the Northwest know this situation all too well. It was actually my predecessor, Senator Gorton, who first proposed this legislation and actually passed it out of this body, and then it languished in the House of Representatives. We waited again in 2002 and 2003 to get this legislation moved forward through the process. So I think it is critically important before this body adjourns next week that we pass the reliability standards legislation and implement it.

Unanimous Consent Request--S. 2236

So, Madam President, I ask unanimous consent that the Senate now turn to Calendar No. 465, S. 2236, a bill to enhance the reliability of the electric system; that the bill be read a third time and passed, and the motion to reconsider be laid on the table, without any intervening action or debate.

Madam President, I hope my colleagues on the other side of the aisle will reconsider their position because we are not, in the next 5 to 6 days of legislative action, going to get a comprehensive energy bill. But we can get an energy reliability standards bill passed and put in place, and send a message sent to electricity providers across the country that there are going to be reliability rules and standards in place.

We cannot continue to hold hostage good energy reliability legislation for a comprehensive bill when consumers are at risk. We cannot continue to deny the reports across the country that more blackouts are coming. We need to act.

Now, Madam President, I would like to take a few minutes to expand on some of the other news and events that relate to this energy policy.

As my colleague mentioned an energy bill, I certainly would like to get an energy bill that did something to prevent market manipulation, or even just a stand-alone bill that would prevent market manipulation. We in the West have been astounded by the lack of response by the Federal Energy Regulatory Commission to the news and information about markets being manipulated.

I do not mean there is speculation about manipulation; I mean there are documents that have now been uncovered through organizations such as Snohomish County PUD; they are actually signed documents by various day traders at the Enron Trading Portland office that showed exactly how the trading schemes worked. While those utilities harmed will continue to pursue their case legally, it is absurd that the Federal energy regulators who are supposed to do their job in protecting consumers are failing to do anything. Basically they are the policemen on the watch and they are letting the crime continue to be committed.

When I say ``continue to be committed,'' I would like to submit for the record an article that was recently published that shows the chances that these schemes might still be continuing in the State of Texas. The Texas Public Utilities Commission has an ongoing investigation, and there are a couple of companies down there that are actually pursuing this case. Some of the same Enron traders who were involved in the Portland office in these schemes have now moved on to other companies. CBS and others now have audiotapes showing that some of these Texas power giants might still be manipulating the market in the same ways that Enron did. So the question is, When are we going to stand up and do something about this?

I ask unanimous consent to have printed in the Record an article entitled ``Accusation: Trader Recordings Show TXU Schemed to Spike Power Prices.''

The issue is really before us in the sense that we need to continue to push the Federal regulators to do their job, the Federal regulators being the Federal Energy Regulatory Commission. They have failed to do their job. We had an Enron collapse and scandal in which markets were manipulated, shareholders were conned, books were cooked, and various aspects of this investigation and prosecution are taking place. My hat is tipped to DOJ in their effectiveness in pursuing this case against various Enron employees, including their recent indictment of Ken Lay, even though that is a process in which Mr. Lay has his opportunity and will have his day in court. But I take great offense to Mr. Lay's PR campaign in which he goes on television saying that all that happened in California was California's fault, that it was wrong for them because they deregulated without proper supply.

Well, I think it is very clear there has been market manipulation as shown by the documents that are being provided, and it is a question of whether the Federal regulators are going to do their job.

Madam President, I ask unanimous consent to have printed in the Record an editorial from the Washington Post from this week in which the paper criticized the Federal energy regulators for not doing their job. I think that is what we need, more attention to show that those Federal regulators have not had the bright light of day shown on them and that they are failing to do their job.

The article basically says:

. . . FERC's overly cautious approach to the Enron aftermath

. . . has damaged the regulatory commission's standing and

even its ability to oversee market regulation in the future.

In California, Nevada, Washington state and elsewhere, the

acronym FERC has become a byword for impotence. Its job was

to protect consumers, the argument goes; it didn't protect

consumers. . . .

So I think we need to continue to push. In fact, the editorial goes on to say:

. . . Congress should quickly act to give FERC the powers it

needs. . . .

We must do our job in continuing to protect consumers from this market manipulation. When we have evidence now that shows it has taken place, and we cannot get the cop on the beat to investigate, and we now have documentation and suspicion that it may still be going on in other parts of the country, Congress needs to do its job.

Just as we did with the SEC in passing new accounting rules, we need to make sure the Federal Energy Regulatory Commission does its job on regulating wholesale power rates, making sure that they are just and reasonable and that the manipulation stops.

I yield the floor.

Mr. President, I rise today to introduce a bill I hope will be the first in a series of proposals to simplify the tax code for small business owners. Once enacted, these provisions will reduce not only the amount of taxes that small businesses pay, but that they also will reduce the administrative burden that saddles small companies in trying to meet this obligation.

The proposal that I am introducing today, will simplify the tax code by permitting small business owners to use the cash method of accounting for reporting their income if they generally earn less than $10 million during the tax year. Currently, only those taxpayers that earn less than $5 million per year are able to use the cash method. By increasing this threshold to $10 million, more small businesses will be relieved of the burdensome record keeping requirements that currently require them to use a different accounting method to report their income.

Before I talk about the specifics of this particular provision, let me first explain why it is so critical to begin considering ways to simplify the tax code. As you know, small businesses are the backbone of our Nation's economy. According to the Small Business Administration, small businesses represent 99 percent of all employers, employ 51 percent of the private-sector workforce, and contribute 51 percent of the private-sector output.

Yet, the despite the fact that small businesses are the real job- creators for our Nation's economy, the current tax system imposes an unreasonable burden on small businesses attempting to comply with the current tax code. This code imposes a large, and expensive, burden on all taxpayers in terms of satisfying reporting and record-keeping obligations, but small businesses are disadvantaged most, even more than large companies, in terms of money and time spent satisfying their tax obligations.

For example, according to the Small Business Administration's Office of Advocacy, small businesses spend more than 8 billion hours each year filing-out government reports, and they spend more than 80 percent of this time on completing tax forms. What's even more troubling is that companies that employ fewer than 20 employees spend nearly $6,975 per employee in tax compliance costs--nearly 60 percent more than companies with more than 500 employees spend.

These statistics are disconcerting for several reasons. First, the fact that small businesses are required to spend so much money on compliance costs means they have less earnings to reinvest into their business. This, in turn, means that they have less money to spend on new equipment or on worker training, which, unfortunately, has an adverse effect on their overall production and the economy as a whole.

Second, the inordinate amount of time small business owners are forced to devote to the completion of paperwork means they have less time to spend doing what they do best-namely running their business and creating jobs.

I do not mean to suggest that the challenges small business confront in regard to tax reporting and compliance are unique to this group, or that these companies should receive a free pass. In order to benefit from the freedoms and protections that our great country provides, individuals and businesses alike are required to pay taxes, and this duty carries with it certain administrative and opportunity costs. What I am asking for is a fairer, simpler tax code that allows small companies to satisfy their obligation without having to expend the amount of resources that they do currently, resources that might be invested in more productive ways.

For that reason, the package of proposals that I will be introducing will provide not only targeted, affordable tax relief to small business owners, it will also seek to simplify existing rules under the tax code. By simplifying the tax code, small business owners will be able to satisfy their tax obligation in a less costly, more efficient manner, allowing them to devote more time and resources to their primary business goals.

As I mentioned earlier, the provision that I am introducing today will permit more taxpayers to use the cash method of accounting, as opposed to depending on accrual or other hybrid method. The same law I referenced earlier which currently permits only those taxpayers earning less than $5 million in gross receipts during the tax year to use the cash method in reporting their income also precludes taxpayers in possession of inventory from using the simpler cash method. As a result, thousands of small businesses which possess inventories, but which might otherwise be entitled to report their income and expenses under the cash method of accounting are also required to follow the accrual or some sort of hybrid accounting method. The result, once more, is the imposition of undue financial hardship and unreasonable administrative burdens.

My bill changes these existing rules, increasing the gross receipts test under current law to $10 million for small businesses and indexing this higher threshold to account for inflation. Given that the current $5 million threshold, it makes little sense to preserve an outdated benchmark in this most important provision when the sensible adjustment that I propose will allow thousands of small businesses presently hobbled by unnecessary paperwork to use the cash method of accounting.

My bill also changes current law to permit even those taxpayers with inventory to qualify for the cash method of accounting. It is important to note, however, that my bill will not simply give these taxpayers an opportunity to recover costs associated with these otherwise inventoriable assets in the year of purchase, but that the bill will require these taxpayers to account for such costs as if they were a material or supply that is not incidental. This standard already exists under current law, and it is one with which most small businesses are already familiar. As such, this less-burdensome standard should ease the existing compliance burden for eligible taxpayers and allow them to devote more time and resources to their business.

Very importantly, these changes will not reduce the amount of taxes a small business pays by even one dollar. Indeed, the overall amount of taxes a qualifying small business pays will remain the same. Rather, this bill simply permits more taxpayers to report income and account for costs in the year of the receipt or expenditure. Clearly, this method makes compliance easier and simpler for small taxpayers, and it will reduce both the time and monetary expenditures spent today to comply with the current tax code.

Finally, this proposal is revenue neutral. In addition to the provision that modifies the income tax rules, my bill would enact Federal legislation to stop an abusive tax shelter that exists currently whereby taxpayers avoid State unemployment taxes. Specifically, States would be required to enact laws that prevent the avoidance of State unemployment tax and that also impose penalties on taxpayers and their advisors who engage in these scams. Consequently, my bill provides a revenue-neutral proposal that simplifies the tax code for small business owners by cracking down on taxpayers who otherwise try to avoid their State unemployment tax obligations.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today with my friend and colleague from Oregon, Mr. Smith, to introduce the State Fiscal Relief Act of 2004. This legislation will extend the Federal fiscal relief enacted last year in order to give states a much needed boost as they continue to struggle to recover from the persisting economic downturn.

Over the last three years, states have experienced the worst fiscal crisis since World War II. The loss of state tax revenue has caused substantial state budget deficits, which totaled over $250 billion in fiscal years 2002, 2003 and 2004. These shortfalls forced states to consider raising taxes or making substantial cuts to critical programs such as public education, health care, and public safety. As my colleagues know, Federal efforts to stimulate economic growth can be futile if states are forced to cut spending and increase taxes. We recognized this last year, and we did something about it. We enacted legislation that provided $20 billion in federal assistance to the states--$10 billion for Medicaid and $10 billion for general revenue grants.

Some of my colleagues have since questioned the benefit of this type of federal assistance to the States. They have charged that the relief was not stimulative and that states did not use the additional resources appropriately. Well, I encourage my colleagues to take a very careful look at the facts. When you analyze all the available data on the $20 billion fiscal relief package enacted last year, only one logical conclusion can be reached--during the worst stages of the economic downturn, when many Americans lost their jobs, states were able to step up and fill major gaps in programs and services because they had the benefit of federal fiscal relief. My home state of West Virginia used the $125 million it received in federal assistance to resolve budget shortfalls and prevent cuts in Medicaid. That was the goal of our efforts all along--to reduce state budget deficits and prevent cuts to critical programs and services--and states used this temporary assistance as it was intended.

In West Virginia and States across the country, fiscal relief strengthened state economies and protected our most vulnerable citizens by helping to reduce the massive spending cuts and tax increases states would otherwise have had to make. The Medicaid portion of fiscal relief was particularly important in helping to stabilize State budgets. As many of my colleagues are aware, Medicaid spending provides a critical form of economic stimulus in addition to delivering essential health services to our most vulnerable citizens. The Medicaid program supports jobs in every state. It helps keep hospitals and nursing homes operating in our communities. Every dollar invested in Medicaid results in an almost three-fold return in state economic benefit.

In January, the Kaiser Commission on Medicaid and the Uninsured released a study which confirms that, because of the timeliness of the Medicaid assistance, all fifty states were able to maintain their Medicaid eligibility levels. This means that access to critical health services and programs for pregnant women, children, the elderly, and workers who lost their jobs and employer-sponsored health coverage was preserved. Without these increased Medicaid payments to States, the number of uninsured Americans would have been far greater over the past several years.

Unfortunately, when we passed fiscal relief last year, we did not include appropriate safeguards to make sure this

Federal assistance would remain available to States if the economic downturn lasted longer than anticipated. Many who supported the $20 billion fiscal relief package hoped the economy would rebound quickly and that federal assistance to the States would not be necessary beyond fiscal year 2004. Well, the fact of the matter is that the economy remains weak, and fiscal relief is still necessary.

While states are beginning to report stronger revenue growth, it is clear they are not out of the woods yet. State revenues are still far below pre-recession levels and are growing at a sluggish pace. In April, the National Conference of State Legislatures reported that states are struggling with an aggregate budget deficit of $36 billion going into fiscal year 2005. Eliminating fiscal relief now will deal a serious blow to the states as they struggle to climb out of the economic downturn.

To remedy this problem, the bill we are introducing today provides $4.8 billion over 15 months to help states maintain the coverage they are currently providing through Medicaid. This additional funding, which is still temporary, will finish the job we started last year. It will help states weather the entirety of the economic downturn without having to cut vital programs and services for low-income women, children, and seniors. While I would have liked to have incorporated even more money for enhanced Medicaid payments to states, I recognize the federal budget realities currently before us. The $4.8 billion included in our bill represents a workable phase-down transition from the $10 billion states received last year, and I know it will go a long way to preserve health care coverage for Medicaid beneficiaries during this ongoing recession.

In addition to providing $4.8 billion for Medicaid, our bill also reimburses states for the $1.2 billion in net costs they will incur in fiscal years 2004, 2005, and 2006 as a result of the Medicare Prescription Drug, Improvement, and Modernization Act. As I stated when I voted against this bill, the Medicare Modernization Act has several major flaws that must be addressed. One such flaw is the fact that the new law undermines state revenues in the midst of their efforts to rebuild their economies. The State Fiscal Relief Act will correct that mistake.

I urge my colleagues to support this important legislation and to stand up for the millions of Americans who are working at low-wage jobs, who benefit from the numerous public programs and services that fiscal relief has helped to maintain, and who are in the process of reinvigorating our economy.

Madam President, I rise today to introduce the Medicare Rural Home Health Payment Fairness Act. This legislation would extend the additional payment for home health services delivered in rural areas. This additional 5 percent reimbursement is currently scheduled to sunset on April 1, 2005. This legislation would make the additional reimbursement permanent.

I note the presence of one of the strongest advocates of home health care, and that is my colleague from Missouri, Senator Bond. He has worked tirelessly to make certain that our seniors and disabled citizens are able to receive the home health care they need. I am very pleased to have him as one of the key supporters of this legislation.

Home health care has become an increasingly important part of our health care system. The kinds of highly skilled and often technically complex services that our home health caregivers provide have enabled millions of our most frail and vulnerable older and disabled citizens to avoid hospitals and nursing homes and to receive health care just where they want to be--in the comfort, privacy, and security of their own homes.

I have had the great honor of accompanying several of Maine's caring home health nurses on their visits to serve their patients. I have seen firsthand the difference that they are making for Maine's elderly. I remember visiting one elderly couple who told me that it was home health care that allowed them to stay together in their very own home, rather than being separated with one of them being forced to go into a nursing home in the remaining years of their life. Another woman told me that her late husband received home health care in the months leading up to his death. That had allowed him to be treated at home and to be with his family, which is where he very much wanted to be.

Nevertheless, surveys have shown that the delivery of home health services in rural areas can be as much as 12 to 15 percent more costly because of the extra travel time required to cover long distances between patients, the higher transportation expenses, and other factors. Because of the longer travel times, rural caregivers are unable to make as many visits in a day as their urban counterparts. The executive director of Visiting Nurses of Aroostook in northern Maine where I am from tells me that her agency covers 6,600 square miles with a population of only 73,000 people. Her costs are understandably much higher than other agencies due to the long distances her staff must drive to see their clients. Moreover, her staff is obviously not able to see as many patients in a day.

Agencies in rural areas are also frequently smaller than their urban counterparts, which means that their relative costs are higher. Smaller agencies with fewer patients and fewer visits mean that fixed costs, particularly those associated with meeting regulatory requirements, are spread over a much smaller number of patients and visits, thus increasing overall the per-patient and per-visit costs. Moreover, in many rural areas, home health agencies are the primary caregivers for homebound beneficiaries with limited access to transportation. These rural patients often require more time and care than urban patients and are understandably more expensive for home health agencies to serve. If the rural extra payment is not extended, agencies may be forced to make decisions

not to accept patients living in remote areas who have greater care needs. That would translate into less access to health care for ill homebound seniors.

Failure to extend the rural add-on payment will only put more pressure on rural home health agencies that are already operating on very narrow margins. It could force some of these agencies to close their doors altogether. Many home health agencies operating in rural areas are the only home health providers in large geographic areas. If any of these agencies is forced to close, the Medicare patients in that region could lose all their access to home health care.

The bipartisan legislation I am introducing today, with Senators Lincoln, Bond, Feingold, Thomas, Conrad, and Burns, will help to ensure that Medicare patients in rural areas continue to have access to the home health services they very much need. I urge all of our colleagues to join us as cosponsors. We must act to ensure that this extra payment does not expire next April 1.

I yield the floor.