IDEA Full-Funding Act of 2003

Mr. President, last November, the Drug Competition Act passed the Senate by unanimous consent. This morning, I am proud to join Senator Grassley, along with Senators Durbin, Feingold, Kohl and Schumer in re-introducing this important bill, I hope that in this Congress it is actually enacted into law. Prescription drug prices are rapidly increasing, and are a source of considerable concern to many Americans, especially senior citizens and families. Generic drug prices can be as much as 80 percent lower than the comparable brand name version.

While the Drug Competition Act is small in terms of length, it is large in terms of impact. It will ensure that law enforcement agencies can take quick and decisive action against companies that are driven more by greed than by good sense. It gives the Federal Trade Commission and the Justice Department access to information about secret deals between drug companies that keep generic drugs off the market. This is a practice that hurts American families, particularly senior citizens, by denying them access to low-cost generic drugs, and further inflating medical costs.

Last fall, the Federal Trade Commission released a comprehensive report on barriers the entry of generic drugs into the pharmaceutical marketplace. The FTC had two recommendations to improve the current situation and to close the loopholes in the law that allow drug manufacturers to manipulate the timing of generics' introduction to the market. One of those recommendations was simply to enact our bill, as the most effective solution to the problem of ``sweetheart'' deals between brand name and generic drug manufacturers that keep generic drugs off the market, thus depriving consumers of the benefits of quality drugs at lower prices. In short, this bill enjoys the unqualified endorsement of the current FTC, which follows on the support by the Clinton Administration's FTC during the initial stages of our formulation of this bill. We can all have every confidence in the common sense approach that our bill takes to ensuring that our law enforcement agencies have the information they need to take quick action, if necessary, to protect consumers from drug companies that abuse the law.

Under current law, the first generic manufacturer that gets permission to sell a generic drug before the patent on the brand-name drug expires, enjoys protection from competition for 180

days--a headstart on other generic companies. That was a good idea--but the unfortunate loophole exploited by a few is that secret deals can be made that allow the manufacturer of the generic drug to claim the 180- day grace period--to block other generic drugs from entering the market--while, at the same time, getting paid by the brand-name manufacturer not to sell the generic drug.

Our legislation closes this loophole for those who want to cheat the public, but keeps the system the same for companies engaged in true competition. I think it is important for Congress not to overreact and throw out the good with the bad. Most generic companies want to take advantage of this 180-day provision and deliver quality generic drugs at much lower costs for consumers. We should not eliminate the incentive for them. Instead, we should let the FTC and Justice look at every deal that could lead to abuse, so that only the deals that are consistent with the intent of that law will be allowed to stand. The Drug Competition Act accomplishes precisely that goal, and helps ensure effective and timely access to generic pharmaceuticals that can lower the cost of prescription drugs for seniors, for families, and for all of us.

I regret that some in the Senate stalled action on this worthwhile measure until very late in the last Congress and that the House chose not to act at all, and I hope that the growing need for more cost- effective health care solutions will serve as a catalyst for quick action on this needed legislation.

Mr. President, I am pleased to join Senator Leahy today in introducing the Drug Competition Act of 2003. This bill will help Federal regulators ensure that there is full and unfettered access to competition for prescription drugs under the law. As the past Chairman of the Special Committee on Aging and now as the Chairman of the Finance Committee, I want to make sure that American consumers-- especially our seniors--are able to get the life-saving drugs they need in a competitive manner.

Our patent laws provide drug companies with incentives to invest in research and development of new drugs. But the law also provides that generic drug companies have the ability to get their own drugs on the market so that there can be price competition and lower prices for prescription drugs. We have a legal system in place that provides for such a balance--the Hatch-Waxman law. Ultimately, we want consumers and seniors to have more choices and to get drugs at lower prices.

So, I was concerned when I heard reports that the Federal Trade Commission had brought enforcement actions against brand-name and generic drug manufacturers that had entered into anti-competitive agreements, resulting in the delay of the introduction of lower priced drugs. This bill targets that problem.

Under the Hatch-Waxman Act, manufacturers of generic drugs are encouraged to challenge weak or invalid patents on brand-name drugs so consumers can benefit from lower generic drug prices. Current law gives temporary protection from competition to the first generic drug manufacturer that gets exclusive permission to sell a generic drug before the patent on the brand-name drug expires. This gives the generic firm a 180-day head start on other generic companies.

However, the FTC discovered that some companies were exploiting this law by entering into secret deals, which allowed the generic drug makers to claim the 180-day grace period and to block other generic drugs from entering the market, while at the same time getting paid by the brand-name manufacturer for withholding sales of the generic version of the drug. This meant that consumers continued to pay high prices for drugs, rather than benefiting from more competitive and lower prices. So the FTC brought enforcement actions against these companies.

In addition, the FTC conducted a comprehensive review of agreements that impacted the 180-day exclusivity period. The FTC found that there are competition problems with some of these agreements that potentially delayed generic drug entry into the market. The FTC recommended:

Given this history, we believe that notification of such

agreements to the Federal Trade Commission and the U.S.

Department of Justice is warranted. We support the Drug

Competition Act of 2001, S. 754, introduced by Senator Leahy,

as reported by the Committee on the Judiciary.

The Drug Competition Act is a simple solution to the 180-day exclusivity problems that the FTC has identified. The bill would require drug companies that enter agreements relating to the 180-day period to file those documents with the FTC and DOJ. It would impose sanctions on companies who do not provide timely notification. This process would facilitate agency review of the agreements to determine whether they have anti-competitive effects.

The Drug Competition Act will ensure that consumers are not hurt by secret, anti-competitive contracts, so that consumers can get competition and lower drug prices as soon as possible. I urge my colleagues to support this bill.

Mr. President, I rise in support of the IDEA Full Funding Act of 2003. I'm so proud to cosponsor this important legislation. This bill provides mandatory increases for IDEA funding each year, so that the Federal Government will be paying its full share of the cost of special education by 2011. This legislation is long overdue. I think it's shocking that the President is fighting for tax breaks for zillionaires while delaying help for those who need it most--the children with special needs and their parents and teachers. We must fully fund IDEA to ensure that children with disabilities are receiving the services they need to succeed with their classmates in public schools.

In 1975, Congress promised to pay 40 percent of the cost of special education when it passed the Individuals with Disabilities Education Act. Yet it has never paid more than 17.5 percent. That means local districts must make up the difference, either by cutting from other education programs or by raising taxes. I don't want to force States and local school districts to forage for funds, cut back on teacher training, or delay school repairs because the Federal Government has failed to live up to its commitment to special education. That's why fully funding IDEA is one of my top priorities.

Everywhere I go in Maryland, I hear about IDEA. I hear about it in urban, rural, and suburban communities, from Democrats and Republicans, and from parents and teachers. They tell me that the Federal Government is not living up to its promise, that special education costs about 18 percent of the average school budget, that schools are suffering, and the parents are worried.

Parents today are under a lot of stress--sometimes working two jobs just to make ends meet, trying to find day care for their kids, and elder care for their own parents. The Federal Government shouldn't add to their worries by not living up to its obligations. With the Federal Government not paying its share of special ed these parents have real questions in their minds: Will my child will have a good teacher? Will the classes have up-to-date textbooks? Will they be learning what they need to know?

Parents of disabled children face such a tough burden already. School should not be one of the many things they have to worry about, particularly when the laws are already on the books to guarantee their child a public school education. The bottom line is that the Federal Government is shortchanging these parents by not paying its share of special ed costs.

This bill will give local governments the resources they need to improve education for all children. It will free up money in local budgets for hiring more teachers, buying new textbooks and technology, and repairing old school buildings. It will help the teachers who struggle with teaching the toughest students. It will help students with disabilities and their families by providing enough funding for special education programs so parents can have one less thing to worry about, and students get the opportunities they deserve.

Full funding of IDEA is essential. It will give disabled children a chance to succeed in school and in life without

shortchanging other vital education programs. It will give parents peace of mind about their children's education. Let's pass this bill as soon as possible.

Mr. President, I rise in support of the IDEA Full Funding Act of 2003. I'm so proud to cosponsor this important legislation. This bill provides mandatory increases for IDEA funding each year, so that the Federal Government will be paying its full share of the cost of special education by 2011. This legislation is long overdue. I think it's shocking that the President is fighting for tax breaks for zillionaires while delaying help for those who need it most--the children with special needs and their parents and teachers. We must fully fund IDEA to ensure that children with disabilities are receiving the services they need to succeed with their classmates in public schools.

In 1975, Congress promised to pay 40 percent of the cost of special education when it passed the Individuals with Disabilities Education Act. Yet it has never paid more than 17.5 percent. That means local districts must make up the difference, either by cutting from other education programs or by raising taxes. I don't want to force States and local school districts to forage for funds, cut back on teacher training, or delay school repairs because the Federal Government has failed to live up to its commitment to special education. That's why fully funding IDEA is one of my top priorities.

Everywhere I go in Maryland, I hear about IDEA. I hear about it in urban, rural, and suburban communities, from Democrats and Republicans, and from parents and teachers. They tell me that the Federal Government is not living up to its promise, that special education costs about 18 percent of the average school budget, that schools are suffering, and the parents are worried.

Parents today are under a lot of stress--sometimes working two jobs just to make ends meet, trying to find day care for their kids, and elder care for their own parents. The Federal Government shouldn't add to their worries by not living up to its obligations. With the Federal Government not paying its share of special ed these parents have real questions in their minds: Will my child will have a good teacher? Will the classes have up-to-date textbooks? Will they be learning what they need to know?

Parents of disabled children face such a tough burden already. School should not be one of the many things they have to worry about, particularly when the laws are already on the books to guarantee their child a public school education. The bottom line is that the Federal Government is shortchanging these parents by not paying its share of special ed costs.

This bill will give local governments the resources they need to improve education for all children. It will free up money in local budgets for hiring more teachers, buying new textbooks and technology, and repairing old school buildings. It will help the teachers who struggle with teaching the toughest students. It will help students with disabilities and their families by providing enough funding for special education programs so parents can have one less thing to worry about, and students get the opportunities they deserve.

Full funding of IDEA is essential. It will give disabled children a chance to succeed in school and in life without

shortchanging other vital education programs. It will give parents peace of mind about their children's education. Let's pass this bill as soon as possible.

Mr. President, rural America has been depopulating at an alarming rate. The same is true for the rural counties in Kansas. In fact, over half of the counties in the State are losing population.

We are going to stop that trend.

Senators, like Ben Nelson and I, who grew up in small towns know a little secret. Rural America is a great place to live. However, for rural towns to compete with urban areas for talented young people, they have to be able to provide the basics--like high quality health care.

For the hospitals represented here today to be able to provide high quality health care for rural America, they have to be able to count on Medicare for fair reimbursement. For quite a few hospitals in Kansas, 70 and 80 percent of their caseload is paid for by Medicare. For the communities these hospitals serve, fair Medicare reimbursement is vitally important.

Unfortunately, much of the regulation that comes out of CMS is based on economics of scale. The actuaries and accountants in Baltimore produce payment systems and formulas for reimbursement. The assumption is that the hospitals that are the most efficient will be the most successful. Unfortunately, efficiency is often a product of volume. If you treat 5,000 stroke patients in a year, you are probably going to be more efficient than if you treat only 5.

Efficiency is a laudable goal, but it shouldn't be the only goal of Medicare. Particularly, when it comes to providing health care in a hospital with fewer than 50 beds.

That is why Senator Nelson and I are introducing the ``Rural Community Hospital Assistance Act of 2003.'' Rather than rely on formulas calculated by CMS bureaucrats in Baltimore, the hospitals covered under our bill will rely on cost-based reimbursement. In addition, the bill recognizes that these hospitals don't have the volume to cover bad debt from patients and to keep up with growing demands for new technology and infrastructure.

This bill will create a new Rural Community Hospital designation within Medicare for rural hospitals with fewer than 50 beds.

These hospitals will be eligible for cost-based reimbursement for impatient and outpatient services; a technology and infrastructure add on; cost based reimbursement for home health services where the provider is isolated; cost based reimbursement for ambulance services; and the restoration of Medicare bad debt payments at 100 percent.

And the cost of the bill, which we believe with stabilize health care in rural America, is less than \1/2\ of 1 percent of annual Medicare expenditures.

This is an important bill for rural hospitals; and I don't think you can overestimate the importance of rural hospitals to the communities they serve.

Mr. President, today I join Senator Brownback in introducing the Rural Community Hospital Assistance Act. This legislation is intended to ensure the future of small rural hospitals by restructuring the way they are reimbursed for Medicare services by basing the reimbursements on actual costs instead of the current pre- set cost structure.

Current law allows for very small hospitals--designated Critical Access Hospitals, CAH, to receive cost-based Medicare reimbursements. To qualify as a CAH the facility must have no more than 15 acute care beds.

In rural communities, hospital facilities that are slightly larger than the 15 bed limit share with Critical Access Hospitals the same economic conditions, the same treatment challenges, the same disparity in coverage area but do not share the same reimbursement arrangement. These rural hospitals have to compete with larger urban-based hospitals that can perform the same services at drastically reduced costs. They are also discouraged from investing in technology and other methods to improve the quality of care in their communities because those investments are not supported by Medicare reimbursement procedures.

The legislation would provide cost-based Medicare reimbursement by creating a new ``rural'' designation under the Medicare reimbursement system. This new designation would benefit seven Nebraska hospitals. Hospitals in McCook, Alliance, Broken Bow, Beatrice, Columbus, Holdrege and Lexington would fall under this new designation, and would have similar benefits provided to nearly sixty other Nebraska hospitals classified under the CAH system.

The legislation would also improve the hospitals with critical access status. Nearly sixty existing CAH facilities in Nebraska already receive cost-based reimbursements for inpatient and outpatient services. The legislation would further assist these existing CAH facilities by allowing them a return on equity for technology and infrastructure investments and by extending the cost-based reimbursement to certain post-acute services.

Rural hospitals cannot continue to provide these services without having Medicare cover the costs. If something

is not done, the larger hospitals may be forced to cut back on the number of beds they keep--and the number of people they care for, and others may be forced to close their doors. These hospitals provide jobs, good wages, health care and economic development opportunity for these communities. Without access to these hospitals, these communities would not survive. The Rural Community Hospital Assistance Act will ensure that the community has access to high quality health care that is affordable to the patient and the provider.

Mr. President, I am proud to sponsor the Military Pay Comparability Act of 2003. In 1999, the Committee on Armed Services passed landmark legislation providing significant benefits to the entire Total Force. I believe we must improve upon this legislation so that we not only eliminate ``pay comparability gap,'' but ensure that we do not recreate one in the future.

Under the 1999 legislation, military raises will exceed growth in the ECI by one-half percent per year through fiscal year 2006. However, starting in 2007, military raises will revert to being capped one-half percentage point below the ECI.

As a former ranking member and long-time member on the Personnel Subcommittee when Senator John Glenn was the chairman, my experience with capping military raises below ECI during the last three decades shows that such caps inevitably lead to significant retention problems among second-term and career service members.

Those retention problems cost our Nation more in the long run in terms of lost military experience, decreased readiness, and increased training costs. Since military pay was last comparable with private sector pay in 1982, military pay raises have lagged a cumulative 6.4 percent behind private sector wage growth--although recent efforts of the executive and legislative branches have reduced the gap significantly from its peak of 13.5 percent in 1999. Our efforts in 1999 increased pay raises, reformed the pay tables, took nearly 12,000 service members off of food stamps, and established a military Thrift Savings Plan.

We have to improve upon the 1999 law to ensure future raises track to civilian pay growth so we don't fall back into pay caps that will get us back in the negative retention/readiness cycle. Subsequent raises after 2006 must sustain full comparability with increases in the ECI. A key principal of the all volunteer force, AVF, is that military pay raises must match private sector pay growth, as measured by ECI. Our action in this area will send a strong message of support to our service men and women and their families that will continue to promote high morale, better quality-of-life, and a more ready military force.

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

Mr. President, today Senator Feinstein and I are introducing the ``Overseas Military Facility Structure Review Act'' to establish a congressional panel to conduct a detailed study of U.S. military facilities overseas. This bill creates a bipartisan congressional commission charged with undertaking an objective and thorough review of our overseas basing structure. The commission will consider a host of criteria to determine whether our overseas bases are prepared to meet our needs in the 21st Century. The commission will be comprised of national security and foreign affairs experts who will present their findings to the 2005 domestic Base Realignment and Closure, BRAC, Commission, providing a comprehensive analysis of our worldwide base and force structure.

We believe it is important to determine our overseas basing requirements, assess training constraints, and provide recommendations on future realignments. As a result, we are proposing legislation that would create a congressional Overseas Basing Commission to review our basing strategy to ensure that it is consistent with both our short- and long-term national security objectives. We believe the time is right to move forward with a more structured approach to reviewing these overseas bases.

Such a review is timely. The 2005 BRAC is just around the corner and some in the Pentagon have suggested it could result in the closure of nearly one out of every four domestic bases. Before we close stateside military bases, we must first analyze our overseas infrastructure. If we reduce our overseas presence, we need stateside bases to station returning troops. It is senseless to close bases on U.S. soil in 2005 only to determine a few years later that we made a costly, irrevocable mistake. A painful lesson we learned in the last rounds of closures.

Though our military force structure has decreased since the Cold War, the responsibilities placed upon our service members have significantly increased. While operational effectiveness is paramount, it would be irresponsible to build on an inefficient, obsolete overseas base structure, as we face new strategic threats in the 21st century, taking valuable dollars needed elsewhere.