Relating to consideration of the bill (S. 1932) to provide for reconciliation pursuant to section 202(a) of the concurrent resolution on the budget for fiscal year 2006 (H. Con. Res. 95).

Mr. Speaker, today, we have the opportunity to make significant improvements in our Federal Deposit Insurance system. We do this from a position of strength, as both the insurance fund and the banking industry are extremely healthy. What better time than to fine tune the system and establish a strong footing going forward.

Basic principles of reform: Fairness and Flexibility

The fundamental driving principles of reform were to provide fairness to all insured depository institutions by assessing each based on risk and provide the FDIC with greater flexibility to manage the fund to reflect different economic conditions.

Regarding fairness: The bill provides greater fairness to insured banks in many important ways. First, it authorized the FDIC to revise the risk-based formula to better reflect the risk each institution poses to the insurance fund. In providing this authority, our Committee looked to and relied upon examples provided by the FDIC regarding how the new system might work, including FDIC representations that about 42 percent of all banks would likely remain in the lowest risk category. We know that the very nature of bank loans involves risk. Therefore, we expect the FDIC to form a reasonable system that encourages appropriate risk-taking, consistent with safe and sound banking, and with premiums at a level that protect the best run banks from being overcharged and that don't inadvertently stop lending. In this bill, we make explicit that the size of the financial institution should not bar an institution from being in the lowest risk category. It is risk that matters, not size. We expect the FDIC to time assessments in such a manner that banks are able to plan for such an expense, thereby avoiding unexpected or untimely costs on the bank.

Secondly, the bill recognizes that about 10 percent of institutions have never paid a premium to the FDIC to support its operations.

This has put a burden on those institutions that fully capitalized the insurance funds in the mid-1990s. Thus, this legislation provides that those institutions that capitalized the fund with initial credits--in proportion to each institution's financial contribution to FDIC--that are intended to offset premium assessments for many years to come. Those institutions that have not financially supported the FDIC would not have these credits and would begin to pay premiums to the FDIC. Moreover, should the insurance fund grow to the upper regions of the normal operating range for the FDIC, banks would be entitled to a cash dividend in proportion to their historic financial contributions.

Regarding flexibility: The bill provides FDIC greater flexibility to manage the insurance fund. The law that our bill replaces constrained the FDIC from charging most banks when the reserve ratio remained above a certain level and would force FDIC to charge high premiums, 23 basis points, at times when it made the least sense. Our bill allows the FDIC to manage the fund within a wide range, with the idea that assessments would remain reasonably constant and predictable.

Importantly, this bill is not intended to raise more money than what the FDIC would have collected under the old law. Nor is this bill intended to encourage the FDIC to build the fund to the highest possible level. In fact, we know that each dollar sent to the FDIC means that there are fewer dollars that can support lending in our communities. And as we considered this bill, we heard testimony that suggested that each dollar sent to Washington means that eight dollars of lending is lost. We cannot afford to restrict lending in our communities just to have more money added to the nearly $50 billion already in the insurance fund.

To protect against the fund growing too quickly, the legislation provides an automatic braking system that would return as a dividend 50 percent of any excess when the reserve ratio of the fund is above 1.35 percent. It also caps the fund level, providing a 100 percent dividend when the reserve ratio exceeds the upper limit of the range at 1.50 percent. This assures that money will remain in our communities. And while we provided the FDIC some authority to suspend the 50 percent dividend under extraordinary circumstances where it expects losses over a 1-year timeframe to be significant, our expectation is that this authority be used rarely and be reviewed each year when the new designated reserve ratio is set. The intention of this exception is that it be temporary and not a regular event, and that the FDIC communicates to Congress and the industry its justifications.

Designed for the Future

Not only does the legislation provide fairness and flexibility, it also anticipates needed changes in the coverage levels over time. We know that inflation has cut in half the real value of the current insurance coverage since it was last changed in 1980. We also know that as the baby boomers move into retirement, that the current coverage level was inadequate to protect their life-long savings. Thus, this bill increased to $250,000 the insurance limit on retirement accounts.

The House has repeatedly voted overwhelmingly in favor of legislation that would automatically index coverage levels based on inflation. The other body has only recently passed deposit insurance reform. The indexing language included in the Senate reconciliation bill required the FDIC to ``determine whether'' to increase coverage based on the amount of inflation increase plus a long list of factors. The compromise language we have agreed to calls on the FDIC and NCUA to jointly consider just three narrow factors. Those factors are (1) the overall state of the Deposit Insurance Fund and economic conditions affecting insured depository institutions; (2) potential problems affecting insured depository institutions; and (3) whether the increase will cause the reserve ratio of the fund to fall below 1.15 percent of estimated insured deposits. If the FDIC and NCUA elect not to increase coverage, they must make the case based on these three narrow factors. The key language in the compromise is that the FDIC and NCUA, ``upon determining that an inflation adjustment is appropriate, shall jointly prescribe the amount by which'' coverage ``shall be increased by calculating'' the amount of inflation. This change in language, from ``determine whether'' to ``shall jointly prescribe'' is a clear statement that Congress is establishing a presumption that the agencies will increase coverage if warranted by past inflation.

Stronger than Ever

This legislation will make the insurance fund even stronger than it already is and, in combination with the extensive regulatory and supervisory authorities of the FDIC, ensures that the fund and the banking industry will remain strong for a very long time.

Mr. Speaker, I rise in strong support of the Deposit Insurance Reform legislation included in S. 1932, the Deficit Reduction Act of 2005.

I want to begin by thanking Financial Services Committee Chairman Oxley for his relentless efforts on moving this deposit insurance reform legislation. He has shown tremendous leadership in steering this complex bill through the legislative process, and I am deeply grateful that he gave me the opportunity to work on this landmark piece of legislation. I also want to thank the Ranking Member of the Committee, Mr. Frank, for his support. This was truly a bipartisan effort, and I believe we have a better legislative product because of that. In addition, I want to express my deep appreciation for Senator Shelby's work on increasing coverage for retirement accounts to $250,000.

Deposit insurance reform has been thoroughly discussed and debated over several years. During both the 107th (H.R. 3717) and 108th (H.R. 522) Congress, I introduced comprehensive deposit insurance reform legislation. The legislation was a byproduct of recommendations made by the FDIC in early 2001, a series of hearings held in my Subcommittee on proposed reforms to the Federal deposit insurance system, and broad- based bipartisan cooperation. H.R. 3717 passed the House in the 107th Congress by a vote of 408-18, and H.R. 522 passed the House in the 108th Congress by a vote of 411-11. During this Congress, Congresswoman Hooley and I introduced this same legislation--H.R. 1185--with Chairman Oxley and Ranking Member Frank. On May 4, 2005, H.R. 1185 passed the House by a vote of 413 to 10. The legislation is supported by the American Association of Retired Persons (AARP) as well as all of the banking and credit union trade associations.

Federal deposit insurance has been a hallmark of our nation's banking system for more than 70 years. The reforms made by this legislation will ensure that this system that has served America's savers and depositors so well for so long will continue to do so for future generations.

What does the legislation do? First, it merges the separate insurance funds that currently apply to deposits held by banks on the one hand and savings associations on the other, creating a stronger and more stable fund that will benefit banks and thrifts alike.

Second, the bill makes a number of changes designed to address the ``pro-cyclical'' bias of the current system, which results in sharply higher premiums being assessed at ``down'' points in the business cycle, when banks can least afford to pay them and when funds are most needed for lending to jumpstart economic growth. By giving the FDIC greater discretion to manage the insurance funds based on industry conditions and

economic trends, the legislation will ease volatility in the banking system and facilitate recovery from economic downturns.

Third, the legislation makes monumental changes to law with regard to deposit insurance coverage levels. The system has gone 25 years without such an adjustment--the longest period in its history--and the increases provided for in the legislation are critical if deposit insurance is to maintain its relevance. The legislation establishes a permanent indexation system to ensure that coverage levels keep pace with inflation by indexing coverage from its current level of $100,000 every five years. The indexation, which begins in 2010, applies to all accounts, including retirement and municipal accounts. Without these changes, deposit insurance will wither on the vine, which is an unacceptable outcome for the millions of Americans who depend upon it to protect their savings.

The legislation also immediately increases deposit insurance coverage available to retirement accounts, including IRAs and 401ks, from its current level of $100,000 to $250,000. Particularly in light of volatility on Wall Street and other developments that have shaken confidence in the markets in recent years, senior citizens and those planning for retirement need a convenient, conservative, and secure place for their retirement savings. With the higher coverage levels provided for in this bill, the American banking system will give seniors that safe haven. That is why the AARP has enthusiastically endorsed the coverage increases in this bill.

All of us have heard from community bankers in our districts about the challenges they face in competing for deposits with large money- center banks that are perceived by the market--rightly or wrongly--as being ``too big to fail.'' By strengthening the deposit insurance system, the conference report will help small, neighborhood-based financial institutions across the country, particularly in rural America, continue to play an important role in financing economic development. The deposits that community banks are able to attract through the Federal deposit insurance guarantee are cycled back into local communities in the form of consumer and small business loans, community development projects, and home mortgages. If this source of funding dries up, it will have devastating consequences for the economic vitality of small-town America.

I want to again commend Chairman Oxley for the tremendous leadership he has shown in steering this complex bill through the legislative process. I also want to thank Ranking Member Frank, Congresswoman Hooley, Senator Shelby, Senator Sarbanes, Senator Enzi, Senator Crapo, Senator Enzi, and Senator Johnson for all of their work on this legislation.

Let me also take this opportunity to thank the staff members on the House Financial Services Committee who worked on this legislation. Both Chairman Oxley and Ranking Member Frank are to be commended for assembling such a talented group of staff to work on Deposit Insurance Reform legislation. On the majority side, I would like to thank Bob Foster, Carter McDowell, Peggy Peterson, Tom Duncan, Peter Barrett and Dina Ellis who serves as my designee on the Committee. I want to give a special thanks to Jim Clinger who recently left the Committee to work at the Department of Justice. Without Jim's hard work, dedication and knowledge we would not be here today, and I am grateful for all of his efforts. I would also like to thank Larry Lavender, Warren Tryon and Kim Olive of my staff for their work on this issue. On the minority staff, I would like to thank the following staff members: Jeanne Roslanowick, Jaime Lizarraga, Erika Jeffers, Ken Swab and Matt Schumaker of Congresswoman Hooley's staff.

In closing, Mr. Speaker, let me just say that this legislation will promote the stability and soundness of the banking system. It will also provide assurance to working families, retirees, and others who place their hard-earned savings in U.S. banks, thrifts, and credit unions that their FDIC-insured deposits are safe and secure.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 653 and ask for its immediate consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the bill before us today has changed somewhat from its travels in the Senate. The rhetoric on the other side of the aisle has not. It is the same old tired class-warfare rhetoric, more befitting of a response to the State of the Union than anything at all related to a parliamentary inquiry regarding unfunded mandates.

The specific point as it relates to an unfunded mandate claim by the other side regarding the child support changes in the Deficit Reduction Act is simply not correct. According to the GAO, in 2004 the Federal Government paid 88 percent of all child support program costs. Eighty- eight percent. Ten States made money on their program from the taxpayers from the other 40 States. Ten States retained more child support collections than it cost them to operate it. They actually generated substantial profit with the Federal Government picking up 100 percent of their costs, the Federal Government obviously not being a nebulous concept, the Federal government being the other 40 States subsidizing 10 States' child support programs to the tune of a profit.

Over the next 5 years, the Federal Government will spend nearly $20 billion on child support program costs. That is after the changes that are made here in the Deficit Reduction Act, and still far more than the States are expected to spend. States continue to receive $500 million in Federal incentive funds every year, on top of $2 in Federal funds for every $1 of State funds spent for a 66 percent Federal matching rate. Not a bad deal.

Set in this context, this claim of unfunded mandates is simply not correct and not meaningful. The child support savings in the Deficit Reduction Act result from ending the practice of States claiming Federal matching funds for spending Federal child support incentive funds, double dipping, if you will.

This double dipping cannot be justified. Closing this loophole, which is what it amounts to, saves $1.6 billion over 5 years with no impact on services being provided to the clients. The change would not take effect until fiscal year 2008, giving States 2 years to adjust to the change. And States could replace every penny of expected Federal savings by increasing their own

spending modestly with the Federal Government filling in the difference. States could unlock $2 Federal dollars for every $1 spent under the program's 66 percent match rate. So if States want to increase spending by $900 million, they would have to pony up $300 million of their own. Again, not a bad deal for the States. I think it is a return that most investors would accept readily.

CBO's letter that the gentleman refers to shows it is impossible to achieve even modest savings in this open-ended entitlement program without raising an underfunded mandate objection. Unless your goal is to prevent any reduction in Federal spending, which I think it is fair to stipulate is their goal, this is not a meaningful objection.

Even with this change, CBO expects child support collections will grow each and every year and the projections bear that out, rising from $24 billion today to $28 billion in 2010 and $34 billion in 2015, clearly only a Democratic definition of a cut.

Other features of the Deficit Reduction Act would provide States significant Federal welfare funds, including $17 billion in annual TANF block grants through 2010 and $3 billion in mandatory child care through 2010, a $1 billion increase above current law.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I remind the gentleman that today we will spend $24 billion on the child support collection program to which he refers. By 2010, we will spend $28 billion on the same program; by 2015, $34 billion.

The gentleman is worried about June, July, August, September, October, and yes, even November. We are worried about 2010, 2020, and 2030, about getting our arms around an exploding entitlement program that is engorging the entire Federal budget, and your actions to stop any and all responsible budgeting to prevent entitlement spending from taking up two-thirds of the Federal budget within the decade, to prevent any meaningful Social Security reform that would guarantee that GenX-ers out there will have the same opportunities that those in their seventies have, to prevent the types of entitlement reforms that are needed to save the very programs that you are so proud of in Social Security and Medicaid and Medicare, that are worthy pillars of this domestic government, you block each and every time, including this action which is a very modest savings that still generates more money each and every year by substantial sums than the previous and still guarantees a high level of service to the young people.

I yield to the gentleman from Michigan.

Mr. Speaker, reclaiming my time, nowhere in the CBO score for this report is there any estimates that States will lose TANF funds for failure to operate satisfactory child support programs. They would score as an additional Federal savings if they did, and that is just not there.

I think I have answered the gentleman's question.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

This debate has devolved into a 10-minute extension of the overall concept of deficit reduction. The unfunded mandates claim does not ring true. There is more money going into these States. States have been double-dipping, and the action in this bill today will simply close that loophole and end that practice, particularly by the 10 States that have been operating on Federal dollars at a profit.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentlewoman from New York (Ms. Slaughter), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

(Mr. PUTNAM asked and was given permission to revise and extend his remarks.)

Mr. Speaker, we are dealing with the Deficit Reduction Act yet again to address some technical amendments that were made by the Senate. House Resolution 653 provides that the House agree with the Senate amendments to the House passed version of S. 1932. S. 1932 provides for reconciliation as described in the Congressional budget resolution of 2006.

As a member of both the Rules Committee and the Budget Committee and a conferee on this legislation, I am pleased to bring this legislation to the floor for what we hope will be its final, final consideration.

For the first time since 1997, the Congressional budget resolution included deficit reduction instructions to authorizing committees to find and achieve mandatory program savings for a more accountable government. It does this by finding smarter ways to spend and by slowing the rate of the growth of government, especially on the mandatory side of the ledger.

The Deficit Reduction Act seeks to curb the unsustainable growth rate of mandatory programs that are set to consume 62 percent of our total budget in the next decade if left unchecked. The agreement will stimulate reform of these entitlement programs, many of which are outdated, inefficient and excessively costly.

Mr. Speaker, I am proud of this legislation, and I am proud of the work that this House, through its authorizing

committees, through the Budget Committee process, through, in short, regular order has achieved. I am proud of that. I am proud that this legislation begins a long-term effort at slowing the growth of entitlement spending.

Our goal was to control government spending so that Americans can keep more of their own money instead of having the government seize more. The authorizing committees from both Chambers have worked very hard to find savings within their individual jurisdictions that total nearly $40 billion in efficiency. The agreement allows programs and agencies to weed out waste, fraud, abuse, duplication of effort, so that we can channel more Federal dollars to programs that succeed and to the people who are truly in need, to serve the intended populations more efficiently, more effectively, and in smarter ways.

I look forward to passing this reform bill and reaffirming sound oversight and fiscal responsibility here in Washington. This legislation is a step towards smarter, more competent government. I urge Members to support it.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I am pleased to yield 5 minutes to the distinguished chairman of the Energy and Commerce Committee, Mr. Barton.

(Mr. BARTON of Texas asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to another gentleman from Florida (Mr. Crenshaw), a distinguished member of the Committee on the Budget.

Mr. Speaker, I yield 2 minutes to the senior member of the Budget Committee, the gentleman from Kansas (Mr. Ryun).

Mr. Speaker, I yield 3 minutes to the gentleman from Georgia (Mr. Deal).

Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from Texas (Mr. Hensarling), who also serves on the Budget Committee.

Mr. Speaker, I yield myself such time as I may consume.

I would like to correct the gentlewoman from Connecticut with regards to the Washington Post article. As is common in this media culture of get-it-fast instead of get-it-right, there was no lobby fix.

The Deficit Reduction Act establishes a timeline for phasing out overpayments to Medicare advantage plans. The Secretary of HHS had already proposed correcting those payment levels but had not set a timeline. Until the Secretary acts, Medicare is currently paying too much to those Medicare advantage plans, and the Deficit Reduction Act sets the timeline for the Secretary to fix it.

The simple explanation for the $22 billion reduction in CBO score is that the Deficit Reduction Act assumes that once the payment system is fixed over the next 5 years the Secretary will have the good sense to keep paying them at the proper level.

So it is incorrect to say that there was a $22 billion giveaway. CBO's estimate assumes that the Secretary will revert to overpaying those same people.

Mr. Speaker, I am pleased to yield 2 minutes to my good friend from Indiana (Mr. Pence).

(Mr. PENCE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from California (Mr. Royce).

Mr. Speaker, may I inquire as to the time remaining on each side.

Mr. Speaker, I continue to reserve the balance of my time.

Mr. Speaker, both of the gentlemen are very eloquent, except they miss the overall point, which is that we are debating the technical amendments to what the House passed long before the President's State of the Union speech.

The three changes that were made by the Senate, that we are dealing with today and that are different than what we have already voted on as a body, deal with a value-based purchasing report, a MedPAC report, MedPAC being the Medicare Payment Advisory Commission, and medical liability. Three items that, for technical rule reasons in the Senate, were stripped, causing the bill to be sent back over here.

The timing of this, situated as it is the day after the President's State of the Union, is irrelevant to the overall issue. We have already voted on this except for these three changes.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, will the gentleman yield?

Under your definition, sir, people continue to get more money year after year after year and it is a cut. Under your definition.

Mr. Speaker, I am pleased to yield such time as he may consume to the gentleman from Iowa (Mr. Nussle), the distinguished chairman of the Budget Committee.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, once again the other side is trying to have it both ways. In alternating speaker form, we are in turn told we are awash in a sea of red ink and that this measure is not adequate to deal with the deficit, and then the next speaker says we have consistently underbudgeted for the Nation's priorities and have not spent anywhere nearly enough money for all of the things that they would like to see spent.

Their metaphors are as limitless as their desire to spend the hardworking Americans' money in the sense we have heard that we are going to throw away Tiny Tim's crutches when we did this at the end of last year, we were told that we were the Grinch, and we were quoted to extensively from literary and

historic figures, and the bottom line is this: We have an explosion of baby-boomers in this country that will create a demographic crisis and we have an explosion on the mandatory side of our budget that will consume two-thirds of it within less than a decade. Already half of the Federal budget is on autopilot. This is the first step since 1997 in beginning to get our arms around that problem.

I urge Members to support this first step towards long-term fiscal discipline and fiscal health for this Nation.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

The previous question was ordered.

Mr. Speaker, pursuant to section 426 of the Congressional Budget Act of 1974, I make a point of order against consideration of this rule, H. Res. 653. Section 425 of that same act states that a point of order lies against legislation which imposes an unfunded mandate in excess of specified amounts against State or local governments. Section 426 of the Budget Act specifically states that a rule may not waive the application of section 425.

H. Res. 653 states that the House hereby concurs in the Senate amendment to the bill S. 1932 to provide for reconciliation. This self- executing rule effectively waives the application of section 425 to provisions in the underlying bill on child support enforcement which the Congressional Budget Office informs us impose an intergovernmental mandate as defined by the Unfunded Mandates Reform Act.

Therefore, I make a point of order that the rule may not be considered pursuant to section 426.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I have no doubt that a lot of moderate Republicans wish they were somewhere else today, anywhere where they could escape the embarrassment of voting against the American people one more time in a brand-new year just after that State of the Union last night.

Here we go again. The first legislative act of 2006 looks just like the last legislative day of 2005. Republicans call this a reconciliation, but it is really Republican resignation from meeting the needs of American people or addressing the issues that threaten our security.

This vote will occur out in the open on the House floor, but the deals were cut in secret behind closed doors with the American people locked out and the Republican Party locked in.

Until Republican leaders got what they wanted, and it is not in the best interest of the American people, we have before us today an example of the President's ownership society: you own the problem. This bill removes Federal money from child support enforcement and for caring for abused kids, requiring States to pick up the tab.

Republicans will twist arms to pass this unconscionable and unfunded mandate. If you are a middle-class student, Republican reconciliation will have you seeing red because your college education will be awash in high-priced debt. Republican leaders care so much about middle-class America that they are cutting $12 billion in student loans.

Want an education? Financial institutions give Republicans a lot more money than you do. Now you get to give the financial institutions a whole lot more money. That is some rabbit-out-of-the-hat trick. By the magic of Republican reconciliation, students will pay more, your parents will pay more when they try to help you, and America will pay more when we deny the next generation the opportunity to get a higher education.

Republicans increase the interest rate for their core corporate constituency and increase the failure rate of the Nation investing in a more important asset: our next generation. Republican reconciliation offers dollars that make no sense. That is what happens when Republican Members have to answer to their leadership before their constituents.

Republicans talk about security, but there is no security in gutting a student loan program that invests in America's future. There is no common sense either. That is no surprise, of course. Republican reconciliation sacrifices common sense for uncommon greed.

Students from solid middle-class families will suffer. So will seniors who use Medicare, because almost $7 billion in Medicare cuts are buried inside this Republican reconciliation. Seniors will pay more so that America's wealthiest can keep more.

The Republicans have squandered our commitment to America's distinguished citizens in order to trade need for greed. Part B premiums for some Medicare beneficiaries are going up because the Republicans locked themselves into a conference committee without the Democrats and locked the American people out.

On Friday, the nonpartisan Congressional Budget Office informed us that $28 billion in cuts to Medicaid in this bill would impose new costs on 13 million poor and working-poor recipients. These are the people the President said last night we are taking care of your health care. Brother, you don't want a guy like that taking care of you.

By 2015, new fees would end insurance coverage for 65,000 Medicaid enrollees, 60 percent of them children.

Meanwhile, the cost of prescription drugs will rise and the number of people helped will fall.

It all happened when Republicans gathered and locked out America. Why debate in public when you can decide it in secrecy? That is the way the Republicans like to do it. They hope no one will notice. They forgot that when middle America is floundering in a lifeboat with loss of pensions, loss of health care, loss of jobs, the Republicans capsize the boat. It is hard not to notice. Water is pouring in all around us, just like New Orleans. Remember when the President said, ``Brownie, you are doing a heck of a job.'' He sure did. Rarely have we seen so much lost over so little, dinner.

Republicans have raised the bar with reconciliation. As bad as it will be for students and as hard as it will be for seniors, Republicans saved their worst tactics for our most vulnerable and defenseless citizens: Kids in foster care, kids in single parent households, kids in low-income families, and kids in families with a disabled parent.

This reconciliation cuts almost $3 billion from programs for America's most vulnerable children. Deadbeat dads, have a great day, guys. The Republicans have given you a head start out of responsibility. Someone may find you eventually. The program to make sure that child support is paid crumbles under this Republican rule.

Today Republicans have resigned from their responsibility to take care of America's interests. They say all of these problems are up to the States to solve on their own because that is what they mean by an ownership society: States own the problems.

Republicans are now telling States to put more welfare recipients into make-work activities, but they do not provide any resources to achieve that goal. They do not even let child care funding keep pace with inflation. So States may have to cut child care assistance to pay for the new welfare requirements. It is just one more unfunded mandate for the States and one more burden for working families.

Now, cash would be nice, but they have drained the Treasury to pay for the President's economic stimulus. Now it is an addiction. Just keep giving the wealthiest Americans more and more money. There is no end to how much money the President is willing to give them, and there is no end to how much money it will take from a host of foreign governments to finance a deficit rising higher than the sky.

Reconciliation by Republicans is a one-point program: Make the rich richer. It was crafted in secret. At least now finally it is out in the open.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Michigan (Mr. Levin), who stopped the attempt to privatize Social Security.

(Mr. LEVIN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, it probably does not surprise most Americans when Republicans and Democrats have different opinions on a bill, so let me highlight the opinion of a third voice, U.S. Conference of Catholic Bishops. Here is what they say about the legislation before us.

Our Bishops' Conference is deeply disappointed that the

final budget reconciliation conference agreement coming once

again before the House of Representatives includes provisions

in these areas which we believe could prove harmful to many

low-income children, families, elderly and people with

disabilities who are least able to provide for themselves.

Because of these concerns, we ask you to oppose the budget

reconciliation conference agreement.

Bishops' President Urges House To Reject Budget Agreement

Washington (January 30, 2006).--The recent budget

reconciliation bill fails to ``meet the needs of the most

vulnerable among us,'' said Bishop William S. Skylstad,

president of the United States Conference of Catholic Bishops

in a January 24 letter to the House of Representatives.

Bishop Skylstad said the greatest concerns were over:

increased Medicaid cost-sharing burdens; cuts to child

support enforcement; changes in Temporary Assistance for

Needy Families programs which underfund work programs and

childcare; and cuts to agriculture conservation programs.

``We urge you to reject the conference agreement and work

for policies that put poor children and families first,''

Bishop Skylstad said.

The text of the entire letter follows.

January 24, 2006.

House of Representatives,

Washington, DC.

Dear Representative: In December, as President of the

United States Conference of Catholic Bishops, I wrote to you

expressing serious concerns about provisions in the budget

reconciliation bill. The proposed changes in Medicaid, child

support enforcement funding, Temporary Assistance for Needy

Families (TANF), and agriculture conservation programs, in

particular, could have a negative impact upon the most

vulnerable in our nation.

Our Bishops' Conference is deeply disappointed that the

final budget reconciliation conference agreement coming once

again before the House of Representatives includes provisions

in these areas which we believe could prove harmful to many

low-income children, families, elderly and people with

disabilities who are least able to provide for themselves.

Because of these concerns, we ask you to oppose the budget

reconciliation conference agreement.

Among the areas of most concern to us are:

Increased Medicaid cost-sharing burdens and eroding federal

benefit standards which can result in low-income children,

families, pregnant women, elderly and those with disabilities

not getting the care they need.

Cuts to child support enforcement, which will mean

collecting billions less in child support for children and

families than under current law.

TANF-related provisions, including:

Immediate and significant changes in state TANF work rules

(although additional proposals to increase hours worked per

week were wisely abandoned) without providing sufficient

additional funding needed to run work programs and provide

child care. This will mean states may have to choose between

cutting child care for low-income working families, reducing

other services for low-income people, or cutting back on cash

assistance for needy families; policies that could have the

effect of disadvantaging two-parent families and married

couples; and failure to restore TANF benefit eligibility to

recently-arrived legal immigrants. Cuts to

key agriculture conservation programs, which will undermine

efforts to promote soil conservation, improve water quality,

protect wildlife, and maintain biodiversity.

We recognize that the bill also includes positive elements,

such as additional funding for victims of Hurricane Katrina

and a program to promote marriage and healthy families. We

are also grateful that cuts to the Food Stamps program were

dropped from the package. However, we believe that, overall,

the impact of this bill will be to fail to meet the needs of

the most vulnerable among us. Therefore, we urge you to

reject the conference agreement and work for policies that

put poor children and families first.

There are many challenges and much tumult in Washington

that demand the attention of our leaders. However, an

essential priority of government is to provide for the

general welfare of its people, especially ``the least among

us.''

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, last night, the President charged us to encourage economic progress, fight disease, and spread hope in hopeless lands. Unfortunately, this budget bill ignores the economic wellbeing, health, and hopes of the poor within our own nation. Just the idea of some of these draconian measures is enough to send chills up and down one's spine because we are talking about programs that provide basic assistance to vulnerable, low-income families and individuals. The proposed cuts come almost entirely from healthcare and education. We are talking about cutting programs that provide help to people with disabilities, to people who make use of the earned income tax credit, to people who use Supplemental Security Income programs, to people relying on the Temporary Assistance to Needy Families, and to the elderly. Although I do not think it is the majority's intention, these cuts effectively target low-income and minority Americans.

I am disappointed and discouraged that education bears one-third--31 percent--of the budget cuts. Education is central to developing economic progress and a successful citizenry. These education cuts impede access to education for hundreds of thousands of low-income and middle-income students. Financial barriers are the key to determining whether most low income, first generation, and minority students will successfully complete college. Indeed, only 54 percent of lowincome students obtain degrees, compared to 77 percent of high-income students. I will soon introduce legislation to help meet the needs of these students, but I fear that it will not cover the ground lost here.

The societal costs of these cuts are great, and my state and district will dramatically feel their effects. In Illinois, residents with a bachelor's degree enjoy almost double the salary of those with only a high school diploma, a 2.5 percent lower unemployment rate, and a dramatically lower likelihood of receiving public assistance. Undermining the ability of individuals to access education affects their long-term ability to be productive citizens. Moreover, 26 percent of Illinois residents have a bachelor's degree, most of whom required student loans to help them attain their degrees. In my district, I have over 40 institutions of higher education, each of which will suffer from this legislation. At the University of Illinois at Chicago alone, almost 10,000 students depend on the Direct Student Loan program to enable them to attend college. The increased fees and interest rates in this bill will burden a dependent undergraduate student at this respected university with an additional $2,500 in debt. It will burden a dental student with an additional $19,000 in debt over the life of their loan.

This bill continues its war on the poor by undermining the adequate health care, with 50 percent of the proposed cuts coming from Medicaid and Medicare. Although health care coverage continues to be an issue of great concern to many Americans, the House leadership and the Bush administration have brought before us a bill that makes drastic cuts in our nation's health care commitments. Over the next 10 years, nearly $50 billion will be squeezed out of Medicare and Medicaid--the very programs that ensure health coverage for our most vulnerable citizens, low-income seniors, and children. The non-partisan Congressional Budget Office estimates that 65,000 Americans, 60 percent of whom are children, will lose access to Medicaid coverage by 2015. Furthermore, health care costs will increase for an estimated 20 million Americans and 1.6 million will lose vital dental, vision, and mental health services. I can just imagine what this will do to the more than 20 hospitals, health centers, and private physician practices in my district. Imagine the large number of children and poor people who will not be able to access adequate health care. These provisions ignore the needs of our most vulnerable and will have a very real impact in human terms.

Further, these cuts jeopardize the well-being of our most needy-- children and families needing temporary assistance. This legislation fails to provide the funding necessary to support low-income families, especially foster care children living with grandparents and other relative providers. One of the most egregious aspects of the bill is that it rewards states for cutting caseloads rather than for successfully moving individuals from welfare to work. This reward system defines success as low-numbers without attention to whether our most vulnerable families are making it. This legislation fails to provide the financial support necessary for families to meet the new requirements, and it sets parents up for failure.

This bill also attacks relative caregivers on multiple fronts. As of 2003, 23 percent of foster children lived with relatives, and, unfortunately, these providers are much more likely than non-kin providers to live in poverty. Rather than support these families, this bill reduces financial support to children living with relatives, encourages non-relative placements, and jeopardizes the ability of states to provide safe and stable placements for children. Given that African-American grandparents serve as kinship care providers at higher rates than other racial/ethnic groups, the elimination of federally funded foster care assistance for thousands of children who live in low-income homes with relatives unfairly discriminate against relative caregivers who are most often African American. These cuts are particularly

upsetting to me because I represent a congressional district with the second highest percentage of grandparents caring for their grandchildren.

The estimated ``savings'' from cuts in the welfare provisions are clearly at the expense of the states and families, and the cuts will negatively affect a state's ability to achieve safety, permanency, and well-being for children in the foster care system, in addition to creating a disincentive to care for these children in need. While noteworthy, this is unfortunately not the only place in this bill in which our most vulnerable citizens who hold little sway in Washington are squeezed to reward the connected and the wealthy.

This legislation comes up short in terms of the needs of businesses as well. Small businesses account for 99.7 percent of America's employers, they are the economic engine that drives America because they create three-fourths of all new jobs, employ half our workers, account for half of our gross domestic product and contribute more than 55 percent of innovations. Yet, the Deficit Reduction Act provides no money for the Small Business Administration's flagship 7(a) Loan Program. It is the agency's largest and most important program in terms of number of loans and program level supported. The 7(a) Program provides loan guarantees to eligible small businesses that have been unsuccessful in obtaining private financing on reasonable terms.

One of the worst offenses of this budget bill is that it legitimizes cutting the basic rights of education, safety, and health to support $70 billion in tax cuts for the extremely wealthy. In essence and in reality, we are talking about Robin Hood in reverse; that is, take from the poor and give to the rich. We are allowing a tremendous burden to be put on working class families to cover budget irresponsibility. Ford Motor Company and General Motors announced plans to lay-off 60,000 workers; workers who have families that are already trying to make ends meet in our in our sluggish economy. I am strongly in favor of our government operating on sound fiscal policies. I am in favor of reducing the deficit to the extent prudent and possible. I am in favor of budget reconciliation, but not on the backs of the poor, needy, and most vulnerable sectors of our society.

This bill is bad for Chicago, for Illinois, and for the nation. I can do nothing less than oppose this bill. As a matter of fact, it would be a dereliction of my duty and responsibility if I were to vote for the Deficit Reduction Act that is before us. I will vote prudently and sensibly.

Mr. Speaker, I yield myself such time as I may consume.

I insert in the Record two documents referring to this bill.

House of Representatives,

Committee on Government Reform,

Washington, DC, January 30, 2006.

Budget Reconciliation and the Alexander Strategy Group

Vote No Until We Know

Dear Colleague: Do you know why the pending Budget

Reconciliation Conference Report contains none of the $10

billion in cuts to pharmaceutical companies that passed the

Senate?

Neither do I.

But I have a guess. On the back of this letter is the

interim disclosure for the first six months of 2005, showing:

PhRMA,

The Alexander Strategy Group,

Ed Buckham, and

Tony Rudy

all working together on ``Medicare, Medicaid, Prescription

Drug Issues, and Budget Process.'' (The final disclosure

forms are not due until February 15).

Postpone the vote on Budget Reconciliation until after an

investigation is conducted on the role of the scandal-ridden

Alexander Strategy Group in the negotiations. Ask the Speaker

to create a bipartisan investigation.

You don't want to vote in favor of a tainted bill. Vote No

until we know.

Sincerely,

Henry A. Waxman,

Ranking Minority Member.

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[GRAPHIC] [TIFF OMITTED] TH01FE06.003

Mr. Speaker, we have heard a great deal from the Republican Party recently about its commitment to reforming the way the House does business.

Again today the Republicans have told us that they have learned from their mistakes, and they will never again allow special interests to distract them from doing the work of the American people.

Actions speak louder than words, and this budget bill before us today is proof that despite all the talk of reform nothing has changed with its leadership. This is a bill that cuts Medicare spending by $6.4 billion. It cuts child support enforcement by $1.5 billion. It cuts $343 million from foster care programs.

Last year, we knew what was behind this bill. It was tax cuts for the very rich. In order to offset the administration's unprecedented giveaway to the country's richest citizens, they are willing to cut the services to the neediest Americans. All of us, while we were home in January, heard from citizen after citizen, constituent after constituent, of the harm that this bill would do to them, begging us not to vote for it. Such an indefensible set of priorities is still the major reason why the majority gave us this bill again today, but this year things are even worse.

We are being asked to vote on a bill that more than ever before proves that the culture of corruption is alive and well in this Congress. At the behest of the drug and managed care industries, who met with the key legislators in closed, backdoor sessions, the Republican conferees have changed this legislation so that it will save these industries a total of $42 billion.

Now, how do they suggest that we pay for this new and improved giveaway to the corporate lobby? By increasing the co-payments and reducing health coverage for children, for seniors and for people with disabilities who rely on Medicaid.

This last year showed us the terrible consequences of poor leadership. We saw a national disaster turn into a national tragedy because of a failed government response. We saw self-interest run amok as top lawmakers violated the people's trust, and they were indicted and forced to step down in the wake of scandal. We saw our troops and the people of Iraq struggle heroically to lift not just the weight of a vicious insurgency, but also the burden of poor planning and unfulfilled promises from the White House.

Here again today, Republicans are acting to make the American people victims of unscrupulous, disingenuous leadership, while they talk of reform and change, and we cannot afford another year like the last one.

Remember, that as you cut the very life out of these programs, you are doing it to provide a tax cut for the richest Americans.

Every Member of this body needs to know the serious consequences of this vote today. A vote for this bill is a vote to literally take away health care from our children so we can give more money to the super- rich. A vote for this bill is a vote to weaken Medicare for our struggling seniors, who are having enough trouble with the so-called Medicare reform bill that we passed here and is giving everybody a fit trying to understand Medicare part D and that thousands are doing without their medication because of it.

It will also put college education farther out of the reach of our students, even though the President last night discussed that our competitiveness depends on what we are teaching our students today, so we can fund more tax-cut giveaways. Remember, that is what you are voting for.

A vote for this bill supports the culture of corruption, and also America can and must do better than this budget reconciliation and what this party is offering us today. I urge all of my colleagues to vote ``no'' on this bill and vote ``yes'' for a new day here in Washington.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from South Carolina (Mr. Spratt), the ranking member of the Budget Committee.

(Mr. SPRATT asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Maryland (Mr. Hoyer), the minority whip.

Mr. Speaker, I yield 3 minutes to the gentleman from Michigan (Mr. Dingell).

(Mr. DINGELL asked and was given permission to revise and extend his remarks.)

Mr. Speaker I yield 3 minutes to the gentleman from California (Mr. George Miller).

(Mr. GEORGE MILLER of California asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I am pleased to yield 2 minutes to the gentlewoman from Connecticut (Ms. DeLauro).

Mr. Speaker, I yield 2 minutes to the gentlewoman from California (Ms. Solis).

Mr. Speaker, I yield 2 minutes to the gentleman from Alabama (Mr. Davis).

Mr. Speaker, I am pleased to yield 2\1/2\ minutes to the gentleman from Illinois (Mr. Emanuel).

Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Ryan).

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Tennessee (Mr. Ford).

Mr. Speaker, I yield 20 seconds to the gentleman from Tennessee (Mr. Ford).

Mr. Speaker, may I inquire how much time remains on my side.

Mr. Speaker, I yield 10 seconds to the gentleman from Alabama (Mr. Davis).

Mr. Speaker, I yield the balance of my time to the gentlewoman from California (Ms. Pelosi), the distinguished minority leader.

Mr. Speaker, on that I demand the yeas and nays.