Protect America Act of 2007

Mr. President, I call up amendment No. 2602.

I ask unanimous consent the reading of the amendment be dispensed with.

Mr. President, let me begin first of all by thanking the distinguished chairman of the finance committee on which I have the pleasure of serving, whose leadership has been critical in bringing this bill to the floor. He and Senator Grassley, Senator Rockefeller, and Senator Hatch deserve the thanks of children all across America, of all those advocacy groups fighting for children's health care, and certainly of our colleagues who care about it and have been fighting for it for a long time. They have shown real leadership in bringing about an important compromise by fashioning a bill that was reported out of committee with bipartisan support.

We all understand how difficult that can be, sometimes. Sometimes the negotiations in our committee are out of balance because of the membership of the committee and you may have a different feeling when you finally get to the floor. So I applaud the Senator from Montana. I will say up front, I know that if he had his druthers, he would vote for this on the floor of the Senate now. I also know when you are the chairman and you fashion a compromise in your committee, you have to stick with your compromises. Everybody here understands how that works. So I recognize that this is an amendment that is difficult for him in the context of this overall bill.

But I ask my colleagues to think about this amendment outside of the inside game of the Senate. I ask my colleagues to think about this amendment outside of the parliamentary agreements that have to be made in order to get something out of the committee and actually get it to the floor so we can all consider it. But I also ask my colleagues to remember that when it gets to the floor, we have a chance to vote as Senators, all of us--not as members of the committee. Certainly, the vast majority of the Senate is not bound by what happened in a committee. We are bound by our responsibility, each and every one of us, to our constituents in our States and to our beliefs about what is best for the country.

I believe, first of all, the legislation that the Senator from Montana and the Senator from Iowa, Senator Grassley, have brought to the floor is important for the country. I think everybody agrees on that. I think this bill is going to pass with a pretty significant vote, ultimately, at its current $35 billion level. But as we debate the future of health for our children, I think we have a responsibility to think about it above and beyond the compromising process of the Senate.

I believe we have to think about it in macro policy terms and also--I know the word gets bandied around here on the floor, and it doesn't always have a lot of meaning anymore--in ``moral'' terms. We have a lot of difficulty sometimes translating what is moral in most people's eyes into legislation. But the fact is I heard Senators on both sides of the aisle, and particularly some of those most responsible for helping to negotiate this on the other side of the aisle--I have heard them say we have a moral imperative to take care of children's health care. I have heard them say we ought to be covering all children.

Of course, we ought to try to cover all children, but isn't it a shame that we can't seem to do that because it costs too much. The Senator from Mississippi came to the floor and spoke about this. He talked about how some want an increase of $50 billion or more and suggested that I approach this purely with an attitude where I say let's decide how many kids we ought to cover, and it does not matter what it costs, let's go pay for it. Well, that is a little bit of a misinterpretation of what I have actually said about it. I have said we ought to decide if we think it is worthwhile to cover all children, and then see if we can pay for it. I did not say pay for it no matter what. See if we can pay for it, but at least decide what your priority is.

If your priority is to cover children which is an important moral imperative, it has a value to our society, it makes a difference to the lives of children, to the lives of the community, the cost of hospitals, the cost of health care, the ability to learn, the ability to grow up and be a full citizen, you measure those and you come to the conclusion hey, this is a good idea, we ought to do this for all kids. Then, you have an obligation to begin to weigh where the money comes from and what the choices are with respect to what you spend money on.

The Senator from Mississippi suggested we have to worry about the cost of the program and who pays for it. Yep, we do, I say to my friend. And he is a good friend, the Senator from Mississippi. We do have to worry about it. But let's measure what people appear to be worried about. Let's measure about why children's health care is a priority.

First, I want to do the ``why.'' What we do here with respect to children is not a Democratic priority or Republican priority. It ought to be the priority of every single Senator. I know most of the Senators here have families, have children, and are deeply concerned about kids and understand these issues.

The real face of this debate does not belong to Senator Baucus or Senator Grassley or Senator Rockefeller or Senator Hatch or anyone else who is here arguing about this. The real face of this debate belongs to young kids all across our country who suffer enormous debits on a lifetime basis because they do not have health care.

The face of this is somebody like 9-year-old Alexsiana Lewis and her mother, Dedra, who come from Springfield, MA. Senator Kennedy-- incidentally, I honor Senator Kennedy's work in this, as we all ought to, because it was his visionary leadership that helped to create the S-CHIP program in 1997. He has constantly been working to build bridges to bring people together to try to sustain and expand the program ever since.

Senator Kennedy and I went to the Children's Hospital in Boston, a famous hospital where kids come from all over our country. And the stories of curing and caring that are exhibited in that hospital on a daily basis are just extraordinary. Well, we met there Alexsiana Lewis and her mother. Alexsiana, 9 years old, was losing her vision due to a very rare eye disease. Her mother, Dedra, had lost her health insurance, like millions of Americans. We have about 45 to 47 million Americans who have no health care at all right now; 9 million of them are children.

Dedra lost her health insurance. Why did she lose her health insurance? She lost her health insurance because she cut back on the hours she was working in order to be able to take care of her child who had this rare disease. And here is what she said at that meeting with Senator Kennedy and myself.

She said: ``If I did not have Mass Health right now''--that is the Massachusetts health program we have in place now funded by S-CHIP-- ``my daughter would be blind.''

So my question to my colleagues in the Senate is very simple: Somewhere in your States all across this country there is another Alexsiana Lewis, or there is another Dedra who is cutting back on her job. There are going to be about 5.7 million children who do not get any coverage when we finish passing this legislation.

Now, my question is, is that the choice of the Senate measured against

the other choices that we could make? Is it our choice that it is OK for an Alexsiana to go blind? Is it OK in your State for some child to have a chronic ailment who will not get the early intervention, the early care, and as a result will probably wind up with a lifetime impairment that will require that child to have special needs education for the rest of their life?

I went out to the State of Washington a couple of years ago. I had recently introduced my Kids First Health Care Plan. And we had about 1,200 people show up. The chief pediatrician for the State of Washington came to this event in Seattle. She stood up and told the story of a 12-year-old child who was disruptive in the classroom. Ultimately, they kicked the child out of the classroom because the child was disruptive. They thought the child was just acting out. Ultimately, that child finally, for the first time, got to a doctor and they found that the child was suffering, not acting out. The child had a chronic infection which spread to the eardrum, and this chronic infection was creating such pain that the child was acting out due to the pain. Now, at the final moment where they diagnosed what was wrong, they found out that child indeed would have a hearing impairment for the rest of that child's life. No health insurance and acting out in class leads to teacher responding and the child finally gets diagnosed as hearing impairment and will require special needs education. What is the rationale? What is the rationale for saying all we can afford is $35 billion over five years, at a moment when people across this country are losing faith in the ability of Washington to be responsible and make responsible choices on their behalf?

I think it is important that we answer that question properly. And I will tell you, when I look at some of the choices we have, it is pretty hard to answer how we are answering it properly. Let me give a few examples to my colleagues. This is a choice the Senate is going to make. If the alternative minimum tax relief is extended, as everybody expects it will be, tax cuts for those earning over $1 million a year will cost $43 billion in 2007 alone. Think about that.

We are saying we cannot afford to cover children to the tune of an additional $15 billion over 5 years, but we can give $43 billion of tax cuts next year to people earning more than $1 million a year. That is obscene. It is ridiculous. It has absolutely no basis in economic argument, and it certainly has no basis in any kind of moral or decent argument.

If you were simply to restore the tax cut to the level before 2001, to only taxable income above $1 million, you would have $44 billion and you could insure children. You would be affecting 0.21 percent, of all taxpayers with positive tax liability in the United States. That is one choice.

Here is another choice Congress seems to be content to make. Currently, major integrated oil and gas companies are eligible for the domestic manufacturing deduction, which reduces their corporate tax rate. In other words, we know fossil fuel is contributing to global warming, but we nevertheless are willing to continue our own dependency on it and give a tax break that encourages people to be able to do what they are going to do anyway because the marketplace is showing that the price of energy is such. These are some of the most profitable companies in the world.

But oh, boy, give them a tax break instead. There is absolutely no valid reason whatsoever that the most profitable oil companies in the world ought to be receiving a subsidy, a deduction, at this time when they are reaping record profits. But guess what, the Finance Committee tried to repeal it and the rest of the Senate did not agree. This deduction cost $9.4 billion over the next 10 years, but we do not have enough money for children.

We didn't close a loophole in our Tax Code for the poor fuel economy--we actually reward gas-guzzling SUV manufacturers. They get $13 billion worth of tax breaks to produce the most gas guzzling cars on the road, the worst fuel efficiency of any car, and we are subsidizing that over children. I do not get it.

I think most Americans, if they had a list of the things that the U.S. Congress gives to big business over children, would laugh at the language they hear when they hear people say: Oh, we have to cover children. There is a real value to covering all of these children.

Here is another one. Most American families do not get this one. If you are a company, you can defer paying U.S. taxes on any foreign income. So you can be an American company and just keep your income drawing offshore, and you do not pay any tax. It can accrue year to year. And repeal of this provision is about $53 billion over 10 years. Also, it is a huge incentive for companies to take their, you know, subsidiaries and other companies offshore and just grow their profits offshore at the expense of American jobs.

There is a long list of choices, similar choices: $12 billion a month in Iraq, going into the sixth year of the war in Iraq; now we are in the fifth year of the war, now a policy that everyone in the world understands is not working. I believe there is a better proposal.

Now, again, I say $35 billion, of course, is better than nothing. But it is incredible to me that we are in this position where the administration is talking about vetoing $35 billion, and we are not willing to do what is necessary to really get the job done.

Let me say that I am pleased that there is a provision that I authored with Senator Smith and Senators Kennedy and Domenici to ensure that there is mental health parity in this State Children's Health Insurance Program. And parity for mental health treatment is a very significant and very much needed improvement in SCHIP.

Instead of discriminating against mental health, which is effectively what we are doing today, we can offer services that actually improve children's performance in school, that keeps them out of trouble in the juvenile justice system, and helps them lead better lives, filled with a lot more opportunity and promise.

But $35 billion over 5 years, let me ask colleagues to measure that. Why have we decided to spend $35 billion at all? Why do we have a program called the Children's Health Insurance Program? If it is worth spending $35 billion, doesn't the same rationale apply to the rest of the children who do not have health insurance?

Where is the big hand of God coming down and saying: You all over here, you get health insurance; and you over here, you do not because we think it is more important that millionaires get a tax cut. We think it is more important that gas-guzzling vehicles get a tax break, and we think it is more important that oil companies with the biggest profits in the country get their money. That is the choice. That is what is happening.

We have some colleagues who just do not want to bend. That is why this agreement had to be reached. I understand the Senator from Iowa--I am not blaming Senator Grassley from Iowa. I respect what he has tried to do. He held the line to get the $35 billion.

I respect what Senator Baucus had to do because we are struggling to get votes. If you don't get over 60 votes, you can't do something. But I think some of those folks who are reluctant to sort of embrace reality ought to step back and question this.

Let me come to another point. I have told my colleagues how we pay for this. First of all, the $35 billion is paid for with a cigarette tax. The cigarette tax I am in favor of, but we know, unfortunately, it is also regressive in a certain way, though hopefully it deters people from smoking. But a whole bunch of poor folks and folks moving to the middle class or folks in the middle class are stuck with their habit and smoke, and they are going to pay a lot of that tax. We would love it if it stopped them from smoking, but we all know that is not going to happen automatically. So here we are looking at how else could you get more kids covered.

What is important about my amendment is that it covers the kids who are eligible for Medicaid. It has a more efficient avoidance of the topic we have heard debated, the crowd-out. People are talking about not encouraging people who currently have private insurance to drop the private insurance to get covered by the State insurance. We obviously don't want that to happen. The fact is that my amendment targets the coverage toward those at 200 percent of poverty or below. So you are mostly targeting Medicaid-eligible children. It is astonishing to me that those are the kids most in need of it, and they are still left out if we don't

pass this amendment. We are trying to get the poorest of the poor. We are trying to get the kids on Medicaid. We still don't fully cover the kids on Medicaid with the $35 billion, even though, obviously, it is an improvement. I will vote for the improvement, and I will vote for the bill. But I still believe we ought to be doing more.

I just went to Fall River, MA, the other day to visit a bunch of workers. We have 900 workers there who have been laid off permanently, let go from a plant, Quaker Fabric, that closed. It closed, incidentally, on a weekend's notice, despite the fact that we have a law about plant closings. They are supposed to let workers know ahead of time what is happening. I went to visit with these people. The biggest single question on their minds was: What am I going to do about my health care? How am I going to cover my kids? What am I going to do? I met people who worked there for 35 years, 27 years, 25 years, all at the same place. They were loyal to the plant, and their 2-week vacation started on a Friday. On Monday, they got a call and they were told: The plant is closing. Sorry. That is it. What is more important--covering their children or making sure people who earn more than $1 million a year get $43 billion worth of tax cuts?

Astonishingly, the President of the United States is threatening to veto new money for this program. Even at $35 billion, he is threatening that. That means the choice the President wants to offer is either Congress can do not enough or do nothing at all. I don't think that is the appropriate choice.

The President has also initiated a disinformation campaign--I guess disinformation campaigns are not new, but it is another disinformation campaign--to denounce this bill as a larger Democratic strategy or plot to somehow massively federalize medicine. I understand the President offered to veto it before he had even read it. Confronted with a bipartisan compromise to extend health coverage to half of the 9 million American children without insurance today, the President apparently only sees some sort of a leftwing conspiracy to try to federalize health insurance. It is almost laughable. I don't think anybody really believes that is what is about to go on, but it sure is one of those scary phrases that create a knee-jerk response in certain sectors of the body politic.

The SCHIP program is, like Medicaid before it, a Federal-State partnership. It is not a Federal program; it is a Federal-State partnership. Ironically, it happens to use private providers as the principal people involved to provide the service. So it is a Federal- State-private sector partnership. It is very hard to understand how the specter of ``federalism'' somehow can get in the way of that.

Another misleading statement we have heard is that SCHIP is a Democratic Trojan horse for socialized medicine. I have to laugh at that. I was here when we did the 1994 debate on health care. I did not sign on to the plan that was offered by the White House in 1994. There were a number of problems. It doesn't matter what they were. I didn't sign on. I worked hard with Senator Bill Bradley, with Senator John Chafee, Senator Bob Dole, and others. We had a compromise that, in fact, if it had been adopted, it had a back-end mandate with the private sector being tapped to provide additional health insurance to Americans. I believe we could have passed it, but there wasn't the mood for a compromise at that point in time. Had it passed 4 years ago, we would have been at about 99 percent of Americans covered by health insurance. That was the opportunity which was missed.

But one thing I learned, you ain't going to see socialized, Government-run health care in America probably during our lifetimes. It is just not in the makeup. There are plenty of ways to put health insurance out there that are more affordable. I offered one of those ways in 2004. That is as viable and as urgent today and, frankly, as compelling today as an approach where you can reduce the cost of all premiums, take catastrophic health insurance off the backs of businesses and Americans, and lower the cost of health insurance, provide unbelievable streamlining of the delivery of the system, and let every American choose where they want to go. It is far more efficient than what we have today.

This red herring, phony debate, straw debate is inappropriate to the cause of children. It doesn't do justice to any of us.

It also is ironic that some of the most significant efforts to expand the Children's Health Insurance Program have come from Republican Governors. The President's former budget director, Mitch Daniels, the current Governor of Indiana, has recently expanded eligibility for children's health insurance to 300 percent of the Federal poverty level or roughly $60,000 for a family of four. Something is seriously wrong when as good a numbers-cruncher as Mitch Daniels and as tough a budget critic, as we all know, can go out to Indiana, which is a pretty centrist conservative State, and wind up expanding health insurance for kids up to 300 percent of poverty. There is a real disconnect in this debate.

The President likes to claim the new program is somehow going to push families like those from private insurance to government health care. But Governor Daniels and a lot of Governors like him understand that is not the case. With the cost of private insurance for that same family approaching $12,000 a year, the real choice for most American families today is either SCHIP or no health care at all because of the current rise in costs. In fact, the National Governors Association this past week sent yet another bipartisan letter to the President stating their support for the bipartisan reauthorization bill that provides increased funding for SCHIP now moving through the Senate.

Finally, SCHIP is not Government run. The vast majority of SCHIP and of Medicaid enrollees receive their coverage through private insurance plans working under contract with the States to administer benefits. So, far from socialized medicine, it represents the kind of commonsense public-private partnership that ought to be a model for greater health care reform.

A lot of families I have met all across the country are scared they will not have adequate health care for their kids. The President's response to that was--I think about a week ago--Well, they have health care. They can just go to the emergency room. I don't know how many Senators have been to emergency rooms lately. First, they are all overcrowded. I know that at Mass General, which is one of the best hospitals in America, in Boston, sometimes it is so crowded it takes hours to get people processed except for the most traumatic who come in. You have people on gurneys in the halls of hospitals all across America, different waiting periods. It is extraordinary what has happened. The degree to which emergency rooms have become the primary care facility for Americans is shocking. Hospitalized children--this is important--without health insurance are twice as likely to die from their injuries as those with coverage. Uninsured kids are only half as likely to receive any medical care in a given year.

We all go to schools and talk to teachers, and we go into communities. We have townhalls, and we listen to voters. I can't tell my colleagues how many times I have heard a teacher tell me how difficult it is to teach a whole class of kids, which is usually an overcrowded class of kids, where many of those children don't have health care. We know that kids who have health care do 68 percent better in school. Here we are, a country that is struggling with an education system that is not keeping up with competitors around the world. We don't graduate enough scientists or engineers, researchers, and so forth. One of the things it is related to, in terms of the choices children have in their long-term education, is whether they get health care and screening early.

Someone who has health care is more likely to get an early diagnosis of whatever the problem is. If you are a child and you have an irregular heartbeat or a hole in your heart or you have some other disorder, early diabetes onset or even autistic tendencies, if you don't get to a doctor and the parent doesn't see those indices and isn't able to understand them for what they might be and get somewhere to get the care, the odds are that child is going to wind up costing everybody a lot more, not to mention what is going to happen to that child's life.

I hope my colleagues will take a hard look at this. I hope the President will

reconsider his decision to veto it. I know Senator Baucus and Senator Rockefeller have negotiated the best bipartisan package they could. Again, I commend them for doing so. But here on the floor of the Senate, we have an opportunity to work our will as a Senate. We have an opportunity to make a different statement. I believe we ought to be investing at least $50 billion. The Senate passed in its budget--this is in the budget today--$50 billion for children's health care. The only reason it has come to the floor at $35 billion is because some people refuse to let it come out of committee or take any shape other than that at this moment in time.

The best way to finance that $15 billion is to do what is fair and to make one of those choices we are called on to make. There are countless choices in this budget. We have 27,000 pages or so--I think more than that now--of Tax Code that fill volumes. Most of those pages do not apply to average Americans. Most of those pages apply to those who have been able to lobby Washington, to those who have been able to bring their cause to this city.

These are children. Children's lobbies reflect a lot of different organizations, but it seems to me we have an opportunity to enroll the lowest income of uninsured children by increasing the bonus payments available to States so they meet or surpass their targets. We don't mandate them to do so. We leave the discretion up to the States. They have wide discretion with the waivers they have today as to how they administer the programs. They have proven themselves very capable and very creative in doing so.

I hope, as a matter of priority, we make a bipartisan down payment of no less than $50 billion toward health care coverage for all our children. The only excuse for not spending more is saying: Oh, we cannot afford that. When somebody says we cannot afford that, then you have to look at what we are choosing to afford. That is the real test of the balance of what we care about and of where we are willing to put our votes.

I yield the floor.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, there are legitimate issues being raised about how adults are dealt with in this SCHIP bill. First of all, adding adults to SCHIP should have never been allowed. It was wrong when the Clinton administration started it. It was wrong when the Bush administration continued it. Stopping it is the right thing to do.

However, I think this amendment goes too far, too fast, and I encourage my colleagues to consider how the Finance Committee bill deals with adults. Let me be clear, in some States, the problem is extreme. Some States cover more adults than children. The even bigger problem is that several States that cover large numbers of adults have very high rates of uninsured children. This problem started under the Clinton administration but the Bush administration made it worse. Both the Clinton and the Bush administrations helped push Humpty-Dumpty off the wall. Now, it is our job to try to put the piece back together.

Advocates for parent coverage under SCHIP argue that in order to get kids covered, you have to cover the parents. I don't buy that argument; too many States that are covering parents are still among the worst in the country at covering kids. But the Congressional Budget Office does buy the argument that covering parents will get a few more kids covered. And they estimate that a reduction in parent coverage will lead to a reduction in children covered, so we have to be cautious. This amendment will lead to children losing coverage.

So what we have done in the Finance Committee bill is to say to States covering parents: put up or shut up. You either cover the kids or you get a far smaller Federal match for the parents you want to cover.

The bill before us eliminates coverage under SCHIP for childless adults by 2009. It eliminates the enhanced match for parents currently covered under SCHIP and prohibits new state waivers for parents. CBO estimates that it would reduce spending on adults by $1.1 billion. Furthermore, the easiest way to put the emphasis back on lower-income kids is to refocus the SCHIP program away from adults. The Finance Committee bill redirects States' efforts to low-income children.

Our bill covers 1.7 million kids in Medicaid who are currently uninsured. We are not talking about adults. We are not talking about middle-income kids. We are talking about 1.7 million of the poorest uninsured kids in this country.

As a former Governor, I am sure the Senator from New Hampshire can appreciate that concept. If your States will only get a lower matching rate for covering adults in SCHIP but significant financial incentives for covering low-income kids, where will you direct your energies? The parent policy in the Senate bill represents a reasonable compromise and I urge my colleagues to oppose the Gregg amendment.

Mr. President, I rise for two reasons: one, to give the compromise that is before the Senate a defense against Senator Kerry's amendment; and then to comment on the bill generally, and mostly to comment to some of my fellow colleagues on the Republican side of the aisle in relation to what I consider unfair criticism of this compromise.

I do not rise to find fault with the goals Senator Kerry has put forth. I do not even find fault with some of his arguments about loophole closings. I might feel compelled to argue against the marginal tax increases he might want to have, but right now I will concentrate on his view of expanding this compromise, not questioning his motives, and not raising any question about the sincerity of his wanting to do more--except reflecting on the 4 or 5 months Senator Baucus and I have been putting this bill together, we have all had some rude awakenings.

Those rude awakenings are that what we put together as a $50 billion package, when it was first scored came back much higher than $50 billion. So to get everything everybody wants in $50 billion is very difficult. The other thing is a philosophy I had, that somehow with something less than $50 billion we would be able to cover every kid under 200 percent of poverty, and we found out that was not possible.

I am sure we both--from Senator Kerry's point of view and from my point of view--went into this whole discussion with a great deal of good intent and finding out that it may be a little more difficult than we anticipated.

So only with that caveat I ask Senator Kerry to consider, I now want to say why we ought to defend the compromise that is before the Senate.

I appreciate Senator Kerry's goal of covering more kids. The bill we have today insures 3.2 million kids who do not have coverage today. I am very proud of that effort, and I am not going to warm to any suggestion that we have not done enough. The Finance Committee bill does so through a new incentive fund, and it is a proposal both sides of the aisle support. It is a compromise.

The incentive fund is a product of months of work. We built on ideas that were formed by another bipartisan couple--Senator Rockefeller on one hand for Democrats, Senator Snowe on the other hand for Republicans. We took those ideas that Senator Rockefeller and Senator Snowe had and reshaped them into what we think represents a very efficient and cost-effective way to increase coverage for children.

As Senator Kerry may recall, during the markup of the Senate Finance Committee, the Congressional Budget Office Director Peter Orszag characterized the incentive fund ``as efficient as you can possibly get per new dollar spent.''

Simply throwing money at States is not an effective strategy for covering more kids. Cost is an object. The bill that is moving in the House does cover 1 million more kids who are not currently covered than the Senate bill. But they do so while spending $12.2 billion more than we do--getting back to the efficiency and effectiveness statement of the CBO Director Peter Orszag. I will leave it to my colleagues to decide for themselves whether they think $12.2 billion for a million kids is cost effective. But I can assure you, the cost will leave us then--if we do that--without a bipartisan bill, and maybe not the chance of getting anything through, other than an extension. It has been stated, even from our Republican colleagues who do not like the waiver process, that is bad policy.

The Finance Committee bill then--I am begging Senator Kerry to understand--is the best of the possible. The left wants more; the right wanted a lot less. We can make speeches or make legislation. Making speeches does not get any kids covered. Making legislation does. Our compromise does that.

I urge my colleagues to keep on the right track for making legislation; that is, doing the art of the possible. I oppose this amendment and urge my colleagues to do the same.

Now, Mr. President, I would like to speak on the bill. I start out by referring to a chart that I hope we have in the Chamber that has been used by a lot of Republican colleagues over the last 2 or 3 days. This was in relation to speeches that were given yesterday by many of my colleagues who are sincere in their approach.

They refer to this as the ``cliff chart.'' Everything to the right of the green is after this legislation expires. They want you to believe we do not take into consideration anything about the future. They are making out this is an unrealistic proposal we have before you, because following that red line up into the future, they maintain it is going to cost more than we can afford. I want to say how this approach is intellectually dishonest.

I have a tremendous amount of respect for the Senators who have been giving these speeches, and I can identify a couple. There are probably more who have been giving these speeches, but I want my colleagues to know I respect Senator Gregg, the ranking Republican on the Senate Budget Committee. The Senator from Mississippi, Mr. Trent Lott, our assistant minority leader, I think has referred to it. I respect his views. But I think everybody ought to take into consideration what we are going to do. I have a chart that is going to lay this out.

In this particular instance, we clearly are on different sides of this argument. There has been a lot of talk around here about how the Senate Finance Committee bill is funded. This chart was used in that discussion. Taking a hard look at how bills are financed is a good thing. Maybe we do not do that often enough. So let me focus on the criticism that has been made about how this SCHIP bill is financed. We need to step back and look at the whole picture. That is what I am begging my colleagues to do. The SCHIP program is a pretty small part of that picture.

The thing about SCHIP is that it is not like Medicaid or Medicare. How many times have you heard the people using this chart refer to it as if it is an entitlement? It is not an entitlement we are discussing today. Or maybe if people do not understand the term ``entitlement''-- it is not a permanent program, such as Medicare and Medicaid because they are entitlements. SCHIP is not. So when the program expires, it truly ends. The day after the authorization ends, poof, there is no more SCHIP program. That is true of any program that sunsets. But Medicare

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

While I know most of us in this Chamber would no sooner let the Department of Defense expire than we would let SCHIP expire, that is a simple fact. And because it is an expiring program, it is subject to a very particular budget rule. That budget rule does not fit this chart. That budget rule says the Congressional Budget Office must score future spending for the program based upon the last year of the program's current authorization. So the baseline for SCHIP for the next year is $5 billion. That is under existing law. If we pass this legislation, that would not be true. But for what is law right now, in the future, they are going to score that at $5 billion. For the next 5 years, the baseline--let me say again--is $5 billion. For the next 10 years, the baseline for SCHIP is $5 billion. It is actually $5 billion a year forever.

Does anyone in this Chamber think the budget rule governing SCHIP is realistic? Well, of course it is not realistic. But that is the way the budget process and the Budget Office must work under existing law. So I am not here to kid anybody.

According to the Congressional Budget Office, 1.4 million children would lose coverage if we simply reauthorized SCHIP at the baseline of $5 billion into the future. Who among us would go home and tell our constituents that we individually voted to reauthorize the SCHIP program--reauthorize it, yes. If you stopped there, they would think: Well, you did a good thing. What you are doing right now, you continue to do. But if you did that, what you would be doing, without telling them--but they would soon find out; you do not fool the American people--1.4 million kids would lose coverage.

So when the Finance Committee went to work to reauthorize this bill-- Senator Baucus and I, with the help of Senators Hatch and Rockefeller-- we had this problem: The baseline only assured $5 billion a year in spending into the future. It was unrealistic.

Let me digress and point to a problem the Agriculture Committee has this year exactly the same way. We did not spend all the money in the agriculture bill last year, so we are working on a baseline that is $15 billion less than it was in 2002, the last time we wrote a farm bill. So this is not just the case of health care for kids. A lot of committees get caught this way.

But we do have the realistic fact that costs continue to increase in SCHIP, even though the $5 billion was frozen in the baseline because of the budget rules.

So what did we have to do? We had to come up with the money to keep the current program afloat. That meant we had to find at least $14 billion to keep the current program afloat. That is right, of the $35 billion in funding in this bill, $14 billion is put into SCHIP to maintain the current program. That is $14 billion to maintain coverage for kids who are currently enrolled.

Do you know what the White House wanted us to believe all this year since they submitted their budget? That you could do that $14 billion-- maintaining the current program--for the $5 billion they put in their budget.

Now, those people down at OMB have to be smart enough in advising the President that you cannot do for $5 billion a policy of doing what we are doing now, and even expanding a little bit, for $5 billion when, in fact, it costs $14 billion. To a very real extent, this is the same kind of situation my good friend from New Hampshire, Senator Gregg-- when he was speaking--was complaining about. The current baseline was not realistic. That created a hole in the budget we had to fill. In our case, it was a $14 billion hole to fill, if you want to maintain current policy.

So what did we do? Well, we did what you have to do if you are responsible and deliver on what you say you are going to do. We filled it. It is that simple. We had to comply with the budget rules.

What people forget around here is the Director of the Congressional Budget Office is like God, and everybody who works in the Budget Office can also be little Gods because what they say has to be followed, and if you don't follow it, you know what you have to do? You have to do almost the impossible around here. You have to have 60 votes to get around it. Should they have that much power? Well, if you are going to have any budget discipline, they have to have that kind of power. But it is that simple. We had to fill that hole. We had to comply with the budget rules, so we did. Do those budget rules make sense? Well, I think I have indicated they probably don't, but that is a question for the Budget Committee to answer, Senator Gregg's committee, Senator Conrad's committee, not the Finance Committee. We have to abide by it.

There is another budget rule that the Finance Committee was required to follow. That rule is called pay-go, which people around here know is short for pay-as-you-go financing. It means the bill needs to cover its 6-year costs and 11-year costs, and that makes sense after all. This bill proposes new spending, and because it proposes new spending, you have to pay for it, or have 60 votes. This bill does pay for it. This bill complies with the budget rules. It complies with the pay-go requirements.

Now, the SCHIP reauthorization we are debating is only a 5-year authorization. That means 5 years from now it will sunset. Congress will have to go through the process of reviewing it. To remind people it is not an entitlement, Medicare and Medicaid doesn't get a review every so often forced upon them. They may get a review by Congress but instituted by Congress, not forced upon Congress by a sunset.

As I think everyone knows, this bill is paid for with an increase in the tobacco tax. This is similar to the original SCHIP bill when it was created under the Republican-controlled Congress in 1997. Now, similar to 1997, when the Republicans did it, we had a problem with how the tobacco tax works. The revenue from the cigarette tax is not growing as fast as health care costs, so that means the revenue-raiser is not going to grow as fast as the cost of health care, generally, and specifically in this instance, the costs associated with the Children's Health Insurance Program.

So the Finance Committee did what was required to do to comply with the pay-go budget rule. The Finance Committee bill reduces SCHIP funding to just below the funding that is in the current baseline. That means the Finance Committee in 5 years will have the same problem we face in putting this bill together today. They will have to come up with the funds to keep the program running because the tobacco tax over the years is not going to bring in enough revenue to keep up with the increased costs of health care. That is just like the $14 billion we had to keep and find to keep the current program running with no changes.

It is true we are covering even more low-income kids in this bill. That is a good thing. But it also means the Finance Committee in 5 years will have a bigger job to keep the program running at that rate. They will have more kids to keep covering and health care costs will be even higher than they are today. This is for the Finance Committee to face in the next 5 years. Of course, during that 5-year period of time, I hope we get a lot of reform of health care in the United States that reduces costs, gets the uninsured covered, so we are not just dealing with SCHIP. Of course, what we have to face in 5 years is similar to the job the Finance Committee had today to continue the SCHIP program. So it is nothing new. But I think some are getting the impression from some of my colleagues who use this chart that this is something new-- some gimmick to get around budget rules. But my good friend from New Hampshire, Senator Gregg, has expressed serious concern about the bill, and I think we should at least take a moment and look at his concerns in proper perspective.

So I go back to one of the charts Senator Gregg has used. Here is the chart used to raise the issue. It shows only the funding in the Finance Committee bill. I think looking at it like this paints a distorted picture. As we all know, the SCHIP program was created to supplement the Medicaid Program. The goal of the program was to encourage States to provide coverage to uninsured children with incomes just above Medicaid eligibility. So to put my colleagues' concerns in perspective, we

should look at SCHIP spending as it relates to Medicaid spending. So I would like to draw my colleagues' attention to a new chart that represents figures for the future from SCHIP, as well as from Medicaid, so everyone can fully appreciate the consequences of our SCHIP bill in the context of the Medicaid Program, which SCHIP supplements. So take a closer look.

Let's start with this little green line at the bottom. That is current law, the green line that goes along the very bottom of the chart. It is a pretty straight line across the chart. The green line represents the SCHIP baseline under current law. As I have already discussed, it is $5 billion each year for the next 10 years and as far into the future as you can go. If you don't change the law, that is the way it is.

Now let's look more closely and honestly at the actual problems we are facing. The massive orange area, as indicated, above the green line is Medicaid. This is the projected Medicaid spending for the next 10 years. It is a lot bigger than SCHIP. Then, on top of that, we are looking to add new spending for the SCHIP bill, and that is the blue line above the Medicaid indicated by the orange. Again, it is not very big. It is quite obvious it is not very big. As you can clearly see, costs are growing at a rapid pace overall. The overwhelming driver of the costs is what? It is Medicaid. We have a very big problem. Entitlement spending is growing, and in future years we are going to struggle to keep these programs afloat. That is why I would not agree to do a $50 billion SCHIP bill. I thought it was too much spending. I am not particularly happy with spending $35 billion, but as I have said, this bill is a compromise, and it is $15 billion less than what the Democratic budget approved.

So let's focus on the total obligations of the Federal program. This chart, when you look at the whole picture, puts things in perspective. Now, remember, all that fire and brimstone about the awful cliff that was on the previous chart, the awful cliff that this bill brings before the Senate, where is that cliff, you might ask, on the chart I put before my colleagues. If you look closely, right here where the blue line on top goes down gradually to beyond the green line, if you look at the blue there where it dips down a little bit, that little dip to the right of the dotted vertical line is what my good friend from New Hampshire is so exercised about. So this little blue line is what the debate is all about. The little blue line is this legislation before us. The little blue line is creating all this rancor. But it looks a little bit different here, doesn't it, than it did on that cliff chart I showed you ahead of time.

Let me tell my colleagues then what the Finance Committee bill--this little blue line--is not; not what it is but what it is not. Looking at this dip, this is not a government takeover of health care. Looking at this dip, this is not bringing the Canadian health care system to America. Looking at this dip in the blue line, this is not the end of the world as we know it.

While I concede that allotments under our bill in the years beyond the 5-year reauthorization do not behave as described in my friend's chart, I don't think it warrants the heated rhetoric we are hearing during this debate yesterday and today and probably tomorrow. SCHIP is not the real fiscal problem we have. The problem is the big orange area. That is Medicaid. The ranking member and I worked together--I am referring now to Senator Gregg, the ranking member of the Budget Committee. He and I worked together last year on the Deficit Reduction Act to try to rein in Medicaid, and I am proud of the work we did. We also found out how hard it is to dial back entitlement spending, even in a Republican-controlled Congress and even with special procedural protections we call reconciliation. We only succeeded in shaving $26 billion over a 10-year period on Medicaid spending.

The problem of entitlement spending is still there, and SCHIP is a pebble next to the boulders of Social Security, Medicare, and Medicaid. Do we have a funding issue? Yes. There is no denying that. We had one today that was the $14 billion hole that we had to fill if we were going to do what the President said he wanted to do with $5 billion. The Republican Congress created that hole in 1997, I am sad to say, but the Finance Committee filled that hole and produced a bill that complies with the budget rules. I am confident the Finance Committee in 5 years will do the same thing.

I think it is also important to point out we have so many far bigger problems in health care today that we need to deal with. If I am supposed to infer from Senator Gregg's speech that this is supposed to be the opportunity to do something about the problems of entitlement spending, I should point out the obvious: The substitute we expect to vote on does absolutely nothing about the entitlement spending but make a big deal out of it.

So I appreciate Senator Gregg's remarks. They are not without some merit, but you have to put them in context. I don't think they fit the crime we are accused of committing.

I yield the floor.

Mr. President, it is important to look at what this amendment actually does. It is a remarkable amendment. What does it do? It would try to spend the same dollar twice, take a dollar from tobacco taxes, spend it in the trust fund and spend it on CHIP--doing two things at once. I don't think we can do that in the real world. It is too good to be true. We can't do it. That is what the amendment says, basically. I do not think the Senator wants to take money away from kids, from the CHIP fund, the CHIP program. The amendment doesn't say that. I am sure he doesn't intend to do that. But what the amendment does say is the same dollars are going to be spent twice--one way we spend it is for this trust fund, the other way is we spend it on kids. I don't know how we do that; how in the real world we can do that. It is fantasy land. We can't do it.

Again, surely the Senator does not want to repeal the entire Children's Health Insurance Program. I am sure he doesn't want to do that. He does not do that in this amendment. But he still sets up the tension between the two, between research and all the good causes the Senator talks about on the one hand, and children's health insurance on the other, pitting one against the other. I don't think he wants to do that. He does not do that directly but he does that indirectly by trying to spend the same dollar twice. That might be possible in Hogwarts; it might be possible in Harry Potter's world. But I don't think it is possible in the real world.

Back here in the real world I want Senators to know this amendment is a thinly veiled attempt to steal the funding from the children's health care program. It is an attempt to undermine children's health care coverage. That is what this bill does. It takes a dollar from the tobacco tax--it is amazing--and that dollar is going to be spent on this trust fund and that same dollar is going to be spent on children's health care. We can't do that.

I urge my colleagues to reject the amendment.

I reserve the remainder of my time.

Will the Senator yield for a question on that one point?

I will take it on our time.

So the Senator wishes to take all the tobacco taxes in the underlying amendment, take all those dollars away from kids?

It is exactly right.

No, take it from the Children's Health Insurance Program.

Will the Senator yield for another question again, again on my time?

I don't mean to be condescending here, but has the Senator read the CBO analysis? I am sure he has. And, having read that, isn't it clear that a large share of the dollars in this bill from the tobacco tax are to maintain current coverage? That is, if we do not provide the $35 billion in this bill, that is the funds from the tobacco tax, that many kids are going to lose coverage? In fact, isn't it true that CBO says about 1.4 million children will lose coverage-- not just maintain, but lose coverage if we do not have this bill?

Of course not.

Mr. President, I think it is important to talk about the amendment, not all these other very important points with respect to health care. The effect of this amendment, the way it is written, will be to spend the same dollar twice. If the effect is what the Senator says it is, and he intends it--although that is not the amendment--if he intends to have all additional tobacco taxes go to the trust fund, then the net effect of this amendment is about 1.4 million American low-income kids will lose coverage. That is CBO. They will lose it, if that is the intent of the amendment.

The actual effect of the amendment the way it is written is the dollars have to be spent twice. We can't do that. I don't know how we do that. But, again, if the intent of the amendment is dollars do not go to kids, then the effect of the amendment is about 1.4 million

children will lose health insurance coverage; that is 5.7 million fewer kids will be covered under insurance than under our amendment.

In the Senator's own statements, he admits it. He apparently does not want to add dollars, he wants to take away the $35 billion raised by the tobacco tax and the honest effect of that $35 billion is to help prevent about 1.4 million kids from losing coverage as well as adding additional coverage. It is both. If the amendment is what the Senator wants it to do and says it is, then about 1.4 million kids will lose coverage.

I don't want to belabor the point. Some of the points the Senator makes are very good. Sure, he wants to do more research, but still the fact is the amendment takes dollars away from kids, away from the Children's Health Insurance Program.

In the children's health care program, 1.4 million American children will lose coverage under the Senator's amendment. That is CBO, that is not me. That is CBO. I do not think we want to take away our current coverage under the program.

One minor point that is not relevant to the amendment, but is relevant to the bill, is the Senator talks a little about something called crowd-out; that is, the number of kids who might not have private coverage who move to the CHIP program. That happens in every single program.

Do you know what the crowd-out estimate was with the Medicare Modernization Act, Part D? It was 75 percent. That was the estimate on how much crowd-out there would be for that legislation, which this body strongly supported. It actually turned out to be much less than that.

When this program was initially enacted in 1997, the Children's Health Insurance Program, CBO estimated crowd-out to be 70 percent. It was much less than that. We have asked the CBO Director to design this legislation to minimize crowd-out as well as we possibly can. And he, in testimony before the committee, said: You have done a very efficient job to minimize so-called crowd-out.

So we are cognizant of the point. But the main point is to get more health insurance coverage for kids. That is what the underlying bill does.

Mr. President, I yield back the remainder of our time.

Mr. President, I move to reconsider the vote.

I do.

Mr. President, I yield to the Senator from Delaware.

Mr. President, I am very happy to see the Committee on Homeland Security doing its work. I think the country is very pleased. Thank you.

I would object to that.

Mr. President, I had the floor, and I yielded to the Senator from West Virginia.

Mr. President, I say to the Senator, you do.

Mr. President, I yield to the Senator from Nevada.

Mr. President, I suggest we get back to business.

Mr. President, I understand Senator Gregg is ready for a vote with respect to his amendment, so I ask unanimous consent that there be 2 minutes equally divided in the usual form for debate prior to a vote in relation to the amendment, that no amendment be in order to the amendment prior to the vote, and that upon the use of time, the Senate proceed to vote in relation to the amendment, with no intervening action.

It may be.

Mr. President, four quick points. No. 1, we clearly want to bring this program down for kids, and this legislation does that. No. 2, the current expansion--not to point fingers anywhere--is basically as a result of the waivers this administration has given to States. That is the main reason for others. That is the main reason we have expansion to cover adults in States. No. 3, we are addressing this in this bill. We cut back on adults in this bill. But No. 4 is, we want to draw the line here a bit, and not totally cut adults off cold turkey, but, rather, childless adults would be cut back and zeroed out after 2 years, but then parents are phased down. But CBO has said when you do not cover parents, then you are also not covering some kids. The goal is to cover kids. I think the legislation is a fair, good, solid way to restrict coverage of adults, and I urge my colleagues, do not support this amendment, which is too draconian and goes too far.

Mr. President, Senator Cantwell is on her way to speak. She is not here. I see the Senator from Pennsylvania on the floor. I know he desires to seek time. I urge the Chair recognize the Senator from Pennsylvania who I think is going to speak about 8 to 10 minutes.

Mr. President, I might inquire of the Senator from South Carolina, how long does he wish to speak? We have been trying to go back and forth.

Because that will be three on your side in a row before we go back to this side. Is the Senator speaking on the same subject?

I urge the Presiding Officer to recognize the Senator from South Carolina.

Mr. President, we now have had three speakers from the Republican side of the aisle, three in a row, so I ask unanimous consent that the following speakers be recognized: Senator Harkin immediately, and following Senator Harkin, Senator Cantwell will speak, and that would be the request at this point.

I thank the Chair.

Mr. President, I know Senator Hatch wishes to speak on the underlying bill, the Children's Health Insurance Program. He is on his way to the floor. In the meantime, I see the Senator from Michigan is here, a very valuable member of the Finance Committee. She works very hard. She would like to speak on this bill. I thank her for coming to the floor. I urge the Chair to recognize the Senator from Michigan.

Mr. President, I understand the Senator from Massachusetts, Mr. Kerry, is about to speak. As he gets ready to speak, there are a couple of points I wish to make. We are still working the numbers on the McConnell-Lott amendment. I wish to point out a couple of points.

No. 1, the McConnell-Lott amendment, although it is advertised to do this, does not put kids first. Despite prohibiting coverage of nonpregnant adults and limiting all State income disregards, this legislation does not cover substantial numbers of additional children.

On the surface, they think they may cover 700,000 additional kids, but we are trying to get the numbers from CBO and trying to determine the actual effect; whereas, the Finance Committee bill the CBO has analyzed very carefully it will cover an additional 4 million children. About two-thirds of those will be on Medicaid, and roughly a million will be under the Children's Health Insurance Program.

The big difference is the different effects between the Finance Committee-passed bill and the McConnell-Lott bill on uninsured Medicaid-eligible children; that is, children today who are not on Medicaid but are eligible--what is the effect of the two various approaches on those low-income kids.

Again, I give the caveat we do not have all the actual language and do not have all the numbers exactly crunched by CBO, but a first analysis essentially looks like this. It looks basically like the McConnell-Lott bill will not add many new kids to be covered under Medicaid; whereas, the Finance Committee bill has about 1.7 million children now not covered under Medicaid who will be covered.

It is complex legislation we are considering. This is a Children's Health Insurance Program. But as we work to get more kids covered under the Children's Health Insurance Program, by definition there are going to be more kids also covered under Medicaid--that is children whose income levels are so low they are covered under Medicaid as opposed to the Children's Health Insurance Program.

There is a huge difference there. It looks like the McConnell-Lott bill will not help the very low-income kids who are currently eligible under Medicaid to be covered. In fact, the Finance Committee bill covers at least five times more.

I might say a word about the so-called crowding out. Senators are concerned this legislation will have the net effect of encouraging some children, now under private health insurance, to drop their private health insurance coverage to take advantage of the Children's Health Insurance Program expansion. There are a couple of points about that.

No. 1, under the McConnell-Lott amendment, it looks like their so- called crowd-out ratio is even more adverse from their perspective than the crowd-out ratio under the Senate Finance Committee bill. I don't wish to belabor the point. It is roughly the same, roughly 30 percent, but their crowd-out rate is a little greater on a percentage basis as to how many kids are there who will drop private health insurance for the Children's Health Insurance Program. But theirs is no better in fact a little worse, from that perspective.

Also, it is important and worth noting that when Congress passed the Medicare Modernization Act a few years ago and it provided for the Part D benefits for senior citizens, CBO said the crowd-out rate for that program would be much higher--and it was. I think there is one estimate beginning at 75 percent. I think it dropped to around 40 percent. I might not be entirely accurate on those numbers, but it is much higher than the 30 percent predicted under the Finance Committee CHIP bill and also about the same under the McConnell-Lott substitute.

In addition to that, we on the Finance Committee wanted to reduce the so-called crowd-out as much as we possibly could. We asked the Congressional Budget Office, especially the Director of the Budget Office, Peter Orszag, to tell us on the committee what did we have to do on this legislation; tell us how we should write it to minimize crowd-out as much as we possibly can, be as efficient as we possibly can. He told us what to do and we did it.

In the Finance Committee markup, when asked about crowding out; that is, kids moving from private health insurance coverage over to the Children's Health Insurance Program, he said you have done it efficiently. You have done it as well as you can do it.

I wish to make the point very clear. While we are helping children, while we are helping low-income kids get health insurance--as we clearly should--we also do not want to disrupt the private industry any more than need be.

It is important to remember that States are given power to decide how they want to administer the Children's Health Insurance Program. It is up to the State. Some States add it to Medicaid. Some States have separate programs. Most States use health insurance companies to administer the health insurance program, the Children's Health Insurance Program, with copays and deductibles, and so forth. So those who on the surface might be concerned if their ideology is it should be private health insurance, not the Children's Health Insurance Program, should not be too concerned, frankly, because we have gone the extra mile to make sure that so-called crowd-out is minimized as much as we possibly could.

I will have other points to make later on about the McConnell substitute. Basically, I wish to say it states that if you are at 200 percent poverty or a little above 200 percent of poverty, despite what we anticipated when we passed this legislation in 1997, I am sorry, you can't go above 200 percent if you want to have the benefit of the Children's Health Insurance Programs match rate, which is a little more beneficial to the States than the Medicaid match rate. That is not right. So many States are at least above 200 percent of poverty. I think that is wrong.

The other major thrust of the McConnell substitute is if you are above 200 percent of poverty, you have to go into the private market. That encourages them very strongly. That is not right either. Fundamentally, the Children's Health Insurance Program was written first, in 1997--again, it is a block grant program that gives States flexibility and recognizes that every State is different.

So often Senators say we should not enact one size fits all. I have heard that 100 times around here. Basically, that is correct--not always but basically. Senators who are advocating McConnell-Lott say one size fits all, basically, not recognizing that different States have different costs of living, some States are much more expensive to live in than others.

I saw a chart the other day that showed if you take 200 percent of poverty and matched that against the cost of living in various States in our country, in some States, the parity level would be maybe down around, oh, say, 150 percent of poverty. But there is one State that was 300 percent. If you translate the 200-percent nationwide figure to what the cost of living is in that State, it comes out to 300 percent. I think that is fair because different States are so different.

I ask unanimous consent, now, that the pending amendment also be temporarily laid aside so Senator Kerry may offer an amendment.

Will the Senator yield for a question?

Are there any States that cover 400 percent of poverty?

That cover children at 400 percent of poverty.

No, that is not correct.

No. Is it true if a State wants to cover, say, above 300 percent of poverty, is it true the State has to get concurrence with the Secretary of HHS?

Has New York received that concurrence?

Actually, I would not say it is 100 percent incorrect, but HHS has discretion, as HHS had discretion granting other waivers which the Senator is concerned with, and, frankly, this Senator is concerned with. As the Senator knows, this bill is designed to crack down on the effect of those waivers and prevent any future waivers with a lot of the adults I know the Senator is concerned about.

I wished to make the point that no State covers at 400 percent of poverty today. Secondly, if New York does seek 400 percent--if any State seeks 400 percent, it has to get the concurrence of the Secretary of HHS.

Will the Senator yield for another question?

I appreciate the willingness of the Senator to engage in a dialogue. Is it true, first, that the match rates States are getting; that is, the Federal proportion and the State proportion, are more favorable to States under the CHIP program than it is under Medicaid?

The Senator is correct. That is correct. Is it also true that, on average, the differential is about 30 percent? That is, the match rate that States get under the Children's Health Insurance Program is about 30 percent better, from the State's perspective, than the State gets from Medicaid; is that also true?

It is true.

It is true it is about 30 percent. Is it also true that different States have different costs of living?

Mr. President, I request time from the Democratic side.

Mr. President, first let me begin by commending Senator Baucus and Senator Grassley and their colleagues, Senator Hatch and Senator Rockefeller, for extraordinary work. This effort represents great legislating based upon principled compromise to achieve a noble objective, which is to provide health coverage to the children of America. I can't think of a more laudable effort than that which has been led and spearheaded by both Senator Baucus and Senator Grassley. They deserve our praise and our support.

I am here today to lend my support to the expansion of the CHIP program, the Children's Health Insurance Program, to support this endeavor which is so critical to the health of the country, literally and figuratively. It is not only a sensible policy in terms of investing in children, it is also morally compelling.

What more lofty objective can we have than to give children access to health care, to be able to grow up in this country knowing they can receive medical attention when they need it?

We are in a situation now where, remarkably, the Nation's level of poverty is growing. It is higher now than it was in 1970. We have not had a President since Lyndon Johnson try to tackle this issue head on. This bill recognizes that there are families who don't have the resources to buy health insurance, but they have a claim as Americans and as citizens to at least have their children covered. I hope we can do that by passing this legislation.

It is estimated there are 37 million Americans in poverty, 13 million of whom are children. These are not merely statistics; they are our neighbors in every State in the Union. They are youngsters who we hope one day will grow up healthy and strong to participate not just as workers in this economy but as productive citizens of this great land. To do that they need access to health care.

We also know that children without access to health care fare very poorly in school and have difficulties. These difficulties become more and more complex, and they compound over the years. In fact, one of the strongest arguments for this legislation is that it makes sense as an investment. It is better to pay now rather than later, in terms of social disruption and serious health problems. That is something I hope even the most hard-nosed colleague in the Senate will appreciate.

One of the consequences of this issue of growing poverty and the bifurcation of income between the rich and the rest of us in what we all consider to be the ``land of opportunity,'' sadly, is that opportunity is not as evident or as palpable as it was in the past. One of the great engines of opportunity for any individual, in addition to education, is health and the ability to seize these opportunities-- work, education, and service to others.

Again, I think this is an incredibly important piece of legislation. We have to do more. We have to recognize there are families who are working two jobs--mothers and fathers working 50, 60, 70 hours a week-- and still they don't have the resources necessary to pay for the increasing cost of health care for their children or themselves. They are squeezed between paying the rent, providing food for the family, and

are looking, many times, for ways to cover the cost of health care for their children.

I am very proud to have been one of the original cosponsors of CHIP in 1997. We were fortunate in Rhode Island to have on the Finance Committee Senator John Chafee, who was one of the leading advocates of the program. As Senator Grassley suggested, this program was crafted with a bipartisan effort in 1997, and one of the great leaders in that was John Chafee. In many respects, we are here today--both of us--to renew his commitment to the children of America.

Over the past decade, this program has been an unequivocal success. It has reduced the number of low-income uninsured children in this country. It has done what it said it would do, and it has done it well. In Rhode Island, we have a combined Medicaid/CHIP program called RIteCare. Our program has been instrumental in reducing uninsured children, and it made a difference for hard-working families in my State. While this program made great strides, there is still much more work to be done.

I want to take a few moments to address some of the issues raised about the Senate Finance Committee agreement and talk to some of the points raised in this Chamber criticizing that agreement. I believe this agreement is not only sound policy, but it addresses a major concern in the country. The proposal before us would achieve several key objectives supported by the overwhelming majority of Americans.

First, it preserves coverage for all 6.6 million children presently covered under the CHIP program. Second, it renews the original intent of the program by making a real commitment to cover an additional 3.2 million children who are eligible for coverage but not enrolled. These two important goals are achieved by allocating $35 billion over 5 years. The original program was financed through the Federal cigarette excise tax, and the proposal before us continues to use this mechanism.

The bill also addresses a problem with the formula that was beginning to plague a growing number of States, including my State of Rhode Island. Last December, I joined a number of my colleagues in crafting an agreement to redistribute unexpended funds from some States and redirect them to States, such as Rhode Island and Georgia and New Jersey, that were rapidly approaching budget shortfalls because they exceeded their CHIP allotment.

The Finance Committee, recognizing this issue, has made a proposal that institutes needed changes in the formula used to calculate State CHIP allotments so Congress is not required to resort to eleventh hour deals to shift money from one State that hasn't used it to other States. That is an important change to the legislation. The bill sets aside a portion of funds in case of contingencies, such as what was experienced during Hurricane Katrina.

Lastly, the bill tackles a challenge that States have been struggling with since the CHIP program began 10 years ago; that is, reaching children who are uninsured and eligible for coverage but are not enrolled. The bill provides incentive funds and flexibility for States to overcome the many economic, social, and geographic barriers that hinder millions of uninsured children who deserve health insurance coverage.

My home State of Rhode Island is a perfect case in point. While Rhode Island ranks 10th nationally in the lowest number of uninsured children--we are very proud of that; in fact, we would like to move up in the ranking from 10 to 1--a recent report by Rhode Island Kids Count indicates that of the estimated 18,680 uninsured children in the State, 11,275 of them were eligible for children's health insurance coverage but were not enrolled. We should enroll all eligible children; that should be our goal. We have to reach these children and, frankly, this legislation will help States become more proactive and successful in enrolling children.

There has been criticism directed at the bill. Let me take a moment to respond to some of the criticism. There has been concern about the cost of the package. I understand that alternative versions of the Children's Health Insurance Program reauthorization will be offered by others in the Chamber during this debate. Some of these bills will have very enticing names, like Kids First, but we should not be fooled by it. The substance of these amendments does everything but put kids first. It won't even maintain the minimum coverage that we have today. Some of the 6.6 million children who are enrolled today will lose out in these alternatives. Rather than expanding coverage, it will contract coverage. We don't want to head in the other direction; we want to move forward.

Similarly, others have balked about the $35 billion price tag. I remind my colleagues that our Senate budget resolution allocated $50 million for children's health insurance coverage. The Senate Finance Committee, the chairman and ranking member, labored mightily and came up with the best possible proposal they could get through the committee, and it is a principled proposal. I salute it. But I was disappointed that the committee left on the table $15 billion that could have been used to insure more children. I have joined Senator Kerry in his amendment to restore it. Again, in terms of our budget priorities, the proposal before us today is even less than what was supported in the budget resolution. For those who say it is too expensive, that suggests this hasn't been very carefully considered and indeed it was, unfortunately, somewhat winnowed down.

Perhaps the most poignant reference is that, while we were talking about $35 billion over 5 years for children's health, we are spending $10 billion a month in Iraq. That says a lot about how we have to begin to reshape our priorities. I don't believe we are spending too much on children when it comes to this particular legislation.

Some have expressed displeasure over using the Federal cigarette excise tax to finance the package. The bill would gradually raise the tax 61 cents, up to $1, over a 5-year period. This is consistent with the original financing mechanism for the Children's Health Insurance Program in 1997. But there is something else interesting here. Cigarette smoking has been identified for decades as one of the chief public health problems in this country, particularly when children start doing it. It is a threat to the health of the Nation, and I doubt if there is anyone in this Chamber who has not had at least one family member's health affected adversely by smoking. I listened to Senator Enzi speak passionately in the Senate Health, Education, Labor and Pensions Committee last week about his father's smoking, which led to his demise, and it also affected his mother.

When you raise the price of a product, you curtail the amount of it that is purchased. We are using market forces to help us do something that we should do: reduce the rate of cigarette smoking. Using market mechanisms in this way, not only to raise resources for health insurance for children, but to lower the number of people who engage in smoking will save public health dollars that are being spent to care for people who have lung cancer, emphysema, and other respiratory diseases caused by smoking.

There is another concern that has been raised, which is that the agreement grossly expands the CHIP program to parents and childless adults, when in fact the bill does quite the opposite. The bipartisan agreement actually ends the administration's practice of providing States waivers to cover parents and childless adults. To date, 14 States have received waivers to cover parents and childless adults, including my State of Rhode Island. In fact, Secretary Leavitt just approved a 3-year extension of Wisconsin's waiver allowing adult coverage. Frankly, I believe that States deserve the ability to take these steps. I am disappointed that more States won't be able to do it. This bill acts as a check on that administrative authority. It deliberately, at this time, restricts the number of parents and childless adults who can join this coverage.

As my colleague, Senator Menendez, mentioned earlier, research shows a strong correlation between parental coverage and the enrollment of eligible children. Once again, the policy behind enrolling parents is sound. But this bill, rather than grossly expanding parental coverage, begins to restrict that coverage. Under the agreement, States with existing coverage expansion waivers will be given a period of transition, and no new States will be granted the opportunity to extend coverage under CHIP. This seems like a reasonable response to these concerns, but I hope as

we go forward we might be able to look at the logic behind parental coverage policies as a way to ensure that the whole family-- particularly children--are covered.

The proposal also rightly grants States the option to cover pregnant women. Good prenatal care is essential to overall child health and well-being, as well as reducing the number of low birth weight and premature babies. Given the fact that the United States is actually behind most developed countries, and even some developing countries, in terms of these indicators, this step is certainly warranted and overdue.

Finally, Members seem to have great consternation over the fact that children's health coverage produces some level of crowding out of private insurance coverage, and the bill is a giant step toward Government-run health care. Again, the rhetoric seems to be at odds with the reality of what is in this bill. I note that most enrollees in public insurance are actually covered through private plans, where States take the money and reimburse the private insurer. The Finance Committee proposal takes the additional step of including something called premium support. It essentially gives States the ability to offer subsidies for children who are eligible for CHIP coverage but have access to employer-sponsored coverage.

In my State, we have had this experience. We have a program called RIteShare. The program has enabled thousands of Rhode Island families who otherwise could not afford to remain in private insurance coverage to do so with a little help from the State. It is a marginal contribution to their private health insurance, which allows them to stay in the private market. This proposal, again, goes a long way toward addressing the issue of potential crowding out.

I believe this bipartisan agreement represents a very strong step forward to facilitate outreach and enrollment of low-income children. It is not a perfect legislative proposal, but it is an important one based on principled compromise. It reinforces our commitment to children's health. I am amazed the President is already suggesting he might veto it, despite overwhelming public support, and despite the compelling economics that are behind investing in children's health.

I hope that we will by our votes demonstrate that this is a bill which should not be vetoed but should be passed quickly so children can continue to enjoy access to health care in our country.

We all understand that our future is really about our children. They will be the leaders years from now, and we all hope and wish that they will grow up strong, able to seize the opportunities of this Nation. Beyond hoping and wishing today, we can help make that a reality by voting for this important legislation. I urge all my colleagues to join me in doing so.

Finally, I would like to take another moment. As colleagues, we come to the floor, we debate issues and legislation we have sponsored, but the details are worked out by staff members long into the wee hours of the morning. We read speeches prepared by very dedicated staff members.

I have the rare privilege of saluting someone who has worked with me for so many years. Lisa German Foster has been with me since January 1996 when I joined the Senate. She is leaving to pursue other endeavors.

She started in my office as an unpaid intern and has become recognized here as one of the preeminent staffers with respect to health care issues and one of the most decent and humane individuals one will ever meet. I salute her for her work on this bill, on child health and immunization, on the bone marrow registry, on tobacco legislation.

She is a native of my home State of Rhode Island, in Narragansett, but I think she is firmly ensconced in Washington, DC, with her husband Bill and children Aidan and Brady.

Lisa, on behalf of all of us here, thank you for your good work.

Mr. President, I yield the floor.

Mr. President, again, as I said when we first took up this bill on Monday evening, I thank the chairman of the committee for his passion in bringing us to this point, he and the ranking member, Senator Grassley, as well as, of course, Senator Rockefeller with his deep commitment, and Senator Hatch as well.

This is a truly bipartisan effort. It is the way we should be legislating--coming together. It is a compromise. If I were writing a bill by myself, I would add more dollars. There are Members on the other side of the aisle who would, in fact, do less. But it is a real compromise.

I start out today speaking to the fact that it is a compromise. As a member of the Budget Committee, having worked with our chairman and members very hard to produce a budget resolution that really does reflect a new direction in values and priorities, I worked very hard to have us achieve a set-aside of $50 billion for children's health care in the budget resolution.

In my heart of hearts, that is where I want to be. I also know that any significant expansion is a victory not only for us and for the Senate but, most importantly, for children and their families.

I know there will be an effort to expand to the full amount that we all wish to do--I think on this side of the aisle, certainly, that is where we want to be, and our House colleagues have focused on that as well. But I also know that we have a President of the United States who shockingly has said that he will veto providing children's health care, an expansion of more than 3.3 million children to receive health care, children of working parents. The vast majority of them have a mom or a dad working one job, two jobs, maybe three jobs trying to make ends meet, but who can't afford health insurance, don't qualify for Medicaid, but find themselves desperately wanting to make sure their children have all that they need, as all of us want as parents.

So we are in a situation where the President of the United States has indicated he does not share that view. His budget, in fact, is a budget that he proposed to us that would cut children. It would cut children who are currently being provided health insurance. It would eliminate their health insurance. So on the Finance Committee, we came together under very strong bipartisan leadership to find a common ground, the middle ground, to be able to increase the number of children who receive health insurance and be able to make sure that the 6 million children who currently have health insurance are allowed to maintain that insurance. We have come to a compromise, and it is a compromise I support.

As we face a potential veto from this President, it is critical that we have the strongest possible bipartisan vote coming from the Senate. If in fact the President follows through and vetoes this, I hope we will have enough votes to override that veto in a strong bipartisan spirit, the spirit that brought us together originally when the Children's Health Insurance Program was originally passed. I urge colleagues to support the Finance Committee version and what we have done as the best way to get us real health care expansion for children.

Then we will come back, and I will be right back as a member of the Budget Committee next year, proposing again that we expand what we are doing to make sure that every child who does not have health insurance, whose family is working hard but doesn't qualify for Medicaid and doesn't have the ability to get private insurance, has the health care they need.

We have, I understand, another proposal in front of us, an amendment that would take us backward. I understand Senator Lott has offered an amendment that has actually been dubbed the CLIP amendment, instead of CHIP--Children's Health Insurance Program--CLIP meaning ``Children Losing Insurance Program.'' Again, we don't need anything that is going to take us backward and have fewer children receiving health insurance.

I want to see us make a major commitment to universal health insurance in the greatest country in the world so that everyone has the opportunity to be able to receive the health care they need. We should be striving to achieve nothing less than that.

The Lott amendment, first, will cut children's health care and take us down the road of debating the number of policies individually that Members may support, policies I find great concern about, and policies that will actually increase the number of uninsured, such as expanding the health savings accounts. I urge colleagues to oppose the Lott amendment because it takes us in absolutely the wrong direction if we want to cover children of low-income working families, and if we want to make sure they have what they need to be able to grow up and be successful in America.

I have also heard debate about the cost of this legislation, and it is important to look at what we are talking about in terms of our values and priorities when we debate any piece of legislation. Everything we do here is about values and priorities. Right now, every month, we are spending $12 billion in Iraq--$12 billion. Regardless of how any one individual feels about the war in Iraq, we are spending $12 billion--not paid for, not a part of the budget--$12 billion a month. This bipartisan effort to provide health insurance for more than 3 million more American children in this country is a cost of $7 billion a year--a year; less than what we are spending in 1 month in Iraq. That is the right value and the right priority. This is paid for, it is responsible and, most importantly, it is the moral thing to do in the greatest country in the world, in my opinion. This is not too much to invest in the future generation of America.

Yesterday, the chairman and I, a number of us, had an opportunity to be with a wonderful woman, Kitty Burgett, from Ohio, who spoke about the importance of children's health care in her family. I know it was a very moving experience to hear her, and I wanted to share her story. I have certainly other stories from Michigan as well, but Kitty came to the Nation's capitol to share what the Children's Health Insurance Program has meant to her and to her family.

Kitty is a widow whose husband died in 1990, leaving Kitty and her two young children without income or insurance. She had Social Security survivor's benefits, but even that little income put her and her children over the Medicaid eligibility levels, so they didn't qualify for low-income health insurance because of their survivor benefits. She started working but earned very little. Nonetheless, she purchased insurance for her children, because like all of us who are parents, she wanted to make sure her children had what they needed. She wanted to make sure if they were sick, she was able to care for them with health insurance. So she purchased that insurance, but the cost rose every 6 months, and she finally had to drop it because of the cost. That is an uncommon story in America today.

Then along came the Children's Health Insurance Program. Kitty immediately enrolled her children. She had a daughter who was 12. Her son was a bit younger. Her daughter then began to develop problems, and, ultimately, at age 15, was diagnosed with bipolar disorder. She was ill. She was hallucinating and she had major mood swings--as those of us who are familiar with that disease understand--from depression to highs and hallucinations. She couldn't concentrate at school. The Children's Health Insurance Program was there so Kitty could get her daughter some help. It covered her medications and therapy and eventually some new medicines that brought

her illness under control. Her daughter is now 22 years old. She is married, she is working, and she is insured. She has an 18-month-old daughter named Scarlet. Kitty says the Children's Health Insurance Program kept her daughter from a lifetime of institutionalization, and, instead, she is a productive, contributing member of society and a loving mother to Scarlet.

That is what this is all about, giving people in America--parents, the vast majority of whom are working--the ability to provide their children with the health care they need so they can go on to be successful, thriving, contributing adults in America.

I might also mention I am very pleased that the bill in front of us expands the opportunity for what is called mental health parity, so that if there is insurance provided, mental health care will be a part of that. I congratulate Senator Kerry and Senator Smith, who have led that effort to expand us into the area of more adequately covering mental health care for children.

This program covers children all over the country. It is interesting to note that there are more children uninsured in rural areas than in urban areas. This will make sure that, in fact, all of the children who qualify under this program are able to receive the health care they need. Right now, in Michigan, we have about 60,000 children who are on the Children's Health Insurance Program and another 90,000 who are eligible--who qualify right now under the program we wrote--but because funds aren't available for outreach, funds aren't available to do what is necessary, we are not able to provide those families, those children, with health insurance. This bill goes a long way to making that happen.

I have heard so many stories from Michigan, and it touches your heart when you think about the way families are struggling to be able to care for their children at the same time costs are going up at every turn. We have folks who are working harder than ever: They turn around and gas prices go up; they turn around and their insurance premium goes up; they turn around again and look at the cost of college, and those costs have gone up. We addressed the cost of college last week. Those things go right to middle-income families--student loans and Pell grants and those programs that allow more people to have the opportunity to go to college and send their children to college.

The reality is that on every side families are feeling squeezed-- working harder and costs going up and up and up. Children's health care is one way, another critical way, we can help families. I think of Chad, a gentleman in Michigan. He and his wife have two young children. He works for a small landscaping business with an ``off season'' of 3 to 4 months in the winter when he is not working. If the couple purchased insurance through Chad's employer, it would be an additional $300 a month, which for them is not affordable. Through MIChild, which is our children's health program, both his sons are able to get the inhalers they need for their asthma. How basic, in America, in the greatest country in the world, to make sure that children can handle their asthma.

I also heard from Pam, who is a full-time preschool teacher and mother. Her monthly premiums of $384 a month, or over $4,500 a year, take up over one-fifth, or 20 percent, of her pay. Through the MIChild program, she was able to get the specialized care she needed for her youngest daughter, who suffers from a rare seizure disorder.

I could go on and on, but I will not. We all have stories of families who are wanting the best for their children, who want the American dream. They do not want to go to bed at night and have to say, please, God, don't let the kids get sick, don't let something happen tonight or tomorrow because I don't know what I am going to do--we don't have health insurance. We are the greatest country in the world and there is no excuse for any family finding themselves in that situation.

We have in front of us a bill that is a true bipartisan compromise. For me, it is a step in the right direction to universal care, and an opportunity to come up with a uniquely American way to provide universal health care for everyone in America. I believe health care is a right, not a privilege, in the greatest country in the world, and we should act like that. This important legislation is part of keeping that promise.

We started down the road with covering children whose parents are working, who do not qualify for low-income help through Medicaid because they are just above that limit, but aren't able to get the insurance they need for their families. We have children who qualify today but, because the resources aren't there, they are not able to get the health insurance they need. This legislation will say that more than 3 million more children--families--in this country will not have to go to bed at night worrying about whether their kids are going to get sick tomorrow.

Finally, I say again that this is about values and priorities. Always it is about values and priorities. This is the right thing to do. It is the moral thing to do. When we find ourselves in the situation of spending $12 billion a month on the war in Iraq, not paid for, and in front of us we have the ability with $7 billion a year to cover over 3 million more children with children's health care, the 6 million who have insurance now and over 3 million more in America, responsibly done and paid for, this is the right thing to do. It is the moral thing to do.

This is a great success story, and I am very hopeful we will see a very strong bipartisan vote when this comes before the Senate for a vote.

I yield the floor.