Improper Payments Elimination and Recovery Act of 2008

Mr. President, I rise today to introduce a critical piece of legislation, the State Fiscal Relief Act of 2008. This legislation builds upon the $20 billion State fiscal relief model passed by Congress and signed into law by President Bush as part of the Jobs and Growth Tax Reconciliation Act of 2003. It would provide $12 billion in State aid, equally divided between an increase in Federal Medicaid matching payments and general revenue sharing grants to States.

Many of my colleagues may wonder why I am introducing a $12 billion State fiscal relief bill instead of a $15 billion State fiscal relief bill--the approach I have consistently supported. The reason is simple. I want to build on the strong, bipartisan support of our Nation's Governors, who have repeatedly endorsed a $12 billion fiscal relief package--with $6 billion in additional Medicaid assistance to States and $6 billion in targeted grants to States. I still worry that State deficits will only grow in the coming days, weeks, and months, but I am willing to start with $12 billion and continue my work with our Nation's Governors, health care providers, advocates, and others to get this aid to States immediately.

I want to begin my remarks with the fact that leading economists support State fiscal relief. Earlier this month, Mark Zandi, chief economist of Moody's Economy.com, examined the effectiveness of the various stimulus options that Congress is considering. Dr. Zandi's analysis found that targeted State aid would generate increased economic activity of $1.36 for each dollar of cost, because it would lessen State and local government budget cuts that ``are sure to become a substantial drag on the economy later this year and into 2009.''

As a former Governor, who survived the tough times of the 1980s, I strongly believe that States deserve to be a part of the economic stimulus package currently before the Senate. State and local governments are an integral part of our national economic engine. They provide health care and a wealth of social services to millions of Americans, particularly when the economy is weak. We should act immediately to provide States with relief before they are faced with the harsh decision to cut children and families off of Medicaid.

States experience enormous budget pressures when the economy slows. State revenues can evaporate rapidly during an economic downturn. Unlike the Federal Government, States cannot borrow infinite amounts of debt from China and other countries. By law, 49 States including West Virginia--are required to balance their budgets and, in times of economic downturn, this task becomes significantly more difficult.

A delayed Federal response to the growing impact of this downturn on States is an invitation to disaster. We know from experience that Medicaid is consistently the first program slated for cuts during a State budget squeeze. This is not only a problem for current Medicaid enrollees; it is also a problem for hard-working Americans who have lost their jobs because of the economic slowdown.

In the last year, our unemployment rate has increased to 5.0 percent with nearly 900,000 more Americans without jobs. The loss of a job is hard enough financially on an individual or family, but since the majority of Americans get their health insurance through their jobs, the loss of a job often results in a simultaneous loss of health insurance coverage. Medicaid fills the gap for working families when they lose access to private coverage. For every 1 percent increase in the unemployment rate, Medicaid enrollment increases by 2-3 million people.

During the last economic downturn, the number of uninsured Americans would have been millions more if Medicaid and CHIP had not responded to the twin challenges of an economic downturn and a sharp drop-off in private health insurance coverage. A critical factor in helping States sustain Medicaid enrollment during those difficult times was the $20 billion in State fiscal relief that Congress enacted in 2003. The 2003 fiscal relief provisions went a long way to preserve health care coverage for millions of working Americans. However, we cannot discount the fact that one million low-income people had already lost Medicaid coverage because we waited two years into the recession to pass State fiscal relief. We should not make the same mistake twice. We must act quickly.

There is no question that health care is economic stimulus. Insuring jobless workers encourages consumption of health care services and provides an economic boost to the health care sector. People without insurance seek treatment less often than people who are insured. Uninsured Americans not only have greater problems accessing needed care but often spend more out-of-pocket on health care, making it harder for them to spend on other things.

The grants to States are also stimulative. For example, they can be used to finance unfunded Federal mandates like child support enforcement. Six economists recently wrote that ``restoring funding to the child support program will produce well-targeted stimulus to the economy because child support redistributes income toward lower-income families who are more likely to use the income to meet their consumption needs. Restoring funding to the child support program would also mean that the State and county governments would not have to lay off child support workers and reduce the level of services that they provide families in the child support program.''

One of the arguments against State fiscal relief that I continue to hear is the argument that State fiscal conditions are not that bad. We have to be very cautious about that type of argument because State fiscal situations are changing rapidly. The recent CBO report on the economy alludes to this very fact. It reads, ``Recent evidence indicates that many States respond relatively quickly to a downturn in the economy, even if it occurs after their budgets have been enacted for the year.''

We already know from the National Governors Association that 18 States have reported budget shortfalls totaling $14 billion for 2008 and 17 States project shortfalls totaling $31 billion for 2009. However, we cannot simply take a snapshot of the economy today and argue that this is not a crisis waiting to happen. The fact of the matter is that a dozen more States could be in deficit situations very soon if the downturn continues. This is especially true given the significant decline in property tax revenues in many States and the impact of the bonus depreciation provisions included in the stimulus bill in several States.

As proud as I am of the 2003 fiscal relief package, I want to remind my colleagues that the $20 billion in relief was nearly too late. One million low-income people had already been cut off of Medicaid by the time that legislation finally passed because we waited two years into the recession to enact it. History does not have to repeat itself. We know that working families are at risk of becoming uninsured now and into the near future, so we must act swiftly to protect them.

I urge my colleagues to support this important legislation. We have a real opportunity to proactively address a looming health care crisis. This approach is supported by the National Governors Association as well as hundreds of provider and health advocacy groups nationwide. We should not allow this opportunity to pass. Too much is at stake.

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

Mr. President, today Senator Hutchison and I are introducing two bills that will significantly alleviate the burden of illegal immigration on State and local governments: the SCAAP Reimbursement Protection Act of 2008 and the Ensure Timely SCAAP Reimbursement Act. We are joined by Senators Boxer, Kyl, Schumer, Cornyn, Durbin, McCain, Bingaman, Craig, Cantwell, Domenici, and Crapo.

These bills will amend the State Criminal Alien Assistance Program, SCAAP, statute to ensure that states and localities receive more funding for costs associated with incarcerating criminal aliens, and that these reimbursements are given out in a timely manner.

The cost of incarcerating criminal aliens is high. In California alone, the State spent more than $900 million in 2007 to house over 20,000 criminal aliens.

Congress enacted SCAAP in 1994 to help reimburse States and localities for the cost of arrest, incarceration, and transportation of these aliens.

However, in 2003, the Department of Justice, DOJ, reinterpreted the statute. Now States are only reimbursed for what they spend incarcerating convicted criminal aliens and only when the arrest and conviction occur in the same fiscal year.

The DOJ reinterpretation has significantly cut the reimbursement local governments are eligible to receive for incarcerating and processing illegal aliens.

This reinterpretation is even more devastating because SCAAP is consistently under-funded. The President has zeroed out SCAAP funding in his budget proposal over the past 6 years. Through bi-partisan support, Congress was only able to partially fund the program.

As a result, SCAAP only reimburses States for a fraction of the costs of incarcerating criminal aliens. For example, in fiscal year 2007, SCAAP reimbursed only $109.5 million of the more than $912.5 million spent by the California Department of Corrections that year. That means the State paid $803 million of its own funds to house criminal aliens.

This cut has had a domino effect on public safety funding. Every dollar less that SCAAP reimburses States means a dollar less to spend on critical public safety services. For example, after the SCAAP funding cuts in 2003, the Los Angeles County Sheriff's Department implemented an ``early release'' policy for prisoners convicted of misdemeanors.

I believe it is the Federal Government's responsibility to control illegal immigration. The funding cuts imposed by this administration have let our local public safety services down, and have made our communities less safe.

The SCAAP Reimbursement Protection Act of 2008 would restore the original intent of SCAAP so that States are reimbursed for the costs of incarcerating aliens who are either charged with or convicted of a felony or two misdemeanors. States would also be reimbursed regardless of the fiscal year of the incarceration and conviction.

This bill has been endorsed by the National Sheriffs' Associate, California State Association of Counties, CSAC, the U.S./Mexico Border Counties Coalition, the Virginia Sheriffs' Association, the Los Angeles County Sheriff Lee

Baca, and the Sheriffs' Association of Texas.

Our colleagues on the House Judiciary Committee unanimously passed a companion bill, H.R. 1512, and I urge you to do the same.

Another problem with SCAAP is the significant delay in reimbursement. Recently, State and county governments that foot the bill for holding criminal aliens between July 2004 and June 2005 had to wait until June 21, 2007, before they were reimbursed.

For example, Los Angeles County, San Bernardino County, and Riverside County waited 2 years to receive their reimbursement--totaling $85.9 million. While they were waiting, public safety offices had to cut back on critical services. This delay is worse when one considers that even when localities receive the federal funds, they are only reimbursed for pennies on every dollar spent.

Delays place unreasonable budgetary burdens on States, counties, and municipalities that already shoulder most of the costs of housing criminal aliens.

California is not alone. Every other State depends on these funds to perform what is ultimately a federal responsibility--to control illegal immigration and its effects in our communities. These delays affect every State.

The Ensure Timely SCARP Reimbursement Act would help ease this burden on States and localities by requiring the Justice Department to disburse funds within 6 months of the application deadline.

I ask my colleagues to join me in supporting these much needed amendments to the SCAAP statute. Mr. President, I ask unanimous consent that the text of these two bills be printed in the Record.

Mr. President, I rise today to introduce the Improper Payments Elimination and Recovery Act of 2008.

At first glance, a bill with a name like that might not seem too exciting. But I can assure my colleagues that it addresses a serious, largely unknown problem that is a real threat to our fiscal well being.

Each year, agencies are required to look at all of their programs and activities and determine which are susceptible to significant improper payments. For those that are deemed at risk, agencies must produce estimated error rates that are included in their year-end financial statements. They must also come up with action plans for reducing their errors.

In fiscal year 2007, agencies are estimated to have made nearly $55 billion in improper payments. That is an astounding number, Mr. President.

We spend so much time around here throwing around numbers like $55 billion that they begin to lose their meaning. So I want to take a minute or so to put that number in perspective.

I was surprised to learn that $55 billion is more than the total budget for the Department of Homeland Security. It is also twice as much as we're projected to spend to protect the vehicles our soldiers are using in Iraq against roadside bombs.

To illustrate further the amount of money we are talking about, $55 billion is just a little bit less than the total GDP of Vietnam. It is a little bit more than the GDPs of Croatia and Slovakia. Most astoundingly, $55 billion equals the combined GDPs of 44 of the smaller countries in the world.

So our Federal Government is likely wasting more money than the total populations of many countries produce in a given year.

But $55 billion is not even a real number. It is likely just the tip of the iceberg. It includes no error estimates for massive programs like TANF, SCHIP, and the Medicare Prescription Drug Program. So I expect that we will see more than $55 billion in improper payments next year and the year after.

My colleagues and I on the Homeland Security and Governmental Affairs Committee's Subcommittee on Federal Financial Management have held six hearings focused on this issue now, including one this afternoon. What we

have learned is that, in some cases, agencies are just not taking their responsibility to deal with and address their problems with improper payments and the management weaknesses that can cause them. The bill I am bringing forward today addresses just about all of the failures and deficiencies we've learned about through our oversight.

My bill starts by improving transparency. OMB right now has set the reporting threshold for improper payments too low, meaning millions of errors go unreported--and potentially unaddressed--each year. I want to lower the reporting threshold so that Congress and the general public have a better picture of the problem we face.

My bill would also help to prevent improper payments from happening in the first place by requiring that agencies come up with stronger corrective action plans and aggressive error reduction targets. It would also implement a recent recommendation from GAO that called on OMB to develop a process whereby agencies would receive regular audited opinions on the financial controls used to prevent improper payments before they happen.

My bill would also force agencies to be more aggressive in recovering improper payments they make. Some agencies--and most private sector firms--regularly go over their books to identify payment errors and get back overpayments made to contractors and others they do business with. We haven't done that enough in the Federal Government. Even as the agencies are reporting more and more improper payments, the amount recovered remains miniscule. I want to change this by requiring that all agencies with outlays of $1 million or more perform recovery audits on all of their programs and activities if doing so is cost effective.

Finally--and perhaps most importantly--my bill would hold agencies accountable. Today, as I mentioned, some agencies do not appear to be taking improper payments very seriously. I want to force agencies to hold top managers accountable for their progress--or lack of progress-- in doing something to take better care of the tax dollars we entrust them with.

I look forward to working with my colleagues to get these important reforms enacted. I am sure we can all agree that allowing this level of waste to continue unchecked is reckless and unacceptable.

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

Mr. President, I rise today to introduce the Improper Payments Elimination and Recovery Act of 2008.

At first glance, a bill with a name like that might not seem too exciting. But I can assure my colleagues that it addresses a serious, largely unknown problem that is a real threat to our fiscal well being.

Each year, agencies are required to look at all of their programs and activities and determine which are susceptible to significant improper payments. For those that are deemed at risk, agencies must produce estimated error rates that are included in their year-end financial statements. They must also come up with action plans for reducing their errors.

In fiscal year 2007, agencies are estimated to have made nearly $55 billion in improper payments. That is an astounding number, Mr. President.

We spend so much time around here throwing around numbers like $55 billion that they begin to lose their meaning. So I want to take a minute or so to put that number in perspective.

I was surprised to learn that $55 billion is more than the total budget for the Department of Homeland Security. It is also twice as much as we're projected to spend to protect the vehicles our soldiers are using in Iraq against roadside bombs.

To illustrate further the amount of money we are talking about, $55 billion is just a little bit less than the total GDP of Vietnam. It is a little bit more than the GDPs of Croatia and Slovakia. Most astoundingly, $55 billion equals the combined GDPs of 44 of the smaller countries in the world.

So our Federal Government is likely wasting more money than the total populations of many countries produce in a given year.

But $55 billion is not even a real number. It is likely just the tip of the iceberg. It includes no error estimates for massive programs like TANF, SCHIP, and the Medicare Prescription Drug Program. So I expect that we will see more than $55 billion in improper payments next year and the year after.

My colleagues and I on the Homeland Security and Governmental Affairs Committee's Subcommittee on Federal Financial Management have held six hearings focused on this issue now, including one this afternoon. What we

have learned is that, in some cases, agencies are just not taking their responsibility to deal with and address their problems with improper payments and the management weaknesses that can cause them. The bill I am bringing forward today addresses just about all of the failures and deficiencies we've learned about through our oversight.

My bill starts by improving transparency. OMB right now has set the reporting threshold for improper payments too low, meaning millions of errors go unreported--and potentially unaddressed--each year. I want to lower the reporting threshold so that Congress and the general public have a better picture of the problem we face.

My bill would also help to prevent improper payments from happening in the first place by requiring that agencies come up with stronger corrective action plans and aggressive error reduction targets. It would also implement a recent recommendation from GAO that called on OMB to develop a process whereby agencies would receive regular audited opinions on the financial controls used to prevent improper payments before they happen.

My bill would also force agencies to be more aggressive in recovering improper payments they make. Some agencies--and most private sector firms--regularly go over their books to identify payment errors and get back overpayments made to contractors and others they do business with. We haven't done that enough in the Federal Government. Even as the agencies are reporting more and more improper payments, the amount recovered remains miniscule. I want to change this by requiring that all agencies with outlays of $1 million or more perform recovery audits on all of their programs and activities if doing so is cost effective.

Finally--and perhaps most importantly--my bill would hold agencies accountable. Today, as I mentioned, some agencies do not appear to be taking improper payments very seriously. I want to force agencies to hold top managers accountable for their progress--or lack of progress-- in doing something to take better care of the tax dollars we entrust them with.

I look forward to working with my colleagues to get these important reforms enacted. I am sure we can all agree that allowing this level of waste to continue unchecked is reckless and unacceptable.

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

Mr. President, today I rise to introduce the PEPFAR Accountability and Transparency Act, a bill that will increase our ability to research and identify the most effective interventions in combating global AIDS. As we work to increase funding for the President's Emergency Plan for AIDS Relief, PEPFAR, I believe we must also insure that we maximize our investment in programs that have been found effective in preventing infections and delivering care to as many people as possible.

Through the years, the science known as operations research--the ability to identify what is working and what is not working in our treatment, prevention, and care interventions--has helped to improve the effectiveness of the health care delivery system that we have established and enhanced with U.S. funding.

Take, for example, the issue of mother to child transmission of HIV. In the U.S., cases of perinatal HIV transmission have dropped markedly--from more than 1,000 in 1991 to less than 100 in 2005-- largely due to access to critically needed, life-extending drugs. But in the developing world, where fewer than 10 percent of HIV positive pregnant women, about 1 out of every 3 children born to mothers with HIV end up with the virus--a wholly preventable situation. The field of operations research is allowing us to understand how we can, in low resource settings, improve testing, education, and treatment options that reduce cases of perinatal transmission.

There are many other areas where the data from operations research can transform our ability to maximize the U.S. investment in global AIDS funding--through measuring the impact of our prevention education efforts, to understanding how addressing gender inequality can reduce HIV infection, to ensuring that treatment is delivered in a way that extends the lives of people with HIV.

This legislation will require the Government to develop a strategic plan to improve program monitoring, evaluation and operations research. With this plan, we can determine the effectiveness of the interventions we are funding, so that we can replicate those that are working well, and examine ways to improve those that do not have the outcomes that we expected. The bill would also increase the dissemination of research findings, so that those working in low-resource settings would be able to easily learn and implement cost-effective interventions in their communities.

I am proud to support increases for PEPFAR, but I also believe that we must ensure that these increases are targeted toward effective programs that reach as many people as possible. This legislation will help us achieve that goal. I look forward to working with my colleagues in the Senate to support this legislation and operations research as we move forward with PEPFAR reauthorization.

Mr. President, I ask unanimous consent that a letter of support be printed in the Record.