Southwest Border Violence Reduction Act of 2008

Mr. President, Medicare and Medicaid cost the American taxpayers a combined $770 billion in 2007; Medicare costing $432 billion and Medicaid $338 billion. In 2007, the Federal Government's share of Medicaid expenditures was $190 billion and is expected to be $402 billion by 2017.

Medicare expenditures alone account for 3.2 percent of GDP. Over the next 75 years these expenditures are expected to explode to almost 11 percent of GDP. Every American household's share of Medicare's unfunded obligation is like a $320,000 IOU.

The Medicaid Program, because of the promise of a generous Federal match of State Medicaid dollars, has given States heavy incentive to increase their State Medicaid spending. Medicaid spending now accounts for 26.3 percent of state budgets, up from just 6.7 percent in 1970. In some States, as much as half of all new revenues will go to Medicaid in the coming years.

We have heard a lot of talk about bi-partisan commissions on entitlement reform come out of the Budget Committee, but the least that we can do is to stop blatant fraud and abuse in the mean time. Eliminating waste, fraud, and abuse is a baby step in addressing entitlements. The Centers for Medicare and Medicaid Services, CMS, has worked over the last 5 or so years to curb waste, fraud, and abuse. They have done work on a State-specific basis and also by promulgating detailed regulations so that States have the clarity they need. Over the years, Medicaid has proven to be a program susceptible to fraud, waste, and abuse. Many States have pushed the limits of what should be allowed to maximize the Federal dollars sent to them.

The Government Accountability Office, GAO, put Medicaid on its ``high risk'' report a few years back because of questionable financing and the lack of accountability.

According to the Wall Street Journal:

The GAO and other federal inspectors have copiously

documented these ``creative financing schemes'' going back to

the Clinton Administration. New York deposited its proceeds

in a Medicaid account, recycling federal dollars to decrease

its overall contribution. So did Michigan. States like

Wisconsin and Pennsylvania fattened their political

priorities. Oregon funded K-12 education during a budget

shortfall.

According to the Wall Street Journal:

The right word for this is fraud. A corporation caught in

this kind of self-dealing--faking payments to extract

billions, then laundering the money--would be indicted. In

fact, a new industry of contingency-fee consultants has

sprung up to help states find and exploit the ``ambiguities''

in Medicaid's regulatory wasteland. All the feds can do is

notice loopholes when they get too expensive and close them,

whereupon the cycle starts over. No one really knows how much

the state grifters have already grabbed, though the

Congressional Budget Office estimates that the Administration

remedies would save $17.8 billion over five years and $42.2

billion over 10. We realize this is considered a mere

gratuity in Washington, but Medicaid's money laundering is

further evidence that Congress isn't serious about spending

discipline.

Examples of fraud in the Medicaid Program are plentiful. One dentist billed medicaid 991 procedures in a single day. According to the New York Times, a former State investigator of Medicaid abuse estimated that as much as 40 percent $18 billion of New York's Medicaid budget was inappropriate. New York spent $300 million of its Medicaid money on transportation.

In 2005, Congressional testimony showed that 34 States hired contingency-fee consultants to game Federal Medicaid payments.

Medicaid regulations by CMS are efforts to provide clear guidance in critical areas where there have been well-documented problems and result from years of work on the part of CMS and myriad reports by the GAO and the Office of the Inspector General, OIG, at the Department of Health and Human Services, HHS.

When CMS doesn't know how a State is billing for a service and States don't have clear guidance for how they should, neither Medicaid beneficiaries nor the taxpayers are well served. The Medicaid regulations fix that problem.

According to the Congressional Budget Office, CBO, the regulations would save the Medicaid Program $17.8 billion over 5 years and $42.2 billion over 10 years by eliminating wasteful and fraudulent Federal payments to the program.

The Federal Government will spend $1.2 trillion over the next 5 years on Medicaid, so the regulations save only about 1 percent of Federal spending on Medicaid. If Congress is afraid of taking on these very modest changes to Medicaid, does it really have the will to take on the special interests that is necessary to truly address entitlement reform?

The very purpose of these regulations is to build accountability into the Medicaid Program that is long overdue. The proposed delay is a budgetary gimmick to avoid paying for the real costs of delaying the Medicaid regulations.

CBO estimates that delaying the rules until April 1, 2009 would cost $1.65 billion. However, if the rules were withdrawn or permanently delayed--as it is likely they would be under the next administration-- the CBO estimates a 5-year year cost of $17.8 billion and a 10-year cost of $42.2 billion. Even if the regulations should be delayed, a war supplemental is the wrong place to include Medicaid policy changes. The war supplemental is given expedited consideration procedures because funding our troops is an urgent matter. The Medicaid regulations have been considered for years, and Congress has already put one 6-month delay on them. This isn't a new or urgent issue that justifies inclusion in a war supplemental.

If ensuring that America's safety net programs are adequately funded is such an important issue, it deserves the full debate and consideration of the Senate. Burying a flat-out moratorium of Medicaid regulations on a war supplemental appropriations bill isn't being honest with the American people. Congressional leaders put a moratorium on the Medicaid regulations last year and are poised to do so again. If Congress truly opposes the regulations, then it should repeal them instead of pretending to ``study them'' a little longer. However, Congress is avoiding that kind of honesty because it will cost ten times the amount of a moratorium.

Instead of blaming the Bush administration, Congress needs to decide for itself how it will address waste, fraud, and abuse in the Medicaid Program. The Bush Administration has taken its turn and taken a stand to protect the integrity of one of our largest entitlement programs. Now it is Congress's turn.

This is no longer about the Bush administration. This is now about Congress. Congress needs to decide whether or not it will ignore years of GAO and HHS OIG reports. Congress needs to decide whether it will listen to their State Medicaid directors and Governors or whether it will safeguard taxpayer dollars.

States have had their turn and demonstrated that they will take advantage of loopholes, ambiguities, and lack of clarity. Congress is the one ultimately responsible for these programs. Congress is elected to set policy and fund priorities.

By imposing another moratorium, Congress is failing to live up to its responsibilities. Congress is running away from them. Congress has closed its eyes and ears to the abuses that have been going on. By stopping the regulations from going into effect, Congress is simply giving more sugar to a diabetic. It may feel good for a moment, but it is not good in the long run. Congress doesn't really need another year to deal with these issues. These abuses have been going on for a long time. The GAO and the OIG have been issuing audits and reports on the abuses for years.

Problems with the regulations themselves warrant a conversation not a moratorium. There have been very few substantive policy disagreements with the administration's regulations. The Finance Committee hasn't engaged the administration on specific problems with the regulations. There have been no hearings over the last 6-month delay. The only ``hearing'' that has occurred is the parade of Governors and providers pleading to not turn off the funding.

The rule to impose a cost limit on government providers--CMS-2258--is commonsense and good government. The cost rule saves $9 billion over five years and $22 billion over 10 years by ending creative State financing schemes. First, it requires that providers, like hospitals and nursing homes and physicians, receive and retain the total computable amount of their Medicaid payments for the services they provided. Why would Congress object to that? It seems simple that if you provided a service, you should get to keep the money.

During the 1990s, States figured out creative ways to pass off their obligations to providers. That was wrong and unfair. Each time Congress stopped one financing practice, a new financing scheme popped up.

In 1991, Congress cracked down on loopholes in provider taxes. States opened up new loopholes. In 1997, Congress cracked down on abuses in the disproportionate share hospital, DSH, payments program. In 2000, it tried to stop the abuses in upper payment limits, though it failed to close them completely.

In 2003, the Bush administration put new emphasis on ending these schemes through the State plan amendment review process. This strategy proved to be effective and many States ended their ``recycling'' arrangements. But some States complained to Congress.

In July 2004, Senator Baucus wrote the Administrator of CMS:

As you know, and as I indicated to you in those

conversations, I feel strongly that any new CMS policy on

intergovernmental transfers (IGTs) must be implemented in a

manner that is transparent, that is applied equally to all

states, and that responsibly takes into account the

potentially serious financial consequences of eliminating a

source of state funding on which some states have a

longstanding reliance. Based on my understanding of current

law and practice, with respect to IGTs, and on my interest in

promoting public confidence in government decision-making

judgment that a rulemaking or legislative process is

warranted in these circumstances. Accordingly, I urge you to

develop rules or a legislative proposal as soon as possible

on this issue.

The current chairman of the Finance Committee requested Medicaid regulations nearly 4 years ago. The administration has responded to that request by promulgating regulations. As soon as the regulations left the desk of the CMS Administrator, Congress blocked them from going into effect LAST year. What has Congress done since then in the way of hearings or conversations with CMS? Nothing. What is Congress doing now? Trying to delay them again.

Chairman Baucus is right about treating States equally; Congress needs to let CMS do so. It is ironic that hospitals are telling Members to stop the Medicaid rules. The policy of the cost rule is that providers should get to keep the full amount of Medicaid reimbursement paid for the services they deliver. Why should hospitals or other types of providers be forced to send part of their payment for services back to the State or local government? It is not their responsibility to fund the State's share of the cost of Medicaid. That is the responsibility of the State and local governments.

Another major part of the cost rule seeks to limit government providers to cost. This has been a recommendation of GAO dating back to 1994. Under this provision, government providers would receive 100 percent of their costs for delivering services to a Medicaid recipient. But they would be limited to cost, they simply could not charge a ``profit'' to the Federal taxpayers.

A government entity shouldn't bill the taxpayer for more than the cost of delivering a service. That is nothing more than Medicaid subsidizing non-Medicaid activities. If State and local officials decide not to fund a program, that doesn't mean the Federal taxpayer should pick up the tab.

Congress may have heard pressure from their States about how the cost rule will ``shred the safety net.'' If Congress really cared about hospitals, shouldn't Congress be supporting the policy that they get paid in full? When this type of policy was put in place in California, revenues to hospitals increased by 12 percent.

If Congress really cared about providers, there are other tax-relief policies that would be helpful to them. Provider taxes on hospitals, nursing homes, and others totaled $12 billion in 2007.

The estimated savings for the cost rule for 2008 and part of 2009 is about $770 million. If you accept the argument that all providers in the entire country will ``lose'' $770 million if the cost rule goes into effect, consider that the hospitals in New York alone paid $2 billion in provider taxes. The hospitals in Illinois paid $747 million in provider taxes. If Congress really cared about them, what about a little tax relief instead?

The real story is that States are using creative ``provider taxes'' to forego paying their share of the Medicaid Program. A few years back, Congress gave a special deal to Illinois supposedly to support the Cook County Hospital system worth about $350 million per year. The hospital is forfeiting more than $300 million in order to generate supplemental payments back to the State for this.

If you add provider taxes and what Cook County Hospital is forfeiting, it totals a billion dollars per year impact on Hospitals in Illinois. Instead of addressing that blatant example of taxpayer money abuse, these rules are an easier target.

Senator Baucus is right that the States should be treated equally. The Senate should instruct the Finance Committee to identify all of the special treatment situations and report legislation to get rid of them.

The school-based administrative costs and transportation rule--CMS- 2287--ensures that Medicaid money goes for medical care--not school buses. First, those individuals and groups who have been scaring parents of a child with a disability that this rule will end their child's treatment need to hear the truth about what this rule does. Schools are required to provide such services and if a child is on Medicaid, Medicaid will continue to pay for medically necessary services. This rule ensures that Medicaid pays only for medical and medically necessary services. Medicaid administrative claiming among schools varies widely among States. There are many States that do not bill Medicaid for administrative activities at all. Much of the funding is concentrated in a small group of States.

Abuses in administrative claiming have been well documented. Comments on the rule confirm that schools are simply using Medicaid as a source of revenue to support activities that are related to education, not health care.

Medicaid reimbursement has been used for a wide variety of unrelated purposes such as instructional materials and equipment or to fund staff positions. Schools use funds to attend workshops and purchase educational technology and materials, even to support after school activities, arts and music programs.

There is no problem with those types of programs, but there is a problem when Medicaid is paying for them. If citizens at the local level decline to raise their property taxes for education, that doesn't mean that Federal taxpayers should have to pick up the tab. If State legislators increase funding for transportation rather than education, Medicaid shouldn't be the means of easing the impact of their decision.

Allowing schools access to open-ended funding of Medicaid with virtually no accountability will erode the decision making process of every school board, State legislature as well as the Federal Government.

Another rule--(CMS-2279) would stop the use of Medicaid dollars-- intended for low-income people--going to fund training for doctors.

There is no question that training the next generation of physicians in this country is important. However, it should be paid for out in the open. There needs to be accountability as to where the dollars go and for whom they are used.

Under Medicaid's graduate medical education, GME, funding, there is no obligation on the part of physicians who are trained with Medicaid dollars to serve Medicaid patients once the physicians graduate. In contrast both the military and the public health service corps require time commitments as repayments for help with medical school.

There is no authority in the Medicaid statute to pay for GME. It is not there. Congress and CMS don't even know the exact fiscal impact of this rule because states are not required to report expenditures as

Mr. President, today we are voting on funding our troops on the front lines. We can disagree about whether we should be in Iraq at all and we can disagree with the President's failed policies, but as long as Americans are in harm's way, we need to give them the best possible protection this country has. To me, that is a sacred obligation. In terms of protection, there are a lot of reasons to vote for this funding--it provides $2 billion to fight deadly improvised explosive devices, it funds 25 C-130s to replace planes worn out by nonstop use moving people and supplies around the war zone, it gives more assets to families, it funds much needed military health care, and it provides $1.7 billion for Mine Resistant Ambush Protected vehicles. That is a good thing.

Now in our fifth year of the Iraq war and the seventh year of the war in Afghanistan, it often seems that good news is hard to come by. But sometimes good things do happen here on the Senate floor. Sometimes we are able to profoundly improve the odds for American men and women fighting in those wars. For my colleagues, I would like to review one good story.

For me, this story begins in the summer of 2006 on one of my trips to Iraq. A Marine commander in Fallujah showed me a new vehicle they were using called a Buffalo. He told me that these Buffalos were saving lives and that they needed more of them. I was impressed. This Buffalo was a huge vehicle with a large claw arm, high off the ground, with a v-shaped undercarriage. I found out later that it was the largest of a group of vehicles called Mine Resistant Ambush Protected vehicles, or MRAPs.

So, when the next wartime funding bill came to the Senate, I looked into what was going on with these MRAPs. The most important thing that I found out was that military experts were starting to say that MRAPs could reduce casualties from improvised explosive devices, those roadside bombs also called IEDs, by two-thirds. At that time, 70 percent of all the casualties suffered by Americans were caused by IEDs. So even if MRAPs only worked half as well as the military claimed, they would have a tremendous effect reducing deaths and injuries.

In a March 1, 2007, memo to the Chairman of the Joint Chiefs of Staff, General Conway, the Commandant of the Marine Corps, emphasized the importance of the MRAPs, saying, ``The MRAP vehicle has a dramatically better record of preventing fatal and serious injuries from attacks by improvised explosive devices. Multi-National Force-- West estimates that the use of the MRAP could reduce the casualties in vehicles due to IED attack by as much as 70 percent.'' He ended by saying, ``Getting the MRAP into the Al Anbar Province is my number one unfilled warfighting requirement at this time.'' Later that month, in testimony to Congress, General Conway told us that the likelihood for survival in Iraq was four to five times greater in an MRAP.

Two weeks after that memo was written, then Chief of Staff of the Army, General Schoomaker told the Committee on Appropriations of the funding shortfalls for MRAP procurement. I will be honest here. I was genuinely surprised. It was clear to me that this vehicle was essential and needed to be fielded as quickly as possible. I could not understand why funding was not already in the supplemental.

I looked into it and found out that in fiscal year 2006 and in the bridge fund for fiscal year 2007, there was a total of $1.354 million for MRAPs, but much more was needed because this was a new vehicle. Only one company was making MRAPs then, and the military was only ordering small amounts of them.

In February 2007 the military ordered and received 10 MRAPs. That is it. It became clear to me that we needed to do more to push this process.

The Marine Corps was running the program for all of the services. They told me that one issue was that the requirements in the field had changed dramatically--it started with a request for 185 in May of 2006, then another 1,000 were requested in July, the total went to 4,060 in November and to 6,728 in early February of 2007. By March, the total need was thought to be 7,774 MRAPs for all four services. The plan at the time was to spend $8.4 billion to build those 7,774 MRAPs--$2.3 billion in fiscal year 2007 and $6.1 billion in fiscal year 2008. The administration, however, had not asked for $2.3 billion. Despite this, my colleagues on the Appropriations Committee put $2.5 billion in their bill because they saw the need.

The Marine Corps believed that even that plan was not aggressive enough and that production could be accelerated if more funding was moved to fiscal year 2007. So I asked my colleagues to join me in adding another $1.5 billion to the wartime funding bill to produce and field 2,500 more MRAPs by December of 2007. I felt very strongly that we had to accelerate things. Some of you may remember that I came to the Senate floor in a tuxedo, to explain

how vital the funding was the night before the vote.

On March 29, 2007, we spoke as one. The vote was 98 to 0 to add the $1.5 billion and give the MRAP program a total of $4 billion. This Senate should be congratulated for that decision.

We stood up and said, ``We can do better.'' We also made clear our agreement with General Conway, who called this effort ``a moral imperative.''

I know that some had doubts. They were concerned that the vehicles had not been adequately tested and that producers simply could not expand production lines quickly enough. But in the end we all agreed that we had to take a chance on American industry because our kids' lives were at stake.

When the bill went into conference, some of our colleagues in the House had not yet realized how critical this was and what a difference early funding could make to the production schedule. So, the total in the final bill sent to the President in late May was reduced to $3.055 billion. The additional funds were important, but equally important was the interest that the debate sparked in the press.

Secretary Gates has said that he first heard about the MRAP program after reading a USA Today article. After which, on May 2, he made the MRAP program the Pentagon's top acquisition priority. On June 1, he gave the program a DX rating, giving it priority for the acquisition of critical items like steel and tires that multiple military programs need. He also established the MRAP Task Force to work on any issues that might delay MRAP production.

Despite Secretary Gates's clear understanding of the need for MRAPs, the fiscal year 2008 wartime funding request from the administration was only for $441 million. Four point one billion was needed just to produce the 7,774 MRAPs. So, on May 17, I formally asked the Armed Services Committee and the Appropriations Committee to provide the $4.1 billion needed. Again, to my colleagues' credit, 17 others joined those requests and both Committees responded with the $4.1 billion needed in the bills they presented to the Senate.

At almost the same time, we began to hear that the requirements in Iraq had grown again. GEN Raymond Odierno, commander of Multi-National Forces--Iraq, indicated that he wanted to replace all of the Army humvees in Iraq with MRAPS. That would mean the Army alone would need close to 17,700 MRAPs. The plan that we had been trying to fund included only 2,500 MRAPs for the Army. That now appeared to be 15,200 too few.

Given that MRAPs cost approximately $1 million per vehicle, that also meant that at least $15.2 billion more would be needed. We were now looking at a total price tag of over $23 billion for MRAPs, making the MRAP program the third most expensive in the entire defense budget.

It was clear to me, and to many colleagues here, that more needed to be done. Despite Secretary Gates's commitment to expedite production, there still seemed to be a lack of urgency in the administration and plenty of people were still saying that more MRAPs simply could not be produced quickly. So on May 23 I called on the President to personally engage so that the Nation could meet the needs of our men and women under fire.

I am sorry to say that we did not see the President engage. To this day, we must wonder how much faster we could have moved if he had.

Instead, in early July, the Army finally said publicly that they needed approximately 17,700 total MRAPs. The Joint Requirement Oversight Council, however, did not immediately approve that change. So, Congress was once again left knowing that the needs in Iraq were growing but not having a clear number or plan to meet the needs.

In speeches I made last year, I talked about some of the tensions within the military that slowed down the MRAP program, so I won't go into those details today. For now I will only quote Secretary Gates's analysis from May 13 of this year: ``In fact, the expense of the vehicles . . . may have been seen as competing with the funding for future weapons programs with strong constituencies inside and outside the Pentagon.''

Despite the frustration of not having a clear plan, some things were going well. The funding we had added to the supplemental combined with the hard work of the MRAP Task Force and MRAP program management team was making a difference. The Pentagon saw clear increases in production capacity and was ready to try to move faster. I told you that in February 10 MRAPs had been produced. In July, that number was up to 161--an amazing increase but clearly nothing close to the level needed to meet the requirement. The Pentagon asked Congress to approve moving $1.165 billion from other military programs to the MRAP program to try to keep growing the production. Congress agreed.

In July, I introduced an amendment to the Defense authorization bill to provide all of the funding that would be needed to get the Army 17,700 MRAPs and to deal with increased costs for the original 7,774 MRAPs that the committees had funded. I was also concerned that we were not moving fast enough to provide protection from explosively formed penetrators, EFPs, so I included funds for that work as well. The total amendment was for $25 billion, which included $23.6 billion for 15,200 MRAPs, $1 billion for cost increases, and $400 million for additional EFP protection. My goal at the time was very simple: to make absolutely clear to the Pentagon and to MRAP producers that Congress would provide all of the funding needed for MRAPs, up front and without delay, so that we could get these lifesaving vehicles to the front lines as quickly as possible.

That bill got delayed, but in the end, there was unanimous approval on September 27 for my amendment adding $23.6 billion to purchase 15,200 more MRAPs. The final bill, passed by the Senate on October 1, also raised the basic amount from $4.1 billion to $5.783 billion to address the increased costs for the 7,774 MRAPs already planned.

Three weeks later, October 23, the administration finally came to Congress and asked for $11 billion for 7,274 additional MRAPs for the Army. This officially made 15,374 the total request for all services and was approximately 8,000 MRAPs less than the Army appeared to need. However, at that time, Army leaders were telling us that they believed it was important to get MRAPs into the field and see how well they worked before committing to the much larger number. Concerned about this, I went to the floor again when it was time to debate the Defense appropriations bill. Mr. President, $11.6 billion was included for MRAPs, and Senator Inouye promised on the Senate floor to closely monitor the Army needs and he personally guaranteed that if those additional vehicles were needed, they would be funded.

By this time, production was truly ramping up. In October, 453 MRAPs were produced. By November we were up to 842, and by December we were at 1,189 MRAPs. That means we got a total of 3,355 MRAPs produced in 2007 even though in February, industry could only make 10 per month. In the span of 18 months, this program went from trying to meet a requirement for 185 MRAPs to meeting the requirement for 15,374 MRAPs. This Senate stepped up and said we will meet the need. We provided over $22.4 billion to give industry the ability to ramp up their production ability.

When I argued in March that we could deliver close to 8,000 MRAPs to Iraq by February of 2008, some said it was impossible. We came close. Five thousand seven hundred and twelve MRAPs had been produced by the end of February.

As of this week, just under 8,300 MRAPs have been produced. More important, 4,664 are fielded and in the hands of front line forces in Iraq and 456 are fielded in Afghanistan. The rest are on the way, and we are producing well over 1,000 per month.

Let me go back to where we started. Something profoundly good happened on this Senate floor last year. Last year, we made it clear that we would provide the best possible protection to our troops. We recognized that this was a matter of honor and a matter of life and death. The results have been phenomenal.

Secretary Gates said last Tuesday, ``MRAPs have performed. There have been 150-plus attacks so far on MRAPs and all but six soldiers have survived. The casualty rate is one-third that of a humvee, less than half that of an

Abrams tank. These vehicles are saving lives.''

MG Rick Lynch, commander of Multi-National Division--Central, which operates south of Baghdad, told USA Today just over a month ago, ``The MRAPs, in addition to increasing the survivability of our soldiers from underbelly attacks, also have improved force protection for EFP attacks as well. So I've had EFPs hit my MRAPs and the soldiers inside, in general terms, are OK.'' He also pointed out that he had lost 140 soldiers, many in up-armored HMMWVs or Bradleys hit by IEDs and said, ``Those same kind of attacks against MRAPs allow my soldiers to survive. I'm convinced of that.''

And soldiers know it. On April 4, the Atlanta Journal-Constitution quoted SSG Jamie Linen of the 3rd Infantry Division talking about using MRAPs in the Baghdad area. He said, ``It is the one vehicle that gives us the confidence to go out there. Nothing is invincible here. You got tanks with three feet of armor getting blown up. But the MRAPs give us a sense of security.''

MRAPs have not only saved hundreds of lives, they have also saved limbs. The additional protection MRAPs provide usually means that injuries are less severe and complicated. That means more soldiers, airmen, sailors, and marines coming home and able to return to the lives they left behind. There is really no price too high to get this result, so again, I want to congratulate this Senate. What we did last year to support the MRAP program was not all that had to be done--the program managers and producers also had to do their part--but it was essential, and today, every day, it is literally saving American lives. What we did today continues that effort.

We have no higher obligation than to give those fighting for us the best possible protection. It is a sacred duty. Today and last year, with the MRAP, we fulfilled that duty, and I congratulate my colleagues.

Mr. President, I come to the floor today to object to the inclusion of provisions that are clearly in the jurisdiction of the Finance Committee in an emergency supplemental appropriations bill to fund the war.

The supplemental appropriations bill seeks to place a moratorium on seven Medicaid regulations until the next administration.

It also prevents implementation of a CMS policy to ensure States cover poor kids before expanding their SCHIP programs.

I know some people have concerns with the CMS policies.

Let me be clear: I am not here to argue the regulations are perfect. I have issues with some of them I would like to see addressed.

However, the regulations do address areas where there are real problems in Medicaid.

Medicaid is a Federal-State partnership that provides a crucial health care safety net for some very vulnerable populations . . . low- income seniors, the disabled, pregnant women, and children. They depend on Medicaid, and it does generally serve them well.

Medicaid is also a program with a checkered history of financial challenges.

Medicaid has a history of States abusively pushing the limits of what should be allowed to maximize Federal dollars sent to them.

And while sometimes States have clearly pushed the envelope, at other times, States have struggled to understand what is and is not allowable in Medicaid.

So after years of work by CMS, numerous reports by GAO and the Inspector General at HHS, and frequent Congressional hearings, CMS issued regulations to try to clarify the rules in some very problematic payments areas of Medicaid.

I will start with the public provider regulation.

We know that in the past, many States used to recycle Federal health care dollars they paid to their hospitals to use for any number of purposes beyond health care.

It was an embarrassing scam that several administrations tried to limit.

For years, the Medicaid Program was plagued by financial gamesmanship. States used so-called intergovernmental transfers or IGTs, to create scams that milk taxpayers out of millions--even billions--of dollars.

Here is an example: a State bills the Federal Government for a $100 hospital charge. The hospital gets the $100 payment and then the State would require the hospital to give $25 of it back to the State. In my view, that is a scam.

What happens to the $25? In the days before Congress and CMS cracked down on the behavior, the money could go to roads or stadium construction.

That is right. Medicaid IGT scams paid for roads and stadiums instead of health care for the poor.

In 1991, 1997 and again in 2000, Congress took specific action to limit the States' ability to use payment schemes to avoid paying the State share of Medicaid.

CMS has continued their work since then.

Over the past 4 years, CMS has been working with States to try to limit these scams.

I will note these efforts have not been without their controversy. States have been very concerned about exactly what the new standards are.

Senator Baucus and I wrote the GAO and asked them to look into what CMS has been up to in trying to limit the way States make these payments.

We were concerned that there was not enough transparency in what CMS was doing.

And CMS did publish a rule for all to see. It is out there in the open.

The core goal of the rule is to limit provider reimbursement to actual cost.

I know some people consider this a radical idea, but I just don't understand why anyone thinks it is a good idea to have hospitals paid more than cost so they can be a part of these scams that rob the taxpayer to fund State pork.

Restricting payments to cost is not exactly a new idea. In 1994, GAO recommended that payments to government providers be limited to cost. This is a fundamental issue for program integrity.

What did GAO find in their 1994 report that led them to this conclusion?

The State of Michigan used these questionable transfers to reduce their share of the Medicaid Program from 68 percent, which is what it should have been, to 56 percent.

The GAO found evidence that in October 1993, the State of Michigan made a $489 million payment to the University of Michigan. Within hours, the entire $489 million was returned to the State.

The report found that in fiscal year 1993, Michigan, Tennessee, and Texas were able to obtain $800 billion in Federal matching funds without putting up the State Share.

Congress and CMS have spent the last 17 years combating that behavior.

Last year, the emergency supplemental included a provision to delay implementation of the public provider rule for 2 years.

Fortunately, cooler heads prevailed and the delay was reduced to 1 year.

But I wish to read what I said at the time. This is from remarks I made on March 28, 2007:

If some people think CMS has gone too far, then we should

review their actions in the Finance Committee. We should call

CMS in, make them testify, and ask the tough questions to

which we need answers. If we think there are things we should

have done differently, then we should legislate. That is the

way it ought to be done.

That is the right way to operate. We should have dealt with it in the Finance Committee.

We should have tackled the issues here that are extremely complex. They deserve thorough consideration so we can insure we are taking appropriate action.

But a year has passed with no action and instead we are here with this amendment to the supplemental appropriations bill. No hearings have been held. No testimony submitted. Nothing.

Making the CMS regulation go away opens the door for a return to the wasteful, inappropriate spending of the past.

Intergovernmental transfers can have a legitimate role, but it is critical that States have a clear, correct understanding of what is a legitimate transfer and what is not.

If the regulation goes away, those lines will still not be adequately defined.

Why should we care if the lines are not adequately defined? Let me read from the National Conference of State Legislatures Web site: ``IGTs can enhance a State's Federal match and thus bring additional funds to the State in two main ways. First, States can use county funds instead of State funds to generate a Federal match to support services provided by counties. Second, States can use IGTs to help it claim additional Federal funds based on upper payment limits. Under this model, a State can make payments to eligible public facilities using the rate Medicare pays for the same service, a rate that may exceed the State's standard Medicaid reimbursement rate. If it chooses to do so, a State then could use a portion of the new revenues generated--a share of the portion that remains after the standard Medicaid rate is paid for other goods or services.''

States speak openly about these payment schemes to maximize Federal dollars flowing to the States.

It is absolutely the worst thing we could do for the Medicaid Program to leave States without clear guidance on these types of payments.

We cannot simply walk away from this subject.

Now I would like to turn to the CMS regulation on graduate medical education. I personally think Medicaid should pay an appropriate share of graduate medical education or GME.

But I would like to see us put that in statute rather than return to the current customary practice because I do not think the taxpayers are well served by the way Medicaid GME operates today.

If we simply make the regulation go away, what are the rules for States to follow?

There are five different methods States use in billing CMS, 11 States don't separate IME from GME, and CMS cannot say how much they are paying States for GME.

Let me quote from a CRS memo I submitted for the Record during the budget debate a few months ago: ``States are not required to report GME payments separately from other payments made for inpatient and outpatient hospital services when claiming Federal matching payments under Medicaid. For the Medicaid GME proposed rule published in the May 23, 2007 Federal Register, CMS used an earlier version of the AAMC survey data as a base for its savings estimate and made adjustments for inflation and expected State behavioral changes, for example.''

To make their cost estimate for the regulation, CMS relied on a report from the American Association of Medical Colleges to determine how much they are paying for GME in Medicaid.

That is because the States do not provide CMS with data on how much they pay in GME.

That is simply unacceptable.

You can disagree with the decision to cut off GME, but simply leaving the current disorderly and undefined structure in place is not good public policy.

Now let me turn to the regulations governing school-based transportation and school-based administration.

Is it legitimate for Medicaid to pay for transportation in certain cases I think the answer to that is yes.

I do think it is legitimate for Medicaid to pay for transportation to a school if a child is receiving Medicaid services at school.

That said, we should have rules in place that make it clear that Medicaid does not pay for buses generally.

We should have rules in place that make it clear that schools can only bill Medicaid if a child actually goes to school and receives a service on the day they bill Medicaid for the service.

You can also argue that the school-based transportation and administrative claiming regulation went too far by completely prohibiting transportation, but if making this regulation go away allows States to bill Medicaid for school buses and for transportation on days when a child is not in school, we still have a problem.

It is also critical that Medicaid pay only for Medicaid services.

We all openly acknowledge the Federal government does not pay its fair share of IDEA.

Quoting from the CRS memo: ``States, school districts, interest groups, and parents of children with disabilities often argue that the Federal government is not living up to its obligation to `fully fund' Part B of the Individuals with Disabilities Education Act--IDEA, P.L. 108-446--the grants-to-States program.''

We can also acknowledge that just because IDEA funding is inadequate, States will try to take advantage of Medicaid to make ends meet.

Again quoting from the CRS memo: ``It is generally assumed that such transportation is predominantly provided to Medicaid/IDEA children.''

If a child is required to be in school under IDEA and receives a Medicaid service while in school, is the transportation of that child 100 percent Medicaid's responsibility?

We should define clear lines so that States know what is and is not Medicaid's responsibility.

Now I would like to turn to the rehabilitation services regulation.

I certainly would argue that Medicaid paying for rehabilitation services is good for beneficiaries. We want Medicaid to help beneficiaries get better.

But States must have a common understanding of what the word ``rehabilitation'' means in the Medicaid Program.

Again quoting from the CRS memo: ``Rehabilitation services can be difficult to describe because the rehabilitation benefit is so broad that it has been described as a catchall.''

Also, States need clear guidance on when they should bill Medicaid or another program.

Again quoting from the CRS memo: ``There is limited formal guidance for states in Medicaid statutes and regulations on how to determine when medically necessary services should be billed as rehabilitation services.''

You can say the CMS regulation went too far, but that doesn't mean there isn't a problem out there.

As CRS notes, billing for rehabilitation services between 1999 and 2005 grew by 77.7 percent. I am far from convinced that all of that growth in spending was absolutely legitimate.

Finally turning to the case management regulation, I first want to point out the issues relating to case management are a little different than issues associated with some of the other Medicaid regulations I have discussed so far.

The provision in the Deficit Reduction Act of 2005--DRA--relating to case management received a full review in the Finance Committee, along with Senate floor consideration and conference debate prior to enactment of the DRA. This regulation relates to a recently enacted statutory provision.

There is reason to believe that States have been using case management to supplement State spending. Some believe that States are shifting some of their child welfare costs to the Medicaid Program through creative uses of case management.

Concern about the inappropriate billing to Medicaid for child welfare services extends back to the Clinton administration.

There are some who would disallow most child welfare case management claims from reimbursement from Medicaid. This goes further than I would support. Getting these children the proper services requires thoughtful review, planning and management, and I believe that Medicaid has an appropriate role in supporting these activities.

On the other hand, driving a child in foster care to a court appearance and billing the caseworker's time to Medicaid is not an activity that should be billed to Medicaid.

Certainly, the regulations are not perfect. The degree that CMS has gone to in specifying how case management should operate conflicts with the efficient operation of the benefit in certain respects.

But again let me quote from the CRS memo:

Although there may be a number of issues related to

claiming FFP for Medicaid addressed in these sources, at

least two issues have been sources of confusion,

misunderstanding, and dispute. One issue where there has been

misunderstanding is non-duplication of payments. Another area

where there has been some disagreement is over the direct

delivery of services by other programs where Medicaid is then

charged for the direct services provided by the other

program.

When CMS tried to come up with rules to increase accountability in case management, they had good reason to be trying to provide clarity and specificity for States.

Surely the answer is not to tell States they are on their own to interpret the case management provision in the DRA.

As CRS notes, billing for case management services between 1999 and 2005 grew by 105.7 percent. With spending growing that fast, we must make absolutely certain States understand how they should be billing

Mr. President, before us today is a supplemental appropriations bill that would provide vital funding for the men and women fighting valiantly on our behalf abroad. Yet instead of acting on the needs of our military in an expeditious and efficient manner, we find ourselves considering a bloated bill, loaded down with extraneous provisions unrelated to the ongoing conflicts in Iraq and Afghanistan. Sadly, this has become an unfortunate and reoccurring trend in recent years.

Congress has an obligation to provide our servicemen and women with the resources they need to fulfill their mission. Yet we have, once again, chosen to abrogate our duties and use this bill as a vehicle to fund various domestic projects that were not requested by the President, nor are they authorized, and have not been handled through the appropriate legislative process.

The President has already stated his intention to veto this measure if it arrives at his desk in its current form. Rather than demonstrating true bipartisanship and working together to produce a bill that meets the needs of our military and one that has the potential of becoming law, the Senate intends to pass a bill will be passed that is sure to be met swiftly by the President's veto pen, unnecessarily prolonging the delay in funding our troops.

Let us not underestimate the necessity of providing this funding to our military promptly and the consequences of delaying such payment. In a recent letter to Congress, Under Secretary of Defense Gordon England stated in no uncertain terms that if this funding is not provided, ``the Army will run out of Military Personnel funds by mid-June and Operation and Maintenance (O&M) funds by early July.'' In order to deal with these depleted accounts, the Department of Defense--DoD--would be required to borrow funds from other service branch accounts, hampering ongoing DoD activities around the globe. Under Secretary England goes on to state in his letter that by late July, the entire Department will have ``exhausted all avenues of funding and will be unable to make payroll for both military and civilian personnel . . . including those engaged in Iraq and Afghanistan.'' Let us understand what this means. If this appropriations measure is not enacted in a timely manner, thousands upon thousands of men and women in uniform will stop receiving a paycheck and our ability to conduct operations throughout the world will be severely restricted.

When we should be working together to produce a clean bill that provides our servicemen and women with the vital resources they need to fulfill their duties, we have instead reverted to the same old Washington habit of loading spending bills with billions of dollars going to unrequested, non-emergency projects. Examples include: $75 million not requested by the administration for expenses related to economic impacts associated with commercial fishery failures, fishery resource disasters, and regulation on commercial fishing industries. This comes after Congress appropriated $128 million in 2005 for commercial fishery failures, $170 million in 2007 and included an additional $170 million in the Farm bill. Since 2005, Congress has provided almost $300 million for commercial fisheries disasters not including the $75 million in this supplemental and the proposed $170 million from the Farm bill. Additionally, questions remain by some commercial fishermen if this funding can be used to offset high gas prices which may be considered a disaster. The disaster here is that the American public isn't receiving any assistance on high gas prices.

Other examples are: $10 million not requested by the administration for Educational and Cultural Exchange programs; $75 million not requested by the administration for rehabilitation and restoration of Federal lands; more than $451 million not requested by the administration for emergency highway projects for disasters that occurred as far back as Fiscal Year 2005; $210 million not requested by the administration for the decennial census and $3.6 billion for 15 Air Force C-17 cargo aircraft. We have looked to the administration to inform Congressional budgetary decisions and the Department of Defense has been quite clear regarding the purchase of more of these cargo aircraft--they do not want them, because there is no military ``requirement'' for them and buying more C-17s is contrary to the Pentagon's current budget plan. DOD Secretary Gates, the DOD Deputy Secretary, and the Department's top acquisition official have all stated that additional C-17s were not necessary. Yet the Air Force continues to appeal to the parochial interests of Members of Congress, and once again the taxpayers find themselves on the wrong end of a bad decision. I am troubled by the Air Force's apparent disregard for proper acquisition policy, practice and procedure and seeming eagerness to further contractors' interests. As evidence of this, the Department of Defense Inspector General has an open investigation regarding how senior Air Force officials may have inappropriately solicited new orders for C-17s contrary to the orders of the President and the Secretary of Defense.

While I do not doubt the importance some may see in the various provisions included in the underlying bill, I strongly disagree with their inclusion in a war supplemental funding bill. Instead of attempting to hijack this vital legislation, the authors of these extraneous provisions should pursue their objectives through the normal legislative process and as part of appropriate authorizing and spending vehicles.

I also want to express my concerns about the authorizing legislation included in this emergency supplemental regarding veterans' educations benefits, commonly referred to as the Webb bill. There have been a lot of misrepresentations made about my position on this issue--not only on the Senate floor by the majority leader, who has alleged that I think the Webb bill is ``too generous,'' which is absolutely false, but most recently in an ad by VoteVets.org, which offers a complete misrepresentation of the facts and is a disservice to our Nation's veterans. I will once again attempt to set the record straight.

I believe America has an obligation to provide unwavering support to our veterans, active duty servicemembers, Guard and Reserves. Men and women who have served their country deserve the best education benefits we are able to give them, and they deserve to receive them as quickly as possible and in a manner that not only promotes recruitment efforts, but also promotes retention of servicemembers. I would

think we could have near unanimous support for such legislation and I am confident that we will reach that point in the days ahead. But adding a $52 billion mandatory spending program to this war funding bill without any opportunity for amendments to improve the measure is not the way to move legislation nor will it expedite reaching an agreement in an efficient manner. Our vets deserve better than this.

On numerous occasions I have commended Senators Webb, Hagel and Warner for their work to bring this issue to the forefront of the Senate's attention. Their effort has been for a worthy cause, but that does not make it a perfect bill, nor should it be considered the only approach that best meets the education needs of veterans and servicemembers. In fact, the Congressional Budget Office estimates that if their bill is passed, it will harm retention rates by nearly 20 percent. That is the last thing we need when our Nation is fighting the war on terror on two fronts.

Senators Graham, Burr and I, along with 19 others, have a different approach, one that builds on the existing Montgomery GI Bill to ensure rapid implementation of increased benefits. And, unlike S. 22, we think a revitalized program should focus on the entire spectrum of military members who make up the All Volunteer Force, from the newest recruit to the career NCOs, officers, reservists and National Guardsmen, to veterans who have completed their service and retirees, as well as the families of all of these individuals.

We need to take action to encourage continued service in the military and we can do that by granting a higher education benefit for longer service. And, we need to provide a meaningful, unquestionable transferability feature to allow the serviceman and woman to have the option of transferring education benefits to their children and spouses. S. 22, unfortunately, does not allow transferability. As a matter of fact, 2 days ago, Senators Webb and Warner agreed that transferability is a serious matter that merited change. What they proposed, however, does not go far enough and would only provide for a 2-year pilot program. Their efforts underscore the need for debate and further discussion on this important issue. But I applaud them for acknowledging the Congress needs to take a proactive stance and allow transferability of earned education benefits to a spouse or children.

We cannot allow this important issue to be hijacked by the anti-war crusade funded by groups like MoveOn.org and VetsVote.org who are running ads saying that that I do not ``respect their service.'' The accusation is wrong, they know that it is, and they should be ashamed of what they are doing to all veterans and servicemembers. I respect every man and woman who have been or are currently in uniform.

It is my hope that the proponents of the pending veteran's education benefits measures can join together to ensure that Congress enacts meaningful legislation that the President will sign and as soon as possible. Such legislation should address the reality of the All Volunteer Force and ensure that we pass a bill that does not induce servicemen and women to leave the military; but instead bolsters retention so that the services may retain quality servicemen and women. It must be easily understood and implemented and responsive to the needs not only of veterans, but also of those who are serving in the active duty forces, the Guard and Reserve, and their families. Their exemplary service to our nation, and the sacrifice of their families, deserves no less.

As we move forward with consideration of this supplemental appropriations legislation, we must remember to whom we owe our allegiance--the soldiers, sailors, airmen and marines fighting bravely on our behalf abroad. These brave Americans need this appropriation to carry out their vital work, and we should have provided it to them months ago. The Congress, which authorized the wars in Iraq and Afghanistan, has an obligation to give our troops everything they need to prevail in their missions. Unfortunately, it seems we have failed to live up to this obligation today, instead producing a bill fraught with wasteful spending more attuned to political interests instead of the interests of our military men and women.

Mr. President, I rise to speak briefly about a number of important provisions in this domestic funding amendment. I am delighted that this amendment passed the Senate by an overwhelming vote of 75-22, and I hope the House will pass it swiftly and overwhelmingly as well.

There are many provisions in this amendment that will meet many important needs we are facing as a country, but I would like to mention a few that are of particular note. First, the bill contains a total of $15 million to help reduce drug-related violence in the border region by aggressively stepping up efforts to prevent weapons from being smuggled into Mexico to arm drug cartels. Of this money, $5 million would be allocated for ATF to provide assistance to Mexican authorities in investigating weapons trafficking cases and $10 million would be set aside for ATF to enhance Project Gunrunner Teams in the southwest border States.

This funding is based on S. 2867, the Southwest Border Violence Reduction Act, which I recently introduced with Senator Hutchison. This measure is also cosponsored by Senators Feinstein, Kyl, Durbin, and Domenici.

According to ATF, about 90 percent of the firearms recovered in Mexico come from the United States. These weapons are used by drug gangs to forcefully maintain control over trafficking routes and greatly undermine the ability of Mexico to fight drug traffickers. These violent groups use smuggled weapons to assassinate military and police officials, murder rival members of drug organizations, and kill civilians. In the Mexican state of Chihuahua, which shares a border with New Mexico, there have been over 200 killings since the beginning of 2008, an increase of about 100 percent over the previous year.

Violence perpetrated by international drug trafficking organizations impacts the well-being and safety of communities on both sides of the United States-Mexico border. I am pleased that additional resources are being allocated to target weapons trafficking networks and enhance international cooperation in investigating these cases.

The second provision I would like to discuss relates to assistance we are providing to local law enforcement situated along the southern border. The bill includes $90 million for a competitive grant program within DOJ to help local law enforcement along the southern border and other agencies located in areas impacted by drug trafficking. As the sponsor of the Border Law Enforcement Relief Act, I have been pressing for Congress to help border law enforcement agencies with the costs they incur in addressing criminal activity in the border region. I strongly believe this funding is greatly needed and I am glad the Congress is giving this issue the attention it deserves.

This bill also takes an important step forward in advancing our economic security by increasing funding for math and science education programs by $50 million. In America Competes, this Congress recognized that in order to ensure an educated and skilled workforce, we needed to strengthen math and science education. Accordingly, we significantly expanded math and science education programs at the National Science Foundation. I am particularly pleased to see an increase of $20 million in the Robert Noyce Scholarship program, which recruits and prepares talented students and professionals to become math and science teachers. The bill also contains an additional $24 million to support graduate study in STEM fields.

Further, earlier this year Senators Domenici, Alexander, Dorgan, Corker, Feinstein, Kennedy, Schumer and I wrote a letter to the Appropriations Committee requesting $250 million for the Department of Energy's Office of Science. This bill allocates some $900 million for agencies performing science, including $100 million for the DOE's Office of Science. In addition, it provides $400 million for the National Institutes of Health to keep its budget up with inflation and $200 million for NASA and their space flight mission. I am grateful to the committee for recognizing the importance of science and taking it into account in this supplemental appropriations bill.

In light of the ``silent tsunami'' of the food crisis in the developing world, I am pleased that the Senate version of the supplemental provides for approximately $1.2 billion in funding for food aid through fiscal year 2009. I am also pleased that USAID will reportedly announce a $45 million package in food aid for Haiti, of which $25 million will be distributed via the World Food Programme, at a press conference tomorrow morning.

However, I believe that more needs to be done for Haiti. According to Haitian President Rene Preval, Haiti needs $60 million in U.S. food aid assistance to avert famines over the next 6 months. Accordingly, I call upon USAID to allocate at least $60 million of the $1.2 billion food aid appropriation to Haiti.

Haiti is the poorest country in the Western Hemisphere, where approximately 76 percent of Haiti's population subsists on under $2 per day and 55 percent on under $1 per day. One in five Haitian children is malnourished. We must address these challenges, partly for reasons of preserving stability in the Caribbean, and partly to provide an alternative to emigrating to the United States, but mostly because it is the right thing to do.

I am also pleased that the supplemental provides for $100 million of assistance for Central America, Haiti, and the Dominican Republic to support the Merida Initiative in those regions and countries. In particular, I am pleased that the Senate version of the supplemental set aside $5 million of this money to combat drug trafficking and for anticorruption and rule of law activities in Haiti. This amount doubled the $2.5 million called for in the House version.

Last year, when the Drug Enforcement Agency stationed two helicopters in Haiti on a temporary basis, the level of cocaine shipments transiting the country by air and sea declined significantly. This decline resulted in lower levels of corruption in Haiti and less cocaine reaching the United States. I hope that today's $5 million in funding for Haiti will replicate these successes,

and I call upon the DEA to use a portion of these funds to increase interdiction capability in Haiti by placing helicopters there on a more sustained basis.

Finally, I would also like to voice my strong support for provisions within this legislation to block attempts by the Bush administration to reduce health care access for low-income children, seniors, and others. In the last year and a half the Bush administration has aggressively attempted to shrink the Federal Medicaid program by reducing the ability of States to provide Medicaid coverage to their most vulnerable populations. These actions have been taken under the ruse of ``fraud and abuse'' reforms but we should be clear about what they really are, an attempt to reduce Federal expenses on the backs of poor Americans. At a time when we are spending approximately $12 billion a month on the war, that is about $5,000 a second, and at a time when so many Americans are facing economic hardship and will be depending on low- income programs, it is unconscionable that the Bush administration is attacking the poorest among us--all in a weak attempt at appearing fiscally responsible.

These programs are critical to many low-income patients and safety- net providers in my home State of New Mexico and across the Nation. For example, the most significant of the administration's proposals would devastate New Mexico's Sole Community Provider Fund, which plays a critical role in ensuring New Mexicans in rural areas of the State have access to life-saving hospital services and funds programs for uninsured New Mexicans. It also would cause the University of New Mexico Hospital and other New Mexico institutions to lose millions of dollars for the care they provide to our low-income residents. It is important to note this is not a partisan issue. I have worked for the last year and a half to block this specific proposal including introducing legislation with Senator Dole, S. 2460. Seventy-four members of the Senate, Democrats and Republicans alike, have gone on record opposing this Bush proposal. We were successful in blocking it last year and I am very pleased that we are acting to block it for an additional year.

Sadly, the Bush administration's proposals don't end there. The White House also would undermine the ability of schools to help enroll children in Medicaid and coordinate their health care services. The administration would also cut rehabilitation services provided to people with disabilities, especially those with mental illness and intellectual disabilities; cut case management services for the elderly, children in foster care and people with disabilities; reduce specialized medical transportation services for children; and severely limit Medicaid payments for outpatient hospital services. Finally, the administration also is attempting to severely limit States' abilities to expand enrollment of children in the State Children's Health Insurance Program or SCHIP.

Taken together the Bush administration's efforts would cost my State approximately $180 million this year in Federal low-income support and much more in subsequent years. The Nation's Governors oppose the Bush administrations efforts, as do State Medicaid directors, State legislators, and the National Association of Counties. More than 2,000 national and local groups--such as the American Hospital Association, the American Federation of Teachers, and the March of Dimes--also oppose these efforts. They know the devastating effect these rules would have on local communities, their hospitals, and vulnerable beneficiaries.