Department of Defense Financial Accountability Act of 2009

Mr. President, I rise today to introduce the Medicare Transitional Care Act of 2009. Time and again, we have heard that our health care system is not working. Costs are too high, outcomes too poor and access too limited. I agree with so many of my colleagues that we need to work together to ensure that all Americans have access to quality and affordable health care.

Everyone deserves stable health care coverage that they can count on, regardless of the job they hold or the curveballs life may throw. All Americans should be able to count on insurance premiums and deductibles that will not continue to rise and eat away more and more of our paychecks. Finally, all Americans deserve stable care that lets you keep your doctor, and your health care plan, that you trust and with whom you have built a relationship.

Let me be clear: health care costs are too high. Every day in New Hampshire and across our country, families are struggling with the crushing cost of health care that threatens their financial stability, leaving them exposed to higher premiums and deductibles, and putting them at risk for a possible loss of health insurance coverage and even bankruptcy. In 2007 our Nation spent $2.2 trillion--or 16.2 percent of the GDP on health care. This is twice the average of other developed nations. As a Nation, our health outcomes are no better. We still lag behind other countries when it comes to efficiency, access, patient safety and adoption of information technology.

It is essential that we cut our Nation's health care costs and improve the quality of care our patients receive.

I rise today to offer a solution that can help address this crisis. I rise to introduce the Medicare Transitional Care Act of 2009-- legislation that will reduce costly hospital readmissions, improve Medicare patients' care and cut Medicare costs. I thank Representative Blumenauer and Representative Boustany for their leadership on this issue in the House and I am pleased to be joined by colleagues, Senator Collins, and Senator Lincoln, in introducing this legislation.

This bill is about reducing costs and offering better support and coordination of care to Medicare patients. It will help keep seniors who are discharged from the hospital from going back. Simply put, it will improve the health care we offer our seniors while saving money.

According to a report from the New England Journal of Medicine, almost one third of Medicare beneficiaries discharged from the hospital were re-hospitalized within 90 days. One half of the individuals re- hospitalized had not visited a physician since their discharge, indicating a lack of follow-up care. The study also estimated that in 2004 Medicare spent $17.4 billion on unplanned re-hospitalizations. This problem is costly for our government and troublesome for our seniors. But the good news is that this problem is avoidable.

Research shows that the transition from the hospital to the patient's next place of care--be it home, or a nursing facility or rehabilitation center--can be complicated and risky. This is especially true for older individuals with multiple chronic illnesses. These patients talk about the difficulty remembering instructions, confusion over correct use of medications, and general uncertainty about their own conditions.

For example, take Michael, a 71-year-old patient who lives with his 73-year-old wife, and has diabetes. Michael had a knee replacement that required two surgical revisions. He uses a walker and has been hospitalized four times. He says ``they would discharge me and the same day I'd be back in the ER. The wound would burst apart.'' Under this legislation, a transitional care clinician could be there to help make sure that Michael and his wife do not need to go back to the hospital.

Let me also tell you about Bill. Over time, Bill has endured a heart attack that required open heart surgery, angioplasty with stent placement, stroke, kidney disease, HIV and depression. He has been hospitalized three times, underwent rehabilitation therapy in an inpatient facility once and lives alone. He says ``there was no help at home [after surgery]. My mother

came and took care of household stuff. I was flat on my back for two weeks. The hospital called to make sure I was okay--`Hey how are you doing?'--but what could they do?'' Bill also notes the difficulty he had with discharge instructions: ``By the time I'm home,'' he says, ``I don't remember what the doctor said. Sometimes they write it down, but I have comprehension problems.''

Stories like Bill's and Michael's demonstrate that patients need support and assistance to manage their health needs along with their caregivers. This legislation provides that opportunity.

Under the Medicare Transitional Care Act, a transitional care clinician would help ensure that appropriate follow-up care is provided to patients during the vulnerable time after discharge from a hospital--and help ensure that they are not re-hospitalized unnecessarily.

The benefit would be phased-in and provided first for the most at- risk individuals. It will be tailored to their needs. It may be as simple as making sure each patient understands how and when to take their medication; or helping to make sure they schedule and are able to get to follow-up appointments with the doctors, or it may be helping patients and caregivers coordinate support services, such as medical equipment, meal delivery, transportation or assistance with other daily activities.

I am pleased that the legislation has the strong support of the AARP.

Proper transitional care is important not only to reduce hospital readmissions, but also to improve patient outcomes and satisfaction. Experts estimate that this legislation could save as much as $5,000 per Medicare beneficiary.

I look forward to working with my colleagues in the Senate to pass comprehensive health care reform to fix our broken system. I urge them to join me in supporting a transitional care benefit that will support patients during the very vulnerable time after discharge from the hospital. The evidence is clear. We can implement a transitional care option that will save money by reducing hospital re-admisssions while improving the quality of care we deliver to patients in New Hampshire and all across this country.

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

Mr. President, today Senators Coburn, Grassley, and I are introducing the Department of Defense Financial Accountability Act of 2009, which imposes hard legislative deadlines on the Department of Defense to finally fix its broken bookkeeping system. This legislation is not only necessary, it is long overdue.

The bill establishes a series of deadlines, beginning next year and running through 2017, for DoD and the Services to become audit ready. In particular, it compels the Services to account for military equipment, real property, inventory, operating materials and supplies, environmental liabilities, and fund balances with Treasury. Thereafter, DOD must undergo a full, independent audit of its financial statements. If DoD fails to meet any deadline set forth in the bill, it must timely document and explain its failure to Congress.

The Department of Defense is the most massive and complex of any organization, public or private. It is entrusted with more taxpayer dollars than any other federal department or agency. For fiscal year 2009 alone, Congress appropriated over $513 billion for DoD's base budget. It added an additional $7.4 billion for DoD in this year's so- called stimulus bill.

To support its business functions, DoD has thousands of separate business systems that it has layered upon one another for decades. They are archaic, overly complex, and error-prone. They are sometimes redundant and often lack standardization. It is no wonder that since 1995, GAO has classified the Pentagon's financial management as high- risk, which makes it vulnerable to fraud and waste. Indeed, according to GAO, DoD's accounting problems cost the American taxpayer $13 billion in 2005--that's $35 million a day.

This has been a problem for decades. In 1975, the Army disclosed that it had spent $225 million over its budget because of a serious breakdown in its accounting and financial management reporting system. For fiscal year 1986, the Navy failed to disclose $58 million in real property, $1.7 billion in guaranteed loans, and data on operating leases on ships. According to the Government Accountability Office, between 1970 and 1980, the Air Force incurred numerous over obligations in amounts up to $210 million of its industrial funds. This would never be tolerated in the private sector.

This is not only about numbers and audits--this is also about the security of our troops and our nation. These broken systems affect operations and endanger our troops. Over the years, the GAO has reported that the Pentagon's poor financial management has caused pay problems for National Guard and reservists; impeded delivery of food and other essential supplies to U.S. troops; and had the Pentagon scrambling to identify and locate 250,000 defective chem-bio suits, some of which were being sold over the Internet.

Let me read into the record one account of how this impacted ongoing operations in Iraq. According to a February 5, 2006 Star Tribune news article: ``When Perry Jeffries was serving in Iraq, the computers showed that his 4th Infantry Division troops had access to drinking water, a place to shower and working wheels on their vehicles. As the first sergeant came to understand when scrounging for water, towing immobilized tanks and driving to other posts or to Kuwait to pick up needed parts, the Pentagon's bookkeeping doesn't always match reality. Jefferies saw the real-life results of what has been a visible `accounting' problem in Washington--the Pentagon's inability to keep accurate track of transactions and assets.''

Congress has already enacted several laws mandating financial management reform and the Office of Management and Budget has issued circulars on internal controls over financial reporting and financial management systems. Notably, none contain hard deadlines for an audit.

Meanwhile, DoD has repeatedly promised Congress that it would fix the problem. In 1999 and 2000, then-DoD Comptroller William Lynn testified before Congress that financial management reform was his highest priority. In fact, Mr. Lynn's successor, Dov Zakheim, set a deadline to have the Department of Defense audit ready by 2007. Under DoD's latest Financial Improvement and Audit Readiness Plan, that deadline is now 2017.

I want to recognize that the Department has tried, with varying degrees of effort, to improve financial management, but DoD auditors and GAO continue to report significant weaknesses.

I appreciate that our military is engaged in ongoing operations in Iraq and Afghanistan. That is why Senators Coburn, Grassley and I have sought to be reasonable and realistic with the deadlines. They are the same deadlines in DoD's current Financial Improvement and Audit Readiness Plan.

It has been 19 years since the CFO Act was passed requiring DoD and other departments to have an audit. It will be 2019--nearly 30 years after the passage of the CFO Act--before the Department of Defense is able to get an audit opinion, if we hold them to their current timeline. If we do not, this may never happen.

The ultimate outcome of this legislation will be the implementation of effective financial management processes, efficient business systems and strong internal controls that are essential to producing timely, reliable and useful financial information. Quality information will allow DoD to make informed business decisions and ensure accountability on an ongoing basis.

Every dollar we save through improved financial management is another dollar for our troops--for body armor, for medical supplies, for veterans care. Improved financial systems will ensure that troops in the future do not find themselves in the same straits as the 4th Infantry Division, searching for supplies that a computer says they already have.

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

Mr. President, today Senators Coburn, Grassley, and I are introducing the Department of Defense Financial Accountability Act of 2009, which imposes hard legislative deadlines on the Department of Defense to finally fix its broken bookkeeping system. This legislation is not only necessary, it is long overdue.

The bill establishes a series of deadlines, beginning next year and running through 2017, for DoD and the Services to become audit ready. In particular, it compels the Services to account for military equipment, real property, inventory, operating materials and supplies, environmental liabilities, and fund balances with Treasury. Thereafter, DOD must undergo a full, independent audit of its financial statements. If DoD fails to meet any deadline set forth in the bill, it must timely document and explain its failure to Congress.

The Department of Defense is the most massive and complex of any organization, public or private. It is entrusted with more taxpayer dollars than any other federal department or agency. For fiscal year 2009 alone, Congress appropriated over $513 billion for DoD's base budget. It added an additional $7.4 billion for DoD in this year's so- called stimulus bill.

To support its business functions, DoD has thousands of separate business systems that it has layered upon one another for decades. They are archaic, overly complex, and error-prone. They are sometimes redundant and often lack standardization. It is no wonder that since 1995, GAO has classified the Pentagon's financial management as high- risk, which makes it vulnerable to fraud and waste. Indeed, according to GAO, DoD's accounting problems cost the American taxpayer $13 billion in 2005--that's $35 million a day.

This has been a problem for decades. In 1975, the Army disclosed that it had spent $225 million over its budget because of a serious breakdown in its accounting and financial management reporting system. For fiscal year 1986, the Navy failed to disclose $58 million in real property, $1.7 billion in guaranteed loans, and data on operating leases on ships. According to the Government Accountability Office, between 1970 and 1980, the Air Force incurred numerous over obligations in amounts up to $210 million of its industrial funds. This would never be tolerated in the private sector.

This is not only about numbers and audits--this is also about the security of our troops and our nation. These broken systems affect operations and endanger our troops. Over the years, the GAO has reported that the Pentagon's poor financial management has caused pay problems for National Guard and reservists; impeded delivery of food and other essential supplies to U.S. troops; and had the Pentagon scrambling to identify and locate 250,000 defective chem-bio suits, some of which were being sold over the Internet.

Let me read into the record one account of how this impacted ongoing operations in Iraq. According to a February 5, 2006 Star Tribune news article: ``When Perry Jeffries was serving in Iraq, the computers showed that his 4th Infantry Division troops had access to drinking water, a place to shower and working wheels on their vehicles. As the first sergeant came to understand when scrounging for water, towing immobilized tanks and driving to other posts or to Kuwait to pick up needed parts, the Pentagon's bookkeeping doesn't always match reality. Jefferies saw the real-life results of what has been a visible `accounting' problem in Washington--the Pentagon's inability to keep accurate track of transactions and assets.''

Congress has already enacted several laws mandating financial management reform and the Office of Management and Budget has issued circulars on internal controls over financial reporting and financial management systems. Notably, none contain hard deadlines for an audit.

Meanwhile, DoD has repeatedly promised Congress that it would fix the problem. In 1999 and 2000, then-DoD Comptroller William Lynn testified before Congress that financial management reform was his highest priority. In fact, Mr. Lynn's successor, Dov Zakheim, set a deadline to have the Department of Defense audit ready by 2007. Under DoD's latest Financial Improvement and Audit Readiness Plan, that deadline is now 2017.

I want to recognize that the Department has tried, with varying degrees of effort, to improve financial management, but DoD auditors and GAO continue to report significant weaknesses.

I appreciate that our military is engaged in ongoing operations in Iraq and Afghanistan. That is why Senators Coburn, Grassley and I have sought to be reasonable and realistic with the deadlines. They are the same deadlines in DoD's current Financial Improvement and Audit Readiness Plan.

It has been 19 years since the CFO Act was passed requiring DoD and other departments to have an audit. It will be 2019--nearly 30 years after the passage of the CFO Act--before the Department of Defense is able to get an audit opinion, if we hold them to their current timeline. If we do not, this may never happen.

The ultimate outcome of this legislation will be the implementation of effective financial management processes, efficient business systems and strong internal controls that are essential to producing timely, reliable and useful financial information. Quality information will allow DoD to make informed business decisions and ensure accountability on an ongoing basis.

Every dollar we save through improved financial management is another dollar for our troops--for body armor, for medical supplies, for veterans care. Improved financial systems will ensure that troops in the future do not find themselves in the same straits as the 4th Infantry Division, searching for supplies that a computer says they already have.

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

Mr. President, I rise to urge my colleagues to support the Foreign Evidence Request Efficiency Act, which I have introduced on behalf of myself and the Chairman and Ranking Members of the Judiciary Committee, Senators Leahy and Sessions. It has been a pleasure to work with them on this truly bipartisan effort, and I am grateful for their support.

Chairman Leahy, Ranking Member Sessions, and I have all served as prosecutors. I can say with no exaggeration that few responsibilities are more important to the rule of law, to the security of our communities, and to the rights and freedoms that we enjoy as Americans. I served as the U.S. Attorney for Rhode Island--Senator Sessions served in that capacity in Alabama--and I know we both will always remember the feeling of standing up in court to say: ``Your Honor, may it please the Court, I represent the United States of America.'' It was the honor of a lifetime.

As my colleagues know, the United States routinely helps foreign law enforcement agencies as they pursue criminal conduct involving activity outside their borders, including inside the United States, and they do the same for us. This is exactly as it should be. As the world grows more interconnected and crime becomes increasingly global, it becomes all the more important for law enforcement agencies in the United States and around the world to work together to bring criminals to justice. Otherwise, it would be very hard to build cases against international organized crime organizations, drug cartels, purveyors of child pornography on the internet, and other criminal threats from outside our borders.

One way that a law enforcement agency provides assistance to another is by gathering evidence from within its borders that a foreign law enforcement agency needs to prosecute a case. The United States routinely completes requests submitted to it by foreign law enforcement agencies just as it receives comparable assistance when it makes evidence requests in foreign countries. For example, let's assume that Spanish authorities are investigating a complicated financial fraud that is being conducted over the internet, apparently from a base in the United States. After conducting their investigation in Spain, the Spanish authorities submit a request to the United States for financial records, internet records, and various other kinds of evidence. U.S. Attorneys review the requests and then seek warrants for the evidence as appropriate. When the evidence is collected, the United States transmits it to Spanish authorities, leading to prosecution in Spanish courts.

This process sounds quite simple, but unfortunately in practice it is extremely cumbersome. This is because under the existing rules, any foreign evidence request must be split up and sent to each district where the evidence exists. So take the Spanish example I just gave, and imagine that the financial records sought are in banks in six different federal judicial districts, that the internet records are in another five federal judicial districts, and that other documentary evidence is spread over another five districts. Under existing law, sixteen different U.S. Attorneys' Offices would have to work on the evidence request. This is incredibly inefficient and burdensome for U.S. Attorneys across the country.

The Foreign Evidence Request Efficiency Act would end this problem by allowing such foreign evidence requests to be handled centrally, by a single or more limited number of U.S. Attorneys offices as appropriate. Why, as in my example, should sixteen U.S. Attorneys' Offices have to deal with an evidence request that one office can coordinate? Simply put, this reform would make life easier for our U.S. Attorneys. We owe them no less.

Of course, respect for civil liberties demands that we not suddenly change the types of evidence that foreign governments may receive from the United States or reduce the role of courts as gatekeepers for searches. The Foreign Evidence Request Efficiency Act would leave those important protections in place, while simultaneously reducing the paperwork that the cumbersome existing process imposes on our U.S. Attorneys.

Two points merit emphasis. First, by making it easier for U.S. Attorneys to collect evidence, the United States can respond more quickly to foreign requests for evidence. Setting a high standard of responsiveness will allow the United States to urge that foreign authorities respond to our requests for evidence with comparable speed. The United States will benefit if foreign governments cannot use our own delay to justify responding slowly to our requests. Second, the Foreign Evidence Request Efficiency Act would not change the United States' obligations to foreign nations. It would only make it easier for the United States to respond to these requests by allowing them to be centralized and by putting the process for handling them within a clear statutory system.

I urge my colleagues to act promptly on this bipartisan legislation. I would like to thank the excellent attorneys in the Department of Justice who have worked with me on this legislation, and would like to request unanimous consent to insert their letter of support into the Congressional Record. I again thank Chairman Leahy and Ranking Member Sessions for their support.

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

Mr. President, I am pleased to be joined by my friend and Finance Committee colleague, Senator Pat Roberts from Kansas, in introducing legislation that can help Americans enjoy a more secure retirement. In these economically challenging

times, financial security--especially during retirement--can be a frustrating and elusive goal. In retirement, the chief anxiety for most people is protecting the savings they have accumulated while working and deciding how best to manage those assets.

In 21st century America, there is another crucial challenge for retirees. The good news is that Americans are living longer, but it also means that people have to plan for a longer period of retirement. A successful long-term retirement income plan is difficult even in a bullish market. How much more difficult is this task in today's market--particularly for the millions of Americans with limited investment experience?

We believe in encouraging people to save for retirement. Through the tax code, we encourage asset-building through home ownership. We provide significant tax incentives for employer-based pension plans and for retirement savings programs by individuals, such as IRAs and 401(k) plans.

One of the biggest threats to retirement income security for baby boomers is their own longevity. It will not be easy to manage their accumulated assets so that they will last a lifetime. Unprecedented numbers of Americans are now living into their 90s and even past 100. Consequently, people are going to spend more time in retirement than previous generations.

Now our society is witnessing the beginning of the retirement wave we knew was already building. Before it recedes, 77 million baby boomers will have entered their retirement years. Many of them will not have the guaranteed monthly retirement checks that many of their parents enjoyed as a result of employer-based pension plans. Traditional defined benefit pension plans have given way to defined contribution plans, which have shifted the retirement income security risk from the employer to the individual.

Of course, there are still many Americans who have no access at all to employer-provided pension plans. Some have never been in the traditional workforce; others work in seasonal jobs or part time. In my state of North Dakota, as well as in rural and farming communities across America, there is an acute need for retirement vehicles that will provide a secure lifetime payout. Others who could face difficulty in securing retirement income are widowed individuals--both men and women--who suddenly find themselves having to make a life insurance benefit or proceeds from the sale of a business or family home last a lifetime.

The proposal we are introducing today will provide a valuable tool for helping people avoid the risk of outliving their assets. Specifically, we are proposing a tax incentive to encourage Americans to annuitize a portion of their assets available for retirement. If they annuitize--in other words, elect to receive their money from an annuity in a series of payments for the rest of their lives, no matter how long that may be--they would be able to exclude from income 50 percent of the annuity benefit that represents the accumulation in the annuity above and beyond the original investment. The exclusion would be capped at $20,000, indexed, to ensure that tax sheltering activity is not encouraged and that the incentive will be effective for people who would benefit most from securing a lifetime income stream.

This proposal we offer today would apply only to life-contingent, non-qualified annuities. A life-contingent annuity that is subsequently modified to a fixed-term payout would be subject to a recapture tax.

Baby boomers represent an unprecedented challenge to our retirement security policies. They should have a wide range of options available for responsible retirement planning. Our proposal focuses on non- qualified annuities because it is important to have this option considered as part of the larger retirement income security debate that Congress should have before baby boomers begin retiring in large numbers. Options for making qualified plans more secure should be part of that debate as well.

I hope that Congress will tackle this matter promptly because over the last few years too many people have seen their retirement savings severely eroded. This legislation will provide an important incentive to help them preserve what they have.

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