Madam President, I come to the floor today to support and urge my colleagues to join in support of the amendment before the Senate for State fiscal relief. I begin by thanking my friend and colleague from Maine, Senator Collins, who has…
Madam President, I come to the floor today to support and urge my colleagues to join in support of the amendment before the Senate for State fiscal relief. I begin by thanking my friend and colleague from Maine, Senator Collins, who has been stalwart in pushing for State fiscal relief for 2-plus years. We have worked very carefully, very closely to bring about this amendment that is before us today.
On two other occasions, we have had overwhelming support. We believe this amendment will potentially have that same level of support. I thank her for all of the work and leadership she has provided in making this possible.
I thank also the distinguished chairman of the Finance Committee, my friend to the east of Nebraska in Iowa, Senator Grassley. He has been a man of his word. We have worked very carefully, very closely on this issue and others. I thank him for contributing significantly to our effort to bring this amendment to the body.
Most of what needs to be said has been said already. I do want to emphasize, as Senator Grassley has, that this is temporary. It is for a 2-year period. And why is it temporary? Because one would expect that if we are going to grant stimulus programs to grow the economy, that after a reasonably short period of time, the economy will respond. That is the hope, that is the expectation, and that clearly is the goal, not only of this amendment but of the entire growth package before the Senate.
Our goal is to make sure that we grow the economy faster than we grow the deficit. It doesn't make a lot of sense to cut taxes in Washington and ignore what is happening in the State capitals. ether it is in Juneau or Lincoln or wherever it may be, what happens in State capitals with the State legislatures does matter.
Over the weekend, I was home in Nebraska and the local news media was covering in great detail the travail of the Nebraska Legislature in trying to take care of a growing budget deficit caused by declining revenues and increasing costs. Therefore, the news was replete on the subject day in and day out. So if we are going to try to change the attitude and improve the economy with active results in Washington, DC, it does not make sense to ignore what is happening in the State capitals.
We only have one tax pocket. The Federal Government is trying to put in some money. States have their hand in taking more out. That certainly is counterproductive to the goal we have if we ignore what is happening at the State level.
I have said that it is the equivalent of trying to drive a car with one foot on the accelerator and the other on the brake. We don't want what we are attempting to do here negated by what is going on in State capitals. This will permit us to do as much as we can to help avoid that.
There is the human side. Quite honestly, in Nebraska, for example, with this projected budget shortfall, the University of Nebraska, the State colleges are all taking significant cuts. Nebraska teachers are out of work because of lower State aid to education. In fact, when it comes to health care coverage and child care options, more than 15,000 children have already been cut from Medicaid benefits and another 2,000 families have lost their child care. More harsh cuts are on the way unless we do something to help fill the revenue gap. This amendment does that.
Some have suggested that this is bailing out the States or somehow it is a gift that we are doing out of the generosity of Washington. I have encountered the generosity of Washington, generally, as a former Governor when things were given to us. They were called underfunded and unfunded Federal mandates. This is not what we are about today. We recognize that one of the best ways to help the States with their problems today is to take care of these needs and make sure that we don't have what we are doing here negated by action at the State level, which is to respond by supporting additional FMAP funding for a period of 2 years, as well as recognizing that the State and local governments are also feeling the pinch with the fast growing requirements due to hometown security under homeland security requirements. They do not have the luxury to run deficits, nor should they.
Therefore, what we propose is $10 billion to be split between the States and local governments on a block grant basis. This will help provide some relief from property taxes that would otherwise most assuredly rise as the cost of local governments are passed on to taxpayers.
As we look at this package, as we look at State fiscal relief, I hope we will continue to have the bipartisan support we have had in the past. Whether it is 75 or 80 votes is secondary. I certainly hope it would be overwhelming support for this effort.
For those who would say what kind of stimulus will come from this effort, there are studies that show that 1.24 will be returned in one year. From my perspective, a 24-percent return on this sort of investment to take back to the States is a good return, and it is certainly a stimulus to the economy. Therefore, it is a stimulus to the future of this great country.
I appreciate the opportunity. I thank my colleague, the Senator from Maine, for her support, for her constant counseling on how we should go about this effort. I thank her for the time to speak on this very important amendment.
I yield the floor to the Senator from Maine.
I am glad my friend from Maine has asked that question so that I can provide some assurances to our colleagues. On behalf of our group of Senators offering this amendment, let me be clear: We have drafted this provision in such a way that the increase in the FMAP will end June 30, 2004. My colleagues will be glad to know that there is precedent for Congress passing short-term Medicaid matching rate increases that have not become permanent.
In 1981, the Omnibus Budget Reconciliation Act reduced Medicaid matching rates for 3 years, while also creating exemptions for States that had high unemployment rates, special hospital review programs, or strong fraud and abuse recovery systems. At the time when this was enacted, some in Congress worried that these changes would be permanent, but these provisions expired on schedule without any particular controversy or efforts to extend them.
There is even a more recent example: The Omnibus Consolidated Rescissions and Appropriations Act of 1996 granted
a temporary increase in the FMAP to Louisiana. The State's matching rate rose from the normal rate of 72.08 percent to a special enhanced rate of 84.28 percent in State fiscal year 1995-96 and from the normal rate of 71.49 percent to an enhanced rate of 81.46 percent in State fiscal year 1996-97. This temporary State relief was granted because the Omnibus Budget Reconciliation Act of 1993 tightened disproportionate share hospital payment policies and posed a hardship for Louisiana at a time when the State's economy was faring badly. The State was able to use these temporary funds to avoid disruptions in essential services. The temporary increase in Louisiana's FMAP expired as scheduled.
These provisions expired as planned after fulfilling their mission of temporary relief to help these States transition through a difficult period. Congress has been able to maintain discipline in the past. There is no evidence that a temporary increase in Medicaid matching rates will inevitably become permanent. In fact, because our amendment in no way adjusts how future FMAPs are calculated, it does not effect a permanent change in FMAPs for States.