Floor Statements

Mr. President, I ask unanimous consent that Terri Postma and Rachel Miller, members of my staff, be granted the privilege of the floor during the debate of H.R. 1.

Mr. President, the matter before this body is the majority's stimulus bill. It merges the products of last week's markup in the Finance Committee and the Appropriations Committee. Twenty-three Senators were involved in the Finance Committee markup. In that group, there were 13 Democrats, 10 Republicans. Thirty Senators were involved in the other committee's markup, the Appropriations Committee. In that group, there were 17 Democrats and 13 Republicans. So if we add that up, it means over half the Senate has been involved in either the Finance Committee part or the Appropriations Committee part of this legislation. For the first time, however, all Senators will have to consider this very large and complicated piece of legislation. That started yesterday and will go on for a week. So the public who want to follow Congress will have a long time to follow the issue.

We ought to take that sort of time with an $800, almost $900 billion piece of legislation. First, I will discuss process and then focus on substance. Because I am the senior Republican on the Finance Committee, I will focus on the Finance Committee's portion. I, like 69 other Senators, am still studying the Appropriations Committee part.

First, I thank my friend from Montana, Chairman Baucus, for courteously and professionally consulting Members on this side. We had one bipartisan Members' meeting where Chairman Baucus patiently heard all of us out. In addition, Chairman Baucus apprised me of the negotiations between Democratic leadership of both bodies and the Obama administration. Those Democrats-only negotiations were extensive. Folks on our side who read press reports could see how extensive they were. Further evidence of that deal making is the relatively small differences between the basic structure of the Committee on Ways and Means of the House of Representatives and the Finance Committee of the Senate. I congratulate Chairman Baucus on those negotiations. The fruit of that labor is the Finance Committee package.

One significant change followed a recommendation I made in early January. That change was made in committee. That was the addition of the alternative minimum tax patch for this year which means over 24 million families need not worry about an average tax increase of at least $2,000 per family for this year. But let no one be mistaken that this bill is the result of bipartisan negotiations. While Republicans were courteously consulted at the Member and staff level, we were never at the negotiating table. Speaker Pelosi best described the bottom line of the process from the Washington

Post, dated Friday January 23, when she said:

Yes, we wrote the bill. Yes, we won the election.

Indeed, there was a rumor floating around about an informal agreement among Democratic Members. The agreement appeared to be to vote against any Republican amendments, no matter what the merits of the amendments might be. As proof of that, if one would review the markup, they will find that nearly all Republican amendments were defeated on a virtually party-line vote. They will also find, for the first time in recent Finance Committee tax legislative history, small issues or modifications raised by dissenting Members, with a couple exceptions. I thank the leadership for those exceptions. None of these smaller issues were even accommodated.

So let's be clear. We knew at the outset the markup would be ratifying a deal made between Democratic leaders of the House and Senate: No Republican ideas need apply. With the exception of that AMT patch amendment, this was the basic outcome.

Since the largely partisan markup process finished, we have been told by the President and members of the Democratic leadership that this bill is open to improvement by amendment, and I am hopeful we will see that follow through, and before the day is over, I am sure we are going to have some votes where we can do that.

If I could define ``bipartisanship'' just for a minute, I would define it kind of the way I have seen it work over the past decade in the Finance Committee but probably other committees do the same thing. Days before you want to bring up a bill, you sit down and you negotiate between the two leaders, and maybe other people, but you consider every member's position to some extent, and you come out with what is called a bipartisan mark.

In our committee, for some times that was Grassley-Baucus, for other times it was Baucus-Grassley. It is a little bit like buying a new car. If it is going to be a family operation, Chuck Grassley does not go up to Barbara Grassley and say: I have made a determination that we are going to buy a Ford Taurus, and it is going to be blue, and it is going to have these accessories, et cetera, et cetera. No. You sit down. Chuck and Barbara Grassley sit down, and we decide what color car do we want, what brand do we want, what do we want for accessories, et cetera, et cetera. And you go to the dealer, and you have a uniform family position of what kind of a car you buy.

That is the way bipartisanship ought to work here. That is the way I define it. That is the way it has worked over a long period of time. But it is not the way it worked in the product we have before us.

Now we have the President of the United States saying to leaders of his party, when they meet at the White House: Republicans have good ideas, and we want to work toward bipartisanship. Now we have a process in place. Will the President's leadership make a difference to the majority party here on Capitol Hill?

Before I get into substance, though, I wish to pull back and talk about the larger picture for a couple minutes. Majority Leader Reid opened debate on this bill yesterday. Yesterday we also had Groundhog Day. My first chart is a depiction of Punxsutawney Phil, that famous weather forecaster there in Pennsylvania. Yesterday, Phil saw his shadow. Groundhog Day is a recurring event. ``Groundhog Day'' is also the title of a famous film starring Bill Murray.

I have another picture for you of Phil and Bill driving along. In the movie ``Groundhog Day,'' Bill Murray finds himself continually repeating the same routine. Now, my friend, Chairman Baucus, last year rightly pointed out the message of the film. The message was that Bill, guided by Phil, eventually had to figure out what he was doing wrong. Once Bill figured it out, he escaped the infinite loop.

On this bill before us, we need to learn from Bill's and Phil's adventure. We cannot and we should not legislate in a hasty manner and place ourselves in an infinite loop of repeating the same exercise. Democrats and Republicans and the President need to get this right, particularly in the time of the terrible economic recession we are in. We cannot casually deficit spend and ask American taxpayers to clean up the fiscal mess with high taxes down the road.

To me, there is a particularly compelling irony to the fact that we are debating another stimulus bill at roughly the same Groundhog Day timeframe. One year ago, almost to this exact date, the Senate spent a week debating an economic stimulus package. The target time set for enacting legislation was similar to the one for this package. I am talking about the Presidents Day recess. Let's keep the Groundhog Day irony in mind as we move forward this week and next week. Let's not repeat the same exercise, except this time with even much bigger dollars. Let's get it right.

Now to substance. I want to make it clear that most on our side agree with President Obama that stimulus is necessary. The economy is flat on its back. Too many Americans who want to find work cannot find those jobs. A lot of Americans are worried their job will be the next to go. We get that on our side. Everyone here knows we need to do everything we can to get the economy moving again. Where we differ between parties is the degree to which the engine ought to be Government or the engine ought to be the private sector, especially America's biggest job creator, our small business sector, where you hear quite regularly from economists that 70, 80 percent of the new jobs are created. In fact, in the year 2007, big business created no new jobs. All the new jobs in 2007 were created by small business.

These are honest, well-intentioned, philosophical differences between our two parties: Government or the private sector. But those are differences that are there. On our side, we want the new jobs to come from the private sector. On the other side, the preference is to grow employment through an expansion of Government.

Many on the other side and opinion makers who agree with them are invoking the example of Iowa-born President Hoover. Iowa is my home State. They seem to be doing it to portray anyone who questions the trillion-dollar package as a reincarnation of what we call Hoover economics. It is an unfair characterization. Again, let's be clear. Folks on our side recognize the need for action. So do not accuse us of Hooverism.

Also, though Iowans are rightly respectful of the only Iowan to be President, President Hoover, you have to recognize history. I would instruct the other side on a couple lessons from the Hoover era, too, where President Hoover was wrong. One lesson: Do not obstruct free trade. The highest tariff levels in the history of this country--the Smoot-Hawley tariffs--were enacted in the middle of his Presidency, and it shut down world trade. We have to think about that right now because the latest reports have the first reversal of the growth of trade worldwide since 1982. There is little doubt those protectionist barriers that were put up in 1930 or 1931 made the Great Depression worse. So let's not repeat that mistake. There is some evidence on the other side of the aisle that they do want to repeat that mistake and build up protectionist walls.

Now, there is another lesson from the Hoover era I want the other side to be aware of. President Hoover signed into law significant tax increases that made that Depression worse. Like high tariffs, economic history tells us that these burdensome taxes retarded the economy's ability to recover--a recovery that did not happen until World War II came along. We do not want war to get us out of a recession.

On this side, we agree the lessons from the Hoover era need to be learned. We cannot be passive. President Hoover was passive. Errors of omission on fiscal stimulus should be avoided by all of us. Likewise, errors of commission on fiscal stimulus, such as impeding free trade and raising taxes, also should be avoided.

By the conclusion of this debate, those differences will be plain to people at the grassroots of America. I will tell you, all you have to do is go to Iowa, go to church on Sunday, go eat at the Village Inn after church with your family, go to a University of Northern Iowa basketball game, and talk to your neighbors. The public knows what is going on here. They see this as a big spending bill and not a stimulus bill.

We will see differences fleshed out in the debate and on the amendments. That is the way it should be. As I indicated above, most on our side want to improve this bill. Our amendments, large and small, will be offered as improvements. We hope the other side is sincere and will follow our President's admonition yesterday in their desire to change the bill in a way that can garner a bipartisan majority. Whether Republicans or Democrats have been in control, the test of proper stimulus boils down to three words.

That famous Harvard economist, former Secretary of the Treasury, a good person, Larry Summers, had this to say that ought to be a lesson for both political parties:

As with any potent medicine, stimulus, if misadministered,

could do more harm than good by increasing instability and

creating long run problems. A stimulus program should be

timely, targeted, and temporary.

He may not be an MD, but there is a lesson from that Ph.D. we can learn. It is a lesson of medicine: First, do no harm. Well, we want to measure this bill according to what Dr. Summers says. If you apply the three ``T's'' test to much of the spending in this proposal, you will find it fails the test. We will get into that when we examine and debate the bill.

Some folks might ask: What is the problem if we overshoot and flunk the test? The first problem is running out of budget room. The bill before us will, when interest costs are included, add up beyond that $900 billion to $1.3 trillion added to the deficit. All of this extra deficit increase would be proposed when the baseline deficit for this fiscal year will hit $1.2 trillion. That amount exceeds all historical records. As a percentage of our economy, that will mean 8.3 percent of gross domestic product.

I have read some economists saying that is more stimulus than we have ever had in the history of this country. Maybe 8.3 percent is enough. I think in a bipartisan way, and with the President, we concluded it is not enough. But above that, it seems to me, we ought to be cautious and make sure it is timely, temporary, and targeted because this amount of 8.3 percent easily exceeds the 5.7 percent in 1983. It is almost 50 percent above any comparable post-World War II levels.

The figures on Federal debt held by the public are likewise staggering. In the period of 2001 to 2007, debt held by the public increased by comparatively smaller amounts, roughly 1 percent per year. This year's change easily exceeds all of that, as you can see from this chart of how the deficit continues to go up. You also see it there, as a percent of gross national product, higher than it has been for a 40- year average.

So we need to acknowledge the deficit situation we are in. It is very serious. So whatever we do, we ought to not make the long-term fiscal situation worse than it is. You can see from this chart in the outyears how bad that situation is going to be.

The other problem is if we prime the pump too much and the pumped-out stimulus does not materialize until after the hoped-for recovery is upon us, then we might risk too much stimulus. The result could be inflation.

Let's look at the timely part of Dr. Summers' statement. That needs to be brought into sharper focus. The Congressional Budget Office tells us that less than half of the appropriations amounts will be spent out by the end of fiscal year 2010. So only half of the spending in the bill is timely. The Finance package does a little better. Ironically, the tax policy stimulus, much maligned by the hardcore of both Democratic caucuses, helps the spend-out ratio greatly in the Finance package.

The theory for erring on the side of overloading the spending side is that we need to direct dollars to the folks most likely to spend them. This is the reason we are told we need extra FMAP money, expanded entitlements, and other State aid.

It misses the point that the U.S. fiscal policy system already has an arsenal of antirecessionary automatic stabilizers directed to the very same populations. These stabilizers provide immediate assistance to those most vulnerable who have been hit by an economic downturn. The Congressional Budget Office says that these benefits, including food stamps, unemployment insurance, and Medicaid, will grow to $250 billion this year. That built-in, lower income-population stimulus will be equal to 1.8 percent of gross national product.

It also misses the point, when you argue that you ought to err on the side of overspending, about ensuring that the lessons of moral hazards apply to the States. The fiscal problems faced by many of our States and localities are largely the result of their inability to keep spending in line with revenue. Between the third quarter of 2006 and the third quarter of 2008, State revenues increased 7 percent and State spending increased twice that amount--15 percent. In other words, the States and localities spent $2.22 for each additional dollar of revenue. The States have been on a spending spree, and they have dug themselves into a hole.

Now, we will hear that the Medicaid money we are adding--which I refer to as a slush fund for States--is necessary to avoid tax increases at the State and local level. We will also hear that vital services will be cut unless we cut a big blank check to States. Just as we did during the Finance Committee markup, some on our side will test these assumptions with amendments on these points. An open-ended slush fund is not targeted. It is not going to bring about sound, responsible fiscal policy in the States that need it, and this is true no matter how you dress up this issue.

Perhaps the most disturbing stimulus test failure is on the third ``t''--that it should be temporary. This is what bothers me most about this bill. I am referring, of course, to the temporary test. In this package, there are many new popular spending programs labeled ``temporary.'' Those programs total $140 billion. If these programs are extended or made permanent, we can expect another $1.3 trillion added to future deficits. I will challenge anyone on the other side to tell me these programs will be turned off once enacted. With large Democratic majorities and a Democratic President, I would say any such promise is dubious in this Congress. It is about as deliverable as a promise to sell the Brooklyn Bridge.

Just so appropriators don't get too far out on a limb, I wish to quote from what Chairman Miller of one of the House committees had to say. He was talking about these built-in expenditures that are going to go beyond the 2 years; things that ought to be handled by the Appropriations Committee on an annual basis, considering all of the priorities that come to us from all segments of the economy and from all government programs. If you think you are building this into the base, this is Chairman Miller--I am going to quote here from Congress Daily:

Chairman Miller in the House was asked about the fact that

funding for education programs disappears in two years, and

he said the word he got from the Obama administration is that

these funding levels will NOT become the baseline and that in

two years, we can expect that the President's Budget Request

will be lower than these new levels. That means schools will

see a short-term jump for these programs, but any teacher or

programs they put in place may be cut in two years.

Now, let me just ask my colleagues about that. Is it smart to use something that is absolutely needed--a stimulus bill--for an excuse to jack up spending well into the future? That is going to be done in 1 week. Isn't that something appropriations committees generally take several months to do before they make decisions to go down that road? That is something for my colleagues to consider.

To sum it up, this package meets a different three t's test. We start with trillion-dollar deficits. We have a bill that, with interest added, adds more than another trillion dollars to future deficits. We have a bill that has new spending ostensibly labeled as ``temporary'' but likely to be extended, that bakes into the cake another $1 trillion of future deficits. Passing this three t's--as in trillions--test ought to be a Senator's pause, and we hope during this debate that pause happens. From our side's view, these are major shortcomings on the substance.

Although we saw execution of a deal to vote down our amendments in committee no matter whether our ideas were meritorious or not, we would like to be and will be constructive, and we will build on parts of the package that we support. But make no mistake about it, we are going to try to use Dr. Summers' guideline of, first, do no harm--he didn't say that--but the

three t's test he put on the chart from his quotation. In other words, we hope our amendments will be more openly received on the Senate floor than they were in committee.

In this respect, we will go back to major differences between the parties on how to get the economy moving. On our side, we would like to push more incentives for long-term growth of private sector jobs. There is a good start on a broad-based middle-income tax cut in the package. We would like to expand the tax cut to cover all middle-income taxpayers.

During this fall's campaign, the President described as middle class families making less than $250,000. Many of the tax cuts don't apply to millions of families making less than $250,000. It doesn't make sense to me to call a proposal a middle-class tax cut if it doesn't apply to millions of middle-class families. We would like to direct that at labor and capital income earned by middle-income taxpayers.

Since we weren't at the negotiating table to offer these progrowth ideas, you will see them arise as constructive offers to improve the package.

I wish to speak for just a minute to some health provisions in the bill.

Spending in this bill should be judged based on two criteria: Will it stimulate the economy, and is the money being well spent? In committee, we aired our honest disagreements over whether several of these provisions were actually stimulative. Improving health information technology is critical for health care infrastructure. I support many of those provisions, but I have to ask: Will it stimulate our economy, and is this money we should add to the deficit rather than offsetting it?

It wasn't so long ago that $16 billion was a lot of money around here. Providing assistance to States makes sense if we are concerned about States raising taxes or cutting spending. But is $87 billion the right number, and is increasing Medicaid spending the right way to do it beyond what is necessary to take care of the millions of people who are going to lose their health insurance? That is a much smaller figure; somewhere around $10 billion to $12 billion rather than $87 billion. Could we better stimulate economic recovery using all or part of that money elsewhere?

The Finance Committee package also includes a 2-year extension of our current Trade Adjustment Assistance Programs. I am working with the chairman to see if we can agree with our counterparts on the House Ways and Means Committee on a broader reauthorization of these programs, but that is still a work in progress.

Apart from trade adjustment assistance, I am disappointed that this administration isn't focusing on trade as a component of an economic stimulus package. As I said, we should heed an important lesson from the Hoover era. Economic growth comes from expanding free trade, not contracting it, because protectionism in the 1930s brought us to World War II. Opening new markets for U.S. exporters should be a part of the mindset to stimulate our economy.

Right now, 20,000 people are being laid off from Caterpillar. I don't think John Deere has laid off very many yet, but 22 percent of John Deere workers have their jobs because of international trade--tractors made in Waterloo, IA, getting on boats in Baltimore to go overseas. We don't want to shut down those kinds of jobs, and without emphasis upon trade being a very important part of a stimulus package, we are sending a message that trade does not matter. Trade does matter. For instance, we have these pending agreements with Colombia, Panama, and South Korea which would provide significant opportunity to do just that, and they should be implemented as soon as possible.

As we go through the bill, our side will offer several amendments that I hope will be accepted to try to make the bill better and answer the questions I and other Members have raised. The people back home see Congress spending vast amounts of taxpayers' money. They are counting on us to ensure their money is spent wisely and not wastefully, and that means to make sure this is a stimulus bill and not a ``porkulus'' bill.

I thank the Chair, and I yield the floor.

Mr. President, I know the Senator from Maryland always thinks things through very well, but I am going to rise in opposition. I don't do it easily. But this is a time when we are in a recession. I know the motivation is to help us get out of a recession, but we have a massive amount of increase in consumer debt, and this is going to just encourage more consumer debt.

We have other things in the Tax Code that help people who buy hybrid cars and electric cars, and we have incentives for the automobile industry within TARP. So I have to oppose this, and in opposing it, I will do it this way, by raising the point of order against the Mikulski amendment pursuant to section 201(a) of Senate Concurrent Resolution 21 of the 110th Congress.

Mr. President, I yield the floor.

Mr. President, I ask unanimous consent that Lacee Oliver of my Finance Committee staff be granted the privileges of the floor during the first session of the 111th Congress.

Madam Chairman, I have decided to support Mr. Holder's nomination to be the next Attorney General of the United States. However, I want to make clear that just because I am voting to support Mr. Holder, this nominee does have a few issues that give me some concern.

For example, I am concerned about Mr. Holder's overly restrictive views of the second amendment. In last year's challenge to the District of Columbia's gun ban in the U.S. Supreme Court case District of Columbia v. Heller, Mr. Holder joined an amicus brief arguing that the second amendment does not provide an individual right for citizens to own firearms. However, a majority of the Supreme Court held that the second amendment does indeed guarantee an individual right to keep and bear arms. I am a strong supporter of the second amendment, so I am concerned that Mr. Holder's views may be too limited. I am also concerned about Mr. Holder's reluctance to expand programs that enforce current gun laws, such as ``Project Exile.'' This highly effective initiative started in the 1990s, but was only implemented in a few targeted cities. I don't understand why Mr. Holder is willing to consider the need for new gun laws and regulations, when we could be embracing a nationwide expansion of a proven, successful program enforcing existing gun laws. In my opinion, Mr. Holder should reconsider this position.

I find Mr. Holder's involvement with the FALN clemencies to be troubling. Mr. Holder played a pivotal role in obtaining clemencies for the FALN terrorists. He fired pardon attorney Margaret Love who had issued a report in 1996 against clemency, and instructed the new pardon attorney Roger Adams to issue an ``options'' memo keeping clemency on the table, even though the pardon attorney, U.S. prosecutors, Bureau of Prisons and FBI were all very much against clemency. Mr. Holder met with a number of groups and politicians who supported the clemencies, but never met with the victims. Mr. Holder testified that his recommendation to support the FALN clemencies was ``reasonable'' and ``appropriate.'' This is remarkable, especially since the FALN pardons were criticized by the public and condemned by Congress.

Mr. Holder's handling of the Marc Rich pardon is also problematic. He recommended Mr. Rich's pardon to President Clinton as ``neutral, leaning favorable,'' even though Mr. Rich was the biggest tax cheat in U.S. history, a fugitive of the law, and an individual who traded with the enemy. Mr. Holder did not provide the Judiciary Committee with a good explanation--legal, political or factual--for why he was ``neutral, leaning favorable'' on the pardon. Mr. Holder assisted Jack Quinn--President Clinton's former White House counsel--in bypassing the U.S. prosecutors and other DOJ officials who opposed the pardon, and advised Mr. Quinn on how to deal with the media and other logistics after the pardon was issued. Although Mr. Holder did acknowledge that he made a mistake with respect to the Rich pardon, I am troubled by Mr. Holder's deliberate maneuvering around the established Justice Department pardon processes. Also, I believe that Mr. Holder made statements to the Senate Judiciary Committee about his involvement in the Rich pardon that appear to be at odds with the facts as recorded in documents written at the time and testimony provided by other witnesses. Mr. Holder has indicated that he will be responsive and candid with Judiciary Committee requests, and that he will respect DOJ internal processes and exercise better judgment with respect to DOJ matters. I am hopeful that Mr. Holder will meet that commitment.

The U.S. Constitution requires Senators to fully vet the qualifications and fitness of presidential nominees and to exercise their independent judgment when they decide whether to ultimately consent to them. This has been a difficult decision for me-- particularly because of the concerns that I have just outlined. However, Mr. Holder is an experienced individual with extensive credentials. He has very good qualifications. Mr. Holder's a good lawyer. He has a lot of support in the law enforcement community. Moreover, Mr. Holder has acknowledged some of the mistakes he made-- even though I believe he could have done a lot more. We had a productive meeting when he came in to talk about his nomination last year, and he seemed to be responsive to the issues that I raised with him. He has committed to work with me on a number of matters that are important to me, such as the False Claims Act. He has pledged to cooperate with my oversight efforts and to be responsive to my document requests. He has pledged to cooperate with Judiciary Committee investigations and requests for information. So I will support Mr. Holder's nomination. But I plan to hold Mr. Holder's feet to the fire to make sure that he leads the Justice Department in the right direction and keeps Americans safe from criminals and terrorists.

Mr. President, for the benefit of my Members, I do not think I will use 10 minutes, but it is always dangerous for me to say that.

(The remarks of Mr. Grassley and Mr. Levin pertaining to the introduction of S. 344 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. President, I rise for the purpose of supporting the Bunning amendment. What I say will have some rebuttal to what the distinguished chairman of the committee has said just.

Medicaid and the Children's Health Insurance Plan were created to cover low-income children. An income of more than $63,000 for a family of four is not low income. I know the Senators from the State of New York and New Jersey will argue that $63,000 is low income in their States. I know they will talk about the cost of living in those States.

As an example, the median home price in Des Moines is greater than that in Binghampton, Buffalo, or Rochester in the State of New York.

The underlying bill says all States can cover above 300 percent of the Federal poverty level. I think that should be limited, as it was in the second bill that was a bipartisan bill passing the Senate in 2007. But if we are going to allow States to cover above 300 percent, all States should be treated equally, and an exception for two States--and I might emphasize only two States--is not fair, and it is not

right. This amendment strikes that exception so all States are treated equally.

I urge support for the Bunning amendment that we will vote on in a little over an hour. I hope Senators coming to the Senate floor will take that into consideration. Treating all States favorably is essential.

Amendment No. 83

(Purpose: To provide H.R. 3963 (CHIPRA II) as a complete substitute)

The amendment I am going to introduce is the exact contents of the bill we call the 2007 bipartisan bill No. 2 because that is the No. 2 bill vetoed by President Bush. This amendment I am offering today, I am doing so with Senator Hatch because he was there with me through all of that discussion in 2007 that brought us to a bipartisan bill.

The amendment is the bill that, 2 years ago, Speaker Pelosi called ``a definite improvement on the first bill,'' meaning the first bill the President vetoed. This amendment I am going to soon lay before the Senate is a bill I believe is the best bipartisan compromise we could put together to cover as many low-income children as possible. This amendment is that 2007 bill that told States they could not cover children above 300 percent of poverty level in the Children's Health Insurance Program. Why do we concentrate so much on that level and not above that level?

In 2007, we thought letting States cover children above the national median income diverted attention from the mission of Medicaid and the Children's Health Insurance Program, which was obvious then and still obvious today; that is, that we ought to be putting the emphasis on low-income children.

The underlying bill allows States to cover children up to any income level and, as I said, includes a special grandfathering exclusion for New York to cover children and families with incomes up to $83,000 per year. The second bipartisan children's health insurance bill--that is the amendment before us or that I will put before us now--returns the focus where it has been since 1997 in the CHIP bill. The emphasis is upon getting low-income children into a plan so they have the health care they need.

This amendment is the bill that includes a policy to address the problem of crowdout that was the subject of an amendment yesterday. It is a policy that is not in the underlying bill, which brings me to the question: What exactly went wrong with the crowdout policies that so many of us voted for in 2007?

Certainly, it is not because the Democrats have put forward a policy that addressed crowdout in a better or more efficient manner. Certainly, it is not because the Democrats have new analyses that crowdout is no longer occurring, especially in the expansion of public programs. When Children's Health Insurance Program dollars go to higher income children who already have private coverage, that money could have gone to low-income children. Make no doubt about it, 4 million new people being covered does not take care of the problem of covering low- income children. There are still going to be millions out there who will not be covered whom we ought to have a focus on.

The second bipartisan children's health insurance bill of 2007 that is now the amendment I am going to lay before the Senate returns the focus to low-income children. Finally, this amendment-to-be is the bill that we voted on in 2007 which did not have the divisive legal immigrant issue in it. The underlying bill today has $1.3 billion of coverage for legal immigrants, more than 100,000 of whom already have private or public coverage, dollars that could have gone to cover more low-income children.

The second bipartisan children's health insurance bill--that is the amendment I am going to lay before the Senate--now returns the focus to low-income children. Now, today in the Senate, there are 43 Democrats and 12 Republicans, of which I am one, who were Members of the Senate in 2007 and voted for this bill that my amendment is going to represent.

Those 43 and 12 Republicans who are still here--that is 55 of us--if we would stand together, we could still do great things. We could show that bipartisan amendments still mean something in the Senate. When the vote count ended, we would probably have more than 70 votes for this amendment. Instead, I know if I call for a vote on this amendment, 43 ayes that were cast in 2007 would become ``no'' votes.

After watching the difficulty those 12 Republicans, including this Republican, faced by voting aye and sticking together because we thought we were doing good policy, watching 43 ayes turn to noes on the very same policy is a bitter pill to swallow.

Mr. President, I ask unanimous consent to set aside the pending amendment and to call up amendment No. 83.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, I yield the floor.

Madam President, I rise for three or four purposes that I will do in succession.

No. 1, I would like to define bipartisanship for the Senator from North Carolina. No. 2, I want to give a statement in support of the Coburn amendment. No. 3, I would like to bring to final debate my amendment 83, if the majority manager would like to vote on it at that time--and that would be a voice vote--and then I would have my last amendment to introduce, which is amendment No. 71 that I would speak about.

First of all, I think I know something about establishing bipartisanship in the Senate. I was part of a bipartisan proposal 2 years ago that maybe Senator Burr didn't like, but it was very bipartisan. It is kind of an institutional thing, bipartisanship, as far as I practice it in the Senate and as Senator Baucus has practiced it, up until this particular amendment. What you do to get to be bipartisan, you sit across the table from each other, Republican and Democrat--and maybe more than one Republican, maybe more than one Democrat--with expert staff, and you build up a piece of legislation that is eventually put before the committee as a Baucus-Grassley bill or as a Grassley-Baucus bill, depending on who is in the majority. Then what you do is you make up your mind that you are going to be arm in arm defending that through the committee process, through the Senate, through conference, and all the way to the President. And you try to maintain 65 to 70 votes within the Senate. That is the way I define bipartisanship.

It is a little bit like if you and your wife were going to buy a new car for that old jeep that you drive around. If you said it is going to be a family affair, you would be sitting down with your wife and asking: What kind of a car do you want? What color do you want? What accessories do you want? You wouldn't go up to your wife, I hope, and say: Honey, we are going to buy a new car. This is what we are going to buy and it is a mutual decision. You wouldn't do that. You would work with your wife to decide what kind of car you want.

So if you want bipartisanship in the Congress of the United States-- and I am sure that is what our President was talking about during his campaign--you have to work together to get it. But it is not like this issue was handled--or maybe I can speak more accurately about the stimulus issue that will be up next week--where 48 hours or 24 hours before it comes up, Republicans are given a document and are notified that this is what we are going to do.

So I say to the Senator from North Carolina, that is my definition on what bipartisanship is. I don't know whether you agree with it, but at least that is what I have tried to practice, and I think Senator Baucus has basically tried to practice that as well.

Madam President, one of the reasons I said I came to the floor was to speak about the Coburn amendment and to say why I am going to vote for it. This amendment, which has been the product of Senator Coburn's and Senator Burr's speeches a few minutes ago, presents a fundamental choice about how we will go forward with health care reform in this country. Now, I wish to emphasize ``how we will go forward with health care reform,'' which is maybe the next health care issue that is going to be before our Senate.

The underlying bill covers 4 million kids. It leaves 2 million kids without coverage. Why? Well, as CBO has told us so often, if you ask State government to go out and cover kids, as we do in Medicaid and the Children's Health Insurance Program, States need more and more Federal dollars to do so. So let's face it, that is exactly how this bill works. We throw billions of dollars at the States, and the States go out and find kids and pay for their health care. The more money we throw at the States, the more kids they cover. The less money we throw at States, the fewer kids they cover.

The Coburn amendment takes a totally different approach. This amendment generally follows the successful way that the Medicare Part D benefit works. By the way, let me say parenthetically about Medicare Part D, which has been law now for 4 or 5 years, it is about the only Federal program I know about that has come in under budget. I am not talking about just for 1 year, I am talking about the projections CBO made for it at that time for the 10 years into the future. I don't have an exact figure in mind now, but maybe 6 months ago I used a figure that was in the billions of dollars that it was under what we anticipated spending.

So we are talking about a Coburn amendment that follows the pattern of Part D Medicare, which works, and it

is financially a protection for the taxpayers' dollars. If the Federal and State governments work together to create a healthier market, the private sector will be more efficient in covering kids. That is the Part D model. That is the model we have before us in the Coburn amendment. It is the private sector, on the one hand, in that philosophy, versus the public sector on the other hand.

I wish my colleagues had more time to fully develop this with the Congressional Budget Office because the contrast this amendment paints is one we are going to be facing in the health care reform. So I wish to emphasize that the next health care debate we have is going to be health care reform and we ought to have that debate and we ought to bring about the reform that is necessary.

So let's think of that as laying the groundwork for a lot of debate that we are going to have in the upcoming issue of health care reform. Basic questions: Do we want a government-run solution? Is growing our Government bureaucracy in the area of health care the pathway to covering all Americans? Or do we want governments to help the market work better; or possibilities of Government and private partnerships? Do we want to harness the ingenuity that is out there in the private sector in covering all Americans?

Now, I don't answer those questions, but those are questions everybody in this body, and I hope grassroots America, will look at in the coming months. With this vote, I am giving you a partial answer to my approach to these questions.

I would like to go on to, hopefully, what will lead us to a vote on amendment No. 83, I believe is the number of the amendment, but before I do that, I would like to speak about an issue that came up when I was off the floor earlier this afternoon. The chairman of the Senate Finance Committee, my friend, Senator Baucus, characterized the Grassley-Hatch amendment I offered earlier as not covering 750,000 individuals as compared to the underlying bill. This is about my amendment 83.

Now, I understand Senator Baucus later came to the floor to acknowledge that his characterization of the Grassley-Hatch amendment was incorrect and he apologized, and I thank him for that. However, the chairman is still inaccurate, from my point of view, in some characterizations of the Grassley-Hatch amendment, and that is what I wish to go into.

The chairman stated my amendment would cover fewer individuals because it does not include the legal immigrant provision. I would like to draw all my colleagues' attention, but particularly Senator Baucus' attention, to footnote ``f'' on the enrollment table of the Congressional Budget Office production on the underlying bill. Footnote ``f'' states:

The Medicaid and SCHIP figures and the Medicaid SCHIP total

may include some legal immigrant children and pregnant women

who receive health insurance provided through State-funded

programs.

In other words, the so-called new enrollments of legal immigrants are actually individuals who are currently insured with State or local funds. In terms of additional enrollment figures, the chairman notes correctly that we don't have a CBO table. He is correct that we don't know the actual enrollment numbers resulting from the Grassley-Hatch amendment.

I would reiterate what I said earlier. The amendment we are going to be voting on is the same bill that 55 Members of this body--and they are presently Members of this body--voted on and successfully passed by a wide margin in 2007. So I have to ask the question, before we vote on my amendment: If it was good enough then, why isn't it good enough now?

If the majority doesn't want to vote on this now, I will go on to offer my other amendment. Do I ask for the question, Madam President, on amendment No. 83?

Madam President, I would, first of all, like to give my rationale for an amendment I am going to present to the Senate before I actually present it. It will be amendment No. 71, though.

Congress has known for some time that the Children's Health Insurance Program faces expiration March 31 of this year. We all knew Congress would have to act quickly once the new session got underway. The majority had three different options they could have taken in moving forward. First, they could have simply picked up one of the two vetoed bills and quickly passed it. It would have received bipartisan support. I would have preferred the second bill over the first, but I could have probably found a way to support the first bill. Either of those bills would have moved quickly and would have had significant bipartisan support.

The second option the majority could have taken was to do a short- term extension of the Children's Health Insurance Program while we worked on broader health care reform. That is what this amendment does. It is a six-quarter extension of SCHIP through the end of the next fiscal year.

Now, I do understand there is a point of order against this amendment. This amendment actually should have been done on the stimulus bill, where everything and the kitchen sink appears to be going, but that is a debate for next week. It would have been a drop in the bucket on that bill.

If the underlying bill is enacted, it will provide coverage to many people who were previously uninsured--approximately 4 million children--by the year 2013. While I don't want to denigrate the accomplishments of this bill, everyone in this Chamber knows we need to roll up our sleeves and get to work on covering the other 42 million uninsured Americans who will not benefit from this bill--millions of whom are children this bill does not provide coverage for.

I wish to focus on that task. I want us to work in a bipartisan manner to get coverage for all Americans, and everything in that process so far has been bipartisan, but it is something we are going to have to deal with on SCHIP again. So I am willing and ready to do the hard work it is going to take. We could have set aside SCHIP while we focused on that most important task of full-fledged health care reform. Instead, the majority has chosen a third option: to bring up a bill that walks away from the bipartisanship of 2007 and threatens relationships moving forward with broad health care reform. I want to emphasize ``threatens'' because so far everything has been bipartisan in meetings and discussions and everything.

I have made no secret of my disappointment in the changes made in the underlying bill. It is very important that people watching the debate understand how totally unnecessary a

partisan fight is. The majority had bipartisan bills they could have brought up for consideration. I had an amendment earlier that would have replaced the underlying bill with the second of those earlier bills. The majority could have done a simple extension of SCHIP while we worked together on covering 46 million uninsured, not just the 4 million covered by this legislation. That is what this amendment does. It is the last chance for cooler heads to prevail.

It was reported recently that the Speaker of the House said, ``We won the election. We write the bills.'' Seeing the majority take that approach on the Children's Health Insurance Program, an issue that always had broad bipartisan support, does not give me comfort moving forward on health care reform.

I ask unanimous consent to set aside the pending amendment and call up my amendment, No. 71. I do not know how much debate there will be on it, but I have nothing more to say on that amendment.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, I wish to emphasize that I do not disagree with what he said, he said it accurately, but here is the point I am trying to make. In just a few months, we are going to be working on health care reform and we are going to be working, within those few months, on how the Children's Health Insurance Program fits in with it. We are going to be going through this exercise once again, so we wasted a lot of time here for nothing.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, in closing today--and I know we have a few votes, but we are about done--I wish to talk about bipartisanship. I believe I have a history of getting bipartisan compromises done. Over the last several years, I have worked to deliver important bipartisan legislation on taxes, trade, and health care. We work together, we make commitments, and we sometimes have to say no to Members of our own party who would put their specific interests ahead of bipartisanship. It is tough at times, but when we work together to produce legislation, we are better off for doing so.

Lately, I have seen a disturbing change in the way bipartisanship appears to be working around the Senate. Last year, on Medicare, we were working together for months--I am talking about for months--on a bipartisan bill to extend a lot of things in Medicare. It was jointly drafted. There were many provisions in the bill I strongly supported. But when we came to an impasse on some of the tough political issues, the majority solved the tough issues the way they wanted them and moved forward. That is not the way I think bipartisanship should work.

Then we have this bill before us today. It is largely the work of Senators Baucus, Hatch, Rockefeller, and myself. It should be a bipartisan piece of legislation, but it is not. In this case, the majority decided to make some very political changes in the bill and presented it to us as a ``take it or leave it'' proposition. Today, I choose to leave it.

Some Senators have tried to argue that this bill is 90 percent the bill we voted in 2007. I wonder that those Senators don't realize how insulting it is to me to hear that. It is an open admission that the majority unilaterally changed 10 percent of the bill and has presented it to me as a take it or leave it; it can still be bipartisan, Chuck Grassley, if you will just do what we tell you to do.

The stimulus bill coming next week is no better. We were presented with a bill and asked if we wanted to sign on to it and call it bipartisan. That approach shouldn't come as a surprise to anybody or much of a surprise at all. As the Speaker said: We won the election, we write the bills. I must admit I appreciate why House Republicans decided yesterday they would not sign off on Speaker Pelosi's version of bipartisanship.

We need to get back to real bipartisanship around here.

I yield the floor.

Mr. President, I suggest the absence of a quorum.

Mr. President, this is where you get the wool pulled over your eyes. Here we are, in the last moments of a very partisan debate, and we have one last vote to abandon further compromises we made in 2007. This one weakens fraud protection.

In that bill 2 years ago, we reached a carefully crafted compromise, balancing access and program integrity. With this amendment, the majority backs away from that compromise further. In 2007, we agreed that an express lane application would require a signature from the applicant acknowledging they were applying for Medicaid or SCHIP. This change eliminates the signature requirement.

It is not technical, it is substantive, and it is going to lead to fraud. We should vote this down because we don't want to promote fraud.

Mr. President, I ask for the yeas and nays.

What do you mean there is not a sufficient second?

Mr. President, people on my side asked for a vote. That is why I am asking for it.

I ask for the yeas and nays.

Mr. President, we all know the rest of this year in health care we have big things ahead of us. We know the bill before us today will make the difference for 4 million or so uninsured kids. So 4 million uninsured Americans down but 42 million uninsured Americans to go. That is not going to be an easy task. If we are going to reform our health care system to cover all Americans, if we are going to improve the quality of care to provide for all Americans, if we are going to bring down the cost of health care for all Americans, we need to work together.

If we are going to work together, we need to get a better understanding of what bipartisanship really means. It is not, we will write 90 percent of the bill together and ask the minority to vote for the last 10 percent, like it or not. It is not: here is the bill, does the minority want to sign off on it and let us call it bipartisan?

It is, frankly, very difficult for me to believe we can return to true bipartisanship. But we will finish this bill today, and then I am going to roll up my sleeves. I am going to sit down with the majority to try to improve our health care system for all Americans despite recent evidence that true bipartisanship is elusive here in the Senate.

I know the issues in front of us are too important for me to do anything less than my very best for all those Americans out there who expect us to solve the problems of the day and make a better America for tomorrow's children and all of us.

Mr. President, 3 years ago, I started conducting oversight of the Securities and Exchange Commission. That oversight began in response to a whistleblower who came to my office complaining that SEC supervisors were impeding an investigation into a major hedge fund.

Soon afterward, I came to the floor of the Senate to introduce an important piece of legislation based on what I learned from that oversight. The bill was aimed at closing a loophole in securities law that allows hedge funds to operate under the cloak of secrecy. Unfortunately, that bill, S. 1402, was never taken up by the Banking Committee in the last Congress.

In light of the current instability in our financial system, I think it is very critical for the Senate to deal with this issue and do it in the near future. Therefore, I am pleased Senator Levin, who is on the floor, and I worked together to produce an even better version of the bill than I introduced previously, and we are now doing that in the 111th Congress.

I thank Senator Levin because he is on a very important oversight committee as well and does a lot of oversight, as I do. I appreciate everything he does in maybe a lot of different areas than I do, but I appreciate working together with him on this issue.

This new bill, the Hedge Fund Transparency Act, does everything the previous version did, but it does more and does it better.

As in the previous version, it clarifies current law to remove any doubt that the Securities and Exchange Commission has the authority to require hedge funds to register--simply to register--so the Government knows who they are and what they are doing. It removes the loophole previously used by hedge funds to escape the definition of an ``investment company'' under the Investment Company Act of 1940.

Under this legislation, hedge funds that want to avoid the stringent requirements of the Investment Company Act will only be exempt if, one, they file basic disclosure forms; and two, cooperate with requests for information from the Securities and Exchange Commission.

I thank Senator Levin for not only cosponsoring this legislation but also contributing a key addition to this new version of the bill. In addition to requiring basic disclosure, this version also makes it clear that the hedge funds have the same obligations under our money laundering statutes as other financial institutions. They must report suspicious transactions and establish anti-money laundering programs.

One major cause of the current crisis is a lack of transparency. Markets need a free flow of reliable information to function properly. Transparency was the focus of our system of securities regulations adopted way back in the 1930s. Unfortunately, over time, the wizards on Wall Street figured out a million clever ways to avoid transparency. The result is the confusion and uncertainty fueling the crisis today that we see.

This bill is an important step toward renewing commitment to transparency on Wall Street and establishing credibility in our financial sector among the American populace. Unfortunately, there was not much of an appetite for this sort of commonsense legislation when I first introduced it before the financial crisis erupted. Hopefully, attitudes have changed, given all that has happened since the collapse of Bear Stearns last March. It is all very obvious to us, and particularly connected with the credit crunch and with the recession.

Hedge funds are pooled investment companies that manage billions of dollars for groups of wealthy investors, and do it in total secrecy. Hedge funds affect regular investors. They affect the market as a whole. My oversight of the SEC convinces me that the Commission needs much more information about the activities of hedge funds in order to protect the markets. Any group of organizations that can wield hundreds of billions of dollars in market power every day should be transparent and disclose basic information about their operations to the agency that Americans rely on as the watchdogs of our Nation's financial markets.

As I explained when I first introduced this bill, the Securities and Exchange Commission already attempted to oversee the hedge fund industry by regulation. Congress needs to act now because of a decision of a Federal appeals court. In 2006, the DC Circuit Court of Appeals overturned an SEC administrative rule requiring the registration of hedge funds. That decision effectively ended all registration of hedge funds with the Securities and Exchange Commission, unless and until we in Congress take action.

The Hedge Fund Transparency Act would respond to that court decision by, one, including hedge funds in the definition of investment company; and two, bringing much needed transparency to this supersecretive industry. The Hedge Fund Transparency Act is a first step in ensuring that the Securities and Exchange Commission has clear authority to do what it has already tried to do. Congress must act to ensure that our laws are kept up to date as new types of investments appear.

Unfortunately, this legislation hasn't had many friends. These funds don't want people to know what they do or who participates in them. They have fought hard to keep it that way. Well, I think that is all the more reason to shed some light--particularly some sunlight--on them to see what they are doing.

So I urge my colleagues to cosponsor and support this legislation, to support Senator Levin of Michigan and me in this effort as we work to protect all taxpayers, large and small.

Once again I thank Senator Levin. And before I yield the floor, Mr. President, I ask unanimous consent to have printed in the Record a background paper on the Hedge Fund Transparency Act.

Mr. President, 3 years ago, I started conducting oversight of the Securities and Exchange Commission. That oversight began in response to a whistleblower who came to my office complaining that SEC supervisors were impeding an investigation into a major hedge fund.

Soon afterward, I came to the floor of the Senate to introduce an important piece of legislation based on what I learned from that oversight. The bill was aimed at closing a loophole in securities law that allows hedge funds to operate under the cloak of secrecy. Unfortunately, that bill, S. 1402, was never taken up by the Banking Committee in the last Congress.

In light of the current instability in our financial system, I think it is very critical for the Senate to deal with this issue and do it in the near future. Therefore, I am pleased Senator Levin, who is on the floor, and I worked together to produce an even better version of the bill than I introduced previously, and we are now doing that in the 111th Congress.

I thank Senator Levin because he is on a very important oversight committee as well and does a lot of oversight, as I do. I appreciate everything he does in maybe a lot of different areas than I do, but I appreciate working together with him on this issue.

This new bill, the Hedge Fund Transparency Act, does everything the previous version did, but it does more and does it better.

As in the previous version, it clarifies current law to remove any doubt that the Securities and Exchange Commission has the authority to require hedge funds to register--simply to register--so the Government knows who they are and what they are doing. It removes the loophole previously used by hedge funds to escape the definition of an ``investment company'' under the Investment Company Act of 1940.

Under this legislation, hedge funds that want to avoid the stringent requirements of the Investment Company Act will only be exempt if, one, they file basic disclosure forms; and two, cooperate with requests for information from the Securities and Exchange Commission.

I thank Senator Levin for not only cosponsoring this legislation but also contributing a key addition to this new version of the bill. In addition to requiring basic disclosure, this version also makes it clear that the hedge funds have the same obligations under our money laundering statutes as other financial institutions. They must report suspicious transactions and establish anti-money laundering programs.

One major cause of the current crisis is a lack of transparency. Markets need a free flow of reliable information to function properly. Transparency was the focus of our system of securities regulations adopted way back in the 1930s. Unfortunately, over time, the wizards on Wall Street figured out a million clever ways to avoid transparency. The result is the confusion and uncertainty fueling the crisis today that we see.

This bill is an important step toward renewing commitment to transparency on Wall Street and establishing credibility in our financial sector among the American populace. Unfortunately, there was not much of an appetite for this sort of commonsense legislation when I first introduced it before the financial crisis erupted. Hopefully, attitudes have changed, given all that has happened since the collapse of Bear Stearns last March. It is all very obvious to us, and particularly connected with the credit crunch and with the recession.

Hedge funds are pooled investment companies that manage billions of dollars for groups of wealthy investors, and do it in total secrecy. Hedge funds affect regular investors. They affect the market as a whole. My oversight of the SEC convinces me that the Commission needs much more information about the activities of hedge funds in order to protect the markets. Any group of organizations that can wield hundreds of billions of dollars in market power every day should be transparent and disclose basic information about their operations to the agency that Americans rely on as the watchdogs of our Nation's financial markets.

As I explained when I first introduced this bill, the Securities and Exchange Commission already attempted to oversee the hedge fund industry by regulation. Congress needs to act now because of a decision of a Federal appeals court. In 2006, the DC Circuit Court of Appeals overturned an SEC administrative rule requiring the registration of hedge funds. That decision effectively ended all registration of hedge funds with the Securities and Exchange Commission, unless and until we in Congress take action.

The Hedge Fund Transparency Act would respond to that court decision by, one, including hedge funds in the definition of investment company; and two, bringing much needed transparency to this supersecretive industry. The Hedge Fund Transparency Act is a first step in ensuring that the Securities and Exchange Commission has clear authority to do what it has already tried to do. Congress must act to ensure that our laws are kept up to date as new types of investments appear.

Unfortunately, this legislation hasn't had many friends. These funds don't want people to know what they do or who participates in them. They have fought hard to keep it that way. Well, I think that is all the more reason to shed some light--particularly some sunlight--on them to see what they are doing.

So I urge my colleagues to cosponsor and support this legislation, to support Senator Levin of Michigan and me in this effort as we work to protect all taxpayers, large and small.

Once again I thank Senator Levin. And before I yield the floor, Mr. President, I ask unanimous consent to have printed in the Record a background paper on the Hedge Fund Transparency Act.

Madam President, I ask unanimous consent that Terri Postma and Rachel Miller, members of my staff, be granted the privilege of the floor during the debate of H.R. 2, the Children's Health Insurance Program Reauthorization Act of 2009.

Madam President, let me say to the Acting President pro tempore that it is a shame she has to be in the chair every time I give a speech, hearing the same things twice.

I shouldn't have put the new Senator in that position, but I thought a little bit of humor around here doesn't hurt anything, does it?

I thank the Senator from Montana, the chairman of the committee, for his remarks. Obviously, from what I stated yesterday, I have a difference of opinion on that issue. I am not going to speak about that because I spoke about it yesterday.

Madam President, I would like to speak generally about the SCHIP bill, not about a specific amendment at this point, although I might mention some differences we have with the original bill.

I have been a Member of the Senate now for quite a few years. I have worked across the aisle on many initiatives in my time in the Senate. We have worked together--we meaning Democrats and Republicans, and in my case as an individual, the Senator from Iowa--and I am speaking about a close working relationship I have with the Senator from Montana, the chairman of the committee now. We have worked together on major tax, trade, and health care legislation over the last few years where we were able to set aside partisanship and work together to make good policy. I know what it means to make a compromise. I know what it means to keep that compromise.

In 2007, I worked with my friend Senator Baucus, as well as Senator Hatch, a Republican, and Senator Rockefeller, a Democrat, to pass the reauthorization to the Children's Health Insurance Program. We twice passed a bill in the Senate with wide bipartisan margins. Was it a bill Senator Hatch and I as Republicans would have written? No. Was it a bill Senator Baucus and Senator Rockefeller would have written if they were writing the bill all by themselves? No. The bill was a compromise, so everybody gives a little bit. We compromised to get a bipartisan vote, and we were successful in getting that bipartisan vote. We won a veto-proof majority in the Senate. We came just a few votes close of a veto-proof majority in the House. In fact, Senator Baucus and I worked with House Republicans to try to get a few more House Republicans to come around so we could have a bill on the books in 2007 or early 2008. Unfortunately, that didn't work out. Unfortunately, at the time, President Bush refused to sign the bill. I thought he was wrong to veto the bill. I still think he was wrong to veto it. I said so loudly and clearly.

I would like to refer to some comments I made 2 years ago to the Senate at that particular time. I don't have the exact date, but it was during the debate on the SCHIP bill at that particular time, and I would quote from that debate. This is the Senator from Iowa saying this 2 years ago:

First, the President himself made a commitment to covering

more children. I wish to refer to the Republican National

Committee in New York City in 2004, and President Bush was

very firm in making a point on covering children. Let me tell

you what he said.

This is the quote I read from President Bush at that time, and he refers to a new term, meaning the term that would start in 2005.

American children must also have a healthy start in life.

In a new term, we will lead an aggressive effort to enroll

millions of poor children who are eligible but not signed up

for the government's health insurance programs. We will also

not allow a lack of attention or information to stand between

these children and health care that they need.

Now, that is the end of the quote from President Bush in 2004. And, Madam President, when I referred to the Republican National Committee in that quote, I think I made a mistake 2 years ago. I was referring to the convention and I said committee.

At that time during the debate in 2007, I went on to say:

That was back in New York City, early September 2004. Three

months later the President is reelected, with a mandate. It

seems to me the President was very clear in his convictions

then. Let me repeat his words because I think they are

important. He said he would lead an aggressive effort to

enroll millions of poor children in government health

insurance programs.

Then I go on to speak for myself:

President Bush, this is your friend Chuck Grassley helping

you to keep the promise you made in New York City, and

helping you keep your mandate that you had as a result of the

last election. But somewhere the priorities of this

administration seem to have shifted. The Congressional Budget

Office reports that the proposal for SCHIP included in the

President's fiscal year 2008 budget would result in the loss

of coverage, not an increase of coverage as the

administration had been advocating for in the year 2004; and

that the loss of coverage would add up to 1.4 million

children and pregnant women.

That is the end of my speech for that day to the Senate. But I want to say that later in the debate, I referred to this again. So I was trying to make very clear that I was speaking to the President of the United States. This is quoting me:

I quoted the President making a promise at the Republican

Convention in New York. I did that yesterday. I want to state

again what the President said. You can't say it too many

times. I hope at some time the President remembers what he

said.

And this is the President from the Republican Convention:

We will lead an aggressive effort to enroll millions of

poor children who are eligible but not signed up for the

government's health insurance program.

That is the end of the President's quote, but continuing to quote from myself.

An extension of law, which is what is going to happen if

the President vetoes this bill, will not carry out what the

President said at the Republican Convention in New York in

2004. Faced with that, your answer today on this bill, Mr.

President of the United States, should be yes. This bill gets

the job done that you said in New York City you wanted to do.

I hope the President's answer will be yes because if he

doesn't veto this bill, then we will do those things he said

he wanted to do. It will help more than 3 million low-income,

uninsured children. About half of the new money is just to

keep the program running. The rest of the new money goes to

cover more low-income children.

Before I go on with my remarks, I want to say that I think I and a lot of other Republicans who voted for that SCHIP bill in 2007 were vindicated when we made the point that, at $5 billion the President didn't have enough money in his budget to cover kids currently enrolled in SCHIP because the next year, the President's budget for SCHIP was $20 billion. We kept saying to President Bush in 2007, you know, $5 billion isn't going to do it. But I think that by putting $20 billion in for FY 2008, the President was admitting that $5 billion wasn't enough.

Now, why do I go to the trouble of explaining to the Senators who are listening what I said 2 years ago? Because we had a Republican President.

I don't like the way this bill has worked out because the bill we have before us today departs so much from that bipartisan compromise on which so many of us worked so hard. So maybe people listening are saying: Well, Chuck Grassley, a Republican, we have a Democratic President, he is my President, but I am going to just be partisan. So I want the public to know that I am approaching this issue in a way where when I disagree with the policy--whether it is the policy of the Bush administration at that time, or the policy of the partisan bill we have before us now that I will speak out.

We have a President today who is going to sign this bill. Unfortunately, we are here with a bill that goes back on those compromises we worked so hard on 2 years ago. For reasons I still don't fully understand, the majority is bound and determined to set aside that hard work that led to that bipartisan agreement 2 years ago. They have decided that going back on critical compromises is more important than achieving the same bipartisan votes as we did in 2007. The Senate should now be considering our second bill, our final compromise of 2007.

I am disappointed because the State Children's Health Insurance Program is the product of a Republican-led Congress in 1997, signed into law by a Democratic President. This has been a very bipartisan issue for 11 years down the road. It is a targeted program designed to provide affordable health coverage for low-income children of working families. These families make too much to qualify for Medicaid but struggle to afford private insurance.

In 2007, Senator Rockefeller made the point that, ``CHIP,'' the Children's Health Insurance Program, ``legislation has a history of bipartisanship. I am quite proud of it.'' That is what Senator Rockefeller said. In 2009, however, the Democratic leadership, having increased their majority, has decided to abandon a number of good-faith agreements made between Members during the last Congress. In doing

so, the Democratic majority has embarked on a reckless course of action designed to alienate the very Republicans who stood up to President Bush when he vetoed the SCHIP bills and who still carry the scars from those fights. It is very disappointing, then, that the first health bill the new Democratic Congress sends to the new Democratic President, my President, is legislation that breaks from that bipartisan tradition.

I want my colleagues to understand that I am very reluctantly in a position of having to fight against this bill. After the bruising battles over SCHIP in 2007, and with the emergence of health reform as a priority for the 111th Congress, I wanted to avoid another fight over the Children's Health Insurance Program and direct all efforts to enacting a broadly bipartisan health reform bill, which I still think is a possibility. At least the meetings we are having lead me to say that at this point. Maybe 6 months from now I will be disappointed, but I hope not.

However, the Democratic majority was determined on this bill that they wanted a short-term ``win'' over a broader, larger effort, and therefore I was told SCHIP was going to be one of the first bills considered by the new Congress.

I was informed that rather than move forward with the second vetoed bill--a bill with changes that Speaker Pelosi called, and this quote is about that compromise of 2 years ago, which she said was ``a definite improvement on the [first] bill''--the Democratic leadership had decided to move ahead with the first vetoed bill instead of this compromise that Speaker Pelosi said was better than the first bill.

Even though I could have insisted on negotiating off the second bill which represented a number of improvements, as Speaker Pelosi said, and I believed it strengthened the bill, I agreed to try to work out a compromise somewhere between that first vetoed bill and the second vetoed bill of 2007. Unbelievably, under pressure from Democratic leadership, my willingness to work out a compromise that could have set us on a bipartisan pathway was met with a resounding: Thanks, but no thanks. No negotiations, no give and take, no compromises, no bipartisanship: Take it or leave it.

The Senate has abandoned moving forward with a bill that generated a great deal of Democratic praise just 2 years ago. The hard work and bipartisan cooperation that went into the children's health insurance bills in 2007 produced legislation that President Obama's new Chief of Staff, Rahm Emanuel, who was a Member of the House of Representatives at that time, said ``should have strong support from both Democrats and Republicans.'' That is from 2 years ago.

However, on a number of key issues, the other side does not even want to support the first children's health insurance bill of 2007.

The bill before the Senate now completely eliminates policies on crowdout of private insurance that were in both vetoed bills, which brings me to a question: What exactly was wrong with the crowdout policy of both of those vetoed bills? The Congressional Budget Office, in a 2007 report on crowdout, estimated that the Children's Health Insurance Program has a crowdout rate of ``between a quarter and a half of the increase in public coverage resulting from the Children's Health Insurance Program.''

The Congressional Budget Office goes on to elaborate that ``for every 100 children who enroll as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children.''

I would be very interested in learning the reasons those on that side of the aisle completely eliminated the crowdout provisions from both of the 2007 SCHIP bills. Certainly, it is not because Democrats have put forward a policy that addressed crowdout in a better or more efficient manner in the bill before the Senate now. Certainly, it is not because Democrats have a new analysis that crowdout is no longer occurring, as CBO says, especially in the expansion of public programs.

I hope Members of this body who supported the crowdout policy of 2007 and now are supporting its elimination will come to the floor and explain to me and other Members of this body why the Democratic majority is not concerned about the problem of replacing private coverage with public coverage.

In other words, if people have insurance today, and you are setting up a program that, even though it increases the number of people covered will not cover all the children eligible for public programs, why would you want to drive people out of private coverage into public coverage? That is what happens, according to the Congressional Budget Office. The Congressional Budget Office is a nonpartisan group of people who are experts in this area.

As I said yesterday, I believe it was, in a comment directed to something Senator Durbin of Illinois said--and I am not denigrating what he said, I am supplementing what he said--he led us to believe the reason you want to have this policy is because there might be some people who have poor private coverage who would be better off in the public program. I am not saying that might not be true. But the Congressional Budget Office tells us you get most crowding out in upper middle-income people, more than you do in lower income people. In other words, maybe people who can afford it better and have higher incomes decide: Why should I pay out of my pocket when I can go on the public program?

I think it is wrong to throw aside something that we had in 2007 that was going to keep people in private coverage and encourage them to go where we do not have enough money to cover children who do not have anything.

Neither bill vetoed by President Bush in 2007 included a provision to allow States to be reimbursed at the Medicaid and SCHIP levels for legal immigrant children and pregnant women. I am not going to go into this issue in depth because I did that yesterday. But this issue does open a difficult and contentious immigration issue that does need to be brought up.

One of the reasons I was able to support the compromise of 2007 on the Children's Health Insurance Program was it did not contain the controversial provisions to direct Federal resources to the coverage of legal immigrants. I said yesterday how in some instances it could end up covering people who have come here illegally.

In the 1996 welfare reform bill, we required the sponsors of legal immigrants to sign an affidavit that they would provide for those immigrants for the first 5 years they were in the country. With this bill we are allowing sponsors to go back on that commitment. If you have a contractual relationship, it seems to me to be only morally right that the Federal Government would want to have that moral contract--not encourage ditching it. But this bill would allow that to happen. We are allowing sponsors to go back on that commitment they made to the taxpayers of this country.

Additionally, the $1.3 billion the bill provides for these immigrants who were promised they would be taken care of is money that could be far better spent on poor, uninsured American children. It is a little bit the same argument I just gave about crowdout.

If you have people on private insurance, then save the public money for people who are currently eligible for public programs, but who are not insured. Use the $1.3 billion for those people.

In 2007, during the debate, the majority leader, Mr. Reid, said this about the Children's Health Insurance Program. It was ``a very difficult but rewarding process for me. It indicates to me that there is an ability of this Congress to work on a bipartisan, bicameral basis.''

You have an election in between, but it seems to me, kind of, comity would dictate if that was a good statement to make in 2007, it would hold true for 2009 as well. This should have been an easy and quick bill to pick up and pass this year. Our bipartisan coalition fought side by side to get the Children's Health Insurance Program done in 2007. Picking up that baton and carrying it across the finish line should have been a straightforward exercise. For somebody like me in the Republican Party who went against his own caucus to get a bipartisan agreement, to stand against my own President and work hard in the House of Representatives to get a few more Republican votes, it kind of leaves us dangling out there. Without a show of appreciation, how can you work in a bipartisan way?

Instead, what are we headed toward? A process that will end up with a bill

that many Republicans, like this Senator, who have been strong supporters of the Children's Health Insurance Program are no longer comfortable supporting.

In 2007, the Children's Health Insurance Program received high praise from the other side. I would like to give a quote, ``a very difficult but rewarding process,'' and one that indicated--showed the ability of Congress, quoting again ``to work on a bipartisan, bicameral basis.''

If the Senator from Montana--I am going to smile at you. That is your quote from 2 years ago.

I have three sentences, if I can have unanimous consent for those?

This is a very unfortunate beginning for the 111th Congress. I regret the Democratic leadership has so quickly abandoned a bipartisan process. It does not bode well for cooperative work in the coming months.

I yield the floor.

I have yielded the floor.

Madam President, I ask unanimous consent the order for the quorum call be rescinded.

Madam President, I support the amendment offered by Senator Roberts. I would like to say a few things about it at this point.

The Roberts amendment would focus the Children's Health Insurance Program back to the original purpose of the program, which is coverage of low-income children. This amendment eliminates the earmarks in the bill which make it easier for States to cover children from families with incomes above 400 percent of poverty.

The amendment sets an actual threshold on a State's ability to expand SCHIP at higher income levels. It does this by capping eligibility for taxpayer-subsidized health coverage in the Children's Health Insurance Program at $65,000 in annual income. The amendment fixes another loophole in the bill which would permit States to set Medicaid eligibility higher than the Children's Health Insurance Program.

Last night the Senate Finance Committee voted out an economic stimulus package with $87 billion in increased Medicaid spending. The increased Medicaid spending is in the form of higher Federal payments to States for the coverage of people in the Medicaid Program.

We heard over and over, from the other side of the aisle, how the Federal taxpayers need to pay for more Federal dollars going into Medicaid because, if they do not, then States will cut benefits or cut back on the already dismal payments for providers who see Medicaid patients. In fact, I offered an amendment to that stimulus bill to protect the safety net. It was defeated on a party-line vote.

My amendment essentially said that if Congress is going to give States $87 billion for their Medicaid Programs, then we should make sure they do not undermine access to vital services with cutbacks to children's hospitals and public hospitals that are already struggling, and we should make sure States do not cut funds for health centers and for pediatricians.

The $87 billion in the so-called stimulus bill will not do much good to protect low-income children and families' health coverage if States are allowed to take these billions of dollars intended to protect the safety net and instead use them as their own slush fund to do whatever they want.

But, sadly, my amendments to protect the safety net were defeated. What we now have is the so-called stimulus bill. In that is nothing more than a $87 billion slush fund for the States.

With States crying out for a multibillion dollar bailout from the Federal Government, it seems to me very ironic that we have come to such a logjam over whether to allow States to expand income levels as high as 300 percent to 400 percent of poverty.

In one State, I believe it is New York, that is above $87,000-a-year income, plus $40,000 to disregard above that.

On the one hand, the other side is fighting so hard to allow States to expand the Children's Health Insurance Program to allow coverage at these higher income levels while, on the other hand, they are saying that unless the Federal Government dumps billions of dollars into State coffers, States will be forced to eliminate benefits and services at very lowest income levels.

That argument obviously makes no sense whatsoever. We should be focusing our efforts on covering low-income kids first. The other side will come down here and say that is what they are doing. But when they are unwilling to back up their rhetoric with changes to actually do that, I wish to make sure everyone understands what we are talking about with this legislation and particularly the Roberts amendment.

The Children's Health Insurance Program provides higher Federal matching dollars to States to provide health coverage for low-income children. That is what it does. The higher Federal matching dollars are there to encourage States to expand their program and get these kids covered. This program has been in place now since 1997--obviously 12 years--and still there are about 6 million low-income uninsured children in America today. The Children's Health Insurance Program reauthorization should be focused on getting these low-income kids covered and

that should be the top priority in this bill. But this bill goes in a different direction. It allows coverage of kids and families with incomes of $83,000.

The median family income in America is roughly $50,000, and I imagine in my State it is probably even lower than that. The median income is the point at which half the households have incomes above that level and half have incomes below that level. So when the Government steps in and says let's have the taxpayers pay for your health coverage, those scarce dollars should be focused on the low-income kids this program is intended to insure--those kids, obviously, who are still uninsured. That ought to be our first priority.

But when the program is allowed to cover children in families at $83,000, and even higher, that means families below the median income are being forced to pay for the health care costs for children of families in the top half, and they are being forced to have their taxes go up to pay for that coverage in the top half, when they may not even have coverage for their own children. That is just plain wrong.

What Senator Roberts' amendment does is cap the eligibility for programs at families with incomes of $65,000. Some people are going to say even that is too high. But at least we are kind of keeping it toward the national median income. That is still a family income that is above, obviously, the median income. A lot of people would say that is still way too high. I cannot say that too many times because I know what the grassroots of America are saying about what we do around here, particularly in rural America; that it seems like we do not understand how the average family lives. But the Roberts amendment is better than the unlimited coverage this Children's Health Insurance Program bill would allow.

But the other side does not want to have any amendments. This is a fundamental difference we have in how we think about things. They believe the Government has to be the solution. They will oppose putting any income limits on eligibility. They want to allow States to expand their programs so taxpayers in the bottom half of incomes in America are helping to buy health coverage for people in the top half of the income or in my State of Iowa, where the average income is less than $50,000, they are going to say Iowans ought to support New York families with incomes of $83,000 for a Children's Health Insurance Program in that State. They believe Government has to be a solution to cover higher income kids. They believe if the Government does not do it, then it will not happen--even though we have about 6 million low- income kids still uninsured in this country; even though States are crying out for the multibillion dollar bailout that is going to be in the stimulus package. They still want to say they will oppose putting any limits on this program. It is outrageous.

When we are headed toward a Federal budget deficit of $2 trillion or more this year, we need to get a grip on reality. Policies that encourage expansions at such high income levels, $83,000 and above, are counter to that effort and are at odds with the fiscal reality and the current demands of States.

I say that every Member ought to take a look at the Roberts amendment. It is a commonsense step to make this bill do what the Children's Health Insurance Program was supposed to be doing for the last 12 years, since it was first instituted in 1997--to help low- income kids get the coverage that they would not otherwise have.

I support this amendment and urge my colleagues to do the same.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, if it is OK with my colleagues, I would like to give a short statement as in morning business and then give a longer one on the Kyl amendment. Is that OK?

I thank the Senator.

Mr. President, first of all, I ask unanimous consent to speak as in morning business for a few minutes.

Mr. President, I wish to speak on Kyl amendment No. 46, named after Senator Kyl from Arizona.

I strongly support the amendment that has been offered by Senator Kyl. This is to the children's health insurance bill. This amendment would reinstate the crowdout policies that were agreed to by both sides in the bipartisan children's health insurance bills that we debated in the Senate in 2007. For reasons that I cannot fathom, this important section of the bill was dropped this year.

A high incidence of crowdout is problematic for many reasons. Before we go any further, I wish to make sure it is clear what the term ``crowdout'' means. Crowdout can have many meanings, in fact, so let me elaborate.

The crowdout we are referring to is when a family already has health coverage for their child and they cancel that policy to put them on a government program. This is referred to as crowdout with the idea that when the government comes in and offers taxpayers subsidized health coverage, it crowds out the coverage that was already there in the first place. This is a bad thing when it happens for a number of reasons, so I will go into those reasons.

First of all, crowdout makes it more difficult for employers to offer health insurance coverage. It especially impacts small employers who may be unable to meet health plan participation requirements. It has implications for the cost of coverage for those who have private plans because it removes a large number of young and healthy individuals from the risk pool, thus spreading the cost of high-risk individuals across smaller and, in most cases, older pools.

The second reason crowdout is bad is it inappropriately uses taxpayers' dollars to fund coverage that could have been provided by an employer. Individuals either leave coverage that had been funded in part by their employer or do not enroll in plans offered and subsidized by their employer to enroll in a private plan. When this occurs, the employer contribution to those plans is replaced by taxpayer dollars.

So crowdout is bad because it crowds out health coverage that was already there. It means taxpayer-subsidized coverage is gradually creeping in and taking over the market. But it is also bad because it is a waste of taxpayers' money. That is what we ought to emphasize because even though this bill meets a good goal of millions of more kids being covered, the question is, are we making the best use of taxpayers' dollars because there are another several million out there we ought to be covering. So when we are incentivizing people leaving private coverage for taxpayer support, then that money isn't available for the millions of people who aren't being covered.

When crowdout happens, it means the Federal taxpayers are being told to pay for coverage for someone who already had coverage. If that child already had coverage, then it goes without saying this child was not uninsured.

Remember the whole problem is when the taxpayers end up paying for coverage that was already there. So the more the children's health insurance programs are allowed to expand to high incomes, the bigger the problem of crowdout becomes.

The focus of this bill should be covering the millions of uninsured kids we have in America with emphasis on the lower the income, the more rationale there probably is for covering kids.

Crowdout is also a bigger problem when the children's health insurance programs try to cover higher income kids. It is easy to see why. Children who live in families with higher incomes are much more likely to have access to private coverage. It means more taxpayer dollars being spent on kids who already have coverage, and it means fewer dollars to cover the lower income kids who are still uninsured. So it is backwards when this happens.

When scarce taxpayer dollars are used to pay for coverage for someone who wasn't uninsured in the first place, this is a complete waste and a mismanagement of scarce resources, and it is a waste of scarce Federal dollars at a time when we cannot afford to do that. It also means one less dollar that could have been used to cover a child who doesn't have any health insurance whatsoever.

The policies that Members on both sides of the aisle agreed to in both of the bipartisan children's health insurance bills we debated in 2007 had a very good policy to minimize crowdout. First of all, those bills--the similar children's health insurance bills that were debated and passed in 2007--had very good policies to minimize this problem we refer to as crowdout. First of all, those bills set out a process in place to study the issue of crowdout. It asked the Government Accountability Office to do a report for Congress describing the best practices that each of the 50 States are using to address the issue of crowdout and whether things such as geographic variation or family income affects crowdout. The provision eliminated in the bill before the Senate--and this is this year, in 2009--also would require the Institute of Medicine to report on the most accurate, reliable, and timely way to measure the coverage of low-income children and the best way to measure crowdout. That provision was eliminated in this bill.

Based on these recommendations, the Secretary of Health and Human Services was required to develop and publish recommendations regarding best

practices for States to address crowdout. The Secretary was also required to implement a uniform standard for data collection by States to measure and report on health coverage for low-income children and crowdout.

The bipartisan crowdout policy of 2 years ago would also require States, having received the recommendations from the Secretary, to describe how the State was addressing the children's health insurance program crowdout issue and how the State was incorporating the best practices developed by the Secretary. The crowdout policy in both bipartisan bills 2 years ago included an enforcement mechanism to hold States accountable for minimizing crowdout when they expand to higher income levels.

This is a very important issue because as we learned from the 2007 report from the Congressional Budget Office, crowdout is a particularly acute problem in children's health insurance programs because crowdout occurs more frequently at higher income levels.

The Congressional Budget Office report also concludes that:

In general, expanding the program to children in higher

income families is likely to generate more of an offsetting

reduction in private coverage than expanding the program to

more children in low-income families.

I wish to emphasize for the public at large--my colleagues know this--the Congressional Budget Office is a nonpartisan, fiscal expert. So this is not a partisan issue of that Congressional Budget Office report.

Going on to refer to the Congressional Budget Office, that office estimates that:

The reduction in private coverage among children is between

a quarter and a half of the increase in public coverage

resulting from SCHIP. In other words, for every 100 children

who enroll as a result of SCHIP, there is a corresponding

reduction in private coverage of between 25 and 50 children.

That is the end of the quote from CBO.

Therefore, under both bipartisan bills, the Secretary, using the improved data mechanism, would determine if a State that was covering children over 300 percent of poverty was doing a good job of covering low-income children. That is to emphasize the point: What was the purpose of SCHIP in 1997? To cover low-income kids who never had any coverage. So you spend a lot of time covering higher income families, and you have less money then to cover low-income kids, and then you have the crowdout that exacerbates that problem.

If it was determined that a State was not doing a good job covering low-income children, then the State will not be able to receive Federal payments for children over 300 percent of poverty. So here there is kind of a sense that we are not arguing if you want to cover people above 300 percent, but, by golly, as a State, you aren't doing a good job of taking care of the low-income kids--where the problem was and why we passed the bill in the first place. You shouldn't be covering people over 300 percent of poverty.

This crowdout policy in both bipartisan bills of 2007 would have worked to minimize crowdout by making sure the States are staying focused on covering low-income kids. So it is a very important issue, and it is one on which we worked together on a bipartisan basis.

There was a lot of debate about crowdout in 2007 when we had extensive discussions about the Children's Health Insurance Program. Everybody recognized this to be a very big problem. So this is why I am so entirely baffled as to why my Democratic colleagues would abandon a provision they helped develop in a bipartisan bill 2 years ago. I don't know why they would want to strike such an important part of the bill and one that also helps blunt sharp criticism of the bill when it allowed States to expand eligibility to 300 percent of poverty.

The bill before us now allows expansion to even higher and higher income kids.

As the Congressional Budget Office says, the crowdout problem is going to be even worse under this bill than it is already.

According to the Congressional Budget Office table detailing estimates of enrollment based on this bill, 2.4 million children will forgo private coverage for public coverage. This is a very troubling number. The fact that the Senate bill does not address this problem and goes back on policies that were worked out on a bipartisan basis is problematic.

I hope Members will reevaluate their opposition to policies to reduce crowdout and to vote in support of the amendment I have been talking about that my colleague, Senator Kyl from Arizona, has offered.

We need to do the right thing here. We need to keep the Children's Health Insurance Program focused where it first started out in 1997 on lower income kids, for sure, in the case of a handful of States covering more adults than they do even kids.

We need to prevent scarce taxpayer funds from being used to pay for kids who already have health coverage. We need to put this bipartisan policy that we had in two bills in 2007 back in this bill.

I urge my colleagues to support the Kyl amendment and do just that.

I yield the floor.

Mr. President, it is no secret that I have worked for decades to bring greater transparency and accountability to all facets of Government operations. If there is one thing I have learned over those years, it is that you cannot achieve the goal of greater transparency and accountability without the access to information.

Today, we are experiencing the greatest financial crisis of our Nation's history. Daily we hear of more companies failing and the need for many more billions of Federal funds to save this bank or that investment company. In response to this crisis, the Treasury Department unveiled an initial plan to buy stakes in banks and other financial firms. That program is known as the Troubled Asset Relief Program known to all of us around here by the acronym TARP, T-A-R-P, and it is costing the American taxpayers nearly three-quarters of $1 trillion.

In an effort to bring maximum accountability to the people for the TARP funds, Congress created a strong Inspector General with the broad powers to investigate and oversee the program, including access to the records of TARP fund recipients. Similarly, in an effort to provide maximum transparency, Congress required the Government Accountability Office, known around here as GAO, to monitor and oversee the TARP program as well. The Government Accountability Office's mission is to look at the overall performance of the initiative and its impact on the financial system.

The Government Accountability Office is also required to prepare regular reports for Congress. However, the Government Accountability Office cannot do its job without access to information, and I have learned that it does not have all the access it needs. Although the Government Accountability Office can examine the records of the Treasury itself and of any of its agents or representatives, the Government Accountability Office does not have access to the books and records of private entities that receive TARP funds. The connection there is public dollars. The public ought to have the right to know.

Believe it or not, the Government Accountability Office can't have access to information from the banks and investment companies that receive billions of taxpayers' dollars; that is the problem. This legislation I am introducing is intended to fix that as well. The Government Accountability Office is supposed to be the eyes and ears of the Congress of the United States. Well, it can't do that job wearing blinders and ear plugs.

Madam President, our goal is to cover 4 million kids, as was spoken by the majority whip. Our goal is to do it in a way so that we actually have the resources to cover children who do not have health insurance.

There are some aspects of the underlying bill before us that would lead families to drop private health insurance, and I am cognizant of what Senator Durbin said, that if you have a bad policy, maybe you ought to be on SCHIP. I don't dispute that. But we have found that when you crowd people out of private health insurance, it is more apt to happen at the highest income levels than at the levels he was talking about, where we ought to be helping people under $42,000.

Then there is another category where they want to help people that sponsors have already assumed the responsibility of making sure their health care would be covered. In that category, we find $1.3 billion being wasted that we can take and use on children who don't have coverage.

So there is no dispute about covering 4 million people. There is a dispute about whether we ought to encourage people who are of higher income to drop out of private policies and to go on the Children's Health Insurance Program. If you talk to people in the Congressional Budget Office--the nonpartisan Congressional Budget Office--you will find that is a fact. Then when we have people sign a contractual relationship with the Federal Government that they are going to provide for the needs of the people they bring into this country, we feel--at least for a period of 5 years, and that is present law--that they should maintain that contractual relationship they have with the government; otherwise, those people would not be here in the first place. So we want to cover 4 million people. We want to cover people who don't have insurance. We don't want to encourage higher income people who do have insurance to go into the State health insurance program, and we want to make sure that people maintain their contractual obligations.

We are going to offer a series of amendments today and tomorrow to bring out these differences between the two approaches, but I am not going to stand by and let anybody on the other side of the aisle say there is a dispute

about covering 4 million people. I will make the point on this side of the aisle that we want to make sure we put emphasis upon covering people who don't have insurance, where they are willing to look at encouraging people to leave private insurance and go into a State-run program or encouraging people to avoid their contractual obligations with the Federal Government. Using our approach, it seems to me, the goal then can be reached so we actually reach more people who don't have insurance.

Amendment No. 41 to Amendment No. 39

Now, the first amendment I am going to offer deals with this issue I referred to as a contractual obligation. The amendment I am offering today is very simple. It increases the coverage of low-income American children currently eligible for Medicaid but who are uninsured relative to the bill before this Senate. My amendment does this by striking the Federal dollars for coverage of legal immigrants and uses those funds to cover more low-income American kids instead.

Let me make it very clear: Whichever bill passes, we are talking about 4 million more kids, but we are still talking about a lot of kids who still aren't going to have coverage that we ought to be concerned about. So this is all about priorities. The Congressional Budget Office has reviewed my amendment and it indeed does the job of covering more low-income American kids. In fact, my amendment will get as many or more low-income American kids health coverage than the majority's bill does with the coverage of legal immigrants.

Does that sound right? It is right. It does not reduce the number of kids covered. It covers as many low-income kids, and maybe even more. The difference is that the additional low-income kids who get health coverage with my amendment are U.S. citizens. It does a better job of enrolling these low-income children than the bill before the Senate. I thought that covering children who were eligible for Medicaid but who were insured was a bipartisan goal shared by my Democratic colleagues. This amendment does exactly that.

I want to get back to the background on the amendment. In other words, there are people who are legally in the country--no dispute about that, legally in the country--who have sponsors. Without the sponsors, they would not be here. Those sponsors have signed an agreement with the Federal Government for these people to come into this country, that they will take care of them for 5 years, that they will not become a public charge. So those sponsors promised for their needs so that they would not be on programs that come out of the Federal Treasury, or else they would not be here. That is a cost of $1.3 billion when you are going to let those people not honor their contractual relationships and allow them to go on the Children's Health Insurance Program. And are they any better off? No, because the people who brought them here promised they were going to fulfill those needs and not become a public charge. But we would take that $1.3 billion and spend it on people who were not promised any coverage but qualify for the Children's Health Insurance Program and cover more kids in the process.

Madam President, I am going to send my amendment to the desk, and I ask that it be read.

Before I do that, I am sorry, I have to ask unanimous consent to set the pending amendment aside.

Madam President, I ask unanimous consent that the reading thus far constitute the reading.

Madam President, did I make a mistake, that I was not supposed to set the amendment aside? I apologize if I made a mistake.

I have said all I am going to say, and from that standpoint, we will be debating this amendment throughout the day. We do not object to what the majority leader said, that he would like to vote on these amendments today. I think it is our intention to do that sometime during the day.

I yield the floor.

Madam President, thank you. For at least as long as Chairman Baucus and I have served as the leaders of the Finance Committee, and certainly during those times I was chairman, all individuals nominated by the President who were subject to the jurisdiction of the Finance Committee have been subject to a thorough and nonpartisan vetting process. In addition to filling out a detailed committee questionnaire, all nominees submit tax returns and the committee is provided with financial disclosures. The review of these documents has nothing to do with the nominee's political affiliation or policy goals.

The Finance Committee's nomination process is there to ensure basic compliance with the law and to confirm that these individuals can be trusted with the incredible responsibilities that come with public service.

My vote on this nominee will be a vote of confidence in the Finance Committee's vetting process; it is a vote for the importance of character and integrity in those who serve; and, specifically, it is a vote for treating Presidential nominees, and all people, in a consistent manner.

This nominee is not the first nominee to run aground on the Finance Committee's vetting process. There are other individuals who, after lengthy discussions with Senator Baucus, me, and committee staff, decided to withdraw from consideration.

In these situations, the Finance Committee keeps details learned during the vetting process private. In cases where the nominee decides to go forward, such as that of this nominee, the committee makes details public in the interest of transparency and good government. I believe the public's business ought to be public. Sometimes when details are disclosed the nominee is confirmed and sometimes the nominee is not confirmed. In these situations, Members have to judge the seriousness of the issues at hand, and the nominees have to judge how far they are willing to go. Consequently, if the nominee decides to move ahead, the information will be released.

However, in the past, nominees who had tax issues as serious as this nominee's, and some who have had less serious issues, have not attained Senate confirmation.

I feel it is improper to judge this nominee by a different standard. I realize that economic times are tough right now, but, if anything, that should be an incentive for us to raise our standards and not lower them.

Finally, I believe we also need to treat all people in a consistent manner. The same Internal Revenue Code applies to everyone regardless of whether someone is a well-known Wall Streeter or a student earning minimum wage. Many people around the country who have not satisfied their tax obligations have been caught by the IRS, as this nominee was for tax years 2003 and 2004. Many people end up having their houses seized, bank accounts frozen, and other assets taken by the Government to pay their tax debts. Some people even go to jail.

There are many people who settle their liabilities without going to jail or having assets seized, but can this system operate with integrity if all parts of it report to someone who was unable for a long period of time to meet his own tax obligations and only did so as a condition of his nomination?

Finally, I want to mention differences of perception of different people who have been found to have unsettled tax liabilities. During last year's Presidential campaign, we read a lot about a man named Joe the Plumber who hailed from Ohio. When this man was found to have a tax lien for State taxes, some portrayed it as evidence that his opinions on national tax policy were irrelevant. However, this nominee's tax problems have been revealed to be much larger than Joe's, and this nominee's defenders still insist he is the only man for the job of Treasury Secretary.

Madam President, I ask unanimous consent that an article discussing this inconsistency by Jonah Goldberg appearing in National Review Online be printed in the Record.

I don't make this decision lightly, but, as I have said, I must uphold the Finance Committee's vetting process; I must vote for the importance of character and integrity in those who serve in government; and I must vote for treating Presidential nominees, and all people, in a consistent manner. Therefore, I must vote against this nominee, Mr. Geithner.

Madam President, I yield the floor and suggest the absence of a quorum.

Mr. President, I am pleased to introduce the Medicare Rural Health Access Improvement Act of 2009.

The purpose of this legislation is to continue ongoing efforts to ensure that Americans in rural areas have access to health care services. Much has been done in the past to improve access to rural providers such as hospitals and doctors. Much more still needs to be done. And it is even more important in light of the economic challenges we face.

I hold town meetings in each of the 99 counties in the great state of Iowa every year. As many know, Iowa is largely a rural state, and a significant concern that I consistently hear during these meetings is the difficulty my constituents experience in accessing health care services. As the former Chairman and currently the Ranking Member of the Finance Committee, it has therefore been a priority for me to improve the availability of health care in rural areas.

In Iowa, as in many rural areas across the country, hospitals are often not only the sole provider of health care in rural areas, but also employers and purchasers in the community. Moreover, the presence of a hospital is essential for purposes of economic development because businesses check to see if a hospital is in the community in which they might set up shop. As you can see, it is vital that these institutions are able to keep their doors open.

In previous legislation, Congress has been able to improve the financial viability of rural hospitals. For instance, the creation and subsequent improvements to the Critical Access Hospital designation have greatly improved the financial health of certain small rural hospitals and ensured that community residents have access to health care.

However, there are still a group of rural hospitals that need help. I am referring to what are known as ``tweener'' hospitals, which are too large to be Critical Access Hospitals, but too small to be financially viable under the Medicare hospital prospective payment systems. These facilities are struggling to stay afloat despite their tireless efforts. Like in many communities in across the country, the staff of tweener hospitals and their community residents take great pride in the quality of care at these facilities. I have heard countless stories of the exemplary work tweener hospitals in Iowa perform not only as providers of essential health care, but also as responsible members of their communities. It is for this reason that many provisions in this bill are intended to improve the financial health of tweener hospitals and ensure that people have access to health care.

Most tweener hospitals are currently designated as Medicare Dependent Hospitals and Sole Community Hospitals under the Medicare program. There are provisions, both temporary and permanent, included in this bill that would improve Medicare payments for both types of hospitals. This includes improvements to the payment methodologies so that inpatient payments to Medicare Dependent Hospitals would better reflect the costs they incur in providing care. Improvements are also proposed in this bill to Medicare hospital outpatient payments for both Medicare Dependent Hospitals and Sole Community Hospitals so they would both share the benefit of hold harmless payments and add-on payments.

Also, a major driver of the financial difficulties that tweener hospitals face is the fact that many have relatively low volumes of inpatient admissions. This bill would improve the existing low-volume add-on payment for hospitals so that more rural facilities with low volumes would receive the assistance they desperately need.

Over the years, many have commented that it is simply unfair for many rural hospitals to receive only a limited amount of Medicare Disproportionate Share Hospital, or DSH, payments while many urban hospitals are not subject to such a cap. This bill would eliminate the cap for DSH payments for those rural hospitals for a two-year period.

There are also other provisions that would continue to help rural hospitals. The rural flexibility program would be extended for an additional year. This essential program provides valuable resources for rural hospitals.

This legislation also seeks to improve incentives for physicians located in rural areas and increase beneficiaries' access to rural health care providers. It includes provisions designed to reduce inequitable disparities in physician payment resulting from the Geographic Practice Cost Indices, or adjusters, known as GPCIs. Medicare payment for physician services varies from one area to another based on the geographic adjustments for a particular area. Geographic adjustments are intended to reflect cost differences in a given area compared to a national average of 1.0 so that an area with costs above the national average would have an index greater than 1.0, and an area below the national average would have an index less than 1.0. There are currently three geographic adjustments: for physician work, practice expense, and malpractice expense.

Unfortunately, the existing geographic adjusters result in significant disparities in physician reimbursement which penalize, rather than equalize, physician payment in Iowa and other rural States. These geographic disparities in payment lead to rural states experiencing significant difficulties in recruiting and retaining physicians and other health care professionals due to their significantly lower reimbursement rates.

These disparities have perverse effects when it comes to realigning Medicare payment to reward quality of care. Let me put that into context. Iowa is widely recognized as providing some of the highest quality health care in the country yet Iowa physicians receive some of the lowest Medicare reimbursement due to these inequitable geographic adjustments. Medicare reimbursement for some procedures is at least 30 percent lower in Iowa than payment for those very procedures in other parts of the country. That is a significant disincentive for Iowa physicians who are providing some of the best quality care in the country, and it is fundamentally unfair. Congress needs to reduce these disparities in payment and focus on rewarding physicians who provide high quality care.

The inequitable geographic payment formulas have also exacerbated the problems that rural areas face in terms of access to health care. Rural America today has far fewer physicians per capita than urban areas. The GPCI formulas are a dismal failure in promoting an adequate supply of physicians in states like Iowa, and more severe physician shortages in rural areas are predicted in the future.

The legislation I am introducing today makes changes in the GPCI formulas for work and practice expense to reverse this trend. It recognizes the equality of physician work in all geographic areas and establishes a national value of 1.0 for the physician work adjustment. It establishes a practice expense floor of 1.0 floor and revises the calculation of the practice expense formula to reduce payment differences and more accurately compensate physicians in rural areas for

their true practice costs. These changes are needed to help rural states recruit and retain more physicians so that beneficiaries will continue to have access to needed health care.

Last year Congress enacted a number of other provisions to improve Medicare payment for health care professionals and providers in rural areas that will expire at the end of 2009. This bill extends the existing payment arrangements which allow independent laboratories to bill Medicare directly for certain physician pathology services through 2010. It extends and improves the rural ambulance payments enacted in the Medicare Improvements for Providers and Patients Act of 2008 by increasing payments from three to five percent and extending them an additional year, through 2010. The bill also includes several new provisions to improve beneficiary access to health care services. It permanently increases the payment limits for rural health clinics. It also allows physician assistants to order post-hospital extended care services and to serve hospice patients.

Finally, the bill would protect rural areas from being adversely affected by the new Medicare competitive bidding program for durable medical equipment. It would ensure that home medical equipment suppliers who provide equipment and services in rural areas and small metropolitan statistical areas, MSAs, with a population of 600,000 or less can continue to serve the Medicare program by exempting these areas from competitive bidding. We must ensure that rural areas continue to have medical equipment suppliers available to serve beneficiaries in these areas.

As you can see, we still have much to do when it comes to ensuring access to health care in rural America. I look forward to working with my colleagues on this important matter.

Mr. President, I am pleased to introduce the Medicare Rural Health Access Improvement Act of 2009.

The purpose of this legislation is to continue ongoing efforts to ensure that Americans in rural areas have access to health care services. Much has been done in the past to improve access to rural providers such as hospitals and doctors. Much more still needs to be done. And it is even more important in light of the economic challenges we face.

I hold town meetings in each of the 99 counties in the great state of Iowa every year. As many know, Iowa is largely a rural state, and a significant concern that I consistently hear during these meetings is the difficulty my constituents experience in accessing health care services. As the former Chairman and currently the Ranking Member of the Finance Committee, it has therefore been a priority for me to improve the availability of health care in rural areas.

In Iowa, as in many rural areas across the country, hospitals are often not only the sole provider of health care in rural areas, but also employers and purchasers in the community. Moreover, the presence of a hospital is essential for purposes of economic development because businesses check to see if a hospital is in the community in which they might set up shop. As you can see, it is vital that these institutions are able to keep their doors open.

In previous legislation, Congress has been able to improve the financial viability of rural hospitals. For instance, the creation and subsequent improvements to the Critical Access Hospital designation have greatly improved the financial health of certain small rural hospitals and ensured that community residents have access to health care.

However, there are still a group of rural hospitals that need help. I am referring to what are known as ``tweener'' hospitals, which are too large to be Critical Access Hospitals, but too small to be financially viable under the Medicare hospital prospective payment systems. These facilities are struggling to stay afloat despite their tireless efforts. Like in many communities in across the country, the staff of tweener hospitals and their community residents take great pride in the quality of care at these facilities. I have heard countless stories of the exemplary work tweener hospitals in Iowa perform not only as providers of essential health care, but also as responsible members of their communities. It is for this reason that many provisions in this bill are intended to improve the financial health of tweener hospitals and ensure that people have access to health care.

Most tweener hospitals are currently designated as Medicare Dependent Hospitals and Sole Community Hospitals under the Medicare program. There are provisions, both temporary and permanent, included in this bill that would improve Medicare payments for both types of hospitals. This includes improvements to the payment methodologies so that inpatient payments to Medicare Dependent Hospitals would better reflect the costs they incur in providing care. Improvements are also proposed in this bill to Medicare hospital outpatient payments for both Medicare Dependent Hospitals and Sole Community Hospitals so they would both share the benefit of hold harmless payments and add-on payments.

Also, a major driver of the financial difficulties that tweener hospitals face is the fact that many have relatively low volumes of inpatient admissions. This bill would improve the existing low-volume add-on payment for hospitals so that more rural facilities with low volumes would receive the assistance they desperately need.

Over the years, many have commented that it is simply unfair for many rural hospitals to receive only a limited amount of Medicare Disproportionate Share Hospital, or DSH, payments while many urban hospitals are not subject to such a cap. This bill would eliminate the cap for DSH payments for those rural hospitals for a two-year period.

There are also other provisions that would continue to help rural hospitals. The rural flexibility program would be extended for an additional year. This essential program provides valuable resources for rural hospitals.

This legislation also seeks to improve incentives for physicians located in rural areas and increase beneficiaries' access to rural health care providers. It includes provisions designed to reduce inequitable disparities in physician payment resulting from the Geographic Practice Cost Indices, or adjusters, known as GPCIs. Medicare payment for physician services varies from one area to another based on the geographic adjustments for a particular area. Geographic adjustments are intended to reflect cost differences in a given area compared to a national average of 1.0 so that an area with costs above the national average would have an index greater than 1.0, and an area below the national average would have an index less than 1.0. There are currently three geographic adjustments: for physician work, practice expense, and malpractice expense.

Unfortunately, the existing geographic adjusters result in significant disparities in physician reimbursement which penalize, rather than equalize, physician payment in Iowa and other rural States. These geographic disparities in payment lead to rural states experiencing significant difficulties in recruiting and retaining physicians and other health care professionals due to their significantly lower reimbursement rates.

These disparities have perverse effects when it comes to realigning Medicare payment to reward quality of care. Let me put that into context. Iowa is widely recognized as providing some of the highest quality health care in the country yet Iowa physicians receive some of the lowest Medicare reimbursement due to these inequitable geographic adjustments. Medicare reimbursement for some procedures is at least 30 percent lower in Iowa than payment for those very procedures in other parts of the country. That is a significant disincentive for Iowa physicians who are providing some of the best quality care in the country, and it is fundamentally unfair. Congress needs to reduce these disparities in payment and focus on rewarding physicians who provide high quality care.

The inequitable geographic payment formulas have also exacerbated the problems that rural areas face in terms of access to health care. Rural America today has far fewer physicians per capita than urban areas. The GPCI formulas are a dismal failure in promoting an adequate supply of physicians in states like Iowa, and more severe physician shortages in rural areas are predicted in the future.

The legislation I am introducing today makes changes in the GPCI formulas for work and practice expense to reverse this trend. It recognizes the equality of physician work in all geographic areas and establishes a national value of 1.0 for the physician work adjustment. It establishes a practice expense floor of 1.0 floor and revises the calculation of the practice expense formula to reduce payment differences and more accurately compensate physicians in rural areas for

their true practice costs. These changes are needed to help rural states recruit and retain more physicians so that beneficiaries will continue to have access to needed health care.

Last year Congress enacted a number of other provisions to improve Medicare payment for health care professionals and providers in rural areas that will expire at the end of 2009. This bill extends the existing payment arrangements which allow independent laboratories to bill Medicare directly for certain physician pathology services through 2010. It extends and improves the rural ambulance payments enacted in the Medicare Improvements for Providers and Patients Act of 2008 by increasing payments from three to five percent and extending them an additional year, through 2010. The bill also includes several new provisions to improve beneficiary access to health care services. It permanently increases the payment limits for rural health clinics. It also allows physician assistants to order post-hospital extended care services and to serve hospice patients.

Finally, the bill would protect rural areas from being adversely affected by the new Medicare competitive bidding program for durable medical equipment. It would ensure that home medical equipment suppliers who provide equipment and services in rural areas and small metropolitan statistical areas, MSAs, with a population of 600,000 or less can continue to serve the Medicare program by exempting these areas from competitive bidding. We must ensure that rural areas continue to have medical equipment suppliers available to serve beneficiaries in these areas.

As you can see, we still have much to do when it comes to ensuring access to health care in rural America. I look forward to working with my colleagues on this important matter.