Floor Statements

Mr. President, I am pleased to introduce today with Senator Specter the Transparency in Medical Device Pricing Act of 2007.

As we all know, both parties to a transaction need information in order for the free market to properly work. If only one party has information, the market does not properly function because you have a one-sided negotiation. The purpose of this legislation is to bring transparency to medical device pricing so that there will be sufficient information available for market forces to truly work.

In the Medicare program, most hospitals receive a single payment for all the health care goods and services provided during a beneficiary's stay. This payment structure is designed to give hospitals incentives to provide efficient, effective, and economical care. Why? Because when a hospital lowers its costs, more of the Medicare payment can go toward the hospital's bottom line.

Hospitals normally have many resources like consultants or reference materials to help them when they negotiate prices for things like drugs, nursing care, or hospital gowns. Unfortunately, this is not the case with implantable medical devices like pacemakers, stents, and artificial hips and knees.

Hospitals have no way of knowing what a fair market price for a medical device is, because in this one industry there is a veil of secrecy over pricing information. In fact, manufacturers typically require hospitals to agree to secrecy or gag clauses in their contracts. The device makers actually prohibit hospitals from disclosing the price of a medical device to others. So hospitals have no idea of what is a fair price. Instead they must engage in one-sided negotiations with medical device manufacturers.

We all know that there must be enough transparency for market forces to work. The free market, after all, thrives on complete information and open competition--not on gag rules and secrecy clauses.

As a farmer, when I go out and buy a tractor, I first go out and talk to a number of people to help me figure out what is a fair price. Having this information puts me on equal footing with the dealer when we negotiate the price. After all, I don't want to be taken to the cleaners.

Today, there is no level playing field when hospitals negotiate with device manufacturers. It shows. This is a major reason why many hospitals pay absurdly more than others for the same medical device. The inflated prices many hospitals pay have implications for the health care system on multiple levels.

First, higher medical device costs take up more of the Medicare payment. That means hospitals have less to spend on other crucial components of care such as staff. And hospitals have less of the Medicare payment to devote toward their bottom line. So they have less money for activities to improve hospital quality and safety. They have less money to spend on health information technology systems. Most importantly, they have less money to keep their doors open and provide care to Medicare beneficiaries. In rural areas in my state where hospitals are barely squeaking by, this is a problem.

Also, I want to point out how hospitals paying more than the fair market price for medical devices adds to skyrocketing entitlement spending. Medicare hospital payments are updated every year. The update takes into account the increased cost of goods and services used to provide care to beneficiaries. Let us say medical device prices are higher than they should be. As a result, Medicare hospital payment updates and Medicare spending will rise faster than they should.

Also, let us remember that there are cost-sharing requirements for certain hospital services. And so Medicare beneficiaries will be paying more out-of-pocket than they should.

All this adds up to one thing: a need for greater transparency in medical device pricing. My good friend and colleague, Senator Specter, and I have developed a way to provide greater transparency.

The Transparency in Medical Device Pricing Act of 2007 would bring this needed transparency to medical device pricing by building on current initiatives at the Department of Health and Human Services, HHS. Under the act, here are some conditions device manufacturers would have to receive direct or indirect payments under Medicare, Medicaid, or SCHIP. Every quarter they would have to submit to the HHS Secretary data on average and median sales prices for all medical devices that are implanted during inpatient and outpatient procedures. Manufacturers would be subject to civil money penalties from $10,000 to $100,000 for failure to report or misrepresentations of price data.

Collecting such data is not new to HHS. The Secretary has been collecting average sales price data for drugs covered under Part B of the Medicare program for a number of years now.

The Secretary would also be required to make the data available to the public on the website of the Centers for Medicare & Medicaid Services, CMS. CMS would have to update the website on a quarterly basis.

Again, this is nothing new at HHS. It has been promoting transparency in Medicare for quite some time. The Secretary already publicly reports quality and price data of various Medicare providers. This is so beneficiaries can use these resources when selecting a provider.

Publicly reporting implantable medical device pricing would help hospitals negotiate fair prices. For once, they would have a resource to consult so negotiations would be fairer.

Mr. President, let me be clear. I fully support the medical device industry making a profit. I just think it should not be at the expense of hospitals, beneficiaries and the American taxpayer paying much more than they should. We must let the market work, and markets depend on information.

The Transparency in Medical Device Pricing Act of 2007 would go a long way toward ensuring that free market forces actually work. The act would enable hospitals to obtain medical devices at fair prices.

Mr. President, I came to the Chamber to speak on an oversight issue on which I have been working for well over a year. But before I speak on that subject, I wish to take advantage of the opportunity to respond to incorrect impressions about the compromise State Children's Health Insurance Program bill on which the House is going to be voting tomorrow. I am speaking as much to Republicans in the House of Representatives as I am responding to some of the points Senator Lott has made. These reminded me that regardless of how many speeches one gives around here, regardless of how many explanations one gives of what our bill does and does not do, nobody listens. We get the same wrong statements being made time after time. I wonder, does anybody ever listen? Maybe they don't like to have Chuck Grassley say it.

I was a negotiator for the Republicans. I never had a single Republican tell me since January that they didn't want the SCHIP program reauthorized after a 10-year sunset. I never had one of them say it wasn't a program that was serving a good purpose. I had a lot of people express faults about what is wrong with the present program. Most of those issues have been corrected in the legislation the President vetoed.

I finally got people to realize the $5 billion the President put in his budget on top of baseline is not enough to do what we are already doing. Even the Republicans on this side offered $14.5 billion over baseline, which still is not enough to do what needs to be done to take care of the kids we are taking care of now and extend coverage to other eligible but uninsured low income children.

Some people are saying this bill should have been vetoed because there are adults in the program. But it was this Administration that approved the waivers to cover adults. The bill that the President vetoed did away with waivers. What has been in the program for 10 years this bill does away with. Childless adults are not going to be on the program. New waivers for parents under SCHIP is prohibited. For states that currently cover parents, the federal match is reduced. But yet people are still saying to me, from the other body, as I talk with Republicans over there to vote to override the President's veto: Why are we letting all these adults on? The waivers did that, and we do away with the waivers.

Also, in my conversations with people in the other body, as I try to convince them they ought to vote to override the veto, this $83,000 number keeps coming up. There was an inference made to it in the previous speech. That is not in our bill, and yet the President in his veto message referred to our bill allowing people up to $83,000 to get on SCHIP. That is in the law. It has been in the law for 10 years, and that can only happen if the President of the United States says a State can do that upon that State's request. Only the President can allow that to happen. That has been that way for 10 years. So don't tell me our bill allows States to go up to $83,000. That has been the law.

What about the statement of having genuine poor children on this program? I agree. Do you know that 92 percent of the kids on the program are in families under 200 percent of poverty? Somebody can say: What about the other 8 percent? OK, so what do we do about that? Because there has been an inference to a State Health Official letter to states released on August 17, 2007 that we did away with what would have prevented that. But the policies in that letter were flawed and unworkable. What we did is we made those policies workable in our legislation. So the emphasis on kids under 200 percent of poverty works out this way: First, we reduce the Federal match to the Medicaid match for any state that wants to go over 300 percent of poverty, beginning upon enactment of the bill. Then, by 2010, any State that wants to go or to continue to go above 300 percent of poverty for children has to demonstrate that they have reached the targets determined by the 10 best States covering kids under 200 percent of poverty. If they do not meet the target, they get no Federal match for kids over 300 percent.

So don't tell me the bill before us does not have emphasis on low- income kids. It has emphasis on low-income kids.

It was not brought up in the previous speech, but in my conversations with the House of Representatives, I have had this other smokescreen thrown at me: Our bill allows illegal immigrants to get on the program. For the first time, we are doing in SCHIP what has never been done before, what we have done for Medicaid in the Deficit Reduction Act. We are making it so that illegal immigrants cannot get on the SCHIP program.

People are paid to read legislation, and I don't know how the President of the United States, who gets paid a heck of a lot more than I do and has a lot of advisers who get paid a heck of a lot more than I do--I don't know how they can have him put in a speech that this bill allows people over $83,000 to get into the program, or there can be speeches in the Chamber of the other body saying we are opening the door for illegal immigrants to be covered by this program when we are doing more than existing law does in that area and where existing law already allows, if the President approves it.

And then this business of adults being in the program--absolutely right, three States have more adults on the program than other States. How did that happen? This administration gave waivers for that to happen. We do away with those waivers. I have heard all the complaints from this side of the Senate, the Republican side of the Senate, that there is no ``A'' in SCHIP--and I agree, it shouldn't be for adults-- and I even heard Democrats strongly speak to this point. This program should never have gone in that direction. We do away with waivers.

I ask everybody to read the legislation, and particularly Republicans in the other body, before they vote tomorrow to override or not override because all these inaccurate representations of the compromise bill are creating a very bad mistake. It's so bad politically that the White House is looking for some way to get out of this situation. Probably that some way to get out of it is negotiating another bill with us. But it would be smart if the White House would send a signal to the House of Representatives: Override our veto; we made a mistake.

Mr. President, I now wish to address this body about some investigations I have been doing over a long period of time.

This is a report to my colleagues that senior executives at the General Services Administration may have failed to meet their responsibilities to the American taxpayers. These issues were carefully examined in two oversight investigations conducted by my staff. These investigations have uncovered a disturbing change of circumstances at the General Services Administration.

In a nutshell, it is this way: These studies indicate that top-level General Services Administration management interfered in contract negotiations with Sun Microsystems. They put pressure on contract officers to sign a potentially bad contract. When that person refused, they had that contract officer removed under duress.

All the evidence from this investigation suggests that this particular contractor had been overcharging the Federal Government for years. The contract officer believed the proposed terms were still not fair to the Government. Even worse, these reports also indicate that allegations of intimidation against the General Services Administration Office of Inspector General and its auditors may have been fabricated. This may have been done to cover high-level pressure on contract officers or maybe because the new contract was signed on terms dictated by the contractor. When I asked for audits of the new contract, this contractor resisted tooth and nail, and in the end they canceled the contract before audits could be completed. I want to repeat that, because this is the bottom

line. When I asked for audits of this new contract, this contractor resisted tooth and nail, and in the end they canceled the contract before the audit could be completed. That ought to tell you something about that contract.

I think it is important my colleagues know what my staff uncovered at the GSA, not merely for the purpose of pointing out mistakes but for the purpose of seeking solutions, because these investigations are about fixing a problem.

Let me set the record straight. This is not some sort of witch hunt for the Administrator of GSA or anything else. Quite simply, this is oversight and investigation, or O&I, as we call it around here on the Hill.

In doing this oversight and investigation work, I am fulfilling one of the most sacred responsibilities of a Member of Congress. As with all my investigations, I want to be certain every tax dollar is spent wisely and according to law--nothing more, nothing less. With that in mind, I want to address the findings of these investigations that are documented in separate staff reports.

The oversight work began last September when I was informed Administrator Lurita Doan of the GSA was attempting to cut the inspector general's budget for audits. These are the policemen to see that the money we appropriate is spent wisely. It appeared that this administrator was attempting to neutralize the inspector general, especially in the area of oversight of Government contracts. This was a red warning flag, so I decided to dig deeper.

The Administrator was alleging that the Office of Inspector General-- or I might refer to that as the OIG--was abusing its power by threatening and intimidating Government contracting officers and vendors. These allegations were raised by the Administrator in numerous statements, publicly and internally, and in letters to me. According to three separate witnesses, Administrator Doan even compared the inspector general officials to terrorists.

These allegations concerned me for two reasons: First, I was extremely concerned that sworn Federal law enforcement agencies and agents, and accredited auditors, might be abusing their power. Second, if there was no factual foundation for these allegations, if they were fabricated, where did they come from and why did they come?

I asked Administrator Doan to provide me with specific examples of the alleged intimidation. Since she had aired these allegations in public, I thought she would provide me with specific details to support the charges. The fact is, she could not. In reality, only one specific instance was brought to my attention. In the end, my staff could find no evidence whatsoever to support those allegations. Sadly, it appears as if that one specific allegation was fabricated to cover up intense top-down pressure on contract auditors to award a contract that was detrimental to the taxpayers.

It was a bureaucratic smokescreen that opened a much larger can of worms. That can of worms was a contract awarded to Sun Microsystems, Inc. in 1999 for computer products and services. The inspector general had this particular contract under a microscope for several years. The IG audits indicated that Sun had failed to report significant discounts given to commercial contractors, as mandated by the contract; in other words, transparency when you are doing business with the Federal Government. Because this information was withheld--in other words, their commercial contract arrangements--Government customers paid much higher prices than Sun's commercial customers. The Government was losing money because of these unfair pricing policies, losses potentially in the tens of millions of dollars. These and other alleged contract violations, including potential fraud, were referred to the Department of Justice and now are in the Federal courts.

The alleged fraud was first reported to General Services Administration management in February of 2005. GSA management had several options, including seeking a better contract, canceling that contract, or suspension. In fact, three GSA contracting officers who handled the Sun contract attempted all three remedies. In each case, intervention from upper management at GSA blocked those moves. Upper management turned a blind eye to the alleged fraud, preferring instead to do business as usual. Then they began applying serious pressure on the contracting officer to extend the contract with Sun for another 5 years.

In August of last year, the GSA contracting officer assigned to the Sun contract dug in his heels, holding out for a better deal, protecting the taxpayers of the United States. He believed the terms offered by Sun in negotiations were not fair to the Government.

Now, if you ask senior GSA management, you get a very different story. Those individuals, including Ms. Doan and FAS Commissioner Williams, claimed this contracting officer was so intimidated, browbeaten, even, by OIG auditors, that he had to be replaced. The facts, however, do not support that allegation or explanation.

The contracting officer and his immediate supervisor both deny experiencing any intimidation from the inspector general auditors. They say, in fact, it never even happened. The source of the allegations has changed her story several times. In fact, she continued to support the contracting officer's position in negotiations--a position that was fully aligned with the inspector general auditors' position--even after claiming he was being intimidated into that position by the same auditors. If that position was tainted by the inspector general auditor intimidation, why would she support it?

One other fact seems to have escaped the GSA managers making these allegations. IG auditors have no direct influence over a contracting officer's career. The only person with that kind of authority is the contracting officer's supervisors, not the inspector general.

There is some irony here too. The same GSA managers who accuse the OIG auditors of intimidating this contracting officer had themselves attempted in vain to intimidate him into awarding the contract.

So it seems that GSA management tried to turn the concept of intimidation upside down. Now, why would they do that?

The evidence suggests these allegations were a smokescreen to hide the actions of the General Services Administration management. They used it for cover while ramming through a contract that may be bad for the taxpayers. There should be no greater motivation for those in Government procurement than protecting the taxpayers' money. Contracting officers who are warranted by this Government should be allowed to fight in negotiations for the best deal for the taxpayers, saving money where they can. Any pressure, any suggestion, any direct involvement by management to thwart that mission would be out of line. What Administrator Doan, Commissioner Williams, and others did to short circuit this process, then, is entirely wrong. To turn up the pressure, senior GSA officials, including Administrator Doan, were communicating directly with Sun Microsystems, Inc. and their lobbyists during negotiations. They made sure that contracting officer knew about that contact they were having. What kind of message does that send to a contracting officer fighting for a good contract to save the taxpayers' money? What kind of message does that send to the current and potential Government contractors, wherever they might be?

I would say that, at the very least, it tells them that if you don't like the deal offered by the contracting officer, go over his or her head. Go to the very top. Get the problem fixed. Get the price you want out of the taxpayers. It also says if the contracting officer is in the way, get rid of the contracting officer and get one who will do the dirty deed.

It would be bad enough were this the end of the story, but it isn't. After forcing out the contracting officer, GSA management assigned a new officer. It took her 9 days to negotiate a final deal with Sun. But what did the Government get?

In interviews, this new contracting officer claimed that she didn't need to talk to IG auditors who had years of knowledge on the Sun contract. She claimed she could solve any impasse in negotiations by listening to what the

contractor had to say. Many of the provisions she adopted were ones steadfastly opposed by the previous contracting officer--the very same ones that led to the so-called ``impasse'' and the removal of that contracting officer.

The new contracting officer even admitted during questioning that she did not fully understand key provisions of the contract. She admitted making ``big oversights'' in some of the contract terms. I fear the Government got a contract based on terms that were dictated by the contractor. I ask you: Is this GSA management's idea of how to negotiate?

After my staff interviewed the new contracting officer, I realized I needed to know more about the new contract. That is the one signed in September 2006. Was the Government continuing to lose money due to the unfair pricing and unreported discounts that they had with the commercial sector?

As a Member of the Senate who cares deeply about oversight, I would have been remiss in not asking more questions. So on June 5, 2007, I asked the GSA inspector general to conduct an audit. I asked the IG to look at the terms of this new contract.

Now, if this contract was such a ``good deal for America,'' as has been suggested by Sun on the one hand and GSA management on the other hand, then one would think Sun would rush to cooperate. Wouldn't they? Well, they did not. Instead, for 3 months, Sun complained to me, they procrastinated, they withheld information and fought the audit at every step. They also lashed out at the GSA inspector general, claiming bias--maybe because the IG had nailed him in the past. To his credit, IG Brian Miller held his ground and forged ahead with the audit.

This is what happened, and sadly so, because you don't get to the bottom of it then. Sun chose to cancel this contract on September 13 of this year, without waiting for the completion of those audits. This entire situation is extremely unfortunate, possibly preventable, and certainly baffling. Why would Sun cancel a contract that it had fought so hard to get? Did Sun have something to hide?

Government contracting, particularly multiple award schedule contracting, appears to be in serious jeopardy. Contracting officers are in short supply and are quitting in alarming numbers. They are overworked, they are stressed, and some try to juggle 100 or more contracts at any given time. With that kind of workload, assuring contract compliance is out of the question.

One of the culprits here may be the industrial funding fee structure we use in Government. This is money that the GSA charges other agencies that tap into governmentwide contracts negotiated by GSA. These fees are the lifeblood of the General Services Administration and are responsible for the lion's share of the agency's budget. The incentive is to maximize fees and agency profits. This creates what has been described as a ``perverse incentive.'' Getting the best deal for the Government and the taxpayers gets lost in the drive for more contracts that generate more fees to fill that agency's coffers.

I feel the Sun contract fiasco may be only the tip of the iceberg. I hope it is an exception, but many contracting officials suggested otherwise.

Am I suggesting that Government procurement is broken beyond repair? No. I do think that GSA procurement officials have a lot of work to do to make sure these situations are corrected. They certainly need to clean up their act, and they will need to make hard choices to fix these problems.

GSA has a professional force of contracting officers. GSA management needs to let them negotiate the best deal possible without interference from the top. Interference in that process as evidenced by the Sun negotiations may not violate the law, but it is not right and it does not protect the taxpayers.

Senior GSA management needs to realize that what may be profitable or strategically important for the GSA may not always be in the best interests of the taxpayers. GSA managers also need to recognize the need for oversight and followup on awarded contracts. Contract officers need to be able to fight for the best possible deal for the taxpayers, even if it means the loss of a contract that is lucrative to the agency for their operating expenses, or for the vendor. GSA must never forget that the real customer is the American taxpayer.

Today, I am forwarding three investigative reports to Administrator Doan, to the GSA inspector general, to the House and Senate oversight committees, and the White House Chief of Staff for review. These reports contain proprietary and privacy-protected information and will not be made public by me. The reports provide in great detail the results of these significant investigations into the allegations of inspector general auditor intimidation and top-level GSA management intervention in the Sun Microsystems contract negotiations.

As I said, it is not my intent to point the finger at any one individual or company. My sole purpose is to get to the bottom of what may be a significant problem in Government contracting and, of course, get it fixed. I respectfully ask GSA Administrator Doan and the inspector general to address the problems identified in these reports and to take appropriate action in the future. I hope GSA will do a better job of protecting the taxpayers' money.

I apologize to the chairman and ranking member of the Labor-HHS Subcommittee for taking this time, but I believed I needed to respond to some of the speeches that were made about the health program before I gave my report on my investigation.

I yield the floor.

Mr. President, I would like to comment on the status of the alternative minimum tax, AMT.

There is some good news regarding the need to do a patch to protect 19 million families. If you look back over the last few months, I have come to the floor several times to urge my friends in the Democratic leadership in both bodies to focus on this problem and get legislation ready. Earlier today, I urged the House to begin work on an AMT patch bill. I urged them to send it to the Senate so that Chairman Baucus and I will have a vehicle to deal with this pressing problem.

We have a few weeks to act before the IRS forms are finalized. After that time, there could be big problems for taxpayers and the Internal Revenue Service.

I was pleased to read in this afternoon's press reports that Chairman Rangel is going to process an AMT patch bill.

I also want to commend our Finance chairman, my friend, Senator Baucus, for convening an informal meeting of the Finance Committee to discuss this pressing matter. I hope the Democratic leadership provides Chairman Baucus floor time to take up a committee bill.

On a related point, at a press event earlier today, in answer to a reporter's question, I indicated that we could look at measures to insure that certain high-income taxpayers who pay no regular income tax or AMT pay some tax. I would like to elaborate on that comment.

I have referred many times to the IRS statistic of high income taxpayers who pay no regular income tax or AMT. The statistic is that, for the tax year 2004, IRS Statistics of Income reported that 2,833 taxpayers with incomes over $200,000 paid no income tax. That same group paid no AMT as well. I will ask to have inserted in the Record a copy of that statistic.

The reason this group does not pay tax is defects in the AMT. What I was saying is that the AMT is defective in its original purpose. That is, to make sure that all high-income taxpayers pay some tax. I was not arguing for a tax increase on high-income taxpayers who are paying either regular income tax or AMT. I was arguing that, if anything, if the AMT's original purpose is to be served, then insure that those not paying ANY tax, pay it.

Mr. Presdient, I ask unanimous consent to have a copy of the statistic to which I referred printed in the Record.

Mr. President, I am pleased to join my colleague, Senator Murkowski, in cosponsoring a resolution commemorating Red Ribbon Week. Red Ribbon Week, celebrated October 23-31 of this year, encourages individuals, families and communities to take a stand against alcohol, tobacco and illegal drug abuse.

The tradition of Red Ribbon Week, now in its 22nd year of wearing and displaying red ribbons, started following the assassination of U.S. Drug Enforcement Agency Special Agent Enrique ``Kiki'' Camarena. In an effort to honor his memory and unite in the battle against drug crime and abuse, friends, neighbors and students from his hometown of Calexico, CA, began wearing red ribbons. Shortly thereafter, the National Family Partnership took the celebration nationwide. Since then, the Red Ribbon campaign has reached millions of children, families, and communities across the country, spreading the message about the destructive effects of drugs.

In my State of Iowa, the theme for Red Ribbon Week is ``Take a Stand--Be Drug Free.'' Schools and community groups across the State are organizing a variety of activities including pledges, contests, workshops, rallies, theatrical and musical performances and other family and educational events. These events are all designed to educate our children on the negative effects of drugs and to promote a drug- free environment.

Research tells us that the longer a child stays drug-free, the less likely they will become addicted or even try illegal drugs. This is why it is so important to maintain a coherent antidrug message that begins early in adolescence and continues throughout the growing years. Such an effort must involve parents, communities and young people. Red Ribbon Week provides each of us the opportunity to take a stand by helping our children make the right decisions when it comes to drugs.

In light of the growing epidemic of prescription drug and cold medicine abuse throughout the Nation, this year's Red Ribbon Week holds greater importance. I thank my colleagues for

passing this resolution to demonstrate our commitment to raising awareness about drugs and encourage everyone to make healthy choices.

Mr. President, it is harvest time in Iowa and throughout heartland. It is the time of year when farmers work around the clock to bring in the year's harvest of corn, soybeans, and other grains. Just this past weekend while on my farm in New Hartford,

I was able to help my son with the harvest.

Across Iowa and the Midwest, farmers are harvesting a bumper crop. It is during this time that we pray that these bounties from the land make their way into of the mouths of the hungry.

It is appropriate, then, that during this season of harvest, a gathering will be taking place in northeast Iowa focusing on global hunger. Not far from my farm, a dinner is taking place tonight in the small town of Protivin, to honor one of America's greatest fighters of hunger.

Dr. Norman Borlaug, who grew up just a few miles from Protivin in Howard County, shared his talents to help populations around the world. His efforts to increase food production, and alleviate global hunger and famine earned him the Nobel Peace Prize in 1970 and the title of ``Father of the Green Revolution.''

His work in food production was also acknowledged this summer when Dr. Borlaug was presented the Congressional Gold Medal by President Bush and the bipartisan leadership of Congress. As a testament to his work around the globe, officials from Mexico, India, Japan, and numerous countries in Africa were present to honor Dr. Borlaug. I was proud to join this distinguished group in honoring him, and I thank my colleagues for acknowledging Dr. Borlaug's accomplishments.

It is clear that Dr. Borlaug has never forgotten his roots. He remains a rural Iowa farmer at heart. That is why I am sure tonight's dinner near his hometown will mean as much as, if not more than, the formal banquet that followed his receiving the Nobel Peace Prize.

It is also appropriate that Dr. Borlaug is making this trip back to the heartland today, October 16. Today has been designated ``World Food Day'' around the globe, and ``Dr. Norman E. Borlaug/World Food Prize Day'' in Iowa.

Dr. Borlaug continues to lead the effort to end global hunger and will do so today by participating in the first Iowa Hunger Summit in Des Moines. This summit will bring together people from across Iowa and the country to focus on feeding the hungry at home and abroad. Iowa Governor Chet Culver and former Governors Vilsack, Branstad, and Ray will also be in attendance for the summit.

I would like to thank the World Food Prize Foundation which provided the leadership in making this daylong focus on hunger possible. The foundation has worked closely with the Alliance to End Hunger, the One Campaign, and Iowa State University to make this event a central focus of World Food Day.

This is an appropriate time of year for us to focus on hunger and feeding the malnourished worldwide. I hope my colleagues will join in commending those who are working daily to raise the awareness of world hunger and working to provide adequate food for all.

Mr. President, it is with great sadness that I must inform the Senate of the death of Sergeant Joseph B. Milledge a Glenwood, IA, native who was killed in Iraq on October 5, 2007, during combat patrol in Baghdad. Sergeant Milledge was part of the 3rd Squadron, 2nd Stryker Cavalry Regiment, 1st Armored Division stationed in Vilseck, Germany. My thoughts and prayers go out to his family and friends, especially his wife Amanda and their 1-year-old son Joseph, Jr., as well as his parents, Carla and Jack.

Joseph Milledge was born in Council Bluffs, IA, and later moved to Glenwood with his family where he attended high school. He enlisted in the U.S. Army in August 2003, a year after he graduated. By all accounts, Joseph was a highly literate man who enjoyed reading books on religion and philosophy and writing poetry. In fact, I understand he gave his wife a book of his unpublished poetry this summer. Joseph loved his family unconditionally and cherished spending time with his son, nieces, and nephews.

Sergeant Milledge was very dedicated to his country and the cause for which he was fighting. His mother explained that he didn't want to go back for a second tour because of his family but did so because he knew it was his duty to his country. Carla Milledge said, ``You couldn't have asked for a better father or husband. He loved his wife and son. He loved them with his whole being.''

I know his loss will be felt very strongly, not least by his infant son. But, as his wife Carla said, ``He'll know his daddy was a hero and died for what he believed in.'' Sergeant Joseph B. Milledge is indeed a great American hero who will be remembered for his courage, his strength, and his love. He gave the ultimate sacrifice for his family, friends, and country, and we are forever grateful.

Mr. President, for 10 years, I have advocated for stronger measures to ensure that America's nursing home residents receive the quality of care they deserve. Currently, over 1.7 million Americans live in nursing homes. This number will grow by leaps and bounds as the baby boomer

generation ages. Therefore, there has never been a more critical time to make sure that the Federal Government does all it can to protect the most vulnerable among us from substandard care.

In late September, an article on the front page of the New York Times underscored this issue and brought to light some troubling data. The article, entitled ``At Many Homes, More Profit and Less Nursing,'' studied the quality of care at investor-owned nursing homes. The findings were alarming, to say the least.

Using numbers from the Centers for Medicare and Medicaid Services, the article compared several investor-owned nursing home chains to industry-wide averages for several indicators. Here is what was found. The investor-owned homes, on average, had fewer clinical registered nurses per resident and higher numbers of serious health deficiencies. The article also reported that, in some cases, long-stay residents in these investor-owned homes suffered from higher rates of deterioration in their condition.

I would like to highlight one case in particular. Following its purchase by a large investment firm, one nursing home cut its number of clinical registered nurses in half. Budgets for nursing supplies, resident activities, and other services were also cut. Investor profits soared and resident care plummeted. Indeed, visits by regulators found fire exits that didn't work, dirty kitchens, and other health and safety violations. Fifteen residents died in 3 years due to negligent care, according to their families.

Our elderly and disabled nursing home residents our own grandparents, mothers, fathers, and other loved ones deserve better.

Is this a case of profits before care? Well, I am not sure. But I certainly intend to look into it. I intend to investigate allegations that some large investment firms are buying up nursing homes across the country and are hurting quality of care. And as a result, achieving, as the New York Times said, ``More profit and less nursing.''

And let's not forget that the Centers for Medicare and Medicaid Services shoulder some responsibility for these problems too CMS needs to do a better job of protecting seniors in our Nation's nursing homes and I am going follow up with them to see what they have to say.

So I say to my fellow Senators, we must do what is necessary to protect America's nursing home residents. We need to closely examine this matter. I plan to take a very active role in looking at this issue and will be speaking with nursing homes, equity firms, and to CMS. We owe it to America's nursing home residents and we owe it to their families.

Mr. President, I ask unanimous consent to have printed in the Record the article to which I referrd earlier.

Mr. President, as cochairman of the Senate Caucus on International Narcotics Control, I have had a distinct interest in the National Youth Antidrug Media Campaign and how we can improve its quality and improve its effectiveness. In 1998, the White House Office of National Drug Control Policy, with overwhelming bipartisan support from Congress, launched a historic initiative to encourage kids to stay drug free. That effort in 1998 built upon the success of former First Lady Nancy Reagan's ``just say no'' campaign. The National Youth Antidrug Media Campaign targets youths age 9 to 18. The campaign also targets parents and other adults who might have influence over the choices young people make about drugs.

Research has clearly shown that if we can keep children free from drugs until the age of 20, chances are very slim that they will ever try or become addicted to drugs. Maintaining a coherent antidrug message begins early in adolescence and continues throughout the growing years. This is essential for educating and enabling our young people to reject illegal drugs. Through realistic portrayals, the media campaign is designed to show kids the harmful effects of drugs and the benefits of a drug-free lifestyle.

I wish to call my colleagues' attention to the poster behind me. This is one of those famous antidrug advertisements that maybe they remember from a long time ago. They might recall this famous advertisement known for its unforgettable slogan: ``This is your brain; this is your brain on drugs.'' Created by the Partnership for a Drug Free America in 1987, it is widely recognized as one of the known influential ads of all time. While most of us have probably never seen an actual brain on drugs, this commercial helped to shape the view of an entire generation regarding the dangers of drugs.

The National Youth Anti-Drug Media Campaign is without a doubt the single most visible symbol of the Federal Government's commitment to youth drug prevention. These advertisements are an important source of information for kids and parents about the risks and dangers associated with illegal drugs. Sadly, though, we have come a long way from the cost and success of those early ads, such as the one you see on the easel.

In the 10 years prior to the creation of the media campaign in 1998, the Partnership for a Drug-free America was able to secure grants from various businesses, foundations, and agencies to create over 1,000 ads. Included in that number is the famous ``this is your brain on drugs'' ad which ran in 90 percent of America's households every day.

Between 1987 and 1998, national and local media outlets donated over $2.3 billion worth of free advertising space. If you adjust that number for today's pricetag, that would be nearly $3 billion worth of donated media time. Unfortunately, as drug use began to decline, then, as you might expect, so did the generous donations of free air time. By 1998, Congress decided--since it was not going to be free--to fund a paid media campaign employing the partnership's antidrug messages.

Since that time, the Federal Government has spent well over $1.5 billion to create, to research, to produce, and to distribute ads to prevent teen drug use. Yet I fear we are continuing to spend precious antidrug dollars to fund increasingly mediocre ads that fail to effectively reach our Nation's youth. In other words, they are nothing like the brain being fried ad I told you about.

A case in point are the spots running on TV today. The image you can see in this new ad I have before us in the Chamber is entitled ``Walk Yourself'' from the ``Above the Influence'' campaign. For those who might not be familiar with this ad, I will give a quick synopsis of what this ad says.

The commercial--which looks as though it could have been drawn by a 5-year-old--begins with a man smoking a marijuana cigarette while his dog looks on. When the man notices that his dog wants to go for a walk, he tells his dog to walk himself, presumably because he is too busy getting high. The dog responds, telling him he is disappointed in his master. The ad ends with the dog leaving and raising an ``Above the Influence'' flag.

Now, maybe I am missing the point, but I fail to see how an ad such as this realistically portrays the dangers or harmful effects of doing drugs.

We have a moral obligation in this country to ensure our young people have a chance to grow up without being accosted with drug pushers at every turn. We need, as a country, to create a strong moral context to help our young people know how to make the right choices. They need to know how to say no. They need to know that saying no is OK. And they need to know that saying no to drugs is the right thing to do. It is not just the safe thing, it is not just the healthier thing, it happens to be the right thing.

While funding for the media campaign has been relatively modest in terms of our overall Federal drug control budget, it, for many, is the most visible aspect of our Nation's war on drugs. With only so much money to go around, we must ensure we are getting the most bang for our buck. Although I support and encourage any agency that works to reduce or prevent drug abuse, as Members of Congress it is important we be good stewards of the taxpayers' dollars.

So I refer you to the Weiden-Kennedy chart--and I am not referring to Senator Wyden or Senator Kennedy. This is a different Weiden and a different Kennedy. We have had numerous studies over the years as to how the effectiveness of the present media campaign is very minimal, if not nonexistent.

In last year's Weiden-Kennedy test results of teenagers, the flags ads I referred to in the previous chart, as these ads are called--they are called ``flags ads''--were rated on their believability, persuasiveness, and honesty. When you add up the averages of the flags ads with the rest of the Partnership for a Drug-Free America ads, the flags ads perform well under the ratings of the previous ads. I think the most important categories an antidrug ad must deliver on would be the ones you see listed on this chart. That is why I am concerned the media campaign is failing to reach and deliver an important message to our teens.

Now, I would like to refer back to the funding because these are taxpayers' dollars, and we ought to see how they are being spent.

So I am not alone in this assessment about the believability or the effectiveness of these ads. There is a wide variety of studies beyond just the one I referred to showing a lack of effectiveness. Even the Government Accountability Office recommended that Congress reduce funding for the campaign until it can be proven to be an effective prevention tool.

Congress has slashed funding considerably. As you can see from this chart, the funding for the media campaign is only half of what it was 10 years ago. For fiscal year 2008, the House has slashed another $6 million off the campaign's budget to bring it to $93 million, though our Senate version keeps the funding level. If this is not a wake-up call to the Office of Drug Control Policy, I do not know what is. If Congress is to support the White House's request for a 30-percent budget increase, then the drug czar must take several steps to improve the quality and the effectiveness of the campaign.

The first thing that must be done is to improve the quality of the ads. This does not require a budget increase to do so. The ads need to be simple, they need to be direct, and, obviously, they need to show the consequences of drug use. Exaggerations like a girl flattened on a couch or ``smushed'' from pot use, along with poorly drawn cartoons where dogs speak and space aliens freely roam show unrealistic scenarios and damage the credibility of the campaign, as you saw in the previous chart.

The early antidrug public service announcements--I am talking about going back to that period of time 1987 through 1998--were simple, they were short, they were memorable. I believe the success of those early ads can be replicated by using a similar formula.

Secondly, the campaign could be more effective if its message was more diversified. Although the media campaign has begun an awareness campaign on meth, it took an act of Congress to force the campaign to spend 10 percent of its budget to do so. Most of the ads produced by the campaign so far have all been about marijuana. Although I believe it is important that we discourage marijuana use, there are new and alarming drug abuse patterns that are starting to emerge among teens.

Recent studies and articles are showing an alarming rate of teenagers who are abusing prescription drugs to get high. These drugs are easily accessible because kids can easily find and purchase them online or grab them from their parents' medicine cabinet. Many parents are not even aware of the trend or how they should go about discarding leftover medication. The media campaign could be a very useful tool to educate young people as well as parents on these new and emerging threats.

Finally, the campaign, along with Congress, should work to encourage media outlets to donate more air time for antidrug messages. Currently, the campaign spends most of its budget in purchasing air time. Although media outlets match the amount the campaign spends, it in no way compares to what was donated 20 years ago. I believe it is imperative we show these outlets the need for more donated time in light of the trends I have previously illustrated. With more donated time, it will enable the campaign to focus on producing more ads on emerging drugs without Congress having to balloon its budget in the process.

Some maybe think I have been against antidrug media campaigns because I have been overseeing some of that for a long period of time. But I am not against media campaigns. I am against wasting taxpayers' dollars on ineffective programs that show no effort at improvement. I believe the campaign can be remade into an effective tool to aid in our prevention efforts against teen drug abuse. But much has to change in order for that to happen.

So I intend to send a letter to Director Walters, our drug czar, to find out why the campaign is not having a positive impact on preventing teen drug use. What do they intend to do to change this trend? I am going to ask him. I look forward to hearing their response promptly and to begin the process of reforming and reenergizing the National Youth Antidrug Media Campaign.

Mr. President, let me ask my colleague from Iowa, who has been waiting to speak, I do not know whether we have the first half hour or whether we are going back and forth, but if the Senator does not need the floor right now, I have other remarks I want to make.

Go ahead.

Thank you, Mr. President. And I thank Senator Harkin.

Mr. President, last week, the Senate voted overwhelmingly to approve the bipartisan agreement to reauthorize the Children's Health Insurance Program. On Saturday, on television I saw that the President called our agreement--our bipartisan agreement, I want to emphasize--he called it irresponsible.

Specifically, in his radio address, the President said we ``put forward an irresponsible plan that would dramatically expand this program beyond its original intent.''

Well, I am here to respond to that accusation by President Bush. To call

what we agreed to as irresponsible is an insult to an agreement we reached and is an insult to 67 Members of the Senate and 265 Members of the House who voted in favor of it.

Calling our bipartisan proposal irresponsible ignores reality. The reality is that the current program--the program of the last 10 years, sunsetting yesterday--is out of control. The present program is failing. That is--to emphasize--the reason for passing the bipartisan bill that we passed. Because the present program is not working the way it was intended, and with this legislation we corrected a lot of problems to turn that around.

So the President is about to veto a bill that fixes the problems and improves the program for the future without having put a credible alternative on the table. We have not heard from the President as to what he would do about the SCHIP program except he wanted to save it and expand it.

The current program does not have adequate funding just to keep running with no changes. Under current law, the current program is authorized to spend $25 billion over the next 5 years. That is the baseline amount. But the Congressional Budget Office says the $25 billion baseline amount will not fully fund the program. So the President says he wants to keep the program going. You cannot do it the way it is funded right now.

Now, what does the Congressional Budget Office say? It says that without more funding, 840,000 kids would lose coverage. Without changes, as many as 22 States will not have any funding to run the program next year, and Iowa is one of those States--my home State. Senator Harkin is on the floor; he would agree with that, I am sure.

Anyway, the President never said he wanted this program to lose kids, but the Congressional Budget Office says, doing what we are doing now, 840,000 kids would lose coverage. So keeping the current level of funding is not responsible, but if the President vetoes that bill, that is what we are doing. Of course, to the President, ignoring that fact is ignoring reality.

Let's look at what the President proposed. The President proposed a $5 billion increase in funding in his budget, but that is also insufficient funding. According to the Congressional Budget Office, the President's proposal would cause 840,000 children to lose coverage. That is right. The President's proposed $5 billion of new funding, without doing anything to get more kids covered, I think is hardly the responsible thing to do.

The proposal put forward by Senator Lott and Senator Kyl that we voted on 2 months ago--now maybe 3 months ago; I guess it was in July we voted on it--was an alternative to the bipartisan product we eventually passed. The proposal by Senators Lott and Kyl devoted twice as much funding as what the President did. To me, that is recognition enough that the President's thinking on the Children's Health Insurance Program is off track. The Lott-Kyl proposal was the alternative children's health insurance proposal offered during floor debate in July. My good friends put some serious thought into what they developed. They proposed about $10 billion in new Children's Health Insurance Program funding. That proposal covered 900,000 additional uninsured children, according to the Congressional Budget Office, but the Lott-Kyl proposal only received 35 votes--barely a third of the Senate.

There are good ideas in the Lott-Kyl proposal. They took a serious look at what populations should be covered by the SCHIP program, and it doesn't result in kids losing coverage as the President's proposals do, as the President's budget does, and that for sure is going to happen with a veto. But with all due respect to my friends, 35 votes is hardly a ringing success.

So how much funding is really needed to keep the program afloat? Well, the Congressional Budget Office says $24 billion of additional funding is needed to provide States with funding so that States can operate their programs as intended. That means $24 billion is needed to make sure there are no funding shortfalls, and $24 billion is needed just to fill the hole in the baseline and cover the kids whom States would like to cover if they had sufficient funding. The compromise agreement provides that level of funding and then goes an additional step by offering States incentives to cover more low-income kids, meaning kids and families under 200 percent of poverty. Now, that is the goal of reauthorization--to cover more low-income kids.

The bill we passed last week makes other important improvements to the program. Those improvements include better dental benefits, improves mental health coverage, with an outreach program to get the word out to kids for the kids to enroll. A bipartisan compromise is a responsible approach to funding the program and returning it to its original intent--covering lower income kids--and not covering more adults in 3 of our 50 States than our kids are being covered in those States.

Now let me shift gears and talk about the alternative to authorizing the program. The alternative to a reauthorization of SCHIP is a simple extension of current law, and calling for a simple extension of the current program without addressing the many problems it has--and I just suggested one: 3 States out of 50 cover more adults in the children's program than they cover children. Now, if you want to talk about the word ``responsible'' and whether Congress is responsible in this bill, I would say anybody who wants to leave the program the way it is--and that is what is going to happen with a veto--that is an irresponsible position to take, to keep a program going that is covering adults in a children's program. We want to cover kids, low-income kids. So the SCHIP program today, which is the way it has been for the last 10 years, is far off track.

The President has it backward when he says our bipartisan proposal ``expands the program beyond its original intent.'' With no changes, it is the current SCHIP program that has strayed far from the original intent. I wish to remind my colleagues of 1997, passing the State Children's Health Insurance Program. There is no ``A'' in SCHIP. It was never meant to cover adults, but adults are being covered. We want to get back to the original intent of this program being for kids.

First of all, the current program covers kids at incomes far above what was considered low income in 1997. It covers parents, and in some States it even covers adults who have no kids. Under the bipartisan agreement passed last week, this program will return to its roots: covering kids, covering low-income kids. Even though the administration approved of States covering childless adults--now, I want to emphasize that: This administration approved the States covering childless adults. Under our bill, childless adults will be phased completely out of the program. This is a responsible thing for Congress to do. This is one of the reasons the President should sign the bill, because the present policies are irresponsible.

Even though the administration approved of States covering parents, under our bill States will no longer be able to get enhanced Federal funding for covering parents. Even though the administration approved of States covering childless adults, under our bill States will only be able to cover higher income kids if they demonstrate they have covered their lowest income kids first.

The agreement passed last week creates new financial incentives to discourage States from spending a penny to cover anyone other than low- income children. All the financial incentives in the agreement are entirely focused on low-income children and, let me emphasize, families of under 200 percent of poverty.

The administration has done nothing to turn around this irresponsible program which is now on the books. In fact, they have made it worse. Yet they have the audacity to call our bill irresponsible. Those who say our bill is irresponsible clearly haven't read the bill. This bipartisan compromise provides coverage for more than 3 million low- income children who don't have coverage today.

If this bill is vetoed and if at the end of the day all we do is simply extend the program that has now been on the books for 10 years, what will we have accomplished? Will adults be gone from the program? No. Will States have a disincentive to cover parents? No. Will States be encouraged to cover low-income kids before higher income kids? No. Will the funding formula be fixed

so that States are not constantly challenged by funding shortfalls? No. Finally, will we have done anything to cover kids out there who are not covered today? The answer is no. No, no, no, no. Is that responsible? No. It is continuing current law. Let me emphasize, it is a continuation of the current law that is the irresponsible thing to do. The program is broken as evidenced in just one way: the 3 out of 50 States covering more adults than kids, in some instances covering adults who don't have any kids.

The program has strayed. It needs fixing. In fact, the bipartisan agreement follows the path laid down by the President himself. I have said this repeatedly. The President made a promise at the Republican Convention in New York:

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.

President Bush said that. An extension of current law will not do that. He may not want to hear this quote again and again, but until he honors the commitment he made in that speech by making a proposal to cover more low-income kids, I intend to keep repeating it.

The President can keep his commitment by signing the bill we passed last week. But if he is going to veto it, he owes those of us who tried to keep his commitment with our bill a sense of what serious policies Congress can adopt to cover more kids.

I yield the floor.

Mr. President, I am here today to talk about health insurance. Congress is well aware of the ever increasing number of the uninsured. Not to mention the fact that health costs continue to rise at an alarming rate. Make no mistake, the numbers are sobering.

But I am not here to dwell on the past and present. I stand here today to talk about the future. I stand here to discuss ways to expand access to health insurance and to change the inequities in the tax treatment of health insurance.

During the debate on SCHIP, I engaged in a colloquy with Senators Burr, Coburn, Martinez, Corker, and Bennett. During that exchange, I explained that, currently, a taxpayer who receives health insurance through his or her employer is not taxed on the cost of the health coverage. I also explained that individuals who do not receive health coverage through their employer generally do not receive a tax benefit. Similarly, a tax benefit is not afforded to people who are not employed and purchase health insurance on the individual market.

I noted that Republicans and Democrats alike agree that Congress should ``level the playing field'' and expand access to health insurance. The question is how. Senators Burr, Coburn, Martinez, Corker, and Dole have introduced a proposal that would eliminate the exclusion for employer-provided health coverage. It would provide a flat tax credit to all Americans who purchase ``qualifying health insurance.'' I commend the Senators for their leadership, and I intend to work with them on ways to expand access to health insurance.

Senators Wyden and Bennett have also introduced a proposal that would expand access to health insurance. Senators Gregg, Bill Nelson, and Alexander have cosponsored the proposal. Most recently, Senators Stabenow, Landrieu, and Coleman cosponsored the legislation. This bipartisan legislation is a ``patient-driven'' approach to reforming our health care system. I want to stress, a ``patient-driven'' approach to reforming health care.

A ``patient-driven'' approach means the patient can shop for their own health care in a competitive marketplace, which will allow them to choose the type of health insurance that meets their needs. Many in the Democratic Party, including several of the Democratic Presidential candidates, want a government-run single-payer health care system that is not ``patient-centered.'' This is a nonstarter and is bad policy. Recent polling shows that the American public thinks so. That is, the majority of Americans do not want a government-run system.

I want to reform the health care system through the Tax Code. I want to cap or eliminate the exclusion for employer-provided health coverage and offer Americans a choice between a tax credit and a deduction for health insurance. I want to condition these tax subsidies on States undertaking certain insurance reforms. I want to give the States the flexibility to decide what

types of reforms are best for their constituencies.

This ``patient-driven'' approach--with insurance reforms and changes in the tax treatment of health insurance--should make health insurance more affordable. And it should significantly reduce the number of the uninsured.

During my tenure in the Senate, I have sought to build bridges between Republicans and Democrats. I believe that there are times where Republicans and Democrats need to come together to produce results.

An example of my efforts to work in a bipartisan manner is the bipartisan SCHIP legislation that was overwhelmingly passed by this body. In the spirit of bipartisanship, I join Senator Wyden in cosponsoring the Healthy Americans Act. The Healthy Americans Act is a ``patient-driven'' approach to reforming our health care system.

While I support this ``patient-driven'' approach, I have serious concerns about a number of the provisions of the Healthy Americans Act. For example, like many of the Democratic Presidential candidates, the act would require all individuals to buy health insurance. I support accessibility to private insurance and differ with my colleagues on this point. Also, Senator Wyden's approach is more regulatory than I would prefer.

In addition, I am not endorsing the repeal of the noninterference clause in Medicare Part D. That is not going to be on the table. So my cosponsorship is not an endorsement of these elements. Instead, I am cosponsoring the Healthy Americans Act to add my voice to the call for significant changes in our health care system.

What we have here is Republicans and Democrats coming together to solve a problem. This is what bipartisanship is all about. We are all on the same page when it comes to the big picture; that is, reforming our health care system and expanding access to health insurance.

We have serious problems, and we need serious people to solve them. So let's put politics aside, roll up our sleeves and work in a bipartisan way to reform our health care system.

Make no mistake, my cosponsorship of the Healthy Americans Act is only one step in the process. I intend to work with Senators Burr, Coburn, Martinez, Corker, and Dole on their health care reform proposal. I intend to work with Chairman Baucus and members of the Senate Finance Committee on small business health reforms, along with more comprehensive health care reform proposals like the Healthy Americans Act. Let's get serious.

We yield back the remainder of our time.

Cloture Motion

Mr. President, I say to the Senator from North Carolina who just completed, I am willing to work with him on all the goals he wants to do. Earlier in the writing of this legislation, back during the months of March, April, and May, we tried to get the White House to get some other Democrats involved and helping Senator Wyden, who wanted to go in that direction, and the White House couldn't deliver.

When it comes down to doing something all at once, or doing it in two separate pieces, sometimes you have to do it in two separate pieces. This is one of those issues. We have to do the Children's Health Insurance Program first and then I am going to join people like Senator Burr. Only I am going to be working in a bipartisan way with Senator Wyden, to see what we can do to take care of all of the uninsured in America.

We can do that. The President wants to do it. There are Democratic leaders who want to do it. Senator Clinton has come out with a program doing it through private health insurance. But we cannot do it on this bill. The people who have been talking for 6 months about doing it on this bill had an opportunity, when it was up in the Senate, to offer an alternative. For all their talk, for months, nothing was offered along the lines of what they wanted to do.

Don't come back complaining after we get a compromise between the House of Representatives and the Senate, and still complain, when you had a debate on this 2 months ago and you didn't have a plan to offer. You can't get anything passed in this Senate if you don't have it down on paper and offer it to us for consideration. But now, after this job is done, let's all get together and do it right. And we will do it right.

I want to spend my time talking about some of the misinformation that was spread about this bill when it was first considered in the Senate 2 months ago and is still being considered today, just as if the debate and all the explanations we gave two Mondays ago didn't make a bit of difference. So let's go through it again. Let's get very basic and let's say where the misinformation is wrong.

I am not here to embarrass any of my colleagues so I am not going to use any names. But yesterday a Member of my party took to the floor talking about this bill pending before the Senate. I wish to address some of those issues that were raised by my friend and colleague.

This colleague repeatedly referred to the Children's Health Insurance Program as leading to a national system of health care.

The goal here is to radically expand the size of a public

insurance program to families that are really doing quite

well, families making up to $80,000 that may not have

children, or the children may already be insured by the

private sector because you want to move more people onto the

public insurance system because you want to have a

nationalized system.

I have one simple question to ask all the critics of this bill who, when confronted with the actual policies in this compromise, respond by shrieking: 80,000 income, $80,000 income; and that question is: If this bill became law tomorrow, how many families earning $80,000 a year would be eligible for this Children's Health Insurance Program? And the answer is: None. None.

As they say in baseball: You can look it up.

I have one simple question to critics who, when asked to respond to what is actually in the black and white of this bill, react by screaming, as we heard in that quote I just gave: National health care, socialized medicine. And that question I ask those folks is this: Under what contorted reasoning is a capped block grant inclusive of policies that prohibit new waivers for parents, phase childless adults completely off of this children's program, and limit matching funding for higher income kids, nationalized health care? That is what this bill does. It takes care of problems that have developed over the last 10 years. There have been legitimate criticisms of it. It fixes those problems and doesn't do any of the things that people say are going to happen, such as families of $80,000 being able to put their kids on this program.

You can call all of this rhetoric something. You can call it anything you want. But in Iowa you can't call a cow a chicken and have it be true.

I have some charts here I want people to see. This colleague of mine also referred yesterday to what is ``budget gimmickry'' about this legislation. I have this response to that colleague of mine. He said this yesterday, ``There is the problem.''

He was pointing to this chart that he had up at that time. Let me start the quote over again.

For example, there is the problem that there is a scam

going on, a scam in this bill as to how it is paid for. You

can see this chart I have in the Chamber. This reflects the

increased costs of the bill as it goes forward. But, in order

to make their own budget rules, which they claim so

aggressively to be following, such as pay-go--

meaning pay as you go--

they have to take the program, in the year 2013, from a $16

billion annual spending level down to essentially zero. In

other words, they are zeroing out this program in the year

2013 . . . that is called a scam.

I end the quote of my colleague.

I am a proud member of the Budget Committee. I think I know how the budget process works. I believe in fiscal discipline and spending restraints. I agree that even under a Republican-controlled Congress, spending got out of control. Part of the reason why Republicans lost control of the Congress last election is because we didn't show concern enough to control spending.

I believe part of the reason the President is threatening a veto of this bill is he is trying to play catchup for failing to veto 6 years of spending bills when Republicans controlled the Congress. I agree that fiscal discipline ought to be applied to spending bills and we should pay some attention to the level of spending and how spending is financed.

From that standpoint, let me focus on the criticism that has been made about how this Children's Health Insurance bill is financed. We need to step back, and in stepping back we need to look at the whole picture. The Children's Health Insurance Program is a pretty small part of that picture. The thing about the Children's Health Insurance Program is that it is not like Medicaid or Medicare. It is not a permanent program. This program expired after 10 years. We are working on it now to reauthorize it. It will expire after 5 years. You never hear of Medicare or Medicaid expiring, sunsetting, so it has to be reenacted. It has been going on for 43 years.

SCHIP, then, is not an entitlement and I have heard my colleagues recently refer to it as an entitlement.

Now, there were some who wanted to turn this Children's Health Insurance Program into an entitlement program. So it has been discussed, I admit. I am not one of those. And nobody in the Senate that I know of spoke that way. But the House bill would have lifted the cap on the national allotment for the Children's Health Insurance Program and extended the program forever.

The word ``entitlement'' may be applicable. I fought hard to maintain the block grant concept, the sunset concept--as has been the case since the program was started 10 years ago--- and to ensure that the program did expire so that in the future, Congress would be forced to reevaluate it and maybe improve or cut back, whatever the situation is 5 years from now, just as we have been doing this year with the sunset program.

So despite the best efforts of House Democrats, because in the House it is more partisan than the way we do business in the Senate, this is a bipartisan bill. Regardless of the best efforts of House Democrats under the compromise bill when the program expires, it truly ends. The day after the authorization ends, poof, no more Children's Health Insurance Program unless Congress reenacts it.

The Children's Health Insurance Program before us is an expiring program. So let me say that again. It is an expiring program. It is not an entitlement. Why do colleagues keep trying to fuzzy the debate by using words that are not applicable?

Well, I know most of us in this Chamber would no sooner let the Department of Defense expire then we would

let the Children's Health Insurance Program expire. That is a simple fact. But that does not make it an entitlement any more than the Department of Defense programs are entitlements. Because it is an expiring program, it is subject then to a very particular budget rule that makes this chart not exactly intellectually honest.

The budget rule says the Congressional Budget Office must score future spending for programs based upon last year's program current authorization. So the baseline for the Children's Health Insurance Program right now, and for next year and next year, is $5 billion. For the next 5 years, the baseline each of those years is $5 billion, and also for the next 10 years. If you want to go beyond 5 years, and we do not do it in this bill, but sometimes the Congressional Budget Office does it, the baseline is still $5 billion. It is actually $5 billion a year forever as far as the Congressional Budget Office is concerned.

Does anyone in this Chamber think the budget rule governing the Children's Health Insurance Program is realistic? Well, it is obviously not. But that is the way the Congressional Budget Office does business around here. So let's not kid ourselves.

According to the Congressional Budget Office, over 1 million children would lose coverage if we simply reauthorized the Children's Health Insurance Program at the assumed baseline of $5 billion a year. Now, I have never heard anybody around here saying they want to throw a million kids off of this program. So what do you do? You provide for where you are.

Well, you can throw them off if you want to, but I have not heard any of my colleagues, even the ones complaining about this bill, I have never heard them complain that we ought to throw 1 million kids off the program.

Who would go home and tell their constituents that they voted to do that? But over 1 million kids would lose coverage. That is not politically viable.

During the consideration of this Senate Finance Committee bill, there was a children's health insurance alternative that included an increase in the Children's Health Insurance Program by spending $9\1/2\ billion over 5 years.

Now, understand, the White House ought to hear that. Even Republicans in the Senate are telling the President: Your $5 billion will not do what you want it to do. Those are even the Members who oppose the Finance bill, acknowledging that $5 billion was not enough. Everyone knows the current baseline is not realistic, that it created a hole in the budget that had to be filled.

So what do we do? If you do not want to throw kids off, you fill that hole. It is that simple. We had to comply, though, with the budget rule. That is the way you have to do business around here. You get a point of order against your bill, and you have to have 60 votes to override it. So we did.

Do those budget rules make sense? Well, that is a question for the Budget Committee, not for our Finance Committee. The Budget Committee sets those rules, and they are not for the Finance Committee to change.

There is another budget rule the Finance Committee was required to follow. That rule is called pay-go, pay-as-you-go, which means that you raise revenue or cut spending someplace else to pay for the new things you are doing. It means the bill needs to cover its 6-year cost, and that makes sense. After all, this bill proposes new spending, and we should pay for it. And this bill does it. This bill complies with those budget rules. It complies with the pay-as-you-go requirement.

Now, the children's health reauthorization that we are debating is only a 5-year authorization. And, as I think everyone knows, the bill is paid for by an increase in the tobacco tax, just like the original CHIP bill was paid for when it was created by a Republican-controlled Congress 10 years ago.

Now, just like in 1997 when the Republicans did it, we had a problem with how the tobacco tax worked. The revenue from the cigarette tax is not growing as fast as health care costs grow. So that means the revenue raiser is not growing as fast as the costs of the program. So the Finance Committee did what it was required to do to comply with pay-go budget rules. The Finance Committee bill reduces children's health insurance funding to just below the funding that is in the current baseline.

That means the Finance Committee, in 5 years, will have the same problem we faced in putting this bill together today. They will have to come up with the funds to keep the program running, if that is what they decide to do 5 years from now.

We are covering even more low-income kids in this bill. That is a good thing. Assuming that Congress does not tackle the increasing problematic issue of health care costs across the board, as Senator Burr was begging us to do, the Finance Committee, in 5 years, will have a bigger hole to fill. They will have more kids to keep covering, and health care costs will be even higher than they are today. That is for the Finance Committee to face down the road 5 years.

That is just like the job the Finance Committee had today if we were going to continue the Children's Health Insurance Program beyond the 10-year sunset. So what I am saying is, this is really nothing new. Now, my friend and colleague whom I have been quoting all the time, a person for whom I have great admiration, has once again distorted the so-called cliff that he referred to on this chart. That is where the line goes down after the year 2012.

He has, once again, produced a chart that shows a dramatic decline in funding of the program. Here is the chart used to raise the issue about financing the compromised bill, which is largely the Senate Finance Committee bill. It shows only the funding in our bill.

The approach that this chart takes reminds me of the story of the seven blind men trying to describe an elephant. Each described different parts of the elephant: one the tusk, another one the tail, another one the ear, another one the leg, and none could describe the whole elephant. They could not see the whole picture. So we have to look at the whole picture.

As we all know, this program was created to supplement Medicaid. So I am going to show you the whole picture. You have to involve Medicaid. The goal of the program was to encourage States to provide coverage to uninsured children with incomes just above the Medicaid eligibility: Medicaid for the lowest income people, SCHIP to help lower income people who maybe could not afford private health insurance or their workplace did not have it.

So to put my colleague's concerns into perspective, we need to look at the whole picture. We need, and we should, look at SCHIP spending as it relates to Medicaid spending. I would like to draw your attention to this chart so everyone can fully appreciate the consequences of our SCHIP program that is a fiscal disaster to some of my friends, as you listen to the debate, the consequences of the SCHIP program in the context of the Medicaid Program which it supplements. So I want you to take a closer look.

Let's start with this tiny green line down to the bottom. That is the Children's Health Insurance Program under current law, the straight line across the bottom. I know we have to squint to see it. But that green line represents the Children's Health Insurance Program baseline under current law.

As I have already discussed, it is $5 billion each year for the next 10 years, and maybe forever, depending on what Congress does in the future.

Now, let's look more closely and honestly at the actual problem we are facing. This massive orange area above that green line I just referred to is Medicaid for several years into the future, 10 years into the future. It is a lot bigger, isn't it, than the Children's Health Insurance Program?

Then, on top of that, we are looking to add what is in this bill, new spending for the Children's Health Insurance Program. The new spending is represented by that narrow blue line across the top there labeled ``funding in the compromise agreement.''

Again, you almost have to squint to see that blue line. And as you can clearly see then, costs are growing at a rapid pace overall. The overwhelming driver of the cost is not the relatively small increase of the blue line. And then the decline, you see a decline in that blue line on top in CHIP spending. That is just kind of a blip on the radar compared to the massive increase we see in Medicaid spending.

We have a big problem. It is not going to go away. But it is not the

Children's Health Insurance Program. It is the entitlement program that SCHIP is not a part of because I made a point--10 times in the last 2 days--that this is not an entitlement, even though my colleagues still talk about entitlement. Where are they coming from? What planet? I don't know.

But entitlement spending is, in fact, ballooning out of control in future years if we do not act. We are going to struggle to keep these programs afloat. When you look at the whole picture, this whole picture, it puts things about the SCHIP program and the criticism of the SCHIP program in perspective. But the criticism is not justified.

Now, remember all of the fire and brimstone about the awful cliff on the chart that we had before, the awful cliff of this compromise bill? The way that it continues to be described, you would think the world is about to end. And now looking at the big picture, where exactly is that cliff, you might ask? Again, you will have to squint to see that cliff. That cliff starts downward after the year 2012. So you saw on the previous chart, you see that big dropoff. That is what I raise about the intellectual accuracy of that chart. OK?

If we go back to the other chart and look at the real program, that is how it goes down a little bit after 2012. It is not that dramatic compared to what we are doing on Medicaid. You can see how this debate has tried to distort what we are accomplishing.

So this little blue line is what this debate is all about. This little blue line is the funding in the compromise agreement. This little blue line is what all the fuss is about. It seems like a whole lot of hollering is going on over a dip that is hard to even see.

Let me tell you what the compromise agreement and this little blue line is not. This is not, as some people want us to believe, a government takeover of health care. This little blue line is not socialized medicine or nationalized medicine or anything like that. This little blue line is not bringing the Canadian health care system to America. That little blue line is not the end of the world that we know. To suggest that this little blue line and this tiny dip we see after the year 2012 is the dismantling of the U.S. health care system borders on hysteria.

While I concede that allotments under our bill in the years beyond the 5-year reauthorization in this legislation do behave as described in my friend's chart, the one with the big dropoff, I don't think it warrants the heated rhetoric we are hearing today and yesterday. SCHIP is not a real fiscal problem. The problem is that issue nobody wants to talk about. What are we going to do about entitlements? Nobody has political guts enough to agree with it, but they want to put this Children's Health Insurance Program on the same par as those Medicaid issues.

My friend I have been quoting all day and I worked together a year ago, now maybe 2 years ago, on the Deficit Reduction Act, to try to rein in this egregious Medicaid spending. I am proud of the work we did. He praised me so much 2 years ago for the heavy lifting I did for the entire Senate on saving some money--I should say Senate Republicans for saving some money--but how times have changed. We also found out how hard it is, at the time of the Deficit Reduction Act, to dial back entitlement spending. Even in a Republican-controlled Congress and even with the special procedural protections of reconciliation, we only succeeded in shaving $26 billion off that orange part of the chart. The problem of entitlement spending is still out there, and SCHIP is like a pimple on an elephant compared to the elephant that Social Security, Medicare, and Medicaid are.

I am very hopeful that once we are done with the CHIP debate, we can roll up our sleeves and get down to the business of tackling health care reform on a much larger scale, as Senator Byrd referred to, and I have referred to Senator Wyden from Oregon working on it over a long period of time. I know Senator Wyden wants to take this on, and I am going to join him in that bipartisan effort.

As I have said many times, I had hoped we could have used this debate on SCHIP to focus on these larger issues of health care reform and helping the uninsured. I tried to engage my colleagues on the other side. I was repeatedly thwarted in that effort and told that SCHIP had to get done first. Well, hopefully we can get SCHIP done and then turn to the bigger issues so the next time the Congress has to tackle the Children's Health Insurance Program, this big orange block would not be so huge.

Before closing, another criticism we had of this bill in the last debate 2 or 3 months ago was this. I will quote Senator Lott. I don't think he will mind my using his name. He was quoted on July 31: The House is going to pass a bill at what, maybe $80, $90, $100 billion, paid for by taking money away from Medicare beneficiaries. We go on conference, what will happen? What always happens. You split the difference. We are at 60. They are at 90. How about $75 billion. How is that going to be paid for? Is it going to be paid for by cutting benefits for the elderly or raising taxes of all kinds?

Well, it is paid for the same way we paid for it on July 31, 2007, with the tobacco tax, not by Medicare money.

He went on to say: I fear what is going to happen in conference. I don't know. Maybe the Senator from Montana and Senator Grassley can sit there and say: Oh, no, no, no, we are not going above what we passed in the Senate. But I think the reverse is going to be true. This is the base. The $60 billion is the beginning.

Where did we come out? Exactly where Senator Baucus and I told the Senate we were going to come out. We came out with the $35 billion that passed this body. So all those people who are worried about the position of the Senate being lost in conference by Senator Baucus and I representing the Senate--and let's say Senator Rockefeller and Senator Hatch as well--would you please tell me you were wrong?

I yield the floor.

Mr. President, since the Senate passed the bill the first time, the subject of ``crowd-out'' has become a lot more important in this debate.

Crowd-out is the substitution of public coverage for private coverage. Crowd-out occurs in CHIP because the CHIP benefit is very attractive and there is no penalty for refusing private coverage if you are eligible for public coverage.

On August 17, CMS put out a letter giving States new instructions on how to address crowd-out.

I appreciate the administration's willingness to engage on the issue. I think they have some very good ideas. But I also think there are some flaws in their policy.

States are supposed to cover 95 percent of the low-income kids. But it has been a month since they issued the letter and CMS still cannot explain what data States should be using.

Personally, I think CMS should have answers before they issue policies. And if they still can't a month later, I believe, as the saying goes, they obviously aren't ready for prime time.

So the compromise bill replaces the CMS letter with a more thoughtful, reasonable approach.

The Government Accountability Office and the Institute of Medicine would produce analyses on the most accurate and reliable way to measure the rate of public and private insurance coverage and on best practices by States in addressing crowd-out.

Following these two reports, the Secretary, in consultation with States, will develop crowd-out best practices recommendations for the States to consider and develop a uniform set of data points for States to track and report on coverage of children below 200 percent FPL and on crowd-out.

Next, States that extend CHIP coverage to children above 300 percent FPL must submit to the Secretary a State plan amendment describing how they will address crowd-out for this population, incorporating the best practices recommended by the Secretary.

After October 1, 2010, Federal matching payments are not permitted to States that cover children whose family incomes exceed 300 percent of poverty if the State does not meet a target for the percentage of children at or below 200 percent of poverty enrolled in CHIP.

Simply put, cover your low-income kids or you get no money to cover higher income kids.

Now I know some people are obsessed with the State of New York and their and their efforts to cover kids up to 400 percent of poverty.

It seems to come up in the talking points of every person who speaks out against our bill. This bill does not allow any State to go to 400 percent of poverty.

In fact, the bill makes it very difficult for any State to go above 300 percent of poverty; it will make it very difficult for New Jersey, the only State currently covering kids above 300 percent, to continue to do so if they don't do a better job of covering low-income kids.

If you are concerned about the State of New York, don't waste your time looking at this bill. You will not find answers to New York's fate here.

The answer is where it has always been--in the office of HHS Secretary Mike Leavitt. Only he has the authority to allow any State to cover children up to 400 percent of poverty. This bill does nothing to change that authority. It is up to the Secretary.

I heartily encourage those of you who haven't to read the bill. It is all there in black and white.

Mr. President, I think we are ready for closing comments by me as ranking member and Senator Baucus as chairman of the committee. Then we will be done with the debate on SCHIP.

Mr. President, first, I thank my colleagues for supporting the vote to move to the consideration of the children's health insurance reauthorization bill so we could avoid a lot of turmoil over getting here where we are to get the business done because I think everybody knows how this is going to turn out.

I appreciate the leadership of Senator Reid because he was an honest broker in helping the House to understand what needed to be done in the Senate, and he held a lot of meetings on this subject.

I thank my good friend, the chairman of the committee, the Senator from Montana, Mr. Baucus, for his leadership in forging this compromise in a bipartisan way.

I also have to recognize people who sat in on a lot of these meetings and worked hard and are part of this compromise: Senator Hatch and Senator Rockefeller. In particular, Senator Hatch has been a stalwart through this process because he was the leader in creating the Children's Health Insurance Program when it was first inaugurated 10 years ago. The continued leadership he showed was very good and necessary.

I realize some in the majority want to do more than we do in this compromise. I know it wasn't easy for those on the other side of the aisle to convince some of their colleagues that this was the right course. But we have a bipartisan bill in the Senate, and now we have a bill with strong bipartisan support in the House of Representatives. We picked up a massive number of Republicans who did not vote for it the first time in the House of Representatives.

Currently, the SCHIP program covers kids at incomes far beyond what was considered low income in the original statute. It covers parents and, in some States, it even covers childless adults. With this reauthorization, this program will return to its original concept: helping the lowest income kids and not helping adults as the program evolved beyond the perceptions that were there 10 years ago when this bill was written.

Childless adults who are presently on the program will be phased out completely because this is a children's program, it is not an adults program. States will not be able to get enhanced Federal funds if they decide to cover parents. States will only be able to cover higher income kids if they demonstrate that they took care of the purpose of this legislation, which is to take care of the lowest income kids first.

Every financial incentive in this bill discourages States from spending a penny to cover anyone other than low-income children. And all the financial incentives are entirely focused on the lowest income children. All the rhetoric to the contrary notwithstanding, this bill does not expand the program to middle-income families. It refocuses the program on the lowest income children.

Some of the speeches I have heard on the Senate floor, I wonder what good does it do to make these points over and over because it is just that some of my colleagues on the Republican side of the aisle don't read this bill, don't care what we say. This bill does what they think it does, even if it doesn't do it, and they say that on the Senate floor. Those who say otherwise than what I just said have not read the bill. This bipartisan compromise provides coverage for more than 3 million children who are without coverage today.

In closing, I encourage my Republican colleagues to think long and hard about what I said as this debate began and throughout this debate. If this bill is vetoed--and this is what I would like to have the opponents concentrate on--if this bill is vetoed, if at the end of the day all we do is simply extend the program that has been in effect for 10 years, what will we have accomplished? Will adults be gone from this program who were not supposed to be included in it in the first place? No. Will States have a disincentive to cover parents? No. Will States be encouraged to cover low-income kids before higher income kids? No. Will the funding formula be fixed so States are not constantly challenged by funding shortfalls? No. And finally, will we have done anything to cover kids who don't have any coverage today? The answer is, again, no.

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:

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.

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.

It provides better options for families to afford employer coverage.

It takes even more steps to address crowdouts, so we don't move people from private insurance to government-funded insurance.

It phases adults out of the program because this is a children's program, it is not an adults program.

It discourages States from covering higher income kids.

It rewards States that cover more of the lowest income kids.

It puts the lowest income children first in line for coverage.

Here is what the bill does not do:

It is not a government takeover of the health care system.

It does not undermine our immigration policy.

It is not expanding the program to cover high-income kids.

It is not everything that people on my side of the aisle said it is in debate on the floor of the Senate. It is, in fact, a good bill. It is a compromise. I urge my colleagues to support this bill for kids.

I yield the floor.

I yield back that time, Mr. President.

Mr. President, the current law is that we have a statutory limit on the amount of money the Federal Government can borrow, and that has to be reconsidered from time to time. The legal limit applies to the money borrowed from individuals, private investors--such as banks and pension funds--as well as money borrowed from other governmental programs that are in surplus--such as Social Security and Medicare, or what we call intergovernmental borrowing.

Increasing the debt limit is necessary to preserve the full faith and credit of the United States of America. Without an increase in this limit, our Government will face a choice between breaking the law by exceeding the legal limit or breaking faith with the investors by defaulting on debt. Neither of those choices is acceptable, and we have never done them.

Critics sometimes object to raising the debt limit on grounds that it will allow the Government to borrow more money, but refusing to raise the debt limit is akin to refusing to pay your individual credit card bill after you have already gone shopping and bought something. We cannot pass tax bills and spending bills and then refuse to pay our bills. The time to control the debt is when we are voting on bills that actually create that debt.

Raising the debt limit is about meeting the obligations we have already incurred, it is that simple. We must meet our obligations. So I urge my colleagues to support this increase.

I yield the floor.