Floor Statements

Mr. President, I ask unanimous consent that there now be a period for the transaction of morning business, with Senators permitted to speak for up to 10 minutes each.

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

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

Mr. President, I ask unanimous consent that the Senate proceed to the consideration of S. Res. 317, submitted earlier today.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table.

Mr. President, I understand there is a bill at the desk that is due for a second reading.

Mr. President, in order to place the bill on the calendar under the provisions of rule XIV, I object to further proceedings.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in adjournment until 9:30 a.m. on Thursday, November 17. I further ask that following the prayer and pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved, and the Senate proceed to a period for the transaction of morning business for up to 30 minutes, with the first 15 minutes under the control of the Democratic leader or his designee and the final 15 minutes under the control of the majority leader or his designee; further, that the Senate then resume consideration of S. 2020, the tax relief reconciliation bill, and that there be 10 hours equally divided for debate remaining under the Budget Act for the consideration of the bill.

Mr. President, tomorrow we will resume consideration of the tax relief reconciliation bill with 10 hours of debate remaining under the agreement just reached. We have a lot of work to do on this bill and on other must-do legislative items before we adjourn for the Thanksgiving holiday. Senators should be ready for late nights with many votes. Before we leave this week, we will need to act on the tax relief bill, as well as appropriations conference reports, the PATRIOT Act conference report, and another short-term continuing resolution. The majority leader has asked Senators to remain flexible in that a weekend session is very likely.

Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate stand in adjournment under the previous order.

Mr. President, I am pleased to join my colleagues Senator Bunning, Senator McCain, Senator Stevens and Senator Rockefeller, as a cosponsor of the Integrity in Professional Sports Act. While it is unfortunate that it has come to this, it is becoming abundantly clear that Major League Baseball and other professional leagues are still more concerned about protecting their own collective bargaining rights than cleaning up their sport.

I have said it before and I will say it again. The abuse of illegal steroids by professional athletes is inexcusable and has no place in competition at any level. Unfortunately, this has become a problem that we can no longer afford to ignore. The most recent studies indicate that possibly up to five to seven percent of students, even as young as middle school, have admitted to using steroids. This is an alarming statistic. If Major League Baseball won't step up to the plate on this issue, we will do it for them.

Every day, millions of young people in this country dream of one day playing ball in the big leagues. When superstar athletes, with their multi-million dollar contracts and lucrative endorsements are seen using steroids to improve their performance, it should come as no surprise that many young athletes would choose to use steroids to improve their own performance.

Professional athletes must be held to a higher standard when it comes to illegal substances such as steroids. Like it or not, young people look up to professional athletes as role models. The Integrity in Professional Sports Act will require all professional sports leagues to adopt a unified standard for testing as well as tougher penalties for any athlete found in violation of these standards. Unlike testing today, this act will require athletes to test during the off-season and frequently during their season of play. Athletes will face severe penalties for a positive test: a two-year ban for the first offense and a lifetime ban for the second.

I have little doubt that this act will aid in the effort to rid professional sports of these dangerous substances and bring integrity back to the game. We must send a strong message to professional athletes. If you choose to cheat and use illegal steroids, you risk ending your career. In turn, our young people will hopefully get the message that using steroids to improve athletic performance is absolutely the wrong way to go.

While this bill specifically addresses professional athletics, the importance of stopping steroid abuse extends well beyond the track, baseball diamond, or football field. We must continue to focus on the health and future of our children. I encourage my colleagues to join in support of this legislation to set the standard for fair competition.

Madam President, I rise in opposition to the Nelson amendment. I think everybody knows that the taxpayers pay 75 percent of the Part B premium and 25 percent is paid by the individual. Whenever we increase doctors' reimbursement--and we do that in this bill by 5.3 percent so that doctors do not lose their money--then, obviously, the 25 percent is going to go up a little bit, just as the 75 percent goes up a little bit when reimbursement is increased.

The Senator from Florida takes offense at the fact that the premium is going to go up in the year 2007 by $1.69. It is the way the formula works. I think every Senator wants to vote to give the doctors fair reimbursement because without doctors senior citizens cannot be served. So we ought to let the formula work.

The offset is very egregious toward managed care as well. Also, do not forget that low-income people, people on

Medicaid, do not pay the Part B and those who are not on Medicaid but below the poverty level have help through the QI program that we passed and the President signed recently to continue that program. So I hope my colleagues will defeat the amendment.

Yes.

Mr. President, how much time do I have?

Mr. President, this is a bipartisan amendment, the Grassley-Dorgan amendment, with a lot of cosponsors. We have a problem in the existing bill that will hurt family farmers. It cuts farm payments across the board for 100 percent of the farmers. It cuts conservation programs, so it harms the environment to a greater extent. What we do is solve a problem and help every family farmer in the process.

Ten percent of the farmers in the United States get 72 percent of the benefit out of the farm program. That is unfair. The farm programs have always been targeted toward medium- and small-sized farmers. So we put in a hard cap of $250,000. Mr. President, $250,000 is all one farm entity can get from the farm program. We redistribute that money so we do not have that 2.5-percent cut. We restore some money for conservation and things of that nature.

So I hope you will support our amendment. The last time it was up, we got 66 votes for it.

Mr. President, pursuant to section 904(c) of the Congressional Budget Act of 1974, I move to waive section 305 of the Budget Act for the consideration of amendment No. 2359, and I ask for the yeas and nays.

Mr. President, I ask Members to vote no on this amendment. There is an odd situation here. We have had a formula in the legislation for 40 years. That formula regularly has some States getting more reimbursement, some States getting less. Next year your State might go up. The next year it might go down. That is the way it has been working. All of a sudden, some States are receiving a reduction, and they want to keep it where it is. I have never had a situation where, when the formula worked to the benefit of the State, their reimbursement went up, that you come in here and ask for us to reduce the reimbursement. No, you accept the formula. If you want to change the formula, Senator Baucus and I have a good plan to change the formula. It would smooth out the peaks and valleys. That is what we ought to be doing instead of piecemeal doing it this way. I ask Members to vote against the amendment.

Amendment No. 2365, as Modified

Mr. President, we do not need an amendment to improve this situation because this bill has in it already very significant incentives for generic utilization through the way we reimburse generics and the dispensing fee we require.

A very significant thing is to remember that brand drugs account for 67 percent of Medicaid prescriptions, but they also account for 81 percent of the Medicaid rebates. This is reasonable policy for us, then, to create parity between brand and generic rebates. This amendment would upset that parity.

The amendment before the Senate also simply strikes generic rebates; it does not pay for it. So I strongly oppose bringing the Committee on Finance out of compliance with our budget instructions. This amendment would do that. I ask Members to oppose the amendment.

Mr. President, I am shocked anybody from the other side of the aisle would raise any questions against the policy we have in our bill. This is not a Republican policy. This is not a Bush administration policy. This is a policy that was offered by the previous administration, the Clinton administration. The targeted case management provision of this bill merely codifies that policy that was offered by the Clinton administration. I have a letter I got from the U.S. Psychiatric Rehabilitation Association expressing thanks for the targeted case management provisions:

Your measured steps and considerations of TCM will preserve

the needed services to those who cannot attain housing,

employment, or health care on their own. [We] appreciate your

work in helping to ensure that mentally disabled Americans

have the opportunity to access Medicaid services.

It seems to me this is something that ought to be of the heart and the brain of anybody on the other side of the aisle.

Mr. President, the fact is that the Government does not negotiate prices, it sets prices. The second thing is that we set in place in the Medicare bill plans to negotiate prices, and we know now from experience, and I did not know it when this amendment was offered before, that these plans are negotiating prices that are much lower for beneficiaries and the taxpayers than we even anticipated when we passed the bill 2 years ago.

One thing that ought to be taken into consideration is the fact that there is no savings from this amendment. I would like to quote from The Washington Post, February 17: Governments are notoriously bad for setting prices, and the U.S. Government is notoriously bad at setting prices in the medical realm.

We need to defeat this amendment as we defeated it a few months ago.

Mr. President, the amendment is not germane to the measure before the Senate so I raise a point of order under section 305 of the Budget Act.

I thank the Senator for his concerns and want to clarify for him the intent of the bill regarding dispensing fees and respond to some of his concerns. I agree that States will need to review and increase the fees that they pay pharmacies for dispensing Medicaid prescriptions. We want to be sure that Medicaid recipients can continue to have access to prescription medications from their local pharmacies. Coming from a rural State, I know that many of my constituents rely on pharmacies for health care services and the pharmacist may be the only health care professional for many miles.

The overall assumptions made in the bill is that States will increase their dispensing fees to account for the fact that States would probably be paying pharmacists a lower amount for the drug product that more accurately reflects the cost of the drug product that is being dispensed. The amount of the dispensing fee increase will depend on many factors in each State.

We expect that each State will regularly undertake surveys of current pharmacy dispensing costs to determine their dispensing fees, and that such costs would include those that are listed in the bill. States would set their dispensing fees based on those surveys. We also expect that States will pay pharmacies a reasonable return for dispensing Medicaid prescriptions.

Our expectation is that States will do all they can to encourage the dispensing of generic drugs in Medicaid. It is my expectation that States will set significantly higher fees for generics than for brands, such as one and a half or twice the brand name fee. If an innovator multiple source drug is less than or equal to the cost of a generic, then the State should pay the generic dispensing fee for that drug.

Senator Rockefeller, I share your concerns about the Section 1115 waivers recently negotiated by CMS and several States, including Florida and Vermont. I am also concerned about pending waivers being negotiated in South Carolina, Kentucky, Georgia and West Virginia. Medicaid is a joint Federal-State partnership in all respects, including its financing, and both Congress and beneficiaries should be aware of the extent to which CMS is negotiating waivers with States that modify the Federal-State financing relationship or the Federal guarantee of health benefits. CMS has taken several steps to improve the waiver information available on its website since early 2002. However, as you pointed out at the Finance Committee hearing last week, CMS does not post notification on their website when they have received formal or informal communication from a State regarding a waiver and the ``State Waiver Programs and Demonstrations'' portion of the website is not updated by CMS on a regular basis.

Senator Baucus, I certainly appreciate your views on this issue. You and I have worked hard over the last couple of years to improve Medicaid waiver transparency, and I think we have made some progress. But, I understand your desire to do more. I want to continue working with you to ensure that the Senate Finance Committee fulfills its oversight obligation in this area. I also think that the Medicaid waiver amendment that Senator Rockefeller is offering has merit, and I would like to continue working with him to improve the waiver information available on CMS' website.

I do recognize the valuable role drug distributors play in the delivery of prescription medication and our Nation's health care and did intend to exclude prompt pay discounts from the methodology.

I say to my colleague from Ohio that I will work with him to ensure that my intention to exclude the discounts is preserved through the conference and enacted into law.

Mr. President, the Senate will vote shortly on final passage of S. 1932. We have had a good debate on this bill. I commend the chairman of the Budget Committee for his effective and fair management of the consideration of this bill this week.

The Senate Finance Committee title was carefully crafted to address a wide range of member priorities. The Senate Finance Committee title is a compromise--one that was meticulously negotiated over many months. It represents clear-headed, commonsense reforms.

But here is something that should make a lot of people wonder what is going on around here. I noted with interest a recent Washington Post article which notes:

The Senate package is gaining kudos from some unlikely

sources. Liberal budget and antipoverty groups say the Senate

budget-cutting legislation largely avoids cuts that will hit

low-income beneficiaries . . .

And here is another one. The Associated Press reports:

As a result, the Senate's Medicare and Medicaid cuts

largely won't touch beneficiaries of the programs, instead

tapping

drug companies, pharmacies and insurance subsidies for much

of the savings.

I am therefore somewhat confused why more of my friends and colleagues from the Democratic side are not going to support final passage of this bill. I think I know partly what the answer is--is it because the House version of this bill is much more far-reaching than the Senate proposal? Is it because the same groups that praise the Senate bill oppose the process moving forward on that basis?

I would make the point that I think the Senate's position in going to conference with the House would be strengthened if S. 1932 passed with strong bipartisan support. I do not understand why the liberal budget groups are not urging Democrats to unite in support of the Senate bill.

I believe that the American people want us to join together to get things done. They want us to get our fiscal house in order, but they also want us to enact compassionate policies that help honest-to- goodness working families. The Senate bill meets both of those priorities. Here is the bottom line, and I want all my friends on the other side of the aisle to hear this. Here is what a vote against the Senate bill we have before us today means. Opposition to the Senate bill's balanced approach to Medicaid reform and program improvements is opposition to achieving savings, preserving services, and protecting beneficiaries.

A ``no'' vote is a vote against cutting wasteful spending in Medicaid and other changes that provide additional resources to State Medicaid programs.

A ``no'' vote is a vote against having the State and Federal Government pay less for drugs.

A ``no'' vote is a vote against tightening up asset transfers, thereby paying less for nursing home care through Medicaid.

A ``no'' vote is a vote against increasing State and Federal payments from drug companies.

A ``no'' vote is a vote against a $2 billion windfall to the States.

Opposition to the Senate bill's balanced approach to Medicaid reform and program improvements is opposition to the bipartisan Family Opportunity Act.

So that means that a ``no'' vote is a vote against the Family Opportunity Act's expansion of Medicaid eligibility for severely disabled children. Opposition to this provision means forcing many working families to refuse better jobs or promotions--keeping them poor in order to qualify for Medicaid or, worse, relinquish custody of their disabled child to the State so that their child can continue to get the services they need.

A ``no'' vote is also a vote against the Family Opportunity Act's protection for families whose newborn is diagnosed with a severe disability from being liable for thousands of dollars of medical costs.

A ``no'' vote is a vote against ``Money Follows the Person,'' which provides grants to States to increase the use of home and community based services, rather than institutional services. ``Money Follows the Person'' also eliminates barriers so that individuals can receive support for long-term services in the settings of their choice.

Opposition to the Senate bill's balanced approach to Medicaid reform and program improvements is opposition to a down payment on Hurricane Katrina disaster relief.

So that means that a ``no'' vote is a vote against providing $1.8 billion to protect Medicaid benefits in Alabama, Louisiana, and Mississippi for people affected by Hurricane Katrina.

Opposition to the Senate bill's balanced approach to Medicaid reform and program improvements is opposition to protecting health coverage for thousands of children and improving the State Children's Health Insurance Program.

A ``no'' vote is a vote against preventing funding shortfalls in the Children's Health Insurance Program in 23 States.

A ``no'' vote is a vote against providing new options for private coverage of long-term care through Long-term Care Partnerships.

A ``no'' vote also means opposition to closing loopholes that permit the unscrupulous ``gaming'' of Medicaid eligibility rules to intentionally shelter assets to qualify for taxpayer-financed long-term care coverage in Medicaid.

Those who vote against this bill are also opposing the Senate bill's balanced approach to Medicaid reform and program improvements is opposition to protecting access for rural beneficiaries.

So that means that a ``no'' vote is a vote against protecting small rural hospitals and sole community hospitals by extending the hold- harmless provisions that protect them from losses resulting from implementation of the hospital outpatient prospective payment system.

A ``no'' vote is also opposition to extending the Medicare Dependent Hospital Program, which provides financial protections to rural hospitals with less than 100 beds that have a greater than 60 percent share of Medicare patients.

A ``no'' vote also means opposition to expanding coverage of additional preventive benefits under Federal Qualified Health Centers.

Why would my Democratic colleagues oppose such commonsense, practical policies that save the States money, expand access for low income and disabled children, help rural hospitals and make progress to rebalancing the institutional bias in the Medicaid program?

I am saddened that it appears my colleagues cannot put partisan politics aside and get behind a bill that saves money for States, protects and expands access, and preserves benefits. I urge my colleagues to support the Senate bill. Let's show the American people that we can put politics aside and stand together and get things done for the good of the country.

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

Madam President, I yield myself 15 minutes.

Yes, the amendment by Grassley, Dorgan, Enzi, Harkin, Hagel, Thune, Johnson, Brownback, and Feingold. It is the amendment on payment limits.

Madam President, since we are talking about farm payments and since I am involved in agriculture, I want to be totally transparent that on the side I am a family farmer, I have income from that farm, and I crop share with my farmer son Robin Grassley. We don't hire labor. So whatever farm payments go with our crops, I receive 50 percent of those farm payments from the Federal farm program.

This amendment is about the family farmer. Farm programs are not just about the 2 percent of Americans who farm for a living. Farm programs are about several things, but, most importantly, they are about national security because Napoleon said ``an army marches on its belly,'' so obviously a secure food supply is very important for our national security.

Second but not often said, it is about the social stability of our Nation because any society is only nine meals away from a revolution, so a certain food supply has something to do with the stable society of any country.

The American people recognize the importance of the family farmer to our Nation and the need to provide an adequate safety net for family farmers. That is why we have had a farm program for 70 years. In recent years, however, these farm payments have come under increasing scrutiny, particularly from people who do not understand agriculture. And when you spend the taxpayers' money, there is nothing wrong with scrutiny. Critics of farm programs have argued that the largest corporate farms reap most of the benefits of these payments.

Yes, I will.

That brings up a situation I wasn't aware of. I thought we had an hour equally divided. There was 45 minutes there, so do we have 1\1/2\ hours and I have 45 minutes on my side?

No, at least not right now. Maybe later.

Madam President, I still would stay within my 15 minutes because I don't want to use floor time that other Members might want to use.

But anyway, farm payments have come under increasing scrutiny, and that is legitimate because we are spending taxpayers' money. Critics of farm payments have argued that the largest corporate farms reap most of benefits from these payments. What is more, farm payments that were originally designed to benefit small and medium-sized family farmers have contributed to the demise of those smaller farmers as well because unlimited farm payments have placed upward pressure on land prices and cash trends and have contributed to overproduction and lower commodity prices, driving many family farmers off the farm.

The law creates a system that is out of balance. This is pointed out in this first chart I have here that basically indicates--and you can look at the different lines, but the bottom line is the one I most often use--10 percent of the largest farmers in America get 72 percent of the benefits that we appropriate to help family farmers with their safety nets. I have to ask: How long are city taxpayers going to support a farm program for family farmers when 10 percent of the biggest farmers are getting 72 percent of the benefits? That is something we in rural America need to be thinking about when we are anticipating just 2 years from now--less than 2 years--having a debate on the renewal of the 2007 farm bill. Are we going to be able to maintain support in the urban-dominated House of Representatives for a farm safety net when 10 percent of the biggest farmers in America are getting 72 percent of the benefits?

I believe we need to correct our course and modify the farm programs before those programs cause further concentration and consolidation in agriculture. Today, most commodities are valued off demand. Markets dictate profitability. When farmers overproduce by expanding rapidly because of the impact of Government farm payments, then markets are not functioning. Federal farm programs are influencing even land prices across the country. Iowa land is selling between $4,000 and $5,000 an acre in counties surrounding my home at New Hartford, IA.

This amendment will revitalize the farm economy for young people across the country by making land prices and cash trends more affordable, and that is going to be most important if we are going to revitalize American agriculture by getting young people in it when you consider today the average age of a family farmer is 50 years.

My amendment will put a hard cap on farm payments at $250,000. That is the same as what is in the President's budget, meaning the Republican President's budget, meaning Republican President Bush's budget. This will take it down from the current payment, $360,000, that is allowed under existing law, under the 2002 farm bill.

Just to remind everybody, I voted against the conference report on the 2002 farm bill, and the lack of farm payments, of responsible hard caps was the reason that I did. I worked back then with Senator Dorgan, who is the main sponsor of this amendment, on a similar measure in 2002, and it passed by a bipartisan, bipartisan support of 66 to 31. The amendment, of course, was taken out in conference.

One section that was added in the 2002 farm bill set up the Commission on the Application of Payment Limitations. This was a substitute for the fact that we didn't get payment limitations; we are going to have a commission study it. This study concluded that payment limitations affect the largest producers and these producers generally have lower per-unit production costs than other producers. But the study also says smaller, less efficient producers may be able to expand production and become more efficient under further payment limitations.

Congress enacted in 1987 the Agricultural Reconciliation Act, more often

referred to as the Farm Program Integrity Act, to establish eligibility conditions that are not being abided by today for recipients and to ensure that only entities actively engaged in farming receive payments. To be considered actively engaged in farming, this act requires an individual or entity to provide a significant contribution of inputs-- capital, land, equipment, labor--as well as significant contributions of services, particularly labor, or active management to the farming operation. But people have been able to find loopholes around this act, and that has facilitated these huge payments that go beyond the limits that are in law today.

Last year, I held a hearing through the Finance Committee on the GAO report that was released April of 2004. The GAO report recommended that measurable standards and clarified regulations would better assure that people who receive payments are actively engaged in farming. Of course, our USDA under both Republicans and Democrats does not want to write these regulations, does not want to enforce them, and that is why we have this legal subterfuge of getting around the payment limitations that are higher but would be effective, and I wouldn't be arguing with them if they were.

Of the $17 billion in payments that the USDA distributed to recipients in 2002, $5.9 billion went to just 149,000 entities. Corporations and general partnerships represented 39 percent and 26 percent of these entities.

I want my colleagues to look at another chart from the Washington Post of March of this year:

If the purpose of the farm subsidies is to make family

farms viable, it's hard to see why payments of more than

$400,000 apiece should have gone to 54 deceased farmers

between 1995 and 2003, or why the residents in Chicago should

have collected $24 million in farm support over that period.

This type of arrangement, and others like it, raise questions about the interpretation and enforcement of the 1987 act that requires each partner be, according to the law, actively engaged in farming.

This is why I wrote the General Accounting Office to conduct a study. I encourage Members of this body to look at that report.

Earlier this year, the Senate went on record supporting a reform of Federal farm subsidies.

During the markup of the Senate budget resolution, I was able, with the ranking member of the committee, Senator Conrad, to include a sense-of-the-Senate amendment expressing support for stronger farm payment limits; hence, this amendment. That amendment passed the Senate Budget Committee 15 to 7.

The committee agreed that any reconciled mandatory agriculture savings required under the resolution should be achieved through modifications to the payment limitation provisions of the 2002 farm bill.

The budget resolution also instructed Congress to find $3 billion in savings over 5 years in agricultural programs. I supported that resolution coming out of committee without offering my amendment in committee because we have a responsibility to support the chairman in moving the budget resolution along. In the Agriculture Committee, it was bipartisan. These savings consisted of cutting commodity programs, and we achieved the $3 billion savings.

The proposed amendment before the Senate would cap farm commodity farm program payments at $250,000 a year. This would encompass direct payments, countercyclical payments, loan deficiency payments, and marketing loan gains. Gains from commodity certificates would be counted toward the limitation, closing another abusive loophole.

By tightening up loopholes, this amendment would save $1.1 billion in savings over 5 years. With these savings, the Grassley-Dorgan amendment would restore 50 percent of the CRP acres cut by the committee and restore up to 75 percent of the Conservation Security Program money that was cut during the Agriculture Committee markup of reconciliation.

These savings will allow us also to prevent a 2-percent reduction in across-the-board commodity cuts that this resolution before us calls for in the 2006 crop year.

Obviously, with all the increased costs of energy, farming, and everything else, we ought to do what we can to strengthen the safety net and not weaken it. This would help prevent that 2.5-percent cut in farm programs.

Not only has the Senate agreed to some type of payment limit reform in the past, but the President in his budget, as I said, included this $250,000 cap.

The Secretary of Agriculture recently at the Commodity Club luncheon on October 6 said he has heard from producers all over the country. I attended such a forum at the Iowa State Fair, and I understand the type of feedback he received.

The concerns that have been expressed to the Secretary of Agriculture are that farm payments have been causing an increase in land values and the greatest benefits going to the largest farmers.

I have been hearing directly from producers for years exactly what the Secretary is hearing at his farm bill forums. We are hearing that young producers are unable to carry on the tradition of farming because they are financially unable to do so because of high land values, high land prices, and cash rent.

Neil Harl, a distinguished agriculture economist, now retired, from Iowa State University and one of the contributors to the commission report I referred to, has come out with another report. Dr. Harl's statement says:

The evidence is convincing that a significant portion of

the subsidies is being bid into cash rents and capitalized

into land values.

If investors were to expect less Federal funding or not at all, land values would likely decline, perhaps as much as 25 percent.

I have a number of editorials supporting my position. The third one I put up comes from the Des Moines Register. Again, it refers to responsibilities I have as chairman of the Senate Finance Committee, assuming I can control every committee in the Senate, and I am willing to inform the Des Moines Register that no Senator who is chairman of the Finance Committee does. They said, in regard to me as chairman of the Finance Committee and Congressman Nussel as chairman of the House Budget Committee:

Both could make a difference for Iowa's farmers and rural

communities by steering adoption of payment limitations for

farm subsidies. Nearly three-fourths of Federal farm payments

go to 10 percent of the farms.

A fourth editorial is from a newspaper that the chairman of the Senate Agriculture Committee, I know, respects very well, the Atlanta Journal-Constitution. The Atlanta Journal-Constitution says:

As time has gone by, smaller farmers most in need have

received less and less of government's support and corporate-

like farms more and more.

Their arguments for payment limitations.

By voting in favor of this amendment, we can restore the cuts that have been made to the commodity and conservation programs and lessen Government support to corporate farmers.

Madam President, I ask for 15 seconds.

We can restore what we cut to family farmers in the resolution. We can allow young farmers to get into farming and lessen dependence on Federal subsidies. I hope my colleagues will support this commonsense amendment.

I yield the floor and reserve the remainder of my time. I ask people who want to speak in support of the amendment to please come to the floor so we can expedite this debate.

I might say that I have all sorts of respect for the Senator from Georgia. He is a tough competitor.

Madam President, I hope it is not wrong for me to say who wants to speak. Senator Harkin wanted 10 minutes, and Senator Dorgan wanted me to save him 10 minutes. I urge they or anybody else who would want time from me to come over. That is all the time I am going to use right now.

I yield myself a minute and a half.

Madam President, this amendment and this discussion both are not about the cost of production of agricultural commodities. This amendment and this discussion are about payment limits and the need to prevent public funds from being used by the biggest producers to become even larger by bidding up cash trends and capitalizing their extra profits from production into land values.

There is public interest in this being the result of Federal farm programs, and all except the very largest farmers know that and support this effort.

Focusing on costs of production is totally meaningless, unless one also includes the revenue from production.

Every crop has a different set of numbers on cost and a different set of numbers on revenue produced. Those numbers vary from crop to crop, and, to a degree, vary from region to region and year to year.

The farm program support levels have never been set on the basis of cost of production or on profitability, taking revenue into consideration. Support levels have been set by the Congress, not by some index based on cost of production.

Moreover, this is not about inefficiency, as some have argued for years. The largest producers, with extra profit from their size or scale, from discounts received in input, and from premiums received for volume production are not passed along to consumers. Those extra profits are used to bid land away from midsize and smaller operators.

Keep in mind that these programs are not entitlement programs. The purpose is to stabilize the sector and provide an income supplement when commodity prices are low.

I yield the floor.

Madam President, I yield 2 minutes to the Senator from North Dakota and 15 minutes to the other Senator from North Dakota.

Mr. President, I yield 2 minutes to the Senator from North Dakota.

Mr. President, I yield myself such time as I might consume.

First of all, the Senator from New Mexico works very closely and very hard as a member of the committee I chair. I appreciate his hard work and he should not take personal anything I am saying about his amendment.

Let me remind people what the Federal medical assistance percentage is all about. We call that FMAP for short. It sets the amount of money that the Federal Government contributes toward the costs of a State's Medicaid Program.

When States are doing well economically, their Federal share goes down. Then when States need more help, when their economy is not doing so well, their Federal share goes up. That is the way the formula was designed. That is the way it has worked. It seems it has worked well for a long period of time. It helps States that need more resources because they have more low-income individuals who will qualify for Medicaid.

Of course, that is another part of the formula. And that makes a lot of sense because it targets scarce Federal resources to States with the largest number of people enrolled in Medicaid. That is the way the program has been on the books since 1965 when it was first enacted.

The Federal contribution, the FMAP, is recalculated each year. As it turns out, at the beginning of the current fiscal year many States saw their Federal share go down, but other States saw their Federal share go up.

So what is the argument that 2006 should be different than any other year? The argument apparently is that this is different because the Census Bureau updated data and that made the FMAP in a few States go down. But the data from the Census Bureau is designed to make the Federal share amounts more accurate. We should seek accuracy in any formulas we have and the statistics that back up those formulas. That is just good common sense, the way Government ought to operate. And, of course, the Census Bureau goes through this very same exercise not just recently--I mean recently but not just for the first time--every 5

years, so this is not something new, and this is done to make sure the rate for Federal contributions to Medicaid, or the FMAP, is set accurately.

Of course, that is what we want. The Federal share should be set according to an accurate formula, and the amount of money that goes to each State ought to be a very accurate amount of money. This is the goal and that is what has happened with the improved data of the Census Bureau.

The States that are affected do not want, of course, to see their Federal share go down, and it is very obvious that Senators, accordingly, would fight for the interests of their States. But Congress--if you look at the responsibility of all of us for the entire country--cannot come in every year and override the FMAP formula, because that defeats the whole purpose of having a formula in the first place.

The Federal share went down in these States this year because, oddly enough, it was supposed to go down. In some years, the Federal share goes up in a majority of the States instead of going down. And surprise--that is the way it is supposed to work. When the Federal share goes up, I can't recall anyone lobbying me as chairman of the committee to override the formula to lower their Federal share instead of increasing it.

If your general argument is that the formula is broken, it is going down for 29 States, doesn't that mean it is not broken for the other 21 States? Is it your argument that the formula only works when the States get more money?

It is true that the fluctuation in the Federal share calculation can create problems in States. I don't doubt that. If the States want to limit the amount of decreases--and the increases in Federal funding-- then that is something that I would be willing to discuss further. I would be willing to work with anybody in this body in the future to bring greater predictability to the process.

This summer, as an example, I worked on a proposal to do that with my counterpart on the Democratic side of my committee, Senator Baucus of Montana. This proposal would put limits on how far the FMAP could go up or go down in any given year--in other words, to smooth out the peaks and valleys. It gives States predictability on their Federal share, and it would certainly bring stability to the process. I would be willing to introduce the Federal share corridor proposal that Senator Baucus worked on over the summer and have anybody in this body join us as cosponsors.

Finally, increasing the Federal share for 29 States this year necessarily means that we create an even bigger problem in the year 2007. This is then trying to solve one problem and creating another problem. We will be back here next year to solve that problem--create a bigger problem in 2008 and be back here to solve that problem in 2008. Most of the States are projected to see slight increases in 2007. By holding all States harmless this year, their decreases the following year will be greater. Are these States going to come back again next year and ask for another temporary fix to get more money for their Medicaid Program? I guess I don't have to tell you the answer to that question. You know what the answer is. They are not going to be here to voluntarily give up something.

I also question the offset included in this amendment to pay for the new spending. This amendment would further increase the rebate paid by drug manufacturers. It would do this by forcing manufacturers to pay States rebates for drugs dispensed through the Medicaid managed care plan.

The bill we are considering today already increases the rebate paid by drug manufacturers from 15.1 to 17 percent. The bill also makes the drug manufacturers pay millions more in rebates by closing a pair of loopholes in the rebate program. All together this bill already increases the rebates drug manufacturers are forced to pay by $1.7 billion. So this was not a source of revenue that my committee overlooked.

I understand my colleague might not think that is enough, but I would encourage him to look at the CBO report put out this past June examining the price of name-brand drugs. That report shows that the effective rebate being paid by drug manufacturers is actually 31.4 percent and not 15 percent.

I am also concerned about the substantive implications of the amendment. These Medicaid health plans are private businesses that can negotiate low drug prices. Yes, that is the way it was set up, so plans would negotiate lower drug prices. They already negotiate the best price of the marketplace. The States already get the benefit of those lower drug prices that these plans negotiate. Making the manufacturers then pay rebates for drugs on top of what is already negotiated is the same as making them pay a double rebate for those drugs. Of course, that makes no sense.

Yes, I do realize that the Medicaid Commission accepted this amendment in its recommendations, but I am quite certain the Medicaid Commission's stamp of approval would not win support from Members of this body for other proposals that we are considering today.

We have looked at this area. We have come up with responsible policies that address loopholes, and I don't think we need to further increase the rebate beyond what is already included in this bill. Therefore, with due respect for my colleague from New Mexico, I urge my colleagues to oppose the amendment and the offset that funds it.

I yield the floor.

Mr. President, I seek time, but I do not have the authority from the floor manager.

Mr. President, I yield myself 10 minutes.

I will yield myself 10 minutes of that.

Mr. President, first of all, I want to make very clear, regarding some of the concerns that have been expressed in support of this amendment, I thought we took them into consideration 2 years ago-- did take them into consideration in their policy. I think now that things are rolling out I am even more confident of what we did. So that would apply also to the issues raised here, whether or not beneficiaries have the ability to make decisions about their care, the type of plan they want to be in.

We knew beneficiaries would need to have good resources to learn about the benefits. We have, for instance, a State Health Insurance Information Program that has counselors who can provide one-on-one counseling. CMS has developed a network of community-based organizations to do the same thing. AARP is holding meetings--all over the country, I believe, but I see them noticed in our newspapers all the time. It seems like a massive number of meetings that my senior citizen constituents have gone to.

Do I think nobody could fall through the cracks? Perhaps so. But I think they would have to be people who are very isolated. I know CMS is taken through the mail, and presumably everybody has an address that gets mail. We have taken very good care to make sure people are notified through the mail. If there is one place where there might be a problem, that is the extent to which States might not have everybody in their files. But I have even been satisfied that CMS has been working on that problem for a long period of time.

So because we have thought about these things, I rise to oppose the amendment by the distinguished Senator from Washington.

When we worked on the Medicare Modernization Act, which established this drug benefit program, every State Governor wanted beneficiaries who have Medicaid and Medicare coverage, dual eligibles, to get their prescription drugs through Medicare.

Members of both sides supported this approach. They said Medicare has been a universal benefit, available to all beneficiaries since its inception. The Medicare drug benefit should then be no different.

Those who supported covering dual eligibles under the Medicare drug benefit noted that these beneficiaries would have nothing, no prescription drug coverage, if a State chose to end its Medicaid prescription drug benefit, which it could do. As Senator Hatch said, we even considered an amendment, supported by 47 Senators, to make the benefit available to all Medicare beneficiaries, including Medicare beneficiaries with Medicaid coverage.

For those of us who ultimately supported this approach in the final bill, did we think that we could just wave a magic wand to make the transition happen? As I said, we did not think that. Transitions like this are not easy. We knew that. The Centers for Medicare and Medicaid Services, the agency responsible for making this transition happen and administering the program over a long period of time, knew it would be a big task to transition all those folks into Medicare.

That is why the agency started working on a transition plan--with States and advocacy groups--more than a year ago. In May, the agency issued a 44-page strategy for transitioning this group of beneficiaries into the Medicare drug benefit. That strategy lays out in great detail the steps that the agency will take to ensure continuity of coverage for this vulnerable group of beneficiaries.

First and foremost, these beneficiaries will be assigned to a Medicare prescription drug plan with their coverage effective on January 1st. Folks refer to this as auto-enrollment. This process will prevent any gap in coverage for these beneficiaries. The agency worked with States to develop lists of dually eligible beneficiaries. These lists have undergone rigorous scrutiny to ensure their accuracy and completeness.

Letters informing beneficiaries about the upcoming changes went out today. It clearly states that beneficiaries should choose a plan, but if they don't, they will be assigned to the plan listed in the letter.

The agency included some additional information in a question and answer format. The first question is, ``What should I do now?'' Among other things, the answer says that beneficiaries should find out which plans cover the prescriptions they take and the pharmacies they want to use.

I know that folks are concerned that a beneficiary might toss aside their letter--we have all done that with mail. That is why pharmacists will have access to the beneficiaries and their assigned plan. So on January 1st, when a beneficiary goes to a pharmacy, the pharmacist can fill that prescription under that plan.

Now, some people are concerned that a beneficiary will be assigned to a plan that doesn't cover a drug they need, and they won't find out until they go into the pharmacy. In its transition guidance to plans, the agency strongly recommended that plans provide for temporary ``first fill'' of 30 days to provide a transition supply to meet the immediate need of a beneficiary. This is a common practice today.

Any plan that chooses not to do this, had to provide the agency with sufficient detail on how it would ensure that new enrollees stabilized on a drug not on the plan's formulary would continue to have access to the drugs they need. For example, a plan not using the first-fill could have procedures in place to contact enrollees in advance of their initial effective date in order to identify their needs. All of these alternative plans were subject to the agency's approval.

In addition the agency carefully reviewed all of the plans' formularies to ensure that dually eligible beneficiaries would have good access to the drugs they need. Many plans around the nation cover nearly all of the top 100 drugs used by seniors. The agency also required plans to cover all or substantially all drugs in six classes that include drugs most commonly used by seniors.

I also know there is concern that a dually eligible beneficiary might be assigned to a plan that doesn't cover a drug they need or include their pharmacy in its network. That is one reason why the Centers for Medicare and Medicaid Services sent the letters out now. Dually- eligible beneficiaries can still pick whatever plan they want for their coverage on January 1st, but if the don't make an affirmative decision, then they will have coverage through the plan to which they been assigned.

And if that plan doesn't work for them, they can switch plans at any time throughout the year. Any time.

I was among the Senators who voted against the amendment in the Senate, but I obviously agreed to the provisions hammered out in the conference committee.

Now is not the time to change the provisions. Letters have gone out to beneficiaries. Plans have submitted their proposals to the government based on the specifications in the law. Changes now could lead to increased cost for all beneficiaries and Government.

Members argued with great passion as to why this group of beneficiaries should have their drug benefit covered by Medicare. Members of the conference committee worked to make that happen.

The Senate bill was bipartisan and it passed by a vote of 76 to 21. The bill that emerged from conference was bipartisan and passed by a vote of 54 to 44 with the support of 11 Democrats and 1 Independent.

The bill passed because we recognized that if we asked seniors to wait for a perfect bill, that they were going to be left waiting for a long, long time.

The AARP and more than 300 patient advocacy and health care organizations endorsed the final product. The AARP said the final bill ``helps millions of older Americans and their families,'' and is ``an important milestone in the nation's commitment to strengthen and expand health security for its citizens. . . .''

The prescription drug benefit is affordable and universal. It will cover about half the cost of prescriptions for the average beneficiary. Dually-eligible beneficiaries will have almost all their drug costs paid.

After years of hard work on both sides of the aisle, Republicans and Democrats came together to pass the Medicare Modernization Act. Now is not the time to reopen this issue.

The Centers for Medicare and Medicaid Services has worked hard to implement the new program. Any changes at this point will almost certainly delay the drug benefit from implementation.

In thinking about the months of negotiating this package, I can tell you that there is no interest from this Senator to reopen and renegotiate the new Medicare drug benefit now.

The time for delay is over. The new Medicare drug benefit was a bipartisan product, it is law, and it is set to begin for all beneficiaries, who have waited long enough for this important benefit.

I agree that every step needs to be taken to ensure that there is no disruption in coverage for these vulnerable beneficiaries.

I believe those steps are being taken. It is my understanding that a number of folks think that this transition will be too confusing for beneficiaries. In my opinion, having some drugs covered by Medicare and some by Medicaid will be even more so.

I urge my colleagues to vote against this amendment.

Madam President, I ask unanimous consent that the following Senate Finance Committee interns and fellows be granted the privileges of the floor during consideration of the Deficit Reduction Omnibus Reconciliation Act of 2005: Brad Behan, Melissa Atkinson, and Catriona Johnson.

Mr. President, I am going to speak against the amendment by the Senator from Arkansas, but I want to make clear that I do not object to the substance of the amendment. I am in a position where I have to have a reconciliation. I want to show sympathy for what she is talking about but defending what I have in my mark and also express--and I am summarizing now--that I hope somewhere between now and the final consideration of the reconciliation we are able to take out Katrina relief that I have in mine, do it more broadly, as Senator Baucus and I have tried to do, but right now I am not in a position to do that. I hope to move that along, and so today I am a little bit opposite of the Senator and a little bit opposite of Senator Baucus.

Yes, I will.

I would like to yield 1 minute.

For a question or comment.

Mr. President, I thank the Senator from Arkansas for her kind remarks. As I explained, because things have to be compromised in order to get anything done here, it tends to be the majority party's responsibility to move along reconciliation. In that vein, I am somewhat different from the Senator from Arkansas, even though I have sympathy and even though I have spoken in support of it and even though I have worked with Senator Baucus on what she wants to accomplish.

So momentarily and throughout this reconciliation bill I have to oppose the amendment by my friend and colleague from Arkansas.

We, of course, Mr. President, were all deeply moved by many of the stories that we have heard on the floor, particularly the stories that the senior Senator from Louisiana tells us about. And it is not only her State but Mississippi and Alabama, stories about people who have lost everything--their homes, their jobs, and, worst of all, more than 1,000 people have died. I am keenly aware that those who have suffered the most are our most vulnerable citizens: the infirm, the displaced, the disabled, and families on welfare. Our hearts go out, as well, to all the others who have suffered so much as a result of this terrible disaster.

I understand the need to act, and my colleague, Senator Baucus, and I came together very quickly--now I think 2 months ago almost--well, at least 6 weeks ago--very quickly, in a bipartisan way, in response to my own leader's desire that we move very quickly to respond to this, as he had a news conference the Wednesday after Labor Day, on behalf of those most vulnerable individuals and families who have suffered so greatly.

You know that it is a priority for me to assist those affected by Hurricane Katrina, and I think Senator Baucus and I came up with a very good package, and I remain committed to it.

Go ahead.

Let me say here that for those people who don't see everything that is going on in the Chamber, we just had a Democrat apologize to a Republican, and a Republican apologize to a Democrat. Everything here is not everybody at each other's throat. And I say that to the public at large because we do get along even though we disagree sometimes.

Anyway, I had this reconciliation package come out of my committee, and we are going to it now. And in the provision that we passed we were able to include what I consider a downpayment of what the Senator from Arkansas and the Senator from Louisiana want to accomplish. In their judgment, it is not enough, but it is moving the ball down the road in a way I hope that will get some help to people who need it.

This provision in the reconciliation legislation then makes that downpayment to respond to the health care needs of low-income families affected by Hurricane Katrina. This is a placeholder for spending on the hurricane victims because I believe it is extremely important that we address the needs of those so affected. The legislation provides $1.8 billion to protect Medicaid benefits in Alabama, Louisiana, and Mississippi. The legislation provides targeted temporary relief to parishes and counties affected by the hurricane.

The legislation reimburses States fully at 100 percent of their share of Medicaid costs for any claim paid for medically necessary health care for evacuees. This Federal Medicaid funding increase is temporary. It begins on August 28, 2005, the day the hurricane hit, and ends on May 15, 2006. This is targeted relief for 1.9 million people. It focuses its assistance to the people who need it the most.

I want to be clear, I would prefer to do our full bill on the Senate floor outside the reconciliation process in what we call emergency measures. I remain deeply disappointed in the people who have stood in our way, and they are on my side of the aisle. In my judgment, this administration's stand as well on this has just been plain wrong, and I have said that in committee, and I have said that in news conferences.

Would I like to do more? Certainly. But to do more means that you must pay for it. Frankly, I am concerned about how the Senator from Arkansas is paying for this amendment. While I support taking funds out of FEMA to pay for Katrina relief, doing so on a reconciliation bill is not germane.

So, Mr. President, the provisions in the reconciliation bill provide assistance for the next 8 months for 1.9 million people, and that is a very good start. It is crucial that we do it this way, and we will get it done this way. At least this much will get done.

I encourage my colleagues to support this provision in my bill and, consequently, I ask them to vote against the amendment by the Senator from Arkansas.

I yield the floor.

Yes.

Mr. President, I get a little tired of people on the other side of the aisle making the point that tax cuts are responsible for the deficit we have, when you consider we inherited a recession from the previous administration, and we had September 11, and because of the catastrophe of September 11, income to our Federal Treasury went down from $2.1 trillion to $1.75 trillion. That went on over a period of 3 years before the economy turned around.

Then, to find fault with the tax cuts of 2001 and 2003, a person no less than Chairman Greenspan said those tax cuts were what turned this economy around. And turning the economy around, we have $274 billion more coming into the Federal Treasury in the year 2005 than we did in 2004.

And then, especially when you measure deficits by gross national product, our deficit now is less than it was in 1993 under Clinton. Our deficit now is less than it was under Reagan in 1982, and a lot less in the case of 1982.

Now, what I rise for is this: the justification that was made this morning that we are having this reconciliation bill, cutting expenditures, so we can cut taxes. We are not going to cut taxes any more. We have done that in 2001 and 2003. That tax policy is what turned this economy around and brought in $274 billion more this year than last year, even $70 billion more in the last 10 months than we estimated back in February would come in this year.

But the case the other side is making that we want to have further tax cuts--if we take no action, what they want to do is have an automatic tax increase. We have a lot of tax provisions that are going to sunset this year. If we do not keep tax policy the way it is, we are going to have a tax increase.

Now, they like to have more money coming in so they have more money to spend. I would like to have somebody on the other side of the aisle tell me how high taxes have to be to be high enough to satisfy their appetite to spend money. I have never heard that. But the fact is, they can have a tax increase and not even have to vote for it. So we have to take action between now and the end of the year to make sure the existing tax policy, that was good for the economy, keeps this economy going, as Chairman Greenspan has given those tax cuts credit for where we are.

I want to tell my colleagues what is going to happen if we do not take action before the end of the year to continue the tax policies that would otherwise sunset, that somehow they do not want us to continue.

Our objective is to preserve current levels of tax relief. These tax increases would occur if my friends on the other side of the aisle--and maybe even an occasional Republican or two--have their way and thwart the reconciliation bill in the process.

First, the tax relief plan continues the hold harmless provision of the alternative minimum income tax. This piece of the plan, the largest, I might add, is worth about $30 billion to 14 million American families. You can see by this chart, if we do not take action, we are going to have about 5 million middle-income taxpayers paying more taxes next year because they will get hit by the alternative minimum income tax.

I want to remind everybody that the alternative minimum income tax was meant to hit the very wealthy, who were taking advantage of every tax loophole they could and not paying any tax, that they ought to pay something. But it was never meant to hit middle-income America.

We are going to have in my State of Iowa 65,000 more Iowans pay tax they were never supposed to pay if we do not take action between now and December 31.

Look at all the places where I wish I could think of all the people who have been complaining the most about what we are talking about. But the point is--North Dakota, for instance, I think it ought to be pretty obvious. Do you want 13,364 North Dakotans to pay additional tax if we do not take action before the end of the year?

Well, I am glad to hear that. But I have heard different rhetoric from the other side. And Michigan is here, if I can find Michigan. We ought to put things in alphabetical order, but it does not matter. It does not matter. You are going to have tens of thousands of people or hundreds of thousands of people paying additional tax if we do not take action.

Now, that is just one provision.

We reduce the capital gains from 20 percent down to 15 percent, and we have been told that is already figured into the stock market. Do we want to let the middle-income taxpayers pay a higher capital gains tax? I do not think so, because there are so many middle-income people now who are investing through their IRAs, through their 401(k)s, that we do not want them to be hit by this.

We have the tax deductibility of college tuition. We have the small savers credit. We have the small business expensing provisions that are going to sunset at the end of the year.

All of these provisions have been bipartisan. Millions of American taxpayers rely on these provisions. Do my friends want to take away the deductibility of college tuition for middle-income Americans that is capped at $60,000? These people who are sending their kids to college ought to have, beyond December 31 of this year, the ability of taking advantage of that deduction.

We have the small savers credit. Do my friends want to take away the expensing of equipment for small business? I don't think so. But they would lead you to believe that we want to cut taxes for the rich. The plan addresses expiring business and individual provisions that we call extenders. These provisions include the research and development tax credit, State sales tax deductibility, and the deductibility of teachers' out-of-pocket expenses. Do the people who say we are going to give tax cuts to the wealthy consider our teachers, who pay out-of- pocket expenses for the classroom, that they

ought to not have the tax deductibility for that? That is going to end December 31.

Go ahead. You interfered with me. Go ahead.

Mr. President, this bill includes a 1.0 percent payment update to physicians for 2006. This was done to maintain beneficiary access to physician services. After all what good are Medicare benefits if you can't get in to see a doctor.

Within the bill, the impact on the part B premium is calculated based on all the provisions that affect Part B. This amendment would only hold the beneficiary harmless from the impact caused by the physician update.

Other provisions included in the bill would increase Part B spending and there are other provisions that decrease Part B spending--so why should we single out physicians?

In June, Senator Baucus and I sent a letter to the Office of Management and Budget calling for removal of Part B drugs from the physician payment formula. This letter was signed by 87 additional Senators from both sides of the aisle. If the administration were to remove Part B drugs from the formula--it would also increase the Part B premium over a number of years.

This letter did not suggest the need for a hold harmless. I wanted to point this out to my colleagues who supported this letter.

Some may feel that the Medicare drug premiums along with the Medicare part B premium may be a significant cost burden to beneficiaries. However, CMS recently announced that Medicare drug premiums will be lower than expected. The average monthly premium will be $32.20. That is $5 less per month than previously estimated.

Even if the part B premium is increased in 2007, the increase is nothing close to the $5 saved in the prescription drug premiums. And keep in mind that the part B premium increase does not affect low- income beneficiaries. Their premiums are paid for by the government. In fact, I worked hard to extend the QI program so Part B premiums would be covered. Currently, 16 percent of beneficiaries enrolled in Part B receive this assistance and more are eligible.

In addition, a MedPAC survey issued earlier this year found that 22 percent of beneficiaries already had trouble getting an appointment with a new primary care physician and 27 percent reported delays in getting an appointment. Payment cuts to physicians will only make these existing access problems worse.

I am also opposed to the provision used to pay for this amendment.

Regarding Medicaid MCO rebate, this amendment would in effect increase the rebate paid by drug manufacturers by making the rebate available to Medicaid managed care plans.

The bill we are considering today increases the rebate paid by drug manufacturers to States through the Medicaid program to 17 percent. The bill also closes a pair of loopholes that have the impact of increasing the rebate.

First, we require the best price of an authorized generic to be considered in the brand name drug's best price calculation. That will have the effect of increasing the rebate.

Second, we require physicians to notify the State Medicaid program of what drugs the physician administers in the office. Under current law, States are permitted to collect rebates on the drugs but nothing in statute requires physicians to disclose that information. As a result, States miss out on the appropriate rebate.

When all these policies are taken into consideration, we have increased the rebate paid by drug manufacturers by $1.7 billion.

Now I understand my colleague might not think that's enough, but I would encourage you to look at a CBO report put out this past June examining the price of name brand drugs. That report shows that the effective rebate being paid by drug manufacturers is actually 31.4 percent not 15 percent.

I am also concerned about the substantive implications of your offset. These Medicaid health plans are private businesses that can negotiate low drug prices. I think it runs contrary to the policy this committee passed in the MMA to allow the plans to negotiate the best deal they can get and then give them a rebate on top of that.

Yes, I do realize the Medicaid Commission accepted your offset in its recommendation, but I am quite certain the Medicaid Commission stamp of approval would not win your support for other proposals we could be considering today. We have looked at this area and come up with responsible policy that addresses loopholes. I don't think we need to further increase the rebate beyond what is already included in the bill.

Therefore, I urge my colleagues to oppose the amendment and the offset that funds it.

Mr. President, I very much thank Senator Judd Gregg, chairman of the powerful Budget Committee, for his leadership and for doing what has not been done in this Senate, it is my understanding, since 1997: We have a budget reconciliation bill that will reduce the deficit by changing programs that are either appropriated or on automatic pilot that tend to never get reviewed as often as they should in order to watch the taxpayers' money wisely.

Senator Gregg's commitment to fiscal discipline has informed and defined this process, and I am grateful for his efforts.

As he just did, I congratulate the chairmen of seven other authorizing committees whose titles of this bill, along with the Finance title that I am going to talk about, comprise this giant legislation that we call reconciliation that Senator Gregg successfully reported last week.

I know that it was not easy for the chairmen of these eight committees to reach consensus and to move their titles forward. These chairmen and the members of their committees have every right to be proud of the work they have done achieving savings but also implementing policies that will help American workers.

Today, we have saved nearly $40 billion over 5 years--to be more accurate, $39.1 billion over 5 years--and that is $4.1 billion more than Congress even directed these committees to do back in April when the budget was adopted. Considering the 8 years since this has been done, this is a significant accomplishment and one of which we ought to be proud.

Many of the proposals in my committee's title, as well as the other titles of this bill, have bipartisan support. Some of them have been proposed by the administration in its budget which came out last February. While I am hopeful that during the debate this week, we will be able to persuade a number of Democrat Members to vote in favor of this bill, I recognize that the budget process is often a partisan exercise and that we will be able to count on few, if any, votes from the Democrat side of the aisle.

As the chairman of the Senate Budget Committee made very clear with his chart that was blank, we have not seen a Democrat proposal. Why? Because they do not want to bite the bullet and do what is hard to suggest from their point of view--how to reduce the deficit--unless it might be by raising taxes because often that is their solution, whereas I myself have never come to the conclusion that the American public is undertaxed. I never have my taxpayers telling me that they are undertaxed. The problem of the budget deficit is that Congress overspends.

In developing my part of this budget reconciliation proposal, I attempted to address a number of bipartisan priorities. These efforts were acknowledged by my colleagues during last week's Senate Finance Committee markup, and I want those members of the Finance Committee to know that I appreciate their kind words. Rather than having their kind words, I would rather have had those Democrats vote for this bill coming out of my committee rather than having it come out on an 11-to-9 partisan vote.

The Finance Committee portion represents nearly a year's worth of work on behalf of members of my committee and the staffs of the respective members, as well as committee staff.

The Senate Finance Committee title achieves a net of $10 billion in savings from Medicare and Medicaid by reducing wasteful spending and by closing loopholes. The Finance title also targets resources to preserving and improving Medicaid, the State Children's Health Insurance Program, and Medicare. In particular, the Medicaid provisions in the title will also produce additional resources for States in operating their Medicaid Programs. In so doing, this bill protects Medicaid benefits for the most vulnerable of our society.

The Senate Finance Committee title cracks down on Medicaid fraud and abuse by encouraging States to aggressively pursue Medicaid fraud by implementing in the respective States, beyond the 13 that have done it, State false claims acts, which in comparable legislation at the Federal level is the single most important tool that U.S. taxpayers have to recover the billions of dollars stolen through fraud every year. In addition, my Finance Committee title requires suppliers that do business with Medicaid to have a false claims act education program so that those with evidence of fraud against Medicaid know they may pursue these claims on behalf of the Government and help to recover stolen funds. In order to fight Medicaid fraud, the Senate Finance Committee title dramatically increases resources to fight fraud and abuse in Medicaid. This then will protect State and Federal budgets and generate substantial savings from this investment.

My committee's title also achieves savings by helping State Medicaid Programs obtain millions in payments owed by third-party payers each year. It also produces savings by ending drug manufacturers' gaming of the system by closing the authorized generic loophole so that appropriate rebates are paid to the States.

The Senate Finance Committee title helps preserve services to beneficiaries by ending overpayments to pharmacies, by reforming the broken system used to reimburse pharmacists for prescription drugs, which is based on the flawed average wholesale price formula, costing taxpayers lots more money than it should. There have been 13 reports in the last 5 years dealing with an average wholesale price formula done by the Congressional Budget Office, the Inspector General's Office, and from the Government Accountability Office, all calling for reforming the Medicaid pharmacy payment formula and ending overpayment for prescription drugs. These overpayments have been costing the States, as well as our Federal Government, billions of dollars needlessly.

The bill also includes provisions to protect rural pharmacies and encourage greater use of cost-saving generic drugs. In addition, my portion of this reconciliation bill balances the savings derived from pharmacy payment reforms with an increase in the rebate paid to State Medicaid Programs by drug manufacturers from 15.2 percent to 17 percent.

On the Medicare side, the Finance title calls for the phaseout of the budget neutral modification to the MedicareAdvantage risk adjuster. This provision will help ensure that the health status risk adjuster required by the Balanced Budget Act of 1997 meets its objective of providing accurate payment to plans based on their enrollees' health. The title also repeals the MedicareAdvantage regional stabilization fund.

There are concerns about these provisions, and some people have argued that we should not touch the MedicareAdvantage Program. In response, I point out that the phaseout of the risk adjuster was announced three times: first in February in the President's budget; second, with the 2006 rates; and again in the September CMS factsheet. So plans submitted their bids knowing full well that the phaseout was going to happen.

When we worked on the Medicare Modernization Act--and that was in 2003--the idea was that if the funds were not needed, then the dollars were to be returned to the U.S. Treasury. We have strong regional preferred provider organization participation. Regional preferred provider organizations are in 21 out of the 26 regions into which the country has been divided. Regional preferred provider organizations have several other safeguards to make sure they are available.

The base MedicareAdvantage rates have been fixed. There are risk corridors, network adequacy requirements, the essential hospital fund, and a moratorium on local PPOs. The title does not affect any of these safeguards, so we feel this money going back to the Federal Treasury under this bill is the right thing to do.

The Finance Committee title of this bill also preserves access to health care for seniors in Medicare by providing a 1-percent payment update to all providers paid under the Medicare physician fee schedule. This replaces a 4.4-percent payment cut that physicians are scheduled to receive in 2006 under the existing formula. So we change that formula to make sure that the 4.4-percent cut does not go through. On top of that, there is a small increase for our physicians.

The Part B premium is affected due to changes included in the title that affect Part B spending. While some provisions lower Part B spending, other provisions increase the spending. However, there is no effect on the Part B premium paid by our seniors until the year 2007. It is also important to keep in mind that the Part B premium increase does not affect low-income beneficiaries. In fact, I worked hard to extend the QI Program so that Part B premiums would continue to be covered for these individuals.

Avoiding the physician payment cut has strong support in the Senate. In July of this year, 89 Senators from both sides of the aisle sent a letter to the White House Office of Management and Budget calling for the removal of Part B drugs from the physician payment formula. This change, which the administration has the authority to make, would permit Congress to address the longstanding programs with the Medicare formula for reimbursing physicians.

Certainly, we are all concerned about any impact on Part B premiums, but this Senate is almost unanimous in its support of addressing this, as evidenced by the 89 signatures calling for changes in the formula that were sent to the administration. To be clear about this, the changes in the physician fee called for in that letter would also increase Part B premiums to our senior citizens. It is important that we take steps to maintain access to physician services in the Medicare Program. The benefits in Medicare are not worth much if beneficiaries cannot find a doctor when they need one.

Another important area addressed by the Senate Finance Committee is long-term care costs. Recognizing that long-term care costs account for significant spending in the Medicaid Program, this bill makes key provisions in long-term care for seniors and the disabled. Consistent with a proposal put forth by President Bush, this bill includes a ``money follows the person'' rebalancing demonstration program. This program would direct grants to States to increase use of home- and community-based services rather than institutional care, and it would eliminate barriers that prevent or restrict the flexible use of Medicaid funds so that individuals may receive support for long-term services in a setting of their choice. This is empowering people.

The title also provides new options for private coverage of long-term care through the long-term care partnerships and promotes the availability of programs of all-inclusive care for the elderly in rural areas.

The Finance Committee title also addresses a number of Medicare priorities while also achieving savings in other areas of Medicare. To begin, being mindful of the unique needs of rural residents and the facilities that serve them, the title protects access to Medicare services for rural beneficiaries.

First, the title would extend the hold-harmless provisions for the small rural hospitals and sole community hospitals from implementation of the hospital outpatient prospective payment system.

Second, it would expand coverage of additional preventive benefits under the Federal qualified health centers.

Third, it would extend the Medicare Dependent Hospital Program, which provides financial protections to rural hospitals with less than 100 beds that have greater than 60 percent of their patients coming from Medicare.

Another issue I suspect we will hear a good deal about during this debate over the next few days is the impact that Hurricane Katrina had when it devastated hundreds of thousands of our fellow Americans.

The title would provide for a much needed downpayment to those States that have suffered as a result of Hurricane Katrina. I am committed to ensuring that the families who have suffered so greatly as a result of this national tragedy receive the services they need to rebuild their lives, and the States which have been affected are made whole.

The Finance Committee title of this bill also provides funding to strengthen and improve the Medicaid and State Children's Health Insurance Program. As my colleagues know, as many as 23 States are projected to experience shortfalls in the Children's Health Insurance Program over the next 2 years. The national total of these State Children's Health Insurance Program shortfalls is near $1 billion. The Senate Finance Committee title includes temporary provisions that will stem these State shortfalls and ensure that States are not forced to curtail or end their Children's Health Insurance Program coverage for vulnerable low-income children.

In order to continue to improve the Medicaid and Children's Health Insurance Programs, the Senate Finance Committee title in this reconciliation bill also includes outreach and enrollment efforts so that children eligible for public health assistance receive that assistance.

This legislation also addresses a fundamental flaw in our current Medicare payment system. Right now, Medicare payment policies do not encourage high-quality care. In other words, doctors get the same reimbursement and hospitals get the same reimbursement whether they are doing the highest quality of care or whether they do not care, and people are always going back into the hospital because the job is not done right the first time. So we have come to the conclusion that we need to reward quality and we need to provide incentives to invest more in health care information technology and other efforts that will improve health care quality.

This reconciliation bill does just that. This bill implements recommendations from the Institute of Medicine and also from the Medicare Payment Advisory Commission. These provisions are based on the bipartisan Medicare Value Purchasing Act, which is S. 1356, introduced by me and my Democratic colleague, the leader on the other side of the aisle of the committee, Senator Baucus of Montana. The legislation creates quality payments under Medicare for physicians and other providers, including hospitals, health plans, skilled nursing facilities, home health organizations, and end stage renal disease facilities.

Finally, the Senate Finance Committee title includes the Family Opportunity Act. The Family Opportunity Act was motivated by the circumstances of individual families--the Melissa Arnold family of Iowa and the Dylan Lee James family. You could say they are representative of hundreds of thousands of families. Both are families we use as an example of those who relied on Medicaid health services for their children with disabilities, and both families ended up risking eligibility for Medicaid as a result of financial eligibility rules that continue to create disincentives for parents to work and stay working and even improve their employment opportunities.

Acute need persists for the Family Opportunity Act. It is just as important today as it was over the past several years that I have been fighting to get the Family Opportunity Act law. I have heard from a number of families in Iowa and across the country, speaking of the imperative to enact the Family Opportunity Act. They tell me about their son or daughter or grandchild, and how much they love their child or grandchild and how important it is to tell their story. They tell about the illness or disability that their families have been struggling with for years.

Then they describe how dad and mom could comfortably support their family but must remain poor, even unemployed, in order that their child receive the health care coverage they need. These parents want to work and provide for their families but must put the health care of their child first.

If we are able to successfully pass the legislation--we have been able to pass this legislation in the Senate, but it did not get through the House of Representatives. If we are successful again, we will achieve important savings that help put our fiscal house in order as well as preserve benefits and ultimately expand access through the Family Opportunity Act for families in Iowa and across the Nation.

The Finance Committee title of this bill achieves significant savings in Medicare and Medicaid by reducing wasteful spending and closing loopholes. It then directs much of these savings to make improvements in these programs that expand access to health care services, protect health care coverage for kids, and protect access to Medicare beneficiaries.

But the bottom line is more than $10 billion in savings in existing programs or additional money being recouped from fraud or money coming in from fees. The bottom line to the Federal deficit is $10 billion.

I have two summaries of the Finance Committee title. I ask unanimous consent that they be printed in the Record.

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

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

Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 9 a.m. on Tuesday, November 1. I further ask that following the prayer and pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved, and the Senate resume consideration of S. 1932, as under the previous order.