Mr. President, this past March, I stood here to express my reluctant support for the fiscal year 2006 concurrent budget resolution. My support was reluctant for one reason only. I believed the budget did not go far enough in slowing the…
Mr. President, this past March, I stood here to express my reluctant support for the fiscal year 2006 concurrent budget resolution. My support was reluctant for one reason only. I believed the budget did not go far enough in slowing the growth of Federal spending.
My colleagues will remember that passing that budget resolution was not an easy thing. Both the original Senate version and the conference report passed by very narrow margins. Not one Democrat voted in favor of the budget resolution, so it was left up to those of us on this side of the aisle to pass that resolution.
The major reason why the budget was so difficult to pass was the inherent problem in getting a majority to agree on legislation that cuts the growth in spending for entitlement programs. Entitlement programs are those that grow automatically without any action from Congress. While they are many of the most important programs in the Government, they are also the most expensive. Some Senators wanted more cuts in spending growth than did others, and it was hard to get a consensus, especially when there was absolutely no support from the other side.
Nevertheless, we did manage to pass the budget resolution, which was the first step in the process we are trying to complete here tonight with the budget reconciliation bill. This bill ``reconciles'' the spending in the budget with the programmatic changes necessary to achieve the budget numbers. And while the projected spending growth in this budget over the next few years is still alarming, the cuts in that growth included in this bill are very much a good first step in the right direction.
What Senator Gregg, the chairman of the Budget Committee, emphasized in his opening remarks is very significant. This is the first time since 1997 that Congress has attempted to restrain the growth of entitlement spending programs. I think we can conclude that although the magnitude of the change is not as large as many of us would like to see, the directional change is very important.
According to the Congressional Budget Office, this reconciliation bill would reduce federal outlays by more than $39 billion over the next 5 years and by almost $109 billion over the next 10 years. I realize that many of my colleagues on the other side of the aisle are scoffing at the idea these numbers are not large enough in terms of reducing the deficit. Why, then, are we not seeing any spending reduction proposals from them? It is because it is much easier to throw rocks at our attempts to rein in spending growth than it is to make the hard choices themselves.
Rather than having an honest debate about how best to deal with out- of-control budgets, most of what we are hearing from our friends on the other side is the same old tiresome accusation that we are reducing spending for lower-income Americans so that we can cut taxes, once again, for those Americans who are wealthy and do not need a tax reduction. This, of course, is a gross distortion of the truth.
As Chairman Gregg has pointed out, the spending growth reductions in this bill are not directed at low-income individuals. We worked very hard to make sure that was the case, especially in the Finance Committee which has jurisdiction over such important safety-net programs as Medicaid.
Indeed, the bill includes a significant amount of new spending. The amount of this new spending, some of which I recognize is necessary, is one of the problems I have with the bill. In addition, a great deal of the deficit reduction in this bill is achieved by raising fees or selling a portion of the broadcast spectrum. That being said, I will detail some of my specific objections about this in a little while.
As to criticisms about so-called tax cuts, there are not any in this bill. The tax reconciliation bill comes later, after this bill has passed. And the tax provisions that will be in that bill are generally in the nature of preventing tax increases on the middle class, not tax cuts for the wealthy. Moreover, most of those provisions enjoy broad support on both sides of the aisle.
Do I believe this reconciliation bill is perfect? Far from it.
Do I think we could have and should have done more in trimming the spending growth of entitlement programs? Absolutely.
As I mentioned before, the significance of this bill is not in the amount of deficit reduction it delivers, but in the change in direction that it represents. I hope we can pass it and then use it as a building block for more deficit reduction next year.
We have only a few short years to make much larger changes in our entitlement spending programs. All of us know that they are on an upward trajectory that is simply not sustainable. Passing this reconciliation bill now begins to turn the tide. It sets the stage for more responsible spending. With a smart mix of pro-growth policies that will help ensure continued economic growth and future spending restraint, we can begin to lower the deficit and put our budget in a condition to withstand the storms ahead.
Now, I would like to take the time to get into some of the details of the changes included in the bill by the three committees on which I serve.
As a senior member of the Senate Finance Committee, I worked hard with Chairman Grassley to ensure that our Committee met the goal of finding $10 billion in savings. Unfortunately, the Finance package also spends a significant amount of money when I believe that our national focus needs to be on saving money. Some of it is necessary. Some not.
And, I am very troubled by how we are paying for this spending. Close to $5 billion comes from eliminating the MedicareAdvantage Regional Plan Stabilization Fund, something I strongly oppose. The stabilization fund is a critical component to facilitating regional Preferred Provider Organizations, PPOs, in the Medicare Advantage program, thus providing these plans to beneficiaries throughout the country, particularly in rural areas.
The MMA has made Medicare Advantage plans more widely available with greater beneficiary savings than ever before, including in rural areas and many other areas that previously were not served by Medicare Advantage plans.
Since the MMA was enacted in 2003, there has been a large increase in the availability of Medicare Advantage health plans that provide additional benefits and corresponding reductions in total health care costs. For example, in rural areas where there has historically been minimal managed care available, there are now three regional PPOs offering an integrated package of medical and prescription drug benefits with extra coverage at lower prices, one of these regional PPOs even offers a zero drug deductible.
The stabilization fund will help make it possible to provide secure access to these new, lower-cost coverage options in underserved areas. While more Medicare beneficiaries than ever will have regional Medicare Advantage options in 2006, further progress is needed for people with Medicare in 13 States, specifically: my home state of Utah; Alaska; Colorado; Connecticut; Idaho; Maine; Massachusetts; New Hampshire; New Mexico; Oregon; Rhode Island; Vermont; and Washington.
When developing the MMA, the Congress recognized that some states might not be served by regional Medicare Advantage plans in the initial years of the program and strategically created the benefit stabilization fund, which sunsets in 2013, to encourage plans to operate in all areas of the Nation. Utah is one of those States and that is why I strongly supported the creation of the stabilization fund during the MMA negotiations.
The stabilization fund helps to make sure that, in future years, plans will choose to serve the people with Medicare who do not have Medicare Advantage options in 2006. And, conversely, repealing the fund, or cutting its revenues, means reduced benefits and higher costs for these seniors in future years.
Many Medicare Advantage plans are already serving Medicare beneficiaries with some very generous benefit offerings for 2006, with the expectation that there would be stability in the program. For the health plans that are interested in potentially providing this regional PPO coverage, it is essential for them to know that they will get some help with starting up if they need it in areas that had been underserved before, and that the Medicare program will keep their payments predictable.
If Congress and the Centers for Medicare and Medicaid Services, CMS, start cutting promised funding and/or changing program rules even before the first benefit is administered, we send a very negative signal to plans, and that may mean worse coverage options and higher costs for Medicare beneficiaries in the future.
Cuts to or reductions in the stabilization fund, and therefore, payments to regional plans amount to adding costs for beneficiaries in the form of higher premiums, reduced benefits, or both. Without this fund, it will be difficult to convince plans to offer coverage to beneficiaries who currently do not have access to regional PPOs.
Maintaining the current stabilization fund will encourage more regional PPOs to enter the Medicare Advantage program and make sure that significantly more people, including my fellow Utahns, have access to Medicare Advantage plans next year.
I do not understand why we would be eliminating this fund, especially before the Medicare drug plan program is even operational. It just does not make good policy sense and that is why I oppose the elimination.
This is especially vexing given that there are a number of other sources for revenue. I will be fighting for more extensive restrictions on asset transfers and the inclusion of provisions which would prohibit intergovernmental transfers. Including these provisions would have severely curtailed activities where individuals and some State governments have intentionally defrauded the Medicaid program.
I have heard the arguments about why we should not have included them in the proposal, but I do not buy those arguments. More aggressive legislating in these areas would preclude some of the other reductions necessitated in this bill, such as those for the stabilization fund.
The provisions on payment for prescription drugs under the Medicaid program are another deep concern of mine. These have only been made worse by adoption of amendments in the Chamber. Let me say that while I agree that changes are warranted, I am very worried about the approach included in the bill. I am not sure that the new definitions created for Average Manufacturer's Price, AMP, Weighted Average Manufacturer's Price, WAMP, and the new formula which were created for the Federal Upper Payment Limit, FUPL, will address the criticisms of the current policy. In fact, these new definitions could make the situation worse. I am also troubled that the genesis of these changes was not a desire for good policy, but rather an interest in seeking funding from a ``deep pocket.'' That trend was only exacerbated during Senate consideration of the Finance title, as we added two rebate-related amendments with spending implications that totaled several billions of dollars more.
It is clear to me that, as consideration of the conference report begins, we must continue discussions with the various stakeholders who have a vested interest in making this policy work, in particular, the pharmacists and the pharmaceutical companies.
The budget resolution contained a reconciliation instruction directing the Senate Health, Education, Labor, and Pensions, HELP Committee, on which I serve, to reduce spending by $13.7 billion in 5 years. We on the HELP Committee worked very hard to achieve this goal, which required difficult spending vs. savings decisions.
Within the past months, as we wrote reauthorizing language for the Workforce Investment Act, WIA, Head Start, the Perkins Act, career and technical education, and the Higher Education Act, HEA, we kept in mind the need to meet the reduction in spending goals. Each of these reauthorization bills was unanimously approved in committee.
While I recognize the tough choices we needed to make, I am pleased overall with the reconciliation bill as it relates to education provisions, accounting for a total savings of $9.8 billion. Spending increases in the bill include increases in Pell grants, along with ProGAP, a new grant assistance to Pell eligible students.
Another new program, SMART grants, would provide assistance to students studying math, science, technology, engineering, or a foreign language. Subsidized borrowing levels were increased, along with a permanent extension of the Taxpayer-Teacher Protection Act. Additional loan deferments were made for members of the Armed Services or the reserves. These programs would give Utah students, particularly those of low or moderate income, greater access to college educations and will boast our local and national economy as we seek to meet the demands of the 21st century workforce.
Significant savings were found in student loans, mostly from lending institutions, including a requirement for guaranty agencies to deposit one percent of their collections in the Federal Reserve fund, a reduction in lender insurance and repeal of the provision that guarantees 100 percent of loans for certain lenders. An additional fee is charged for lenders originating consolidation loans, and permanent restrictions are made on transfer or refunding of certain tax-exempt bonds that receive a 9.5 percent rate of return.
I have concerns about last-minute changes to include major spending increases, even though they appear to have been reconciled by savings. However, my colleagues should know that I am paying particular attention to fixing the interest rate for undergraduate and graduate non-consolidation borrowing at 6.8 percent, preferring a choice of a variable rate similar to the House provision. I am also concerned about the way certain bills are structured that are currently before the Senate that deal with the inclusion of Katrina public and private school payments.
The HELP Committee also included provisions increasing significantly the amounts of premiums employers that sponsor defined benefit pension plans must pay to the Pension Benefit Guarantee Corporation, PBGC. These increases were larger than they needed to be, and represent placeholders until we can pass the pension reform bill that was produced by the Finance and HELP Committees. I hope we will soon be able to consider and pass that legislation, partly for the reason of reducing these premium increases to more reasonable amounts.
The Judiciary Committee greatly exceeded its reconciliation targets, and I applaud that accomplishment even though I do not support the means by which it was achieved. Federal spending is out of control and, as my colleagues know, this has been a concern of mine for a long time. I am gratified to see that so many others now share my concerns and, more importantly, that we are finally doing something about irresponsible spending despite the efforts of a few members on the other side of the aisle to scuttle this reconciliation bill.
I am pleased that the Judiciary Committee did not report a proposed tax on the explosives industry. It was just plain wrong, and it would have hurt a lot of people in Utah. Naturally, I fought tooth and nail to make sure it was off the table and I, along with others, succeeded in stopping it.
This brings us to the current Judiciary title. I do not think we should have used a reconciliation measure to alter immigration policy, particularly in light of the current debate on comprehensive immigration reform. For this, and other reasons, I offered an amendment that would have imposed a 5 percent increase in all immigration related fees instead of simply allowing more people into the country as a way of reducing our Nation's deficit. Unfortunately, my amendment was defeated in committee.
That being said, I recognize that it is not easy to come up with savings. It means tough choices. But it is our job to make the tough calls and the Judiciary Committee did just that.
I strongly support moving this package through the Senate. However, I want my colleagues to understand my concerns and that I intend to continue working with them on improving the package. I know this was an extremely difficult task, and I appreciate all the hard work of many of my colleagues, and particularly the chairmen of the committees on which I serve.