Deficit Reduction Act of 2005--Conference Report
DEFICIT REDUCTION ACT OF 2005--CONFERENCE REPORT -- (Senate - December 20, 2005)
BREAK IN TRANSCRIPT
Mr. REED. Mr. President, I strongly oppose the Deficit Reduction Act of 2005 Conference Report. This conference report and the Administration's budget are fiscally irresponsible and reflect misguided priorities.
The dual reconciliation process this year illustrates these misplaced priorities, as middle- and low-income families are being asked to pay the price for tax cuts for the wealthiest. The second reconciliation bill, which will soon be negotiated by the House and the Senate, will contain a reduction of as much as $70 billion in tax revenue that will more than eliminate the effect of the spending cuts to critical programs in the conference report that we are considering today. With the enactment of the two reconciliation bills, there is a real effort by this administration and the majority to perform a bait and switch on the American people and at the end of the day the ``so-called'' deficit reduction bill along with the tax reconciliation bill will further increase the deficit by as much as $30 billion over the next 5 years.
The President's claim at his news conference yesterday that his policies are focused on the priorities of average Americans belies the experience of most working families. The economy has grown this year, but the benefits of that growth continue to show up in the bottom lines of companies rather than in the paychecks of workers. The Minority Views of the Joint Economic Committee 2005 Annual Report released yesterday finds that in the recovery from the 2001 recession, working families have been left behind from the start, and they continue to be left behind today.
The unemployment rate is nearly a full percentage point higher than when President Bush took office, about 5 million fewer jobs have been created in this recovery than at this point after the 1990-91 recession, and millions of Americans who want to work do not have jobs.
Higher prices for gasoline, home heating fuel, and medical care are also squeezing the take-home pay of workers. In the past year, average hourly earnings are down, after adjusting for inflation. Moreover, wage growth has been uneven, with low-earning workers hit hardest by sluggish wage gains and more recently by declining real wages.
The signature policies of the administration and the majority have not addressed the problems facing ordinary American families. Successive rounds of tax cuts were poorly designed to stimulate job creation and produced a legacy of large budget deficits. Those large and persistent budget deficits contributed to an ever-widening trade deficit and massive borrowing from abroad.
Most of the benefits of the tax cuts accrued to very high-income taxpayers, while--as this reconciliation bill shows--cuts in programs that benefit middle- and lower-income families are viewed as the best way to pay for those tax cuts.
As far as health and human service programs go, this bill has gone from bad to worse as compared to the Senate-passed bill. As expected, significant portions of the reduction that are achieved in this reconciliation bill are achieved by cuts in programs that low- and moderate income Americans rely on. The reconciliation package before us includes roughly $40 billion in spending cuts over 5 years, of which $11.2 billion will come from Medicaid and Medicare.
Included among these `savings' are new copayments on Medicaid beneficiaries and additional flexibility to States to scale back coverage for certain vulnerable populations. It also tightens rules designed to limit the ability of elderly people to shed assets in order to qualify for nursing home care. And, for the first time, people with home equity of $500,000 or greater would be ineligible for nursing home care under Medicaid.
During Senate consideration of the reconciliation bill, I offered an amendment to restore targeted case management services, TCM, to assist eligible high-need Medicaid beneficiaries gain access to needed medical, social, educational, and other services. Despite promises that this provision would be corrected, the conference report jeopardizes an essential bridge to services for these populations.
While low-income Medicaid beneficiaries are bearing the brunt of budget cuts, drug companies and Medicare managed care plans emerged virtually unscathed in the conference report. Specifically, the report drops a Senate provision that would have eliminated the $10 billion slush fund to health insurers a key recommendation of the Medicare Payment Advisory Commission, MedPAC, because it is unnecessary, unwarranted, and provides an unfair competitive advantage to private health plans over traditional Medicare. Nevertheless, under veto threat by the President, the conference report leaves this fund fully intact, forgoing $5.4 billion in savings over 5 years and twice that amount over 10 years.
The bill also shed most of the drug rebate provisions contained in the Senate-passed bill and includes only two minor provisions that generate savings of only $220 million over 5 years and $720 million over 10 years.
I would remind my colleagues that this body passed by a vote of 75 to 16 a Baucus motion to instruct conferees to reject provisions that would undermine Medicaid coverage for pregnant women, the disabled, low-income children, the elderly, or other vulnerable populations. Yet, this conference report entirely ignores the will of the majority of the Senate in this area.
At the same time, this conference report strikes yet another blow to community health care providers who serve Medicare and Medicaid recipients. On the Medicaid side, pharmacy payment reform provisions contained in this bill will be devastating to the Nation's community retail pharmacies and could significantly reduce Medicaid recipients' access to their essential services. The provisions cut $6.3 billion out of community retail pharmacies payments over the next 5 years by reducing the amount that Medicaid pays for generic medications at a time when the program should be doing everything it can to
encourage utilization of generic medications. Every time a pharmacy dispenses a generic medication, Medicaid saves about $100, but this report drives pharmacies to either dispense more expensive medications or simply not serve Medicaid customers at all.
The conference committee also included cuts to Medicare providers that were not included in either the House- or Senate-passed bills. Under the conference report, home health care providers will see their reimbursement rates frozen in 2006, in addition to the already scheduled .8 percent reduction implemented as part of the Medicare Modernization Act of 2003. Again, this conference report puts into effect the exact opposite policy at a time when the administration and States have made access to home- and community-based care a priority. I, along with Senator Collins, had urged the conferees to not consider such cuts, and I am disappointed that is exactly what the conference did.
Another unfortunate provision in this conference report will impact individuals with disabilities who have languished for months waiting for the Social Security Administration to review and approve their applications for Social Security Supplemental Income, SSI, and are owed back benefits as a result of these delays. They will now have to wait even longer under this package. Instead of receiving a single lump sum payment as they do under current law, SSI beneficiaries will receive back benefits in installments that could stretch out over the course of a year.
This provision means many poor SSI recipients with disabilities who have been unable to work and who have probably been unable to pay their mortgage, heating, and other bills will be forced to endure financial destitution even longer.
Another area of concern is the inclusion of the House reauthorization for Temporary Assistance for Needy Families, TANF. This bill adds tough new requirements on States and recipients with no additional funding for child care. The Congressional Budget Office, CBO, has estimated that an additional $11 billion in childcare funding is needed to meet these requirements. Unfortunately, this bill only provides $1 billion in additional childcare funding.
If my Republican colleagues were truly committed to helping families break the cycle of poverty, they would not create tough new requirements that States and recipients will be challenged to meet and then provide no additional childcare funding to help them do so.
Moreover, the policy goals of this conference report are quite detrimental to States like my home State of Rhode Island. We are a leader among States in providing childcare assistance to low-income families. We recognize that all working families need help paying for childcare and that high quality early care is the key to the healthy development of our children. Rhode Island has made a commitment to help all low-income families pay for childcare, giving equal treatment to families on welfare and those who are working but cannot afford the high cost of childcare. In Rhode Island, we have seen childcare budgets rise as Federal investments have remained stagnant. The new TANF work requirements, coupled with inadequate funding for childcare, jeopardizes my State's commitment to assure that all children have safe, nurturing, and enriching childcare.
New harsh requirements will now apply to separate State programs as well, hurting States that have been successful in helping families transition to work through other State initiatives. The Congressional Budget Office, CBO, has estimated a cost to States of $8.4 billion over the next 5 years in order to meet these work requirements. This amounts to a higher cost to States than even the controversial House-passed bill.
I want to take this opportunity to remind my colleagues that last week Senator Carper introduced and this body approved by a vote of 64 to 27 a motion to instruct conferees not to include the reauthorization for Temporary Assistance for Needy Families in this reconciliation package. I am most troubled that such a vote was ignored, and we now face the reauthorization of TANF without allowing the Senate to put forth its own bill and have a fair debate on this issue.
The reconciliation conference report also includes a $1.5 billion cut in Federal funding for child support enforcement efforts over the next 5 years and $4.9 billion cut over the next 10 years. Some of my colleagues on the other side of the aisle might suggest that these child support cuts are modest, but the fact remains that the CBO has estimated that, as a result of these cuts, $2.9 billion in child support will go uncollected over the next 5 years.
In my home State of Rhode Island, 45,000 families rely on the Office of Child Support Services for help in securing and maintaining child support payments. This is an agency that needs more not fewer resources in order to continue to make collections efficient. I am baffled that the leadership of this Chamber would cut a program that is cost effective, promotes responsibility, and helps families. This program has garnered strong bipartisan support because of its cost effectiveness.
During consideration of S. 1932, the Budget Deficit Reduction Act, the Senate approved a sense-of-the-Senate amendment offered by Senator Harkin, stating that the Senate should not accept any cuts to the child support enforcement program during this Congress. In addition, last week Senator Kohl introduced and this Chamber passed by a vote of 75 to 16 a motion to instruct conferees not to include any provisions that would reduce funding for the child support program. How can a program that has this level of bipartisan support receive a $1.5 billion dollar cut?
This reconciliation conference report also hurts college students by eliminating the Pro-Gap Program that would have provided $6.5 billion in much-needed aid for college students. In its place is a single modest math/science initiative. While I fully support initiatives that boost our global competitiveness through encouraging study of math and science, I am dismayed that this bill compromises the successful and important Pell grant program to do so. For the first time need-based financial aid under the Pell grant program is tied to curriculum, essentially stifling academic freedom for low-income students.
Again, I remind my colleagues that last week Senator Kennedy introduced and this Chamber passed by 83 to 8 a motion to instruct conferees to insist that the Senate provisions increasing need-based financial aid, which were fully offset by savings in S. 1932, be included in the final conference report. I am disappointed that such a vote was ignored.
In the wake of Hurricanes Katrina and Rita, escalating home energy prices, and stagnant wage growth, taking money from important Federal programs in order to pave the way for billions of dollars in tax cuts shows how out of touch the majority and administration are with hard-working Americans.
Unfortunately, there has been no change in the priorities or policies of the administration and the majority to address the problems facing the country's most disadvantaged citizens or to help ordinary working families.
And instead of sound budget policies aimed at preparing for the imminent retirement of the baby boom generation, this administration and this majority have refused to adopt the kinds of budget enforcement rules that helped achieve fiscal discipline in the 1990s and have remained committed to extending tax cuts that will add further to the budget deficit.
The end result is that policy priorities are distorted and programs that help working families cope in a difficult economy have become candidates for budget cutting in order to fund tax cuts for the wealthiest. Meanwhile the problems of large budget and trade deficits and the economic insecurity felt by many American families remain unaddressed.
http://thomas.loc.gov/