Small Business Tax Relief Act of 2007--Continued

Floor Speech

SMALL BUSINESS TAX RELIEF ACT OF 2007--Continued -- (Senate - July 31, 2007)

BREAK IN TRANSCRIPT

Mr. GRASSLEY. I appreciate those kind remarks. I obviously have commented many times on this floor in the last 6 years about the close working relationship I have had with him and his efforts, because most everything that came out of our committee in the last 6 or 7 years has been bipartisan.

As we all know, nothing gets through the Senate that is not bipartisan, and so you might as well start at the committee level if you are going to get anything done. I think we have gotten a lot done. I thank the Senator for his kind comments.

Obviously everybody knows we are just beginning, yesterday and today and probably this week, and hopefully completing work this week, on the State Children's Health Insurance Program. So we are going to continually refer to the acronym known as SCHIP.

This, as I said yesterday, is a product back from 1997, now sunsetting 10 years later, by a Republican-led Congress. It is a very targeted program, because too often some people giving speeches on the floor of this body want to leave the impression, or maybe they think it actually is, an entitlement program. This is not an entitlement program. An entitlement program is when a program goes on forever, and if you qualify, there is automatic access to the program, and withdrawal from the Federal Treasury. This program is not an entitlement program because it is based upon a specific amount of money appropriated for the program. That money has got to be divided up among all of the States and among all of the participants. So it is not an entitlement.

I think you are going to hear a lot of debate this week that people want you to think this is an entitlement. This program, targeted as it is, is designed to provide affordable health coverage for low-income children in working families. These families make too much to qualify for Medicaid, which is one of those entitlement programs--and legitimately an entitlement program--but these are families who earn too much to qualify for Medicaid but struggle to afford private insurance.

It is important that we reauthorize this very important program targeted for children. The Finance Committee's bill proposes a reasonable approach for reauthorizing SCHIP that is the product of months of bipartisan work in the committee. I emphasize the word ``bipartisan.'' As I have said so often, this Finance bill is a compromise. I think it is the best of what is possible. Clearly folks on the left wanted to do more, and if you did what they wanted to do, you would have a Democratic bill. My colleagues on the right wanted to do less, and if you did and even go in a different direction, if you did what they wanted to do, you would have a Republican-only bill. So one way or the other, you have got 51 to 49, and nothing is going to get done. You have got to have bipartisanship, because it takes 60 votes around here to shut off debate, to go to finality.

Neither side got what they wanted. I would suggest to you this is the essence of compromise. This compromise bill maintains the focus on low-income, uninsured children and adds coverage for an additional 3.2 million low-income children, children who could presently qualify but not enough money is available or States were not doing their job of outreach to bring these people in.

I have heard some harping from different quarters about the role Senator Hatch and I have played in developing this important piece of legislation. Some on my side, meaning the Republican side, have suggested our efforts at finding compromise have been inconsistent with advancing the Senate Republican agenda. For a person like me who has been chairman of a committee for the last 6 years, getting a lot of Republican programs through, I take exception to someone who says I am not concerned about Republican principles and getting a Republican program, so I want to put this harping in context. I wish to remind the critics that we would not have made tax relief law if we had not found a way to compromise with Democrats who shared some of our tax reduction goals. The bipartisan tax relief plans of 2001, 2003, 2004, and 2006 could not have passed the Senate on Republican votes only.

During the 4 1/2 years of my chairmanship, we were able to enact almost $2 trillion in broad-based tax relief that was not tax relief as an end in itself but was meant to stimulate the economy, and did stimulate the economy to a point where we have had $750 billion more coming into the Federal Treasury than anticipated as a result, as Chairman Greenspan said, of these tax bills expanding the economy and producing 8.2 million new jobs in recent years.

None of that would have happened if Republicans were working by ourselves, just by ourselves. It took bipartisanship to get that done. So while the temptation is always there for some Members on both sides of the aisle to not engage the other side, rarely if ever will that policy result in sustaining itself.

When it comes to the Republican agenda here, I have not heard any Republicans say to me in the 5 months we have been talking about reauthorizing SCHIP that we should not provide coverage to low-income children. I have not heard anyone say we should not reauthorize this specific bill. Quite to the contrary.

First, the President himself made a commitment to covering more children. I wish to refer to the Republican National Committee in New York City in 2004, and President Bush was very firm in making a point on covering children. Let me tell you what he said.

America's children must also have a healthy start in life. In a new term [meaning when he was reelected] we will lead an aggressive effort to enroll millions of poor children who are eligible but not signed up for the Government's health insurance program. We will not allow a lack of attention or information to stand between these children and the health care that they need.

That was back in New York City, early September, 2004. Three months later the President is reelected, with a mandate. It seems to me the President was very clear in his conviction then. Let me repeat his words because I think they are important. He said he would lead an aggressive effort to enroll millions of poor children in Government health insurance programs.

President Bush, this is your friend Chuck Grassley, helping you keep the promise you made in New York City, and helping you keep your mandate that you had as a result of the last election. But somewhere the priorities of this administration seem to have shifted. The Congressional Budget Office reports that the proposal for SCHIP included in the President's fiscal year 2008 budget would result in the loss of coverage, not an increase of coverage as the administration had been advocating for in the year 2004; and that loss of coverage would add up to 1.4 million children and pregnant women.

Secretary of Health and Human Services Mike Leavitt has also supported expanding SCHIP. Secretary Leavitt is the President's Cabinet member for health care. When Secretary Leavitt was Governor of Utah, he favored expanding SCHIP during a public media availability on SCHIP following a meeting with the President.

Here is what he, now Secretary Leavitt, but then Governor, had to say about that meeting:

There was a discussion on children's health care. A lot of celebration among governors and the President on the successes that we have had in implementing the Children's Health Insurance Program. Over the course of the last couple of years, it has been a very successful partnership. And we discussed [I assume that ``we'' means the President and the Governors] ways in which that could be expanded.

That is Michael Leavitt.

Also there was a Governor Glendenning at that time representing the Democratic Governors, holding a roundtable with the President.

Now, however, Secretary Leavitt wrote the Finance Committee to say that the President would veto the Finance Committee's SCHIP bill. But even in that letter, he does not call for ending SCHIP. He does not suggest we should not cover kids through SCHIP, not at all. Here is what he said about SCHIP:

The President and I are committed to reauthorizing a program that has made a significant difference in the health of lower-income children. Through 10 years of experience and bipartisan support the State Children's Health Insurance Program serves as a valuable safety net for children and families who do not have the means to purchase affordable health care. We are committed to its continuation.

I appreciate this support in the past for expanding SCHIP from both the President and Secretary Leavitt. Now, however, some around here say we should not update the SCHIP program regardless of what the President said in the past in New York City, regardless of what Secretary Leavitt said. These people are basically saying the program is fine as it is right now. They want a simple continuation of the current program and current funding.

I will soon say what is wrong with that. But the current program does not work, and the current levels of funding will not do the job everybody says they want to do. Under current law, the current program is authorized to spend $25 billion over the next 5 years. That is if this program were not sunsetting, just continuing on as is. That is what we call a baseline amount. But the Congressional Budget Office says the $25 billion baseline amount will not fully fund the program.

CBO says that without more funding, 800,000 kids would lose coverage. To the chagrin of many Republican Senators and even some Democratic Senators, the administration in the last 6 years--in fact, in one case in Wisconsin, in the last 3 months--has allowed adults to get covered under a program for children. That is not what we intended with the Children's Health Insurance Program. SCHIP is for kids, not for adults. There is no letter ``A'' in the acronym ``SCHIP.'' A simple extension of current law, however, means that adults, about whom everybody is complaining for being on a program only for children, would stay on the program. A simple extension would also mean more adults would be added. Of course, the reason for that is that States will continue in the future to ask for waivers and, be those waivers granted, they would be free to get approval for more childless adults and parents to be on a program that was not intended for anything but children. Covering adults drains scarce resources away from what we consider a priority--children's coverage first.

We may end up having to pass a short-term extension of the current law for a few months before work is finished on this reauthorization. I hope not, but that is a possibility. This is something we have to live with while Congress finishes work on a final version of the reauthorization. If that happens, so be it. But hopefully we can avoid a long-term extension of current law.

The SCHIP formula funding in current law doesn't work either. It actually gives less money to States that get their kids covered. That doesn't make sense. An extension of current law won't fix the formula.

The current formula also penalizes small rural States. That is because uninsured kids are not counted accurately in small rural States. That has resulted in funding shortfalls in those States. An extension of current law means this inaccurate funding formula would continue. That means more shortfalls for these States.

Another problem with current law is that there isn't enough funding. Under a straight extension of current law, there are going to be additional State shortfalls. We dealt with that earlier this year. I believe 14, 15, 16 States had shortfalls. The Congressional Budget Office says those shortfalls would cause 800,000 kids to lose coverage.

When Congress has faced these shortfalls in the past, what have we done? We just handed out more money to the States. Congress did that on three separate occasions. So that would keep those 800,000 kids from losing coverage, but this wouldn't fix any of the other problems. In fact, it would perpetuate the problems about which everybody is complaining--the funding coverage of adults, No. 1; and No. 2, a fundamentally flawed formula that our legislation takes care of.

That is why an extension of current law won't work. More adults? Think of all the Senators who have been complaining to me because there is no ``A'' in ``SCHIP.'' It wasn't meant to cover adults. It just leaves things as they are--more adults. We have a broken funding formula. We have some States coming up short. So you have to appropriate more money. And most importantly, you have 800,000 kids losing coverage. So what other options are there?

Well, there is the President's proposal. I am not here to bad-mouth the President's proposal or any of my colleagues on this side of the aisle who are working on proposals. I am not going to, obviously, bad-mouth anything Senator Wyden is doing in the same respect on the Democratic side of the aisle. These policies are good. But I am going to tell the President: Now is not the time.

Going back to the President's program on SCHIP, the President's plan is in his budget. It proposes a $4.8 billion increase in SCHIP, but it does not work either. What many have overlooked is that the President's plan assumes a massive redistribution of about $4 billion in SCHIP funds that States have in reserve. So the President assumes States will willingly relinquish all of those SCHIP reserves. It assumes the Secretary will redistribute those funds to States that currently have SCHIP shortfalls. As someone who was worried about State SCHIP shortfalls before, worrying about SCHIP shortfalls was cool, I tell my colleagues: That dog won't hunt. It is robbing Peter to pay Paul. There is no way a proposal that sucks $4 billion out of State coffers will ever fly around this Senate.

That is not all. Under the President's plan, 1.4 million children and pregnant women would be cut off of the program between now and 2012; 1.4 million would lose coverage, to emphasize. That is the end result of the President's plan: Rob Peter to pay Paul; 1.4 million children losing coverage.

Then we are going to hear about a more comprehensive plan. This is the one I was referring to when I referred to Senator Wyden and when I was referring to the President having a proposal and some well-meaning people on my side of the aisle. Most of the news is from either Senator Wyden or from Republican colleagues of mine, a well-meaning approach, a proposal to use the Tax Code to cover many millions of uninsured children and adults through private health insurance. Again, I don't disagree with that policy, but now is not the time for it.

I said during Finance Committee consideration of this bill that I would have liked the debate about SCHIP to focus on a larger effort to address the millions of Americans who are uninsured. I think we are missing an opportunity by only focusing this debate on SCHIP reauthorization. Too many Americans don't have health insurance, and we need to address rising health care costs. That approach will help that as well. I agree that we should be doing more, and I want to see Congress consider proposals to reform the tax treatment of health care to increase coverage for tens of millions of the 46 million people who don't have insurance today. But in terms of this bill and the whole issue of SCHIP reauthorization, that is not realistic.

I continue to be disappointed by the fact that there isn't bipartisan support for trying to do more as part of SCHIP. I urged the administration months ago to get bipartisan support--I emphasize bipartisan support because that is the only way we get things done in the Senate--if they want the President's initiative to be successful. I never saw any effort beyond maybe talking to Senator Wyden. It just didn't happen. I looked far and wide. I can't find a single Democratic Senator who will support a tax reform alternative to the SCHIP bill. Even though it won't happen with this bill, we still need to work for a broader package to address the more fundamental problems of rising health costs and the uninsured.

Until then, I see SCHIP as a stopgap measure--5 years in duration, 5 years to do something bigger. The $35 billion we are investing in children's health coverage over the next 5 years is a drop in the bucket. When I say $35 billion is a drop in the bucket, somebody will say: You have been in Washington too long. Let me explain. That is one-quarter of 1 percent of the $14 trillion that will be spent on health care in this entire country, public and private expenditures, between now and the end of this authorization, 2012. Economists generally agree that if a condition cannot persist, then it won't persist. The current spending on health care cannot persist.

Members on both sides of the aisle have worked on proposals to address the broader issues of the uninsured and health reform overall. I have already referred to Senator Wyden as a leader among Democrats on this issue. He has Senator Bennett of Utah as a Republican working with him. They have been championing a more comprehensive approach to cover the uninsured. Many Republican Senators want to make changes in the Tax Code to help cover tens of millions of Americans of all ages instead of the few million kids whom we do with this legislation. I am looking forward to a fruitful debate on this issue of health reform and the uninsured through the Senate Finance Committee but not until we complete action on this bill. SCHIP must be passed.

Turning back to the Finance Committee bill, meaning the SCHIP bill before us, I am rather surprised at the overheated rhetoric that has emerged from both sides of the aisle. It has really been pretty unbelievable. On one side, I hear that nothing less than $50 billion will do the job, and if that number is not reached, children are at risk of dying. On the other side, I hear maintaining coverage for kids currently on this program and covering about half the kids eligible for Medicaid or SCHIP represents a slippery slope that leads us to the Government takeover of the entire health care system. Both sides need to call time-out to cool down, stop the hysteria, and take a look at what we actually have before the Senate in this Finance Committee compromise.

In 1997, SCHIP was conceived as a capped block grant program, not an entitlement. That was very important to Republicans. It is our model for how a safety net should work. It is not an open-ended entitlement. The Finance Committee bill maintains the block grant. It does not create an entitlement. I warn my colleagues, they are going to hear this too much, and they are going to hear me wake them up that this is not an entitlement. I believe they know better, but we know the game that is played around here.

In 1997, SCHIP was intended to encourage public-private partnerships. The Finance bill improves and strengthens private coverage options. In 1997, SCHIP gave States the tools they needed to control costs. These tools included allowing waiting lists, adding reasonable cost sharing, and limiting enrollment. The Finance bill maintains the flexibility which was in that 1997 act.

In 1997, SCHIP gave States the flexibility to address geographical differences in health care costs. States determine eligibility for benefits and tailor the benefits to their needs. The Finance bill affirms the States' role in managing this program.

SCHIP is also a humble program when compared to Medicaid. Medicaid is the bigger and more expansive entitlement program. Medicaid is a program for low-income individuals, pregnant women, and families. The bill before us today represents a modest update of the SCHIP program created by the 1997 act.

So what does the bill before the Senate actually accomplish? The bill before the Senate extends the program and fixes problems with current law, first, by extending the program that would otherwise expire September 30, doing away with the sunset or extending the sunset 5 years; No. 2, eliminating shortfalls that have plagued the program; No. 3, eliminating enhanced match for coverage of parents and childless adults--in other words, saving money so you spend more on kids; and No. 4, preserving the original SCHIP mission, coverage of low-income children.

The bill before the Senate continues and focuses coverage on low-income children by doing the following: No. 1, it provides additional resources targeted toward covering low-income children. No. 2, it extends coverage for the 6.6 million children currently enrolled in SCHIP. I want to emphasize, 91 percent of these families have incomes below 200 percent of poverty.

No. 3, it covers an additional 2.7 million children already eligible for Medicaid or SCHIP under current law. No. 4, it provides coverage for an additional 600,000 uninsured low-income children.

The Finance Committee bill provides targeted incentives to precisely and, more importantly, efficiently cover the lowest income children. It does this by doing two things: one, by providing precisely targeted incentives that use an incentive fund to encourage enrollment of the lowest income children--in other words, go after those with the most need--and, two, by encouraging States to increase outreach and enrollment.

The Director of the Congressional Budget Office, Dr. Peter Orszag, characterized the incentive fund ``as efficient as you can possibly get per new dollar spent.''

The Finance Committee bipartisan bill also removes childless adults and limits payments for parents. It eliminates coverage under SCHIP for childless adults within 2 years. Those are the people who are already on the program. It eliminates the enhanced match for parents covered under SCHIP. It prohibits new State waivers to expand coverage for parents.

Now, again, I wish to emphasize this point. It does away with State waivers. You get back to every complaint I hear about this bill. You do not hear complaints about covering kids under 200 percent of poverty from Republicans or Democrats. But you hear an awful lot from both Republicans and Democrats about covering adults because there is no letter ``A'' in the acronym SCHIP, and those adults are covered because the law allows waivers. So this bill does away with waivers, so you do not get the adults on the program the way they have gotten there in the past.

Next, it reduces spending on adults by $1.1 billion.

Finally, the Finance Committee bill spends less than the $50 billion authorized in the budget. Now, once again, let me emphasize, there are people around here who say $5 billion in addition to what we are spending now is enough. Then, you have people who say only $50 billion more than what we are spending now is enough. Somewhere in the middle is where you end with compromise.

Now, for Republicans who are irritated because I am here with a bipartisan compromise, along with 16 other members of the Finance Committee--17 to 4 this bill was voted out--we are $15 billion under what a lot of people in this body would like to spend. I think for some people maybe $50 billion would not have been enough.

Continuing SCHIP with static enrollment would cost $14 billion over 5 years over the baseline anyway. At $35 billion, the SCHIP Reauthorization Act will cost $15 billion less than what was included in our budget. This additional funding goes toward coverage of lowest income children.

This bill does not include everything on everybody's wish list. I worked hard for a responsible, bipartisan agreement because I wish to see this bill pass. I think we have done a good job. But I also wish to make one more point very clear. My support for this legislation, in the end, will depend upon the outcome of the floor debate and the conference. I am not going to be able to support a bill that changes significantly from what we have in this proposal.

I appreciate very much the leadership Chairman Baucus has provided. I thank him and Senator Rockefeller for what they did to reach a bipartisan agreement.

I also extend my sincere thanks to Senator Hatch for the hours and hours he has put into this effort. Senator Hatch was the main Republican sponsor of the bill that created the SCHIP program 10 years ago. His commitment to the ideals and fundamentals of the program is steadfast, and the program is better for it.

I also have to say I am disappointed by the way the Democratic leadership is handling the process of bringing this bill up for consideration on the floor. It does not bode well for the outcome of the bill. In the Senate, process matters as much as policy, and this process has not been managed in a bipartisan or responsible manner. However, the Finance Committee SCHIP bill is still one I can support. It is a compromise. It is based upon reality. This bill is for kids.

So I will end with an analogy from a child's bedtime story. This bill is not too big, it is not too small. It is not too hard, it is not too soft. It is not too hot, it is not too cold. It is just right.

Mr. President, I yield the floor.

AMENDMENT NO. 2538 TO AMENDMENT NO. 2530

Mr. GRASSLEY. Madam President, for Senator Ensign, I send an amendment to the desk and ask for its consideration.

The PRESIDING OFFICER (Mrs. McCaskill). The clerk will report.

The bill clerk read as follows:

The Senator from Iowa [Mr. Grassley], for Mr. Ensign, proposes an amendment numbered 2538 to amendment No. 2530.

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

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment is as follows:
(Purpose: To amend the Internal Revenue Code of 1986 to create a Disease Prevention and Treatment Research Trust Fund)

At the appropriate place, insert the following:

SEC. X. DISEASE PREVENTION AND TREATMENT RESEARCH TRUST FUND.

(a) In General.--Subchapter A of chapter 98 of the Internal Revenue Code of 1986 (relating to establishment of trust funds) is amended by adding at the end the following new section:

``SEC. 9511. DISEASE PREVENTION AND TREATMENT RESEARCH TRUST FUND.

``(a) Creation of Trust Fund.--There is established in the Treasury of the United States a trust fund to be known as the `Disease Prevention and Treatment Research Trust Fund', consisting of such amounts as may be appropriated or credited to the Disease Prevention and Treatment Research Trust Fund.

``(b) Transfer to Disease Prevention and Treatment Research Trust Fund of Amounts Equivalent to Certain Taxes.--There are hereby appropriated to the Disease Prevention and Treatment Research Trust Fund amounts equivalent to the taxes received in the Treasury attributable to the amendments made by section 701 of the Children's Health Insurance Program Reauthorization Act of 2007.

``(c) Expenditures From Trust Fund.--

``(1) IN GENERAL.--Amounts in the Disease Prevention and Treatment Research Trust Fund shall be available, as provided by appropriation Acts, for the purposes of funding the disease prevention and treatment research activities of the National Institutes of Health. Amounts appropriated from the Disease Prevention and Treatment Research Trust Fund shall be in addition to any other funds provided by appropriation Acts for the National Institutes of Health.

``(2) DISEASE PREVENTION AND TREATMENT RESEARCH ACTIVITIES.--Disease prevention and treatment research activities shall include activities relating to:

``(A) CANCER.--Disease prevention and treatment research in this category shall include activities relating to pediatric, lung, breast, ovarian, uterine, prostate, colon, rectal, oral, skin, bone, kidney, liver, stomach, bladder, thyroid, pancreatic, brain and nervous system, and blood-related cancers, including leukemia and lymphoma. Priority in this category shall be given to disease prevention and treatment research into pediatric cancers.

``(B) RESPIRATORY DISEASES.--Disease prevention and treatment research in this category shall include activities relating to chronic obstructive pulmonary disease, tuberculosis, bronchitis, asthma, and emphysema.

``(C) CARDIOVASCULAR DISEASES.--Disease prevention and treatment research in this category shall include activities relating to peripheral arterial disease, heart disease, valve disease, stroke, and hypertension.

``(D) OTHER DISEASES, CONDITIONS, AND DISORDERS.--Disease prevention and treatment research in this category shall include activities relating to autism, diabetes (including type I diabetes, also known as juvenile diabetes, and type II diabetes), muscular dystrophy, Alzheimer's disease, Parkinson's disease, multiple sclerosis, amyotrophic lateral sclerosis, cerebral palsy, cystic fibrosis, spinal muscular atrophy, osteoporosis, human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS), depression and other mental health disorders, infertility, arthritis, anaphylaxis, lymphedema, psoriasis, eczema, lupus, cleft lip and palate, fibromyalgia, chronic fatigue and immune dysfunction syndrome, alopecia areata, and sepsis.''.

(b) Clerical Amendment.--The table of sections for subchapter A of chapter 98 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

``Sec..9511..Disease Prevention and Treatment Research Trust Fund.''.

Mr. GRASSLEY. Madam President, I yield the floor.

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