[Congressional Record Volume 141, Number 46 (Monday, March 13, 1995)]
[Senate]
[Pages S3840-S3841]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        RETURNING TO STATES RESPON- SIBILITY FOR COMPLEX ISSUES

  Mr. GRAHAM. Mr. President, I first would like to commend our friend 
and colleague, the Senator from Arkansas, for another outstanding 
statement on a cause that he has led for many years, and I hope, I say 
to the Senator from Arkansas, that we are close to the time when your 
long walk will reach its destination. I agree with the comments that 
you have made today as to the fairness and the rationale of moving 
forward as the Supreme Court has now allowed us to do to sanction 
States to impose this sales tax on mail order businesses.
  But, Mr. President, I suggest that there is another reason why this 
is an imperative at this point in time. We are soon to consider a 
series of proposals that will have the effect of devolving back to the 
States, returning to the States significant responsibility for some of 
the most complex domestic programs that we have in our Nation, 
programs, in some cases, in which the States have had current 
involvement, such as the Medicaid Program, some programs in which the 
Federal Government has in the past played a priority role, such as 
welfare, and others that are mixed.
  If we are prepared to say that the States are able to provide the 
administrative machinery to carry out these complex domestic programs, 
I find it hard to say that the States should not be entrusted with the 
authority to make a judgment as to whether it is in the interest of 
their citizens to tax products that come in by mail order in a parity 
means with products that are purchased within the State itself, and 
that is essentially what the issue is with the legislation proposed by 
the Senator from Arkansas. We are not imposing the tax, we are 
authorizing the 50 individual States to make a judgment as to whether 
they believe it is in the interest of their citizens for those States 
to impose the tax.
  I am also concerned, Mr. President, about what we are about to do to 
States, and I come out of a background as a very strong believer in the 
State Government sensitivity to their people, to their capability to 
operate programs effectively and efficiently and to their innovative 
capabilities. But the States also are not alchemists, they do not have 
the ability to take stones and rub them and convert them into golden 
coins.
  We are going to be sending substantial responsibilities back to the 
States with substantially less dollars than we had felt it was 
necessary to operate those if they were still under Federal obligation. 
As an example, in my State of Florida, the calculations are that if we 
send back Medicaid, the program that provides financing for indigent 
Americans, to the States, that over the next 5 years, the State of 
Florida will receive approximately $3.5 billion less than the 
individual recipients of those funds would have received had we stayed 
with the current Federal program--$3.5 billion less.
  The State of Florida this year, from both Federal and State sources, 
will spend approximately $5 billion on Medicaid. So we are talking 
about very substantial percentage reductions in funds available.
  Why is it going to cost the State of Florida so much? In part it is 
because the formula that has been suggested is one that essentially 
says we take the status quo, we freeze it for 5 years and allow 
essentially a cost-of-living adjustment. In my State, we are a growth 
State which is adding a substantial population every year. For the last 
15 years, we have grown at a rate in excess of 300,000 persons a year. 
Many of those 300,000 are in the high-target populations for Medicaid. 
In my State, about half of Medicaid expenditures goes for the elderly, 
primarily for long-term care.
  So if we are going to say for the next 5 years we are going to freeze 
the program at a cost-of-living factor and not take into account growth 
in population, not take into account growth in those populations that 
are heaviest users of these programs, we are going 
[[Page S3841]] to be imposing very serious financial obligations on the 
States.
  I think that as we enter into this debate on turning responsibility 
back to the States, we have an obligation to also ask the question, 
what are we going to do to assure that the States have the fiscal 
capacity to accept those responsibilities that we are imposing?
  I believe the Senator from Arkansas has certainly pointed to what 
ought to be at the head of the line as we begin to ask that question of 
fiscal responsibility. Here is the program for which there is no 
rationale as to why the Federal Government should deny the States the 
authority to impose this tax. There is every reason in terms of tax 
fairness that they should, in fact, treat mail order sales in parity 
with sales from the local Main Street store, and the States are going 
to need the revenue this will provide.
  In my State of Florida, the estimate is that in 1974 had the sales 
tax been applied on mail order sales to the same extent it was on Main 
Street sales it would have produced $168.9 million. That will not close 
all the gap that our States are going to be faced with as they are 
asked to take on these new responsibilities, but it will be a worthy 
beginning.
  So, Mr. President, I believe for all of the reasons that the Senator 
from Arkansas has cited with such force and eloquence, as well as the 
time in history in which we find ourselves, in which we are about to 
ask the States to do more, that we should also have a concern about how 
our brethren in the Federal system are going to have the capacity to 
accept those responsibilities.
  We say that it is not our purpose to have a dramatic fraying of the 
safety net. The safety net in my State for hundreds of thousands of 
older Americans who are in need of long-term care and who have spent 
all of their life savings as their health condition deteriorated, I do 
not think we as a nation want to turn those people out of the kind of 
institutions that they need in order for their well-being.
  We are asking the States now to pick up a much larger share of the 
cost of providing for those Americans. This is a beginning of a 
demonstration of the Federal Government's commitment to see that there 
are adequate resources available at the State level to meet the 
additional responsibilities that we are proposing to impose.
  So, in closing, I want to thank my friend from Arkansas for his 
leadership in this effort. I hope his leadership will be rewarded by 
successful passage of this legislation and passage in 1995. Thank you, 
Mr. President.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. Mr. President, let me, first of all, thank my very 
distinguished colleague from Florida, a former Governor, as was I, who 
fully understands the problem the States are going to have with 
unfunded mandates, but also for his very perceptive comments about the 
legislation.
  Now, Mr. President, let me make just a couple of observations. I see 
the Senator from Michigan awaits recognition, so I will not be long. 
But the Senator from Florida has just told you about some of the budget 
constraints on them because of the Medicaid Program, but there are a 
whole host of others.
  This bill has the potential for $169 million a year for the State of 
Florida. That is not beanbag either. And I promise you the Governor of 
Florida favors this legislation. I promise you the Governor of 
virtually every State in this Nation favors this legislation. As I 
said, every mayor, every county executive favors it. But the point that 
must not be lost sight of is we are not imposing anything. We are 
simply saying to the States, if you choose to do this, it is your 
prerogative. If you do not, that is also your prerogative. But we are 
also saying that if you do not have a sales tax in your State, you 
cannot charge it.
  There are five States in this country that have no sales tax. This 
bill would not apply to them. They would not be able to charge this 
because they do not have a tax that they tax their own citizens with, 
and therefore they could not tax citizens of other States.
  How many times have you heard in this body that the reason for the 
big revolution on November 8 was people are tired of being told what to 
do. They want somebody to listen to them. They want to have some 
discretion over their own lives and what they want to do.
  Now, here is a classic case of doing precisely that. We are saying to 
the States we are going to enable you to help yourself if you choose. 
But that is your discretion, not ours. So how can anybody quarrel with 
that? If you vote for this and you do not personally approve of it, go 
tell your Governor I voted for it to give you the discretion. But if 
you do not want to do it, that is OK with me.
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER (Mr. Gorton). The Senator from Michigan.
  Mr. ABRAHAM. Thank you, Mr. President.
  

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