[Congressional Record Volume 142, Number 57 (Tuesday, April 30, 1996)]
[Senate]
[Pages S4444-S4445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    THE OMNIBUS APPROPRIATIONS BILL

 Mr. KERREY. Mr. President, last week we voted on an omnibus 
bill that completed our long-delayed work on fiscal year 1996 
appropriations. This legislation's arduous and agonizing history defies 
belief--particularly since all sides claim to be committed to reducing 
the Federal deficit and balancing the Federal budget.
  However, I want to point out two egregious provisions in this 
legislation. They particularly disturb me because I share my 
colleagues' interest in balancing the budget. These provisions also 
trouble me because they will increase Medicaid spending--and therefore 
crowd out discretionary programs within this year's spending bill and 
in the future. Under the mantle of fiscal conservatism--the premise of 
this appropriations bill--we are providing additional Federal dollars 
to States that have won political favor. We are spending hard-earned 
tax dollars in these States, but will not see an improvement in their 
health systems nor any other public good that will benefit American 
taxpayers. Although Republicans claim that they want to control Federal 
spending, the reality does not live up to their rhetoric.
  The omnibus appropriations bill includes State-specific provisions 
that permit two States--States that blatantly abused Federal matching 
rules in the past--to draw excessive Federal Medicaid payments. 
According to a host of independent analyses, the disproportionate share 
hospital [DSH]

[[Page S4445]]

schemes used by these States and others nearly single handedly created 
double-digit increases in Federal Medicaid spending in the early 
1990's. Congress shut down these schemes in 1991 and 1993 by creating 
State-specific and hospital-specific limits on DSH payments. However, 
through Republican maneuvering under this omnibus bill, two States that 
relied on these schemes will once again disproportionately benefit from 
the Federal Treasury.
  First, New Hampshire will receive Federal matching payments for the 
disproportionate share hospital payments it made last year to a State-
owned psychiatric hospital, even though these payments violate the 
hospital-specific limits enacted in 1993. The Department of Health and 
Human Services has deferred making Federal matching payments 
because these DSH payments normally would not be allowable under 
Medicaid matching rules. The omnibus appropriations bill would allow 
New Hampshire to receive matching payments up to $54 million, whether 
these payments are allowable or not.

  In addition, although the majority intended to provide a fix only for 
New Hampshire, other States may also qualify under this provision.
  Second, Louisiana will receive a guaranteed Federal payment of $2.6 
billion--even though it will not be putting up the State dollars 
necessary to claim these matching payments. This provision, in essence, 
provides Louisiana with a higher Federal matching rate than allowed 
under current law, simply because Louisiana is unwilling or unable to 
commit sufficient State funds to support its existing Medicaid Program. 
Louisiana also used DSH scams to draw enormous Federal Medicaid 
payments and is now facing a budget shortfall under current, tighter 
rules. CBO initially estimated that this fix will cost the Federal 
Government an additional $900 million through 1999. Late-breaking 
negotiations have shortened the time-frame and lessened the Federal 
cost in the out-years. However, increased spending still will not be 
offset because the increase occurs later than fiscal year 1996.
  In 1991 and 1993 Congress chose to close down some States' creative 
bookkeeping schemes and construct reasonable limits to the 
disproportionate share hospital program. These appropriations 
provisions will undermine those important protections for the Federal 
Treasury. If congressional Republicans were serious about limiting 
Federal spending, they would have refused to include these give-aways 
in this appropriations agreement. Instead, Congress will provide 
additional funding with no additional gain to American taxpayers.
  The Republican Governors say that they can control Medicaid spending 
themselves--and they have clamored for Federal block grants to do so. 
Yet the Republican Governors in these two States sought these 
exceptions to Medicaid law. These legislative fixes signal that the 
Republican Governors in these States cannot even live within existing 
limits that control only one aspect of the Medicaid Program. If 
Medicaid block grants were to be enacted, we should expect a deluge of 
formula fixes in the future.

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