[Congressional Record Volume 142, Number 73 (Wednesday, May 22, 1996)]
[Senate]
[Pages S5498-S5499]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROTH:
  S. 1795. A bill to restore the American family, enhance support and 
work opportunities for families with children, reduce out-of-wedlock 
pregnancies, reduce welfare dependence by requiring work, meet the 
health care needs of America's most vulnerable citizens, control 
welfare and Medicaid spending, and increase State flexibility; to the 
Committee on Finance.


      the personal responsibility and work opportunity act of 1996

 Mr. ROTH. Mr. President, today is the day we have reached the 
top of a great divide. We can clearly see both what lies ahead and that 
which is behind us. Today is the day we decide whether we dare to press 
forward and change a welfare system that is crippling children and 
families.
  Today is a day of contrasts--39 months ago, President Clinton 
promised the Nation's Governors and the American people that he would 
end welfare as we know it. Nothing happened.
  He abandoned welfare reform and instead pursued a misguided attempt 
to take Government control over the world's finest health care system. 
It didn't work.
  Today, the Republicans in the House and Senate are introducing 
legislation which will deliver on the promise of welfare reform and 
which will protect the health benefits of needy families as they move 
from welfare to work. Today we are introducing welfare and Medicaid 
reform based on the bipartisan recommendations of the Nation's 
Governors. While the Clinton administration has pursued policies of 
national control from Washington, we believe the future of these 
programs belong in the States.
  Without even having seen our proposal, President Clinton labeled 
Medicaid reform a ``poison pill.'' We think it is good medicine. Under 
our proposal, Federal spending for the Medicaid program will total $371 
billion over the next 6 years. This represents an average annual growth 
rate of 6.5 percent between 1996 and 2002 while still achieving savings 
of $72 billion compared to current law.
  But $371 billion represents many important things in addition to how 
much the Federal Government will choose to spend on the third largest 
domestic program in the Federal budget.
  It represents bipartisan compromise.
  It represents the future of how Government will work to help families 
escape welfare dependency.
  And it represents the future of governmental relationships in our 
constitutional system of federalism.
  First, $371 billion represents an important element of compromise in 
the political process. In the budget negotiations with President 
Clinton last

[[Page S5499]]

December, the Republican leadership recommended Medicaid savings of $85 
billion. During the negotiations, President Clinton wanted to reduce 
the savings level for Medicaid to $59 billion. At that time, there was 
a recognition by the administration that Medicaid spending indeed was 
out of control. For example, between 1994 and 1995, total Federal 
outlays grew by 3 percent.
  But Medicaid spending grew nearly three times as fast.
  On a number of occasions, the administration has indicated that the 
President intends to reduce Medicaid spending by $59 billion.
  The President's fiscal year 1997 budget released in March includes 
saving of $55 billion.
  Thus, by setting Medicaid spending at $371 billion, we are meeting 
President Clinton halfway. The difference between us is now $13 
billion. This is less than 2 percent of the total Federal Medicaid 
spending over the next 6 years. This is a difference of 16 cents per 
Medicaid recipient per day.
  When President Clinton vetoed the Balanced Budget Act of 1995, he 
argued that the Medicaid budget savings cut too deeply.
  The adoption of today's budget resolution and the introduction of 
this legislation clearly demonstrates that the debate over Medicaid is 
not about spending. The issue is, who will control the spending, 
Washington, or the States?
  In February, the Nation's Governors unanimously adopted a proposal to 
restructure the Medicaid Program. Democratic and Republican Governors 
alike have called upon the President and Congress to dramatically 
change the Medicaid Program.
  The Medicaid proposal we are introducing reflects the Governors' 
policies, including guarantees for children, pregnant women, the 
elderly, and persons with disabilities.
  Together, the Democratic and Republican Governors have testified 
before Congress that budget savings should be between $59 and $85 
billion. The Republican proposal of $72 billion in savings reflects 
this spirit of bipartisan compromise and is the midpoint of these 
savings figures.
  The Medicaid debate therefore is about policy, not budget. Medicaid 
is the largest welfare program and must be part of the solution for 
moving families from welfare to work. It costs more than the AFDC, Food 
Stamp, and SSI Programs combined.
  The growths in the welfare programs are intimately linked to 
Medicaid. Medicaid is the nucleus of authentic welfare reform.
  The Nation's Governors support reform and share the common goal to 
end the status quo. Democratic and Republican Governors have forged a 
bipartisan blueprint for reform.
  Our legislation reflects the principles and framework of the 
Governors' proposals and meets their goals.
  Nearly everyone, including President Clinton, recognizes that the 
welfare system is broken and must be fixed. The Governors, Democratic 
and Republican alike, know that Medicaid and welfare were in the same 
car wreck and both require major reconstructive surgery as soon as 
possible.
  The Governors understand there are major problems in the Medicaid 
Program. To begin with, Medicaid is an all-or-nothing proposition.
  A person either qualifies for all Medicaid benefits or no Medicaid 
benefits. There is no flexibility in the current system to provide 
benefits tailored to a family's needs.
  As such, the welfare system often creates disincentives to work and 
gross inequities for low-income working families, many of whom have no 
other way to provide health care for their children.
  For the individual, the current Medicaid program is often self-
defeating as it encourages dependency. Many proud families can describe 
what they are forced to do to acquire and maintain Medicaid coverage.
  If a family's income rises above the eligibility level by just $1, 
the entire Medicaid package is taken away.
  Medicaid performs as it was designed 30 years ago--$731 billion 
therefore represents a new opportunity to refocus our welfare programs 
to help the present and future generations to escape dependency.
  Governors know that Medicaid is a critical link in moving families 
from welfare to work. They understand it can be difficult to convince a 
family that work pays more than welfare if the price includes the loss 
of their health insurance.
  The Medicaid current program discourages expansion of coverage and 
innovation.
  There is little flexibility or reward for the States to experiment 
with ways of improving access to care.
  The Governors have testified how their ideas to cover more families 
have been stopped cold by Federal rules and regulations.
  The bureaucracy often thwarts targeting of benefits which, for 
example, could be more effective in lowering infant mortality rates.
  Medicaid lags far behind the private sector in adopting progressive 
managed care strategies which have saved employers and working families 
billions of dollars.
  Two-thirds of the people covered by employer-sponsored health plans 
today are enrolled in some type of managed care plan.
  In contrast, only about one-quarter of the Medicaid recipients are in 
any form of managed care.
  Medicaid contains a number of barriers to managed care.
  For example, Florida is facing major disruptions in its entire 
Medicaid system because two of its best HMO's do not meet Medicaid's 
``75/25'' requirements.
  Freed from the choke hold of the Federal bureaucracy, States will be 
able to harness their enormous purchasing power to improve the delivery 
of services at lower costs.
  The central issue of the pending Medicaid debate is who can best 
design a State's public health insurance program--the Federal 
bureaucracy or the States?
  The idea that the children and elderly citizens in a State must be 
protected from their Governor and State legislators is not only wrong.
  Mr. President, it is insulting.
  Finally, slowing the rate of growth represents a fundamental decision 
about the future of federalism. Our elected State officials are 
hostages to the demands of the current Medicaid Program. The Federal-
State partnership cannot survive the skyrocketing cost of the Medicaid 
Program which ricochets throughout State budgets.
  For example, in 1990, Medicaid replaced higher education as the 
second largest State spending category, exceeded only by elementary and 
secondary education.
  In 1987, elementary and secondary education accounted for 22.8 
percent of State spending. Medicaid took 10.2 percent of State 
spending.
  According to the latest report issued by the National Association of 
State Budget Officers, the share of State spending for elementary and 
secondary education has declined to 20.9 percent while Medicaid's share 
has nearly doubled to 19.2 percent.
  If present trends continue, Medicaid will soon pass elementary and 
secondary education as the largest item in State budgets.
  Medicaid has seized the power of decisionmaking from State officials. 
It is simply draining resources from other priorities.
  As summarized by the State budget officers' report, ``Medicaid * * * 
continues to limit the ability of decisonmakers to use the budget as a 
tool for implementing public policy.''
  Last January, President Clinton proclaimed an end to big government. 
Nothing could demonstrate a true allegiance to this pledge better than 
to return the responsibility and authority for welfare programs to the 
States.
  In sum, the critical difference between President Clinton and the 
Republicans is not about the level of Medicaid spending.
  Mr. President, the difference lies in the vision of the proper roles 
of Government and in the faith of the American people to govern 
themselves.

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