[Congressional Record Volume 143, Number 114 (Wednesday, September 3, 1997)]
[Senate]
[Pages S8725-S8728]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MOYNIHAN (for himself and Mr. D'Amato):
  S. 1144. A bill disapproving the cancellation transmitted by the 
President on August 11, 1997, regarding Public Law 105-33; to the 
Committee on Finance.


                        DISAPPROVAL LEGISLATION

  Mr. MOYNIHAN. Mr. President, on this the first full day of Senate 
business since our adjournment for the August recess, I come to the 
floor with my colleague and friend from New York, Senator D'Amato, to 
address an issue of importance to New York, and of surpassing 
significance to our constitutional form of government. On August 11, 
for the first time in our history, President Clinton exercised his new 
authority under the Line Item Veto Act. In doing so he repealed, a 
provision of Federal law intended to relieve New York of up to $2.6 
billion in disputed Medicaid claims. The provision had been included at 
Senator D'Amato's behest, and with my full support, in the Balanced 
Budget Act of 1997, one of the two major reconciliation bills signed 
into law on August 5 in a ceremony at the White House.
  Senator D'Amato and I rise today to state for the record our firm 
opposition to the President's repeal of the New York Medicaid 
provision, and to introduce a ``disapproval bill'' to reverse the 
President's action. I will also speak to the underlying question of the 
constitutionality of the Line Item Veto Act.
  Each year, for 21 years now, I have issued a report on the balance of 
payments, as we put it, between New York State and the Federal 
Government. The twenty-first edition, now prepared in collaboration 
with the Taubman Center on State and Local Government at the John F. 
Kennedy School of Government will be published toward the end of this 
month. Let me report for purposes of this comment, however, that it 
will show that New York has the third highest poverty rate in the 
Nation and the fourth highest Cost of Living Index--as computed by the 
Friar-Leonard State Cost of Living Index. This has resulted in an 
extraordinarily high level of Medicaid costs for the State and 
especially for the city of New York.
  This level of payments might have been sustainable with a more 
equitable Federal-State matching formula. If, for example, the Federal 
Government paid 73 percent as it does in Arkansas. But we were capped 
at 50 percent. As my colleague from New York knows, the current 
Federal-State Medicaid matching formula was taken directly from the 
Hill-Burton Hospital Survey and Construction Act of 1946, under which 
the matching rate is based on the square of the ratio of State per 
capita income and national per capita income. In a commencement address 
at Kingsborough Community College in New York 20 years ago, I 
suggested, only half jokingly, why not square root? If you are going to 
have algebra in Federal statutes, why not turn it our way? Given New 
York's 50-percent match rate, however, something had to be done.
  And so, like a number of other States, New York began to impose 
provider taxes on hospitals, nursing homes, home health agencies, and 
so forth, as a way of generating revenues to finance specific health 
care programs. As part of the costs incurred by providers, these taxes 
were reimbursable, withal at the 50-percent level, by the Federal 
Government. The taxes all went into additional health care, and no one 
could claim fraud. However, in recent years some States got too 
creative in imposing and seeking Federal matching funds for their 
provider taxes, in some instances using the Federal money for purposes 
unrelated to health care. This led Congress in 1991 to enact 
legislation to prevent States from gaming the system. Since New York 
was confident its taxes were in compliance with the 1991 law, the State 
continued its practice, all the while seeking a waiver from the Federal 
health care bureaucracy.
  And so, when the time came to draft the 1997 reconciliation bill, 
Senator D'Amato, a member of the Committee on Finance, asked that a 
provision be included that would simply preclude any Federal claims 
regarding the use of these taxes from 1991 to 1996. I fully supported 
this measure. The issue had been debated during our markup in the 
Finance Committee, and the provision was included in the final bill, 
which was passed by a large 73 to 27 majority. The conference report 
was adopted by an even larger majority, 85 to 15.
  As ranking member of the committee, I was on this floor with our 
esteemed chairman, Senator Roth, for several days and in meetings with 
House conferees and administration officials for an eternity, or so it 
seemed. Morning, noon, night; mostly night. Let the Record reflect that 
at no point in the course of those deliberations did the subject of the 
Medicaid waiver come up. No Member of the House challenged it; no 
representative of the administration said a word to me. In fact, the 
only administration objection that I know of was buried deep in the 21-
page letter of administration views sent by OMB Director Raines on July 
7, which said, in pertinent part:

       [T]he Senate bill would deem provider taxes as approved for 
     one State. We have serious concerns about these provisions 
     and would like to work with the Conferees to address the 
     underlying problems.

This was not the clearest possible statement. What, for example, does 
``deem'' mean? Further, the term ``serious concerns'' is used any 
number of times in the administration's views, yet in none of those 
other instances did a line item veto result. ``Serious concerns.'' I 
ask my friend from New York, does that sound like a veto threat to him? 
In 20 years in the Senate, this Senator has heard many veto threats 
made, but never one like that. Yet this is evidently how we should 
expect things to work in the era of the line item veto.
  This leads to my second, larger, point. I am one of those--and I am 
not alone--who hold that the line-item veto is unconstitutional in that 
it violates the presentment clause of article I, section 7, which 
states:

       Every bill which shall have passed the House of 
     Representatives and the Senate shall, before it becomes a 
     law, be presented to the President of the United States; if 
     he approve, he shall sign it, but if not, he shall return it.

  When the Line Item Veto Act was first debated in the Senate in the 
spring of 1995, I argued--along with our revered colleague from West 
Virginia, Senator Robert C. Byrd, and others-- that the presentment 
clause means exactly what it says. But I'm afraid not many people were 
listening.

[[Page S8726]]

  Recall that the line item veto was part of item one in the Contract 
With America, which was then only a few months old. But we said: 
``Don't do this! It violates the principle of the separation of powers 
as we have understood it since George Washington was President.'' For 
it was President Washington who wrote ``From the nature of the 
Constitution, I must approve all the parts of a bill or reject it in 
toto.''
  In lengthy statements here on the floor, Senators Byrd, Levin, 
Hatfield, and I--among others--argued as emphatically as we could. We 
cited the relevant case law--INS versus Chadha, Bowsher versus Synar; 
we quoted prominent constitutional scholars--Laurence H. Tribe, Michael 
J. Gerhardt. Yet in the end we were in a regrettably small minority. 
The Line Item Veto Act passed the Senate on March 23, 1995, by a vote 
of 69 to 29. When the conference report came back in March of 1996--a 
full year later--it passed by a vote of 69-31. Of the 31 Senators 
opposed, four of us felt the principle at stake was so consequential 
that it demanded immediate scrutiny by the courts. For which the Line 
Item Veto Act had explicitly provided: Section 3 of the act provides 
for ``expedited review'' of the statute's constitutionality by the U.S. 
District Court for the District of Columbia, with direct appeal to the 
U.S. Supreme Court. The act further stated that ``any Member of 
Congress or any individual adversely affected'' could bring an action 
``on the ground that any provision of this part violates the 
Constitution.''
  Accordingly, on January 2 of this year, the first business day after 
the Line Item Veto Act took effect, I joined with Senator Byrd, Senator 
Carl Levin of Michigan, former Senator Mark O. Hatfield of Oregon, and 
Representatives Henry A. Waxman of California and David E. Skaggs of 
Colorado, as plaintiffs in a lawsuit challenging the constitutionality 
of the measure. We were represented on a pro bono basis by a team of 
distinguished and learned counsel, including Louis R. Cohen; Charles J. 
Cooper; Lloyd N. Cutler; Michael Davidson; and Alan B. Morrison. Oral 
argument was heard on March 21 by Judge Thomas Penfield Jackson of the 
U.S. District Court for the District of Columbia. And less than 3 weeks 
later, on April 10, Judge Jackson held for us and declared the bill 
unconstitutional. He wrote in his opinion:

       . . . the Act effectively permits the President to repeal 
     duly enacted provisions of federal law. This he cannot do. . 
     . . The duty of the President with respect to such laws is to 
     ``take care that [they] be faithfully executed.'' U.S. Const. 
     art. II, sec. 3. Canceling, i.e., repealing, parts of a law 
     cannot be considered its faithful execution.

  On June 26, however, the Supreme Court vacated the district court's 
judgment, holding in a 7-2 decision that as Members of Congress, we did 
not have ``standing'' to sue, as we could not demonstrate any personal, 
or ``judicially cognizable,'' injury. We do not agree; in our view, the 
measure shifts the balance of power between the Congress and President 
in direct contravention of article I, something that can only be done 
by constitutional amendment. But, of course, the Court left it for 
others to sue.
  Now we can. As a consequence of the President's decision to use the 
line-item veto on a measure designed to help New York, surely there 
will now be a lawsuit that will persuade the Supreme Court to strike 
down the measure as unconstitutional. All manner of New Yorkers 
presumably have standing; they have suffered injury. The Court was 
explicit that in such a case, the act was open to constitutional 
challenge. Let the Governor sue. The Comptroller. The Speaker. Mayors. 
Hospital administrators. Nurses unions. I shall be honored to join in. 
Expedited judicial review will again be provided pursuant to section 3 
of the Line Item Veto Act; the action will again begin in the district 
court in Washington, with direct appeal to the Supreme Court. This time 
round, I trust the Court will declare the statute unconstitutional. As 
Justice John Paul Stevens wrote in his dissent to the Court's June 26 
decision:

       If the [Act] were valid, it would deny every Senator and 
     every Representative any opportunity to vote for or against 
     the truncated measure that survives the exercise of the 
     President's cancellation authority. Because the opportunity 
     to cast such votes is a right guaranteed by the text of the 
     Constitution, I think it clear that the persons who are 
     deprived of that right by the Act have standing to challenge 
     its constitutionality. . . [T]he same reason that the 
     respondents have standing provides a sufficient basis for 
     concluding that the statute is unconstitutional.

  Once the constitutional issue is disposed of, and even if it is not, 
and very possibly before it is, I know my colleague from New York will 
join me in saying that the issue of the equity of the Medicaid matching 
formula must be addressed. It is too extreme an example of 
discrimination to go on for another half century. Three years ago, 
President Clinton said as much. On a visit to New York City in May 
1994, he spoke at a breakfast of the Association for a Better New York. 
Inviting questions, the President was asked by State Comptroller H. 
Carl McCall whether anything would be done to relieve the State of the 
``crushing burden'' imposed by Medicaid. The President replied:

       There's no question that the formula should be changed, and 
     that states like New York with high per capita incomes but 
     huge numbers of poor people are not treated fairly under a 
     formula that only deals with per capita income.

There was no reference to this in the President's recent veto message 
of the New York provision. Rather, the contrary:

       No other state in the nation would be given this provision, 
     and it is unfair to the rest of our nation's taxpayers to ask 
     them to subsidize it.

This was not entirely accurate, although there is no reason to suppose 
the President was aware of this. In the absurdly dense 1,600-page bill 
Congress had sent him, there was a small provision, adopted in the 
Finance Committee, which raises the Medicaid matching level for Alaska 
from the bottom rate of 50 percent to the national average of 59.6 
percent. The Senators from Alaska made the simple case that the cost of 
living in Alaska is well above the national average. This is reflected 
in higher incomes, which the Medicaid formula wrongly interprets as 
greater wealth. They asked for nothing more than the national average. 
The District of Columbia got an increased match rate as well. Hawaii 
asked also, but the bill had been closed by then. Senator D'Amato and I 
say it is time to open the issue up.
  The case for legislative remedy is surely overwhelming. And we intend 
to use the new attention that has been drawn to this issue by the 
President's veto to press that case at every opportunity.
  Mr. D'AMATO. Mr. President, may I suggest the absence of a quorum so 
I will have an opportunity to concur with my colleague, the 
distinguished senior Senator from New York? Let me say, No. 1, that I 
totally support his presentation as it related to the manner in which 
this veto took place. It is something that none of us were apprised of 
or aware of; that there had been extended negotiations with his 
administration during this process. It came as a total surprise. But I 
would like to take one moment and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. Mr. President, I send, for myself and Mr. D'Amato, a 
bill to the desk and ask that it be appropriately referred.
  The PRESIDING OFFICER. The bill will be appropriately referred to the 
appropriate committee.
  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mr. D'AMATO. Mr. President, I rise this morning, along with Senator 
Moynihan, to introduce legislation to ``disapprove'' President 
Clinton's line-item veto that cancels a Medicaid provision in the 
Balanced Budget Act of 1997 which provides health care to the poorest 
of the poor in New York. Let me say that that is the legislation which 
has just been sent to the desk. That is legislation to disapprove this 
veto. Let me also say that I must speak out not about the authority of 
the line-item veto, which I support, but about its use in this 
particular case.

[[Page S8727]]

  Mr. President, I have to tell you--and I listened intently to Senator 
Moynihan making his presentation with respect to the manner in which 
the entire budget negotiations and the process was conducted. The fact 
of the matter is that the administration and the President agreed 
during the budget negotiations to accept the provisions that were 
included in this bill.
  The fact of the matter is, I believe it was June 25 when these 
provisions were adopted by the full Senate. Mr. President, there was no 
secret. The administration knew. The administration had ample time all 
during that process to say ``no'', this is unacceptable.
  I have to tell you, I am shocked and outraged that the administration 
has singled out New York for this particular provision by stating that 
this is an ``item that would have given preferential treatment to only 
New York.''
  Mr. President, that is blatantly, patently false. It is a total 
misstatement.
  I hope that the President will have an opportunity to examine this 
because I believe that his advisers have given him very poor advice.
  I can't believe, knowing the President's commitment to attempt to 
deal with the problem of the uninsured, particularly the children--he 
had full knowledge of the manner and the totality of dealing with the 
shortcomings because we are attempting to reduce the burdens, we are 
attempting to get our Medicaid and Medicare costs under control. In 
this bill, notwithstanding that the administration claimed and advised 
the President and his people that this was a special provision just for 
New York, there are instance after instance, in case after case after 
case, where other States received similar treatment, as they can and 
should have in order to push the tremendous cuts --15 percent-plus in 
some cases. There were going to be 25 percent cuts that hospitals 
dealing with a disproportionate share of this Nation's poor would 
otherwise have had to make. That is DSH payments.
  Let's understand what we are talking about. The average person--what 
are you talking about? What is this DSH? How do you take care, in large 
metropolitan areas in the North, the South, the East, and the West of 
our country, of those who do not have medical insurance? What do those 
hospitals do? Close their doors? Go bankrupt? Who is to pay for them?
  So there was a conscious effort by the committee to see to it that 
States with these disproportionate problems in terms of dealing with 
the uninsured, with those who had just Medicaid and Medicaid alone, who 
cannot sustain the operations of our medical centers, to give relief. 
Indeed, Mr. President, I believe if one were to add up the totality of 
the money provided, it would be in the area of $700 to $800 million 
that was given in relief to pushing the cuts that these States and 
these institutions would otherwise absorb.
  Let me give you just some of the States. Alabama, Connecticut, 
Florida, Louisiana, Maine, Missouri, New Hampshire, New Jersey, South 
Carolina, Texas, Vermont.
  Mr. President, to suggest that New York was the only one, indeed, New 
York could have been included. And if draftsmanship had been used, if 
we had known that we would have been singled out in this manner, I tell 
you we could have included the provision within the budget in such a 
way that all of these States including New York would have had to be 
vetoed then.
  Are we saying it is the poor of New York who should be disadvantaged? 
We don't begrudge help to those States that are needing it. This is not 
an attempt to game the system. And let me talk about that.
  There came a point in time when the Federal Government became aware 
that some States were gaming the system. In other words, certain States 
were guilty of scamming. That was wrong, and both Senator Moynihan and 
I provided the support, and it passed unanimously, that we put a stop 
to that. But let's understand that is not what New York was doing.
  For example, for those who were gaming the system, a provider would 
pay a $5,000 provider tax to the State. The State would then draw a 
matching $5,000 from the Federal Government and then reimburse the 
provider. It was a scam. It was simply a bookkeeping entry to get the 
Federal Government to pick up an expense that the State never really 
incurred and the provider did not incur.
  That is wrong. That is not our system. New York was not then and is 
not now involved in that scam. This wasn't an attempt to bill poor 
people for services and build roads or not use those moneys. That has 
never been the allegation. And, indeed, as a matter of fact, New York 
has had a long history of requiring insurers to pay assessments on 
hospital services. Thereby, that assessment over and above that 
particular service would go to help the poorest of the poor. And, 
indeed, we now have a program by utilizing these provider taxes that 
provides insurance for those families who could not purchase it for 
their youngsters. We provide up to 140,000 youngsters, children up to 
the age of 19, with insurance. It comes from this provider tax.
  Let me say that these assessments provide $1.1 billion a year in 
gross provider tax collections and are used for dealing with uninsured 
children, the poorest of the poor. The Balanced Budget Act contained 
language which specifically determined that New York provider taxes 
meet the legitimate requirements. That is what we did.
  Now, Mr. President, we have attempted for more than 2 years to get a 
resolve of this matter from HCFA. Nothing. Nothing. No response. Delay, 
delay, delay, delay. You can't do that to a community. You are not 
doing it just to a State government. That impacts on the lives of 
hundreds and hundreds of thousands of people. Is that fair?
  And so, Mr. President, I find it incomprehensible and absolutely a 
tragedy that the President would have received this kind of advice. 
People, I believe, did not tell the President the entire story. I 
cannot believe that he really would want to veto a provision, the 
dollars of which are used to take care of the truly needy. I hope that 
between the time this legislation that we have introduced comes to a 
vote, we can get a resolve of this matter, not to deal with it in a 
confrontational, adversarial way, but in a way that makes sense, in a 
way that is fair, that is fair intellectually, that is fair morally, 
that is fair ethically.
  And I want to make it clear that I concede nothing. If we have to 
fight, why then we will, because this is a battle not about a State 
being treated fairly or unfairly but about its people and their needs. 
This is a battle that says that a State does have a right to raise 
revenues in a particular manner and to utilize them for the purpose 
which I have attempted to outline.
  I want to commend my colleague, who, as the ranking member of Finance 
and, indeed, the senior member on Budget, was there every moment of the 
negotiations, and never once were we told this is a special treatment.
  Mr. MOYNIHAN. Never.
  Mr. D'AMATO. Never once. And so for it to be sprung on us --I was out 
of the country--I said, when asked, that I was shocked, truly shocked. 
Again, I think the President is a big enough person to look at this in 
a way, or to say to those in charge at HCFA, come on, let's resolve 
this. Let's see to it that New York's problem, which is one of seeing 
to the needs of the uninsured--and, by the way, we have plans in 
speaking to the administration--and Senator Moynihan and I have been 
conferring with the health department people. They believe that this 
program can be and will be in the fullness of time--it is a program to 
provide insurance where families pay a very modest amount, in some 
cases $25 a month, and some none depending upon their income--that it 
can be expanded to take care of up to 500,000 young people, youngsters, 
children who otherwise would not be insured.
  Mr. President, we are not going to give up the battle. It is a battle 
that we are committed to winning on behalf of the poor, on behalf of 
the needy, on behalf of the uninsured, on behalf of the many working 
families that do not have full coverage. And I am proud and privileged 
to join the senior Senator from New York, Senator Moynihan, in an 
attempt to get justice for these children and for those in need.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mr. MOYNIHAN. May I just congratulate my colleague and friend for the 
tone of his statement, its tenor. He is not seeking confrontation with 
the administration. He is seeking insurance for the poorest of poor 
children in

[[Page S8728]]

our State. I was able to say earlier that in the annual balance of 
payments study that we have been putting out for 2 years, New York has 
the third highest poverty rate in the Nation and the fourth highest 
cost of living. These children are at stake.
  The Senator has made the point, and I congratulate the Senator for 
it, in that mode and making clear because the record is there that this 
issue was never raised prior to the veto. It was a decision made after 
the bill was signed, I think. I don't know. And I think that some 
reassessment of the process, the procedure might bring change in 
judgment.
  Again, I thank my friend, and I am telling him how pleased and 
honored I am to be associated with him in this matter.
                                 ______