[Congressional Record Volume 144, Number 59 (Tuesday, May 12, 1998)]
[Senate]
[Page S4726]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. THOMPSON (for himself and Mr. Glenn):
  S. 2068. A bill to clarify the application of the Unfunded Mandates 
Reform Act of 1995, and for other purposes; to the Committee on the 
Budget and the Committee on Governmental Affairs, jointly, pursuant to 
the order of August 4, 1977, with instructions that if one Committee 
reports, the other committee have 30 days to report or be discharged.


                     UNFUNDED MANDATES LEGISLATION

  Mr. THOMPSON. Mr. President, I rise today to introduce a bill to 
clarify the application of the Unfunded Mandates Reform Act of 1995. On 
its face, this legislation is necessary to correct the Congressional 
Budget Office's interpretation of the law as it applies to large 
entitlement programs. But more fundamentally, it is a bill to force 
Congress to abide by the spirit of the law we passed in 1995 to 
discourage Congress from imposing costly new mandates on States and 
local governments.
  CBO's performance in fulfilling its responsibilities under the 
Unfunded Mandates Reform Act has been commendable. CBO cost estimates 
have been timely and sound, and analysts have been responsive. However, 
I have serious concern that CBO is misinterpreting the definition of 
``Federal intergovernmental mandate'' as provided in the law. The 
result is a loophole that makes the Unfunded Mandates Reform Act 
inoperative for two-thirds of all federal aid to all governments for 
all purposes. Every State, every municipality is justifiably concerned; 
indeed, it is with the strong backing of the National Governors' 
Association that I introduce this bill today.
  The Unfunded Mandates Reform Act defined ``federal intergovernmental 
mandate'' with the intent to cover new requirements or a cap on the 
federal share of costs under Medicaid or other large entitlement 
programs--unless the legislation imposing the new mandates also 
provides new flexibility in the program to offset the cost. However, 
CBO has taken the position that existing flexibility is sufficient to 
offset the cost of new mandates. For example, CBO has determined that 
the current ability of States to reduce ``optional'' Medicaid services 
is, in effect, the flexibility called for in the law. If this had been 
the intent of the drafters, there would have been no reason for them to 
cover Medicaid under the Act in the first place. CBO's interpretation 
of the law largely removes the point of order as a tool to discourage 
new mandates or cost-shifts to States under the large entitlement 
programs where mandates tend to be the most burdensome and expensive.
  Let's stop for a moment and consider why it is so important that we 
act to correct this problem. Congress passed the Unfunded Mandates 
Reform Act in 1995 with the recognition that State and local 
governments are not wayward subordinates who cannot be trusted to run 
their own affairs, nor are they just more entities for the Federal 
Government to regulate. They are our partners in government. The 
Unfunded Mandates Reform Act was intended to force Congress to stop and 
think twice before violating this partnership. It does not preclude new 
mandates, but it does give any member the right to raise a point of 
order against new mandates which would cost States or localities more 
than fifty million dollars.
  To avoid the point of order, the House and Senate intended that the 
flexibility required under the Act be new flexibility, concomitant with 
the mandate-imposing legislation, for States to amend their 
responsibilities to provide ``required services''--not optional 
services. CBO is not reading the law as Congress intended. The bill I 
am introducing today amends the Unfunded Mandates Reform Act to clarify 
that new flexibility is required to offset any new federally-imposed 
costs that States or localities will incur under large entitlement 
programs.
  I am pleased that Senator Glenn, an original cosponsor and conferee 
on the Unfunded Mandates Reform Act of 1995, has joined me in 
cosponsoring this bill to clarify its application.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2068

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. FEDERAL INTERGOVERNMENTAL MANDATE.

       Section 421(5)(B) of the Congressional Budget and 
     Impoundment Control Act of 1974 (2 U.S.C. 658(5)(B)) is 
     amended--
       (1) by striking ``the provision'' after ``if'';
       (2) in clause (i)(I) by inserting ``the provision'' before 
     ``would'';
       (3) in clause (i)(II) by inserting ``the provision'' before 
     ``would''; and
       (4) in clause (ii)--
       (A) by inserting ``that legislation, statute, or regulation 
     does not provide'' before ``the State''; and
       (B) by striking ``lack'' and inserting ``new or expanded''.
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