[Congressional Record Volume 144, Number 141 (Friday, October 9, 1998)]
[Senate]
[Pages S12168-S12172]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KYL:
  S. 2601. A bill to provide block grant options for certain education 
funding; to the Committee on Labor and Human Resources.


             dollars follows the kid education block grant

  S. 2602. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit against income tax for expenses of attending elementary and 
secondary schools and for contributions to charitable organizations 
which provide scholarships for children to attend such schools; to the 
Committee on Finance.

[[Page S12169]]

                 k through community participation act

 Mr. KLY. Mr. President, I rise to introduce two education 
legislative proposals that will increase parental and student choice, 
educational quality, and school safety.
  A colleague from the Arizona delegation, Representative Matt Salmon, 
is today introducing these proposals in the House of Representatives.
  The first proposal is the ``Dollars Follow the Student Education 
Block Grant Act.''
  This proposal would ensure that education dollars are spent in the 
classroom on behalf of specific students rather than in bureaucracies 
like the Department of Education in Washington, D.C.
  The second proposal is the ``K through 12 Community Participation 
Act'' which would offer tax credits to families and businesses of up to 
$500 annually for qualified K through 12 education expenses or 
activities.
  Over the last 30 years, Americans have steadily increased their 
monetary commitment to education.
  Unfortunately, we have not seen a corresponding improvement in the 
quality of the education our children receive.
  Given our financial commitment, and the great importance of 
education, these results are unacceptable.
  Mr. President, I believe the problem is not how much money is spent, 
but how it is spent, and by whom.
  Our national commitment to education is clear from the ever-
increasing sums we spend annually.
  The problem is the big-government, Washington D.C.-based policies 
that have squandered these resources on well-meaning but misguided 
programs that are failing our children and our country.
  By beginning the debate on these two legislative proposals at the end 
of the 105th Congress, I believe the Congress can build upon the great 
progress made in the direction of parental choice, educational quality, 
and safety--progress which has been led by Senator Paul Coverdell and 
Senator Slade Gorton, and Senator Tim Hutchinson.


     the dollars follow the student education block grant proposal

  As a nation we have long recognized the supreme importance of 
educating our children.
  It is the foundation for a productive and rewarding future for all 
individuals and, as Thomas Jefferson noted, ``is essential to the 
preservation of our democracy.''

  The critical issue is whether the taxpayers are getting their money's 
worth for their education tax dollar in light of the disappointing 
conclusions of the recent congressional Education at the Crossroads 
report.
  As the report pointed out, the federal government pays only seven 
percent of the cost of education, but imposes 50 percent of the 
paperwork requirements that schools face.
  Our students are struggling to master just the basics in reading, 
math, and science. Around 40 percent of our fourth graders can't read, 
while the government pays to add subtitles to the ``Jerry Springer 
Show.''
  It is clear that after more than 30 years of topdown control, 
hundreds of duplicative federal programs and one-size-fits-all policies 
from Washington are not working.
  In fact, according to a recent study by the Heritage Foundation, 20 
cents of each education tax dollar are lost to administrative and 
federal compliance costs. I believe these resources would be better 
spent on textbooks or making schools safer than on salaries of, and 
regulations issued by, bureaucrats in Washington.
  It's clear that we need to get more from our education tax dollars by 
spending more of them in the classroom and less in Washington.
  This idea--an education block grant--has been successfully promoted 
by Senator Slade Gorton of Washington state. The Gorton block grant 
proposal passed the Senate and the House in 1997, but, at the Clinton 
administration's insistence, it was stripped from the Labor, Health and 
Human Services, and Education appropriations bill of 1997.
  As with the Gorton proposal, my bill would consolidate most federally 
funded K through 12 education programs, except for special education. 
This money is sent directly to states and local school districts free 
from federal mandates or regulations.
  Under both proposals, each state would choose one of three options: 
1. To have federal block grant funds sent directly to local school 
districts minus federal regulations; 2. To have federal block grant 
funds sent to the state education authority, again without federal 
regulations; 3. Or to continue to receive federal funds under the 
current system of categorizing monies rigidly into specific programs.
  But my amendment adds a new feature to the block grant idea for 
states that choose a block grant option. Several years ago, the 
Goldwater Institute, a Phoenix-based educational think tank, began to 
advocate market-based education finance reform in which a specific 
amount of money would follow each child to the school of his or her 
choice. I believe the time has come for this concept of ``dollars 
following kids'' to be debated and implemented on the national level.
  Under this proposal, each state electing to have a block grant could 
also decide to allow parents of children in private schools, public 
schools (including charter schools), and parents of ``home schooled'' 
kids, to receive their ``per capita'' amount directly, rather than 
indirectly through the school district and school. This money would 
literally ``follow the child'' from school to school, thus creating an 
incentive for the school to muster the best education product possible 
in order to keep the child enrolled.

  I believe the fundamental problem with today's method of federal 
education funding is that it provides little if any link between the 
quality of a school or school district's educational product and the 
education funding it receives. The absence of a link between school 
funding and education quality has led to a loss of accountability and 
to an education product that is, in many ways, severely deficient. 
Parents, students, and the nation suffer from this loss of 
accountability.
  As we all know, under current education-funding procedures, federal 
dollars allocated by the U.S. Department of Education are sent to state 
education agencies, and then to each school district, and finally, to 
each school. At each level, important education decisions are being 
made by bureaucrats--and more importantly, not being made by parents. 
Also, at each level of bureaucracy, additional percentages of the 
original education-funding dollar that left Washington is being lost. 
Currently, fully 20 percent of all federal education dollars never make 
it to the classroom and the student.
  I believe we need to explore a new education-funding framework that 
is child-centered rather than school, or school district, centered. The 
current system has proven to be inconsistent with the fundamental 
principles of parental choice, competition, and education quality.
  This proposal would implement the fundamental reform needed in our 
education financing system. I believe we should consider financing 
public education by linking funding to individual students and 
requiring that the schools and school districts compete for those 
students by providing a quality education. This approach puts the 
child, rather than the system itself, at the center. With child-
centered funding, students are more valuable to schools than the 
bureaucrats who make funding decisions.
  Simply put, under my plan, the federal money that supports primary 
and secondary education would go directly from the state to parents, 
and only then to the schools in which parents chose to educate their 
children.
  Practically speaking, what does this mean? First, the federal 
government funds about 6.3% of the total amount--$358 billion--invested 
in primary and secondary education each year. If every state chose the 
block grant, this proposal would result in a block grant of roughly $13 
billion sent to the states with greatly reduced regulatory mandates. 
(It is important to note that federal funding through the Individuals 
with Disabilities Act is exempted from this block grant.)
  This amount--$13 billion--divided among roughly 50 million students 
results in $255 dollars that will ``follow'' each student. When one 
considers that the average school enrollment is 530 students, this 
block grant proposal would mean that each school would receive an 
average of $135,000 in federal dollars and, more importantly, would

[[Page S12170]]

have the flexibility to sue it to address the specific educational 
needs of the students in that school.

  Suppose the parents of 50 students decided to remove their children 
because they were unsatisfied with the educational product of the 
school: that school would lose over $12,000 as a result. This would 
mean that each school would have the strong incentive to improve its 
curriculum, its staff, and its overall performance, since, if parents 
weren't satisfied, they could move their child to another school--and 
the dollars along with the child.
  To allay fears that federal funding will be cut if consolidated into 
a block grant, this proposal provides that, if federal funding falls 
below the levels agreed to in the 1997 budget agreement, it will revert 
back to funding under federally-designated categories.
  Also, my bill encourages states that choose block grants to adjust 
the per-student amounts by two factors: The relative cost of living, 
i.e., rural v. urban; and the income of the child's parents.
  Citizens in the states put their trust in members of Congress to 
represent them in the nation's capital. It is time Congress showed the 
same trust in them and gave them more discretion in how their education 
tax dollars are spent.
  It comes down to this: Will local schools be improved through more 
control from Washington, or will they be improved by giving more 
control to parents, teachers, and principals? The question needs only 
to be asked to be answered. The K through 12 Community Participation 
Act.
  Mr. President, the second education legislative proposal I am 
introducing today is the K through 12 Community Participation Act. This 
proposal addresses the problem of falling education standards by giving 
families and businesses a tax incentive to provide children with a 
higher quality education through choice and competition.
  The problem of declining education standards is illustrated by a 
report just released by the Education and Workforce Committee of the 
House of Representatives, Education at the Crossroads. This is the most 
comprehensive review of federal education programs ever undertaken by 
the United States Congress. It shows that the federal government's 
response to the decline in American schools has been to build bigger 
bureaucracies, not a better education system.
  According to the report: There are more than 760 federal education 
programs overseen by at least 39 federal agencies at a cost of $100 
billion a year to taxpayers. These programs are overlapping and 
duplicative. For example, there are 63 separate (but similar) math and 
science programs, 14 literacy programs, and 11 drug-education programs.
  Even after accounting for recent streamlining efforts, the U.S. 
Department of Education still requires over 48.6 million hours worth of 
paperwork per year--this is the equivalent of 25,000 employees working 
full time.
  As I mentioned earlier, states get at most seven percent of their 
total education funds from the federal government, but most states 
report that roughly half of their paperwork is imposed by federal 
education authorities.
  The federal government spends tax dollars on closed captioning of 
``educational'' programs such as ``Baywatch'' and Jerry Springer's 
squalid daytime talk show.
  With such a large number of programs funded by the federal 
government, it's no wonder local school authorities feel the heavy hand 
of Washington upon them.
  And what are the nation's taxpayers getting for their money? 
According to the report, around 40 percent of fourth grades cannot 
read, and 57 percent of urban students score below their grade level. 
Half of all students from urban school districts fail to graduate on 
time, if at all. U.S. 12th graders ranked third from the bottom out of 
21 nations in mathematics. According to U.S. manufacturers, 40 percent 
of all 17-year-olds do not have the math skills to hold down a 
production job at a manufacturing company.
  The conclusion of the Education at the Crossroads report is that the 
federally designed ``one-size-fits-all'' approach to education is 
simply not working.
  I believe we need a federal education policy that will: Give parents 
more control. Give local schools and school boards more control. Spend 
dollars in the classroom, not on a Washington bureaucracy. Reaffirm our 
commitment to basic academics.
  As was the case regarding my block grant proposal, my state of 
Arizona has led the way with legislation passed in 1997. This state law 
provides tax credit that can be used by parents and businesses to cover 
certain types of expenses attendant to primary and secondary education.
  Mr. President, today, Representative Salmon and I are introducing a 
form of the new Arizona education tax-credit law.
  The K through 12 Community Participation Education Act would be 
phased in over four years and would impel parents, businesses, and 
other members of the community to invest in our children's education. 
Specifically, it offers every family or business a tax credit of up to 
$500 annually for any K through 12 education expense or activity. This 
tax credit could be applied to home schooling, private schools 
(including charter schools), or parochial schools. Allowable expenses 
would include tuition, books, supplies, and tutors.
  Further, the tax credit could be given to a ``school-tuition 
organization'' for distribution. To qualify as a school-tuition 
organization, the organization would have to devote at least 90 percent 
of its income per year to offering available grants and scholarships 
for parents to use to send their children to the school of their 
choice.
  How might this work? A group of businesses in any community could 
join forces to send sums for which they received tax credits to 
charitable ``school-tuition organizations'' which would make 
scholarships and grants available to low income parents of children 
currently struggling to learn in unsafe, non-functional schools.
  Providing all parents--including low income parents--the freedom to 
choose will foster competition and increase parental involvement in 
education. Insuring this choice will make the federal education tax 
code more like Arizona's. It is a limited but important step the 
Congress and the President can--and I believe, must--take.
  Mr. President, it's clear that top-down, one-size fits all, big 
government education policy has failed our children and our country.
  This tax-credit legislation, as well as the block-grant legislation I 
described earlier, will refocus our efforts on doing what is in the 
best interests of the child as determined by parents, and will give 
parents and businesses the opportunity to take an important step to 
rescue American education so that we can have the educated citizenry 
that Jefferson said was essential to our health as a nation.
                                  ____

      By Mr. BAUCUS (for himself, Mr. Daschle, Mr. Inouye, Mr. 
        Bingaman, Mr. Johnson, and Mr. Conrad):
  S. 2603. A bill to promote access to health care services in rural 
areas; to the Committee on Finance.


              promoting health in rural areas act of 1998

  Mr. BAUCUS. Mr. President, all Americans deserve access to primary 
health care and emergency treatment. But in rural America the delivery 
of these services is often difficult, given the vast distances and 
extreme weather conditions that typically prevail. Just as small 
communities' transportation, education and housing needs are different 
than those of urban areas, so too are their mechanisms for delivering 
health care.
  That's why Senator Daschle and I are introducing the Promoting Health 
In Rural Areas Act of 1998. PHIRA would, among other things: 
reformulate the Adjusted Average Per Capita Cost for Medicare payments 
to managed care; direct Medicare payments to tribally-owned hospitals; 
rebase provisions for Sole Community Hospitals; revise the underserved 
criteria used by the Office of Personnel Management; and allow 
recently-closed hospitals to be designated on a Critical Access basis.
  As you know, 1997 reforms went a long way towards ensuring the 
viability of the Medicare program, including its use by rural 
Americans. For example, under Section 4201 of the 1997 BBA, Congress 
established a rural-friendly

[[Page S12171]]

hospital program. Modeled on a demonstration project conducted in my 
state of Montana, the new program allows a rural hospital to convert to 
a limited-service hospital status, called a ``Critical Access 
Hospital,'' or CAH. These hospitals are given flexibility and relief 
from Medicare regulations designed for full-size, full-service acute 
care hospitals. By giving these smaller hospitals greater latitude on 
staffing and other cumbersome federal regulations, it is easier for 
rural hospitals to organize their staffs and facilities based on 
patient needs.
  If the demonstration project on which this new program is based is 
any indication (and I certainly hope that it is), Congress can be proud 
of this new law. And rural folks across the country will benefit. They 
will receive access to quality care in a way that meets their unique 
needs, and they will be assisted in preserving a way of life that is 
increasingly threatened by the urban- and sub-urbanization of America.
  Yet despite many positive developments, it has become clear to the 
Minority Leader and I that much still needs to be done to facilitate 
the delivery of rural health services. In order to meet those needs, 
the Promoting Health in Rural Areas Act will do several things. First, 
it will change the Office of Personnel Management's underserved 
designation criteria by changing the way the Office of Personnel 
Management designates rural areas. Back in the 1960s, underserved areas 
were designated on a state-by-state basis. Now, the Department of 
Health and Human Services has the sophistication to designate areas by 
county, or even sub-county. The bill we are introducing today would 
require OPM to designate underserved areas on a county-by-county, not 
state-by-state, basis.
  Second, PHIRA would direct Medicare payments to tribally-owned 
hospitals. As you know, Mr. President, a demonstration project 
conducted in Alaska, Mississippi and Oklahoma allowed four tribal 
health care providers operating Indian Health Services hospitals to 
bill Medicare and Medicaid directly. The demo project increased 
efficiency and, by allowing providers to directly bill Medicare, 
provided badly-needed revenue. Our bill would expand the demonstration 
project nationwide and make it permanent.
  Mr. President, our bill would also allow recently-closed hospitals to 
be designated as Criticala Access Hospitals. Under the 1997 law 
establishing the Critical Access Hospital program, a closed or 
downsized hospital does not qualify. Our bill would allow a hospital 
that had closed within the last five years to qualify for conversion to 
CAH status.
  Our bill also addresses rural needs for Medicare Graduate Medical 
Education (GME). As you know, BBA mandated a cap on the number of 
residents a teaching hospital is allowed to train. Because this 
provision threatens to exacerbate an already serious shortage of 
physicians in rural America, our bill would allow programs training 
residents targeted for rural areas to be exempt from the cap.
  Mr. President, by reforming the way health care is delivered in rural 
areas, we are not only making government more efficient, we are making 
agencies more accountable. And we are preserving a way of life that 
American pioneers established long ago and that rural Americans 
continue today. It is in many ways a simpler lifestyle, uncomplicated 
by traffic, smog and a desire to get everything done yesterday. But it 
is also a difficult way of life, characterized by harsh weather, long 
distances, and the historic tendency of the Federal Government to view 
all areas--rural or urban--through a one-size-fits-all lens. I invite 
senators to join the Minority Leader and I today, to ensure that our 
rural residents are given proper access to the health care they need. I 
urge my colleagues to support this important legislation.
  Mr. DASCHLE. Mr. President, today, with Senator Baucus, I introduce a 
bill intended to improve health care for Americans living in rural 
communities. The Promoting Health in Rural Areas Act of 1998 would help 
rural communities attract and retain health care providers and health 
plans, improve the viability of sole community hospitals, and make 
optimal use of the advances in medical technology available today.
  Delivering health care in rural America presents unique challenges--
issues related to geography, lack of transportation, and reimbursement. 
With a relatively small population spread over a large area, and health 
care professionals in short supply, patients often must travel long 
distances to see a physician or get to a hospital. While these rural 
communities strive to improve access through telemedicine and 
recruitment efforts, they must also struggle to maintain what they 
have, to ensure that providers who leave their area are replaced, and 
to keep their hospitals' doors open.
  Rural communities have long had great difficulty recruiting and 
retaining health care providers to serve their needs. Despite great 
increases in the number of providers trained in this country over the 
past 30 years, rural communities have not shared equitably in the 
benefits of this expansion. Even though 20 percent of Americans live in 
non-metropolitan counties, only 11 percent of physicians practice in 
those counties, and that percentage has been falling for the last 25 
years. Currently, 30 towns in South Dakota are looking for family 
physicians.
  Telemedicine is a promising tool to provide medical expertise to 
rural communities. Through telemedicine technology, rural patients can 
have access to specialists they would otherwise never encounter. The 
benefits of telemedicine extend to rural health professionals as well, 
providing them with technical expertise and interaction with peers that 
can make practicing in a rural area more attractive. Yet the potential 
of telemedicine has been limited by reimbursement issues and a number 
of other obstacles.
  In addition to problems with provider recruitment and limitations 
facing telemedicine, seniors in rural areas do not have the array of 
health plan options available in more urban areas due in part to a 
disparity in reimbursement. Although the Balanced Budget Act began to 
address the issue of low payment levels in rural areas, and has been 
successful to some degree, budgetary constraints have prevented the 
expected increase in rural areas.
  The Promoting Health in Rural Areas Act of 1998 is intended to 
address some of the basic challenges facing rural health care. It will 
not address every health problem facing rural America. It is, however, 
intended to take important steps to improve access, increase choice, 
and improve the quality of care provided in more isolated parts of the 
country.
  The bill addresses obstacles in current law to the recruitment and 
training of providers in rural areas. One provision in the bill ensures 
that new rules enacted as part of the Balanced Budget Act, regarding 
reimbursement for medical residents, do not discriminate against areas 
that train residents in rural health clinics or other settings outside 
a hospital.
  The bill also helps medically underserved communities plan and be 
ready for the retirement of a physician. Current law effectively 
requires communities to actually lose a physician before they qualify 
for recruitment assistance to replace that doctor. Because recruitment 
is rarely less than a 6-month-long process, current policy places a 
community at risk of potentially having no physician available to them 
for long periods of time. This bill would provide communities with 12 
months of lead time to secure recruitment assistance when they know a 
retirement or resignation is pending.
  The bill would enhance the economic viability of Sole Community 
Hospitals, often the only source of inpatient services that are 
reasonably available in a geographic area, by updating the base cost 
reporting period.
  The bill would ensure that health plans for Medicare beneficiaries 
who want to develop in rural counties get the increased reimbursement 
promised in the Balanced Budget Act, while maintaining budget 
neutrality. This provision is important to ensure that beneficiaries in 
rural areas begin to have some of the health plan choices available to 
urban seniors.
  The bill also places significant focus on the promise of telemedicine 
for rural areas and attempts to overcome some of the barriers that have 
limited its potential. The bill would expand reimbursement for 
telemedicine to all rural areas, not just those designated as health 
professional shortage areas. The bill also would allow reimbursement 
for services currently covered by

[[Page S12172]]

Medicare in face-to-face interactions with health professionals. It 
also would make telemedicine more convenient, by allowing any health 
care practitioner to present a patient to a specialist on the other 
side of the video connection.
  Mr. President, providing health care in rural communities raises 
unique challenges that require targeted responses. Rural America 
deserves appropriate access to health care--access to providers, access 
to hospitals, access to quality care, and greater choice. The bill we 
introduce today takes important steps to achieve these ends.
                                 ______