[Congressional Record Volume 151, Number 125 (Friday, September 30, 2005)]
[Senate]
[Pages S10797-S10805]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DORGAN (for himself and Mr. Wyden):
  S. 1805. A bill to repeal the increase in micropurchase authority for 
property and services for support of Hurricane Katrina relief and 
rescue operations; to the Committee on Homeland Security and 
Governmental Affairs.
  Mr. DORGAN. Mr. President, Senator Wyden and I are introducing 
legislation today to change a provision in law that was attendant to 
the emergency supplemental passed recently dealing with hurricane 
Katrina. That provision in law increased the amount of money that would 
be available to be spent on a Government credit card from $2,500 to 
$250,000. That is right--$250,000 for purchases on a Government credit 
card.
  Here is what a Government credit card looks like. There are about 
390,000--somewhere in that neighborhood--390,000 Government credit 
cards in the country. I have three GAO reports that describe 
substantial abuse and misuse of these Government credit cards.
  The proposal that passed this Congress attendant to the hurricane 
emergency relief says that on these credit cards, the limit will go 
from $2,500 to $250,000. Let me describe for a moment what the GAO 
found in various investigations.
  What has been charged to a Government credit card? Hiring 
prostitutes, gambling, breast-enlargement surgery--yes, it was for a 
girlfriend of somebody who had a Government credit card--cigars, 
mounting a deer head, jewelry, wine, and the list goes on.
  Now the limit goes to $250,000. We aim to take it back to $2,500. It 
will still have the emergency capabilities that existed since 9/11 
which will allow a $15,000 limit under emergencies.
  We had a hearing at which a professor from GW Law School who is an 
expert in this area of Government procurement testified. Here is what 
he said about the $250,000 credit card limit:

       The potential for abuse is staggering.

  Everybody knows that: ``The potential for abuse is staggering.'' If 
you don't believe it, take a look at the GAO reports with respect to 
the abuse when the limit was $2,500. Now it is $250,000 for a credit 
card purchase? Who is going to stand up for the interest of the 
taxpayers?
  This fellow, Mr. Safavian, was the top contracting officer for 
purchases of

[[Page S10798]]

the Federal Government. He just said several weeks ago about the 
$250,000:

       This guidance--

  That he and OMB would provide--

       This guidance helps make sure that adequate management 
     controls are in place to ensure that taxpayers' dollars are 
     spent efficiently and responsibly in support of disaster 
     victims.

  Meaning the new $250,000 on credit cards will be spent efficiently 
and responsibly. That is from David Safavian, Director of the Office of 
Procurement and Policy. The problem is, Mr. Safavian was arrested by 
the FBI on September 19 and charged with lying to an ethics officer and 
so on. He is the guy who gave us the assurance that taking the credit 
card from $2,500 to $250,000 will be just fine because there are all 
these limits in place and it will be spent wisely and efficiently. Yes, 
and the Moon is made of green cheese.
  Who is going to believe this, especially when we have the GAO reports 
that show past abuses with even the $2,500 limit, which includes the 
hiring of prostitutes on Government credit cards? It includes breast-
enlargement surgery on Government credit cards. When on Earth will 
people wake up and start thinking?
  So Senator Wyden and myself are today introducing legislation to say, 
How about let's sober up and think through this the right way on behalf 
of the American taxpayers.
  We want to help hurricane victims, no question about that. But I do 
not want people walking around with credit cards that have a $250,000 
limit that say U.S. Government on them, in a way that the GAO says puts 
us at risk and in a way that Government procurement experts tell us is 
very dangerous for the American taxpayer.
  I am pleased to do this with my colleague, Senator Wyden. For the 
past several years, Senator Wyden and I have taken a look at a whole 
range of wasteful issues. I might just say that Senator Wyden and I, a 
while back, found deep in the bowels of the Pentagon there was a plan 
to create what was called a futures market for terrorism. I think they 
were preparing to spend another $8 million on it. And, yes, they were 
going to actually have a futures market for terrorism so that people 
could make wagers buying futures contracts on things such as how many 
American soldiers will be killed in the next year, will the King of 
Jordan be assassinated within the next year. One could actually wager 
and make money by betting on those kinds of things.
  Senator Wyden and I blew that wide open. The next day, both Secretary 
Rumsfeld and the President said they did not know it was going on. They 
shut it down and it is all over. In my judgment, that was unbelievably 
stupid as a public policy, whoever allowed that to happen. It is now 
shut down.
  A lot of bad things happen in circumstances where no one is watching. 
In this case, with credit cards that have a $250,000 limit, there is 
something fundamentally wrong with that. I do not know who put that in 
the emergency supplemental. It should not have been there. But it was 
there. We aim to repeal it on behalf of the American taxpayer.
  Mr. WYDEN. Will the Senator yield?
  Mr. DORGAN. I would be happy to yield to my friend from Oregon.
  Mr. WYDEN. I appreciate my colleague yielding to me and particularly 
highlighting the need for some real accountability and protection for 
the taxpayers at this time. We are seeing expenses for the Government--
the war in Iraq, the various disasters that have hit--exploding to the 
point where people are saying, well, let us hold off on giving senior 
citizens some help with their prescription drugs.
  I think what the Senator is saying is, before one takes those kinds 
of steps, put the brakes on the opportunity for ripping off taxpayers.
  I want to ask the Senator a question that really stunned me. There 
are now about 392,000 Federal employees who have these credit cards 
across the country. We have been trying to figure out how many folks 
have them on the gulf coast and how many of the folks have this 
$250,000 authority. The two of us feel very strongly that there are a 
lot of dedicated people down there who are working very hard and nobody 
is suggesting otherwise, but what possible argument would there be for 
not having something along the lines of some guardrails to try to make 
sure that people did not abuse these credit cards?
  That strikes me as a pretty modest step, just have some guardrails 
rather than saying, look, go out and take $250,000 worth of authority 
and we will see what happens.
  Mr. DORGAN. Mr. President, in answer to the Senator's request, he is 
asking that of perhaps 390,000 credit cards that exist in the 
possession of Federal workers, do we know how many have this $250,000 
limit? We do not have the foggiest idea.
  The Senator indicated we want to help people who are dealing with the 
hurricane. Our interest is not in pulling the rug out from under people 
who are working and trying to respond to the devastation of these 
hurricanes, but I am not interested in paving the way for additional 
waste, fraud, and abuse with the misuse of Federal credit cards.
  Yes, there are thousands of dedicated public servants who will use 
these responsibly, but increasing the limit from $2,500 to $250,000, in 
my judgment, is fundamentally irresponsible, and we aim to take it back 
with this amendment and aim to offer this amendment to the next 
supplemental that deals with this hurricane.
  I will yield the floor so my colleague from Oregon can have the 
floor, and I would like to propound a question at some point later when 
he finishes his statement.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. WYDEN. Mr. President, it seems to me that the bottom line is we 
want Federal workers in the hurricane zone to have all the tools they 
need to get the job done. But a month after the hurricane hit, we do 
not need $250,000 worth of authority on a credit card. One needs 
permission to spend that kind of money. The fact is, under the current 
rules one can have it when they need it, just not on a credit card 
where they do not even have to ask. This is a commonsense step.
  Senator Dorgan indicated if somebody needs to spend more than $15,000 
a shot, there are already streamlined, simplified acquisition 
procedures in place to let them do that. Those procedures at least have 
some oversight. The two of us supported the Katrina bills that came 
through the Congress. We support the rule that was already in place 
that increases the spending power of these cards by a reasonable amount 
in an emergency from $2,500 to $15,000. What the two of us feel 
strongly about and what we do not support is how can one support 
excessive spending without any safeguards at all?
  We heard from a Dr. Yukins at George Washington that there is 
extraordinary potential for abuse here. Dr. Yukins said it was 
staggering.
  In looking at Government waste at a variety of agencies, Senator 
Dorgan and I have come to the conclusion that when one is talking about 
the Department of Homeland Security, when one is talking about the 
Federal Emergency Management Agency, and when one is talking about the 
Department of Defense, what one needs is more accountability and more 
oversight rather than less.
  In Homeland Security, we have seen massive outlays for ineffective 
programs to hire the TSA screeners. At FEMA, it is hard to know where 
to start there, but folks may have heard on public radio yesterday that 
a Government Accountability Office audit more than a year ago said that 
only one in several dozen FEMA employees could prove that they had done 
the proper paperwork for procurement authority.

  When it comes to Iraq, all one needs to do there is talk about Iraqi 
contracts. Senator Dorgan and I have tried to put in place some 
oversight and some accountability there, and we will continue on that 
as well. So this is not the only avenue for abuse of taxpayer dollars. 
If one wants to come to the floor and talk about no-bid contracts and 
the like, there is plenty to dig into in terms of more oversight and 
more accountability for our taxpayers. This is a commonsense step that 
the Senate can take.
  I have listened to Senator Collins on this issue, as well as Senator 
Grassley. A number of colleagues on both sides of the aisle have 
expressed concern about this in effect blank check to use credit cards, 
and use them on some pretty high ticket items.

[[Page S10799]]

  I am going to yield the floor back to Senator Dorgan, but given the 
fact that there is a catalog of abuses--this happened outside the 
hurricane zone before anybody knew about Katrina--let us now deal with 
an emergency, let us recognize that there are different spending needs 
given that emergency, but let us also make sure that there are some 
safeguards in place to make sure the taxpayers' interests at a critical 
time when costs in Government are exploding, let us make sure there are 
some safeguards in place to protect the public.
  I yield the floor.
  Mr. DORGAN. Mr. President, I conclude by pointing out that, yes, 
others have described their concern about the $250,000, and some have 
talked about a $50,000 limit and other approaches. Senator Wyden and I 
say that we ought to go back to the old limit, $2,500 per credit card 
per transaction. That is why we introduced this legislation and hope 
that our colleagues will agree.
  Again, this is what the credit card looks like. There are nearly 
400,000 that are possessed by Federal workers. We do not allege that 
these are not dedicated public servants. We do allege that at least in 
some instances, according to three GAO reports, there have been massive 
abuses. These are just a few.
  I put up another chart about them: Liquor, gambling, mounting a deer 
head, cigars, ski clothes and diamond rings, not to mention hiring 
prostitutes and breast enlargements--all put on Government credit 
cards.
  Does that make a person look and pay attention? Of course. Should 
that be happening? Of course not.
  The $250,000 limit on the credit card, this is what Professor Yukins 
said, who is an expert in these areas:

       [T]he Administration has announced various protective 
     measures. . . . It appears, however, that those additional 
     protections will not address the core problem with the new 
     procurement exceptions: Under the new law, agencies will be 
     able to spend billions of relief dollars without any of the 
     competition, transparency or other legal rules that normally 
     protect our procurement system.

  I ask my colleagues how this got into the supplemental bill, taking 
it from a $2,500 to a $250,000 limit on a Federal Government credit 
card. How did that happen? When one looks at that they say: Wait a 
second, we are going to increase the limit on a credit card from $2,500 
to $250,000? What on Earth are you thinking about?
  Well, it came from the White House. The White House made the specific 
request, believing in the wake of Hurricane Katrina people were going 
to need emergency capabilities to do these kinds of purchases. So the 
White House said they wanted an increase to $250,000. The person they 
sent down to brief staff in the Senate of how this would work and why 
it is necessary was Mr. David Safavian. He was the head of all 
procurement policy at the Office of Management and Budget in the White 
House.
  What did he tell us publicly and what did he tell the American 
people? ``This guidance''--guidance about procurement with the $250,000 
limit on a credit card:

       This guidance helps make sure that adequate management 
     controls are in place to ensure that taxpayers' dollars are 
     spent efficiently and responsibly in support of disaster 
     victims.

  That was said 2 weeks before Mr. Safavian's arrest by the FBI for 
lying. This is the person who came to brief the Senate staff about why 
the $250,000 limit on credit cards was necessary.
  It not only is not necessary, it is terribly unwise. In my judgment, 
unless changed, from this we will see a dramatic amount of waste, 
fraud, and abuse. There is a right way and a wrong way to do things. I 
guarantee this proposal to increase credit card limits for Federal 
employees to $250,000 is the wrong way.
  Senator Wyden and I are going to do everything we can to see if we 
cannot in more sober moments persuade everyone here that we ought to go 
back to the previous limits and that we ought to enforce them the right 
way. The GAO's reports say that even with the $2,500 limits, there are 
serious problems with the use of these Federal credit cards.
  That is our proposal. I want to thank my colleague from Oregon with 
whom I have worked on a number of occasions on many areas of Federal 
waste. Yes, this is a big old government, a big bureaucracy. There are 
wonderful people who work in it, and it does wonderful things. There 
are also areas of waste that make me furious. Senator Wyden and I have 
worked on that in a number of areas, in a number of ways, and I hope we 
can continue to do that. This is a preventive way to try to restore 
that $2,500 as a limit on Federal credit cards.
  I yield the floor.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Kerry, Mr. Vitter, Ms. Landrieu, 
        Mr. Talent, Mr. Kennedy, Mr. Cornyn, and Mr. Bayh):
  S. 1807. A bill to provide assistance for small businesses damaged by 
Hurricane Katrina or Hurricane Rita, and for other purposes; to the 
Committee on Small Business and Entrepreneurship.
  Ms. SNOWE. Mr. President, I rise today to bring to the attention of 
the Senate a bill, the Small Business Hurricane Relief and 
Reconstruction Act of 2005, which provides a comprehensive package for 
immediate emergency resources to help the victims of Hurricane Katrina 
rebuild their lives and their businesses.
  As we are well aware, the entire gulf coast of the United States has 
been ravaged by the disaster of Hurricane Katrina. No natural disaster 
in this country in recent memory has carried with it the devastation 
and horror we have witnessed in the recent weeks. Many lives have been 
lost and damages are projected in the hundreds of billions of dollars. 
The President and Congress have already provided over $61 billion in 
emergency funds.
  While we work to reestablish communities and provide some stability 
to the affected areas, we must consider the enormous economic impact 
this catastrophe has had on the region and on our entire Nation. This 
impact is particularly pronounced for the vital small business sector. 
With over 800,000 firms damaged in the hurricane-affected region, 
employment in the Louisiana, Mississippi and Alabama area may be 
reduced by over a million jobs! Moreover, our economy which has 
recently recovered from recession, thanks largely to our small 
businesses which have created three-quarters of all new jobs, could be 
dampened by as much as a full percentage point.
  As chair of the Committee on Small Business and Entrepreneurship, I 
am committed to do everything in my power to provide immediate and 
necessary support to rebuild this region and to help sustain our 
economy. I want to ensure that every American affected by this 
hurricane has the resources to begin rebuilding their lives, their 
businesses, and their dreams.
  I would like to thank my colleagues, Senator Kerry, Senator Vitter, 
Senator Landrieu, Senator Talent, Senator Kennedy, Senator Cornyn, and 
Senator Bayh, for cosponsoring this bill. This bill includes all of the 
provisions that were in prior hurricane relief legislation that I 
introduced with Senator Vitter and Senator Talent but also includes 
several additional provisions and improvements to preexisting 
provisions.
  The provisions of this bill were contained in an amendment that I 
proposed, amendment No. 1717, to the Commerce, Justice, and Science 
Appropriations Act of 2005, H.R. 2862. I would like to thank my 
colleagues, Senator Kerry, Senator Vitter, Senator Landrieu, and 
Senator Talent, for cosponsoring that amendment. The amendment was 
approved in the Senate by a rollcall vote of 96 to 0 on September 15, 
2006, and subsequently passed the Senate in the Commerce, Justice, and 
Science Appropriations Act on that same day.
  Senator Vitter, Senator Talent, and I also introduced the provisions 
of S.A. 1717 as a stand-alone bill, S. 1724, on September 19, 2005. We 
took this step in order to begin the process of enacting these 
provisions into law more quickly than might occur through the Commerce, 
Justice, and Science Appropriations Act, which must still complete its 
Senate-House conference.
  Today we are introducing an expanded package of provisions 
to increase the assistance provided to victims of the hurricane, who 
require immediate assistance. Because the Federal Disaster Loan program 
administered by the Small Business Administration issues disaster loans 
to businesses, homeowners, and renters, this

[[Page S10800]]

legislation would have a significant impact on many facets of the 
efforts to rebuild the areas damaged by Hurricane Katrina.

  Because of the importance of this rebuilding challenge, I chaired a 
hearing in the Committee on Small Business and Entrepreneurship on 
September 22, 2005 to address the impact that Hurricane Katrina and 
Hurricane Rita have had on small businesses. At that hearing, the 
Committee heard testimony from the Administrator of the Small Business 
Administration, Hector Barreto, who explained the unprecedented scope 
of the SBA's response to these disasters. In addition, the director of 
the SBA's Disaster Assistance Program, Herb Mitchell, testified about 
the SBA's actions thus far, and its plans for the continuing recovery.
  The committee also heard testimony from seven representatives of 
small businesses, and of small business development centers, in the 
gulf coast region. These witnesses, who traveled from Louisiana, 
Mississippi, and Alabama for the hearing, described to the committee 
the devastation that has occurred to their businesses and communities 
and various steps they believe would assist in the rebuilding process.
  Many of their recommendations were contained in the legislation I had 
introduced last week, S. 1724, and the legislation I am introducing 
today includes other provisions stemming from the committee's hearing 
and their testimony.
  The Small Business Administration is and must be at the forefront of 
this massive relief effort, playing a significant role in assisting 
impacted communities. This bill will strengthen the SBA's resources and 
will enable them to pave the pathway to recovery. I have faith that 
American small businesses will persevere through these difficult times 
and help lead the region's recovery. It is essential that we work 
together here in Congress, and put forth the best possible proposal to 
stimulate our economy and foster job growth.
  I have spoken with SBA's Administrator Barreto concerning the various 
ways to respond to this disaster and assist with the recovery. He 
informed me that FEMA has referred over 500,000 cases for loan 
assistance to the SBA, and that the SBA is receiving up to 20,000 calls 
per day. This is a tremendous volume and a vital challenge that the SBA 
must satisfy. To date, the SBA has sent out almost 500,000 applications 
for loans to individuals and businesses, and has received 810 loan 
applications as of Monday morning, which demonstrates that much 
assistance is yet to be provided by the SBA. Therefore, it is critical 
that we act now.
  I have included many provisions in my bill that would assist 
hurricane victims applying for SBA disaster loans. My legislation 
increases the maximum size of an SBA disaster loan from $1.5 million 
per loan to $10 million per loan and makes it possible for non-profit 
institutions damaged by Hurricane Katrina to be eligible for disaster 
loans.
  I firmly believe this legislation is the best possible package to aid 
families, businesses, and communities through these challenging times. 
Small businesses must have a fighting chance to survive the economic 
disaster caused by Hurricane Katrina.
  For instance, the bill increases the share of small businesses in 
Federal prime contracts and subcontracts for rebuilding the damaged 
areas through meaningful goals, set-asides, subcontracting plans, 
outreach programs, and HUBZone preferences.
  The legislation also allows recipients of disaster loans to increase 
the size of their loan if the additional amounts would be spent on 
mitigation efforts, such as sea walls, storm shutters, or better 
drainage system to prepare for future disasters. This provision was 
suggested by the administration in its proposal to rebuild the gulf 
coast region.
  The bill also allows the Small Business Administration to offer 
economic injury disaster loans to small businesses throughout the 
country if the businesses suffered direct adverse economic impacts from 
the two hurricanes. The SBA offered these loans nationwide after the 
terrorist attacks of September 11, 2001.
  In addition, the bill protects future borrowers in the SBA's business 
loan programs from having to pay higher fees to compensate the Federal 
Government for any defaults that may occur because the businesses of 
some current borrower who had loans before the hurricane were destroyed 
in the hurricanes. SBA business loan programs utilize fees to pay for 
all or part of the programs' costs, and those businesses that default 
because of the hurricanes would not be included in the calculation of 
future program costs in the SBA's business loan programs.
  The bill addresses concerns about fraud and lack of competition by 
abolishing the excessive increase in the ``micro-purchase'' threshold 
to $250,000. This increase, slipped into the second hurricane 
Supplemental Appropriations Act in September 2005, allowed Federal 
officials to ignore small businesses in awarding contracts up to 
$250,000. Micro-purchases are generally strictly limited to $2,500 and 
to $15,000 in case of nuclear attack or military contingency. These 
purchases allow for convenient credit card transactions by the Federal 
Government, but are vulnerable to fraud and favoritism.

  I have also provided the SBA with the authority to grant victims of 
Hurricane Katrina up to 12 months to begin repaying their SBA disaster 
loans which would assist both small and large businesses, homeowners, 
and renters. This l2-month period could be extended to 24 months at the 
discretion of the SBA Administrator if he determines that Katrina 
victims would need additional time to begin repaying their loans. This 
would allow also homeowners and businesses additional time to get their 
lives and businesses restored before being required to begin repaying 
loans.
  This legislation also proposes lowering fees for the 7(a) program to 
make borrowing more affordable for small businesses both within and 
outside the disaster areas, many of which have been impacted by the 
disaster and are struggling to cover higher costs in health care and 
energy and rising interest rates.
  Recognizing the increased demand this disaster will place on all 
small business lending programs, the amendment proposes increasing the 
7(a) lending program from a program level of $17 billion to $27 
billion, and the 504 lending program from a program level of $7.5 
billion to $12.5 billion. Both the 504 and 7(a) lending programs are 
funded entirely through fees, so the increases require no 
appropriation.
  Moreover, this bill increases the program level for SBA disaster 
loans--physical and economic injury--by approximately $800 million, 
requiring an appropriation of approximately $86 million. The committee 
is concerned there will not be enough funding for disaster loans 
available to meet the scope of this disaster, given that the economic 
injury disaster loans alone for the September 11 attacks amounted to 
about $1 billion, and the physical damage for Katrina is considered 
much more extensive.
  The bill also includes a provision requiring the SBA to treat these 
special provisions as separate from the regular programs, to avoid 
increasing future subsidy rates, and therefore, the costs for borrowers 
who rely on those programs. This same protection was provided for 
emergency 7(a) loans after the September 11 attacks, and for the 
special disaster loans made after those attacks.
  Additionally, many small businesses in the disaster areas will 
require relief from making payments and interest on 504 loans they had 
before Katrina hit. Therefore, this amendment includes a provision that 
authorizes the SBA to cover the payments and interest on existing loans 
until the small business can resume payments.
  Similar to the Supplementary Terrorist Activity Relief, STAR, loans 
enacted by Congress after September 11, this bill allows the SBA to 
provide similar loans with lower fees for small businesses located 
outside the disaster zones but are nonetheless indirectly impacted by 
Hurricane Katrina. The lowers fees also provides the lenders with an 
incentive to lend to these businesses.
  Importantly, the bill includes protections to mitigate recent reports 
of past misdirection of loans to nondisaster victims. The protections 
include requiring lenders to inform borrowers that they are receiving 
Katrina relief loans, requiring lenders to document to

[[Page S10801]]

the SBA how the borrower was adversely affected by Hurricane Katrina, 
and for the SBA's inspector general to collect the explanations and 
report to the Senate Committee on Small Business and Entrepreneurship 
and House Committee on Small Business every 6 months, verifying loans 
are being used for the intended purposes. Finally, the bill would 
require the Government Accountability Office to review the 
implementation of the program, after its completion, and report its 
findings to Congress. These added protections will ensure that only 
applicants who really need these loans to recover from the horrific 
effects of Hurricane Katrina and Hurricane Rita will receive the loans.
  Furthermore, the legislation authorizes $450 million to the affected 
State governments of Louisiana, Mississippi, Alabama, Texas, and 
Florida to provide emergency bridge loans or grants to small businesses 
in the disaster areas that have been adversely impacted by Hurricane 
Katrina and require immediate access to capital until they can secure 
other loans or financial assistance. The goal is to disburse the funds 
quickly, and this measure is based on a successful program that helped 
victims of the hurricanes in Florida in past years.
  With the cost of Katrina relief and rebuilding estimated at over $100 
billion, small businesses, particularly those located in the disaster 
area and that employ individuals in the affected areas, should receive 
their fair share of Federal contracting and subcontracting dollars. My 
bill also attempts to provide critical assistance to small businesses 
that have been operating in the areas devastated by the Hurricane 
Katrina by expanding access to Federal contract and subcontracts.
  Government projects provide solid business opportunities and prompt, 
steady pay for small businessmen and businesswomen. In addition, 
Government procurement would open doors for many local small 
businesses to participate in the long-term reconstruction work in the 
gulf coast areas. Prior to the disaster, small construction companies 
in Alabama, Mississippi, and Louisiana brought home nearly $500 million 
in Federal contracts a year. Total small business contracts in the gulf 
coast region exceeded $3 billion a year. While many small businesses 
would benefit from other forms of disaster assistance, many of them are 
ready to get back to work and into business as soon as possible.

  To that end, my bill designates the Hurricane Katrina disaster area 
as a HUBZone. A HUBZone designation would enable small businesses 
locating in the disaster area and employing people in that area to 
receive contracting preferences and price evaluation preferences to 
offset greater costs of doing business. The HUBZone program was created 
to direct federal contracting dollars to economically distressed areas. 
Extending the HUBZone designation to the gulf coast would bring needed 
businesses development tools to affected areas.
  In addition Mr. President, my bill would increase the maximum size of 
SBA surety bonds for small businesses from $2 million to $5 million, 
and authorizes the SBA to increase the size of these bonds further to 
$10 million. Small contractors vying for work need an increase in bonds 
to handle greater projects for Hurricane Katrina relief. Local small 
businesses in the gulf coast can use higher bonds to compensate for the 
damage to their assets from the hurricane.
  My bill would also direct the SBA, its resources partners, and the 
Federal offices of small and disadvantaged business utilization to 
create a contracting outreach program for small businesses located or 
willing to locate in the Katrina disaster area. Finally, my bill would 
establish small business contracting and subcontracting goals for all 
Katrina-related contracts and subcontracts to promote greater jobs 
creation and development, while providing reasonable flexibility to 
Federal agencies in meeting that goal in light of difficult 
circumstances on the ground.
  Finally I would also like to comment on the funding levels provided 
for the SBA in this bill. I have authorized the appropriation of $24.25 
million for grants to increase business counseling in the damaged areas 
for several SBA entrepreneurial development programs including: Small 
Business Development Center, SBDCs; SCORE; Womens Business Centers, 
WBCs; Veteran's Business Centers, and Microloan Technical Assistance.
  Our Nation's 25 million small businesses prove time and again to 
breathe new life into our economy, by growing at twice the rate of all 
firms. And when a disaster strikes, the spirit, determination and will 
of America's small businesses help to create the firm economic 
foundation, propelling our Nation's economic growth. Therefore, we in 
turn must create an atmosphere favorable for small businesses and 
provide this emergency package to the SBA. We must allow our Nation's 
small businesses to do what they do best--create jobs.
  Mr. President, I urge my colleagues to support this bill. Too much is 
at stake for small businesses, and the economy as a whole, to allow 
this critical legislation to languish. Congress must find essential 
agreement and fulfill its obligation to America's small businesses. 
Clearly, if we strive for anything less, we fail to support the 
backbone of our economy, our hope for new innovation, and the 
entrepreneurs reach for the American dream.
  Thank you, Mr. President.
  Mr. KERRY. Mr. President, today I join with Senator Snowe, the chair 
of our committee, and our colleagues, Senators Landrieu and Vitter, to 
introduce a bill to help small businesses that have been damaged, 
physically and economically, by one or both of the hurricanes that have 
destroyed the gulf region over the past four or five weeks.
  Our colleagues should feel very comfortable voting for this bill. The 
need is undeniable, based not only on what we see on television every 
day and read in the papers but also based on the testimony of small 
businesses and governors at hearings held in the Senate, in our 
committee last week, and this week before the Finance Committee. 
Further, 96 Senators voted for very similar legislation 2 weeks ago.
  This bill is very similar to the amendment (S.A. 1695) that Senator 
Landrieu and I offered to the fiscal year 2006 appropriations bill for 
the Departments of Commerce, Justice, and Science, and that passed the 
Senate by a vote of 96 to 0 on September 15 as part of the compromise 
amendment (S.A. 1717) that I put forth with Senators Snowe, Landrieu, 
and Vitter. We offered those amendments to the appropriations bill 
because relief for small businesses had not been provided for in the 
two emergency supplementals. Two bills, worth some $63 billion, and 
nothing designated for small businesses.
  It is through the Small Business Administration that disaster loan 
assistance is available, not just for businesses but for homeowners and 
renters, and it is through the Small Business Administration that the 
Federal Government provides the full complement of assistance to the 
small businesses in our Nation. The SBA is indispensable to the 
recovery of the gulf region after Hurricane Katrina. If the 
administration is not going to provide small business relief in the 
emergency spending bills it sends to Congress, this is absolutely 
appropriate.
  We have got to get into law, and to fund, relief for small businesses 
before Senators go home for a week break in October. These folks have 
waited too long. We have got to get people back to work.
  Since Hurricane Katrina hit, the gulf has had the extreme misfortune 
of being hit by Hurricane Rita. And this bill reflects the damage 
caused by going a bit further to take care of those small businesses, 
too. It also incorporates provisions requested by the administration. 
For example, at the request of the administration, the bill authorizes 
the Small Business Administration to make economic injury disaster 
loans nationwide to any small business directly and adversely impacted 
by Hurricane Katrina or Hurricane Rita. The bill limits eligibility of 
economic injury disaster loans to those small businesses suffering 
economic losses because of the spikes in gasoline and natural gas and 
heating oil related to Hurricanes Katrina and Rita. That is consistent 
with all other provisions in this bill. We also increased the amount of 
funding for grants to the States from $400 million to $450 million, to 
reflect the increased damage and delays in recovery caused by Hurricane 
Rita. We also repeal some contracting provisions enacted as part of

[[Page S10802]]

the second supplemental that were anti-small business and would have 
resulted in millions of contracting dollars lost for small businesses 
that should be getting Federal contracts to rebuild the area. The small 
businesses don't just need loans; they need work to get revenue flowing 
again and to hire again, creating local jobs.
  Mr. President, I extend great thanks to my colleagues, Senators 
Snowe, Landrieu, and Vitter for their work on this bill. I think we 
have demonstrated to a weary public that we can work together, and I 
hope that our colleagues in the Senate and in the House and the 
President will join us and vote to make this law and to fund it.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 1808. A bill to amend title XIX of the Social Security Act to 
improve the qualified medicare beneficiary (QMB) and specified low-
income medicare beneficiary (SLMB) programs within the medicaid 
program; to the Committee on Finance.
  Mr. BINGAMAN. Mr. President, I rise today to introduce the ``Medicare 
Beneficiary Assistance Improvement Act.'' This legislation would 
improve what are referred to as the Medicare Savings Programs, which 
includes the Qualified Medicare Beneficiary, QMB, and Specified Low-
income Medicare Beneficiary, SLMB, and Qualifying Individual-1 (QI-1) 
programs that provide cost-sharing assistance for low-income Medicare 
beneficiaries through the Medicaid program. It would also make 
permanent the QI-1 program, which expires today due to inaction by the 
House of Representatives to extend the program.
  The QI-1 program was established as part of the Balanced Budget Act 
of 1997 and was authorized for 5 years. In 2002 and 2003, extensions of 
the program were included in various continuing resolutions. The 
program was further extended through passage of Public Law 108-448 in 
2004, through today's expiration date.
  There is no reason that the Congress must participate in this annual 
last minute scramble to try and extend the program for a few months or 
a year. It is a disservice to the States, who must watch the Congress 
closely to constantly prepare to send out disenrollment notices and 
layoff staff, even though they are relatively certain the program will 
be extended. But, more importantly, it is a disservice to those that 
need this important assistance, as many of those enrolled worry this 
benefit will be taken away and many of those never enrolled never are 
told of the benefit since States and advocates are spending their time 
trying to get the program extended rather than conducting outreach.
  While I remain very hopeful that the Congress will pass an extension 
of the QI-1 program for an additional period in the coming week, I am 
introducing the ``Medicare Beneficiary Assistance Improvement Act'' 
today in the hope that Congress will end this process of temporary 
extensions and permanently authorize the program, as provided for in 
this legislation.
  To reiterate, low-income senior citizens and disabled Americans 
nationwide should not be subjected to the constant risk of losing 
crucial health care benefits. Furthermore, the Centers for Medicare & 
Medicaid Services, CMS, the Social Security Administration, SSA, and 
the States should be spared the administrative burdens and cost 
associated with reauthorizing the program each year--sometimes more 
than once in a year.
  Furthermore, the bill proposes several improvements to the Medicare 
Savings Programs and application processes that will make these low-
income benefits both more efficient to administer and more accessible 
to the individuals who need them. It would also seek to simplify the 
process and make the Medicare Savings Programs more understandable to 
low-income senior citizens and people with disabilities, as well as 
State and Federal Government officials.
  In New Mexico, over 1,500 low-income Medicare beneficiaries receive 
the QI-1 benefit, which saves them almost $1,000 in Medicare Part B 
premium out-of-pocket costs annually. Unfortunately, according to 
estimates made by the Medicare Rights Center using Census Bureau data, 
over 11,000 are likely to be eligible. Many are completely unaware of 
the assistance this program offers.
  The same is true among those of us that created the three different 
Medicare Savings Programs. In fact, I am almost absolutely certain that 
few of my Senate colleagues could accurately explain how any of these 
programs work and that is precisely the problem with them. They are 
intended serve our Nation's most vulnerable, low-income citizens with 
their Medicare cost-sharing burdens, but do so in a very complicated 
manner that few can understand. It is no wonder that many of our 
Nation's elderly and people with disabilities that qualify for this 
assistance do not participate.
  For example, the QI-1 program is Federal grant payment to States for 
the purpose of paying the Medicare Part B premium, which is $78.20 per 
month in 2005 and will increase to $88.50 per month or over $1000 per 
year in 2006, for individuals with income between 120 and 135 percent 
of the Federal Poverty Level. Through this Federal grant, States must 
pay the full amount of the Medicare Part B premium for qualifying 
individuals but may cap or otherwise limit enrollment if the State 
projects that further enrollment will result in exhaustion of their 
State allotment.
  Six States had enrollment this year that would exceed their allotment 
so were forced to cap funding. The Centers for Medicare & Medicaid 
Services, CMS, responded to this problem with a rule on August 26, 
2005, that reallocated unspent funding from some States to those that 
had exhausted their funds in order to eliminate the enrollment caps in 
the States of Oregon, Arizona, Mississippi, Louisiana, Alabama, and 
Connecticut.
  Three days later Hurricane Katrina hit three of the six States and 
now their entire health care systems are in chaos, and Congress has 
failed to act to address their need. While that has gained a great deal 
of much needed attention and deserves even greater attention from the 
media and public, the House of Representatives yesterday failed to 
extend the QI-1 program and went out of session for the week even 
though it expires today. Senators Grassley and Baucus were working with 
the House of Representatives on a last minute extension through the 
introduction of S. 1718, but it failed to move in the waning hours of 
the fiscal year and the House of Representatives took no action 
whatsoever.
  Even though CMS has apparently notified the Congress that it can 
continue to run the program for a few days, the failure of the Congress 
to take action in a timely manner to ensure that disenrollment notices 
are not sent out by the States to an estimated 185,000 low-income 
Medicare beneficiaries nationwide is absolutely unacceptable and also 
is deserving of attention and media scrutiny.
  Furthermore, while the QI-1 program has always played an important 
role in helping low-income Medicare afford health care coverage, the 
QI-1 program would, in the future, play an important role in helping 
low-income Medicare beneficiaries access prescription drug coverage 
through Medicare's new drug benefit. Enrollment in the QI-1 program is 
supposed to automatically qualify a person for the Medicare Part D drug 
benefit's low-income subsidy beginning on January 1,2006.

  To briefly describe the most critical aspects of the legislation, 
Section 2 of the bill simply provides for one unified name for the 
Federal programs that offer cost sharing and benefit assistance for 
low-income Medicare beneficiaries. Rather than separately referring to 
the QMB, SLMB, and QI-1 programs, the bill provides one common name for 
all of these programs, the ``Medicare Savings Programs.''
  Low enrollment in these assistance programs is in large part due to 
the lack of knowledge and understanding of the programs or benefits 
offered. This simple change has been pilot tested with Medicare 
beneficiary groups and found to elicit a positive response and interest 
from Medicare beneficiaries.
  Section 3 of the legislation would make permanent the QI-1 category 
by incorporating these individuals into the SLMB category at the State 
Children's Health Insurance Program enhanced matching rate. In addition 
to simplifying and making permanent the program, States would see a 
financial benefit from this change.

[[Page S10803]]

  Section 4 eliminates some of the critical barriers to enrollment. As 
I noted earlier, just 1,500 of the estimated 11,000 low-income Medicare 
beneficiaries in New Mexico eligible for the QI-1 benefit are enrolled. 
This section provides for several important enrollment simplification 
procedures, such as allowing self-certification of income and 
continuous eligibility, and expanded outreach efforts.
  Section 5 eliminates the limit on assets, which is set at $4,000 for 
an individual and $6,000 for a couple and disqualifies millions of 
Medicare beneficiaries with very low incomes from qualifying for 
assistance. Some States have waived or disallowed the counting of some 
assets for the purposes of eligibility determination and have seen much 
higher enrollment rates.
  I urge the Congress to pass a temporary extension of the QI-1 program 
early next week, but then to immediately begin work to permanently 
authorize the QI-1 program and to simplify and streamline all the 
Medicare Savings Programs. Our Nation's low-income Medicare 
beneficiaries and the States deserve nothing less.
  I ask unanimous consent to print a summary and text of this 
legislation in the Record.
  There being no objection, the materials were ordered to be printed in 
the Record, as follows:

                               Fact Sheet

          ``Medicare Beneficiary Assistance Improvement Act''

       Sponsor: Senator Bingaman
       Purpose: To amend title XIX of the Social Security Act to 
     improve the Qualified Medicare Beneficiary (QMB) and 
     Specified Low-income Medicare Beneficiary (SLMB) programs 
     within the Medicaid program, and in doing so to make 
     permanent the Qualifying Individual-1 (QI-1) program.
       Background: The QI-1 program is a federal grant payment to 
     states for the purposes of paying the Medicare Part B 
     premium, which is $78.20 per month in 2005 and will increase 
     to $88.50 per month (over $1000 per year) in 2006, for 
     individuals with income between 120 and 135 percent of the 
     Federal Poverty Level. Federal assistance for QI-1s was 
     created in the Balanced Budget Act of 1997 for a five-year 
     period and has been extended on a year-to-year basis since 
     December 2002. The program is currently slated to expire on 
     September 30, 2005.
       Now is a critical time to make QI-1 a permanent program. 
     Approximately 185,000 low-income Medicare beneficiaries 
     nationwide currently rely on the QI-1 program for payment of 
     their Part B premium and will be hard pressed to afford 
     Medicare coverage without this assistance. The QI-1 program 
     also plays an important role in helping low-income Medicare 
     beneficiaries access prescription drug assistance through 
     Medicare's new drug benefit. Enrollment in the QI-1 program 
     automatically qualifies a person for the Part D drug 
     benefit's low-income subsidy beginning on January 1, 2006.
       The legislation would ensure that low-income older and 
     disabled Americans nationwide are no longer at risk of losing 
     crucial health care benefits. Furthermore, states, the 
     Centers for Medicare and Medicaid Services (CMS), the Social 
     Security Administration (SSA) would be spared the 
     administrative burden and cost associated with reauthorizing 
     the program each year--sometimes more than once in a year.
       Furthermore, the bill proposes several improvements to the 
     QMB and SLMB programs and application processes that will 
     make these low-income benefits both more efficient to 
     administer and more accessible to the individuals who need 
     them.


                                Summary

     Section 1. Short Title.
       This section gives the bill's title: the ``Medicare 
     Beneficiary Assistance Improvement Act.''
     Section 2. Renaming the Program to Eliminate Confusion.
       This section provides for one unified name for the federal 
     programs that offer cost sharing and benefit assistance for 
     low-income Medicare beneficiaries. Currently, 
     beneficiaries may be in ``dual eligible'' programs, 
     ``Qualified Medicare Beneficiary'' programs (QMB), 
     ``Specified Low-income Medicare Beneficiary'' programs 
     (SLMB), or Qualifying Individual-1 (QI-1) programs. This 
     bill provides one common name for all of these programs, 
     the ``Medicare Savings Programs.''
       One of the problems contributing to low enrollment in the 
     assistance programs is lack of understanding of the programs 
     or benefits offered, in part due to confusing nomenclature. 
     The new name has been pilot tested with Medicare 
     beneficiaries groups and found to elicit a positive response 
     and interest from Medicare beneficiaries.
     Section 3. Expanding Protections by Increasing SLMB 
         Eligibility Income Level to 135 Percent of Poverty.
       This section would make permanent the QI-1 category, which 
     provides assistance with the cost of the Medicare Part B 
     premium for beneficiaries with incomes between 120 percent 
     and 135 percent of poverty, by incorporating these 
     individuals into the SLMB category. In addition, the 
     legislation provides enhanced matching payments (at the 
     state's CHIP rate) for the SLMB population (100-135% FPL).
     Section 4. Eliminating Barriers to Enrollment.
       In the states that use 209(b) or SSI criteria for 
     eligibility for the QMB program, Medicare beneficiaries are 
     not automatically made eligible for assistance, even though 
     they qualify. In other states that do not use these criteria, 
     Medicare beneficiaries are automatically eligible if they 
     meet the income thresholds to qualify for SSI payments. 
     Subsection (a) requires that states that use these 
     alternative definitions for eligibility make Medicare 
     beneficiaries automatically eligible for assistance as well.
       Subsection (b) allows individuals to certify their income 
     without having to provide additional documentation. Many 
     eligible Medicare beneficiaries decline to participate in 
     assistance programs because they have difficulty producing 
     the necessary documents and generally are reluctant to 
     provide such information.
       Subsection (c) provides for continuous eligibility in the 
     assistance programs. Just as Medicare beneficiaries apply 
     once for Medicare, they can apply once for assistance 
     programs as well, without the need for yearly 
     recertification.
       Subsection (d) requires states to allow applications for 
     assistance programs on a simplified application form by 
     telephone or mail without the need for a face-to-face 
     interview. Many eligible individuals choose not to apply for 
     government programs because of the stigma associated with a 
     Social Services office. Research shows that individuals are 
     more likely to apply for a benefit when they are not required 
     to have an in-person interview at one of these offices.
       Subsection (e) expands the role of Social Security in the 
     Medicare Savings Program application process by requiring 
     local Social Security offices to provide oral and written 
     information about Medicare Savings Program benefits and offer 
     Medicare beneficiaries the ability to apply for assistance at 
     these offices, as is the application protocol for the drug 
     benefit's low-income subsidy program.
       Subsection (f) allows states to outstation eligibility 
     workers at local Social Security field offices.
     Section 5. Elimination of Asset Test.
       This section eliminates the strict limit on assets that 
     disqualifies millions of Medicare Beneficiaries with very low 
     incomes from qualifying for assistance. States with high or 
     no asset tests have maximized their QI-1 funding allotments, 
     while states with standard assets tests have seen extremely 
     low QI-1 enrollment.
     Section 6. Improving Assistance With Out-of-Pocket Costs.
       Subsection (a) prohibits estate recovery against QMBs for 
     the cost-sharing or benefits provided through this program. 
     Many individuals do not apply for assistance because they 
     fear a surviving spouse will lose what little income they 
     have by having to repay the state for benefits received upon 
     death.
       Subsection (b) gives QMBs three months of retroactive 
     eligibility, allowing the state to pay for Medicare cost-
     sharing and premiums for the previous three months. Other 
     categories of individuals who receive assistance through 
     Medicaid (SLMBs, QI-1s, and dual eligibles) are eligible for 
     assistance beginning three months prior to the date which 
     they are enrolled. Because of the low incomes of these 
     beneficiaries, coupled with the fact that lower-income 
     individuals have higher health care costs, such retroactive 
     assistance is particularly important.
     Section 7. Improving Program Information and Coordination 
         With State, Local, and Other Partners.
       This section authorizes a data match demonstration project 
     between Health and Human Services, the Internal Revenue 
     Service, and SSA to match information to identify individuals 
     who are potentially eligible for assistance programs but not 
     enrolled. This section also authorizes $100 million in grants 
     to states to use the information identified through the 
     demonstration project to improve enrollment in the Medicare 
     Savings Programs and the low-income subsidy, as well as 
     grants to other entities like the Indian Health Service and 
     Veterans' Affairs to do coordinated outreach with these 
     programs.
     Section 8. Notices to Certain New Medicare Beneficiaries.
       This section requires SSA, upon sending out initial 
     notification of Medicare eligibility, to include information 
     and an application for the Medicare Savings Programs to 
     individuals the Commissioner identifies as likely to be 
     eligible for benefits under those programs. The section also 
     requires the Secretary of Health and Human Services to 
     include in the annual Medicare & You handbook information on 
     the availability of the Medicare Savings Programs and a toll 
     free number for beneficiaries to call to obtain additional 
     information.
                                  ____


                                S. 1808

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Beneficiary Assistance Improvement Act''.

[[Page S10804]]

       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Renaming program to eliminate confusion.
Sec. 3. Expanding protections by increasing SLMB eligibility income 
              level to 135 percent of poverty.
Sec. 4. Eliminating barriers to enrollment.
Sec. 5. Elimination of asset test.
Sec. 6. Improving assistance with out-of-pocket costs.
Sec. 7. Improving program information and coordination with State, 
              local, and other partners.
Sec. 8. Notices to certain new medicare beneficiaries.

     SEC. 2. RENAMING PROGRAM TO ELIMINATE CONFUSION.

       The programs of benefits for lower income medicare 
     beneficiaries provided under section 1902(a)(10)(E) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(E)) shall be 
     known as the ``Medicare Savings Programs''.

     SEC. 3. EXPANDING PROTECTIONS BY INCREASING SLMB ELIGIBILITY 
                   INCOME LEVEL TO 135 PERCENT OF POVERTY.

       (a) In General.--Section 1902(a)(10)(E)(iii) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(E)(iii)) is amended by 
     striking ``120 percent in 1995 and years thereafter'' and 
     inserting ``120 percent in 1995 through 2005 and 135 percent 
     in 2006 and years thereafter''.
       (b) Conforming Removal of QI-1 Provisions.--
       (1) Section 1902(a)(10)(E) of such Act (42 U.S.C. 
     1396a(a)(10)(E)) is further amended--
       (A) by adding ``and'' at the end of clause (ii);
       (B) by striking ``and'' at the end of clause (iii); and
       (C) by striking clause (iv).
       (2) Section 1933 of such Act (42 U.S.C. 1396u-3) is 
     repealed.
       (3) The amendments made by this subsection shall take 
     effect as of January 1, 2006.
       (c) Application of CHIP Enhanced Matching Rate for SLMB 
     Assistance.--
       (1) In general.--Section 1905(b)(4) of such Act (42 U.S.C. 
     1396d(b)(4)) is amended by inserting ``or section 
     1902(a)(10)(E)(iii)'' after ``section 
     1902(a)(10)(A)(ii)(XVIII)''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to medical assistance for medicare cost-sharing 
     for months beginning with January 2006.

     SEC. 4. ELIMINATING BARRIERS TO ENROLLMENT.

       (a) Automatic Eligibility for SSI Recipients in 209(B) 
     States and SSI Criteria States.--Section 1905(p) of the 
     Social Security Act (42 U.S.C. 1396d(p)) is amended--
       (1) by redesignating paragraph (6) as paragraph (11); and
       (2) by adding at the end the following new paragraph:
       ``( 6) In the case of a State which has elected treatment 
     under section 1902(f) for aged, blind, and disabled 
     individuals, individuals with respect to whom supplemental 
     security income payments are being paid under title XVI are 
     deemed for purposes of this title to be qualified medicare 
     beneficiaries.''.
       (b) Self-Certification of Income.--Section 1905(p) of the 
     Social Security Act (42 U.S.C. 1396d(p)), as amended by 
     subsection (a), is amended by inserting after paragraph (6) 
     the following new paragraph:
       ``(7) In determining whether an individual is a qualified 
     medicare beneficiary or is eligible for benefits under 
     section 1902(a)(10)(E)(iii), the State shall permit 
     individuals to qualify on the basis of self-certifications of 
     income without the need to provide additional 
     documentation.''.
       (c) Automatic Reenrollment Without Need to Reapply.--
       (1) In general.--Section 1905(p) of the Social Security Act 
     (42 U.S.C. 1396d(p)), as amended by subsections (a) and (b), 
     is amended by inserting after paragraph (7) the following new 
     paragraph:
       ``( 8) In the case of an individual who has been determined 
     to be a qualified medicare beneficiary or eligible for 
     benefits under section 1902(a)(10)(E)(iii), the individual 
     shall be deemed to continue to be so qualified or eligible 
     without the need for any annual or periodic application 
     unless and until the individual notifies the State that the 
     individual's eligibility conditions have changed so that the 
     individual is no longer so qualified or eligible.''.
       (2) Conforming amendment.--Section 1902(e)(8) of the Social 
     Security Act (42 U.S.C. 1396a(e)(8)) is amended by striking 
     the second sentence.
       (d) Use of Simplified Application Process.--Section 1905(p) 
     of the Social Security Act (42 U.S.C. 1396d(p)), as amended 
     by subsections (a), (b), and (c), is amended by inserting 
     after paragraph (8) the following new paragraph:
       ``(9) A State shall permit individuals to apply to qualify 
     as a qualified medicare beneficiary or for eligibility for 
     benefits under section 1902(a)(10)(E)(iii) through the use of 
     the simplified application form developed under section 
     1905(p)(5)(A) and shall permit such an application to be made 
     over the telephone or by mail, without the need for an 
     interview in person by the applicant or a representative of 
     the applicant.''.
       (e) Role of Social Security Offices.--
       (1) Enrollment and provision of information at social 
     security offices.--Section 1905(p) of the Social Security Act 
     (42 U.S.C. 1396d(p)), as amended by subsections (a), (b), 
     (c), and (d) is amended by inserting after paragraph (9) the 
     following new paragraph:
       ``(10) The Commissioner of Social Security shall provide, 
     through local offices of the Social Security Administration--
       ``(A) for the enrollment under State plans under this title 
     for appropriate medicare cost-sharing benefits for an 
     individual who is a qualified medicare beneficiary or is 
     eligible for benefits under section 1902(a)(10)(E)(iii) 
     through utilization of the process established under section 
     1860D-14; and
       ``(B) for providing oral and written notice of the 
     availability of such benefits.''.
       (2) Clarifying amendment.--Section 1902(a)(5) of such Act 
     (42 U.S.C. 1396a(a)(5)) is amended by inserting ``as provided 
     in section 1905(p)(10),'' after ``except''.
       (f) Outstationing of State Eligibility Workers at SSA Field 
     Offices.--Section 1902(a)(55) of such Act (42 U.S.C. 
     1396a(a)(55)) is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
     (a)(10)(A)(i)(VII), or (a)(10)(A)(ii)(IX)'' and inserting 
     ``paragraph (10)(A)(i)(IV), (10)(A)(i)(VI) (10)(A)(i)(VII), 
     (10)(A)(ii)(IX), or (10)(E)''; and
       (2) in subparagraph (A), by striking ``1905(1)(2)(B)'' and 
     inserting ``1905(l)(2)(B), and in the case of applications of 
     individuals for medical assistance under paragraph (10)(E), 
     at locations that include field offices of the Social 
     Security Administration''.

     SEC. 5. ELIMINATION OF ASSET TEST.

       (a) In General.--Section 1905(p)(1) of the Social Security 
     Act (42 U.S.C. 1396d(p)(1)) is amended--
       (1) by adding ``and'' at the end of subparagraph (A);
       (2) by striking ``, and'' at the end of subparagraph (B) 
     and inserting a period; and
       (3) by striking subparagraph (C).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to eligibility determinations for medicare cost-
     sharing furnished for periods beginning on or after January 
     1, 2006.

     SEC. 6. IMPROVING ASSISTANCE WITH OUT-OF-POCKET COSTS.

       (a) Eliminating Application of Estate Recovery 
     Provisions.--Section 1917(b)(1)(B)(ii) of the Social Security 
     Act (42 U.S.C. 1396p(b)(1)(B)(ii)) is amended by inserting 
     ``(but not including medical assistance for medicare cost-
     sharing or for benefits described in section 
     1902(a)(10)(E))'' before the period at the end.
       (b) Providing for 3-months Retroactive Eligibility.--
       (1) In general.--Section 1905(a) of such Act (42 U.S.C. 
     1396d(a)) is amended, in the matter preceding paragraph (1), 
     by striking ``described in subsection (p)(1), if provided 
     after the month'' and inserting ``described in subsection 
     (p)(1), if provided in or after the third month before the 
     month''.
       (2) Conforming amendments.--(A) The first sentence of 
     section 1902(e)(8) of such Act (42 U.S.C. 1396a(e)(8)), as 
     amended by section 4(c)(2), is amended by striking ``(8)'' 
     and the first sentence.
       (B) Section 1848(g)(3) of such Act (42 U.S.C. 1395w-
     4(g)(3)) is amended by adding at the end the following new 
     subparagraph:
       ``(C) Treatment of retroactive eligibility.--In the case of 
     an individual who is determined to be eligible for medical 
     assistance described in subparagraph (A) retroactively, the 
     Secretary shall provide a process whereby claims submitted 
     for services furnished during the period of retroactive 
     eligibility which were not submitted in accordance with such 
     subparagraph are resubmitted and re-processed in accordance 
     with such subparagraph.''.

     SEC. 7. IMPROVING PROGRAM INFORMATION AND COORDINATION WITH 
                   STATE, LOCAL, AND OTHER PARTNERS.

       (a) Data Match Demonstration Project.--
       (1) In general.--The Secretary of Health and Human Services 
     (acting through the Administrator of the Centers for Medicare 
     & Medicaid Services), the Secretary of the Treasury, and the 
     Commissioner of Social Security shall enter into an 
     arrangement under which a demonstration is conducted, 
     consistent with this subsection, for the exchange between the 
     Centers for Medicare & Medicaid Services, the Internal 
     Revenue Service, and the Social Security Administration of 
     information in order to identitfy individuals who are 
     medicare beneficiaries and who, based on data from the 
     Internal Revenue Service (such as their not filing tax 
     returns or other appropriate filters) are likely to be--
       (A) a qualified medicare beneficiary (as defined in 
     1905(p)(1) of the Social Security Act (42 U.S.C. 
     1396d(p)(1)));
       (B) otherwise eligible for medical assistance under section 
     1902(a)(10)(E) of the Social Security Act (42 U.S.C. 
     1396a(a)(10)(E)); or
       (C) entitled to a premium or cost-sharing subsidy under 
     section 1860D-14 of such Act (42 U.S.C. 1395w-114).
       (2) Limitation on use of information.--Notwithstanding any 
     other provision of law, specific information on income or 
     related matters exchanged under paragraph (1) may be 
     disclosed only as required to carry out subsection (b) and 
     for related Federal and State outreach efforts.
       (3) Period.--The project under this subsection shall be for 
     an initial period of 3 years and may be extended for 
     additional periods (not to exceed 3 years each) after such an 
     extension is recommended in a report under subsection (d).
       (b) State Demonstration Grants.--
       (1) In general.--The Secretary of Health and Human Services 
     shall enter into a demonstration project with States (as 
     defined for

[[Page S10805]]

     purposes of title XIX of the Social Security Act (42 U.S.C. 
     1396 et seq.) to provide funds to States to use information 
     identified under subsection (a), and other appropriate 
     information, in order to do ex parte determinations or 
     utilize other methods for identifying and enrolling 
     individuals who are potentially--
       (A) a qualified medicare beneficiary (as defined in 
     1905(p)(1) of the Social Security Act (42 U.S.C. 
     1396d(p)(1)));
       (B) otherwise eligible for medical assistance described in 
     section 1902(a)(10)(E) of the Social Security Act (42 U.S.C. 
     1396a(a)(10)(E)); or
       (C) entitled to a premium or cost-sharing subsidy under 
     section 1860D-14 of such Act (42 U.S.C. 1395w-114).
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to the 
     Secretary of Health and Human Services for the purpose of 
     making grants under this subsection.
       (c) Additional CMS Funding for Outreach and Enrollment 
     Projects.--There are hereby appropriated, out of any funds in 
     the treasury not otherwise appropriated, to the Secretary of 
     Health and Human Services through the Administrator of the 
     Centers for Medicare & Medicaid Services, $100,000,000 which 
     shall be used only for the purpose of providing grants to 
     States to fund projects to improve outreach and increase 
     enrollment in Medicare Savings Programs and low-income 
     subsidy programs under section 1860D-14 of such Act (42 
     U.S.C. 1395w-114). Such projects may include cooperative 
     grants and contracts with community groups and other groups 
     (such as the Department of Veterans' Affairs and the Indian 
     Health Service) to assist in the enrollment of eligible 
     individuals.
       (d) Reports.--The Secretary of Health and Human Services 
     shall submit to Congress periodic reports on the projects 
     conducted under this section. Such reports shall include such 
     recommendations for extension of such projects, and changes 
     in laws based on such projects, as the Secretary deems 
     appropriate.

     SEC. 8. NOTICES TO CERTAIN NEW MEDICARE BENEFICIARIES.

       (a) SSA Notice.--
       (1) In general.--At the time that the Commissioner of 
     Social Security sends a notice to individuals that they have 
     been determined to be eligible for benefits under part A or B 
     of title XVIII of the Social Security Act (42 U.S.C. 1395 et 
     seq., 1395j et seq.), the Commissioner shall send a notice 
     and application for benefits under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) to those individuals 
     the Commissioner identifies as being likely to be--
       (A) a qualified medicare beneficiary (as defined in 
     1905(p)(1) of the Social Security Act (42 U.S.C. 
     1396d(p)(1)));
       (B) eligible for benefits under clause (i), (ii), or (iii) 
     of section 1902(a)(10)(E) of such Act (42 U.S.C. 
     1396a(a)(10)(E)); or
       (C) entitled to a premium or cost-sharing subsidy under 
     section 1860D-14 of such Act (42 U.S.C. 1395w-114).
       (2) Additional information required.--Such notice and 
     application shall be accompanied by information on how to 
     submit such an application and where to obtain more 
     information (including answers to questions) on the 
     application process.
       (b) Including Information in Medicare & You Handbook.--The 
     Secretary of Health and Human Services shall include in the 
     annual handbook distributed under section 1804(a) of the 
     Social Security Act (42 U.S.C. 1395b-2(a)) information on the 
     availability of Medicare Savings Programs and a toll-free 
     telephone number that medicare beneficiaries may use to 
     obtain additional information about the program.

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