[Congressional Record Volume 152, Number 28 (Tuesday, March 7, 2006)]
[Senate]
[Pages S1835-S1844]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. BURR:
S. 2379. A bill to amend the Internal Revenue Code of 1986 to allow a
deduction for health and long-term care insurance costs of individual
not participating in employer-subsidized health plans; to the Committee
on Finance.
Mr. BURR. Mr. President, I rise today to introduce legislation that
would provide an above-the-line tax deduction for individuals who
purchase their own health insurance and are not receiving it through
their employer. An above-the-line tax deduction would allow a taxpayer
to take the deduction even if they don't itemize their taxes. Current
law allows those individuals who are self-employed and purchase health
insurance to take an above-the-line tax deduction. My legislation would
make the tax code fairer by allowing those people who are not self-
employed to take the same deduction.
An estimated 17.4 million Americans in 2005 were covered by
individually purchased health insurance policies. Some of these people
are self-employed and can currently take this deduction. However, based
upon these statistics, I estimate that up to 2 million families who
have purchased health insurance do not have access to this deduction.
My legislation seeks to correct that. Additionally, the legislation
will make it cheaper for uninsured people to purchase their own health
insurance policies. Health care costs in general are expected to rise
7.2 percent per year for the next ten years, so it is important for
Congress to pursue steps to attempt to rein in this inflation and also
to try to make health care and health insurance more accessible and
affordable. This legislation is a part of those efforts.
Another important aspect of the legislation is that it would also
allow individuals to take an above-the-line deduction for the purchase
of long-term-care insurance. Most employers do not offer any subsidized
long-term-care insurance to their employees, so those who need this
protection often have to purchase it in the individual market. It is
very important for Americans to purchase this insurance, since many
people assume that Medicare covers long-term-care costs when people
turn age 65. However, this is not true. Often, seniors will find
themselves on Medicaid, the low-income federal health care program,
when they have long stays in nursing homes that they cannot pay for.
Long-term-care insurance is a far better alternative to having seniors
go onto Medicaid. It is important for Congress to incentivize people to
purchase this insurance, and my legislation is a step in the right
direction.
I want to urge my colleagues to look at this legislation. It is short
and to the point, but helping people to have private health insurance
and long-term-care insurance is an important part of improving our
health care system.
______
By Mr. DODD:
S. 2380. A bill to add the heads of certain Federal intelligence
agencies to the Committee on Foreign Investment in the United States,
to require enhanced notification to Congress and for other purposes; to
the Committee on Banking, Housing, and Urban Affairs.
Mr. DODD. Mr. President, today I have introduced a bill entitled the
U.S. National Security Protection Act of 2006. This legislation would
enact some critical reforms with respect to the Committee on Foreign
Investment in the United States, CFIUS. I look forward to working with
my colleagues in the coming days on this bill.
One thing is clear. The importance of reforming CFIUS has been
brought into sharp focus by the proposed acquisition of P&O Steamship
Navigation Company's U.S. port operations by Dubai Ports, DP, World, a
company based in Dubai in the United Arab Emirates, UAE. The reason so
many people are concerned about that particular deal is obvious: while
security threats are dynamic, assets such as our ports are, and always
will be, a national security concern.
CFIUS's role is to vet these deals for possible national security
dangers. But the problem here is that the CFIUS process is broken.
Indeed, the DP World deal was approved in less than 30
[[Page S1836]]
days--even though U.S. law clearly required there to be a full 45-day
investigation.
Many of us here in Congress have for a while now expressed concerns
over whether the current CFIUS structure is adequately protecting our
national security. The GAO also expressed these concerns in a report it
released last September. So again, it's not like the cat has suddenly
been let out of the bag that the CFIUS process needs reform.
Yet despite all the evidence to the contrary--most prominently, the
DP World-P&O deal--the administration does not seem to believe that
there is anything wrong with the CFIUS process.
The bill I introduced today--the National Security Protection Act of
2006--goes to the heart of three very simple principles. First, since
CFIUS is set up to protect our national security, the intelligence
community--whose fundamental purpose is to promote national security--
needs to have a formal and expanded role in CFIUS. Second,
accountability and transparency need to be made a permanent part of the
CFIUS process. And third, when critical U.S. infrastructure might be
acquired by a foreign government-controlled entity, CFIUS must perform
a full 45 day investigation--no exceptions.
My bill would address these issues by doing the following: First, it
would add the Director of National Intelligence, DNI, and Director of
the CIA, DCI, to the CFIUS panel.
Second, it would create a CFIUS Subcommittee on Intelligence whose
members would represent the heads of all of the intelligence agencies
of the U.S. government. That subcommittee, chaired by the Director of
National Intelligence, would review and provide comments on matters to
come before CFIUS--including comments on 30 day reviews which do not
result in 45 day investigations and comments on the results of 45 day
investigations. This subcommittee would also conduct 15 day initial
reviews of all cases filed with CFIUS.
Some might ask why the DNI would need to serve on both the full CFIUS
panel and on the subcommittee. The reasoning behind this is simple--the
DNI has two important roles in the process. On the full committee, the
DNI should fill a role of providing policy advice from the perspective
of the intelligence community. On the subcommittee level, the DNI
should oversee the collection, analysis, and reporting on specific,
case-related intelligence that is vital to the CFIUS process.
Third, the National Security Protection Act would create two Vice
Chair positions on the full CFIUS panel, to be filled by the
Secretaries of Defense and Homeland Security. That will help to ensure
that economic, intelligence, and security matters are given appropriate
weight in the decision making process. Economic interests, while
important, must never come ahead of the protection of our national
security.
Fourth, this legislation would mandate that only the CFIUS chair,
with the concurrence of the two Vice Chairs, or the President acting on
his own authority, can sign off on a 30-day review which concludes that
a potential deal poses no security threat. In addition, it would
require that this determination be made in writing with the appropriate
signatures, and mandate that the CFIUS Chair and Vice Chairs who make
such a determination be at the level of Secretary so that this
responsibility is not delegated to subordinates. Furthermore, if either
of the Vice Chairs dissent with respect to the decision to not conduct
a 45-day investigation, my bill would mandate that the matter be sent
to the President for a final determination.
Fifth, my bill would require the President or CFIUS to notify
Congress not later than 15 days after paperwork is submitted by
companies for CFIUS review, and not later than 15 days after the
commencement of all 30-day reviews and 45-day investigations.
Sixth, this bill would also require the President to provide
quarterly reports to Congress detailing all 30- and 50-day actions.
These reports would include the intelligence subcommittee's comments on
each case, and they would be submitted in unclassified form with a
classified annex.
Seventh, for any transaction where a foreign-owned company is seeking
to acquire U.S. critical infrastructure, this bill would mandate that
the company provide the appropriate notification to CFIUS of the
proposed transaction as well as the required information for CFIUS to
examine the case. Currently that process is voluntary and it shouldn't
be.
Eighth and finally, the National Security Protection Act would amend
existing U.S. law, which governs under what conditions the President
must conduct a full 45-day investigation. Currently, U.S. law requires
a full investigation if ``an entity controlled by or acting on behalf
of a foreign government'' attempts to acquire a U.S. entity engaged in
interstate commerce that could affect U.S. national security. My bill
would clarify this provision by requiring a 45-day investigation
whenever the U.S. entity to be acquired controls, owns, or operates
critical infrastructure in the U.S.
I don't want anyone to misinterpret what I am saying here. Foreign
investment in the U.S. economy provides an important influx of capital.
In today's globalized world, we would do tremendous damage to our
economy by cutting off foreign investment. And I do not think anyone
here is talking about that.
Just to provide some reference, according to the Commerce Department,
in 2004, foreigners invested $113 billion in U.S. businesses and real
estate. But that amount is only about half as much as U.S. firms
invested abroad. So while we rightly have concerns about outsourcing
and enforcement of fair trade practices, the U.S. obviously gets
significant benefits from participating in the global economy.
But supporting free and fair trade, and working to protect the
national interest, are not mutually exclusive. Because we are not just
working to protect the American worker, we are also trying to protect
his or her family, and the generations to come.
Simply put, national security should never be subordinated to
commercial interests.
Some would suggest that this is an issue of race-baiting, ill will,
or bias toward the Arab world. Let me be clear on that point. Nothing
we say with respect to DP World or the situation in the UAE--or any
other potential deal--should be construed as such.
To that end, I wholly reject the views of those who suggest that our
concern with the DP World acquisition, and with other foreign
government acquisitions of U.S. critical infrastructure, is somehow
rooted in a xenophobic ideology.
Rather, when it comes to international business, there are two main
issues that I think we as Americans are concerned with. One is the
protection of the U.S. economy, our industrial base, and American
workers. The other is the safeguarding of our national security. With
respect to the DP World-P&O deal, we're mainly talking about that
second issue.
According to United Press International, UPI, operations at up to 22
U.S. ports would come under the control of DP World if it is allowed to
acquire P&O's U.S. port operations. This includes critical ports in New
York, New Jersey, Baltimore, Miami, New Orleans, Mississippi, and
Texas. And it reportedly includes two ports in Texas used by the Army,
and through which approximately 40 percent of equipment shipped to our
troops in Iraq has flowed.
Yet, CFIUS decided in less than 30 days that this deal did not pose a
security threat to the U.S. There was no full and thorough 45 day
investigation, which in my view was mandated by law. Indeed, the Byrd
Amendment to Exon-Florio requires a full 45 day investigation if two
conditions are met: first, that the acquirer is controlled or acting on
behalf of a foreign government; and second, if the acquisition could
affect U.S. national security. Both of these conditions are clearly met
in this case.
There also appears to have been no consultation with Members of
Congress on the DP World issue. In October, Deputy Treasury Secretary
Kimmitt testified that he and his agency support more effective
communication with Members of Congress to enhance the transparency of
CFIUS. I ask where that communication was with respect to DP World.
Certainly, I understand the desire for protecting privacy, but that
does not
[[Page S1837]]
excuse the lack of any real consultation with Congress and the
resulting lack of transparency. This is an issue of checks and
balances, which exist to protect Americans. And the protection of
Americans must never be subordinated to foreign interests.
But there are other problems with CFIUS that have become apparent
through the DP World case. Indeed, we recently learned that neither
Secretary Snow nor President Bush knew about the DP World acquisition.
Not even Secretary Snow's deputy knew about the matter while it was
undergoing the initial 30 day review.
Now, given Secretary Snow's history with CSX, whose port operations
were acquired by DP World in 2004, his lack of involvement was the
right thing. I only wish that it had been intentional.
And when it comes to the President, I would simply ask this question:
When operations at 22 critical U.S. ports are to be sold to a company
controlled and owned by a foreign government, one with a questionable
security history with respect to terrorism and WMD proliferation, why
wasn't the President made aware of the deal?
In a March 1 New York Times article, the President was quoted as
saying that ``If there was any doubt in my mind, or people in my
Administration's mind, that our ports would be less secure or the
American people endangered, this deal wouldn't go forward.''
I frankly have no idea how the President could reach this conclusion.
There has been no thorough investigation, as required by law. The
President did not even apparently know about the DP World deal until
very recently. It is precisely this kind of superficial determination
that has the American people so worried about their security--and
rightly so.
If all of this is not evidence of a broken CFIUS process, then I do
not know what is.
I know that some people would argue that the issue is not CFIUS--that
the real issue is having adequate measures to protect our ports.
Frankly, I think that both of these are major Issues.
And if we look at the pathetic security situation at our Nation's
ports today, that becomes quite clear. Only about 5 percent of the
cargo that comes through our ports is actually inspected. Indeed, the
resources available to the Department of Homeland Security to undertake
port and container security are woefully inadequate. According to
reports, U.S. Customs has only 80 inspectors to monitor the compliance
of nearly 6,000 importers, who are currently charged with maintaining
the security of their goods during transit. The Coast Guard is even
worse off with 20 inspectors dedicated to assessing worldwide
compliance with relevant international shipping and port facility
security codes. That's 100 people for the whole world. And it is a
problem that needs to be fixed.
But CFIUS reform is an indispensable part of the process of
strengthening U.S. national security. Indeed, the current problems are
evident in other cases besides DP World. Most recently we learned about
another deal with a Dubai-based company. That company, Dubai
International Capital is seeking, as part of a $1.2 billion deal, to
acquire London-based Doncasters Group Ltd. Doncasters has operations in
the U.S.--primarily in my home state of Connecticut and in Georgia.
True, in this case, CFIUS has decided to perform the full 45-day
investigation. I'm glad that they have, because Doncasters is involved
in the production of components for some of our most critical military
equipment, including the M1 Abrams tank.
But while I'd like to think that the Doncasters investigation was
begun on its own merits, I must admit that I find the timing of this
investigation highly suspect. In fact, it appears that this
investigation was not even launched until the DP World issue became
public and stirred up some very legitimate concerns.
So as we can see, it is critically important that we reform the CFIUS
process. We can not afford to sit and wait on this. The U.S. National
Security Protection Act of 2006 would significantly strengthen CFIUS
and thus our national security. I urge my colleagues to support this
bill.
I ask unanimous consent that the text of my bill, the U.S. National
Security Act of 2006, be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 2380
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``U.S. National Security
Protection Act of 2006''.
SEC. 2. DEFINITIONS.
As used in this Act--
(1) the term ``Committee on Foreign Investment in the
United States'' or ``CFIUS'' means the committee established
by the President under Executive Order 11858, May 7, 1975,
and any successor thereto; and
(2) the term ``intelligence community'' has the same
meaning as in section 3(4) of the National Security Act of
1947 (50 U.S.C. 401a(4)).
SEC. 3. COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES.
(a) CFIUS Membership.--
(1) Directors of national intelligence and central
intelligence.--Notwithstanding any other provision of law,
the Director of National Intelligence and the Director of
Central Intelligence shall be members of the Committee on
Foreign Investment in the United States.
(2) Vice chairs.--The Secretary of Homeland Security and
the Secretary of Defense shall serve as vice chairs of the
Committee on Foreign Investment in the United States.
(b) Subcommittee on Intelligence.--Not later than 30 days
after the date of enactment of this Act, the President shall
establish within the Committee on Foreign Investment in the
United States a Subcommittee on Intelligence, which shall
be--
(1) chaired by the Director of National Intelligence; and
(2) comprised of the head of each member of the
intelligence community.
SEC. 4. SUBCOMMITTEE REVIEW OF CFIUS INVESTIGATIONS.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by adding at the end the
following:
``(l) Intelligence Subcommittee Reviews of
Investigations.--
``(1) Pre-investigation review and comment.--The
Subcommittee on Intelligence of the Committee on Foreign
Investment in the United States shall--
``(A) review information relating to a proposed merger,
acquisition, or takeover, during the 15-day period following
the date of receipt of such information, and before the
commencement of any investigation under subsection (a) or
(b); and
``(B) provide written comments on any determination by the
President or CFIUS not to conduct an investigation under
subsection (a).
``(2) Post-investigation review and comment.--The
Subcommittee on Intelligence of the Committee on Foreign
Investment in the United States shall--
``(A) review each investigation conducted by the President
or CFIUS under subsections (a) and (b); and
``(B) provide written comments on the results of each such
investigation.''.
SEC. 5. TREATMENT OF CRITICAL INFRASTRUCTURE AS AFFECTING
NATIONAL SECURITY.
Section 721(b) of the Defense Production Act of 1950 (50
U.S.C. App. 2170(b)) is amended by inserting after ``commerce
in the United States'' the following: ``, including any
person that owns, controls, or operates any critical
infrastructure, as defined in section 1016(e) of the USA
PATRIOT Act (42 U.S.C. 5195c(e)),''.
SEC. 6. CERTIFICATION OF NATIONAL SECURITY DETERMINATIONS.
``(m) Presidential or Chair Certification of Threat
Determinations.--
``(1) In general.--Notwithstanding any other provision of
law, a final determination that an investigation under
subsection (a) is not required with respect to a merger,
acquisition, or takeover may be made only--
``(A) by the President, in any case in which the President
is acting on the President's own behalf under subsection (a);
or
``(B) by the Secretary of the Treasury, with the
concurrence of the Secretary of Homeland Security and the
Secretary of Defense, in their respective capacities as chair
and vice chairs of CFIUS, in any case in which CFIUS is
acting as the President's designee under subsection (a).
``(2) Certifications required.--
``(A) Presidential determinations.--In any instance in
which the President is acting on his or her own behalf under
subsection (a), the President shall certify in writing to a
final determination that an investigation under subsection
(a) is not required with respect to a merger, acquisition, or
takeover, and such certification requirement may not be
delegated to any person.
``(B) CFIUS determinations.--In any instance in which CFIUS
is acting as the President's designee under subsection (a),
the Secretary of the Treasury, the Secretary of Homeland
Security, and the Secretary of Defense shall each certify in
writing to a final determination that an investigation under
subsection (a) is not required with respect to a merger,
acquisition, or takeover, and such certification requirement
may not be delegated to any person.
``(3) Nonconcurrence.--If there is not concurrence among
the chair and vice chairs of CFIUS for purposes of paragraph
(1)(B), the President shall make the final determination that
an investigation under subsection
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(a) is not required with respect to a merger, acquisition, or
takeover, and the President shall certify such determination
in writing.''.
SEC. 7. MANDATORY SUBMISSION OF INFORMATION.
Section 721(c) of the Defense Production Act of 1950 (50
U.S.C. App. 2170(c)) is amended--
(1) in the subsection heading, by striking
``Confidentiality of'' and inserting ``Submission of'';
(2) by striking ``Any information or documentary material
filed'' and inserting the following:
``(1) Required submissions.--Each person controlled by or
acting on behalf of a foreign government or foreign person
shall--
``(A) notify the President or the President's designee in
writing of any proposed merger, acquisition, or takeover of
any United States critical infrastructure (as defined in
section 1016(e) of the USA PATRIOT Act (42 U.S.C. 5195c(e)))
; and
``(B) provide such information to the President or the
President's designee with respect to such proposed
transaction as may be necessary for purposes of this section.
``(2) Confidentiality of information.--Any information or
documentary material filed, either voluntarily or under
paragraph (1),''.
SEC. 8. NOTICES OF REVIEWS AND INVESTIGATIONS AND QUARTERLY
REPORTS REQUIRED.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by adding at the end the
following:
``(n) Notices of Reviews and Investigations and Quarterly
Reports to Congress.--
``(1) Notices to congress.--The President or the
President's designee shall notify the appropriate committees
of Congress--
``(A) not later than 15 days after the date of receipt of
written notification of a proposed or pending merger,
acquisition, or takeover described in subsection (a) or (b);
and
``(B) at the commencement of each investigation under
subsection (a) or (b).
``(2) Quarterly reports to congress.--
``(A) In general.--The President shall, on a quarterly
basis, submit to Congress a report on all mergers,
acquisitions, and takeovers that were the subject of
investigation or review under this section during the
quarter, including any comments submitted under subsection
(l)(2).
``(B) Form.--Each report required under subparagraph (A)
may be submitted in unclassified form, and may contain a
classified annex.''.
SEC. 9. CFIUS AS PRESIDENT'S DESIGNEE UNDER DEFENSE
PRODUCTION ACT.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by adding at the end the
following:
``(o) Designee.--Notwithstanding any other provision of
law, the President's designee for purposes of this section
shall be the Committee on Foreign Investment in the United
States, established by order of the President in Executive
Order 11858, May 7, 1975 (in this section referred to as
`CFIUS'), or any successor thereto.''.
______
By Mr. FRIST (for himself, Mr. McConnell, Mr. McCain, Mr. Kerry,
Mr. Sessions, Mr. Allen, Mr. Bunning, Mr. Alexander, Mr.
Talent, Mr. DeMint, Mr. Graham, Mr. Kyl, Mr. Allard, Mrs. Dole,
Mr. Enzi, Mr. Brownback, Mr. Isakson, Mr. Burr, Mr. Chambliss,
Mr. Chafee, Mr. Santorum, Mr. Thune, Mr. Gregg, Mr. Sununu, Mr.
Vitter, Mr. Martinez, Mr. Crapo, and Mr. Thomas):
S. 2381. A bill to amend the Congressional Budget and Impoundment
Control Act of 1974 to provide line item rescission authority; to the
Committee on the Budget.
Mr. FRIST. Mr. President, I rise to introduce the Legislative Line
Item Veto Act of 2006. I am proud to say there are over 20 Senators who
have joined me as original cosponsors of this legislation, including
our colleague from Massachusetts, Senator Kerry. I wish to thank
Senator Kerry for his support, and for the support of all of the other
original cosponsors who have joined me on this significant legislative
reform proposal.
The legislation itself is long overdue. It is an authority provided
in one version or another to 43 Governors today. It is an authority
that has been requested by at least 11 Presidents, including Franklin
Roosevelt, Harry Truman, Dwight Eisenhower, Ronald Reagan, and Bill
Clinton.
The Legislative Line Item Veto Act of 2006, first outlined by
President Bush yesterday, when enacted will provide the President and
the Congress with a tool to surgically remove specific spending and
targeted tax benefits from broader enacted legislation. Unlike the line
item veto legislation that the Supreme Court ruled unconstitutional in
1998, this is clearly constitutional.
The legislation builds upon current Presidential rescission
authorities changing the current process to require Congress to act,
one way or the other, on the President's proposed removal of items in
enacted law. This new procedure guarantees an up-or-down vote on the
President's proposed rescissions, without amendments.
I was trying to think how to describe this procedure when people ask,
and one might think of it as similar to the Armed Forces BRAC
Commission process. I am really talking about the approach, the
procedure itself. By that, I mean that the President proposes and the
Congress, under expedited procedures, within 10 days, approves or
disapproves of the legislation that rescinds spending, including both
appropriation items or entitlement spending. The one spending program
which would be exempt from this process is Social Security.
The legislation is balanced in that it would also allow the President
to eliminate revenue-losing provisions that provide Federal tax
benefits to 100 or fewer beneficiaries or provide temporary or
transitional relief to 10 or fewer beneficiaries.
I am encouraged by the broad bipartisan support for this reform
legislation. I hope this Congress will act on the bill to provide us
another tool to control unnecessary and wasteful spending in tax
expenditures. It is just good government.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. --
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Legislative Line Item Veto
Act of 2006''.
SEC. 2. LEGISLATIVE LINE ITEM VETO.
(a) In General.--Title X of the Congressional Budget and
Impoundment Control Act of 1974 (2 U.S.C. 621 et seq.) is
amended by striking part C and inserting the following:
``Part C--Legislative Line Item Veto
``EXPEDITED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS
``Sec. 1021. (a) Proposed Rescissions.--The President may
propose, at the time and in the manner provided in subsection
(b), the rescission of any dollar amount of discretionary
budget authority or the rescission, in whole or in part, of
any item of direct spending.
`` (b) Transmittal of Special Message.--
``(1) Special message.--
``(A) In general.--The President may transmit to Congress a
special message proposing to rescind any dollar amount of
discretionary budget authority or any item of direct
spending.
``(B) Contents of special message.--Each special message
shall specify, with respect to the budget authority or item
of direct spending proposed to be rescinded--
``(i) the amount of budget authority or the specific item
of direct spending that the President proposes be rescinded;
``(ii) any account, department, or establishment of the
Government to which such budget authority or item of direct
spending is available for obligation, and the specific
project or governmental functions involved;
``(iii) the reasons why such budget authority or item of
direct spending should be rescinded;
``(iv) to the maximum extent practicable, the estimated
fiscal, economic, and budgetary effect (including the effect
on outlays and receipts in each fiscal year) of the proposed
rescission;
``(v) to the maximum extent practicable, all facts,
circumstances, and considerations relating to or bearing upon
the proposed rescission and the decision to effect the
proposed rescission, and the estimated effect of the proposed
rescission upon the objects, purposes, and programs for which
the budget authority or item of direct spending is provided;
and
``(vi) a draft bill that, if enacted, would rescind the
budget authority or item of direct spending proposed to be
rescinded in that special message.
``(2) Enactment of rescission bill.--
``(A) Deficit reduction.--Amounts of budget authority or
items of direct spending which are rescinded pursuant to
enactment of a bill as provided under this section shall be
dedicated only to deficit reduction and shall not be used as
an offset for other spending increases.
``(B) Adjustment of committee allocations.--Not later than
5 days after the date of enactment of a rescission bill as
provided under this section, the chairs of the Committees on
the Budget of the Senate and the House of Representatives
shall revise levels under section 311(a) of the Congressional
Budget Act of 1974 and adjust the committee allocations under
section 302(a) of the Congressional Budget Act of 1974 to
reflect the
[[Page S1839]]
rescission, and the appropriate committees shall report
revised allocations pursuant to section 302(b) of the
Congressional Budget Act of 1974, as appropriate.
``(C) Adjustments to caps.--After enactment of a rescission
bill as provided under this section, the Office of Management
and Budget shall revise applicable limits under the Balanced
Budget and Emergency Deficit Control Act of 1985, as
appropriate.
``(c) Procedures for Expedited Consideration.--
``(1) In general.--
``(A) Introduction.--Before the close of the second day of
session of the Senate and the House of Representatives,
respectively, after the date of receipt of a special message
transmitted to Congress under subsection (b), the majority
leader or minority leader of each House shall introduce (by
request) a bill to rescind the amounts of budget authority or
items of direct spending, as specified in the special message
and the President's draft bill. If the bill is not introduced
as provided in the preceding sentence in either House, then,
on the third day of session of that House after the date of
receipt of that special message, any Member of that House may
introduce the bill.
``(B) Referral and reporting.--The bill shall be referred
to the appropriate committee. The committee shall report the
bill without substantive revision and with or without
recommendation. The committee shall report the bill not later
than the fifth day of session of that House after the date of
introduction of the bill in that House. If the committee
fails to report the bill within that period, the committee
shall be automatically discharged from consideration of the
bill, and the bill shall be placed on the appropriate
calendar.
``(C) Final passage.--A vote on final passage of the bill
shall be taken in the Senate and the House of Representatives
on or before the close of the 10th day of session of that
House after the date of the introduction of the bill in that
House. If the bill is passed, the Secretary of the Senate or
the Clerk of the House of Representatives, as the case may
be, shall cause the bill to be transmitted to the other House
before the close of the next day of session of that House.
``(2) Consideration in the house of representatives.--
``(A) Motion to proceed to consideration.--A motion in the
House of Representatives to proceed to the consideration of a
bill under this subsection shall be highly privileged and not
debatable. An amendment to the motion shall not be in order,
nor shall it be in order to move to reconsider the vote by
which the motion is agreed to or disagreed to.
``(B) Limits on debate.--Debate in the House of
Representatives on a bill under this subsection shall not
exceed 4 hours, which shall be divided equally between those
favoring and those opposing the bill. A motion further to
limit debate shall not be debatable. It shall not be in order
to move to recommit a bill under this subsection or to move
to reconsider the vote by which the bill is agreed to or
disagreed to.
``(C) Appeals.--Appeals from decisions of the Chair
relating to the application of the Rules of the House of
Representatives to the procedure relating to a bill under
this section shall be decided without debate.
``(D) Application of house rules.--Except to the extent
specifically provided in this section, consideration of a
bill under this section shall be governed by the Rules of the
House of Representatives. It shall not be in order in the
House of Representatives to consider any bill introduced
pursuant to the provisions of this section under a suspension
of the rules or under a special rule.
``(3) Consideration in the senate.--
``(A) Motion to proceed to consideration.--A motion to
proceed to the consideration of a bill under this subsection
in the Senate shall not be debatable. It shall not be in
order to move to reconsider the vote by which the motion to
proceed is agreed to or disagreed to.
``(B) Limits on debate.--Debate in the Senate on a bill
under this subsection, and all debatable motions and appeals
in connection therewith (including debate pursuant to
subparagraph (D)), shall not exceed 10 hours, equally divided
and controlled in the usual form.
``(C) Appeals.--Debate in the Senate on any debatable
motion or appeal in connection with a bill under this
subsection shall be limited to not more than 1 hour, to be
equally divided and controlled in the usual form.
``(D) Motion to limit debate.--A motion in the Senate to
further limit debate on a bill under this subsection is not
debatable.
``(E) Motion to recommit.--A motion to recommit a bill
under this subsection is not in order.
``(F) Consideration of the house bill.--
``(i) In general.--If the Senate has received the House
companion bill to the bill introduced in the Senate prior to
the vote required under paragraph (1)(C), then the Senate may
consider, and the vote under paragraph (1)(C) may occur on,
the House companion bill.
``(ii) Procedure after vote on senate bill.--If the Senate
votes, pursuant to paragraph (1)(C), on the bill introduced
in the Senate, then immediately following that vote, or upon
receipt of the House companion bill, the House bill shall be
deemed to be considered, read the third time, and the vote on
passage of the Senate bill shall be considered to be the vote
on the bill received from the House.
``(d) Amendments and Divisions Prohibited.--No amendment to
a bill considered under this section shall be in order in
either the Senate or the House of Representatives. It shall
not be in order to demand a division of the question in the
House of Representatives (or in a Committee of the Whole). No
motion to suspend the application of this subsection shall be
in order in the House of Representatives, nor shall it be in
order in the House of Representatives to suspend the
application of this subsection by unanimous consent.
``(e) Temporary Presidential Authority to Withhold.--
``(1) In general.--At the same time as the President
transmits to Congress a special message pursuant to
subsection (b), the President may direct that any dollar
amount of discretionary budget authority proposed to be
rescinded in that special message shall not be made available
for obligation for a period not to exceed 180 calendar days
from the date the President transmits the special message to
Congress.
``(2) Early availability.--The President may make any
dollar amount of discretionary budget authority deferred
pursuant to paragraph (1) available at a time earlier than
the time specified by the President if the President
determines that continuation of the deferral would not
further the purposes of this Act.
``(f) Temporary Presidential Authority to Suspend.--
``(1) In general.--At the same time as the President
transmits to Congress a special message pursuant to
subsection (b), the President may suspend the execution of
any item of direct spending proposed to be rescinded in that
special message for a period not to exceed 180 calendar days
from the date the President transmits the special message to
Congress.
``(2) Early availability.--The President may terminate the
suspension of any item of direct spending at a time earlier
than the time specified by the President if the President
determines that continuation of the suspension would not
further the purposes of this Act.
``(g) Definitions.--For purposes of this section--
``(1) the term `appropriation law' means any general or
special appropriation Act, and any Act or joint resolution
making supplemental, deficiency, or continuing
appropriations;
``(2) the term `deferral' has, with respect to any dollar
amount of discretionary budget authority, the same meaning as
the phrase `deferral of budget authority' defined in section
1011(1) in Part B (2 U.S.C. 682(1));
``(3) the term `dollar amount of discretionary budget
authority' means the entire dollar amount of budget authority
and obligation limitations--
``(A) specified in an appropriation law, or the entire
dollar amount of budget authority required to be allocated by
a specific proviso in an appropriation law for which a
specific dollar figure was not included;
``(B) represented separately in any table, chart, or
explanatory text included in the statement of managers or the
governing committee report accompanying such law;
``(C) required to be allocated for a specific program,
project, or activity in a law (other than an appropriation
law) that mandates the expenditure of budget authority from
accounts, programs, projects, or activities for which budget
authority is provided in an appropriation law;
``(D) represented by the product of the estimated
procurement cost and the total quantity of items specified in
an appropriation law or included in the statement of managers
or the governing committee report accompanying such law; or
``(E) represented by the product of the estimated
procurement cost and the total quantity of items required to
be provided in a law (other than an appropriation law) that
mandates the expenditure of budget authority from accounts,
programs, projects, or activities for which dollar amount of
discretionary budget authority is provided in an
appropriation law;
``(4) the terms `rescind' or `rescission' mean to modify or
repeal a provision of law to prevent:
``(A) budget authority from having legal force or effect;
``(B) in the case of entitlement authority, to prevent the
specific legal obligation of the United States from having
legal force or effect; and
``(C) in the case of the food stamp program, to prevent the
specific provision of law that provides such benefit from
having legal force or effect.
``(5) the term `direct spending' means budget authority
provided by law (other than an appropriation law);
entitlement authority; and the food stamp program;
``(6) the term `item of direct spending' means any specific
provision of law enacted after the effective date of the
Legislative Line Item Veto Act of 2006 that is estimated to
result in a change in budget authority or outlays for direct
spending relative to the most recent levels calculated
pursuant to section 257 of the Balanced Budget and Emergency
Deficit Control Act of 1985 and included with a budget
submission under section 1105(a) of title 31, United States
Code, and with respect to estimates made after that budget
submission that are not included with it, estimates
consistent with the economic and technical assumptions
underlying
[[Page S1840]]
the most recently submitted President's budget; and
``(7) the term `suspend the execution' means, with respect
to an item of direct spending or a targeted tax benefit, to
stop for a specified period, in whole or in part, the
carrying into effect of the specific provision of law that
provides such benefit.
``(8)(A) The term `targeted tax benefit' means--
``(i) any revenue-losing provision that provides a Federal
tax deduction, credit, exclusion, or preference to 100 or
fewer beneficiaries under the Internal Revenue Code of 1986
in any fiscal year for which the provision is in effect; and
``(ii) any Federal tax provision that provides temporary or
permanent transitional relief for 10 or fewer beneficiaries
in any fiscal year from a change to the Internal Revenue Code
of 1986.
``(B) A provision shall not be treated as described in
subparagraph (A)(i) if the effect of that provision is that--
``(i) all persons in the same industry or engaged in the
same type of activity receive the same treatment;
``(ii) all persons owning the same type of property, or
issuing the same type of investment, receive the same
treatment; or
``(iii) any difference in the treatment of persons is based
solely on--
``(I) in the case of businesses and associations, the size
or form of the business or association involved;
``(II) in the case of individuals, general demographic
conditions, such as income, marital status, number of
dependents, or tax-return-filing status;
``(III) the amount involved; or
``(IV) a generally-available election under the Internal
Revenue Code of 1986.
``(C) A provision shall not be treated as described in
subparagraph (A)(ii) if--
``(i) it provides for the retention of prior law with
respect to all binding contracts or other legally enforceable
obligations in existence on a date contemporaneous with
congressional action specifying such date; or
``(ii) it is a technical correction to previously enacted
legislation that is estimated to have no revenue effect.
``(D) For purposes of subparagraph (A)--
``(i) all businesses and associations that are members of
the same controlled group of corporations (as defined in
section 1563(a) of the Internal Revenue Code of 1986) shall
be treated as a single beneficiary;
``(ii) all qualified plans of an employer shall be treated
as a single beneficiary;
``(iii) all holders of the same bond issue shall be treated
as a single beneficiary; and
``(iv) if a corporation, partnership, association, trust or
estate is the beneficiary of a provision, the shareholders of
the corporation, the partners of the partnership, the members
of the association, or the beneficiaries of the trust or
estate shall not also be treated as beneficiaries of such
provision.
``(E) For the purpose of this paragraph, the term `revenue-
losing provision' means any provision that results in a
reduction in Federal tax revenues for any one of the two
following periods--
``(i) the first fiscal year for which the provision is
effective; or
``(ii) the period of the 5 fiscal years beginning with the
first fiscal year for which the provision is effective.
``(F) The terms used in this paragraph shall have the same
meaning as those terms have generally in the Internal Revenue
Code of 1986, unless otherwise expressly provided.
``(h) Application to Targeted Tax Benefits.--The President
may propose the repeal of any targeted tax benefit in any
bill that includes such a benefit, under the same conditions,
and subject to the same Congressional consideration, as a
proposal under this section to rescind an item of direct
spending.''.
(b) Exercise of Rulemaking Powers.--Section 904 of the
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is
amended--
(1) in subsection (a), by striking ``and 1017'' and
inserting ``1017, and 1021''; and
(2) in subsection (d), by striking ``section 1017'' and
inserting ``sections 1017 and 1021''.
(c) Clerical Amendments.--(1) Section 1(a) of the
Congressional Budget and Impoundment Control Act of 1974 is
amended by--
(A) striking ``Parts A and B'' before ``title X'' and
inserting ``Parts A, B, and C''; and
(B) striking the last sentence and inserting at the end the
following new sentence: ``Part C of title X also may be cited
as the `Legislative Line Item Veto Act of 2006.' ''
(2) Table of contents.--The table of contents set forth in
section 1(b) of the Congressional Budget and Impoundment
Control Act of 1974 is amended by deleting the contents for
part C of title X and inserting the following:
``PART C--Legislative Line Item Veto
``Sec. 1021. expedited consideration of certain proposed
rescissions.''.
(d) Severability.--If any provision of this Act or the
amendments made by it is held to be unconstitutional, the
remainder of this Act and the amendments made by it shall not
be affected by the holding.
(e) Effective Date.--The amendments made by this Act
shall--
(1) take effect on the date of enactment of this Act; and
(2) apply only to any dollar amount of discretionary budget
authority, item of direct spending, or targeted tax benefit
provided in an Act enacted on or after the date of enactment
of this Act.
Mr. CHAFEE. Mr. President, I join with Senators Frist, McCain, and
others as a cosponsor of legislation to establish a Presidential line
item veto. This is a fiscally prudent measure which could reduce
wasteful spending and bring down our Nation's deficit.
The proposal would give the President the authority to strike
wasteful spending measures from legislation, to ensure that the
American taxpayer is not footing the bill for projects that are not
national priorities. I applaud President Bush for putting forth this
initiative, which would be significant progress in the fight to reduce
nonessential spending.
Throughout our country's history, the line item veto has enjoyed a
long line of bipartisan support, with Presidents such as Ulysses Grant,
Franklin Delano Roosevelt, Ronald Reagan, and Bill Clinton calling for
the authority. Additionally, the power has been given to Governors in
43 of the 50 States.
I am pleased that the proposed legislation would require the
President to send recision proposals back to Congress for final
passage. Not only does this make the legislation consistent with the
Constitution, it also limits the scope of any President's veto
authority, as proposed changes will need congressional approval.
I am heartened to see this call for fiscal responsibility from
President Bush. I have joined as a cosponsor of this legislation
because it will be impossible for us to reduce our national debt and
balance the Federal budget unless we curb wasteful spending. I have
been an advocate for the pay-as-you-go budget rule, which would require
Congress to pay for any new spending or tax cuts, and will continue to
press for its adoption.
Since chronic deficits add to the burden of debt we are bequeathing
to future generations, congressional spending must be reigned in, and I
am pleased to support this proposal which is one tool that can improve
spending discipline in Washington.
______
By Mr. DURBIN (for himself, Mrs. Lincoln, Mr. Reid, Mr. Baucus,
Mr. Kennedy, Mr. Kerry, Mr. Bingaman, Mrs. Boxer, Ms. Cantwell,
Mr. Carper, Mrs. Clinton, Mr. Dodd, Mr. Harkin, Mr. Johnson,
Mr. Kohl, Ms. Landrieu, Mr. Lautenberg, Ms. Mikulski, Mr.
Nelson of Florida, Mr. Pryor, Mr. Menendez, Mr. Rockefeller,
and Mr. Leahy):
S. 2382. A bill to establish a national health program administered
by the Office of Personnel Management to offer health benefits plans to
individuals who are not Federal employees, and for other purposes; to
the Committee on Finance.
Mr. DURBIN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 2382
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Employers Health
Benefits Program Act of 2006''.
SEC. 2. DEFINITIONS.
(a) In General.--In this Act, the terms ``member of
family'', ``health benefits plan'', ``carrier'', ``employee
organizations'', and ``dependent'' have the meanings given
such terms in section 8901 of title 5, United States Code.
(b) Other Terms.--In this Act:
(1) Employee.--The term ``employee'' has the meaning given
such term under section 3(6) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(6)). Such term
shall not include an employee of the Federal Government.
(2) Employer.--The term ``employer'' has the meaning given
such term under section 3(5) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(5)), except that
such term shall include only employers who employed an
average of at least 1 but not more than 100 employees on
business days during the year preceding the date of
application. Such term shall not include the Federal
Government.
(3) Health status-related factor.--The term ``health
status-related factor'' has the meaning given such term in
section 2791(d)(9) of the Public Health Service Act (42
U.S.C. 300gg-91(d)(9)).
(4) Office.--The term ``Office'' means the Office of
Personnel Management.
(5) Participating employer.--The term ``participating
employer'' means an employer that--
[[Page S1841]]
(A) elects to provide health insurance coverage under this
Act to its employees; and
(B) is not offering other comprehensive health insurance
coverage to such employees.
(c) Application of Certain Rules in Determination of
Employer Size.--For purposes of subsection (b)(2):
(1) Application of aggregation rule for employers.--All
persons treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986 shall be treated as 1 employer.
(2) Employers not in existence in preceding year.--In the
case of an employer which was not in existence for the full
year prior to the date on which the employer applies to
participate, the determination of whether such employer meets
the requirements of subsection (b)(2) shall be based on the
average number of employees that it is reasonably expected
such employer will employ on business days in the employer's
first full year.
(3) Predecessors.--Any reference in this subsection to an
employer shall include a reference to any predecessor of such
employer.
(d) Waiver and Continuation of Participation.--
(1) Waiver.--The Office may waive the limitations relating
to the size of an employer which may participate in the
health insurance program established under this Act on a case
by case basis if the Office determines that such employer
makes a compelling case for such a waiver. In making
determinations under this paragraph, the Office may consider
the effects of the employment of temporary and seasonal
workers and other factors.
(2) Continuation of participation.--An employer
participating in the program under this Act that experiences
an increase in the number of employees so that such employer
has in excess of 100 employees, may not be excluded from
participation solely as a result of such increase in
employees.
(e) Treatment of Health Benefits Plan as Group Health
Plan.--A health benefits plan offered under this Act shall be
treated as a group health plan for purposes of applying the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1001 et seq.) except to the extent that a provision of this
Act expressly provides otherwise.
SEC. 3. HEALTH INSURANCE COVERAGE FOR NON-FEDERAL EMPLOYEES.
(a) Administration.--The Office shall administer a health
insurance program for non-Federal employees and employers in
accordance with this Act.
(b) Regulations.--Except as provided under this Act, the
Office shall prescribe regulations to apply the provisions of
chapter 89 of title 5, United States Code, to the greatest
extent practicable to participating carriers, employers, and
employees covered under this Act.
(c) Limitations.--In no event shall the enactment of this
Act result in--
(1) any increase in the level of individual or Federal
Government contributions required under chapter 89 of title
5, United States Code, including copayments or deductibles;
(2) any decrease in the types of benefits offered under
such chapter 89; or
(3) any other change that would adversely affect the
coverage afforded under such chapter 89 to employees and
annuitants and members of family under that chapter.
(d) Enrollment.--The Office shall develop methods to
facilitate enrollment under this Act, including the use of
the Internet.
(e) Contracts for Administration.--The Office may enter
into contracts for the performance of appropriate
administrative functions under this Act.
(f) Separate Risk Pool.--In the administration of this Act,
the Office shall ensure that covered employees under this Act
are in a risk pool that is separate from the risk pool
maintained for covered individuals under chapter 89 of title
5, United States Code.
(g) Rule of Construction.--Nothing in this Act shall be
construed to require a carrier that is participating in the
program under chapter 89 of title 5, United States Code, to
provide health benefits plan coverage under this Act.
SEC. 4. CONTRACT REQUIREMENT.
(a) In General.--The Office may enter into contracts with
qualified carriers offering health benefits plans of the type
described in section 8903 or 8903a of title 5, United States
Code, without regard to section 5 of title 41, United States
Code, or other statutes requiring competitive bidding, to
provide health insurance coverage to employees of
participating employers under this Act. Each contract shall
be for a uniform term of at least 1 year, but may be made
automatically renewable from term to term in the absence of
notice of termination by either party. In entering into such
contracts, the Office shall ensure that health benefits
coverage is provided for individuals only, individuals with
one or more children, married individuals without children,
and married individuals with one or more children.
(b) Eligibility.--A carrier shall be eligible to enter into
a contract under subsection (a) if such carrier--
(1) is licensed to offer health benefits plan coverage in
each State in which the plan is offered; and
(2) meets such other requirements as determined appropriate
by the Office.
(c) Statement of Benefits.--
(1) In general.--Each contract under this Act shall contain
a detailed statement of benefits offered and shall include
information concerning such maximums, limitations,
exclusions, and other definitions of benefits as the Office
considers necessary or desirable.
(2) Ensuring a range of plans.--The Office shall ensure
that a range of health benefits plans are available to
participating employers under this Act, at least one of which
shall be a plan that provides the same benefits as the
government-wide plan available to Federal employees as
described in section 8903(1) of title 5, United States Code.
(3) Participating plans.--The Office shall not prohibit the
offering of any health benefits plan to a participating
employer if such plan is eligible to participate in the
Federal Employees Health Benefits Program.
(4) Nationwide plan.--With respect to all nationwide plans
other than the plan required under paragraph (2), the Office
shall develop a benefit package that shall be offered in the
case of a contract for a health benefit plan that is to be
offered on a nationwide basis.
(d) Standards.--The minimum standards prescribed for health
benefits plans under section 8902(e) of title 5, United
States Code, and for carriers offering plans, shall apply to
plans and carriers under this Act. Approval of a plan may be
withdrawn by the Office only after notice and opportunity for
hearing to the carrier concerned without regard to subchapter
II of chapter 5 and chapter 7 of title 5, United States Code.
(e) Conversion.--
(1) In general.--A contract may not be made or a plan
approved under this section if the carrier under such
contract or plan does not offer to each enrollee whose
enrollment in the plan is ended, except by a cancellation of
enrollment, a temporary extension of coverage during which
the individual may exercise the option to convert, without
evidence of good health, to a nongroup contract providing
health benefits. An enrollee who exercises this option shall
pay the full periodic charges of the nongroup contract.
(2) Noncancellable.--The benefits and coverage made
available under paragraph (1) may not be canceled by the
carrier except for fraud, over-insurance, or nonpayment of
periodic charges.
(f) Requirement of Payment for or Provision of Health
Service.--Each contract entered into under this Act shall
require the carrier to agree to pay for or provide a health
service or supply in an individual case if the Office finds
that the employee, annuitant, family member, former spouse,
or person having continued coverage under section 8905a of
title 5, United States Code, is entitled thereto under the
terms of the contract.
SEC. 5. ELIGIBILITY.
An individual shall be eligible to enroll in a plan under
this Act if such individual--
(1) is an employee of an employer described in section
2(b)(2), or is a self employed individual as defined in
section 401(c)(1)(B) of the Internal Revenue Code of 1986;
and
(2) is not otherwise enrolled or eligible for enrollment in
a plan under chapter 89 of title 5, United States Code.
SEC. 6. ALTERNATIVE CONDITIONS TO FEDERAL EMPLOYEE PLANS.
(a) Treatment of Employee.--For purposes of enrollment in a
health benefits plan under this Act, an individual who had
coverage under a health insurance plan and is not a qualified
beneficiary as defined under section 4980B(g)(1) of the
Internal Revenue Code of 1986 shall be treated in a similar
manner as an individual who begins employment as an employee
under chapter 89 of title 5, United States Code.
(b) Preexisting Condition Exclusions.--
(1) In general.--Each contract under this Act may include a
preexisting condition exclusion as defined under section
9801(b)(1) of the Internal Revenue Code of 1986.
(2) Exclusion period.--A preexisting condition exclusion
under this subsection shall provide for coverage of a
preexisting condition to begin not later than 6 months after
the date on which the coverage of the individual under a
health benefits plan commences, reduced by the aggregate 1
day for each day that the individual was covered under a
health insurance plan immediately preceding the date the
individual submitted an application for coverage under this
Act. This provision shall be applied notwithstanding the
applicable provision for the reduction of the exclusion
period provided for in section 701(a)(3) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1181(a)(3)).
(c) Rates and Premiums.--
(1) In general.--Rates charged and premiums paid for a
health benefits plan under this Act--
(A) shall be determined in accordance with this subsection;
(B) may be annually adjusted subject to paragraph (3);
(C) shall be negotiated in the same manner as rates and
premiums are negotiated under such chapter 89; and
(D) shall be adjusted to cover the administrative costs of
the Office under this Act.
(2) Determinations.--In determining rates and premiums
under this Act, the following provisions shall apply:
(A) In general.--A carrier that enters into a contract
under this Act shall determine that amount of premiums to
assess for coverage under a health benefits plan based on an
community rate that may be annually adjusted--
[[Page S1842]]
(i) for the geographic area involved if the adjustment is
based on geographical divisions that are not smaller than a
metropolitan statistical area and the carrier provides
evidence of geographic variation in cost of services;
(ii) based on whether such coverage is for an individual,
two adults, one adult and one or more children, or a family;
and
(iii) based on the age of covered individuals (subject to
subparagraph (C)).
(B) Limitation.--Premium rates charged for coverage under
this Act shall not vary based on health-status related
factors, gender, class of business, or claims experience.
(C) Age adjustments.--
(i) In general.--With respect to subparagraph (A)(iii), in
making adjustments based on age, the Office shall establish
no more than 5 age brackets to be used by the carrier in
establishing rates. The rates for any age bracket may not
vary by more than 50 percent above or below the community
rate on the basis of attained age. Age-related premiums may
not vary within age brackets.
(ii) Age 65 and older.--With respect to subparagraph
(A)(iii), a carrier may develop separate rates for covered
individuals who are 65 years of age or older for whom
medicare is the primary payor for health benefits coverage
which is not covered under medicare.
``(3) Readjustments.--Any readjustment in rates charged or
premiums paid for a health benefits plan under this Act shall
be made in advance of the contract term in which they will
apply and on a basis which, in the judgment of the Office, is
consistent with the practice of the Office for the Federal
Employees Health Benefits Program.
(d) Termination and Reenrollment.--If an individual who is
enrolled in a health benefits plan under this Act terminates
the enrollment, the individual shall not be eligible for
reenrollment until the first open enrollment period following
the expiration of 6 months after the date of such
termination.
(f) Continued Applicability of State Law.--
(1) Health insurance or plans.--
(A) Local plans.--With respect to a contract entered into
under this Act under which a carrier will offer health
benefits plan coverage in a limited geographic area, State
mandated benefit laws in effect in the State in which the
plan is offered shall continue to apply to such health
benefits plan.
(B) Rating rules.--The rating requirements under
subparagraphs (A) and (B) of subsection (c)(2) shall
supercede State rating rules for qualified plans under this
Act, except with respect to States that provide a rating
variance with respect to age that is less than the Federal
limit or that provide for some form of community rating.
(2) Limitation.--Nothing in this subsection shall be
construed to preempt--
(A) any State or local law or regulation except those laws
and regulations described in subparagraph (B) of paragraph
(1);
(B) any State grievance, claims, and appeals procedure law,
except to the extent that such law is preempted under section
514 of the Employee Retirement Income Security Act of 1974;
and
(B) State network adequacy laws.
(g) Rule of Construction.--Nothing in this Act shall be
construed to limit the application of the service-charge
system used by the Office for determining profits for
participating carriers under chapter 89 of title 5, United
States Code.
SEC. 7. ENCOURAGING PARTICIPATION BY CARRIERS THROUGH
ADJUSTMENTS FOR RISK.
(a) Application of Risk Corridors.--
(1) In general.--This section shall only apply to carriers
with respect to health benefits plans offered under this Act
during any of calendar years 2007 through 2009.
(2) Notification of costs under the plan.--In the case of a
carrier that offers a health benefits plan under this Act in
any of calendar years 2007 through 2009, the carrier shall
notify the Office, before such date in the succeeding year as
the Office specifies, of the total amount of costs incurred
in providing benefits under the health benefits plan for the
year involved and the portion of such costs that is
attributable to administrative expenses.
(3) Allowable costs defined.--For purposes of this section,
the term ``allowable costs'' means, with respect to a health
benefits plan offered by a carrier under this Act, for a
year, the total amount of costs described in paragraph (2)
for the plan and year, reduced by the portion of such costs
attributable to administrative expenses incurred in providing
the benefits described in such paragraph.
(b) Adjustment of Payment.--
(1) No adjustment if allowable costs within 3 percent of
target amount.--If the allowable costs for the carrier with
respect to the health benefits plan involved for a calendar
year are at least 97 percent, but do not exceed 103 percent,
of the target amount for the plan and year involved, there
shall be no payment adjustment under this section for the
plan and year.
(2) Increase in payment if allowable costs above 103
percent of target amount.--
(A) Costs between 103 and 108 percent of target amount.--If
the allowable costs for the carrier with respect to the
health benefits plan involved for the year are greater than
103 percent, but not greater than 108 percent, of the target
amount for the plan and year, the Office shall reimburse the
carrier for such excess costs through payment to the carrier
of an amount equal to 75 percent of the difference between
such allowable costs and 103 percent of such target amount.
(B) Costs above 108 percent of target amount.--If the
allowable costs for the carrier with respect to the health
benefits plan involved for the year are greater than 108
percent of the target amount for the plan and year, the
Office shall reimburse the carrier for such excess costs
through payment to the carrier in an amount equal to the sum
of--
(i) 3.75 percent of such target amount; and
(ii) 90 percent of the difference between such allowable
costs and 108 percent of such target amount.
(3) Reduction in payment if allowable costs below 97
percent of target amount.--
(A) Costs between 92 and 97 percent of target amount.--If
the allowable costs for the carrier with respect to the
health benefits plan involved for the year are less than 97
percent, but greater than or equal to 92 percent, of the
target amount for the plan and year, the carrier shall be
required to pay into the contingency reserve fund maintained
under section 8909(b)(2) of title 5, United States Code, an
amount equal to 75 percent of the difference between 97
percent of the target amount and such allowable costs.
(B) Costs below 92 percent of target amount.--If the
allowable costs for the carrier with respect to the health
benefits plan involved for the year are less than 92 percent
of the target amount for the plan and year, the carrier shall
be required to pay into the stabilization fund under section
8909(b)(2) of title 5, United States Code, an amount equal to
the sum of--
(i) 3.75 percent of such target amount; and
(ii) 90 percent of the difference between 92 percent of
such target amount and such allowable costs.
(4) Target amount described.--
(A) In general.--For purposes of this subsection, the term
``target amount'' means, with respect to a health benefits
plan offered by a carrier under this Act in any of calendar
years 2007 through 2011, an amount equal to--
(i) the total of the monthly premiums estimated by the
carrier and approved by the Office to be paid for enrollees
in the plan under this Act for the calendar year involved;
reduced by
(ii) the amount of administrative expenses that the carrier
estimates, and the Office approves, will be incurred by the
carrier with respect to the plan for such calendar year.
(B) Submission of target amount.--Not later than December
31, 2006, and each December 31 thereafter through calendar
year 2010, a carrier shall submit to the Office a description
of the target amount for such carrier with respect to health
benefits plans provided by the carrier under this Act.
(c) Disclosure of Information.--
(1) In general.--Each contract under this Act shall
provide--
(A) that a carrier offering a health benefits plan under
this Act shall provide the Office with such information as
the Office determines is necessary to carry out this
subsection including the notification of costs under
subsection (a)(2) and the target amount under subsection
(b)(4)(B); and
(B) that the Office has the right to inspect and audit any
books and records of the organization that pertain to the
information regarding costs provided to the Office under such
subsections.
(2) Restriction on use of information.--Information
disclosed or obtained pursuant to the provisions of this
subsection may be used by officers, employees, and
contractors of the Office only for the purposes of, and to
the extent necessary in, carrying out this section.
SEC. 8. ENCOURAGING PARTICIPATION BY CARRIERS THROUGH
REINSURANCE.
(a) Establishment.--The Office shall establish a
reinsurance fund to provide payments to carriers that
experience one or more catastrophic claims during a year for
health benefits provided to individuals enrolled in a health
benefits plan under this Act.
(b) Eligibility for Payments.--To be eligible for a payment
from the reinsurance fund for a plan year, a carrier under
this Act shall submit to the Office an application that
contains--
(1) a certification by the carrier that the carrier paid
for at least one episode of care during the year for covered
health benefits for an individual in an amount that is in
excess of $50,000; and
(2) such other information determined appropriate by the
Office.
(c) Payment.--
(1) In general.--The amount of a payment from the
reinsurance fund to a carrier under this section for a
catastrophic episode of care shall be determined by the
Office but shall not exceed an amount equal to 80 percent of
the applicable catastrophic claim amount.
(2) Applicable catastrophic claim amount.--For purposes of
paragraph (1), the applicable catastrophic episode of care
amount shall be equal to the difference between--
(A) the amount of the catastrophic claim; and
(B) $50,000.
(3) Limitation.--In determining the amount of a payment
under paragraph (1), if the amount of the catastrophic claim
exceeds the amount that would be paid for the healthcare
items or services involved under title XVIII of the Social
Security Act (42
[[Page S1843]]
U.S.C. 1395 et seq.), the Office shall use the amount that
would be paid under such title XVIII for purposes of
paragraph (2)(A).
(d) Definition.--In this section, the term ``catastrophic
claim'' means a claim submitted to a carrier, by or on behalf
of an enrollee in a health benefits plan under this Act, that
is in excess of $50,000.
(e) Termination of Fund.--The reinsurance fund established
under subsection (a) shall terminate on the date that is 2
years after the date on which the first contract period
becomes effective under this Act.
SEC. 9. CONTINGENCY RESERVE FUND.
Beginning on October 1, 2010, the Office may use amounts
appropriated under section 14(a) that remain unobligated to
establish a contingency reserve fund to provide assistance to
carriers offering health benefits plans under this Act that
experience unanticipated financial hardships (as determined
by the Office).
SEC. 10. EMPLOYER PARTICIPATION.
(a) Regulations.--The Office shall prescribe regulations
providing for employer participation under this Act,
including the offering of health benefits plans under this
Act to employees.
(b) Enrollment and Offering of Other Coverage.--
(1) Enrollment.--A participating employer shall ensure that
each eligible employee has an opportunity to enroll in a plan
under this Act.
(2) Prohibition on offering other comprehensive health
benefit coverage.--A participating employer may not offer a
health insurance plan providing comprehensive health benefit
coverage to employees other than a health benefits plan
that--
(A) meets the requirements described in section 4(a); and
(B) is offered only through the enrollment process
established by the Office under section 3.
(3) Offer of supplemental coverage options.--
(A) In general.--A participating employer may offer
supplementary coverage options to employees.
(B) Definition.--In subparagraph (A), the term
``supplementary coverage'' means benefits described as
``excepted benefits'' under section 2791(c) of the Public
Health Service Act (42 U.S.C. 300gg-91(c)).
(c) Rule of Construction.--Except as provided in section
15, nothing in this Act shall be construed to require that an
employer make premium contributions on behalf of employees.
SEC. 11. ADMINISTRATION THROUGH REGIONAL ADMINISTRATIVE
ENTITIES.
(a) In General.--In order to provide for the administration
of the benefits under this Act with maximum efficiency and
convenience for participating employers and health care
providers and other individuals and entities providing
services to such employers, the Office is authorized to enter
into contracts with eligible entities to perform, on a
regional basis, one or more of the following:
(1) Collect and maintain all information relating to
individuals, families, and employers participating in the
program under this Act in the region served.
(2) Receive, disburse, and account for payments of premiums
to participating employers by individuals in the region
served, and for payments by participating employers to
carriers.
(3) Serve as a channel of communication between carriers,
participating employers, and individuals relating to the
administration of this Act.
(4) Otherwise carry out such activities for the
administration of this Act, in such manner, as may be
provided for in the contract entered into under this section.
(5) The processing of grievances and appeals.
(b) Application.--To be eligible to receive a contract
under subsection (a), an entity shall prepare and submit to
the Office an application at such time, in such manner, and
containing such information as the Office may require.
(c) Process.--
(1) Competitive bidding.--All contracts under this section
shall be awarded through a competitive bidding process on a
bi-annual basis.
(2) Requirement.--No contract shall be entered into with
any entity under this section unless the Office finds that
such entity will perform its obligations under the contract
efficiently and effectively and will meet such requirements
as to financial responsibility, legal authority, and other
matters as the Office finds pertinent.
(3) Publication of standards and criteria.--The Office
shall publish in the Federal Register standards and criteria
for the efficient and effective performance of contract
obligations under this section, and opportunity shall be
provided for public comment prior to implementation. In
establishing such standards and criteria, the Office shall
provide for a system to measure an entity's performance of
responsibilities.
(4) Term.--Each contract under this section shall be for a
term of at least 1 year, and may be made automatically
renewable from term to term in the absence of notice by
either party of intention to terminate at the end of the
current term, except that the Office may terminate any such
contract at any time (after such reasonable notice and
opportunity for hearing to the entity involved as the Office
may provide in regulations) if the Office finds that the
entity has failed substantially to carry out the contract or
is carrying out the contract in a manner inconsistent with
the efficient and effective administration of the program
established by this Act.
(d) Terms of Contract.--A contract entered into under this
section shall include--
(1) a description of the duties of the contracting entity;
(2) an assurance that the entity will furnish to the Office
such timely information and reports as the Office determines
appropriate;
(3) an assurance that the entity will maintain such records
and afford such access thereto as the Office finds necessary
to assure the correctness and verification of the information
and reports under paragraph (2) and otherwise to carry out
the purposes of this Act;
(4) an assurance that the entity shall comply with such
confidentiality and privacy protection guidelines and
procedures as the Office may require; and
(5) such other terms and conditions not inconsistent with
this section as the Office may find necessary or appropriate.
SEC. 12. COORDINATION WITH SOCIAL SECURITY BENEFITS.
Benefits under this Act shall, with respect to an
individual who is entitled to benefits under part A of title
XVIII of the Social Security Act, be offered (for use in
coordination with those medicare benefits) to the same extent
and in the same manner as if coverage were under chapter 89
of title 5, United States Code.
SEC. 13. PUBLIC EDUCATION CAMPAIGN.
(a) In General.--In carrying out this Act, the Office shall
develop and implement an educational campaign to provide
information to employers and the general public concerning
the health insurance program developed under this Act.
(b) Annual Progress Reports.--Not later than 1 year and 2
years after the implementation of the campaign under
subsection (a), the Office shall submit to the appropriate
committees of Congress a report that describes the activities
of the Office under subsection (a), including a determination
by the office of the percentage of employers with knowledge
of the health benefits programs provided for under this Act.
(c) Public Education Campaign.--There is authorized to be
appropriated to carry out this section, such sums as may be
necessary for each of fiscal years 2007 and 2008.
SEC. 14. APPROPRIATIONS.
There are authorized to be appropriated to the Office, such
sums as may be necessary in each fiscal year for the
development and administration of the program under this Act.
SEC. 15. REFUNDABLE CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH
INSURANCE EXPENSES.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 36 as
section 37 and inserting after section 35 the following new
section:
``SEC. 36. SMALL BUSINESS EMPLOYEE HEALTH INSURANCE EXPENSES.
``(a) Determination of Amount.--In the case of a qualified
small employer, there shall be allowed as a credit against
the tax imposed by this subtitle for the taxable year an
amount equal to the sum of--
``(1) the expense amount described in subsection (b), and
``(2) the expense amount described in subsection (c), paid
by the taxpayer during the taxable year.
``(b) Subsection (b) Expense Amount.--For purposes of this
section--
``(1) In general.--The expense amount described in this
subsection is the applicable percentage of the amount of
qualified employee health insurance expenses of each
qualified employee.
``(2) Applicable percentage.--For purposes of paragraph
(1)--
``(A) In general.--The applicable percentage is equal to--
``(i) 25 percent in the case of self-only coverage,
``(ii) 35 percent in the case of family coverage (as
defined in section 220(c)(5)), and
``(iii) 30 percent in the case of coverage for two adults
or one adult and one or more children.
``(B) Bonus for payment of greater percentage of
premiums.--The applicable percentage otherwise specified in
subparagraph (A) shall be increased by 5 percentage points
for each additional 10 percent of the qualified employee
health insurance expenses of each qualified employee
exceeding 60 percent which are paid by the qualified small
employer.
``(c) Subsection (c) Expense Amount.--For purposes of this
section--
``(1) In general.--The expense amount described in this
subsection is, with respect to the first credit year of a
qualified small employer which is an eligible employer, 10
percent of the qualified employee health insurance expenses
of each qualified employee.
``(2) First credit year.--For purposes of paragraph (1),
the term `first credit year' means the taxable year which
includes the date that the health insurance coverage to which
the qualified employee health insurance expenses relate
becomes effective.
``(d) Limitation Based on Wages.-- With respect to a
qualified employee whose wages at an annual rate during the
taxable year exceed $25,000, the percentage which would (but
for this section) be taken into account as the percentage for
purposes of subsection (b)(2) or (c)(1) for the taxable year
shall be reduced by an amount equal to the product of such
[[Page S1844]]
percentage and the percentage that such qualified employee's
wages in excess of $25,000 bears to $5,000.
``(e) Definitions.--For purposes of this section--
``(1) Qualified small employer.--The term `qualified small
employer' means any employer (as defined in section 2(b)(2)
of the Small Employers Health Benefits Program Act of 2006)
which--
``(A) is a participating employer (as defined in section
2(b)(5) of such Act),
``(B) pays or incurs at least 60 percent of the qualified
employee health insurance expenses of each qualified employee
for self-only coverage, and
``(C) pays or incurs at least 50 percent of the qualified
employee health insurance expenses of each qualified employee
for all other categories of coverage.
``(2) Qualified employee health insurance expenses.--
``(A) In general.--The term `qualified employee health
insurance expenses' means any amount paid by an employer for
health insurance coverage under such Act to the extent such
amount is attributable to coverage provided to any employee
while such employee is a qualified employee.
``(B) Exception for amounts paid under salary reduction
arrangements.--No amount paid or incurred for health
insurance coverage pursuant to a salary reduction arrangement
shall be taken into account under subparagraph (A).
``(3) Qualified employee.--
``(A) Definition.--
``(i) In general.--The term `qualified employee' means,
with respect to any period, an employee (as defined in
section 2(b)(1) of such Act) of an employer if the total
amount of wages paid or incurred by such employer to such
employee at an annual rate during the taxable year exceeds
$5,000 but does not exceed $30,000.
``(ii) Annual adjustment.--For each taxable year after
2007, the dollar amounts specified for the preceding taxable
year (after the application of this subparagraph) shall be
increased by the same percentage as the average percentage
increase in premiums under the Federal Employees Health
Benefits Program under chapter 89 of title 5, United States
Code for the calendar year in which such taxable year begins
over the preceding calendar year.
``(B) Wages.--The term `wages' has the meaning given such
term by section 3121(a) (determined without regard to any
dollar limitation contained in such section).
``(f) Certain Rules Made Applicable.--For purposes of this
section, rules similar to the rules of section 52 shall
apply.
``(g) Credits for Nonprofit Organizations.--Any credit
which would be allowable under subsection (a) with respect to
a qualified small business if such qualified small business
were not exempt from tax under this chapter shall be treated
as a credit allowable under this subpart to such qualified
small business.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 36 of such Code''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by striking the last item and inserting the
following new items:
``Sec. 36. Small business employee health insurance expenses
``Sec. 37. Overpayments of tax''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2006.
SEC. 16. EFFECTIVE DATE.
Except as provided in section 10(e), this Act shall take
effect on the date of enactment of this Act and shall apply
to contracts that take effect with respect to calendar year
2007 and each calendar year thereafter.
____________________