[Congressional Record Volume 155, Number 16 (Tuesday, January 27, 2009)]
[Senate]
[Pages S867-S881]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION ACT OF 2009--
                               Continued

  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. BROWN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BROWN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Ohio is recognized.
  Mr. BROWN. Mr. President, today with the advent of the 111th 
Congress, the Senate is considering legislation to renew and expand the 
Children's Health Insurance Program, sending a clear and definitive 
message that this country will no longer turn its back on our 9 million 
uninsured children.
  When we pass this bill, we will make it clear that the health and 
well-being of our children--in bad economic times or, in the future, in 
good economic times--the well-being and health of our children comes 
first.
  After 2 long years and repeated vetoes from former President Bush, 
this legislation finally has a chance of becoming law, thanks to the 
support of a new President who is committed to reforming our Nation's 
health care system.
  It is my sincere hope that the passage of this legislation will be 
the beginning--the beginning--of a major overhaul of American health 
care, which ultimately will provide all Americans with the quality, 
affordable health care coverage we all deserve as Americans.
  The Children's Health Insurance Program is a success story. It was 
created about 13 years ago, in 1996, to provide health coverage to 
children who would otherwise not be insured. The program provides 
health insurance to low-income families who do not qualify for Medicaid 
but who are unable to afford private coverage, to reduce the number of 
uninsured children in working families--underscore that, Mr. President: 
in working families--by about one-third.
  Despite its huge successes, there is room for improvement. Sadly, 
millions of American children remain without health insurance, even 
though the law states they are eligible for it.
  Today, we have an opportunity to take decisive action to bridge that 
gap and to reach children who need this coverage desperately but who 
are not receiving it. The legislation before us today would provide 
coverage to an additional 4.1 million uninsured low-income children. It 
would improve access to dental coverage. It would improve the public 
health by enabling legal--legal--immigrant children to receive care in 
doctors' offices rather than taking them to more high-cost, less 
primary care, emergency rooms.
  If signed into law, S. 275 would have a profound impact on children 
and families nationwide, including in my State of Ohio, including 
Toledo and Akron and Canton and Mansfield and Cincinnati and Bellaire. 
It would provide approximately $294 million to Ohio in fiscal year 
2009, helping my State cover approximately 245,000 uninsured children--
children such as Emily Demko from Athens County.
  Emily was born with Down Syndrome. When her mother Margaret made the 
decision to stay at home to care for Emily, their family found 
themselves without health insurance. The Demkos looked into many 
options, but no private insurer would cover Emily, at any cost, due to 
her genetic, preexisting condition. Luckily, the Demkos found they were 
eligible for Medicaid. However, during their 6-month reauthorization 
meeting, they were informed their income was--get this--$135 per month 
too much to qualify any longer. Mr. President, $135 too much to qualify 
for Medicaid any longer.
  Since Emily's medical bills were in excess of $3,500 a month, the 
Demkos had to make decisions no parent should ever have to make. They 
had to decide what therapies and treatment they could afford for their 
daughter.
  Although they have done their best to manage Emily's medical care, 
being uninsured has left Emily without access to needed hearing tests, 
corrective treatment for an eye condition, and several blood tests to 
scan for conditions likely to occur with Down Syndrome.
  It is for children such as Emily that we must support the 
reauthorization and the expansion of CHIP. Access to health coverage 
will provide Emily and so many others around our great Nation with the 
opportunity to live a healthier, happier, more productive life, 
regardless of their medical condition.
  For the third time in my Senate career, I have come to this floor to 
advocate for the reauthorization and expansion of the Children's Health 
Insurance Program. I did it in the House 13 years ago, when this 
program was first conceived and when we first enacted it.
  For the third time in my Senate career, I have come to the Senate 
floor to speak on behalf of the 9 million children in this country who 
do not qualify for Medicaid but whose families cannot afford health 
insurance.
  For the third time in my Senate career, I have come to this floor to 
cast a vote in favor of legislation which will enable parents to help 
their children when they are ill. In my opinion, there are few 
legislative or ethical priorities more important than that.
  This is the third time I have advocated for CHIP on the Senate floor. 
I believe, I hope, the third time will be the charm.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BROWN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN. Mr. President, there was an amendment offered earlier by 
Senator Hatch with whom I sit on the Health, Education, Labor and 
Pension Committee. Senator Hatch has played a major role in health 
issues in this country and I respect him for that. His amendment, 
however, to this bill is sort of the same old same old. We have seen 
this throughout the Children's Health Insurance Program debate. We saw 
it last year both times when the President vetoed the bill. We saw it 
raised by opponents in the House of Representatives. We saw it raised 
many years ago. When the amendment says States should have to enroll at 
least 90 or 95 percent of their kids under 200 percent of the Federal 
poverty level before they can enroll children at higher income levels, 
it pretty much says no more children in the Children's Health Insurance 
Program. I wish they would simply be more direct saying, We don't want 
more kids in here. Instead, they say if you can't find close to 100 
percent of these children who are eligible--this is a big country, it 
is a complicated country; so many of the people we are trying to insure 
are living economically on the margins. There are two children with a 
single parent who has moved from one job to another. Those children 
often move across town or to another county as their mother or father 
get another job--a job that may pay $20,000 a year and a job without 
health insurance--so the Children's Health Insurance Program is so 
important to them. So when they build in this ``standard'' that 
virtually everybody--95 percent of all children eligible have to be 
enrolled before you can enroll new children who are a little bit better 
off--a little bit better off isn't a family making $100,000 a year; it 
is a family making much less than that without health insurance and 
simply can't afford it. Even mandatory programs we have found around 
the country don't have a 95-percent take-up rate. It is simply 
impossible for Government or for private businesses

[[Page S868]]

or for social services working with Government to get to 100 percent of 
the people who are eligible. So what this does is say no more children 
would enroll.
  We know health insurance is becoming less and less affordable for 
families at every income level. I know what has happened in my State. 
As the Senate majority leader told us earlier today--an hour ago--
85,000 people in this country lost their jobs today. Eighty-five 
thousand people lost their jobs today. In my State, we have lost 
200,000 manufacturing jobs in the last 8 years. It was 200,000 as of 
last October. That number has gone up. We hear about plant layoffs such 
as the third shift at Lordstown in northeast Ohio, a General Motors 
plant that assembles goods. As the Presiding Officer knows from what 
has happened to his plant in Delaware, we know what happens when people 
are laid off from these jobs. They cut off the third shift at 
Lordstown. We are seeing Wilmington, DHL in southwest Ohio, 7,000 jobs 
over a several week period have been terminated in a city of about 
13,000 people. That DHL plant is the largest employer in a six-county 
area, in each of these six counties--in Clinton County, Brown County, 
Adams County, Highland County, and two other counties.
  The point is we don't want with this economic downturn--we don't want 
to turn back the clock. It is the worst possible time to cut back on 
States' tools for helping low-income children. We want these children 
to become insured, not to find ways to deny coverage. The Hatch 
amendment does that. That is why it is so important later today, if and 
when we vote on this amendment.
  Another point. There are about 150,000 children in my State. My State 
has a population of around 11 million. There are about 154,000 of our 
children in my State--enough to fill Ohio State Stadium. The Presiding 
Officer, even though he is from Delaware, is an Ohio State graduate. He 
knows how big that stadium is. It holds more or less 100,000 people in 
one place--Columbus--in the heart of the State. There are 150,000 
children who don't have insurance, enough to fill that stadium one and 
a half times. That number grows. That was sort of yesterday's number. 
That number grows every day. Ohio has already lost 100,000 jobs in this 
recession. If the pace of job loss accelerates this year as expected, 
more and more children will suddenly become uninsured. President Obama 
has already said the 2009 economy is going to be even worse than the 
2008 economy. That is why Senator Inouye and so many others in this 
body, Senator Mikulski and others on the Appropriations Committee, are 
working so hard to put a stimulus package together that will have an 
impact as quickly as possible as we work our way through the second 
year of this recession.
  In these tough economic times, the risk of being uninsured is even 
greater. Many Ohio families, as we know too well, are only one 
emergency room visit away from bankruptcy and foreclosure. Too many 
have declared bankruptcy, too many people have lost their homes to 
foreclosure, too many people have lost their jobs to this recession. We 
should not turn our back on them in providing health insurance to their 
children. Again, these are mostly people who are eligible for the 
Children's Health Insurance Program, mostly children in families where 
mom or dad or mom and dad have jobs and simply are not making enough to 
buy health insurance and those employers for whom they work simply 
don't have the ability to provide insurance to these families. That is 
why this legislation is so important. That is why defeating the Hatch 
amendment is so important.
  I would add that in the Hatch amendment, the 95-percent rule is 
especially for those who want to enroll legal immigrant children and 
pregnant women. Again, that is a standard I don't think we can meet, 
because no matter how hard these States try, they can't find 95 percent 
of the people who are eligible. That will mean too many children of 
legal immigrants, legal people in this country, too many pregnant women 
simply would not have insurance for their children that we should offer 
them in this body.
  Mr. President, I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator is recognized.
  Mr. KYL. Mr. President, the legislation that is before us is a 
reauthorization of the Children's Health Insurance Program, but it is, 
as I said yesterday in my remarks, seriously flawed in a number of 
respects. Because of that, the minority leader, the Senator from 
Kentucky, and I have offered an alternative. It is called the Kids 
First Act. The Kids First Act is an effort to reauthorize this 
important program but address the numerous flaws in the pending 
proposal so we can adopt something that literally puts kids first.
  I spoke yesterday about several of the problems with the underlying 
bill. First, the problem of crowding out private coverage. We created 
this Children's Health Insurance Program in order to help families who 
did not have insurance. But the bipartisan Congressional Budget Office 
has noted that because of provisions in the underlying bill, there are 
actually over 2 million people--in fact, 2.4 million people--who will 
go to the Government insurance program who already have private health 
insurance that is perfectly adequate to their needs. The reason 
primarily is because their employers obviously appreciate the fact that 
it is costing them money to insure their employees' families and it 
will be a lot cheaper if those families go to this Government-run 
program. Our effort was never to cause people to leave the health 
insurance coverage they have to come to a new Government program. Our 
effort, when we adopted the kids insurance program, was to provide 
insurance for those who did not have it already.
  This crowdout effect is well known, and it is well understood. It can 
actually be quantified as the Congressional Budget Office did. Last 
year, we offered a couple of amendments to ensure that the crowdout 
effect would be minimized. The amendment I offered was not adopted. But 
recognizing that there was a serious problem, when the Democratic 
leaders in the House and the Senate wrote the bill that ended up 
passing both the House and the Senate, though it was vetoed, it was 
supported by Democratic majorities in both the House and Senate, and it 
had some language related to crowdout. I thought it was insufficient 
language, but nevertheless I understood the necessity of dealing with 
the issue.
  That language is not in this bill. So in the committee, I offered the 
Democratic language. The Senator from Montana, the chairman of the 
committee, helped draft it. As I said, it was supported by Democratic 
majorities in both the House and Senate. Essentially on a party-line 
vote, that amendment was rejected.
  We need to deal with the problem of crowdout. The legislation Senator 
McConnell and I have drafted does put kids first. It tries to deal with 
the problem of kids who do not have insurance rather than taking 
families who are already insured and transferring them to a Government 
program.
  Another problem we spoke of is the fact that as this program has 
expanded, it does not just relate to families who are at the poverty 
level or even twice the poverty level but three and four times the 
poverty level. In other words, it can actually cover families in two 
States--up to $88,000 a year in New York and about $10,000 less than 
that in New Jersey. That is clearly wrong. We are trying to talk about 
low-income families. In fact, if you add other assets of a family that 
are not counted in income, you could literally have $40,000 in 
additional assets and, in New York, be making $128,000 a year for a 
family and be eligible for this low-income children's health care--
$128,000-a-year income. That is wrong. What that does is take money 
from the State of the Senator from Oklahoma, it takes money from my 
State of Arizona and other States and transfers that. We are trying to 
be as frugal as we can. Our limit is 200 percent of poverty. That is 
twice the poverty level. That is what we pay for in Arizona. But we are 
having to pay for more than twice that much for families in New York. 
That is not fair. The program Senator McConnell and I have offered as 
an alternative deals with that problem as well.

[[Page S869]]

  In addition, we ask that people demonstrate that they are eligible 
for this coverage. That has always been a part of the program. The bill 
that is before us weakens those provisions so that you do not have to 
have the same kind of documentation that you are eligible for the 
program. It expands the program to legal immigrants in this country who 
have always had a contract that they will not become part of our public 
welfare system.
  One of the really interesting things is the budget gimmick that is 
used which Senator McConnell and I believe should not be part of this 
program. It is a budget gimmick to circumvent the Senate's so-called 
pay-go rules by which we ensure whatever the costs are, there is a way 
to cover those costs. The way that is done is that the program, even 
though it is a 10-year program, as all of our authorizations are--after 
5 years, there is just an assumption that it does not cost very much 
anymore. Of course, under that assumption, we would have to disenroll 
millions of people from this program. That is never going to happen. 
Everybody knows that. Everybody knows that gap in financing would be 
filled, and as a result, the program would actually cost $40 billion 
more than it is alleged to cost as the bill came out of the committee. 
And that is by CBO's number, $41 billion-plus.
  Those are some of the deficiencies with the legislation.
  The amendment Senator McConnell has offered, the Kids First Act, is 
very targeted and I think a much more responsible approach to the 
problem. It does reauthorize the children's health care insurance 
program. It preserves health care coverage for millions of low-income 
children. It actually adds 3.1 million new children to SCHIP. It 
minimizes the reduction in private coverage, the so-called crowdout I 
spoke about earlier, by targeting SCHIP funds to low-income children, 
not higher income families who may already have access to insurance. By 
the way, it is offset without new tax increases or a budget gimmick 
such as the program before us is.
  I encourage my colleagues to ask us questions about this amendment. 
If they have concerns about it or would like to debate, I would love to 
have that debate on the floor, if anyone would like to engage me in a 
discussion about why this is not a superior alternative.
  The bottom line is, we have two choices. We have a budget buster that 
does not protect SCHIP coverage for low-income children, that 
represents an open-ended financial burden on taxpayers and takes a 
significant step toward Government-run health insurance or the 
amendment Senator McConnell has filed, a fiscally responsible SCHIP 
reauthorization that preserves coverage for low-income children. It is 
fully offset without a budget gimmick or a tax increase, and it 
minimizes the so-called crowdout effect on employer-sponsored health 
coverage that people have today.
  I think the answer is clear. The Kids First Act is the right 
solution. And when we have an opportunity to vote on that, hopefully a 
little bit later this afternoon, my colleagues will take a good hard 
look at it and see if they don't agree that is a good approach to the 
reauthorization of SCHIP and support the McConnell amendment.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. BROWN. Mr. President, I appreciate the comments of my friend and 
colleague from Arizona. The minority leader filed this amendment in 
2007. It was not a good idea then. It simply knocks too many children. 
These are not rich kids. These are sons and daughters of people who are 
working who are not making a lot of money, are not making enough that 
they have health insurance or can afford out-of-pocket health 
insurance. They are working for employers who do not provide it--small 
businesses, lower income workers. I don't want to do anything that 
takes away the eligibility of those children.
  When I hear about the crowdout provision Senator Kyl discussed, I 
want to make a couple of comments about that. I just don't think it 
exactly is going to work that way.
  The CHIP statute already requires States to determine and monitor 
whether crowdout is occurring and adopt policies to limit crowdout if 
it does occur. Most States that cover children at more moderate income 
levels have imposed 3- or 6-month waiting periods to prevent families 
from dropping employer-based coverage to enroll in CHIP. There may be a 
time when families are not going to want to do that.
  It is not as though States want to give away this money. States are 
squeezed today every bit as much as many families are squeezed. States 
already have a strong interest in monitoring and preventing crowdout. 
They don't want to spend limited resources on children who already have 
private health insurance.
  This bill does a good job of targeting the lowest income children. 
The new enrollment options, the performance bonus, and the outreach 
funding all help to achieve everyone's shared goals to ensure that the 
most vulnerable are covered.
  We accept that our friends on the other side of the aisle want to 
insure people at 100 percent, 150 percent of poverty, but we also want 
to extend this to families who still do not have insurance for their 
children because of their economic situation. These are not 
Congressmen's kids. These are children whose parents are working at 
places that do not offer insurance and do not make enough money that 
they can out of pocket come up with health care coverage for their 
children.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. COBURN. Mr. President, I wonder if anybody has ever asked the 
question--it has certainly never been answered--if you are a family and 
you qualify at the new 300 percent and you are buying your own 
insurance and you are covering your two kids, what happens when you 
transfer your kids to SCHIP, the Children's Health Insurance Program? 
What happens to your premium? I can tell you what happens to the 
premium. Do you know what happens to the premium? It goes down zero 
because health insurance is sold as an individual or a family product. 
So by taking two children, if I am earning 300 percent of poverty, and 
taking them off and transferring--now I am paying for it--and 
transferring that to the State Children's Health Insurance Program, the 
taxpayers of this country now will pay for that premium about $2,200 a 
piece when you can buy it in the private market for $1,100 a piece, but 
the parents will get no decrease in their insurance premium. That is 
why the crowdout provision is so negative for the American taxpayer and 
the generations that follow us.
  My friend, the Senator from Ohio, mentioned that everybody wants to 
cover the 200 percent and below. The fact is, we have done a terrible 
job of covering the 200 percent and below. There are 5.4 million 
children out there today who do not have health insurance, whose 
parents do not have health insurance, who are eligible for Medicaid and 
SCHIP today, and they are not signed up. What are we doing? We are 
expanding a program that has only gotten about 51 percent of the kids 
who are eligible right now signed into the program. We are also being 
dishonest about what it costs. It is actually going to cost $42 billion 
more than what we say it is going to cost. Nobody will deny that. So 
why would we not want to have something that will limit the amount of 
crowdout because as we take money for kids who are now insured and put 
it to them through a Government program, it means these same 5.4 
million kids are still not going to get covered.
  We have not improved the program by increasing the eligibility. What 
we have done is we have just moved the income scale up to $60,000, some 
$62,450 a year, and we say: We will now cover your kids, and even if 
you have them covered now, you will not get any break from your 
insurance. But the same 5.4 million kids who are in poverty or at 200 
percent of poverty still are not covered.
  What are we doing? Why wouldn't we want to fix it to where all the 
kids who are out there today who do not have insurance, who are 200 
percent and below the poverty level, why aren't we making sure they are 
covered? Why are we not doing that? Why are we not saying: States, you 
can go to the 300 percent if you want but only after you have covered 
the kids whom the program was designed for in the first place.

[[Page S870]]

  There is an amendment by Senator Hatch in that regard. Why would we 
spend all this extra money?

  By the way, we just met with the President. Other than the short-term 
financial struggles we are in, one of the big concerns with him is the 
fact that we have an unending entitlement disaster before us and we are 
getting ready to make it worse. Why would we not address that? Why 
would we say we are going to help kids but not really help kids? Why 
would we say we want to help the poorest children and the families who 
need it the most but still ignore them?
  There is an answer to it. There is an answer to it, in that we want 
to move whichever way we can to eventually have a single-payer system 
in this country. We gutted the Premium Assistance Program. The Senator 
from Pennsylvania listed all the great things about the Premium 
Assistance Program. He listed all the different programs in 
Pennsylvania. Those are gutted under this bill. You can have one, but 
by the time you get it, nobody will want to have it.
  We have taken what people have and said maybe we could spend $500 per 
kid per year to keep them in a health insurance program that the 
parents might have at work, but instead we are taking them all out and 
putting them in a Government program that costs twice as much as it 
does to buy them the same insurance in the open market.
  Crowdout is a real phenomenon, but the most important thing is it 
helps the people who need it the least the most. And it helps the least 
those people who need it the most. That is what we are doing in this 
bill. We are not helping the lowest. We are only moving it up the chain 
and we are saying if you make $62,000 a year in this country, your 
children can be covered by the Government.
  Why would you not want to do that? We do not have any other 
Government program that people do not voluntarily take if we put it out 
there. That is in the face of the fact that this year--hear my words 
very clearly--this year the true Federal budget deficit will be $1.6 
trillion. The Government will spend $24,000 per family more than it 
takes in. Hear those words--$24,000 more per family it will spend than 
it takes in.
  What is the future to be for this child at the 300 percent above 
poverty level? Their parents make $62,000 and we are going to give them 
this gift of health insurance today. But you will not be able to afford 
a college education. You certainly will never afford a home. It is 
doubtful you will ever be able to afford a car that is reliable. You 
will be in a debtor nation. Those are the consequences of our actions 
in the name of wanting to expand a program that today is highly 
ineffective in addressing the needs of the real poor children in this 
country.
  Why would we do that, and just say: Don't worry, you have a pricetag 
to pay if you ever hope to get out of college or have the ability to 
get out of college? By the way, we are going to up your taxes if you 
get out there and get it up here on the front end.
  This body is abandoning the very principles this country was built 
on. This country was built on a heritage of sacrifice, sacrifice by the 
common man for the common good to create a great, bright shining future 
for the generations that follow. This bill doesn't fit with that 
heritage. This bill, as a matter of fact, undermines that heritage. In 
the name of helping children, we are hurting those children's children. 
We are stealing opportunity from those children's children.
  As I said earlier this morning, I want every child in this country 
insured. If we took the money that was out there today in Medicaid and 
SCHIP and the State contribution to it, we could insure every child in 
this country. We could create an insurance policy for every child in 
this country that gives them total screening exams, could give them 
prevention care, could give them acute care, and could give them 
hospital care. Yet when we run it through the Government, it costs 
twice as much because of the inefficiencies that are inherent in the 
system.
  Later on I am going to offer a limitation based on improper payments. 
The American public may not know this. Certainly Members of Congress 
know. We do not know how much money is wasted in Medicaid because 
Medicaid has refused to report it. By law they are mandated to report 
it. They have refused to report it. We now have the information on 17 
States on improper payments. The average is 10.5 percent on the 17 
States we have looked at. Of that, 90 percent of those are 
overpayments. In New York City alone their own inspector general said 
at a minimum $15 billion a year is wasted in fraud, abuse, and deceit 
on the Medicaid Program. Where have we addressed any of that in this? 
Where have we put the safeguards to make sure this doesn't happen here? 
We have not done that.
  We are not fixing the problems that are in front of us. What we are 
doing is creating more problems in the name of expanding a children's 
insurance program and limiting the future of the things that have been 
very successful with it, such as premium assistance, and taking that 
away.
  There is going to be crowdout and the crowdout is going to benefit 
the most wealthy of the upper middle income because in some States, by 
the time you count exclusions, you can earn $120,000 a year and have 
your kids on SCHIP. We are going to help them. But not the kids of the 
parents working at $7 an hour, both of them, making $28,000 or $30,000 
a year, of which half of them are not on either Medicaid or SCHIP. Why 
would we do that? Do we truly care about children's health? Are we 
really about trying to solve it?
  Where are the ideas of combining where the biggest health care 
disparities are in our country? We know where those are. Why not design 
a program to go and attach and direct health care dollars to the large 
health care disparities? We know it pays big returns in terms of 
childhood obesity, in terms of precluding the onset of smoking, in 
terms of prevention and vaccinations, in terms of well-child care? Why 
would we not look at where the problems are and try to direct dollars 
to where the problems are? Instead, we are going to allocate across 
this country, to those who can now afford it, we are now going to start 
paying for it.
  Even if we wanted to do that, why would we do it at twice the cost of 
what you could buy in a private market? Mr. President, $1,156 is the 
average market cost to insure a child in this country. Why would we 
spend $2,200 to get the same thing? So we can say we did something?
  If, in fact, you could take $1,156 or $1,200 for every child out 
there--we have more than enough money with what we are spending today 
to accomplish that--we could buy them all an insurance policy.
  I am not sure this bill is about children. I am not sure it is about 
children's health care. I have some doubts when we are not frugal. If 
it is about children's health care now, it is certainly not about those 
children's long-term financial security, when we are not even going to 
be honest with how much this bill costs. We have pulled a trick so we 
do not have a pay-go rule, and the trick keeps us from offsetting $42 
billion in expenses associated with this bill. Everybody knows that. 
Nobody will say that is not right. Nobody wants to talk about that. 
That is what is wrong.
  That is why people do not have confidence in the Congress. It is 
because we have this sleight-of-hand. We want to do something good but 
we don't want to tell you what it costs and we don't want to get rid of 
programs that don't work in order to be able to do something good. We 
are going to hide it under the blanket. So we are hiding $42 billion 
under the blanket. We are playing the inside baseball game, not being 
honest with the American people about what it costs; not being honest 
with the American people that it is a lot cheaper to give premium 
assistance than it is to give a program directly to a child; not being 
honest about the fact that this costs twice as much as what you could 
buy a health insurance policy for, for every child in this country.
  We are not being honest at all, so our integrity is in question. 
Would we do the right thing in the long term for these kids that we say 
we care about their health care? I do not have the confidence we will. 
I have the confidence that this train is going to roll, we are going to 
do it just the way we have done it. There are still going to be 5.4 
million kids out there 10 years from now, when we look at eligibility. 
It will be the same 5.4 million under the 200

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percent of poverty level that we did not reach, that we didn't get out 
and actually make a difference. And then we are going to pay a larger 
cost as they mature as adults because what we could have prevented will 
not have been prevented, what we could have taught will not be taught, 
and the health care costs associated with that will be tremendous.
  Mr. President, 5.4 million children are presently eligible for either 
SCHIP or Medicaid and we have done nothing to make sure those kids get 
a program that is readily available to them today. We have done 
nothing. We put $100 million in for outreach and said we will feel good 
about it because maybe that will reach some of them. We will still have 
millions of children who are eligible for these programs who will not 
get it.
  We are going about approaching it the wrong way. We ought to be 
saying let's have a bill that insures every American child. Let's do 
that. Every American child, universal access with an insurance policy 
for every American child, why won't we do that? That is what we should 
be doing. Let's do it for every child. Then the insurance rates on 
adults will modulate and then husband and wife will not be paying a 
falsely elevated price once their kids get pulled off of their 
insurance policy and go into a Government program. Why not buy them all 
something, from then until the time they are 21, that covers them, that 
gives them the prevention care, that gives them the counseling, that 
gives them the immunizations? We know what it costs and we know what we 
can do it for. Why not do that?
  Instead, we have created this complex, convoluted system that can be 
gamed. The estimate on Medicaid fraud--listen to this--the estimate on 
Medicaid fraud is $60 billion a year. That is enough to pay for where 
we cheated on this program if we would get rid of 10 percent of it a 
year over the next 10 years, if we got rid of 10 percent of the fraud. 
There is nothing in here on fraud. There is nothing in here to make the 
States accountable for the money we send out there.
  We have done a poor job. We claim we want to help children, we claim 
we want children to have health insurance, yet we mortgage those very 
children's futures by not being honest about how we are going about 
doing it, about how we are going to pay for it and what the ultimate 
results will be.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Sanders). The Senator from Ohio is 
recognized.
  Mr. BROWN. Mr. President, I appreciate as always, even when we 
disagree, the words of the Senator from Oklahoma. He and I have worked, 
from our time in the House, on international health legislation 
together. We come at things from very different perspectives. But I 
often come down in the same place. I would love to hear more about his 
plan on children's health, to extend universal coverage to all 
children.
  I was driving to the airport this morning after leaving my mother in 
Mansfield, and heard Bill Considine, who is the president of Akron 
Children's Hospital, one of the premier children's hospitals in my 
State and in our country. Mr. Considine, the CEO of that hospital, had 
some interesting things to say about what I believe he called Kids 
Care, which may be similar to what Senator Coburn was talking about.
  I hope we can work some things through there. I want to disagree, 
though, for a moment briefly with Senator Coburn's comments about we 
absolutely want to--we do not want 50 percent of children covered who 
are at 200 percent of poverty or 300 percent or beyond for that matter.
  We obviously want to do better. We have done generally fairly well 
locating those children and signing them up, those children who are 
eligible.
  This legislation goes a good bit further, and the efforts to, if you 
will, encourage and find those children who are eligible and sign them 
up, those efforts have been very bipartisan in the last dozen years.
  The Presiding Officer from Vermont has been part of this. He has 
always had an abiding, intense interest with what we do with children's 
health care. I extend this back a couple of sessions ago--Senator 
Frist, the Republican leader, and Senator Bingaman, a Democrat from New 
Mexico; and Senator Lugar, a Republican from Indiana, with Senator 
Bingaman; and at other times Senator Grassley, a Republican from Iowa, 
Senator Hatch a Republican from Utah--all of them have been part of, 
and many on my side of the aisle have been part of, finding ways to get 
people to sign up, simplification of paperwork and bureaucratic 
requirements, including language directly from legislation introduced 
by Senators Lugar and Bingaman; providing funding for outreach and 
enrollment, which is language originally introduced by Senators Frist 
and Bingaman and pushed and supported by Senators Grassley and Hatch in 
the legislation in the last Congress.
  It provides for incentives for States to encourage and to provide 
coverage for those eligible but unenrolled children. We can certainly 
learn from Senator Coburn to do more, but this legislation is replete 
with provisions to bring in more children. It does not mean we do not 
enlarge the eligibility to 300 percent of poverty, nor does it mean we 
do not look down the road, I hope, sooner than later with the 
relationship that Senator Coburn has built with President Obama, both 
as freshmen Members of the Senate and since Senator Obama has become 
President, to work together in finding ways to do this.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. COBURN. Mr. President, I thank my colleague for his comments. 
There is an easy way to solve this; it is called auto enrollment. You 
just write a bill. Anybody in any region under 200 percent who has a 
claim of deduction for children is automatically enrolled in SCHIP or 
Medicaid. It is not hard. We do not want to do that. Why are we not 
doing that? Because we do not want to help all of these 5.4 million 
children. We do not want to do that.
  We have all of these incentives that have not worked in the past. We 
have done all of these things. All you have to do is auto enrollment. 
We can write a law. We can pass it. We can say: The IRS can look at 
every family who has children under 200 percent who files a tax return 
or files for the earned income tax credit, and their children are 
automatically enrolled. They automatically get a notice that says: Here 
is your insurance. Here is your State card. You have coverage.
  It is not hard. We can do that. But we have not done it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized.
  Mr. BURR. Mr. President, I wanted to pick up where I was before 
lunch. I am glad to see my good friend from Ohio. We were having 
conversations before lunch on this bill. Clearly, it is an important 
piece of legislation.
  As Dr. Coburn and I said before lunch, I think every Member of the 
Senate, I think every Member of Congress, and probably everybody in the 
country believes it is important that we cover children; that the 
prevention and wellness aspects of having coverage means we have a 
healthier community; that we take those who, by the way, are 
historically more healthy, younger folks, and we give them the 
assurances of check-ups and the ability to visit a doctor so that we 
minimize anything that can happen to them. In 1996 and 1997, the 
Senator from Ohio and I were both on the Energy and Commerce Committee. 
We were involved in crafting the original legislation. I remember it 
today as well as I do then. The legislation was targeted at a specific 
group of our country's children: those over 100 percent of poverty 
whose families made too much for Medicaid but those with not enough 
income between their parents to be able to afford health care at the 
time.
  My gracious, health care has done nothing but get more expensive 
since 1997. We appropriated and authorized $40 million for a 4-year 
program. The target--I can't remember what the target was for the 
number of kids--but today, at 100 percent of poverty for a family of 
four, they would have an income of $22,000. At $22,000 they apply for 
Medicaid, regardless of what State they live in, and health care is 
provided under Medicaid for that family.
  As Dr. Coburn pointed out, I think rather clearly, for Medicaid and 
SCHIP today, we have probably eliminated access to about 40 percent of 
health professionals because they choose not to

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participate in the programs. Why? It is because the reimbursements are 
so pitiful in those two programs, regardless of the State. Doctors have 
chosen to opt out of providing that care and focus just on the Medicare 
and private market or just on the private market.
  So just the creation of Medicaid and SCHIP means we have eliminated 
some choices for these people where this coverage is their only option, 
it is their safety net. Now, if I had my druthers, I would rather be 
here debating overall health care reform because I believe every 
American should have the ability to be insured.
  I am not sure I would have much disagreement in Congress or in 
America on that. We will have a big disagreement on how we get there, 
but we can get there. Were we to have that debate today, we would not 
be here talking about the expansion of one program that hits a small 
group of Americans and is targeted to put them in a one-size-fits-all 
program that only 40 percent of the health care professionals even 
participate in.
  Now, having said all of that, SCHIP is up for reauthorization. We are 
now 10 years down the road, and we are talking about, How do you change 
this bill to apply what we have learned? Can we reach new efficiencies 
in cost? Can we cover more people? If so, how? Which States have done 
well? Which states can we learn from? Which have done poorly? Which 
states should we work with in the legislation to try to prod?
  Well, we find in this legislation that in 10 years, we have moved 
from 200 percent of poverty to 300 percent of poverty. I do not have 
any big disagreement with that, with the rise in health care costs. 
Three hundred percent of poverty for a family of four is $66,000 a 
year.
  So under this program--SCHIP currently, not under the reauthorization 
bill--if a child lives in a household that has an income of $66,000, 
above $22,000, they are eligible in several states for SCHIP today.
  So what is our experience so far? As we get ready for this 
reauthorization, we have 7.4 million children enrolled in SCHIP in 
2008. But the average monthly enrollment for 2008 was 5.5 million, 
meaning that somewhere, somehow we have had almost 2 million drop out. 
They have moved to a different State. The income of their family 
changed. They are no longer eligible. So 5.5 million covered children 
today seem to be sort of the fixed point.
  Well, how many are eligible today but not covered? I think my 
colleagues would be amazed to find out it is 5.4 million. We are 
covering 5.5 million, but we are not covering 5.4 million who are 
eligible under today's guidelines.
  So in typical Washington response, what do we do? We come out with a 
reauthorization that expands the eligibility. Already we have in place 
a waiver where New Jersey can currently go up to 350 percent of 
poverty. Well, what is that? That is $77,175. Now in the 
reauthorization bill, we are going to grandfather the 350 percent, and 
we are going to go up to 400 percent for New York. What is 400 percent? 
Well, that is $88,200. How do those 5.4 million who were eligible 
before get enrolled? Well, the answer is, they are not. This is what 
Dr. Coburn was talking about. How about the kids nobody is going out to 
enroll? Do auto enrollment. It is easy.
  But that is not what this bill is attempting to do. This bill is 
attempting to increase the eligibility to get a bigger slice of America 
eligible for Government programs so that at some point the number of 
folks who are on Government programs--Medicaid, Medicare, SCHIP, VA, 
the list goes on--is well over 50 percent of America, and then the die 
is cast. We go to a single-payer system. The Government runs it, the 
Government tells us how much we get, the Government tells us where we 
go, and the American taxpayer pays for everybody.
  Now, here is the decision the Senate has--the House has already voted 
this bill out. We have a decision whether we are going to stand up for 
those 5.4 million. Those are the tough ones. Those are the ones who did 
not walk into the door and raise their hand when their parents were 
told they were eligible and say: I want to enroll. I would like health 
care. I would like prevention. I would like a primary care doctor. I 
would like a medical home. No, they are the 5.4 million children who 
are out there to whom no State is reaching out. They are just letting 
them fall by the wayside. Rather than focus on the 5.4 million, we are 
focusing on how we increase eligibility, how we change the income 
parameters.

  Let me point out New Jersey, which is grandfathered to 350 percent of 
poverty under this bill, ranked 47th in the country at enrolling 
children who are at 100 percent to 200 percent of poverty. Let me say 
that again. A State that we have allowed to be grandfathered in at 350 
percent of poverty ranks 47th out of 50 in the United States at 
enrolling kids between 100 and 200 percent of poverty.
  As a matter of fact, 28 percent of their children are uninsured in 
that 100 to 200 percent of poverty. Yet once again we are going to 
grandfather them and allow this incredible expansion to continue. So 
where is their focus? Let's go after the easy ones. Let's go after the 
ones in families who are easier to find and who are easy to enroll.
  Well, why does that happen? Let me point out to my colleagues, 
Medicaid gets a matching rate from the federal government, depending 
upon which State you are from, and that rate is from 50 percent to 
75.9, with a ceiling of 83. So as the State makes a Medicaid payment of 
$1, depending upon what State you are from, the Federal Government 
reimburses anywhere from 50 cents to 83 cents.
  But if you are enrolled in SCHIP, the range goes from 65 to 85. So if 
you are on the bottom, if you are a State on the bottom, why would you 
lobby for expanded eligibility? It is because if you are on the bottom, 
you are going to have an increase in the Federal share of what you pay 
out from 50 to 65 cents. It is 15 cents of every dollar. You are crazy, 
if you are a State, for not lobbying for this because you are going to 
spread the cost over the entire taxpayer base. It makes a lot of sense 
if your focus is not on 5.4 million children and how they get covered 
and how they get health care.
  If you are only focused on how you get a bigger piece of the Federal 
pie, if you are only focused on how you get a bigger share of space at 
the trough, then this makes a tremendous amount of sense. But from the 
standpoint of developing health care policy, it makes absolutely no 
sense whatsoever.
  I don't take my position just looking at one section of the bill. Dr. 
Coburn pointed out, as I did earlier, that the financing of this bill 
is suspect. In fiscal year 2012, which is the last of 5 years, we 
allocate $14.98 billion to fund the program, almost $15 billion. Yet in 
2013, the bill reduces the allocation to $5.7 billion. How do you have 
a health care program for children, with all these people enrolled, 
that is sucking up $15 billion a year, and all of a sudden, the next 
year it drops to $5.7 billion? The answer is, you don't. We all know 
it. The reality is, you have to go to the next 5-year period to find 
the answer. The answer is, starting in year 6, out of the next 5-year 
budget, we do a one-time payment of $11.7 billion on top of what it 
costs us to run the program for 2013.
  So what does that mean? Frankly, it means the accounting methods used 
in Washington are not accounting methods any family in America could 
use because their creditors would walk in the door and shut them down. 
Yet we get up here every day and claim we do things just like people at 
home. In fact, we know when it comes to budgets, there is no American 
family who can get away with what we get away with, especially when it 
is this obvious. One year it costs us $15 billion. The next year it 
costs $5.7 billion. There are only two ways you accomplish that. You 
either reduce enrollment drastically or you magically come up with the 
money and you stick it in and say: Oops, we didn't understand that was 
going to happen.
  We understood it was going to happen. It is done to fit the 
parameters, to get around pay-go rules so you can actually take this 
money and stick it right onto the deficit and the debt of the country. 
In other words, we are going to provide our children health care with 
one hand, and we are going to rob their financial future with the 
other, all at the same time. It is miraculous that we would even 
attempt to do this. At least we could ask for honesty and transparency 
in how we are funding this program.
  It is important that we sort of recap. What is SCHIP? I think a lot 
of people

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who might not have been in Congress very long, certainly weren't here 
in 1996 and 1997 when we passed it, people across the country might be 
saying: I have never heard of this program. Again, we saw the need in 
1996 to create an insurance product for children's health, for those 
people who financially didn't qualify for Medicaid and didn't make 
enough to purchase insurance on the open market. SCHIP was created with 
the vision of trying to take kids from 100 percent of poverty to 200 
percent of poverty and make them eligible for a program where 100 
percent of them would have health care. Nationally, the parameters grew 
from 100 percent to 300 percent, and we still haven't met the original 
1996 mission of covering all the kids. Because with 5.5 million people 
covered today, average monthly number, we still have 5.4 million over 
here who are eligible and don't have insurance. Clearly, we have a 
tremendous amount of work to do to get the SCHIP program to fulfill its 
original mission.
  Let me go specifically to the bill before us. CBO estimates the bill 
will increase outlays by $32.3 billion above the baseline over 5 years 
and $65 billion over 10. The cost is offset by a tobacco tax. I am from 
North Carolina. I can get up and wail about how this is unfair. It is 
not the first time Congress has done it. It is the most regressive tax 
there is. In essence, we are taking a group who financially are 
challenged and, according to every analysis I have looked at, the 
people who are going to be most taxed by a tobacco increase are those 
people in the lower socioeconomic levels. So, in essence, we are not 
spreading this across taxpayers. We are asking the parents of these 
children to pay for the expansion in eligibility because we are going 
to tax them for every cigarette they buy and consume. We are going to 
hope that they quit. When they quit, I am not sure how we are going to 
fund the program except probably do it the same way we are doing it in 
the year 2013. We will come up with the money in some way and some 
fashion.
  It is important we realize today we have something we call a Medicaid 
sandwich. Medicaid starts here; SCHIP goes here; Medicaid wraps on the 
top. It is hard to believe we could have something designed that is so 
complicated for the States, that Medicaid applies here to some; SCHIP 
applies here to others; and Medicaid applies on top of that to an even 
larger group. If it seems confusing, it is. If it is this confusing, 
one has to ask: Why don't we change it? Why don't we fix it? Yet as I 
continue to go through the Baucus bill, what I find is that we are 
making it more complicated. We are designing it in a fashion that 
aggressively goes after an increase in enrollment but does not go after 
the 5.4 million children who currently today are unenrolled in the 
program but are certainly eligible. As a matter of fact, the Baucus 
bill spends $34 billion over 5 years. It targets 5.7 million new 
children. I might add, 2 million of those children today are currently 
covered under their parents' insurance. So we have actually got a net 
pickup of 3.7 million kids who were uninsured. That is $34 billion.
  There is an alternative plan. It is called the McConnell substitute. 
It is called Kids First. It uses $19.3 billion over 5 years to enroll 
3.1 million kids who are uninsured today. So what do we get with the 
$34 billion investment that we are not getting with a $19.3 billion 
investment? The answer is quite simple: 600,000 uninsured kids who are 
enrolled under the Baucus bill. When you do the simple math on that, 
you find out you are paying $4,000 per enrollee under the Baucus bill.
  Now, I don't expect everybody to associate with this, but last year I 
had a son who was a senior in college. Because we have these funky 
Government rules that say no matter where you are in your education 
process, when you become 22, you are no longer eligible to be under 
Government insurance for your family--it doesn't apply just to Members 
of the Senate or to Congress; it applies to every Federal employee--I 
was forced, as a parent, to go out and go through the thought process 
of getting my son insurance. Sure, he is 22 years old. He is healthy as 
a bull. There is no reason I should suspect he is going to get sick. 
But what if something happens to him.
  So I immediately did what every good Federal employee would do. I 
called the correct office up here, and I said: This has to be something 
you have run into. Have you got some type of gap insurance I can turn 
to and I can purchase for that 22-year-old healthy son? They said: 
Certainly, Senator. We have negotiated with the same company, the same 
plan he was under, and he can go on that tomorrow. I said: How much is 
that? They said: $5,400 a year, for a 22-year-old, healthy-as-a-bull 
senior in college.
  I did probably what every parent would do. I called the college and 
said: Have you got a plan? Here is the situation. They said: 
Absolutely. We have negotiated with the same company, with the same 
plan he was under as a child of a Federal employee. I said: What is the 
premium? They said: $1,500 a year.
  Now, that lesson I actually learned when I became a Member of 
Congress. When I became a Member of Congress, I chose the same 
insurance plan I was under in Winston-Salem, NC, working for a company 
of 50 employees, the same exact plan paying the same 25 percent, and 
the only difference was my health insurance cost went up $100. Why? 
Because a company of 50 employees negotiated a better plan than the 
U.S. Government on behalf of 2 million employees. But it had been 14 
years. I had forgotten that. I relearned it firsthand though with my 
son, when all of a sudden I realized he got a plan for $1,500 that the 
University of North Carolina Chapel Hill had negotiated, and the 
Federal Government had negotiated the same plan at $5,400. No wonder 
parents are confused. No wonder most Americans are confused. What a 
screwed up market this is. How unbelievably complicated is it for an 
individual to try to go out and access insurance, and at what point do 
you actually know that you have found a value?
  Let me try to bring some relevance to this story. For that 22-year-
old, healthy-as-a-bull senior in Chapel Hill, his health care plan was 
$1,500 a year. For all these 600,000 kids we are adding to SCHIP, we 
are spending $4,000 a year to insure them. The average cost per policy 
for somebody under 18 in America today is about $1,132. Yet under the 
Baucus bill we are going to invest $4,000 per child, per those 600,000 
children, to make sure they are covered--not a wise investment. But 
considering my experience with the Federal Government, I can understand 
why, for some people here, that makes absolutely perfect sense.
  Let's assume for a minute somebody is going to say my numbers are 
wrong. I am sure they will before the debate is over. Let's assume for 
a minute we are trying to figure out the number of increased 
enrollees--and I am not talking about the ones who had their own 
insurance and we just shifted them over to government insurance--what 
are we paying for them? We are paying about $2,200. They are still 
paying $700 more a year to insure every child 18 and under than I paid 
in premiums to cover my 22-year-old, healthy-as-a-bull senior in 
college. So we are overpaying at least by $700. At most, we are 
overpaying by almost $2,500. Somewhere in that range, I would hope the 
American people would say: Hey, let's stop for a second. Let's call 
time out. Let's go back and get Congress to re-look at this program 
because this doesn't make a lot of sense.
  I am not getting into any of the aspects that have already been 
addressed which deal with the loopholes that were created. I actually 
sat on the floor and heard somebody say this was a bipartisan bill. If 
you count one Republican vote out of the Finance Committee, then you 
are right, it is bipartisan. But I am not sure that is President 
Obama's interpretation of what bipartisanship is. He came to the Hill. 
He had lunch with us today because he is trying to get more Republicans 
to support a stimulus package because he doesn't want to just win it, 
and he doesn't want to win it by one vote. He wants the American people 
to understand that there is confidence up here in the legislation that 
is passed. He probably should have talked about this bill. It is going 
to be bipartisan, not by many votes.
  If that is the type of bipartisanship we want, then it is going to be 
a long couple of years.
  My hope is we can actually get something done. There are so many 
areas I

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could talk about on this bill, but it would keep me here forever, and I 
see my good friend, Senator Whitehouse, is in the Chamber.
  Let me end with this. I am sure I will come back. What I want Members 
to search their souls and ask is, Is it really the Federal Government's 
responsibility and, more importantly, the taxpayers' responsibility 
that a family making $88,000 be included in a plan that is designed and 
was originally designed to take care of kids between 100 and 200 
percent of poverty? Do we feel bad that today 5.4 million children who 
are eligible at 100 percent to 200 percent of poverty are not enrolled 
in the program?
  This is not the first time I have had a test like this. My own 
President, last year, proposed we increase spending for HIV/AIDS 
patients in Africa from $15 billion to $50 billion, and to many 
people's amazement, Tom Coburn and I supported the President. Then all 
of a sudden they made a change in the program. The program had always 
said 50 percent of the money had to go to the treatment of HIV and AIDS 
patients, meaning they actually had to deliver medicine to them.
  Well, when all of a sudden the countries that got these Federal 
grants to carry out these programs in Africa looked at the program, 
they said: My gosh, for us to get from committing $7.5 billion all the 
way up to $22.5 billion in delivering medicines to people who have HIV 
or AIDS, that is going to be tough. We are going to have to work to 
find these people. It is going to be dangerous in some cases for us to 
get drugs out.
  What did the White House do? They dropped the requirement in total. 
They did not require one dime of that $50 billion to actually go to the 
delivery of drugs to HIV and AIDS patients. So what did we do? We held 
up the bill. We were taking flak from our own President because other 
people wrote a bill that was structured poorly. It actually did not 
accomplish what we set out to have with PEPFAR originally.
  At the end of the day, they put back in the requirement of 50 
percent, and today, for the multiple countries this applies to, we have 
a commitment that $22.5 billion is going to go to actually treat 
individuals who have HIV and AIDS--our original intent of the program. 
We just expanded it.
  Now, we were not going to get there just by saying it is difficult, 
therefore we do not think we should do that. And we are not going to 
cover these 5.4 million kids who are eligible but not enrolled if we 
say: Do you know what. This is hard. And since it is hard, why don't 
you change the program so the eligibility is wider so we can get some 
of the kids who are out here in different income groups who are easier 
for us to enroll than for us to go and find the 5.4 million who are so 
hard to find.
  Well, I am going to say to my colleagues, just like I said to my 
President: No. That is not what we intended to do. We put this program 
together to make sure the most at-risk kids in this country had health 
coverage, so they had a medical home. To suggest we are now going to 
change the parameters of this and allow a larger income pool to come in 
because it is hard to reach out and find these 5.4 million people, no; 
it is not going to happen. It may happen, but it should be as difficult 
at happening as it possibly can.
  I look forward to the debate we are going to have. It is my hope we 
will have an opportunity to actually look at honest budget numbers that 
share with the American people exactly what this costs, that we can 
look at the eligibility requirements with predictability, understand 
who is going to have an opportunity to be enrolled, and, hopefully, at 
the end of the day, when a bill passes--whether we vote for it or not--
that we can all look at it and say: There is a real chance that 100 
percent of the kids at 100 percent to 200 percent of poverty have a 
real opportunity to be enrolled in this program. I fear without changes 
to this legislation that will not happen. We will not have fulfilled 
what we set out to do.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, I see my colleague and friend from 
Virginia, Senator Webb, who is prepared to speak, and we will recognize 
him in just a moment.
  I would note there would have been, by our estimates, 3.3 million 
children who would have been covered had the bill passed in 2007. That 
would have been one very good way to reduce the number of children in 
this country who are not protected by health insurance.
  Mr. BURR. Mr. President, will the Senator yield for a question?
  Mr. WHITEHOUSE. Of course.
  Mr. BURR. Would any of those 3.3 million children have been in 100 
percent to 200 percent of poverty?
  Mr. WHITEHOUSE. As I understand it, the bill contained both funds and 
programs for outreach that would have supported the States in their 
initiatives to find the children who, because their parents were moving 
or for one reason or another, were eligible but had not entered into 
these State programs. So I think the answer to that question would be 
yes.
  Mr. BURR. Let me suggest to the Senator--and I will not ask him to 
yield much longer--there was the same expansion of eligibility in last 
year's bill, so the likelihood is any increase in enrollment would have 
been spread across not just the 100 percent to 200 percent of poverty, 
but all the way up to the 400 percent of poverty.
  Mr. WHITEHOUSE. I think the increase in enrollment would have spread 
wherever the program went. There are very few areas, as the Senator 
knows, where the eligibility level is 400 percent of poverty. In the 
vast majority of the country, in my State, for instance, it is well 
below that. It is a program that supports working families, that 
supports low-income working families, that makes sure their children 
get health care.
  But for a number of reasons, probably the most prominent of which is 
people moving from location to location and not being registered with 
the local program, there are outreach requirements. I would be happy to 
work with the Senator on improving those outreach requirements in any 
way he wishes. But I think to hold the entire bill and his support--I 
think in this case we are estimating it will now reach 4.1 million 
children--hostage because of not having gotten the outreach better is a 
strategic mistake.
  If your goal is to insure more children, then you should go about it 
by insuring more children. If the outreach is a problem, then we can 
happily make that better. But for outreach to be criticized, when it 
was President Bush who vetoed that bill, I am not sure how the 
distinguished Senator from North Carolina voted on that--
  Mr. BURR. Mr. President, I would be happy to disclose to my colleague 
that I voted against the bill, for the same reasons that without 
changes I will oppose it this year because the eligibility requirement 
is being expanded.
  As I said, and I thought fairly clearly, when you expand eligibility, 
you take the pressure off of making sure the enrollees come from the 
most at risk. It is my hope we can modify this bill. I am not 
embarrassed to be on the Senate floor and talk about the aspects of 
this legislation that I am unhappy with. But certainly I can count, and 
I know the majority can move this bill at any point they feel 
comfortable, and I am sure they will.
  At the end of the day, it is my hope we will cover as many of the 
originally targeted children in that 100 percent to 200 percent of 
poverty as possible.
  Mr. WHITEHOUSE. I understand the Senator from Virginia wishes to 
speak. I will simply respond before I yield the floor to Senator Webb 
that I have had quite a number of years of experience with our 
Children's Health Program in Rhode Island, back to the years when I 
came in with Governor Sundlun in a bad economic crisis in Rhode 
Island--probably the largest percentage deficit in the State budget of 
any State ever recorded. Even in that very gloomy fiscal environment, 
Governor Sundlun insisted we build a statewide universal health care 
program that protected children.
  SCHIP is very much in line with that. The people who have been 
working on that for these many years in Rhode Island--and I suspect it 
is the case in many other States--feel a real passion for trying to 
make sure children get health care, that they get the health care to 
which they are entitled.
  So I am not sure the notion that by just putting more pressure on 
them, by just refusing to add any other children until they have done 
this, is really a productive or fair way to go about

[[Page S875]]

reaching the children who have not been reached. What the bill does is 
provide outreach funds and empower these people who care so deeply 
about this issue to actually get out there and work harder to find 
them, have the additional resources to find people. From my work in law 
enforcement, my work with schools, my work on health care, there are a 
lot of people who live apartment to apartment, very hand to mouth, and 
it is a very significant challenge to keep up with them. The resources 
to do that, I submit, would be the best way to solve that problem, not 
holding one set of children hostage to providing health care for 
another set of children.
  With that, Mr. President, I yield the floor for the distinguished 
Senator from Virginia.
  The PRESIDING OFFICER (Mr. Nelson of Nebraska). The Senator from 
Virginia.
  Mr. WEBB. Mr. President, I thank the Senator from Rhode Island, and I 
am here to speak in favor of this legislation. This is a very important 
piece of legislation. It is long overdue. I also would like to point 
out that I have an amendment I will offer.
  I am very concerned about the way this legislation is going to be 
funded. We all have our own issues with respect to whether tobacco 
should be used or not used, but to fund an entire program based on a 
tobacco tax, I think, is not the way to go for a number of reasons. So 
I am offering an amendment that will help offset this highly 
regressive, 61-cent-per-pack increase in the cigarette tax that is 
being used to fund this bill, and to add on to the bill a tax on 
carried interest, which is the compensation that is received by hedge 
fund managers. This proposal would generate $11.2 billion in revenue 
over 5 years. Tobacco taxes would thus be raised by a more reasonable 
37 cents a pack to make up for the shortfall between the revenue being 
generated by this amendment and the costs of the CHIP reauthorization.
  Tobacco is already federally taxed at 39 cents per pack for the CHIP 
program. All 50 States and the District of Columbia also impose an 
excise tax on cigarettes above this tax. For instance, my State of 
Virginia adds 30 cents on top of the present tax. In these difficult 
times, many States, including Virginia, are considering an increase in 
their State excise tax.
  So we would have, with the amendment I am going to offer, the 39-cent 
Federal tax that is already in place on a pack of cigarettes, an 
additional 37 cents--instead of an additional 61 cents--plus the State 
taxes on cigarettes; and a big proportion of this--all the Federal 
tax--going to fund a health program.
  I would like to be clear that there is no question in my mind about 
the fact that we do need to reauthorize and expand this program. But I 
do not think it is a proper to fund this program on the backs of people 
who, for better or worse, smoke cigarettes. I am a reformed smoker. 
Many of my contemporaries in the Senate are reformed smokers. I am not 
encouraging anyone to smoke cigarettes. I hope you do not. I just 
believe although tobacco taxes are already a popular source of revenue, 
it does not change the reality that this tax is regressive.
  We had a Congressional Research Service report brought to my office, 
and I am going to quote from it. It said:

       Cigarette taxes are especially likely to violate horizontal 
     equity and are among the most burdensome taxes on lower-
     income individuals. Only about a quarter of adults smoke, and 
     less than half of families have expenditures on tobacco. 
     Tobacco is more heavily used by lower-income families than 
     are other commodities, and is unusual in that actual dollars 
     (in addition to the percent of income) spent on tobacco 
     products decline in the highest income quintile.

  My amendment will help soften the blow of the increase in the 
cigarette tax.
  Let me provide some background on carried interest. A partner of a 
private equity or hedge fund receives two different types of 
compensation. First, hedge fund managers receive management fees that 
are linked to the assets they oversee. Second, they receive what is 
called ``carried interest,'' which is compensation based on the 
percentage of the profits generated by the assets they manage. 
Currently, carried interest is taxed at a capital gains tax rate. As 
noted by Peter Orszag, who is now a member of the Obama administration, 
in his 2007 testimony, many economists view carried interest as:

       Performance-based compensation for management services 
     provided by the general partner rather than as a return on 
     financial capital invested by that partner.

  Given that carried interest is performance-based compensation, it 
makes sense to tax it as ordinary income. This compensation has been 
earned by many of the same people who helped bring about the present 
financial crisis. The Financial Times stated these managers ``have made 
fabulous sums in recent years.'' Given the need to pay for children's 
health insurance, it makes more sense to have these persons, who are 
better positioned to pay for it, pay a greater percentage of the cost.
  When it comes to taxing carried interest as ordinary income, there is 
a wide acceptance in support of this proposal among thinkers and 
editorial writers across the country. The Financial Times itself 
editorialized ``this repair should be done at once.'' They made that 
statement 2 years ago.
  I have a string of editorials that support the idea of closing this 
carried interest loophole as a matter of fairness. I ask unanimous 
consent they be printed in the Record at the end of my statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. WEBB. They include editorials from the Washington Post, New York 
Times, USA Today, the Philadelphia Inquirer. In fact, the Washington 
Post in 2007, in talking about this particular tax break, said this:

       The only mystery is why Senate Democrats don't have the 
     good sense to grab on to this as their centerpiece domestic 
     issue. It's hard to think of an issue that better taps into 
     the public anxiety about the markets and the economy, the 
     anger about income inequality, or the disgust with a 
     political system that bends to the will of powerful 
     interests.

  The Washington Post continued:

       This is a make-or-break issue for Democrats. If they can't 
     unite around this issue, then they aren't real Democrats and 
     they don't deserve to govern.

  The New York Times in 2007 talked about this issue, mentioning:

       With income inequality surging along with the need for tax 
     revenue, supporters rightly conclude that it is untenable for 
     the most highly paid Americans to enjoy tax rates that are 
     lower than those of all but the lowest income workers.
       Congress will achieve a significant victory, for fairness 
     and for fiscal responsibility, if it ends the breaks that are 
     skewing the tax code in favor of the most advantaged 
     Americans.

  There are others and, as I mentioned, I will insert the full text of 
these editorials at the end of my comments.
  I also should point out that our new President, President Obama, has 
supported throughout his campaign the idea of taxing carried interest 
as ordinary income.
  So the choice is this: Do we help fund this program, which we all 
agree is critically necessary, with a well-deserved tax adjustment for 
some of those who are the most capable of absorbing a new tax, or do we 
take money exclusively from tobacco, causing people who in large part 
are in the same economic circumstances as the beneficiaries of this 
health insurance program to foot the bill?
  Let's think for a moment about the irony of that. We are taxing a 
practice that we deem unhealthy in order to fund a health program, and 
we supposedly want this practice to go away, but if it goes away, we 
are not going to be able to fund our health program.
  So we need to find a way to fund health care needs that is 
sustainable and fair, and a declining revenue source is not 
sustainable. I hope my colleagues will join me in supporting this 
measure, which will partially offset the cigarette tax that is a part 
of the bill. I again wish to express my strong appreciation to Chairman 
Baucus and to others, such as my colleague from Rhode Island, who have 
worked so hard on this bill and who work to help those in our system 
who are most in need of medical care.
  With that, I yield the floor.

                               Exhibit 1

Editorials Supporting Closing Private Equity/Carried Interest Loophole 
                         as Matter of Fairness

               [From the Washington Post, Sept. 9, 2007]

           Private-Equity Tax Breaks, a Call To Be Up in Arms

       Even by Washington standards, the private-equity industry 
     certainly went over the

[[Page S876]]

     top in conjuring up the economic woes that would befall the 
     United States if their cherished tax breaks were taken away.
       Pensioners would be destitute. Wall Street would pack up 
     and move to Dubai. The hedge fund industry would disappear. 
     Federal revenue would plummet. Entrepreneurial risk-taking 
     would grind to a halt. And the urban underclass would slip 
     even deeper into poverty.
       And all that just because some of the richest people in the 
     world would have to pay the same 35 percent tax rate on their 
     income as dentists, lawyers and baseball players.
       There is no mystery as to why the industry bothers to make 
     these ridiculous and contradictory arguments--billions of 
     dollars in tax windfalls are at stake.
       The only mystery is why Senate Democrats don't have the 
     good sense to grab onto this as their centerpiece domestic 
     issue as they head into the 2008 campaign. It's hard to think 
     of an issue that better taps into the public anxiety about 
     the markets and the economy, the anger about income 
     inequality, or the disgust with a political system that bends 
     to the will of powerful interests. And if Republicans go 
     through with their threats of a filibuster and a presidential 
     veto, Democrats ought to put aside all other business and 
     call their bluff.
       This is a make-or-break issue for Democrats. If they can't 
     unite around this issue, then they aren't real Democrats and 
     they don't deserve to govern.
                                  ____


               [From the Washington Post, July 13, 2007]

Equity for Private Equity; Legislation To Raise taxes on Fund Managers' 
                                 Income

       Investment partnership funds can be enormously profitable, 
     highly secretive and lightly regulated. People tend to get 
     suspicious.
       As a result, government bodies periodically try to tamper 
     with private equity firms, hedge funds, venture capital firms 
     and the like. This largely unregulated industry does a lot to 
     stabilize America's financial system by fostering innovation 
     and bringing inefficient or undervalued markets closer to 
     equilibrium, and most of these attempts to regulate or 
     reconfigure the industry would be bad for the U.S. economy. 
     But this time around Congress has proposed legislation that 
     makes sense.
       A House bill would set a higher tax rate for ``carried 
     interest,'' the cut of profits typically awarded to fund 
     managers at private equity firms and other investment 
     partnerships. In these investment partnerships, a fund 
     manager typically manages the investment made by himself and 
     various limited partners, with the manager usually 
     contributing about 1 percent of the investment. The fund 
     manager then usually receives 2 percent of the assets he 
     manages annually and 20 percent of the profits earned on the 
     investment when it is sold. Even though this 20 percent cut 
     makes up the bulk of the manager's compensation, and even 
     though it is awarded for managing others' money, under 
     current tax law this income is treated as capital gains 
     rather than ordinary income. As a result, fund managers who 
     make zillion-digit incomes from carried interest can be taxed 
     at the same rate (15 percent) as a part-time janitor.
       The House bill, sponsored by Sander M. Levin (D-Mich.), 
     Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.), 
     Financial Services Committee Chairman Barney Frank (D-Mass.) 
     and 13 other Democrats, would close this loophole for fund 
     managers and treat their ``carried interest'' earnings as 
     regular income taxable at the ordinary 35 percent top-income 
     rate that high-earning employees in other industries must 
     pay. The bill would not affect the other investors in these 
     funds, nor would it affect the tax rate for profits that fund 
     managers make on investments with their own money.
       A Senate bill that also attempts to bring equity to the 
     private equity industry would force investment partnerships 
     that are publicly traded--right now, only a handful--to pay 
     corporate income taxes. Support for the Senate bill has 
     gained some momentum because of Blackstone Group's splashy 
     initial public offering, one of the largest in history. The 
     Senate's corporation-rather-than-manager-based solution seems 
     less effective, however, because companies can easily move 
     overseas (as many have already done), while individuals are 
     less likely to do so. Investment partnerships can also simply 
     choose not to go public.
       Critics of the two bills argue that investment fund 
     managers should be rewarded for taking high risks. But these 
     fund managers, for the most part, are not risking their own 
     money, and they're paid management fees during the duration 
     of their partnerships, so they have steady incomes. Besides, 
     plenty of risky industries don't enjoy comparable tax 
     benefits. Income earned from managing an investment 
     partnership fund should be treated just like the income 
     earned for providing any other service.
                                  ____


                [From the New York Times, June 25, 2007]

                    Raising Taxes on Private Equity

       So much for the argument often made by managers of hedge 
     funds and mavens of private equity that higher taxes would 
     cripple their business.
       The prospect of higher taxes did not dent, in the least, 
     the initial public offering on Friday of the Blackstone 
     Group, the giant private equity firm. The week before, a bill 
     was introduced in the Senate to raise taxes on private equity 
     firms that go public. On the day of the offering, a House 
     bill was introduced that would raise their taxes, whether 
     they're publicly traded or not.
       And yet, Blackstone had a debut that was one of Wall 
     Street's biggest, its thunder muted only by the announcement 
     by its longtime rival, Kohlberg Kravis Roberts, that it, too, 
     planned to go public.
       The bills in Congress take aim at a provision of the tax 
     law that has allowed private equity and hedge fund operators 
     to pay a lower capital-gains tax rate of 15 percent, instead 
     of the ordinary top income-tax rate of 35 percent, on the 
     performance fees that make up the bulk of their huge 
     paychecks.
       With income inequality surging along with the need for tax 
     revenue, the bills' supporters rightly conclude that it is 
     untenable for the most highly paid Americans to enjoy tax 
     rates that are lower than those of all but the lowest-income 
     workers.
       Fairness is not the only reason to change the rules. The 
     private equity industry is on shaky ground when it claims 
     that current practice is a correct application of the law.
       Many of the firms' partners are not investing their own 
     money in the various funds and ventures, and so have no 
     direct risk of loss, the general test for claiming capital-
     gains treatment on one's earnings. Moreover, the tax rules in 
     question were developed decades ago for enterprises that had 
     passive investors to whom gains were passed along. Hedge fund 
     managers and private equity partners are not passive. They're 
     actively managing assets, and should be taxed accordingly as 
     managers earning compensation.
       The challenge now is to develop a single bill that can 
     withstand the formidable lobbying efforts of the private 
     equity industry to water it down.
       To do so, the final bill should clearly apply to other 
     firms where partners may also receive most of their pay as 
     capital gains, such as oil and gas partnerships. It will also 
     be necessary to narrow the bill, where appropriate. For 
     instance, it could include a mechanism to allow some 
     compensation to be taken in a form similar to incentive stock 
     options.
       Congress will achieve a significant victory, for fairness 
     and for fiscal responsibility, if it ends the breaks that are 
     skewing the tax code in favor of the most advantaged 
     Americans.
                                  ____


                    [From USA TODAY, July 23, 2007]

            Wealth Money Managers Make More, Get Taxed Less

       As many business executives, doctors, lawyers and other 
     skilled professionals know, the top income tax rate is 35%. 
     The top rate on dividends and long-term capital gains is 15%.
       Whether it makes sense to tax the output of expertise and 
     hard work at more than twice the rate of investment returns 
     is debatable. But, for better or worse, that's the way it is.
       Except, that is, when it isn't. Owners of companies, 
     ranging from small real estate partnerships to multibillion 
     dollar hedge funds and private equity firms, have devised a 
     way to erase this distinction. Their managers pay 15% on 
     their income by dressing it up as investment returns--even 
     though they bear no investment risk or put none of their own 
     money in play.
       Nice work if you can get it. But in this case it 
     constitutes a frontal assault on fairness. Why should such 
     people pay only 15% when senior corporate executives pay 35% 
     for making many of the same types of business decisions? More 
     to the point, it's hard to see the logic (or the justice) in 
     a school teacher or bus driver with taxable annual family 
     income as low as $63,700 paying 25% when someone like 
     Blackstone Group CEO Stephen Schwarzman can make nearly $700 
     million on the day his firm went public and pay at most 15%.
       Congress is rightfully re-examining the issue. Reps. Sandy 
     Levin, D-Mich., and Charles Rangel, D-N.Y., have a proposal. 
     In the Senate, Max Baucus, D-Mont., and Chuck Grassley, R-
     Iowa, have a useful, if narrower, bill.
       The practice they are seeking to ban or limit is a 
     transparent ruse. Here's how it works using the example of a 
     private equity firm: The partners raise capital from banks, 
     pension funds and other large investors, which they use to 
     buy companies and resell them. Their investors give them some 
     direct compensation, which is taxable as income.
       But most of the compensation comes in the form of an 
     investment vehicle known as ``carried interest,'' which gives 
     them a right to a portion of the profits they generate 
     (typically 20%). That portion of the profit is taxed 15%, 
     just as if they supplied 20% of the capital at the outset.
       It's a creative practice, but with a result that says the 
     rich get to write their own rules. That's not a new problem 
     in the American tax system, but it is nevertheless repulsive. 
     Income is income, or so you'd think.
       Supporters of this scam argue that these money managers 
     actually are risking their own investments. It's just not 
     money, in their case, but their ``sweat equity,'' their time, 
     their expertise. But the same could be said of the lawyer who 
     takes a case on a contingency fee, the movie actor who 
     negotiates a cut of the box office receipts, the financier 
     who chooses to work for a firm known for paying enormous 
     bonuses during good years. In most, if not all, of such 
     cases, these people pay income taxes.
       And so should partners in these exotic investment firms. 
     More so because the tax

[[Page S877]]

     they avoid paying is money that has to be made up by people 
     of lesser means--or borrowed from later generations by adding 
     to the budget deficit.
       These schemes add insult to injury at a time of increasing 
     wealth concentration. It is time to end them.
                                  ____


            [From the Philadelphia Inquirer, Sept. 19, 2007]

            Equity Managers' Loophole; Billion-Dollar Breaks

       For years, a relatively few players in the corporate 
     takeover game have benefitted from a tax loophole that costs 
     the federal government billions annually.
       Now a push is under way in Congress to tax these wealthy 
     managers of private equity funds at the same income-tax rates 
     as everyone else. Congress should end this unfairness in the 
     tax code.
       Most workers pay income taxes on a graduated scale, with 
     marginal tax rates running from a low of 10 percent, to a 
     high of 35 percent for the wealthiest wage earners. But 
     managers of private equity funds, who usually do extremely 
     well for themselves, pay only a capital gains tax rate of 15 
     percent on most of their income. That's because the tax code 
     considers their wages ``carried interest,'' even though this 
     compensation can run into hundreds of millions of dollars per 
     individual. The preferential treatment can be worth millions 
     of dollars to such a manager.
       Rather than being taxed on compensation for services 
     rendered, these managers are taxed as though they had 
     invested a 20-percent stake in the fund. But, even though 
     they sometimes gain equity stakes in the companies they buy 
     and manage, they don't have capital at risk in the ventures. 
     They're really being compensated for their expertise and 
     effort.
       This definitional fiddle creates a class of service 
     provider that is taxed a preferential rate. Economist Greg 
     Mankiw, former chair of the Council of Economic Advisers 
     under President Bush, has said that carried interest should 
     be taxed at the same rate as other compensation for such 
     services. As it stands now, an executive in a financial-
     services firm is taxed differently from the manager of a 
     private equity or a hedge fund.
       There's no good reason why a person earning $200 million 
     per year should pay a lower tax rate than a single worker 
     earning $45,000 annually and paying 20 percent in taxes.
       The loophole costs the Treasury several billions of dollars 
     per year. The sum is small compared with the overall federal 
     budget. But in a budget season in which Congress and the 
     president are feuding over a difference of about $22 billion, 
     such sums do matter.
       Some argue that taxing these fund managers at a higher rate 
     would harm ordinary investors, such as those enrolled in 
     state employee pension plans, because the fund managers would 
     demand higher compensation. But the evidence is slim. The 
     liberal Center on Budget and Policy Priorities, a nonprofit 
     think tank in Washington, said the impact on investors would 
     be ``quite small.''
       And this glaring inequity shouldn't be preserved on the 
     presumption that a tiny fraction of it will trickle down to 
     the folks already paying their fair share.
                                  ____


                [From the Washington Post, Nov. 8, 2007]

                            No Pay, No Patch

       Nearly everyone wants to ``patch'' the alternative minimum 
     tax. Not everyone wants to pay to do so. That is the 
     challenge facing lawmakers as they race to install yet 
     another temporary fix on the tattered federal tax system in 
     time for the Internal Revenue Service to produce forms 
     reflecting the change. How this job is accomplished will show 
     whether congressional Democrats are willing to live up to the 
     pay-as-you-go obligations they imposed on themselves when 
     they retook control of Congress--and whether Republicans can 
     regain any credible claim to being committed to fiscal 
     discipline.
       The alternative minimum tax was created in 1969 to dun a 
     tiny number of the super-rich who managed to avoid paying any 
     income taxes. Because the tax isn't indexed for inflation and 
     because the 2001 tax cut lowered regular tax rates, the AMT, 
     without adjustments, will affect millions of taxpayers who 
     everyone agrees were never its intended targets. But 
     exempting those millions will cost a lot in forgone revenue, 
     money that the Bush administration has built into its budget 
     numbers. Because fixing the problem is expensive and 
     complicated, lawmakers have chosen for years to slap a Band-
     Aid onto it--and bill the cost to future generations. This 
     year's model totals $50 billion, $76 billion when the cost of 
     extending expiring tax provisions and other changes is 
     included.
       To its credit, the House Ways and Means Committee has 
     produced an AMT patch whose costs are offset by other 
     changes, including eliminating the carried-interest deduction 
     that allows private equity and hedge fund managers to pay 
     taxes at far lower rates than other wage-earners. This is far 
     from a perfect solution: It would take 10 years of revenue to 
     pay for the one-year patch.
       It's preferable, though, to the approach of congressional 
     Republicans and the Bush administration, which is to not 
     offset the tax cut with new taxes or spending cuts. House 
     Minority Leader John A. Boehner (R-Ohio) was illustrative of 
     the irresponsibility. ``Tax relief pays for itself by 
     creating more American jobs for more taxpayers to strengthen 
     our economy,'' he said in a statement. Perhaps Mr. Boehner 
     believes that the Tax Fairy will simply leave $50 billion 
     under the IRS's pillow; there is no economic basis for his 
     statement that ``tax relief pays for itself.'' Moreover, if 
     Mr. Boehner doesn't like the way Democrats propose to finance 
     the patch, what would he cut instead?
       Republicans may not be the only obstacle to responsibility. 
     Senate Democrats say they want to comply with the pay-go 
     requirement, and there were hopeful signs last week from 
     Majority Leader Harry M. Reid (D-Nev.). ``I'm not in favor of 
     waiving pay-go rules,'' he said. ``I think we cannot waver on 
     that.'' But Senate Finance Committee Chairman Max Baucus (D-
     Mont.) has been less definitive, saying only that he'd like 
     to comply with pay-go to the extent possible; he has also not 
     been eager to close the carried-interest loophole. Once the 
     pay-go rule is ignored, though, lawmakers won't be able to 
     discipline themselves in the future. This is a key test for 
     the party that wants to wear the mantle of fiscal 
     responsibility.
                                  ____


                [From the New York Times, Nov. 8, 2007]

                        Alternative Tax Showdown

       The House and Senate are poised to vote on a vitally 
     important tax bill that poses a test for each chamber of 
     Congress. In the House, the vote on a short-term fix for the 
     alternative minimum tax will test whether Democratic 
     representatives have the courage of their convictions. In the 
     Senate, the vote will test whether Democratic senators have 
     any convictions at all, or just a belief in keeping the world 
     safe for campaign contributors.
       Under current tax law, 23 million taxpayers will owe the 
     alternative tax for 2007, up from 4 million last year. The 
     tax was originally intended to apply to multimillionaires. 
     But most of this year's alternative taxpayers make between 
     $100,000 and $500,000 and about a third make less than 
     $100,000. They all have good cause to feel rooked and to 
     expect help from Congress.
       The challenge is the ``pay-as-you-go'' budget rule adopted 
     when Democrats took control of Congress this year. New tax 
     relief must be paid for, either by raising taxes elsewhere or 
     by cutting government benefits like Medicare or Social 
     Security that cover everyone who is eligible. The one-year 
     cost of shielding millions of Americans from a tax they 
     should not have to pay is $51 billion.
       The House tax committee met the challenge, drafting a bill 
     that provides the needed tax relief and plugs the resulting 
     budget gap, mainly by raising taxes on private equity 
     partners and hedge fund managers. The bill is good policy. 
     The tax relief assuages justifiably aggrieved taxpayers. Tax 
     increases on private equity firms and hedge funds rectify 
     outdated rules that have allowed the very wealthiest to enjoy 
     tax rates lower than those paid by middle-income Americans 
     and, in some cases, to defer taxes indefinitely.
       But key Democratic senators, among them New York's Charles 
     Schumer, who is the main fund-raiser for Senate Democrats, 
     are balking. They know they must provide alternative tax 
     relief, but they don't want to tax private equity and hedge 
     funds to pay for it. Their defense of the industries' morally 
     indefensible tax breaks is tawdry. As The Washington Post 
     reported yesterday, in the first nine months of 2007, as 
     pressure built to dismantle the tax breaks, investment firms 
     and hedge funds contributed $11.8 million to candidates, 
     party committees and leadership political action committees. 
     That's more than was given in 2005 and 2006 combined. More 
     than two-thirds of that money went to Democrats.
       The Senate's equivocating has rubbed off somewhat on the 
     House. The bill is still expected to pass the House, as early 
     as tomorrow, but some members have wondered aloud why they 
     should support a tough measure if the Senate is determined to 
     kill it.
       The answer is that it is the right thing to do. The House 
     bill holds true to the pay-as-you-go rule when doing so 
     matters most, that is, when large sums and difficult trade-
     offs are at stake. It undoes a tax injustice. And maybe, just 
     maybe, the money men in the Senate can be swayed by example.

  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. WHITEHOUSE. Mr. President, this week we have the chance in the 
Senate to provide health insurance to 4.1 million children in this 
country who now don't have it, to cover 11 million children total. All 
we have to do is the right thing and pass H.R. 2, the Children's Health 
Insurance Program.
  I know the distinguished Presiding Officer from Nebraska and the 
distinguished Senator from Virginia, who has just spoken so eloquently, 
have shared the experience I have had in my home State of Rhode Island, 
and that is to travel around and hear personal stories from people 
whose lives and whose health have collided with our broken, 
dysfunctional health care system. Too often, families in this country 
can't afford to pay for the care they need. As our economic troubles 
worsen, that problem only grows more acute. Too often, they can't even 
get in to see a doctor. Too often, when they do receive care, it falls 
short in quality, in efficiency, in effectiveness, and in timeliness.

[[Page S878]]

  The crisis in our health care system affects all of us, but it is 
greatest and it is most tragic when it affects our children. That is 
why Congress created the Children's Health Insurance Program which for 
years has given millions of uninsured, hard-working American families 
access to health care for their kids.
  The program has not only expanded health care coverage for children, 
it has encouraged States to be flexible, innovative, and responsive in 
meeting their families' health care needs. We come from 50 different 
States with 50 different sets of history, demographics, and economics, 
and as a result, the States come up with different programs. That is 
something to celebrate, not to bemoan. The program has safeguarded the 
vulnerable, it has united families, and it has invested in the future 
of our Nation. It is a special program of all the things that we do 
here.
  The Children's Health Insurance Program means that children are more 
likely to receive medical care for common conditions such as asthma or 
ear infections. It means that children end up with higher school 
attendance rates, and that children have higher academic achievement. 
It means that children have more contacts with medical professionals. 
It means that children receive more preventive care. It means that 
children go to the emergency room when it is an emergency, and when it 
is not, they have someplace else to go that allows them and their 
families to stay out of those expensive urgent care settings. So as we 
have done for the past 2 years, this week we are working to pass 
legislation to ensure that every eligible uninsured child in America 
can get regular checkups when they are well and can get medicine when 
they are sick.
  Not long ago, former President Bush denied children needed health 
care coverage by vetoing this legislation. But the American voters have 
spoken and we are in a new era in this country--a new era for peace of 
mind, for security, and for dignity for American children and for their 
families. With a new Congress and a new President committed to health 
care for all American families, I could not be more hopeful as we 
discuss this bill today.
  I am especially proud to serve with my senior Senator, Jack Reed of 
Rhode Island, and to support him in this fight. I have been in the 
Senate for 2 years now. Before I even got here, Jack Reed was one of 
the most prominent, most ardent, and most determined fighters for our 
Nation's children. Frankly, it is in significant part due to his 
relentless work that we have come this far.
  I am proud also to represent a State that has one of the lowest rates 
of uninsured adults and children in the Nation. It was not easy. Rhode 
Island worked hard over the past 15 years to achieve this success. It 
began with the RIte Care Program in 1993. In 2001, the creation of the 
Children's Health Insurance Program allowed Rhode Island to further 
reduce uninsurance rates in the State. I am proud to be on the team of 
former Governor Bruce Sundlun who turned 89 a few days ago. When he was 
Governor, he created the original RIte Care Program. His vision and 
determination to do this, in a time of grave economic straits for Rhode 
Island, has yielded immense rewards. Now, as health care costs 
skyrocket and the number of people in this country who lack health 
insurance approaches the staggering number of 50 million--50 million 
Americans, and so many of them children--we in Congress have an 
obligation to strengthen initiatives like RIte Care through which 
States have made health care more accessible.
  Today, 4.1 million uninsured children are waiting for us to pass this 
bill; 4.1 million children who might not see a doctor this winter when 
they get the flu because their parents can't afford to pay out of 
pocket for the visit; 4.1 million children who might delay needed 
vaccinations or other preventive care because their parents have to buy 
food instead; 4.1 million children who might not get an inhaler or 
insulin or--heaven forbid--chemotherapy because in this economic 
downturn, the money just isn't there.
  Who could say no to uninsured, vulnerable children? Should we not at 
least be able to agree on that? Why would anyone say no? We plan to 
raise taxes on cigarettes, a tax that the American Cancer Society says 
could prevent nearly 1 million deaths and keep nearly 2 million 
children from starting to smoke; a tax with health savings that could 
ultimately decrease government costs for government health care 
programs; a tax that the Congressional Budget Office confirms will 
fully offset this bill so as not to add to our deficit. I don't think 
that would be a good reason to deny vulnerable children the safety and 
security of health insurance.
  During the course of this discussion, some Members have tried to make 
this debate about illegal immigration. It is not. We should not permit 
the very difficult issue of illegal immigration to affect this bill to 
deny millions of children the health care they badly need. That would 
be a grave mistake. That would be a wrong.
  Let me be very clear: Only children who are legally in the United 
States are eligible to receive coverage under Medicaid or the 
Children's Health Insurance Program. They must document their 
immigration status. Medicaid agencies use information provided by the 
Bureau of Citizenship and Immigration Services to confirm the status of 
legal immigrants applying for benefits. Further, this bill does not 
even require States to cover legal immigrant children. It simply 
provides and supports that option.

  Legal immigrants pay taxes, they serve in our Armed Forces, and just 
like the rest of us, they play by the rules. They are our future 
citizens, and insuring their children makes sense. This was the law 
until 1996 when sweeping restrictions affecting legal immigrants were 
made. Since 1996, we have become wiser, and many of those restrictions 
have been reversed on a bipartisan basis by Congress. The provision in 
this legislation covering legal immigrants is fully consistent with 
that trend back to 1996 levels.
  This Nation is slowly emerging from a dark time when our ideals and 
our virtues were too often hidden in the shadows, when we let our fear 
overcome our principles and our better judgment, when we lost sight of 
our priorities and left millions of people in the cold and millions of 
children uninsured. That time can end now.
  This bill is a chance to show these millions of Americans that we 
have heard them and that we stand ready to help. We know how tough it 
is for working families in this economy. If there is one worry, one 
burden we can take off those parents' shoulders so they can be sure 
their children have the health insurance every American deserves, we 
should stand ready to help. This country should once again own its duty 
to protect those who cannot protect themselves and to restore dignity 
and hope where it has diminished.
  I close by applauding Chairman Baucus and the Finance Committee for 
bringing this vitally important and long overdue legislation to the 
floor.
  I urge all of my colleagues--it would be wonderful if we could do 
this together--to allow these 11 million children to be covered by 
health insurance, to have access to the health care they need, to grow 
up healthy and strong and ready to seize the boundless opportunities 
that are at the heart of the American dream.
  I think we will find in the months and in the years ahead that there 
will be things we cannot do to help families. I know everybody in this 
Chamber wants to do everything they can, and we want to work as hard as 
we can, but the economic situation is dire, and we are not going to be 
able to do everything we would like. But this is something we can do. 
This is something we can do for American families and for their 
children, and I hope very much we will do it.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                         Committee Assignments

  Mr. REID. Mr. President, in accordance with S. Res. 18, I announce 
that the following Democratic Members have been assigned to the 
following committees: Agriculture, Mr. Bennet and Mrs. Gillibrand; 
Banking, Mr.

[[Page S879]]

Bennet; Environment and Public Works, Mrs. Gillibrand; Foreign 
Relations, Mrs. Gillibrand; Homeland Security, Mr. Bennet; Aging, Mr. 
Bennet and Mrs. Gillibrand.
  The PRESIDING OFFICER. The Record will show the appointments.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask unanimous consent that, at 5:25 p.m. 
today, the Senate resume consideration of the DeMint amendment, No. 43, 
with the time until 5:45 p.m. for debate with respect to the amendment, 
with the time equally divided and controlled in the usual form, with no 
amendment in order to the amendment prior to a vote; that at 5:45 p.m. 
the Senate proceed to vote in relation thereto; that upon disposition 
of the DeMint amendment, the Senate resume consideration of the Hatch 
amendment, No. 45, with 2 minutes of debate equally divided and 
controlled prior to a vote in relation to the amendment, with no 
amendments in order to the amendment prior to a vote; that upon 
disposition of the Hatch amendment, the Senate proceed to executive 
session and the Banking Committee be discharged from further 
consideration of the nomination of Daniel K. Tarullo to be a member of 
the Board of Governors of the Federal Reserve System; that the Senate 
then proceed to vote on confirmation of the nomination; that upon 
confirmation, the motion to reconsider be laid upon the table, and the 
President be immediately notified of the Senate's action; that the 
Senate then resume legislative session; further, that after the first 
vote in this sequence, the remaining votes be 10 minutes in duration.
  If I could say to Senators within the sound of my voice, we would be 
having more votes today, but I conferred with Senator McConnell. The 
Finance Committee is involved in marking up the economic recovery plan. 
There are scores of amendments they are trying to work through so we 
are limiting the number of amendments today. We are going to work hard 
tomorrow, as I indicated when we opened today. We are not going to have 
morning business all week. We are going to get these amendments 
processed as quickly as we can.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WHITEHOUSE. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WHITEHOUSE. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. McCaskill). Without objection, it is so 
ordered.
  Mr. WHITEHOUSE. Madam President, I see the very distinguished Senator 
from Arkansas in the Chamber to take over managing this bill.
  Before I leave the floor, I want to make two points. I have been here 
while a great deal of discussion has taken place about 5.4 million 
children who are eligible for children's health care but who, through 
lack of effort, it is claimed, the State programs are not finding. The 
purpose of the argument has been to argue if we could make the States 
find these kids, they would be the ones for whom the program was truly 
designed, and that the 4.1 million additional children we are going to 
help with this legislation are sort of a distraction from that figure.
  I have not been able to source that 5.4 million number to anything. I 
would note on a population basis, my State of Rhode Island is one 
three-hundredth of the country. So if there are 5.4 million kids out 
there, in that circumstance, Rhode Island should have, by my math, 
18,000 of them. We only have 12,000 kids in the CHIP-funded portion of 
what we call the RIte Care Program.
  From my own experience, the likelihood of there being 18,000 eligible 
children in our small State who cannot be found makes no logical sense 
at all, which gives me significant pause about the validity of this 5.4 
million number upon which so much of our colleagues' argument stands.
  The other point I would make is there are many States that could 
reach more eligible children, but the funding is not there for them. 
Rhode Island is one such State. When other States return funds, we get 
access to that pool, and we can expand our coverage.
  So, in fact, by supporting this legislation, you will enable the 
State programs to reach whatever that group of kids is, whether it is 
5.4 million or 540,000. I do not know what the number is. Madam 
President, 5.4 million sounds very unlikely. But even setting that 
question aside, the fact that we would vote against this piece of 
legislation in order to help those 5.4 million kids makes no sense 
whatsoever because this legislation contains both the funding and the 
outreach tools to allow the State programs to reach those very kids.
  So that argument, at least from this Senator's perspective, appears 
to hold no water whatsoever, or at least requires substantially better 
justification and support before it should be counted on, at least in 
my view, by any Senator as a reason to oppose this piece of 
legislation.
  With that observation, I yield the floor and suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DeMINT. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            Amendment No. 43

  Under the previous order, the time until 5:45 will be equally divided 
and controlled prior to a vote on amendment No. 43, offered by the 
Senator from South Carolina, Mr. DeMint.
  The Senator from South Carolina is recognized.
  Mr. DeMINT. Thank you, Madam President.
  I wish to take a few minutes to talk about an amendment I am offering 
as part of the children's health plan we will be voting on probably 
later this week.
  I think it is important, as we talk about expanding the program, we 
do it responsibly and make sure we do everything we can to keep 
personal responsibility as part of the plan. All of us, Republicans and 
Democrats, look forward to the day when every American family has a 
health insurance plan they can afford and own and keep.
  The children's health plan is, I see, maybe an interim step to that. 
It was started to help America's poorest children be insured. The plan 
we are discussing today, however, expands the children's health plan to 
children over 200 percent of poverty. One of the things we want to make 
sure does not happen is people who have private insurance and have 
taken responsibility for health insurance for their family are not 
encouraged to drop their private insurance and to join a government 
children's health plan.
  There are ways we can do it, and some States already do this. This is 
by adding cost-sharing provisions for those who take advantage of the 
government children's health plan. That is what my amendment is about: 
making sure States that provide Government health coverage to families 
over 200 percent of poverty have some cost-sharing arrangement to send 
the signal that this is not a permanent subsidy from Government but a 
temporary bridge to help families who need some help getting health 
insurance for their children to get the help they need.
  So let me talk a little bit about what is in there.
  Again, the main goal of this amendment is to stop the people moving 
from private plans--that they are paying for and taking responsibility 
for--to a Government-sponsored plan so there is accountability, and 
that is what we want to make sure is in this system.
  We need to remind our colleagues the children's health plan was 
created for America's poorest children. I wish a lot of our emphasis 
and debate was on: How can we get more children under 200 percent of 
poverty actually registered for the program? There are millions of 
children today who qualify for the current children's health plan who 
are not registered, either for what we call SCHIP or for Medicaid. 
Instead of

[[Page S880]]

just taking those numbers up and expanding the people who can take 
advantage of the program, we should be trying to get those who are most 
needy registered for the program. Instead, I am afraid we are going to 
crowd out those folks, as we provide insurance for other families. In 
some States, under this plan, families making over $70,000 a year, with 
a family of four, can take advantage of Government health plans.
  So what we are going to have is one person making $70,000 a year 
paying for their own private insurance and their neighbor making the 
same amount who has Government health care. There are ways we can 
discourage it. A number of States already require that the 
beneficiaries of this children's health plan pay a copay or a small 
part of the cost of the health insurance, and that is what this 
amendment does.
  My amendment specifically would require that States that are offering 
the children's health plan to families above 200 percent of poverty 
have some minimum cost-sharing. We protect the beneficiaries by saying 
that no State can charge a user of the children's health plan more than 
5 percent of their monthly income, and we don't have a minimum. So we 
expect most States to have a very minimum cost-sharing plan put in 
place.
  What we are doing does not replace or change anything that States 
already have set up for cost-sharing. In fact, I think it will make it 
fairer for them. The way the system will work, unless we pass this 
amendment, is the people in States that are participating in the costs 
of this plan will help pay more for those States that don't have any 
cost-sharing. So it is not fair, if we have some States encouraging 
personal responsibility and cost-sharing, to put more of a burden on 
them to pay for States that might not do the same.
  My belief is that every State would implement for families over 200 
percent of poverty a cost-sharing arrangement. What this does is just 
lays out some basic parameters that give the States complete 
flexibility, whether it is a copay, whether it is a percent of the 
insurance, but not to exceed 5 percent of the income of any of the 
recipients.
  I understand this is the next amendment to be voted on. I encourage 
all of my colleagues to do everything we can to stop any incentives 
that move people from private insurance to Government insurance, create 
some accountability and personal responsibility in this plan for the 
ones with higher incomes, and to save more of the dollars for those who 
are most needy in the plan.
  Again, I encourage a vote, and I reserve the remainder of my time.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. PRYOR. Madam President, I ask unanimous consent that the time 
during the quorum call be divided evenly, and I suggest the absence of 
a quorum.
  Mr. DeMINT. Madam President, reserving the right to object, I 
understand I have 2\1/2\ minutes left; is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. DeMINT. And the quorum call will be applied against that time; is 
that correct?
  The PRESIDING OFFICER. Equally applied to the Senator 2\1/2\ minutes 
and the time remaining on the majority side.
  Mr. DeMINT. If the Senator would agree, I don't have much time left, 
and if I could reserve that time. If there is no opposition, obviously, 
I don't need to use any additional time.
  Mr. PRYOR. That is agreeable.
  Mr. DeMINT. I thank the Senator.
  Mr. PRYOR. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. PRYOR. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRYOR. Madam President, I move to table the DeMint amendment No. 
43 and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necesarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Louisiana (Mr. Chambliss).
  The PRESIDING OFFICER (Mr. Tester). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 60, nays 37, as follows:

                      [Rollcall Vote No. 16 Leg.]

                                YEAS--60

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Bond
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Hutchison
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Specter
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--37

     Alexander
     Barrasso
     Bennett
     Brownback
     Bunning
     Burr
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hatch
     Inhofe
     Isakson
     Johanns
     Kyl
     Lugar
     Martinez
     McCain
     McCaskill
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Snowe
     Thune
     Vitter
     Voinovich
     Wicker

                             NOT VOTING--2

     Chambliss
     Kennedy
       
  The motion was agreed to.


                            Amendment No. 45

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided prior to a vote in relation to 
amendment No. 45, offered by the Senator from Utah, Mr. Hatch.
  The Senator from Utah is recognized.
  Mr. HATCH. Mr. President, to remind my colleagues, the Hatch 
amendment, No. 45, says that before a State is permitted to cover legal 
immigrants through CHIP and Medicaid, it must demonstrate to the HHS 
Secretary that 95 percent of its State children who are citizens under 
200 percent of the Federal poverty level are enrolled in either the 
State's Medicaid Program or CHIP.
  My amendment does not prohibit legal immigrant children from being 
covered, but it does set some of the parameters. Again, I believe our 
U.S. children who are citizens should be covered first. If you cover 95 
percent, then you can go on and do more. Once those kids are covered, I 
am happy to work with my colleagues to cover legal immigrant children, 
but our U.S. citizen kids should be covered first. That is all I am 
saying, and I think it is reasonable.
  Mr. President, I think this is a reasonable amendment. I am prepared 
to ask unanimous consent to have a voice vote on it.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, basically the amendment requires States to 
certify that 95 percent of their CHIP children, or Medicaid, are being 
paid first before the children of legal immigrants. No State meets that 
requirement.
  I might also say the nationwide average for covering children under 
200 percent of poverty is 80 percent. No State reaches 95. It is too 
high a standard.
  More than that, we do include in this bill provisions for bonus 
payments to States to encourage them to cover low-income kids first. I 
think it would be inappropriate and unfair to make it an ironclad 
requirement that States must certify 95 percent. These are kids who are 
sick through no fault of their own. Their parents are paying taxes. 
They are full citizens--they are legal immigrants, but they are already 
incorporated into the system, being taxed, et cetera, and their kids 
should not be penalized.
  I strongly encourage us not to adopt this amendment because no State 
can certify to 95 percent.
  The PRESIDING OFFICER. All time has expired. The Senator from Utah is 
recognized.

[[Page S881]]

  Mr. HATCH. Mr. President, I ask unanimous consent that we withdraw 
the call for a rollcall vote and voice-vote this amendment.
  The PRESIDING OFFICER. The rollcall vote has not been ordered.
  The question is on agreeing to the amendment.
  The amendment was rejected.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I have conferred with the Republican leader. 
This will be the last vote today. The Finance Committee is still 
meeting, and they expect to continue working tonight. I spoke to the 
chairman just a short time ago. He is going to do everything within his 
power to finish the markup tonight. We are going to get back tomorrow 
and again have no morning business. We will be back on this bill 
tomorrow. Everyone who has amendments to offer, get them ready.

                          ____________________