[Congressional Record Volume 156, Number 6 (Wednesday, January 20, 2010)]
[Senate]
[Pages S7-S10]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HEALTH CARE
Mr. ALEXANDER. Mr. President, Massachusetts voters yesterday sent a
clear message that the Democratic majority in Congress is not in touch
with the American people and that we ought to restart the health care
debate.
Senator-elect Scott Brown's independent voice will provide a much
needed check and balance to a Congress that has become dominated by
more taxes, more spending, and more cash takeovers. Nothing
demonstrates that need more than the so-called health care reform bill,
a 2,700-page attempt to remodel 17 percent of the American economy that
was concocted in secret, presented to the Senate over the weekend
before Christmas during the worst snowstorm in years, voted on in the
middle of the night, and passed 5 days later, on Christmas Eve, without
one single Republican vote.
Now that the people have spoken in Massachusetts, we should abandon
these arrogant notions of trying to turn our entire health care system
upside down all at once and, instead, set a clear goal of reducing
health care costs and then work together, step by step, to re-earn the
trust of the American people--an approach Republican Senators urged
exactly 173 different times on the floor of the Senate during last
year.
If you will examine the Congressional Record, you will find that
Republican Senators have been proposing a step-by-step approach to
confronting our Nation's challenges 173 different times during 2009. On
health care, we first suggested setting a clear goal: reducing costs.
Then we proposed the first six steps toward achieving that goal: one,
allowing small businesses to pool their resources to purchase health
plans; two, reducing junk lawsuits against doctors; three, allowing the
purchase of insurance across State lines; four, expanding health
savings accounts; five, promoting wellness and prevention; and, six,
taking steps to reduce waste, fraud, and abuse.
We offered these 6 proposals in complete legislative text totaling
182 pages. The Democratic majority rejected all six and ridiculed the
approach, in part, because our approach was not comprehensive.
A good place to restart the health care debate would be to abandon
plans to send a huge bill to States--that is, every State except
Nebraska--to pay for Medicaid expansion. The 60 Senators who voted for
this so-called health care reform legislation ought to be sentenced to
go home and serve as Governor for two terms to try to pay for it
because what these Senators would find is that States are broke, and
there will either be higher State taxes or higher college tuition or
both to pay for what the Democratic Governor of Tennessee has called
``the mother of all unfunded mandates.''
That mandate arrogantly expands Medicaid and, to help pay for it,
would send a 3-year, $25 billion bill to Governors who, in turn, will
send the bill to State taxpayers and then to college students. That is
akin to your big-spending Uncle Sam hiring someone to paint your house
and then sending the bill to you, even though you told Uncle Sam you
already spent all your available money sending your kid to college. Of
course, Uncle Sam does not have to balance its budget and you do.
I speak today not just as a Senator but as a former Governor worried
about our States and as a former president of a great public university
worried about our college students, many of whom are seeking an
education to get a job.
Washington policies are turning our Federal constitutional system
upside down. They are transforming autonomous State governments into
bankrupt wards of the central government. In doing so, they are making
it harder for States to support public higher education; therefore,
damaging its quality and damaging the opportunity for Americans to
afford it.
Governor Schwarzenegger of California said:
With a $19 billion deficit, the last thing we need is
another $3 billion bill for Medicaid.
At the University of California, students are paying a 32-percent
tuition increase. Why? Because, according to the New York Times, ``the
University of California now receives only half as much support from
the State per student as it did in 1990.''
Why is that? Because when Governors make up their budgets, it usually
comes down to a choice between exploding Medicaid costs and higher
education, and Medicaid, hopelessly entangled with expensive Washington
policies and mandates, usually wins.
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This is not a new problem. It was a problem when I was Governor 30
years ago. It became a bigger problem between 2000 and 2006, when
Medicaid spending for State governments rose 63 percent, while spending
for higher education went up only 17 percent.
The Association of American Universities and President Obama's Budget
Director both have warned us that the drop in State support is hurting
the quality of American public higher education, and the problem gets
worse.
Some estimates predict the State share of Medicaid spending will go
from $138 billion in 2007 to $181 billion in 2011. Yet instead of
fixing the problem of exploding Medicaid costs and its impact on higher
education, the health care bill would make it worse.
Over the Christmas holidays in my State, the most talked about part
of the health care bill was the so-called cornhusker kickback, which
makes taxpayers and students all over America pay for Nebraska's
Medicaid so Nebraskans will not have to raise their taxes and tuition.
I can guarantee you any Senator who is sentenced to go home and serve
as Governor--except perhaps in Nebraska--would not vote for this health
care bill.
The second recent big blow to States and to higher education has been
the stimulus package, which was hailed as bailing States out but
instead will soon push them over the financial cliff.
This is how the Democratic Lieutenant Governor of New York explained
it in a Wall Street Journal article on January 8. He said:
. . . states, instead of cutting spending in transportation,
education, and health care, have been forced to keep most of
their expenditures at previous levels and use Federal funds
only as supplements. The net result of this: The federal
stimulus has led states to increase overall spending in these
core areas, which in effect has only raised the height of the
cliff from which state spending will fall if stimulus funds
evaporate.
On top of all this is the dramatic deterioration of the autonomous
role of the States in our Federal system. Thanks, in part, to the
stimulus, federally collected tax dollars have risen to 40 percent of
State budgets. So instead of serving as autonomous laboratories of
democracy in a Federal system, States are becoming little more than
heavily regulated and increasingly insolvent administrative divisions
of the central government in Washington.
Some are suggesting a new stimulus to bail out the States. Why should
we even consider that when the last one is helping to push States off
the financial cliff? Why should we pass a new health care bill that
makes it worse for States; that is, every State except Nebraska.
Wouldn't it be better to restart the health care debate and take a
series of steps to reduce health care costs without the Medicaid
mandate?
Instead of expanding Medicaid and sending the States the bill, why
not reform Medicaid, which has become an embarrassing administrative
nightmare, where $30 billion a year goes to waste, fraud, and abuse,
according to the Government Accountability Office.
Instead of dumping 15 million to 18 million more low-income Americans
into a Medicaid Program, in which 50 percent of doctors--50 percent of
doctors--will not take new patients, shouldn't we try a better idea?
Lieutenant Governor Ravitch suggests that one place to start is
relieve States of the responsibility for those patients who draw
services from both Medicare and Medicaid.
That would save States about $70 billion a year and would place all
the responsibility on Washington for reforming the program so taxpayers
could afford it.
Thirty years ago, when I was Governor, I met with President Reagan
and proposed a grand swap: that the Federal Government would take over
all of Medicaid in exchange for giving the States all the
responsibility for elementary and secondary education. President Reagan
liked the idea. I still think fixing the responsibility for both
education and Medicaid in a single government would make it work better
and force its reform.
The No. 1 topic on the minds of most Americans today is jobs. Running
up the cost of health care, raising State taxes, damaging the quality
of universities and community colleges, and restricting access to them
is a good way to kill jobs, not create jobs.
There still is time to restart the health care debate, to work
together on a step-by-step plan to reduce health care costs, while
avoiding expensive mandates on States that increase State taxes and
increase college tuitions. The surest way to cause this to happen is to
tell those 60 Senators who voted for this health care bill that if it
becomes law, they will be sentenced to go home and serve as Governor
for two terms to try to pay for it.
Mr. President, I ask unanimous consent to have printed in the Record
three newspaper articles.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, Jan. 7, 2010]
Washington and the Fiscal Crisis of the States--The Strings on Federal
Stimulus Money Are Making it Harder for States To Cut Spending and
Balance their budgets
(By Richard Ravitch)
As one whose interest in public service stems largely from
the conviction that government can make a positive difference
in people's lives, I have found the past year a paradox. From
the financial crisis to health-care reform, the federal
government has taken on challenges that urgently need to be
addressed. Yet despite these actions--and sometimes because
of them--the states, which provide most of the services that
touch citizens' lives, are in their deepest crisis since the
Great Depression. The state crisis has become acute enough to
belong on the federal agenda.
New York State faces a budget deficit that could climb to
$8 billion or $9 billion in fiscal year 2010-11 and the state
could face another deficit in 2011-12 of about $14 billion to
$15 billion. The causes of the larger deficits down the road
include a drop off in federal stimulus funds, an increase in
Medicaid costs, and the planned expiration of a state income
tax surcharge, as well as the state's underlying structural
deficit.
New York is in a tough spot, but few other states are
immune from large and growing deficits. According to the
Center on Budget and Policy Priorities, the states have faced
and will face combined budget shortfalls estimated at $350
billion in fiscal years 2010 and 2011. Past experience
suggests that these deficits will continue even if a national
economic recovery takes hold. Moreover, we do not know how
robust the recovery will be or what shape it will take. We
know only that it will not spare the states the necessity of
making acutely painful fiscal choices. New York and other
states face draconian cuts in public services, higher taxes,
or, more likely, a combination of both.
The federal stimulus has provided significant budget relief
to the states, but this relief is temporary and makes it
harder for states to cut expenditures. In major areas such as
transportation, education, and health care, stimulus funds
come with strings attached. These strings prevent states from
substituting federal money for state funds, require states to
spend minimum amounts of their own funds, and prevent states
from tightening eligibility standards for benefits.
Because of these requirements, states, instead of cutting
spending in transportation, education, and health care, have
been forced to keep most of their expenditures at previous
levels and use federal funds only as supplements. The net
result is this: The federal stimulus has led states to
increase overall spending in these core areas, which in
effect has only raised the height of the cliff from which
state spending will fall if stimulus funds evaporate.
Until recently, some people predicted that the stimulus
funds would not evaporate--that instead the federal
government would rescue the states once more with another
stimulus bill. But the prospect of this kind of help looks
doubtful as an increasing number of lawmakers in Washington
worry about the federal deficit and seem intent on taking
serious steps to rein it in.
If those steps include neglecting the fiscal situation
facing the states, the country could be headed for fiscal
problems that are larger than the ones we face now. We are in
a time of extraordinary economic change and Washington is
struggling with the sometimes-conflicting demands of the
federal deficit and the unemployment rate. But the states'
growing deficits present their own urgent national problem
that the federal government must place in the balance.
Federal policy makers do not have the option of assuming
that the state fiscal crisis is temporary or will cure itself
without further involvement by Washington. This crisis
reflects the growing long-term pressures on the states from
the health-care needs of an aging population and the
maintenance needs of an aging infrastructure. Moreover, the
$3 trillion municipal bond markets have begun to notice the
states' deficits: Moody's recently downgraded the bond
ratings of Arizona and Illinois because of the deficits those
states face. The rating agency says it is waiting to see
whether New York will reduce its budget gaps and has warned
the state against trying to do so solely through one-time
actions.
It seems almost inevitable now that the states' fiscal
problems will have further effects on capital markets,
possibly as soon as next spring and summer. If more cracks
appear in the capital markets that handle municipal bonds,
the U.S. Treasury and the
[[Page S9]]
Federal Reserve will be faced with an unattractive set of
options: They can allow those markets to deteriorate or use
federal tax dollars to shore them up and thereby increase the
federal deficit.
It is safe to say that one way or another events will force
federal policy makers to spend money in response to state
deficits. Federal officials shouldn't wait for an emergency
to begin to address two questions: Which services should the
federal government provide and which should the states
provide? And how should the costs of these services be split
among federal, state, and local tax bases?
For example, Medicare, not Medicaid, is the primary payor
of health-care costs for the elderly and disabled. About 17%
of Medicare beneficiaries are low-income and, thus, also
receive varying levels of state Medicaid benefits. These
``dual eligible'' beneficiaries account for some 40% of state
Medicaid spending.
For these beneficiaries, the current system is a nightmare:
They disproportionately suffer from chronic diseases but must
navigate two separate bureaucracies and sets of rules in
order to receive care. For the states, this system is a
costly burden. From the perspective of a rational health
policy, the system is an anachronism. It developed when
Medicare did not provide income-based aid and did not have
income-based information about those it served. Medicare now
provides such aid and has the information and capacity to
provide these benefits more effectively, with more potential
for cost containment, than the current system.
A federal takeover of services to dual eligibles would cost
about $70 billion per year. For many states, a share of this
amount would be the difference between chronic fiscal crisis
and a chance at structural budget balance. After the Troubled
Asset Relief Program and health-care reform--with the cost of
the latter estimated by the Congressional Budget Office at
almost $900 billion from now through 2019 and $1.8 trillion
in the 10 years from 2014 through 2023--the bill for such a
takeover does not seem huge or disproportionate to the relief
it would provide to state budgets.
Those of us responsible for the states' budgets have the
unpleasant duty of imposing greater burdens on our citizens
before we can reach legitimate balance between revenues and
expenditures. It is not unreasonable for us to hope that
federal policy makers will treat our state deficit problems
with the same seriousness with which they are now preparing
to address the national deficit.
____
[From the Wall Street Journal, Jan. 5, 2010]
The Pushback--State AGs Say Ben Nelson's Medicaid Deal is
Unconstitutional
``It's not a special deal,'' Ben Nelson told the New York
Times of the special deal that converted him into the 60th
Senator for ObamaCare. ``It's a fair deal. Some people said I
was getting money for Nebraska. That's wrong. I was just
getting rid of an underfunded federal mandate. There's
nothing sleazy about it. I cracked the door open for other
states.''
The other states think somewhat less of Mr. Nelson's
benevolence. Under the ``Cornhusker Kickback,'' the federal
government will pay all of Nebraska's new Medicaid costs
forever, while taxpayers in the other 49 states will see
their budgets explode as this safety-net program for the poor
is expanded to one out of every five Americans.
``In addition to violating the most basic and universally
held notions of what is fair and just,'' the AGs wrote last
week to the Democratic leadership, the Article I spending
clause is limited to ``general Welfare.'' If Congress claims
to be legitimately serving that interest by expanding the
joint state-federal Medicaid program, then why is it
relieving just one state of a mandate that otherwise applies
to all states? In other words, serving the nongeneral welfare
of Nebraska--for no other reason than political expediency--
violates a basic Supreme Court check on the ``display of
arbitrary power'' that was established in 1937's Helvering v.
Davis.
Obviously Congress treats different states differently all
the time, via earmarks and the like, but in this case there
is simply no plausible argument for some kind of ``general''
benefit. The only state that gains from special treatment for
Nebraska is Nebraska--and this actively harms all other
states, which will have fewer tax dollars for their own
priorities while effectively subsidizing the Cornhusker
state.
The 12 Attorneys General are all Republicans, but as it
happens their complaints are echoed by the liberal states of
New York and California. In a December letter Governor Arnold
Schwarzenegger lamented that ObamaCare would impose the
``crushing new burden'' of as much as $4 billion per year in
new Medicaid spending in a state that is already deeply in
the red. And in a Christmas Day op-ed in the Buffalo News,
New York Governor David A. Paterson protested the almost $1
billion in new costs as well as the ``unfairness of the
Senate bill'' when ``New York already sends significantly
more money to Washington than it gets back.''
The reality is that national taxpayers have subsidized New
York and California's social services for years because
Medicaid's funding formula rewards higher state spending.
That spending helps explain why these two states, plus New
Jersey, are in such budget fixes today. But we welcome Mr.
Paterson's discovery that redistributing income via
progressive taxation is harmful.
``The final bill must provide equitable federal funding to
all states,'' Mr. Paterson insisted, and in that sense Mr.
Nelson may be right about his opening the political door. As
Democrats merge the House and Senate bills, they may extend
the 100% Nebraska deal to all states to shut them up,
assuming they can rig the budget math. Of course, that gambit
would harm either medical providers, given that state
Medicaid reimbursement rates are well below even Medicare's,
or Medicaid patients, as more doctors and hospitals simply
drop those patients.
We recognize that mere Constitutional arguments won't deter
the political juggernaut that is ObamaCare. But no one should
be surprised when Americans wonder if this unprecedented
federal intrusion into their lives violates our nation's
founding principles.
____
[From the Wall Street Journal, Jan. 2, 2010]
The States and the Stimulus--How a Supposed Boon Has Become a Fiscal
Burden
Remember how $200 billion in federal stimulus cash was
supposed to save the states from fiscal calamity? Well, hold
on to your paychecks, because a big story of 2010 will be how
all that free money has set the states up for an even bigger
mess this year and into the future.
The combined deficits of the states for 2010 and 2011 could
hit $260 billion, according to a survey by the liberal Center
on Budget and Policy Priorities. Ten states have a deficit,
relative to the size of their expenditures, as bleak as that
of near-bankrupt California. The Golden State starts the year
another $6 billion in arrears despite a large income and
sales tax hike last year. New York is literally down to its
last dollar. Revenues are down, to be sure, but in several
ways the stimulus has also made things worse.
First, in most state capitals the stimulus enticed state
lawmakers to spend on new programs rather than adjusting to
lean times. They added health and welfare benefits and child
care programs. Now they have to pay for those additions with
their own state's money.
For example, the stimulus offered $80 billion for Medicaid
to cover health-care costs for unemployed workers and single
workers without kids. But in 2011 most of that extra federal
Medicaid money vanishes. Then states will have one million
more people on Medicaid with no money to pay for it.
A few governors, such as Mitch Daniels of Indiana and Rick
Perry of Texas, had the foresight to turn down their share of
the $7 billion for unemployment insurance, realizing that
once the federal funds run out, benefits would be unpayable.
``One of the smartest decisions we made,'' says Mr. Daniels.
Many governors now probably wish they had done the same.
Second, stimulus dollars came with strings attached that
are now causing enormous budget headaches. Many environmental
grants have matching requirements, so to get a federal
dollar, states and cities had to spend a dollar even when
they were facing huge deficits. The new construction projects
built with federal funds also have federal Davis-Bacon wage
requirements that raise state building costs to pay inflated
union salaries.
Worst of all, at the behest of the public employee unions,
Congress imposed ``maintenance of effort'' spending
requirements on states. These federal laws prohibit state
legislatures from cutting spending on 15 programs, from road
building to welfare, if the state took even a dollar of
stimulus cash for these purposes.
One provision prohibits states from cutting Medicaid
benefits or eligibility below levels in effect on July 1,
2008. That date, not coincidentally, was the peak of the last
economic cycle when states were awash in revenue. State
spending soared at a nearly 8% annual rate from 2004-2008,
far faster than inflation and population growth, and liberals
want to keep funding at that level.
A study by the Evergreen Freedom Foundation in Seattle
found that ``because Washington state lawmakers accepted $820
million in education stimulus dollars, only 9 percent of the
state's $6.8 billion K-12 budget is eligible for reductions
in fiscal year 2010 or 2011.'' More than 85% of Washington
state's Medicaid budget is exempt from cuts and nearly 75% of
college funding is off the table. It's bad enough that
Congress can't balance its own budget, but now it is making
it nearly impossible for states to balance theirs.
These spending requirements come when state revenues are on
a downward spiral. State revenues declined by more than 10%
in 2009, and tax collections are expected to be flat at best
in 2010. In Indiana, nominal revenues in 2011 may be lower
than in 2006. Arizona's revenues are expected to be lower
this year than they were in 2004. Some states don't expect to
regain their 2007 revenue peak until 2012.
So when states should be reducing outlays to match a new
normal of lower revenue collections, federal stimulus rules
mean many states will have little choice but to raise taxes
to meet their constitutional balanced budget requirements.
Thank you, Nancy Pelosi.
This is the opposite of what the White House and Congress
claimed when they said the stimulus funds would prevent
economically harmful state tax increases. In 2009, 10 states
raised income or sales taxes, and another 15 introduced new
fees on everything from beer to cellphone ringers to hunting
and fishing. The states pocketed the federal money and raised
taxes anyway.
Now, in an election year, Congress wants to pass another
$100 billion aid package for
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ailing states to sustain the mess the first stimulus helped
to create. Governors would be smarter to unite and tell
Congress to keep the money and mandates, and let the states
adjust to the new reality of lower revenues. Meanwhile, Mr.
Perry and other governors who warned that the stimulus would
have precisely this effect can consider themselves
vindicated.
The ACTING PRESIDENT pro tempore. The Senator's time has expired.
The Senator from Arizona is recognized.
____________________