[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.

[[Page S8]]

  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

[[Page S10]]

     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.

                          ____________________