[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[Senate]
[Pages 1906-1907]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                 STATES' RIGHTS PROTECTION ACT OF 1999

 Mr. ABRAHAM. Mr. President, I rise as an original cosponsor of 
the ``States' Rights Protection Act of 1999.'' This legislation will 
prevent a grave injustice that could do significant damage to our 
states, and to our federal system.
  Several years ago, Mr. President, a number of states commenced 
lawsuits against American tobacco companies. The states sought damages 
on the basis of a number of claims, including violation of consumer 
fraud and other State consumer protection laws, antitrust violations 
and unjust enrichment. Some suits included claims for tobacco-related 
health care costs incurred by the states, and some did not.
  Eventually all 50 states became parties in one way or another to 
anti-tobacco lawsuits. Last November a major settlement was reached, 
involving 46 states. That settlement included no funds of any kind to 
be allocated for State medicaid costs.
  The federal government in Washington did not initiate these suits. 
The federal government in Washington provided no financial assistance 
to the states in furtherance of their suits. Yet now, after the states 
and the tobacco companies have agreed on a financial settlement, the 
Clinton Administration is seeking to divert a significant portion of 
that settlement to its own use.
  The federal Health Care Financing Administration (HCFA) has stated 
that it wants to ``recoup'' some of the states' settlement funds. They 
claim to have a right to these funds under a Medicaid law which the 
federal government has traditionally used to recover its share of 
``overpayments.'' These overpayments typically arise when providers 
overbill Medicaid.
  Mr. President, HCFA's claims cannot stand. The law to which they 
refer was intended to prevent fraud and other forms of overbilling. It 
was not intended to allow the federal government to seize huge amounts 
of money to

[[Page 1907]]

which it has no proper title. States have obtained a legal right to 
this money. They gained this right through a properly constructed and 
affirmed legal settlement of lawsuits filed against product 
manufacturers, on behalf of all their residents, asserting a consumer 
protection and various other causes of action.
  There is no federal medical claim involved. Thus HCFA has no right to 
these monies, and neither does any agency of the federal government.
  The Administration's pursuit of monies from this settlement amounts 
to nothing more or less than a raw assertion of federal power. We must 
oppose it for the good of our states and for the good of our form of 
limited, federal government.
  Ours is a limited government, Mr. President. It is limited in that 
the Constitution delegates only certain powers to the federal branches 
and their officials. Our Constitution includes a number of what James 
Madison called ``auxiliary precautions'' to keep federal officials 
within their proper bounds, thereby protecting our liberties. But 
Madison recognized that the primary check on those who would overstep 
their proper bounds must be the determination of elected officials to 
see that the Constitution's terms are respected.
  A federal government that simply steps in to take money from the 
states is not respecting our Constitution. That federal government is 
taking us far down a dangerous path toward unrestrained central power. 
We must see that this does not happen.
  In addition, Mr. President, as a practical matter it would be a 
mistake to allow the federal government to commandeer these funds. To 
begin with, were the federal government in Washington to take these 
funds from the states under the weak legal pretense put forward by the 
HCFA, the result would be long, wasteful litigation. That litigation 
will benefit no one, instead it will poison intergovernmental relations 
for years to come.
  Indeed, if the HCFA begins to seize state settlement funds, it will 
do so by cutting federal Medicaid payments to the states. This will 
make it much more difficult for states to provide health care for 
children from low and moderate income families, the disabled and 
millions of others who depend on Medicaid. The real victims of this 
money grab will be the weakest members of our society, those least able 
to take care of themselves.
  Of course, the Administration claims that it will use the states' 
money to benefit everyone. It seeks to take $18.9 billion of the 
states' money over the next five years. No doubt the Administration 
will find attractive programs on which to spend this money. But the 
federal government already consumes more than 20 percent of our 
national income. We do not need yet another federal tax and spend 
policy.
  As a nation what we need is more innovative policy making at the 
state and local level. And that is what these monies will produce, if 
only we will leave them in their proper place.
  A number of states already have acted in reliance on the tobacco 
settlement, putting forward proposals and new programs that will 
greatly benefit their people.
  For example, in my state of Michigan, Governor John Engler in his 
state of the state address a few short weeks ago proposed to endow a 
Michigan Merit Award Trust Fund with Michigan's share of the tobacco 
settlement.
  Under this program, every Michigan high school graduate who masters 
reading, writing, math and science will receive a Michigan Merit 
Award--a $2,500 scholarship that can be used for further study at a 
Michigan school of that student's choice.
  In addition, all Michigan students who pass the 7th and 8th grade 
tests in reading, writing, math and science administered by the state 
will be awarded $500. That means, Mr. President, that any Michigan 
student successfully completing secondary schooling will receive $3,000 
for further education.
  The young people of Michigan will benefit tremendously from this 
program, Mr. President. Their motivation to do well in school will be 
significantly increased, as will their ability to afford and succeed in 
higher education.
  We need programs like Michigan's to help kids do well in school and 
get ahead in life. The federal government should be learning from these 
kinds of programs and working to show other states how well they can 
work. It should not be taking money out of the pockets of Michigan's 
young people to put into the pockets of Washington bureaucrats.
  We must protect the rights and the people of our states by seeing to 
it that tobacco settlement money stays where it belongs, and where it 
will do the most good--in the states.
  I urge my colleagues to support this bipartisan legislation.

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