[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[House]
[Pages 29773-29775]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  STATE FLEXIBILITY CLARIFICATION ACT

  Mr. REYNOLDS. Mr. Speaker, I move to suspend the rules and pass the 
bill H.R. (3257) to amend the Congressional Budget Act of 1974 to 
assist the Congressional Budget Office with the scoring of State and 
local mandates, as amended.
  The Clerk read as follows:

                               H.R. 3257

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``State Flexibility 
     Clarification Act''.

     SEC. 2. FLEXIBILITY AND FEDERAL INTERGOVERNMENTAL MANDATES.

       (a) Committee Reports.--Section 423(d) of the Congressional 
     Budget Act of 1974 (2 U.S.C. 658b(d)) is amended--
       (1) in paragraph (1)(C) by striking ``and'' after the 
     semicolon;
       (2) in paragraph (2) by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(3) if the bill or joint resolution would make the 
     reduction specified in section 421(5)(B)(i)(II), a statement 
     of how the committee specifically intends the States to 
     implement the reduction and to what extent the legislation 
     provides additional flexibility, if any, to offset the 
     reduction.''.
       (b) Congressional Budget Office Estimates.--Section 424(a) 
     of the Congressional Budget Act of 1974 (2 U.S.C. 658c(a)) is 
     amended--
       (1) by redesignating paragraph (3) as paragraph (4); and
       (2) by inserting after paragraph (2) the following:
       ``(3) Additional flexibility information.--The Director 
     shall include in the statement submitted under this 
     subsection, in the case of legislation that makes changes as 
     described in section 421(5)(B)(i)(II)--
       ``(A) if no additional flexibility is provided in the 
     legislation, a description of whether and how the States can 
     offset the reduction under existing law; or
       ``(B) if additional flexibility is provided in the 
     legislation, whether the resulting savings would offset the 
     reductions in that program assuming the States fully 
     implement that additional flexibility.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Reynolds) and the gentleman from Massachusetts (Mr. Moakley) 
each will control 20 minutes.
  The Chair recognizes the gentleman from New York (Mr. Reynolds).


                             General Leave

  Mr. REYNOLDS. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on this legislation, and to include extraneous material.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, our State and local governments were historically 
burdened by unfunded Federal mandates that more often than not forced 
these governments to spend money they did not have on things they did 
not need nor could not use. That is why in 1995 Congress passed 
sweeping reforms with the Unfunded Mandates Reform Act which attempted 
to restrict the Federal Government from opposing burdensome, 
unnecessary, and unfunded mandates.
  Unfortunately, the Congressional Budget Office had a different 
perspective on Federal mandates than what Congress clearly intended. 
CBO exempted more than two-third of the mandatory programs from 
coverage under the Unfunded Mandates Reform Act.
  During remarks at a White House conference on small business, 
President Ronald Reagan noted that the Federal Government's view of the 
economy could be summed up in a few short phrases: ``If it moves, tax 
it. If it keeps moving, regulate it, and if it stops moving, subsidize 
it.''
  Coming up through the ranks as a town councilman and a county 
legislator and State assemblyman of New York, I would make one addition 
to President Reagan's observations. If the Federal Government has an 
expensive and often unnecessary program, let somebody else pay for it.
  As a local and State official, I have seen firsthand how unfunded 
mandates have busted local budgets. As a Member of Congress, we have 
had the opportunity and a responsibility to stop placing this burden on 
the backs of State and local governments.
  Mr. Speaker, this bipartisan bill is a simple, technical 
clarification of Congress's intent under the Unfunded Mandates Reform 
Act of 1995.
  Mr. Speaker, the State Flexibility Clarification Act corrects the CBO 
interpretation in three ways. First, it clarifies the goal of UMRA, 
which is that any cut or cap or safety net programs constitutes an 
intergovernmental mandate, unless State and local governments are given 
new or additional flexibility to implement the restriction or funding 
reduction.

[[Page 29774]]



                              {time}  1215

  Second, the bill requires committees to include in their reports an 
explanation of how the committee intends the States to implement the 
reduction in funding and what flexibility, if any, is provided in the 
legislation.
  Third, the bill requires CBO to prepare in its mandates statement how 
the States could implement the reductions under existing law. If such 
legislation does not provide additional flexibility, then CBO must 
include in its report an estimate of whether the savings from an 
additional flexibility would offset the reduction in Federal spending.
  Mr. Speaker, this Congress responded to our States and localities 
when they requested needed relief from unfunded mandates. This 
clarification will ensure that they get it.
  Mr. Speaker, I would like to thank the gentleman from Massachusetts 
(Mr. Moakley) for all of his efforts on this measure. I urge my 
colleagues to restore fairness to the Federal budget and pass H.R. 
3257.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, today's suspension deals with the confusing issue of 
unfunded mandates, which have become a very bad word here in the halls 
of Congress. Mr. Speaker, contrary to popular belief, unfunded mandates 
are not always bad. Unfunded mandates keep our food safe, keep our air 
clean, keep our civil rights strong. But they can also impose enormous 
costs. I believe that the Members should know these costs before they 
are asked to vote on any bill.
  Today we are considering under suspension of House rules a 
clarification to the unfunded mandates point of order. The substance of 
this bill, Mr. Speaker, is relatively noncontroversial. Today's bill 
clarifies the definition of a Federal mandate. It says,

       A bill must be scored by the Congressional Budget Office if 
     it increases costs for State or local governments by 
     expanding an existing program, but fails either to pay for 
     the increased costs or to provide for the flexibility to 
     absorb those costs.
  This bill will expand the Congressional Budget Office requirements as 
Congress had originally intended.
  I really want to take this time to thank my chairman, the gentleman 
from California (Mr. Dreier), and his entire staff, the gentleman from 
New York (Mr. Reynolds), and all the other Members of the Committee on 
Rules for addressing the problems that we had with them.
  We informed them of our concerns and they amended the bill 
accordingly. Thanks to their very gracious acceptance of our 
suggestions, I have no major concerns with this bill, and I urge my 
colleagues to support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. REYNOLDS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Dreier), the distinguished chairman of 
the Committee on Rules.
  Mr. DREIER. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, the gentleman from Massachusetts (Mr. Moakley) will be 
very happy that I have taken the well to speak, because along with 
complimenting the gentleman from New York (Mr. Reynolds), I want to 
thank him for his hard work and that of his staff, who worked with the 
gentleman from New York (Mr. Reynolds) and his staff in putting 
together what I think is a very important measure.
  As has been pointed out, this has twice passed the House before 
through the Unfunded Mandates Reform Act, and we have had difficulty 
getting that legislation through. So I believe that the gentleman from 
New York (Mr. Reynolds) was absolutely right on target in stepping up 
to the plate and saying that we needed to move this State flexibility 
clarification measure.
  In 1996, the CBO estimate exempted committee-reported bills that 
limit resources available to State and local governments from budget 
scoring as defined by the 1995 Unfunded Mandates Reform Act, 
legislation which sought to lift that burden of unfunded Federal 
mandates.
  As both the gentleman from Massachusetts (Mr. Moakley) and the 
gentleman from New York (Mr. Reynolds) have pointed out, this is a 
technical point but it is a very important one, because without such 
scoring, committees would be unable to consider the ramifications of 
proposed legislation on State and local governments.
  This bill that the gentleman from New York (Mr. Reynolds) has 
carefully crafted will stipulate that any new changes to entitlement 
programs that do not provide new flexibility would be construed by the 
Congressional Budget Office as an intergovernmental mandate as defined 
by the Unfunded Mandates Reform Act.
  This bill has been endorsed by a wide range of groups, including the 
National Governors Association, the National Conference of State 
Legislators, and other major State and local organizations.
  I would like to simply say that I believe it is a very important 
measure that we move through. I am glad that it enjoys strong 
bipartisan support. As we have delved into the annals of history in the 
Committee on Rules, it appears that this may be if not the first time, 
the first time in a heck of a long time that the Committee on Rules has 
moved legislation which is being considered under suspension of the 
rules.
  Mr. Speaker, it is with this bipartisan spirit that I would like to 
congratulate the gentleman from New York (Mr. Reynolds) for his hard 
work on this, and urge my colleagues to support this measure.
  Mr. MOAKLEY. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. REYNOLDS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Georgia (Mr. Linder), chairman of the Subcommittee on 
Rules and Organization of the House of the Committee on Rules.
  Mr. LINDER. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, I rise in strong support of the State Flexibility 
Clarification Act, and I commend the hard work in the gentleman from 
New York in ensuring its passage.
  Mr. Speaker, as the chairman of the Committee on Rules subcommittee 
with jurisdiction over the mandates legislation, I held a hearing 
earlier this year on the effectiveness of the 1995 Unfunded Mandates 
Reform Act and proposals to expand that Act.
  We have now had 3 full years to observe how the law has worked. It 
has worked well. The bill has simply forced Members to review reliable 
information from the CBO in an effort to increase not only Member 
consciousness of the cost of legislation, but also public awareness.
  The bill under consideration today is similar to language in the 
Mandates Information Act that we considered in February of this year. I 
am pleased that the State Flexibility Clarification Act will now pass 
as a stand-alone bill today.
  The reason this bill is necessary is because in 1996 the 
Congressional Budget Office decided that Federal entitlement programs 
such as Medicaid, child nutrition, and foster care are considered 
exempt from the unfunded intergovernmental mandates requirements if 
Congress imposes new conditions, places caps on funding, or cuts 
funding without giving the States the authority to adjust to those 
changes.
  The CBO interpretation exempted more than two-thirds of mandatory 
entitlement programs from coverage under the 1995 mandates bill. As a 
result, the point of order against unfunded requirements on State and 
local governments would not apply in these circumstances.
  Therefore, the bill on the floor today will help clarify that any cut 
or cap of entitlement programs constitutes a Federal intergovernmental 
mandate, and would require committees and the CBO to report on new or 
additional flexibility and the authority to offset the cut or the cap.
  This is a good bill that clarifies what was intended by the Congress 
when it passed the original mandates bill in March of 1995. I urge 
Members to strongly support it.
  Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.

[[Page 29775]]

  Mr. Speaker, I again want to thank the gentleman from California (Mr. 
Dreier), the chairman, and the gentleman from Massachusetts (Mr. 
Moakley) for their assistance in this legislation as we bring it before 
the House on suspension.
  Mr. MORAN of Virginia. Mr. Speaker, I rise in support of this 
legislation and applaud the gentlemen from California (Mr. Condit) and 
New York (Mr. Reynolds) for their work on this issue. My own 
involvement on the unfunded mandate issue began more than five years 
ago. Our efforts were successful.
  As one of the first acts of the 104th Congress, we passed the 
Unfunded Mandate Reform Act. We all should all be held accountable for 
legislation we support regardless of whether it imposes a cost on the 
public or private sector. The Unfunded Mandate Reform Act gives us this 
accountability for legislation that affects state and local 
governments.
  Today, the legislation provides a technical fix on the issue of 
state-administered entitlement programs like food stamps, TANF, and 
Medicaid. The fix is necessary because the Congressional Budget Office 
(CBO) has determined that any new entitlement program mandates is 
exempt from the Unfunded Mandate Reform Act if there is sufficient 
flexibility within the entitlement program to offset the new mandate's 
new state and local costs. For example, on June 10, 1996, CBO ruled 
that a point-of-order would not exist for a proposed cap on federal 
Medicaid contributions and any other mandatory federal aid programs 
except food stamps. The effect of this interpretation was to exempt 
more than two-thirds of all grant-in-aid, the mandatory entitlement 
program, from coverage under the Unfunded Mandate Reform Act.
  What may appear to be an optional federal mandate program from CBO's 
perspective, such as, expanded Medicaid coverage to pregnant women and 
children, is not an optional program from the states' perspective. I 
know of no state willing or reduce Medicaid coverage to pregnant women 
and children to help offset the cost of a new federal mandate.
  The legislation would correct this interpretation problem by adding a 
few simple words to the Unfunded Mandate Reform Act to clarify that any 
cut or cap of safety net programs constitutes an intergovernmental 
mandate unless state and local governments are given new or additional 
flexibility and the authority to offset the cut or cap. This provision 
has been endorsed by the five major state and local organizations.
  I urge you to vote for this legislation.
  Mr. PORTMAN. Mr. Speaker, I rise in support of the State Flexibility 
Clarification Act (H.R. 3257) sponsored by my friend from New York, Mr. 
Reynolds. This bill is a technical correction to the Unfunded Mandates 
Reform Act of 1995. And as one of the lead authors of that measure, I 
believe it is entirely consistent with the legislative intent of that 
law.
  The State Flexibility Clarification Act clarifies that any 
legislation capping or decreasing federal financial participation in 
state-administered entitlement programs is an intergovernmental mandate 
if it doesn't provide new or expanded authority for the states to deal 
with the change.
  It would also make the cap or decrease subject to the CBO unfunded 
mandates scoring process and procedural points of order. This fix will 
help facilitate state and local input in the drafting of new federal 
entitlements and changes to current entitlements.
  This is a commonsense technical correction to the Unfunded Mandates 
Reform Act, and it has been endorsed by all of the leading 
organizations representing state and local governments who were so 
instrumental in supporting UMRA, including: the National Governors 
Association, the National Conference of State Legislatures, and the 
National Association of Counties.
  Nearly identical provisions have already passed the House of 
Representatives twice in versions of the Mandates Information Act in 
both the 105th and 106th Congresses.
  I commend the gentleman from New York for his leadership, and I 
commend the Committee on Rules for moving this important correction 
forward.
  Mr. WAXMAN. Mr. Speaker, H.R. 3257, the State Flexibility 
Clarification Act, amends the Unfunded Mandates Reform Act (UMRA) to 
require Congressional committees and the Congressional Budget Office to 
give States guidance on how to reach program goals if Congress decides 
to reduce funding to the States. This bill does not change the 
definition of an unfunded mandate. Therefore, only those funding 
reductions for programs already defined as an unfunded mandate under 
the existing law would be subject to these additional analyses.
  As originally introduced, H.R. 3257 would have amended the definition 
of an unfunded mandate to include Medicaid and other entitlement 
programs. Under existing law, the Congressional Budget Office has 
determined that these entitlement programs are exempt from UMRA because 
States are given sufficient flexibility to meet minimum Federal 
requirements without undue burden. If this definition was changed to 
include Medicaid, then any legislation that tightens quality standards; 
improves nursing home requirements; protects funding for rural or 
community health centers with a prospective payment system; or enhances 
benefits or services provided under Medicaid would become subject to a 
point of order on the House floor and the other procedural requirements 
under UMRA.
  Because of our concerns, the bill's sponsors agreed to remove this 
change in definition. The gentleman from Georgia implied in his 
statement that this bill would change the definition of an unfunded 
mandate to include Medicaid and other entitlement programs. He was 
referring to the bill as originally introduced. The bill we are 
considering today would not amend the definition of an unfunded 
mandate. Therefore, Medicaid and other entitlement programs would 
continue to not be subject to UMRA and Congress will still be able to 
provide necessary oversight to ensure that States are using Federal 
funds for these programs for their intended purposes.
  Mr. REYNOLDS. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Ose). The question is on the motion 
offered by the gentleman from New York (Mr. Reynolds) that the House 
suspend the rules and pass the bill, H.R. 3257, as amended.
  The question was taken.
  Mr. REYNOLDS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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