[Congressional Record (Bound Edition), Volume 153 (2007), Part 16]
[Senate]
[Pages 22001-22058]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 SMALL BUSINESS TAX RELIEF ACT OF 2007

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of H.R. 976, which the clerk will 
report.
  The assistant legislative clerk read as follows:

       A bill (H.R. 976) to amend the Internal Revenue Code of 
     1986 to provide tax relief for small businesses, and for 
     other purposes.

  Pending:

       Baucus amendment No. 2530, in the nature of a substitute.
       Grassley (for Ensign) amendment No. 2538 (to amendment No. 
     2530), to amend the Internal Revenue Service Code of 1986 to 
     create a Disease Prevention and Treatment Research Trust 
     Fund.
       Bunning amendment No. 2547 (to amendment No. 2530), to 
     eliminate the exception for certain States to cover children 
     under SCHIP whose income exceeds 300 percent of the Federal 
     poverty level.
       Dorgan amendment No. 2534 (to amendment No. 2530), to 
     revise and extend the Indian Health Care Improvement Act.
       Gregg amendment No. 2587 (to amendment No. 2530), to limit 
     the matching rate for coverage other than for low-income 
     children or pregnant women covered through a waiver and to 
     prohibit any new waivers for coverage of adults other than 
     pregnant women.

  The ACTING PRESIDENT pro tempore. Under the previous order, there is 
now 30 minutes of debate equally divided prior to a vote in relation to 
amendment No. 2538.
  Who yields time? The Senator from Nevada is recognized.
  Mr. ENSIGN. Mr. President, the bill before us today would reauthorize 
SCHIP for 5 years with a $35 billion expansion in spending. But because 
of the way the budget gimmicks were worked in this bill, it is actually 
an expansion of somewhere around $110 billion.
  This expansion, or at least part of it, is going to be funded by an 
increase in the Federal tobacco tax by 61 cents per pack and up to $10 
per cigar. The problem with the funding mechanism in this bill, the way 
I see it, is that for the funding to still be there, we actually need 
to encourage people to smoke. Today, in our health care system, smokers 
contribute to a lot of diseases and this imposes large costs. In the 
future, as we raise the price of tobacco, fewer people smoking will 
mean less revenue. The proposal to fund the SCHIP expansion will yield 
diminishing returns. In the future, the tobacco tax will not adequately 
pay for the spending that is provided for in this bill.
  This bill greatly increases dependency on the Federal Government and 
the dependency of the Federal Government on this tobacco tax revenue. 
The expansions included in this bill will have little bang for the buck 
in terms of reducing the ranks of the uninsured. As more money is 
poured into expanding SCHIP, less of the new funds will go to providing 
coverage to low-income children who currently go without coverage. 
SCHIP expansion will only serve to coax individuals and families out of 
the private insurance market and into Government coverage.
  Undermining private health insurance coverage by creating more 
Government dependence is not an effective way to address shortfalls in 
coverage. We should have more of a comprehensive approach. This 
approach should include fiscal discipline, not more taxes and higher 
spending. We should be working to strengthen private sector health 
insurance options and increase parental choice and responsibility.
  My amendment, however, will not address taking a more comprehensive 
approach to coverage. We will have other amendments during this debate 
that will address more of a comprehensive approach to insurance 
coverage.
  I strongly believe in the role of Federal Government plays in 
promoting basic research. Some have noted that an increase in the 
tobacco tax should be used to fund the costs that tobacco imposes on 
our society. I agree with that. My amendment would establish a trust 
fund that will be known as the Disease Prevention and Treatment 
Research Trust Fund. The revenue from increased tobacco tax rates in 
the underlying bill will be transferred to this trust fund. From there, 
the dollars will be made available to fund research on diseases that 
are often associated with tobacco use.
  I also believe the chronic underfunding of research in areas such as 
pediatric cancer need to be addressed, so I have expanded the 
permissible use of these funds to cover research on other diseases as 
well. I urge my colleagues to support my amendment to help discover new 
knowledge and treatments that improve and save lives.
  Our current health care system is a sick care system. We do not spend 
nearly as much money on prevention as we do on getting people healthy 
once they are sick. This trust fund will fund research into areas to 
keep people healthy, to make sure we are spending money on disease 
research that actually keeps people out of hospitals, that keeps people 
as healthy as possible for as long as possible throughout their lives. 
I think this is a better use of taxpayers' dollars, especially when we 
are going to be raising those taxes on people who smoke. Let's use that 
money to fund disease research instead of taking people from the 
private health market onto the Government-funded health market.
  I reserve the remainder of my time.
  The ACTING PRESIDENT pro tempore. The Senator from Montana is 
recognized.
  Mr. BAUCUS. Mr. President, it is important to look at what this 
amendment actually does. It is a remarkable amendment. What does it do? 
It would try to spend the same dollar twice, take a dollar from tobacco 
taxes, spend

[[Page 22002]]

it in the trust fund and spend it on CHIP--doing two things at once. I 
don't think we can do that in the real world. It is too good to be 
true. We can't do it. That is what the amendment says, basically. I do 
not think the Senator wants to take money away from kids, from the CHIP 
fund, the CHIP program. The amendment doesn't say that. I am sure he 
doesn't intend to do that. But what the amendment does say is the same 
dollars are going to be spent twice--one way we spend it is for this 
trust fund, the other way is we spend it on kids. I don't know how we 
do that; how in the real world we can do that. It is fantasy land. We 
can't do it.
  Again, surely the Senator does not want to repeal the entire 
Children's Health Insurance Program. I am sure he doesn't want to do 
that. He does not do that in this amendment. But he still sets up the 
tension between the two, between research and all the good causes the 
Senator talks about on the one hand, and children's health insurance on 
the other, pitting one against the other. I don't think he wants to do 
that. He does not do that directly but he does that indirectly by 
trying to spend the same dollar twice. That might be possible in 
Hogwarts; it might be possible in Harry Potter's world. But I don't 
think it is possible in the real world.
  Back here in the real world I want Senators to know this amendment is 
a thinly veiled attempt to steal the funding from the children's health 
care program. It is an attempt to undermine children's health care 
coverage. That is what this bill does. It takes a dollar from the 
tobacco tax--it is amazing--and that dollar is going to be spent on 
this trust fund and that same dollar is going to be spent on children's 
health care. We can't do that.
  I urge my colleagues to reject the amendment.
  I reserve the remainder of my time.
  The ACTING PRESIDENT pro tempore. The Senator from Nevada is 
recognized.
  Mr. ENSIGN. Mr. President, our amendment clearly takes the money from 
the increase in the tobacco tax, and instead of dedicating to the 
expansion of SCHIP, puts it into a disease research trust fund. SCHIP 
is still authorized; we don't do anything to the underlying program 
that currently exists. We take the money out of the expansion, this is 
tobacco tax money out of the expansion, and we apply it to the trust 
fund to be used for disease research. That is what this bill does. That 
is what the amendment does.
  Mr. BAUCUS. Will the Senator yield for a question on that one point?
  Mr. ENSIGN. Yes, but let me explain it.
  Mr. BAUCUS. I will take it on our time.
  Mr. ENSIGN. Let me explain it to you and then I will yield for a 
question. It says:

       There are hereby appropriated to the Disease Prevention and 
     Treatment Reserve Trust Fund--

  which we are talking about here,

     --amounts equivalent to the taxes received in the Treasury 
     attributable to the amendments made by section 701. . . .

  That is the tobacco taxes. We are taking the tobacco taxes, which 
would fund part of the increase the SCHIP expansion, and apply it to 
the Disease Prevention and Treatment Research Trust Fund. We are not 
taking money out of the trust fund; it is the revenues generated from 
the expansion of the tobacco tax from which we are taking the money.
  Mr. BAUCUS. So the Senator wishes to take all the tobacco taxes in 
the underlying amendment, take all those dollars away from kids?
  Mr. ENSIGN. That is not exactly right.
  Mr. BAUCUS. It is exactly right.
  Mr. ENSIGN. As you heard in my statement, pediatric cancer research 
is underfunded.
  Mr. BAUCUS. No, take it from the Children's Health Insurance Program.
  Mr. ENSIGN. We are taking it from the expansion, which is not just 
children. We are going to have other amendments to make sure the 
prioritization is on low-income kids. Part of the expansion is in 
States where the folks being covered are not just those under 200 
percent of the poverty level. The expansion of SCHIP has been part of 
the problem. I believe in actually covering everybody, but doing it in 
a way that is different than the approach in the bill. What we want to 
do is take the tobacco taxes and take those funds that are raised by 
the tobacco taxes and dedicate those funds to disease research. The 
budget gimmicks used in the SCHIP expansion are so phony that it is 
ridiculous, some of the worst I have seen around here. These gimmicks 
assume these folks are going away in a few years, that they are not 
going to be on the program at the end of the 5-year reauthorization. 
This is how they got the SCHIP expansion to meet pay-go requirements.
  But we say let's take the money and put it in a trust fund and with 
those real dollars that are in the trust fund, we are going to fund 
disease research that will help children, that will help adults, that 
will help all Americans.
  Mr. BAUCUS. Will the Senator yield for another question again, again 
on my time?
  Mr. ENSIGN. Yes.
  Mr. BAUCUS. I don't mean to be condescending here, but has the 
Senator read the CBO analysis? I am sure he has. And, having read that, 
isn't it clear that a large share of the dollars in this bill from the 
tobacco tax are to maintain current coverage? That is, if we do not 
provide the $35 billion in this bill, that is the funds from the 
tobacco tax, that many kids are going to lose coverage? In fact, isn't 
it true that CBO says about 1.4 million children will lose coverage--
not just maintain, but lose coverage if we do not have this bill?
  Mr. ENSIGN. That is exactly why I believe in a comprehensive approach 
to solve the problem we have in the country. You do not take care of 
all of the children in America in this bill.
  Mr. BAUCUS. Of course not.
  Mr. ENSIGN. I believe in taking a more comprehensive approach that 
actually doesn't increase the dependence on the Government. I am 
addressing something different with this amendment. What I believe is 
we should do this amendment to fund disease prevention research, but 
then do a comprehensive approach that takes care of kids, that takes 
care of those uninsured adults, that gets them into the private 
insurance market. The more people, especially a lot of younger people, 
healthier people who are currently uninsured, whom we get into the 
private health insurance markets--the more the better. There are 
several proposals out there, whether it is tax credits or tax 
deductions; there is a blend of the two that has been talked about. We 
need to explore those because if we are doing it in a way that will 
take care of the uninsured, we bring in the folks who are healthier 
which will bring down the cost of health care insurance for all 
Americans.
  That is the direction we should be going. SCHIP will take people out 
of the private insurance market. The program, the expansion you have 
done--and this is according to CBO--will take children who are 
currently in the private health insurance market and it will move them 
to Government programs. There will be a great incentive in the future 
to do more and more of this.
  The ACTING PRESIDENT pro tempore. The Senator from Montana is 
recognized.
  Mr. BAUCUS. Mr. President, I think it is important to talk about the 
amendment, not all these other very important points with respect to 
health care. The effect of this amendment, the way it is written, will 
be to spend the same dollar twice. If the effect is what the Senator 
says it is, and he intends it--although that is not the amendment--if 
he intends to have all additional tobacco taxes go to the trust fund, 
then the net effect of this amendment is about 1.4 million American 
low-income kids will lose coverage. That is CBO. They will lose it, if 
that is the intent of the amendment.
  The actual effect of the amendment the way it is written is the 
dollars have to be spent twice. We can't do that. I don't know how we 
do that. But, again, if the intent of the amendment is dollars do not 
go to kids, then the effect of the amendment is about 1.4 million 
children will lose health insurance coverage; that is 5.7 million fewer 
kids will

[[Page 22003]]

be covered under insurance than under our amendment.
  In the Senator's own statements, he admits it. He apparently does not 
want to add dollars, he wants to take away the $35 billion raised by 
the tobacco tax and the honest effect of that $35 billion is to help 
prevent about 1.4 million kids from losing coverage as well as adding 
additional coverage. It is both. If the amendment is what the Senator 
wants it to do and says it is, then about 1.4 million kids will lose 
coverage.
  The ACTING PRESIDENT pro tempore. The Senator from Nevada is 
recognized.
  Mr. ENSIGN. Mr. President, to be clear, this amendment funds cancer 
research, including:

        . . . pediatric, lung, breast, ovarian, uterine, prostate, 
     colon, rectal, oral, skin, bone, kidney, liver, stomach, 
     bladder--

any kind of cancer you can think of.

       Respiratory diseases . . . chronic obstructive pulmonary 
     disease--

  We hear so much about that today.

     --tuberculosis, bronchitis, asthma and emphysema. All the 
     related problems we see so much with smoking: 
     ``Cardiovascular diseases''--a huge killer in the United 
     States with huge costs to our health care system. We are 
     going to fund a lot more research with this money. I think 
     this money is going to some very good things in America, 
     things that will benefit not just children but will benefit 
     all Americans. It doesn't spend the money twice as I pointed 
     out. It takes the money from the expansion and actually 
     spends it, I believe, in more appropriate areas. Then, later 
     in the bill, we are going to be offering some alternatives 
     that will make sure the kids are covered and we will be 
     looking at some other alternatives to do more comprehensive 
     care.

  I urge my colleagues to support this amendment.
  Have the yeas and nays been ordered?
  The ACTING PRESIDENT pro tempore. They have not.
  Mr. ENSIGN. I ask for the yeas and nays.
  The ACTING PRESIDENT pro tempore. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. ENSIGN. Mr. President, I ask unanimous consent to have a letter 
from Dr. Neal Birnbaum, president of the American College of Radiology, 
printed at the end of my remarks on amendment No. 2538. The letter 
expresses support for my amendment, which would use the tobacco tax 
increase to fund research on diseases that are often associated with 
tobacco use, including arthritis.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    August 1, 2007
     Hon. John Ensign,
      U.S. Senate,
     Washington, DC.
       Dear Senator Ensign: The American College of Rheumatology 
     greatly appreciates your leadership and amendment of the 
     Internal Revenue Code of 1986 to create a Disease Prevention 
     and Treatment Research Trust Fund (H.R. 976). This piece of 
     legislation is of vital importance to the rheumatology 
     community.
       Arthritis currently affects over 46 million Americans, 
     including 300,000 children. It is the nation's leading cause 
     of disability and cost the U.S. economy approximately $128 
     billion annually in medical costs and lost productivity.
       We appreciate your efforts in bring forth this amendment 
     that would use the tobacco tax increase to fund research on 
     diseases that are often associated with tobacco use such as 
     arthritis. This is a disease that has been chronically 
     underfunded.
       We will send supporting materials in the coming days 
     regarding the increased prevalence of Rheumatoid Arthritis in 
     smokers.
           Sincerely,

                                            Neal Birnbaum, MD,

                                                        President,
                                 American College of Rheumatology.

  Mr. ENSIGN. I am willing to yield back time so we can get back on 
schedule for a 10:30 vote, if that will be OK with the Senator?
  The ACTING PRESIDENT pro tempore. The Senator from Montana is 
recognized.
  Mr. BAUCUS. I don't want to belabor the point. Some of the points the 
Senator makes are very good. Sure, he wants to do more research, but 
still the fact is the amendment takes dollars away from kids, away from 
the Children's Health Insurance Program.
  In the children's health care program, 1.4 million American children 
will lose coverage under the Senator's amendment. That is CBO, that is 
not me. That is CBO. I do not think we want to take away our current 
coverage under the program.
  One minor point that is not relevant to the amendment, but is 
relevant to the bill, is the Senator talks a little about something 
called crowd-out; that is, the number of kids who might not have 
private coverage who move to the CHIP program. That happens in every 
single program.
  Do you know what the crowd-out estimate was with the Medicare 
Modernization Act, Part D? It was 75 percent. That was the estimate on 
how much crowd-out there would be for that legislation, which this body 
strongly supported. It actually turned out to be much less than that.
  When this program was initially enacted in 1997, the Children's 
Health Insurance Program, CBO estimated crowd-out to be 70 percent. It 
was much less than that. We have asked the CBO Director to design this 
legislation to minimize crowd-out as well as we possibly can. And he, 
in testimony before the committee, said: You have done a very efficient 
job to minimize so-called crowd-out.
  So we are cognizant of the point. But the main point is to get more 
health insurance coverage for kids. That is what the underlying bill 
does.
  Mr. President, I yield back the remainder of our time.
  The ACTING PRESIDENT pro tempore. All time is yielded back.
  The question is on agreeing to the amendment.
  The yeas and nays have been ordered.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Hawaii (Mr. Akaka), the 
Senator from Delaware (Mr. Carper), the Senator from South Dakota (Mr. 
Johnson), the Senator from Louisiana (Ms. Landrieu), the Senator from 
Michigan (Mr. Levin), the Senator from Connecticut (Mr. Lieberman), the 
Senator from Missouri (Mrs. McCaskill), amd the Senator from West 
Virginia (Mr. Rockefeller) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Hawaii (Mr. Akaka), the Senator from Delaware (Mr. Carper), the Senator 
from Louisiana (Ms. Landrieu), the Senator from Michigan (Mr. Levin), 
the Senator from Connecticut (Mr. Lieberman), and the Senator from 
Missouri (Mrs. McCaskill) would each vote ``nay.''
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback), the Senator from Oklahoma (Mr. Coburn), 
the Senator from Minnesota (Mr. Coleman), the Senator from Arizona (Mr. 
McCain), the Senator from Alaska (Mr. Stevens), the Senator from New 
Hampshire (Mr. Sununu), the Senator from Ohio (Mr. Voinovich), and the 
Senator from Virginia (Mr. Warner).
  Further, if present and voting, the Senator from Minnesota (Mr. 
Coleman) would have voted ``nay.''
  The PRESIDING OFFICER. (Mr. Whitehouse). Are there any other Senators 
in the Chamber desiring to vote?
  The result was announced--yeas 26, nays 58, as follows:

                      [Rollcall Vote No. 287 Leg.]

                                YEAS--26

     Allard
     Barrasso
     Bennett
     Bunning
     Burr
     Chambliss
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Gregg
     Inhofe
     Isakson
     Kyl
     Lott
     Martinez
     McConnell
     Sessions
     Shelby
     Thune
     Vitter

                                NAYS--58

     Alexander
     Baucus
     Bayh
     Biden
     Bingaman
     Bond
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Casey
     Clinton
     Cochran
     Collins
     Conrad
     Corker
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Grassley
     Hagel
     Harkin
     Hatch
     Hutchison
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Lautenberg
     Leahy
     Lincoln
     Lugar
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Salazar
     Sanders
     Schumer
     Smith
     Snowe

[[Page 22004]]


     Specter
     Stabenow
     Tester
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--16

     Akaka
     Brownback
     Carper
     Coburn
     Coleman
     Johnson
     Landrieu
     Levin
     Lieberman
     McCain
     McCaskill
     Rockefeller
     Stevens
     Sununu
     Voinovich
     Warner
  The amendment (No. 2538) was rejected.
  Mr. BAUCUS. Mr. President, I move to reconsider the vote.
  Mr. GRASSLEY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Montana.
  Ms. LANDRIEU. Will the Senator from Montana yield?
  Mr. BAUCUS. I do.
  The PRESIDING OFFICER. The Senator from Louisiana.


                           Vote Explanations

  Ms. LANDRIEU. Mr. President, I missed the previous vote because we 
were in a markup in committee. About six other Members did as well. 
Could I please be recorded as having voted no? If I were here, I would 
have voted no on the previous amendment.
  Mr. WARNER. I was likewise in the committee when we were informed by 
the chairman and ranking member that we had an extra minute to finish 
the markup. But the best I can do is add, if I were present, I would 
have voted no.
  Mr. LEVIN. Mr. President, I was in a similar situation. I would have 
voted no had I been here. I was also in the same committee meeting.
  Mr. VOINOVICH. Mr. President, I had the same problem the other 
Members had. If I were here, I would have voted no.
  The PRESIDING OFFICER. Without objection, it will be so ordered.
  Mr. COBURN. Mr. President, as a member of the Homeland Security 
Committee, we were advised that we would be given leniency on this vote 
through our chairman, through communication, I assumed, from leadership 
staff. We did not come on a timely basis. I would like to be recorded 
as aye. It will not make a difference in the vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COLEMAN. Mr. President, I was also in Homeland Security. We were 
advised by the chair that we would be able to make the vote. Obviously, 
we weren't. I would like to be recorded as voting no.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mrs. McCASKILL. I also was in the Homeland Security markup where we 
were informed that the vote would be held open so we could finish the 
markup. Had I been in the Chamber, I would have voted no.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. I am the chairman of the Homeland Security Committee. 
I apologize to my colleagues for any misunderstanding. We had a very 
busy agenda, important matters that we needed to get done today. I did 
make a request that the vote be held open. It was the wisdom of the 
Chair not to do so. I particularly express my regret to my colleagues, 
for some of whom this was the first rollcall that they have missed. 
Anyway, for myself, had I been here I would have voted in the negative. 
It would not have altered the result.
  The PRESIDING OFFICER. The Senator from Hawaii.
  Mr. AKAKA. I also was detained. Were I here, I would have voted no.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. SUNUNU. Mr. President, I also was at the Homeland Security 
markup. I am sure that anyone observing this is surprised that so many 
Senators in one setting, having been notified by the cloakroom, were 
put in a position where they missed a vote. Had I been here, like all 
my other colleagues, I would have voted aye. As we see, given that so 
many of our colleagues have to make this point to the Chair, we have 
now exceeded by far any time that might have been saved by cutting off 
the vote in an atypically short way.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield to the Senator from Delaware.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. CARPER. Mr. President, as did my other committee colleagues, I 
missed the vote. Had I been present, I would have voted ``no.''
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I am very happy to see the Committee on 
Homeland Security doing its work. I think the country is very pleased. 
Thank you.
  Mr. BYRD. Mr. President, let us have order in the Senate. May we have 
order in the Senate, Mr. President.
  Why all this consternation about this vote? Were Senators promised 
they would have a chance to vote? They were. And we did not hold the 
vote for them. Now, we ought to do what we promised Senators we will 
do. Shame.
  Mr. GREGG. Mr. President, will the Senator from West Virginia yield 
for a question?
  Mr. BYRD. Mr. President, I yield for a question.
  Mr. GREGG. As one of the most leading Parliamentarians in the history 
of the Senate, would it be appropriate by unanimous consent to reopen 
that vote so that the----
  Mr. BYRD. May I ask the Senator, what did he say?
  Mr. GREGG. I ask the Senator if he feels it is appropriate to reopen 
the vote so that vote could be reconsidered and Senators could----
  Mr. BAUCUS. I would object to that.
  Mr. REID. Mr. President, can I be heard?
  The PRESIDING OFFICER. The majority leader.
  Mr. REID. Mr. President, I am very sorry people missed the vote. We 
waited almost 25 minutes for the vote. And I am sorry. Senator 
Lieberman certainly did not do anything intentionally. He thought the 
vote would be held open. I have checked with the very loyal staff we 
have in the cloakroom, and there was a misunderstanding between the 
cloakroom and Senator Lieberman.
  But, regardless, I hope everybody understands we have to have some 
semblance of order around here. We are doing our very best to save 
people time. One of the things we are doing to save time is have a vote 
start on time and end on time. A 15-minute vote is a 20-minute vote. 
This vote was cut off approaching 25 minutes.
  So I am sorry that people missed the vote. I had one Senator tell me 
it was the first one they missed. It is a favor to that person. I say 
the first vote I missed took a lot of the pressure off.
  This vote passed, I think, 2 to 1. It is not a very difficult issue. 
I am so sorry that people are disturbed about following the rules here. 
That is what we are doing.
  I appreciate my friend from Montana because if he had not objected, I 
would have.
  Mr. HATCH. Mr. President, will the leader yield?
  Mr. REID. Yes.
  Mr. HATCH. Mr. President, apparently this was a sorry situation. 
Nobody's vote would be changed. Why can't we ask unanimous consent that 
these votes be counted?
  Mr. REID. Because I will object to it.
  Mr. HATCH. You would object to it?
  Mr. REID. Yes.
  Mr. BYRD. What was the Senator's request?
  Mr. HATCH. I was requesting that we should consider unanimous consent 
that their votes be counted.
  Mr. BYRD. No, Mr. President, we cannot do that.
  Mr. HATCH. I understand.
  Mr. BYRD. I thank the Senator. We cannot do that. I hope Senators 
will pay a little more attention.
  Mr. President, who has the floor?
  Mr. BAUCUS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I had the floor, and I yielded to the 
Senator from West Virginia.
  Mr. BYRD. I thank the Senator for yielding.
  I was caught in this situation a while back, and I have cast more 
votes than any Senator in the history of this Republic, and it was 
called on me. I regretted that.

[[Page 22005]]

  Sometimes I think we get a little bit too hung up. The Senate is a 
body in which we talk to one another, we talk with one another, we 
think about one another, and we think of one another's problems. We can 
get a little bit too hung up on the time on a vote. A vote is 
important. The people send me here, the people of West Virginia--who 
has the floor, Mr. President?
  Mr. BAUCUS. Mr. President, I say to the Senator, you do.
  The PRESIDING OFFICER. The Senator from Montana yielded time to the 
Senator from West Virginia.
  Mr. BYRD. I thank the Senator from Montana.
  Now, the people send me here to vote. That is my right. Of course, I 
ought to get here, be here on time. But the people expect Robert Byrd--
the people of West Virginia expect Robert Byrd--to vote. So let's do 
not get hung up on 60 seconds or 30 seconds or whatever it is. Let's 
have a little bit of accommodations to one another.
  I hope I am not speaking out of turn. I hope I am not saying too much 
or making too much of nothing. But I am sent here to vote, and I hope 
we will accommodate one another. We Democrats ought to accommodate one 
another, and we ought to accommodate the Republicans, too.
  I thank the Senator.
  Mr. REID. Mr. President, will the Senator from Montana yield?
  Mr. BAUCUS. Mr. President, I yield to the Senator from Nevada.
  Mr. REID. Mr. President, I say to all my colleagues, we have been in 
this session now for 7 months. This is something we all decided would 
be best for the institution. We all decided this. This is not something 
we put into effect yesterday. And I say to my dear friend, the senior 
Senator from Utah, I understand his compassion. He does not want to 
miss votes. But if we decide to change it this time, then we will be 
doing it every time people miss a vote.
  Now, it would be different--I say to my friend, the ``Babe Ruth'' of 
the Senate, Senator Byrd, this was not 60 seconds, a few seconds off. 
We have a lot of work we need to do here. The vote was a 15-minute 
vote. We waited almost 25 minutes. So I think we have been fair.
  The one I feel worst for is my friend Joe Lieberman, because he felt 
they had the time to get here. I have checked with the cloakroom, and 
they emphatically said there was a misunderstanding, because they have 
a time, they know when the vote is going to end. When everybody calls, 
they say there is no extension, the time the vote will end is such and 
such a time. They have been instructed to do this because one Senator 
missed a vote Monday. So the cloakroom has instructions as to what to 
do.
  I am sorry people missed votes, but remember, this is not anything 
that is new. It is something that has been going on for 7 months, and 
we have a lot of work to do. I respectfully suggested to one of my 
friends, who said: Well, we wasted all this time; we could have gone 
ahead and waited for everybody--but while we are waiting for everybody 
to come and vote, some people got here on time, and other people have 
work they want to do, waiting for people to get here on time.
  So I think it is best for the body that we stick to our 15 minutes, 
plus 5 minutes. That is when the vote will be called. For those of us 
who have had service in the House--many of us have--you do not have any 
wiggle room in the House. That vote is over, and you are through. It is 
done mechanically, and you are all through. We do not want it to be 
like the House. This is the Senate, and we want it differently. That is 
why we have a 5-minute leeway.
  I appreciate everyone's thoughtfulness, but I am certainly trying to 
do the right thing.
  Mrs. HUTCHISON. Mr. President, will the distinguished leader yield 
for one observation?
  I understand totally that the leader has to have a firm principle. 
And when it is one person who is late because they are off the Capitol 
grounds or something such as that, I think that is totally legitimate. 
This is something I have never seen since I have been here for 14 
years, where a committee is meeting, with important business, and the 
committee chairman gives people the comfort that the vote is going to 
be held, and so you have around 12 people who have missed a vote.
  I ask one more time for, just this once, a unanimous consent and will 
propose a unanimous consent that we reopen this vote.
  Mr. REID. Let me say this. I have heard everyone loudly and clearly 
because we have spent a lot of time on this. Just so everyone has the 
total, absolute understanding, in the future--Senator Leahy; Senator 
Lieberman; Senator Baucus; Senator Kerry; Senator Dorgan; Senator Byrd, 
on Appropriations--if Appropriations chairmen tell you there is more 
time to vote, there is not any. Therefore, if the chairman is trying to 
keep you there, and the time is running, walk out of there.
  I ask unanimous consent that those Senators who missed the vote 
because of the misunderstanding with Senator Lieberman be allowed to 
cast their votes.
  Mr. BYRD. No, Mr. President. That has never been done.
  Mr. REID. Never been done. OK.
  The PRESIDING OFFICER. That request is not in order and prevented by 
the rules.
  Mr. REID. We tried, Kay.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I suggest we get back to business.
  The PRESIDING OFFICER. The Senator from Montana has the floor.


                           Amendment No. 2587

  Mr. BAUCUS. Mr. President, I understand Senator Gregg is ready for a 
vote with respect to his amendment, so I ask unanimous consent that 
there be 2 minutes equally divided in the usual form for debate prior 
to a vote in relation to the amendment, that no amendment be in order 
to the amendment prior to the vote, and that upon the use of time, the 
Senate proceed to vote in relation to the amendment, with no 
intervening action.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. GREGG. Mr. President, I understand this is a 45-minute vote?
  Mr. BAUCUS. It may be.
  The PRESIDING OFFICER. Who yields time?
  Mr. GREGG. Mr. President, can we have order.
  The PRESIDING OFFICER. The Senate will be in order.
  There are 2 minutes of debate equally divided on the Gregg amendment.
  Who yields time?
  Mr. GREGG. Mr. President, I will claim my time, but I want the Senate 
to be in order before I begin.
  The PRESIDING OFFICER. May we have order in the Senate for the 
Senator from New Hampshire. Will the Senate be in order.
  The Senator from New Hampshire.
  Mr. GREGG. Mr. President, this amendment essentially says what the 
bill is titled and represents to be, which is that the funds will go to 
children, to help children get health insurance. This amendment says 
that adults can continue to be insured by States at the reimbursement 
rate, which is the Medicaid rate, should they so desire, but that a 
higher rate should not apply to adults by putting adults under a 
children's program.
  The problem is very simple. States are gaming the system. They are 
using the SCHIP program, which gives a higher reimbursement rate, to 
bring into the system adults, and then they take that money and 
basically use it in their general fund. This is not appropriate. It is 
not appropriate, first, to have adults funded under a children's health 
insurance program. Secondly, it is not appropriate to give States the 
ability to game the system in this manner.
  So I hope people will vote for this amendment, which essentially 
keeps the program for children and actually expands the number of 
children who can be covered by saving some money that is being spent on 
adults.
  Mr. GRASSLEY. Mr. President, there are legitimate issues being raised 
about how adults are dealt with in this SCHIP bill. First of all, 
adding adults

[[Page 22006]]

to SCHIP should have never been allowed. It was wrong when the Clinton 
administration started it. It was wrong when the Bush administration 
continued it. Stopping it is the right thing to do.
  However, I think this amendment goes too far, too fast, and I 
encourage my colleagues to consider how the Finance Committee bill 
deals with adults. Let me be clear, in some States, the problem is 
extreme. Some States cover more adults than children. The even bigger 
problem is that several States that cover large numbers of adults have 
very high rates of uninsured children. This problem started under the 
Clinton administration but the Bush administration made it worse. Both 
the Clinton and the Bush administrations helped push Humpty-Dumpty off 
the wall. Now, it is our job to try to put the piece back together.
  Advocates for parent coverage under SCHIP argue that in order to get 
kids covered, you have to cover the parents. I don't buy that argument; 
too many States that are covering parents are still among the worst in 
the country at covering kids. But the Congressional Budget Office does 
buy the argument that covering parents will get a few more kids 
covered. And they estimate that a reduction in parent coverage will 
lead to a reduction in children covered, so we have to be cautious. 
This amendment will lead to children losing coverage.
  So what we have done in the Finance Committee bill is to say to 
States covering parents: put up or shut up. You either cover the kids 
or you get a far smaller Federal match for the parents you want to 
cover.
  The bill before us eliminates coverage under SCHIP for childless 
adults by 2009. It eliminates the enhanced match for parents currently 
covered under SCHIP and prohibits new state waivers for parents. CBO 
estimates that it would reduce spending on adults by $1.1 billion. 
Furthermore, the easiest way to put the emphasis back on lower-income 
kids is to refocus the SCHIP program away from adults. The Finance 
Committee bill redirects States' efforts to low-income children.
   Our bill covers 1.7 million kids in Medicaid who are currently 
uninsured. We are not talking about adults. We are not talking about 
middle-income kids. We are talking about 1.7 million of the poorest 
uninsured kids in this country.
  As a former Governor, I am sure the Senator from New Hampshire can 
appreciate that concept. If your States will only get a lower matching 
rate for covering adults in SCHIP but significant financial incentives 
for covering low-income kids, where will you direct your energies? The 
parent policy in the Senate bill represents a reasonable compromise and 
I urge my colleagues to oppose the Gregg amendment.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, four quick points. No. 1, we clearly want 
to bring this program down for kids, and this legislation does that. 
No. 2, the current expansion--not to point fingers anywhere--is 
basically as a result of the waivers this administration has given to 
States. That is the main reason for others. That is the main reason we 
have expansion to cover adults in States. No. 3, we are addressing this 
in this bill. We cut back on adults in this bill. But No. 4 is, we want 
to draw the line here a bit, and not totally cut adults off cold 
turkey, but, rather, childless adults would be cut back and zeroed out 
after 2 years, but then parents are phased down. But CBO has said when 
you do not cover parents, then you are also not covering some kids. The 
goal is to cover kids. I think the legislation is a fair, good, solid 
way to restrict coverage of adults, and I urge my colleagues, do not 
support this amendment, which is too draconian and goes too far.
  The PRESIDING OFFICER. All time has expired.
  The question is on agreeing to the amendment.
  Mr. GREGG. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from South Dakota (Mr. 
Johnson), the Senator from Illinois (Mr. Obama), and the Senator from 
West Virginia (Mr. Rockefeller) are necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
  The PRESIDING OFFICER (Mr. Casey). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 42, nays 53, as follows:

                      [Rollcall Vote No. 288 Leg.]

                                YEAS--42

     Alexander
     Allard
     Barrasso
     Bennett
     Bond
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Conrad
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Dorgan
     Ensign
     Enzi
     Graham
     Gregg
     Hagel
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McCaskill
     McConnell
     Nelson (NE)
     Roberts
     Sessions
     Shelby
     Stevens
     Sununu
     Thune
     Vitter
     Voinovich
     Warner

                                NAYS--53

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Coleman
     Collins
     Dodd
     Domenici
     Durbin
     Feingold
     Feinstein
     Grassley
     Harkin
     Hatch
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Pryor
     Reed
     Reid
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Tester
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--5

     Brownback
     Johnson
     McCain
     Obama
     Rockefeller
  The amendment (No. 2587) was rejected.
  The PRESIDING OFFICER. The Senator from Mississippi is recognized.


                Amendment No. 2593 to Amendment No. 2530

  Mr. LOTT. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. Without objection, the pending amendment will 
be set aside.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Mississippi [Mr. Lott], for himself, Mr. 
     McConnell, Mr. Kyl, Mr. Gregg, Mr. Cornyn, Mr. Bunning, Mr. 
     Coburn, and Mr. DeMint, proposes an amendment numbered 2593 
     to amendment No. 2530.

  Mr. LOTT. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. LOTT. Mr. President, I thank the managers of the legislation for 
allowing me to go forward with this alternative amendment at this time. 
I think it is important on an issue of this nature that we have a full 
discussion and amendments offered and debated and voted on. That helps 
us get to a conclusion on a major piece of legislation such as this 
without it turning into a late-night ugly session.
  This alternative is intended to show we fully intend to be supportive 
of the SCHIP program--the program for children's health insurance--and 
we want it to be done in a responsible way and in a way that actually 
increases funding to make sure the children it wants to cover are 
actually covered.
  This is an effort of good faith to come up with an alternative that I 
think is better, in many ways, than the underlying Baucus and others 
legislation. I have, on two previous occasions, indicated that part of 
my big problem is the pattern of the coverage going up and up, to the 
point where States that have waivers now, and under the underlying 
bill, middle-income children would be covered, and that we are on a 
steady march to say all children ought to be covered regardless of 
income.
  I think that is a mistake. I think it is unaffordable. It will lead 
to disruptions, and it will lead to significant tax increases, or it 
will start to put our children against the parents. The way

[[Page 22007]]

the House proposes to pay for this underlying bill is to go after funds 
in the Medicare Program. At least this bill doesn't do that, but it 
does pay for the increases with tax increases--yes, tobacco tax 
increases, but still tax increases which, in my opinion, are not going 
to be achievable and which will leave a huge hole in the funding.
  So what we do in the alternative is to direct our attention at the 
core mission, which is low-income children--not adults, not middle-
income children. We pay for it in a way that would equalize this 
Medicaid coverage in our States. So I think overall it is a very good 
alternative.
  We have a number of Senators who are cosponsors of the legislation 
and would like to speak on it as we go forward this morning and into 
the afternoon.
  Again, we all support reauthorization of the so-called SCHIP program, 
and we want to ensure that children have access to good, quality health 
care insurance. How you do it is the difference. We have come up with a 
different alternative that does it better because it puts kids first. 
It makes sure we take care of the kids, not an ever-growing list of 
kids and not a lot of adults. I think you have to do it in a fiscally 
responsible way so we don't have huge holes develop in the outyears. 
One of the problems in the underlying bill is that down the road, in 6 
years or so--and before that, in my opinion--the numbers are not going 
to add up. We will not have the income we were going to have, and there 
will be an explosion of the costs that are involved. So I think we 
should pay attention to the impact not just next year, or in 5 years, 
but it will be the situation in 7 or 8 years. That is what this bill 
does.
  We have heard talk in the last couple of days from our friends on 
other side of this issue that they are concerned about the insurance 
for kids. I believe that, but that will be done in this bill. Let me 
tell you why. Under the Kids First amendment we sent to the desk, 1.5 
million more children will be covered under SCHIP in 2017 than under 
the Baucus bill. Yes, that is a long way down the road, but the truth 
of the matter is we need to look at these programs over a 10-year 
period, not just the 5 years, because the commitments we make in that 5 
years will continue to go up. We need to think about what is going to 
be the impact. You heard it right. It would cover actually more 
children in 2017. The Kids First bill will cover 3.6 million children. 
The Baucus bill will cover 2.1 million children in the SCHIP program.
  The Kids First bill actually spends more money than the Baucus bill. 
You heard that right. We increase SCHIP spending by $9.3 billion over 
the next 5 years, expanding coverage to 1.3 million new children. 
Because the Kids First Act doesn't rely on any kind of budget gimmicks, 
as the underlying bill does, we can actually spend more on SCHIP over 
the budget window than the underlying bill does. I think it is 
important we focus on honest budgeting.
  I realize honest budgeting is quite often in the eye of the beholder, 
but I don't think anybody would deny there are budget problems with the 
underlying bill. The Baucus bill has a long-term budget point of order 
against it, meaning that over the long-term it will significantly 
increase the budget deficit. The reason for this is the budget bill 
relies on the declining revenue. When you have the amount of increase 
on tobacco products included in the underlying bill--61 cents a pack 
for cigarettes and, of course, the same application to other tobacco 
products, including cigars--you are going to get less revenue than you 
project. People will not be able to afford it. They are going to change 
their habits. Some people would say that is going to be good for 
health. OK. I am not a big advocate of smoking, even though I smoke a 
pipe privately. Nobody here has ever seen me do that.
  I think we have to be honest about what is going to be the impact the 
next 5 years. This will also contribute to an increase in Medicaid 
costs because the Baucus bill reduces SCHIP funding in those outyears, 
and CBO assumes those kids will have to be moved to Medicaid. That is 
part of what is going to be happening. More children will be under 
SCHIP under the bill and more children will be on Medicaid and more 
children will be coming off private health insurance. I don't think we 
want to do at least two out of those three things.
  So I think it is important we cover the children in the low-income 
area and that we cover more children. That is what this alternative 
does. This amendment doesn't have a dime in tax increase to pay for it. 
It would not be subject to a point of order. Then it does a couple of 
other very important things. Unfortunately, last year, we never could 
get action on the associated health plans, the small business health 
plans.
  We were so close, and yet because of some objections, perhaps 
legitimately, that the sponsors could not agree on, we did not give 
this opportunity to small business women and men to cover more of their 
employees, and they would like to. I talk to small business men and 
women. They don't understand why they cannot form groups and provide 
coverage to these low-income, entry-level workers, a lot of times unwed 
mothers, high school dropouts.
  For the life of me, I cannot understand why we do not give that 
option. It would probably be a way that 10 to 20 million more working 
adults could get coverage. We do include in the bill the small business 
health plans.
  We also include important health savings accounts reforms and provide 
for a study of ways to increase health insurance coverage through 
reforms to our Tax Code to enhance tax equity.
  The Kids First Act is an amendment that all my colleagues, 
Republicans and Democrats, should support. The amendment enrolls 
millions more kids in SCHIP than the underlying bill and does it in a 
fiscally responsible way and avoids budget points of order. It will not 
expand Medicaid spending.
  I urge my colleagues to actually take a look at this legislation. We 
have spent a long time coming up with it. I actually thought this was 
probably the bill that would come out of the Finance Committee when we 
started. We had bipartisan meetings. We talked about, OK, do we want to 
do this health insurance program for children? Yes, we do. How much do 
we want to do, and how are we going to pay for it? Of course, there 
were those in the beginning who said: No, we need a lot more than this. 
We need an increase of $50 billion or more.
  I know the Senator from Massachusetts, Mr. Kerry, feels strongly 
about that point. He made his point legitimately. He said: Should we 
just decide how many we want to cover and don't worry about the cost 
and just do it? No, I think we also have to worry about the cost of 
these programs and how it is going to be paid for, who pays for it.
  One of the things that worries me because we have this gap in the 
outyear funding--we have had pictures of children on the floor of the 
Senate. I have some grandchildren I worry a lot about--a 9-year-old 
grandson and two little girls, just under 6, and one 3. My daughter is 
a working mom full time, partially so her family can have insurance 
coverage, and her husband is a small businessman, an entrepreneur. It 
is not easy working full time as a mom, having two children, and 
dealing with other issues she really cares about, such as charitable 
activities. I worry about them. She is working to make sure they have 
this coverage, but I am worried they are going to be saddled with the 
cost of this extra coverage.
  So let's do what we can affordably while complying with the 
underlying core mission of making sure that low-income children have 
access to this coverage. Generally speaking, my daughter and her 
husband would be considered middle-income Americans. That is what they 
would consider themselves. Yet they are having to work to get the 
coverage they want and barely making it so that others can have 
coverage who are making probably almost as much money as they are. I 
don't know, the way things are going, they might be eligible for this 
program. I don't think they should be.

[[Page 22008]]

  Common sense is what is called for. We have a long way to go. There 
is no question the House bill is going to be much larger and funded in 
a much worse way. By putting down this marker, giving Members a 
legitimate alternative that a lot of Senators have been involved in, is 
a good way to go.
  I urge Members to support this alternative.
  I yield the floor.
  Mr. McCONNELL addressed the Chair.
  Mr. LEAHY. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Republican leader is recognized.
  Mr. LEAHY. I suggest the absence of a quorum.
  Mr. McCONNELL. Mr. President, have I been recognized?
  The PRESIDING OFFICER. I recognize the Republican leader.
  Mr. LEAHY. Will the Republican leader yield for a moment?
  Mr. McCONNELL. Would the Senator from Vermont like to ask the Senator 
from Kentucky a question?
  Mr. LEAHY. I said, will the Senator from Kentucky yield for a 
question?
  Mr. McCONNELL. I will be happy to yield.
  Mr. LEAHY. Mr. President, the distinguished majority leader wishes to 
be on the Senate floor, and I ask the Senator from Kentucky if he will 
yield for a brief quorum call so that the distinguished majority leader 
can be on the floor.
  Mr. McCONNELL. Mr. President, I will be happy to accommodate that 
request. It was my understanding that the majority leader was on the 
way, and I thought I would get started. But I will be happy to wait 
until he walks through the door, if that is the request of my good 
friend from Vermont.
  Mr. LEAHY. 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. McCONNELL. 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. McCONNELL. Mr. President, is the Lott amendment the pending 
question?
  The PRESIDING OFFICER. It is the pending question.
  Mr. McCONNELL. I ask unanimous consent that it be temporarily set 
aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 2599 to Amendment No. 2530

  Mr. McCONNELL. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Kentucky [Mr. McConnell], for himself and 
     Mr. Specter, proposes an amendment numbered 2599 to amendment 
     No. 2530.

  Mr. McCONNELL. Mr. President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To express the sense of the Senate Judge Leslie Southwick 
               should receive a vote by the full Senate)

       At the end of the substitute, insert the following:

     SEC. ___. SENSE OF THE SENATE REGARDING THE NOMINATION OF 
                   JUDGE LESLIE SOUTHWICK.

       (a) Findings.--The Senate makes the following findings:
       (1) Judge Leslie Southwick served on the Mississippi Court 
     of Appeals from January 1995 to December 2006, during which 
     time he was honored by his peers for his outstanding service 
     on the bench.
       (2) The Mississippi State Bar honored Judge Southwick in 
     2004 with its judicial excellence award, which is awarded 
     annually to a judge who is ``an example of judicial 
     excellence; a leader in advancing the quality and integrity 
     of justice; and a person of high ideals, character and 
     integrity''.
       (3) The American Bar Association has twice rated Judge 
     Southwick well-qualified for Federal judicial service, its 
     highest rating. As part of its evaluation, the American Bar 
     Association considers a nominee's ``compassion,'' ``open-
     mindedness,'' ``freedom from bias and commitment to equal 
     justice under law''.
       (4) In 2006, the President nominated Judge Southwick to the 
     United States District Court for the Southern District of 
     Mississippi.
       (5) Last fall, the Senate Judiciary Committee unanimously 
     reported Judge Southwick's nomination to the full Senate for 
     its favorable consideration.
       (6) In 2007, the President nominated Judge Southwick to the 
     United States Court of Appeals for the Fifth Circuit.
       (7) The Administrative Office of the Courts has declared 
     the Fifth Circuit vacancy to which Judge Southwick has been 
     nominated a ``judicial emergency'' with one of the highest 
     case filing rates in the country.
       (8) Judge Southwick is the third consecutive Mississippian 
     whom the President has nominated to address this judicial 
     emergency.
       (9) Both Senators from Mississippi strongly support Judge 
     Southwick's nomination to the Fifth Circuit, and they 
     strongly supported his 2 predecessor nominees to that 
     vacancy.
       (10) The only material change in Judge Southwick's 
     qualifications between last fall when the Senate Judiciary 
     Committee unanimously reported his district court nomination 
     to the floor, and this year when the Committee is considering 
     his nomination to the Fifth Circuit is that the American Bar 
     Association has increased its rating of him from well-
     qualified to unanimously well-qualified.
       (11) While on the State appellate bench, Judge Southwick 
     has continued to serve his country admirably in her armed 
     forces.
       (12) In 1992, Judge Southwick sought an age waiver to join 
     the Army Reserves, and in 2003, he volunteered to serve in a 
     line combat unit, the 155th Separate Armor Brigade. In 2004, 
     he took a leave of absence from the bench to serve in Iraq 
     with the 155th Brigade Combat Team of the Mississippi 
     National Guard. There he distinguished himself at Forward 
     Operating Base Duke near Najaf and at Forward Operating Base 
     Kalsu.
       (b) Sense of Senate.--It is the sense of the Senate that 
     the nomination of Judge Leslie Southwick to the United States 
     Court of Appeals for the Fifth Circuit should receive an up 
     or down vote by the full Senate.

  Mr. McCONNELL. Mr. President, in 1992, a Mississippi lawyer named 
Leslie Southwick wanted to serve his country in the Armed Forces. At 
42, he was too old to do so, but service to others is a duty that 
Leslie Southwick has always taken very seriously, whether in the 
Justice Department or on the State bench or with Habitat for Humanity 
or in doing charity work for inner-city communities. So in 1992, 42-
year-old Leslie Southwick sought an age waiver to join the U.S. Army 
Reserves. The country had the good sense and the good fortune to grant 
his request.
  Leslie Southwick continued to serve in the Armed Forces after he was 
elected to the State court of appeals in 1994. He conscientiously 
performed his military and judicial duties, even using his vacation 
time from the court to satisfy the required service period in the 
Mississippi National Guard.
  In 2003, Lieutenant Colonel Southwick volunteered for a line combat 
unit--this is 2003--a line combat unit, the 155th Separate Armor 
Brigade. His commanding officer, MG Harold A. Cross, notes that his 
decision ``was a courageous move, as it was widely known at the time 
that the 155th was nearly certain to mobilize for overseas duty in the 
near future.''
  Colleagues such as attorney Brian Montague were not surprised. This 
is what Brian Montague had to say: ``Despite love of wife and 
children,'' Leslie Southwick volunteered for a line combat unit over a 
safer one ``because of a commitment to service to country above self-
interest.''
  In August of 2004, Leslie Southwick's unit mobilized in support of 
Operation Iraqi Freedom. His commanding officer states that he 
distinguished himself at forward operating bases near Najaf. Another 
officer, LTC Norman Gene Hortman, Jr., describes Southwick's service in 
Iraq as follows:

       Service in a combat zone is stressful and challenging, 
     oftentimes bringing out the best or the worst in a person. 
     Leslie Southwick endured mortar and rocket attacks, travel 
     through areas plagued with IEDs, extremes in temperature, 
     harsh living conditions--the typical stuff of Iraq. He 
     shouldered a heavy load of regular JAG officer duties, which 
     he performed excellently. He also took on the task of 
     handling the claims of the numerous Iraqi civilians who had 
     been injured or who had property losses due to accidents 
     involving the U.S. military. . . .This involved long days of 
     interviewing Iraqi civilian claimants, many of whom were 
     children, widows, and elderly people, to determine whether 
     the U.S.

[[Page 22009]]

     military could pay their claims. Leslie always listened to 
     these Iraqi claimants patiently and treated them with the 
     utmost respect and kindness. He did this not just out of a 
     sense of duty, but because he is a genuinely good and caring 
     person. His attitude left a very positive impression on all 
     those that Leslie came in contact with, especially the Iraqi 
     civilians he helped. This in turn helped ease tensions in our 
     unit's area of operations . . . and ultimately saved American 
     lives.

  Lieutenant Colonel Hortman concludes that Leslie Southwick ``has the 
right stuff'' for the Fifth Circuit Court of Appeals--``profound 
intelligence, good judgment, broad experience, and an unblemished 
reputation.'' Lieutenant Colonel Hortman added:

       I know him and can say these things without reservation. 
     Anyone who says otherwise simply does not know him.

  Stuart Taylor writes in the National Journal that Leslie Southwick 
``wears a distinctive badge of courageous service to his country,'' and 
that he ``is a professionally well-qualified and personally admirable'' 
nominee for the Fifth Circuit Court of Appeals.
  Judge Southwick does not seek thanks or notoriety or charity for his 
military and other civic service. He asks to be judged fairly--to be 
judged on the facts, to be judged on his record. It is the same 
standard he has applied to others as a judge, a military officer, a 
teacher, and a mentor.
  It is a standard for which he is well known and admired. By that 
standard, he is superbly fit to continue to serve his country, this 
time on the Fifth Circuit Court of Appeals.
  His colleagues know this, as do his home State Senators. His peers 
within the State bar know this. They honored him as one of the finest 
jurists, declaring him ``an example of judicial excellence; a leader in 
advancing the quality and integrity of justice; and a person of high 
ideals, character, and integrity.''
  The American Bar Association knows this as well. It has twice given 
him its highest rating, ``well qualified,'' and in so doing found him 
to be exemplary in the areas of compassion, open-mindedness, freedom 
from bias, and commitment to equal justice under law.
  Even Democrats on the Judiciary Committee know this because just last 
fall, all of them--again, all of them--looked at his record and 
approved him for a lifetime position on the Federal bench.
  But it appears that Democrats on the committee may now apply a 
different standard to Judge Southwick. A member of the Democratic 
leadership who serves on that committee states that what is 
``determinative'' is whether a judicial nominee is perceived to be 
fair.
  The notion that perception, rather than reality, will be dispositive 
in evaluating a nominee is at odds with the principle of the rule of 
law. And it is not fair to manufacture a false impression of someone 
through insinuation and innuendo, and then use that falsehood to defeat 
him. In the case of Judge Southwick, the sudden ``perception'' about 
his fairness is driven by those who do not even know him, and it is 
disproved by his long record by those who know him very well.
  All nominees deserve to be treated with dignity, but a selfless 
public servant and veteran such as Leslie Southwick deserves to be 
treated with respect as well. It is disrespectful for the same members 
of the Judiciary Committee who unanimously supported his nomination 
last fall to now turn around and unanimously oppose him. There is only 
one change in Judge Southwick's credentials between last year and now. 
The ABA, hardly a bastion of conservatism, has actually increased--
increased--its rating for him from ``well qualified'' to ``unanimously 
well qualified.'' Now what that means is that every single member of 
the ABA committee evaluating Judge Southwick's credentials for the 
Fifth Circuit, every single one of them gave him the highest possible 
rating--a unanimous ``well qualified'' rating.
  A party-line committee vote would not be a ``perceived'' flipflop or 
a ``perceived'' injustice but an actual one. This is not a question of 
perception; this is a question of actually ignoring the reality of this 
man's record. It would make clear that despite the promise of a new 
start on judicial nominations that the Senate majority leader and I 
have been hoping for all year, when push comes to shove, we will treat 
nominees unfairly based upon a manufactured perception.
  This sad standard is not only unjust, but it is actually unwise. As 
we all know, once established, precedents in the Senate are extremely 
difficult to undo. Establishing a third-party perception standard on 
the Southwick nomination will be bad for this Congress and really, more 
importantly, I will say to our colleagues on the other side of the 
aisle, bad for future Congresses regardless of who is in the White 
House and which home State Senators support a nomination. The standard 
we set now with a Republican in the White House and a Democratic Senate 
might well be the standard applied in a future Congress if, for 
example, it were a Democrat in the White House and a Democratic Senate.
  Because such a decision will affect us all, and for the worst, it is 
appropriate for the Senate collectively to express its view on whether 
it wishes to go down this path, whether it wishes to undo the good work 
and good will that brought us back from the precipice just a few years 
ago. It is for that purpose that I have offered the sense of the Senate 
on the Southwick nomination. I encourage my colleagues to review it, to 
review the record, and to think long and hard about whether we want to 
deny this good man an opportunity for a vote here in the Senate.
  Again, Mr. President, at the risk of being redundant, let me just say 
that the majority leader and I have been working hard all year to try 
to improve the confirmation process. I think that is a very wise thing 
for the majority to do because someday they may have the White House 
again, in spite of the best efforts of people like me. Once we 
establish an unrealistic standard for the treatment of qualified 
judicial nominees for the circuit court, there will be a great 
temptation on the part of the other side of the aisle to apply the same 
standard in the future.
  There are plenty of grievances from the past. We have had Republican 
complaints about Democrats and Democratic complaints about Republicans. 
I guess the fundamental question is, When do we stop it? When do we 
stop it? For the sake of the institution, for the sake of the country, 
and for the sake of the party that may not currently occupy the White 
House, when do we stop?
  It strikes many of us that the Leslie Southwick nomination is a good 
time to stop it because we all know he is extraordinarily well 
qualified. There is really no serious argument otherwise. And if we 
can't stop it now, Mr. President, when will we stop it?
  So I think this will give us an opportunity to let all of the Senate 
express themselves, rather than just a few in one committee, on the 
appropriateness of this nominee.
  With that, I yield the floor.
  Mr. REID. Mr. President, it is my understanding the distinguished 
Senator from West Virginia is going to be recognized now; is that 
right?
  The PRESIDING OFFICER. That is correct.
  Mr. BYRD addressed the Chair.
  Mr. REID. Mr. President, if I can interrupt my friend for a minute, 
will the Senator yield to me to make a brief statement regarding the 
statement made by the distinguished Republican leader, to be followed 
by 5 or 6 minutes by the Senator from Vermont, the chairman of the 
Judiciary Committee, and then the Senator from West Virginia would, of 
course, have all of his time?
  Mr. BYRD. Yes. Yes, I will do that.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, it appears at this time that we will move to 
table this sense-of-the-Senate resolution offered by my friend, the 
distinguished Republican leader. I appreciate his advocacy for Judge 
Southwick. Some of us have a different opinion about Judge Southwick, 
and that has been made a part of the record already. I would refer to 
the Congressional Record of July 20, where I gave an extended statement 
on Judge Southwick and why I thought he should not be confirmed, but 
there will be more time to talk about this.

[[Page 22010]]

  We have done a very good job, working with Senator Leahy, in clearing 
judges. We have a bump in the road with this one, there is no question, 
and the bump is still there. I admire and appreciate the work done by 
the Senator from Vermont because we have been through some difficult 
times in recent years with the Judiciary Committee. Senator Leahy will 
make a brief statement about some of the travails we have had.
  Judge Southwick has had a hearing. It is up to the Republicans--
namely, Senators Lott and Cochran--whether they want to vote in that 
committee. That is so much more than was given to Senator Clinton's 
nominees, where about 70 never even had a hearing.
  So we will have more time to debate this at a subsequent time, and 
sometime later today I will confer with my distinguished Republican 
colleague, the minority leader, to determine when I will offer a motion 
to table or Senator Leahy will offer a motion to table.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. First, Mr. President, I thank the distinguished Senator 
from West Virginia for his usual courtesy and giving me some time to 
speak. I have had the privilege of serving almost 33 years--a third of 
a century--with the distinguished Senator from West Virginia. Of 
course, I know my 33 years pale in comparison with the time he has 
served.
  While the distinguished Republican leader is on the floor, he and I 
have worked closely together on many things. I will not make comments 
about crocodile tears and all that, but it is interesting that he spoke 
of Judge Southwick being passed out unanimously last year. He forgot 
the fact that when he was being cleared for a vote by the Republican-
controlled Senate, a Republican objected.
  The Republican leader has forgotten that the Senate has confirmed 25 
nominations for lifetime appointments this year--more than were 
confirmed, for example in all of 2005 with a Republican chairman and a 
Republican majority.
  The leadership over there has forgotten that we Democrats--we 
Democrats--have confirmed more of President Bush's nominees for any 
given period of time while we have been in charge than the Republicans 
did. We have had three different leaderships in the Senate Judiciary 
Committee and the Senate itself during the time President Bush has been 
in office. During the time that the Democrats have been in charge, we 
have actually confirmed more of President Bush's nominees than the 
Republicans did.
  The weeping and gnashing of teeth going on makes me think that 
congressional Republicans love to shut down the Government and seem 
intent on manufacturing excuses to do so. In 1995 Newt Gingrich was so 
upset by the door he had to use on Air Force One--most people would be 
thrilled to fly on Air Force One--that he shut down the Government. 
When they were in the Senate majority a few years ago, Senate 
Republicans insisted on a 40-hour debate on their own President's 
court-packing scheme. And then we found out that during that time they 
were stealing our computer files. The then Republican leader had to 
fire one of his own aides for stealing computer files from the 
Democrats. So the weeping and gnashing of teeth that is going on leaves 
a little bit to be thought about.
  The Senate has confirmed 20 circuit court nominations and 125 Federal 
judicial nominees during the 2 years I have been Judiciary Committee 
chairman. Compare that to the numbers of the Republicans. During the 
Bush presidency, more circuit judges, more district judges and more 
total judges have been confirmed, in less time, while I served as 
Judiciary Chairman than during the longer tenures of either of the two 
Republican Chairmen working with Republican Senate majorities. Yet you 
would think that somehow we are holding up everybody.
  I would point out that it was the Republicans who pocket-filibustered 
over 60 of President Clinton's nominees. I think we have stopped two or 
three of President Bush's. Sixty-one. The distinguished Republican 
leader said he hoped all this would stop. Well, we are not going to do 
what they did. Incidentally, 17 of those were circuit nominees. Let me 
mention their names for those that have short memories: Barry Goode, 
Helene White, Alston Johnson, James Duffy, Elena Kagan, James Wynn, 
Kathleen McCree Lewis, Enrique Moreno, Allen Snyder, Kent Markus, 
Robert Cindrich, Bonnie Campbell, Stephen Orlofsky, Roger Gregory, 
Christine Arguello, Andre Davis, and Elizabeth Gibson. These are just 
some of the ones they pocket-filibustered.
  Now, on Judge Southwick, I had him on the agenda. I took him off the 
agenda at the request of the Republicans. We actually had him on one 
time, and we did not get enough Republicans to show up to make a quorum 
to vote on him. I took Judge Southwick's nomination off the agenda at 
the request of Republican Senators. Neither the junior Senator from 
Mississippi nor the senior Senator from Mississippi nor the 
distinguished Republican leader has asked me to put him back on the 
agenda.
  I am growing somewhat tired of the statements being made publicly 
about delay, many of which I do not attribute, of course, to my 
colleagues, so I put Judge Southwick's nomination back on the agenda 
for tomorrow.
  I must say--and I will close with this--this makes me think about the 
first time I was chairman of this committee in the first Bush 
administration, knowing that we come from a time when the Republicans 
had pocket-filibustered 61 of President Clinton's nominees and one they 
had voted out almost unanimously from the committee whom they then 
ambushed on the floor, the distinguished James Graves, an African 
American who then became chief justice of the Missouri Supreme Court, 
the distinguished African American whom they humiliated by voting him 
out of committee, with no real objections, and then, in lockstep, with 
no notice, voted him down on the floor of the Senate. One of the most 
distinguished African-American jurists in the country, the Republican 
leadership decided to vote him down. But notwithstanding that, I tried 
to change that.
  I remember when the Republicans asked me to have a hearing on a 
controversial nominee of theirs. They were very concerned about it. I 
actually came back from Vermont, which is not an easy thing to do in 
August, to leave that beautiful State--it is like leaving the beautiful 
State of West Virginia during the month of August, one of our prettiest 
times--but I left Vermont, came back, and held a hearing on that 
nominee so we could arrange in the first week of September to get him 
passed. Do you know what happened, Mr. President? Do you know what the 
reaction of the Republicans was? They trotted out a member of their 
leadership to tell the press how terrible it was that I held a hearing 
during August, even though that was the only way they were going to get 
their nominee through. That was hypocrisy.
  Mr. President, with that, I will just point out again that there is 
no question of the numbers. The Democrats have moved more of President 
Bush's nominees more quickly than his own Republicans have when they 
have been in charge. If we are able to confirm just the five 
nominations for lifetime appointments to the federal bench currently on 
the Senate's executive calender, I will have presided over the most 
productive 2-year period for judicial confirmations in the last 20 
years, with 130 confirmations. Let us stop the crocodile tears. Let us 
stop the hypocrisy. Let us stop the grandstanding and worry about what 
is best for the courts. This administration has played politics with 
the judiciary more than any of the six administrations I have served 
with--not for but with--and I think one example of their knowing what 
is best for law enforcement, what is best for the judiciary, is this 
administration's strong support of the current Attorney General.
  With that, I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
West Virginia is recognized.


                                  Iraq

  Mr. BYRD. Mr. President, it was 122 degrees in Baghdad today. The 
Iraqi

[[Page 22011]]

Parliament thinks it is too hot to work and has gone on vacation. Our 
soldiers don't have that luxury. Our brave men and women continue to 
patrol the hot streets of Baghdad in full battle gear. They will get no 
vacation. They continue to risk their lives in the sand and in the 
heat, supposedly to give the Iraqi politicians ``breathing room'' to 
build a political consensus. Those politicians are now on vacation.
  A majority of Iraqis now say that we are doing more harm than good by 
staying in their country. Perhaps I should say that again. A majority 
of Iraqis now say that we are doing more harm than good by staying in 
their country.
  Every day brings more terrible news of American casualties. What has 
the response from this administration been? ``Wait. Wait. Give us more 
time.'' Our President has been saying that for the last 4 years, and it 
is clear that he will keep on saying it for as long as we keep on 
accepting it. So I am angry. This is my 49th year in the Senate. I 
believe it is the first time I have said that. I am angry. Every Member 
of this body should be angry, angry that the Iraqi Government is on 
vacation while our troops, American troops, U.S. troops--your troops, 
my troops, our troops--fight and die in their civil war.
  Everyone, including General Petraeus, agrees that there is no 
military solution in Iraq. None. Iraqis will have to make the hard 
political compromises necessary to force a national consensus. Nothing 
the U.S. military does can force them to make those compromises. But, 
rather than work to craft a political solution, the Iraqi Government 
decided to take the entire month of August off.
  And where has our Congress been? I am deeply disappointed that the 
Senate has once again failed to have a real debate on the issue of the 
war in Iraq. There is no issue currently facing our Nation that more 
deserves the attention of this body, and yet we continue to have empty 
procedural votes instead of passing legislation that would mandate a 
change of course, as a large majority of Americans want. We are, in 
fact, charged by the Constitution to have that debate, and yet we wait. 
``Wait until September,'' the critics say. ``Wait until the new 
report.'' How many reports must this Congress read before we see the 
handwriting on the wall? I, for one, am tired of waiting. The American 
people are tired of waiting. Our brave soldiers and their families are 
tired of waiting.
  The President and his supporters in Congress are fond of painting a 
picture of what would happen following a precipitous withdrawal from 
Iraq, and they paint with a pallet of fear. But their picture is not 
reality. It is easy to win an argument against a straw man, but we are 
not calling for a precipitous withdrawal. The proposal that 53 Senators 
voted in favor of recently called for a phased redeployment of troops 
to focus on the threats that truly face us, not a hasty and radical 
complete pullout.
  I opposed this terrible war from its beginning, but I recognize we 
are there now and some actions can't be so simply undone. Our first 
priority must be that of protecting U.S. interests, and the simple 
truth is that we do have vital interests in the region. The question is 
how to best protect those interests.
  The President of the United States, President Bush--and I say this 
most respectfully--the President says that al-Qaida wins if we leave 
and that if we pull out the terrorists will follow us home. Let me say 
that again. The President says that al-Qaida wins if we leave and that 
if we pull out the terrorists will follow us home. Al-Qaida is our 
enemy, but are we really defeating them by trying to referee a 
sectarian civil war between Shia and Sunni that has been going on for 
over 1000 years? The President's own advisers now admit that al-Qaida 
is as strong today as it was before 9/11.
  Al-Qaida is resurgent in Pakistan and Afghanistan. When the President 
of the United States took his eye off the ball and diverted our 
national attention from Osama bin Laden and his terrorist training 
operation in Afghanistan, the President dealt the security of the 
people, the American people, a major blow.
  Iraq did not attack the United States on 9/11. No Iraqi, not one--not 
one--was involved in those attacks. Al-Qaida may now be in Iraq. But it 
was not there before we went in and handed them a new training ground 
for fresh recruits.
  More importantly, al-Qaida is not the core of the problem in Iraq. 
Al-Qaida is not the core of the problem in Iraq, no matter how often 
the President says that it is. Former Secretary of State Colin Powell 
said recently that al-Qaida was only 10 percent of the problem in Iraq. 
The real problem in Iraq is not al-Qaida, the real problem is the 
multiple civil wars that are raging: Shiia versus Sunni, Shiia versus 
Shiia, Sunni versus Kurds.
  The argument that if we lose in Iraq, they will follow us here is 
pure hogwash. Nonsense. Did you hear me? I say, did you hear me? Let me 
say it again. The argument that if we lose in Iraq, they will follow us 
here is pure hogwash. H-o-g-w-a-s-h. Hogwash.
  I have heard that time and time again. If we lose in Iraq, they will 
follow us here. That is absolutely hogwash. Nonsense. What is keeping 
terrorists from coming here now? Tell me. So we heard the argument: If 
we lose in Iraq, they will follow us here. Well, what is keeping the 
terrorists from coming here now? Certainly not the fact that our 
military is in Iraq. Our military was not in Iraq when hijackers with 
box cutters flew planes into the Pentagon and the World Trade Center. 
Have we such short memories? I saw those planes attack the World Trade 
Center. I have not forgotten it.
  Keeping our troops in Iraq is not what is going to keep a terrorist 
attack from happening again. So I repeat that. Keeping our troops in 
Iraq is not what is going to keep a terrorist attack from happening 
again. The real threat, the real threat, the real threat is in Pakistan 
and Afghanistan, as the President's own advisers admit.
  Principled people in this country, let me say that again, principled 
people--in other words, people of principle in this country and in the 
Congress are calling for a change in strategy, not because they are 
weak, not because they are scared, not because they are callously 
political, they are calling for a change because it has become patently 
obvious that what we are doing is not making us safer, it is making us 
less safe.
  They are calling for a change because it has become patently--p-a-t-
e-n-t-l-y--obvious that what we are doing is not making us safer, it is 
making us less safe.
  Now, as U.S. officials absolutely wake up to the resurgence of al-
Qaida in Afghanistan and urge President Musharraf's Government to crack 
down in Pakistan, we confront great anger in the region. I think that 
statement is entitled to a rehearing.
  Now, as U.S. officials slowly wake up to the resurgence of al-Qaida 
in Afghanistan and urge President Musharraf's Government to crack down 
in Pakistan, we confront great anger in the region.
  Our continuing occupation of Iraq has damaged our credibility and 
aroused suspicions about the depth of the U.S. commitment to the 
sovereignty of other nations. There is a lesson here. It is this: If 
you are marching in the wrong direction or if you are fighting the 
wrong fight, unflinching persistence is not a sign of strength, it is a 
sign of stupidity.
  If you are marching in the wrong direction or fighting the wrong 
fight, unflinching persistence is not a sign of strength, it is a sign 
of stupidity. Yet amazingly we hear plans of continuing for 2 more 
years our pointless, senseless occupation in Iraq.
  I said it was wrong in the beginning. It was wrong from the start. It 
amazes me when we hear plans of continuing for 2 more years our 
pointless, costly, senseless occupation in Iraq.
  The seas are rising and our present course is headed for an iceberg. 
Turn around. Turn around, Mr. President. Turn around.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Menendez). The Senator from Florida is 
recognized.

[[Page 22012]]


  Mr. MARTINEZ. Mr. President, I wish to speak on the current health 
care discussion on the floor and take a few minutes to address this 
very important issue.
  SCHIP is a great program that is called Kid Care in the State of 
Florida, where it has very successfully, over the past many months, 
been a good program in reducing the amount of children without health 
insurance.
  I support its reauthorization as proposed in the McConnell-Lott 
amendment. I support a straight reauthorization because the 
alternative, the Democratic bill before us, greatly steers the program 
away from the original intent. The intent of this program is to provide 
health care for low-income children.
  Instead, the underlying bill redefines SCHIP. It redefines the 
program to make SCHIP cover more adults and people well outside 
poverty. This bill will make families make a choice. A family of four 
making $82,000 a year could remain on private insurance, paid out of 
pocket, or they could take public-funded insurance.
  That kind of choice will cost Americans about $37 billion a year by 
the year 2012. This kind of expansion of Government-controlled health 
care is counter to any effort to reform our health care system. The 
question comes: Why are we considering this expansion? Why take the 
focus away from the children SCHIP was intended to serve? SCHIP has 
successfully achieved what it set out to do and has significantly 
reduced the number of uninsured children.
  Last year, 6.6 million children received health insurance through 
SCHIP. Rather than change the purpose of the program, as Democrats have 
proposed, we should refocus SCHIP on finding and covering the low-
income children who are eligible for the program but are not yet 
enrolled.
  The McConnell-Lott bill turns the focus to the original purpose, 
helping ensure children from low-income families have health insurance.
  Instead of an expansion toward Government-run health care, the 
Republican alternative authorizes the program to keep the focus on 
children and invests an additional $14 billion into the program.
  Additionally, the Republican alternative provides important practical 
and easily implemented reforms to make health insurance more affordable 
for the uninsured. Part of the problem with SCHIP right now is we can't 
find all the kids who need it. The Republican alternative commits $400 
million over the next 5 years for improved outreach programs. This 
money targets enrolling low-income children. These funds target the 
low-income children SCHIP was meant to help. We have a problem when we 
have children who have no health insurance but yet we have not reached 
out and touched them. This new reauthorization will put the funds 
behind going out and doing the outreach necessary to ensure that all 
children who are uninsured who could be covered under this program are 
reached.
  The Congressional Budget Office projects that the Baucus plan will 
cover 600,000 new uninsured individuals at higher income levels, but 
then the plan would also cause 600,000 privately insured individuals at 
these income levels to drop their private coverage. Ironically, the 
Baucus bill drives people out of private insurance and into Government-
sponsored health care. Under the Baucus plan dependency on government 
health care will increase significantly. In total, CBO says that 2.1 
million individuals will move from private coverage to Government 
dependency if the Baucus plan is implemented. This isn't the health 
care reform Americans want. This isn't in the best interest of our 
country.
  Before we take this step of moving people on to Government plans, 
let's have a broader debate. Let's think about the ramifications and 
the opportunities. We can do better by providing Americans with more 
individual freedom and more choice while increasing health care 
coverage and security. We can help more Americans to own their own 
health care, take it with them from job to job, and partner with States 
to make that policy more affordable. That is why some of my colleagues 
and I have introduced the Every American Insured Health Act.
  The principles for health care reforms our bill addresses include tax 
equity. It is indefensible that Americans who buy insurance on their 
own are treated differently than those who buy insurance through their 
employer. Our bill amends the Tax Code to treat all Americans equally 
when it comes to the purchase of health insurance. The effect will be 
that health care will be accessible and affordable whether an employer 
offers coverage. As the name implies, the Every American Act provides 
everyone in America, regardless of income or employer, refundable flat 
tax credits--$2,160 per individual or $5,400 per family. The Wall 
Street Journal wrote in a recent editorial that restoring the tax 
parity of health in dollars would go a long way to improving the system 
and increasing access and affordability for everyone, including the 16 
percent or so who today find themselves uninsured. It would also allow 
individuals to buy policies themselves rather than rely on their 
employers and take those policies with them wherever they work.
  The flexibility the bill we propose is founded on the belief that 
Government's role should be to organize the health care marketplace and 
then let consumers make choices. We provide the opportunity for every 
individual family to choose the health care policy that best meets 
their needs. When you have a competitive marketplace, you get more 
choices, better care, and lower prices.
  To get that market, our bill improves health insurance affordability 
in State marketplaces. It gives incentives, not mandates, for State 
insurance marketplace reform to create more options and more 
competition. The bill provides States the incentive to make health 
insurance more affordable and accessible by establishing a process to 
assist States in ensuring competitiveness. States will be given a menu 
of choices such as the incentive to establish a statewide insurance 
pool or establish high-risk mechanisms such as high-risk pools or 
reinsurance and improve their markets to enable insurance plans to 
offer at least one affordable policy valued at 6 percent of median 
income. This approach achieves the goals of universal coverage in a way 
that is truly American, by decreasing the number of uninsured 
Americans, thereby lowering health care costs for all Americans. This 
provides every American the right to choose their own health insurance 
plan.
  Finally, our approach authorizes incentives for States to reform 
their health insurance markets to ensure the availability of 
affordable, high quality health insurance for individuals and for 
families. For too long Congress has skirted the real issue that affects 
Americans and their health insurance. It is time to start finding 
solutions to the problems instead of putting Band-Aids on programs and 
systems that are truly failing all Americans.
  I ask my colleagues to reject the Baucus amendment, reject efforts to 
redefine and socialize our health care system. I ask my colleagues to 
support the McConnell-Lott amendment because it helps ensure that 
children in SCHIP continue to be served by the system and the program 
that was intended to serve them, broadening those who today could 
benefit from the program but are not there utilizing the opportunity 
before them because we have not reached out to them, and then also, as 
we do this, let's broaden the debate over fixing our entire health care 
system. It is a debate that is long overdue. It is a debate America 
yearns for. I look forward to engaging in that debate, how we continue 
to provide America the best and most sophisticated health care in the 
world but to make sure that every American participates in the 
opportunity to receive that best of health care we have to offer 
anywhere in the world.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, Senator Cantwell is on her way to speak. 
She is not here. I see the Senator from

[[Page 22013]]

Pennsylvania on the floor. I know he desires to seek time. I urge the 
Chair recognize the Senator from Pennsylvania who I think is going to 
speak about 8 to 10 minutes.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. I thank the distinguished chairman.


                           Amendment No. 2599

  I have sought recognition to speak briefly on the nomination of Judge 
Leslie Southwick to the Court of Appeals for the Fifth Circuit. I have 
spoken extensively about Judge Southwick in the past, but I do want to 
address a few remarks on the pending amendment offered by Senator 
McConnell and myself on the sense of the Senate that Judge Southwick 
ought to have an up-or-down vote on the floor of the Senate. It is my 
hope that we will proceed on judicial confirmations in a spirit of 
bipartisanship. Senator Leahy, chairman of the Judiciary Committee, and 
I have worked very closely on that in this Congress, as he and I did in 
the 109th Congress when I was chairman and he was ranking member.
  This body has seen some very controversial moments: in 2005, with 
filibusters against President Bush's nominees and the threat at that 
time to invoke the ``nuclear'' or ``constitutional option'' which would 
have brought the Senate to a standstill. We avoided that showdown and 
then worked harmoniously, in a dignified way, with Supreme Court 
nominations in 2005 and 2006. It is my hope we will find a way through 
on the Southwick nomination. I hope we do not have this vote degenerate 
back to a party-line vote without the kind of independent thought the 
Senate ought to exercise in evaluating the question which is whether 
Judge Southwick ought to have an up-or-down vote.
  Judge Southwick has an extraordinary record. I do not use that word 
lightly. He served on the Mississippi State appellate court for some 12 
years. He has been a party to some 8,000 decisions. He has written 985 
opinions himself. He is rated unanimously well qualified by the 
American Bar Association. He passed out of the Judiciary Committee, 
unanimously, for a district court judgeship. He has been an adjunct 
professor at a law school. He was clerk of the Court of Appeals for the 
Fifth Circuit, so he has experience there. In a very unusual way, in 
his fifties, he volunteered for the Judge Advocate General's Corps, 
volunteered to go to Iraq and served there in a heavy combat zone.
  I have had occasion to talk to him at great length, and he is a 
scholarly, intellectual, experienced lawyer, an experienced jurist. I 
have put into the Record detailed statements about many of his 
decisions where he has found in favor of the so-called little guy, 
finding in favor of people who have tort claims for injuries sustained, 
in favor of employees in employment cases.
  The only two situations which have been brought up in opposition to 
Judge Southwick are two cases where he concurred in an opinion, two 
opinions which he did not write. In one of the opinions, it was a 
custody case, and the court found in favor of the father. There was a 
reference to the ``homosexual lifestyle'' of the mother which is a term 
that is used with some frequency. I think there could be more 
discretion in that language, but the court found in favor of the father 
because of his community roots, because of the home he could provide 
for the child, and because of the father's income. The important thing 
about that case was its procedural posture. That was the sum and 
substance of that matter.
  There was a second case where the issue involved a racial slur which 
admittedly was reprehensible. It was said by an individual, a public 
employee, about a fellow worker who was not present at the time. The 
subject did not hear the slur. There was an immediate apology. There 
was no workplace disturbance. The issue then came before an 
administrative review board that found that although the comment was 
reprehensible, under these facts it was not sufficient to support 
termination of employment. That issue then came back before the 
appellate court on a very narrow question. The question was whether the 
decision by the administrative board was arbitrary and capricious, 
which is lawyer talk for whether there was any evidence to support the 
board's ruling. The court felt that there was evidence to support the 
conclusion that there was not sufficient grounds for firing. The case 
then went to the State Supreme Court, and the State Supreme Court 
remanded on the limited question about having more detailed factual 
findings. But the Supreme Court of Mississippi agreed that the incident 
was not sufficient to warrant a permanent firing.
  That is the sum and substance of the objections. When you look at the 
full record, you see that Judge Southwick ruled in a case where the 
trial judge had excluded evidence that the victim of a crime was gay, 
and Judge Southwick upheld the ruling that that would have been 
prejudicial, defense counsel should not have been permitted to ask that 
of a victim, seeking only to prejudice the jury. It did not having any 
bearing on the issue involved in the case. This supports the conclusion 
that Judge Southwick, in the custody case to which I referred, did not 
have any demonstrate traits or indications that he was biased or 
prejudiced or unjudicial in his approach to that particular issue.
  It is my hope we will take a careful look at Judge Southwick's record 
before casting votes. I understand there will be a tabling motion. We 
should look at the underlying merits.
  When we had the controversy in 2005, I urged my colleagues in the 
strongest terms to take a look at whether they thought individually 
filibusters were warranted against Priscilla Owen and Bill Pryor and 
Janice Rogers Brown. I asked my Republican colleagues to take a look on 
the merits as to whether it was warranted to talk about a ``nuclear'' 
or ``constitutional option.'' I make the same plea here today. Let's 
not be bound by a party-line vote, ignoring the merits.
  There have been comments on the floor today, as there have been in 
the past, about President Clinton's nominees being improperly treated. 
I agree with that today, and I agreed with that when it happened, and I 
crossed party lines. I have crossed party lines to vote for President 
Clinton's judicial nominees when they were qualified. I hope we will 
come in the Senate, take a look at the individuals, take a look at the 
merits, and not move for a party-line consideration, and not avoid a 
vote, to have the man bottled up in committee. That smacks of the days 
of Senator Jim Eastland, when the Judiciary Committee bottled matters 
and prevented the Senate from voting on them.
  I can understand there are some Senators who do not want a vote on 
Judge Southwick, but that is what we are here for. That is the pay 
grade--to vote. So I urge my colleagues to look at this matter on the 
merits. I hope we do not have our actions disintegrate to the kind of 
controversy we had a couple years ago, but that we can move beyond this 
to the kind of bipartisanship which Senator Leahy and I have been able 
to muster for the Judiciary Committee.
  I thank the Senator from Montana for allowing me to speak. I know the 
Senator from South Carolina, Mr. Lindsey Graham, has a few comments. I 
expect he will be very brief on the subject.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I might inquire of the Senator from South 
Carolina, how long does he wish to speak? We have been trying to go 
back and forth.
  Mr. GRAHAM. Mr. President, I say to the Senator, about 5 minutes.
  Mr. BAUCUS. Because that will be three on your side in a row before 
we go back to this side. Is the Senator speaking on the same subject?
  Mr. GRAHAM. Yes.
  Mr. BAUCUS. I urge the Presiding Officer to recognize the Senator 
from South Carolina.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. GRAHAM. Mr. President, I will try to be brief. I appreciate the 
recognition. I wish to speak very briefly

[[Page 22014]]

on the matter pending before the Senate.
  The whole idea of the confirmation process of judges has taken a kind 
of wrong turn for many years now. There is plenty of blame to go around 
from both parties. But one thing I wish to have happen in the Senate--
for the good of the country--is to make sure when well-qualified people 
come before this body, they are put through their paces about their 
qualifications, their abilities, their disposition, their demeanor, 
inquiring as to how they think and what drives their thinking, but, at 
the same time, understanding that our job is to confirm people who are 
sent over by the President--elections do matter--and that when we look 
at a nominee, we part the politics of the last election, of the next 
election, and focus on the individual who will serve for a lifetime.
  It is important to understand the nominee before this body, Mr. 
Southwick, has been serving as a judge in Mississippi since 1995. As 
Senator Specter indicated, he has been involved in thousands of 
decisions in a concurring role, and he has offered hundreds of 
decisions.
  He joined the military, and volunteered, as a lieutenant colonel to 
go serve in Iraq at the age of 52.
  The American Bar Association unanimously considered him well 
qualified, saying very glowing things about his temperament, his 
disposition. This is someone who has been looked at by people outside 
of politics and found to be extremely well qualified.
  Mr. DURBIN. Mr. President, will the Senator from South Carolina yield 
for a question?
  Mr. GRAHAM. Yes, sir.
  Mr. DURBIN. I want to ask the Senator two or three questions about 
this nominee after he completes his remarks. I would be glad to wait 
until the Senator finishes.
  Mr. GRAHAM. Absolutely. I will be glad to.
  I do not want to infringe on the 5 minutes. But the bottom line, I 
guess to my good friend from Illinois, is, I do not think this is about 
qualifications at all. I think this man has lived a good life in the 
law and seems to be a good person, from what I understand from everyone 
who has spoken on his behalf. It is not a question about a character 
flaw or a lack of legal ability. It is about two cases.
  As Senator Specter said, one case involved a racial slur that is a 
horrible term. The administrative review board, which took up that 
matter--should the person be fired because of this racial slur--found 
it was not a repeated event--under Mississippi law, it has to be more 
than an isolated event--it did not disrupt the workplace, there was an 
apology made and accepted, and the board found that this was not 
sufficient to terminate the person.
  It went to the Mississippi Court of Appeals, and they, under 
Mississippi law, had to determine whether the administrative review 
board made an arbitrary and capricious decision, whether there is any 
evidence to support the court's finding, and they upheld the court's 
determination.
  Judge Southwick, in that case, commented many times about how 
offensive the word was, and there is no place in society for this word 
to be used without it being considered to be offensive. But judges have 
to apply the law, not emotions.
  I guess the question I have is, is there any belief on anyone's part 
that his concurrence in this upholding of the administrative review 
board suggests that he, as a person, is racially biased? Does this 
suggest he is defective as a person, that he harbors animosity against 
one group or another? I do not think anybody can reasonably conclude 
that.
  Judges sometimes have to be involved in emotional decisions. If 
people want to march through Jewish communities holding the Nazi flag, 
that is horrible, but under the law that is allowed on certain 
occasions.
  The second case is about the term ``homosexual lifestyle.'' It was a 
custody case, and he was in an appellate review situation. That term 
was used in the underlying decision by the judge in terms of custody, 
but that term has been used in many other cases throughout the country 
in different jurisdictions.
  I guess my question is, do you take these two cases, where he 
concurred, to say there is something wrong with him? Did he do 
something out of the mainstream of the law? And does it show that he, 
Judge Southwick, is somehow not the type person you would want to sit 
in judgment of your case or your family?
  I think what we are doing to him is incredibly unfair. There is no 
real evidence at all this man, as a person, harbors animosity against 
one group versus the other. Quite to the contrary, from everything I 
see in the record, he has been a very decent, scholarly man who has 
applied the law in an admirable fashion.
  So I wish we could allow an up-or-down vote on this fine fellow.
  I will yield for a question.
  Mr. DURBIN. Mr. President, if the Senator from South Carolina will 
yield for a question.
  Mr. GRAHAM. Yes.
  Mr. DURBIN. Under the previous administration of President Clinton, 
there was considerable controversy in the Judiciary Committee about 
whether President Clinton's nominees would receive a hearing and a 
vote. In scores of instances, nominees were given neither.
  Can the Senator from South Carolina put in the Record now whether 
Judge Leslie Southwick was given a hearing before the democratically 
controlled Senate Judiciary Committee?
  Mr. GRAHAM. I believe he was, yes. I believe so.
  Mr. DURBIN. I say to the Senator, he did receive such a hearing.
  Mr. GRAHAM. Yes.
  Mr. DURBIN. I attended the hearing. I thought it was very fair at 
allowing both parties to ask Judge Southwick questions.
  Mr. GRAHAM. All right.
  Mr. DURBIN. Since the sense-the-Senate resolution before us suggests 
Judge Southwick's name be removed from the Senate Judiciary Committee 
and brought directly to the floor, I wish to ask the Senator from South 
Carolina, has there been any effort by any Democrat on the committee to 
stop Senator Specter or any Republican from calling Judge Southwick's 
name for a vote in the committee?
  Mr. GRAHAM. As I understand it, the problem with Judge Southwick is 
that it appears there has been some effort to try to get the 
Mississippi Senators to nominate someone else. And there has been the 
suggestion he could be a district judge but we want someone else to be 
the court of appeals nominee. I do not think that is a process we 
should engage in. So there are a lot of politics behind this 
nomination. We should not allow that to happen. We should not basically 
hold hostage the ability of the Senators from Mississippi and the 
President to put someone forward. If we think they are not qualified, 
vote them down. But playing politics, trying to change the nominating 
process, I do not think is kosher. And I think that is what is going 
on.
  Mr. DURBIN. My question directly is this: Is the Senator aware of any 
effort to stop Senator Specter or any Republican Senator from calling 
Judge Southwick's nomination for a vote in the Senate Judiciary 
Committee?
  Mr. GRAHAM. No. But I am aware of an effort to get Judge Southwick 
replaced with another person more acceptable to the Democratic majority 
and, basically, to take away from the President the ability to nominate 
a well-qualified person for this slot and, basically, neutralize the 
two Mississippi Senators, who I think have chosen wisely. I think that 
is politics that is dangerous for us to play, and I wish we would not 
do it.
  Mr. DURBIN. I am going to ask the Senator to yield for a question. I 
see Senator Leahy has come to the floor.
  I can say for the record--he can back me up--not only was Judge 
Southwick given a hearing--which many nominees in the previous 
administration were not given a fair hearing, I believe; and I think 
all present would say--there has been no effort to stop Senator Specter 
or any Republican from calling this nomination for a vote.
  I wish also to ask the Senator from South Carolina, is he aware of 
the fact

[[Page 22015]]

that the only African-American Congressman from the State of 
Mississippi, the Magnolia Bar Association, which represents most 
African-American attorneys in Mississippi, and the major civil rights 
group have expressed their opposition to the nomination of Judge 
Southwick?
  Mr. GRAHAM. Yes, I understand there is some opposition from African-
American elected officials. What I would say to that is, being a son of 
the South, I am very sensitive to all of this. I have lived all my life 
in South Carolina, and I understand the sins of the past. They are very 
real. I can remember growing up. My dad owned a bar where African 
Americans came into our bar and they had to buy their products to go. I 
remember that very well as a young man. I see things changing for the 
better, and we have a long way to go.
  But what I see here, I say to my good friend from Illinois, is a man 
who has lived his life very well, who has been part of the solution, 
not the problem, who has never used the robe to impose arbitrary 
justice, who is trying to be a constructive member of the Mississippi 
judicial community, who has worked hard to make something of himself, 
and he is being accused of something he is not.
  I do not care where the criticism comes from. What I am going to 
evaluate is what the facts are about this man. This is a good man, who 
has been a good judge, who is well qualified, and who is being unfairly 
labeled based on two cases that are being turned upside down. We are 
going to ruin the judiciary if we continue to play this game.
  Mr. LEAHY. Mr. President, will the Senator yield for another 
question?
  Mr. GRAHAM. Absolutely.
  Mr. LEAHY. Mr. President, is the Senator aware of the fact that, 
formerly, when Judge Southwick was on the calendar as a nominee to be a 
district judge--Republicans were in charge--that when he was up for a 
vote, agreed to by the Democrats, he did not get a vote because of a 
Republican objection to a slate of judges? Is he aware of that?
  Mr. GRAHAM. No, I was not. It is my understanding there was no 
objection on your side about him being a district court judge. Is that 
correct?
  Mr. LEAHY. To answer that question, he was voted out for a district 
court judgeship, an entirely different type of judgeship than a court 
of appeals judgeship. It was in a package to be confirmed, I guess by 
unanimous consent, with the Republicans in leadership, and a Republican 
Senator from Kansas objected to one of the nominees, and, of course, it 
brought down the package.
  If I understood the Senator correctly, he was worried about political 
actions. Was he aware--I know he was not able to make a couple recent 
markups of the Senate Judiciary Committee, although he is a member. Is 
he aware of the fact that Mr. Southwick is on the agenda for tomorrow's 
markup?
  Mr. GRAHAM. Yes, I believe I am aware of that.
  Mr. LEAHY. Was he aware of the fact that he was taken off the agenda 
earlier at the request of the Republicans?
  Mr. GRAHAM. Yes, I am, because it is my understanding, if I could 
reclaim my time--and I am sorry to run over, I say to my good friend 
from Ohio--here is what I think is happening. I think everybody was OK 
with him being a district court judge, except maybe somebody on our 
side, and if the problem with this man is he has associated himself in 
a way that disqualifies him because of a racial problem, why should he 
be a district judge? If his problem is that he is against people 
because of sexual orientation unfairly, why would he ever be a district 
judge? So the point is that if he was good enough for a district judge 
based on his qualifications, why shouldn't we give him an up-or-down 
vote in a fair way in terms of the court of appeals?
  So I think what is going on here is that we are trying to replace the 
discretion of the President and the two Senators from Mississippi to 
play with a court of appeals nomination of Mississippi in a way that 
will come back to haunt all of us, and I just wish we wouldn't do it. 
Give this man an up-or-down vote on the floor.
  Mr. LEAHY. Mr. President, if the Senator would yield on that point, 
when the Republicans were in charge of the responsibility of bringing 
forth his record, they never brought forth either the sexual or the 
racial issues that have been raised when he was up for district court 
judge. But we will discuss this tomorrow. I hope the Senator will be 
able to join us at the markup tomorrow. We have had a couple of 
occasions when the President's nominees for judges have been on our 
agenda and Republicans did not show up to make a quorum. I don't know 
if this helps to keep their numbers--I remind the Senator, however, 
that with the Democrats in charge, the time the Democrats have been in 
charge, President Bush's judges have been confirmed at a far more rapid 
pace and in greater numbers--in greater numbers--than they have been 
under a Republican-controlled committee or Senate.
  Mr. GRAHAM. Mr. President, we will be there at the committee 
tomorrow, and I will yield the remainder of my time so we can get on 
with other business.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, we now have had three speakers from the 
Republican side of the aisle, three in a row, so I ask unanimous 
consent that the following speakers be recognized: Senator Harkin 
immediately, and following Senator Harkin, Senator Cantwell will speak, 
and that would be the request at this point.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. BAUCUS. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. HARKIN. Mr. President, in the decade since it was first 
authorized, the Children's Health Insurance Program has been an 
extraordinary success story. It has reduced the number of uninsured 
low-income children by a third, providing basic health insurance to 6.6 
million children whose parents cannot afford private insurance but who 
do not qualify for Medicaid.
  In my State of Iowa, the Children's Health Insurance Program has 
brought health insurance to nearly 50,000 children. Think about that: 
50,000 kids who otherwise have had no health insurance have had access 
to regular checkups and prompt treatment of illnesses and injuries. By 
any measurement, this is a stunning success.
  Let me introduce to my colleagues one of those 50,000 success 
stories. Her name is Jenci Ruff. She lives in Knoxville, IA. When she 
was in the third grade, she began having trouble seeing the blackboard. 
The school nurse recommended that she have her eyes tested, but her 
parents couldn't take her to a doctor; they were living paycheck to 
paycheck; they had no health insurance. By fourth grade, Jenci still 
couldn't see the blackboard and she began having headaches.
  Fortunately, Mrs. Ruff learned about the Children's Health Insurance 
Program. She enrolled Jenci and her little brother. Jenci was referred 
to an eye specialist and received treatment. A year and a half later, 
her vision has greatly improved and her headaches have gone away. Mrs. 
Ruff believes that the treatment made possible by the Children's Health 
Insurance Program saved her daughter from going blind. In addition, 
Jenci's brother, prior to starting school, was able to get the 
necessary shots and physicals he needed.
  As Mrs. Ruff told the Des Moines Register:

       Before, Jenci was having such a hard time to get through 
     her reading. Her grades have improved. Her attitude about 
     school has improved. But if she hadn't had this program--

  The Children's Health Insurance Program--

       we never would have made it to a specialist.

  I am very happy for Jenci Ruff and her brother and her family. But I 
have to ask, Don't we owe it to all of America's kids? Surely, in a 
humane, decent society, no child should go uninsured. No child should 
go without regular checkups and prompt treatment of illnesses and 
injuries.
  That is why it is incomprehensible--incomprehensible--to me that 
President Bush is pledging to veto this bill

[[Page 22016]]

because it would extend coverage of the CHIP program to too many kids. 
How could we extend it to too many kids? Instead, the President 
proposed $4.8 billion in additional funding over the next 5 years. That 
is less than what is needed just to maintain current enrollments. 
According to the Congressional Budget Office, the President's proposed 
funding would cut 1.4 million children and pregnant women from the 
Children's Health Insurance Program. How could anyone say that Jenci 
Ruff should have been cut from the children's health program? It saved 
her. It saved her from going blind. Yet we are told we don't have the 
money for this? Nonsense. Just think what it would have cost society if 
Jenci had gone blind, God forbid. What would the cost to society have 
been for her lifetime of special education, special schools, seeing-eye 
dogs, and all of the other things? How much more productive is she 
going to be now? Talk about penny wise and pound foolish.
  The President just doesn't get it. Sometimes, when people are born 
with a silver spoon in their mouths and they have had all the 
accoutrements, they have had all the wonderful hospitals and doctors 
all their lives, they somehow--and I don't say this of everyone, but 
some people just can't imagine that everyone is not like them. Well, 
there are a lot of people who do not have the kind of wherewithal you 
may have had growing up.
  So it is not just a public policy choice. I think the choice we have 
is a very moral choice: Do we go forward and extend health insurance to 
more kids from low-income families or do we cut these children from the 
rolls, condemn them to a childhood without checkups, without decent 
health care, without necessary medical treatment--that is, until they 
show up in the emergency room.
  We all know too well what it means when a child does not have health 
insurance, when they don't even have access to basic medical care. 
Earlier this year, the Washington Post reported on 8-year-old Deamonte 
Driver of Prince George's County, MD. Deamonte was suffering from an 
abscessed tooth, but his mother could not afford to take him to a 
dentist. Eventually, the abscess spread to Deamonte's brain. He was 
taken to an emergency room, but tragically, after 2 operations and more 
than 6 weeks of hospital care costing upwards of $250,000, Deamonte--
this young guy right here, Deamonte Driver--died. He died from an 
abscessed tooth. In the 21st century in the United States of America, 
this child died because he had an abscessed tooth because he is so low-
income, he didn't have health care and mom didn't have any money. Not 
until he got so sick that they rushed him to the emergency room, and he 
died.
  Why in the world would President Bush want to cut more than a million 
children from the rolls of the Children's Health Insurance Program and 
put them in jeopardy--the kind of jeopardy that took Deamonte's life? 
What is the real cost of denying children access to basic health care? 
Well, in the case of Deamonte Driver, if you want to know just in money 
terms, a quarter of a million dollars in emergency hospital bills, and, 
most importantly, it deprived Deamonte of his life and a very happy 
future.
  So you compare the positive fate of Jenci Ruff, who is covered by the 
Children's Health Insurance Program, to the tragic fate of Deamonte 
Driver, who was not. This is not just a tale of 2 kids and 2 very 
different outcomes; it is the tale of 2 choices, the 2 choices we have 
to make. So we must make the right choice. Surely some things are 
beyond partisan disputes and ideological obsessions. Surely we can come 
together here to support extending health insurance to more kids in 
low-income families.
  Some have argued that the President's pledge to veto this Children's 
Health Insurance Program is the death knell of compassionate 
conservatism. We have all heard about compassionate conservatism. Well, 
I would just point out that the President's threat of a veto is 
disappointing. But I would like to note on the positive side that this 
bill enjoys the strong support of a large number of conservatives, 
moderates, and liberals here in the Senate and in the other body, and 
it has no more outspoken champion than my distinguished senior 
colleague from the State of Iowa, Senator Grassley, who I see just 
arrived on the floor. So, as I said, this cuts across ideological 
lines. This is no conservative, liberal, moderate, up, down, sideways 
kind of issue; it is a basic moral issue that we have to confront.
  I would say on behalf of my colleague from Iowa and so many 
Republicans who are supporting the Children's Health Insurance Program 
that compassion and common sense is alive and well with these 
Republicans. I applaud them for it. With their support, we intend to 
move forward with a bill that is not only strongly bipartisan but that, 
according to a recent Georgetown University poll, is supported by 9 in 
10 Americans, including, I might add, the poll said 83 percent of self-
identified Republicans. So again, this is not a partisan issue. Now, it 
may be an issue with this President and his ill-conceived notions, but 
it is not a partisan issue.
  Lastly, this program has been a Godsend to my State of Iowa. As I 
said earlier, 50,000 kids in Iowa are covered who obviously would not 
have been. We call it the HAWK-I Program in Iowa, the Healthy and Well 
Kids in Iowa--the HAWK-I Program. The top income limit for Iowa 
families is 200 percent of the Federal poverty level, which comes to 
about $34,000 for a family of three, and, along with Medicaid, provides 
primary and preventive services to 3 out of every 10 Iowa kids. Yet, 
even with these programs I am talking about--Medicaid and HAWK-I--even 
with those two, an estimated 30,000 to 55,000 Iowa children remain 
uninsured. With the new funding provided in this bill, Iowa could cover 
nearly 15,000 more children over the next 5 years.
  Expanding this program to cover more low-income kids is not only the 
right thing to do, it is the smart and cost-effective thing to do. We 
know when children get access to preventive and primary care services, 
good things happen. Kids get better health outcomes. They stay out of 
the emergency room. They get better grades. They do better in school. 
One dollar spent on the CHIP program can save many more dollars in 
health care expenses.
  When an asthmatic child is enrolled in the program, the frequency of 
attacks declines by 60 percent and the likelihood that they will be 
hospitalized for that condition declines by more than 70 percent. If 
anybody has been paying attention, you know that kids' asthma has been 
on a huge increase in this country, especially among poor kids. Well, 
this is one way of keeping them out of the hospital. It is providing 
them with this kind of preventive coverage.
  I might also add that the Children's Health Insurance Program is 
vitally important to rural Americans--rural States such as Iowa. The 
simple fact is that rural kids are more likely to be poor. In the most 
recent survey, 47 percent of rural children--47 percent--live in low-
income families. So they are not only more likely to be poor, their 
parents are less likely to have any access to an employer-based health 
insurance program. So in the absence of the CHIP program and Medicaid, 
millions of low-income rural families have no other health insurance 
option, period. They live in small towns. They work for small 
employers,--mom-and-pop places that employ two or three or four or five 
people. They don't have the wherewithal to provide employer-based 
health insurance. They don't pay a lot of money. But these people are 
hard-working. They go to work every day and they work hard; they just 
don't make a lot of money. They live in a rural area, so they don't 
qualify for Medicaid, but they don't have enough money to buy health 
insurance. That is why this program is so important to rural America.
  Experience shows that rural children are also difficult to enroll in 
the Children's Health Insurance Program, even when they are eligible. 
Again, low-income parents are often required to travel long distances 
to enroll their kids. In addition to high travel costs, there are 
language and sometimes cultural barriers. For these reasons, I am

[[Page 22017]]

pleased that this bill would establish a new grant program to finance 
outreach and enrollment efforts targeted to rural areas.
  So not only has the Children's Health Insurance Program been a great 
success, it is more important today than ever. In the decade since the 
program was created, we know the cost of insurance has skyrocketed and 
the number of Americans covered has fallen dramatically. But this has 
been a safety net for millions of low-income American families.
  The bill before us would maintain coverage for the 6.6 million 
children currently covered and would extend coverage to more than 3 
million more low-income, uninsured children over the next 5 years. That 
is a good and noble goal.
  Obviously, if I had my druthers, I would say we ought to cover all 
kids--every child in America whose family does not qualify, does not 
have employer-based insurance, and whose income is such that they 
cannot afford private insurance. They ought to be covered by this 
program. They said this would cost $50 billion over the next several 
years. Well, then they made an agreement to make it $35 billion instead 
of $50 billion. OK, fine. I understand compromise around here. But that 
doesn't remove the fact that, even with this bill, millions of low-
income kids will still be left without health insurance coverage. That 
is our task--to fill that gap. We may not get it done this year, but at 
least we can get this done this year and, hopefully, we can finish the 
job next year and cover every kid in America with health insurance.
  It is time to put partisanship, ideology, and politics aside and pass 
this bill. Hopefully, the President will see more clearly his 
obligation to sign it and not veto it.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Ms. CANTWELL. Mr. President, I rise to talk about the Children's 
Health Insurance Program and why we need to reauthorize the program 
that is about to expire in September. I thank Chairman Baucus and 
Senators Grassley, Rockefeller, and Hatch for their countless hours of 
meetings before the Senate Finance Committee, which met to mark up this 
bipartisan package. The fact that the bill passed out of committee with 
such a bipartisan effort shows people are working on both sides of the 
aisle to make children's health care a priority.
  While my colleagues have talked a lot about what the administration 
has threatened to do in vetoing this legislation, in fact, as my 
colleague from Iowa mentioned on the floor, the President's own budget 
request doesn't put enough money on the table to take care of those 
currently enrolled in the Children's Health Insurance Program. In a 
bipartisan effort in the Senate, we are working across the aisle to say 
we want to do more, we want to cover about 3.2 million more children.
  I thank my colleagues and their staff for coming up with this 
comprehensive bill and moving us further down the way to covering more 
children in America, as it is such a priority.
  Some of my colleagues have mentioned why this is such important 
timing, and many have mentioned the fact that the bill's authorization 
is expiring in September. I think there is a more important reason. The 
important reason is we are seeing the cost of health care continue to 
rise; the fact that premiums have doubled, probably, in the last 5 to 6 
years; the fact that insurance now is somewhere between $12,000 and 
$14,000 a year. A family who is at an income of $40,000 a year for a 
family of four is finding it very hard to keep pace. Those premiums may 
have doubled, but I guarantee you their wages and salaries have not 
doubled. So more and more people are finding themselves in the 
unfortunate situation of not being able to provide health care for 
their children.
  I can tell you, in talking to people from all over Washington State, 
there is nothing more concerning to the parents than the health of 
their child and nothing more scary than to think they may not be able 
to get the health care attention their child needs.
  So for us, we have a choice--a very smart choice. This is a cost-
effective bill. If you think about the costs of providing children's 
health insurance under this proposal, we are helping families who 
cannot afford private insurance, or cannot find it available in the 
marketplace, or maybe their employer is not providing it. Now, under 
this program, with State and Federal matching dollars, these families 
can provide health insurance for roughly $2,000 a year per child--maybe 
a little more or a little less, in some instances, for those currently 
on the program to the new enrollees.
  Think about that. Think about the fact that if you don't have health 
insurance and a child is delayed in getting that health care or has to 
wait until the last minute to go into an emergency room, I guarantee 
the cost of a child's visit to an emergency room is probably going to 
be at least $3,000. The fact that we can make this prudent investment 
for 3.2 million more children; not only is this about their health and 
safety for the future, but it is about a plan that helps us in making 
sure we have an efficient health care system, giving those children 
their due need.
  Too many families, as I said, are being forced to go without this 
coverage. What does that mean? We talk about preventive care and 
maintenance care. It means that these children are going without 
regular checkups, that they are missing more school than other 
children, and that they have to wait in the emergency room to get an 
answer about something that is a basic illness. It means that if simple 
infections--such as an ear infection or cavities or asthma or 
diabetes--go untreated and they spiral out of control, that child may 
fall further and further behind in their academic career. I believe no 
child should be forced into a special education program because their 
health care needs haven't been provided for.
  This bill provides better coverage so we can treat things such as 
injuries and infections, detect far worse things such as chronic 
illnesses and make sure we are managing the conditions of children 
before they get out of control.
  I know it is upsetting to my colleagues to read things such as: 
Uninsured children are four times more likely to delay their health 
care or that uninsured children are four times more likely to go 
without a doctor visit for 2 years or that uninsured children admitted 
to hospitals due to injuries are twice as likely to die while in the 
hospital as their insured counterparts.
  Those are horrible statistics that point to the dilemma of not 
providing health care coverage for children.
  I know my colleagues have been out here on the floor debating this 
issue as it relates to fairness and geography. I tell you, no child 
knows they are somehow prohibited from getting access to health 
insurance because of geography. Nor should the Senate make the mistake 
in thinking we are making geographic choices.
  This bill is about flexibility. It starts with the flexibility of 
individual States because this is a partnership between the States and 
Federal Government in deciding what percentage of the Federal poverty 
line they are going to cover.
  You can see on this chart the States in white have been more 
aggressive in covering a higher percentage of the Federal poverty line, 
and those in the gold color are obviously below 200 percent of the 
Federal poverty line. It doesn't take a genius to figure out why 
certain States are more aggressive or active in covering their area. If 
you look at the income and cost of living in these areas, they are 
challenged by what it takes to maintain a household, to put their 
children in school, and to take care of their health care needs. For 
example, there are parts of the country such as New Jersey, which the 
Presiding Officer is from. If you look at what it takes to provide the 
same goods and services in New Jersey and compare that with someplace 
like Arkansas, you are talking about a $13,000 difference in what it 
costs to provide the same services. In Little Rock, it may cost $30,000 
for those goods and services, compared to $43,000 in New

[[Page 22018]]

Jersey. That is why this flexibility is so important in the program. 
The fact that we allow States to determine its costs and we match that 
with Federal dollars.
  The second thing we have not focused enough on is the fact that we 
also have disparity in insurance costs. Look at what it costs to 
provide insurance. For example, it is expensive to provide health 
insurance in Seattle, which costs about $13,000 a year. If you look at 
New York, it is $16,542. So the notion that somehow New York or New 
Jersey are getting a better deal because they live in a high-expense 
area of the United States and somehow, even with that extra cost of 
insurance, we should prejudice legislation from serving those children, 
I say that is a mistake. Every child in America who is covered by this 
health insurance program will be healthier, and every child who is 
covered and healthy will not only be a more contributing citizen to our 
society, but also we are going to reduce our own health care costs in 
the future.
  So it is a wise and prudent plan to have such diversity in this 
proposal. I ask my colleagues, before they come out and look at 
formulas and offer amendments that basically cut States from having the 
flexibility in these formulas, to consider the geographic disparity and 
the challenges those individual States face.
  I believe the Children's Health Insurance Program provides a critical 
backstop to families. They would rather be in a situation where they 
could provide the health insurance and care, I am sure, for themselves. 
I have certainly met Washingtonians who have given up their own health 
insurance to provide health insurance for their children.
  We need to prevent the number of uninsured children in this Nation 
from growing, and this bill, the Children's Health Insurance Program, 
should be reauthorized and expanded to make sure we do stop the number 
from growing and that we attach our principles of covering at least 3.2 
million now and, as we see brighter budget days coming back, covering 
the rest of the children in America.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mrs. CLINTON. Mr. President, I thank my colleague from Washington for 
her usual very thorough and persuasive statement on the floor about the 
need for flexibility in this important program and the recognition that 
health care, similar to everything else, costs differently depending 
upon where you are in the country. I thank the Senator from Washington 
for reinforcing that important point.
  The larger point is that today, in this Congress, we are on the verge 
of providing the greatest expansion of health coverage for our children 
since the creation of the Children's Health Insurance Program a decade 
ago. I believe--and I don't imagine anybody in this Chamber would argue 
with this belief--that every child deserves a healthy start in life. 
Certainly, we try to provide that healthy start for our own children, 
and we give a lot of lip service to the idea that we should provide it 
for all children. Yet far too many children in our Nation--more than 9 
million--do not have health care.
  I was very proud to help create the State Children's Health Insurance 
Program during the Clinton administration, working on this legislation 
during my time as First Lady. After the bill passed, I worked to get 
the word out to try to help more children and their parents understand 
what this new program could mean for them and encourage them to sign up 
in the first few years. In the Senate, I have continued that effort, 
fighting to ensure that health care for children has the priority in 
our budget that it deserves.
  Today, thanks to the work of so many, CHIP provides health insurance 
for 6 million children. In New York alone, almost 400,000 children 
benefit from this program every month. With the legislation that 
Chairman Baucus and Senators Grassley, Rockefeller, and Hatch helped to 
craft, an additional 50,000 children in my State of New York will have 
access to health insurance coverage.
  This legislation will also help enroll many of the 300,000 children 
in New York who live in families who are already eligible because their 
families make less than $52,000 a year, 250 percent of the poverty 
level for a family of four.
  In total, across our country, 3.2 million children who are uninsured 
will gain coverage. That will reduce the number of uninsured children 
by one-third over the next 5 years.
  If we can afford tax breaks for companies that ship jobs overseas and 
tax cuts for oil companies that are making record profits, I certainly 
think we can find it in our hearts and our budget to help cover 
millions of children who deserve a healthy start.
  I want to be clear. If the President vetoes this bill, he will be 
vetoing health care for more than 3 million children. And, once again, 
the President will have put ideology, not children, first.
  Earlier this year, I was proud to introduce legislation with 
Congressman John Dingell to reauthorize and expand CHIP, and I am very 
pleased that a number of the ideas in our bill are included in this 
legislation, such as cutting the redtape and bolstering incentives to 
get eligible children into the program.
  The legislation also improves access to private coverage and expands 
access to benefits, such as mental health and dental coverage.
  This is so important, and I applaud the Finance Committee, under 
Chairman Baucus's leadership. Mental health and dental coverage are too 
often left out when we talk about health care.
  Not far from where I am standing, in the State of Maryland last year, 
a young boy, Deamonte Driver, had a toothache. His mother sought help 
for him to get dental care. She called dentists, but they were not 
taking any more children on Medicaid or on CHIP. Then she got help from 
a legal aid group that helped poor families. They called around. I 
think they called 27 or 28 dentists who said: Look, our quota for poor 
kids is filled.
  Deamonte Driver's toothache turned into an abscess, and the abscess 
burst, infecting his bloodstream, and he ended up in the hospital where 
doctors valiantly tried to save his life from the brain infection that 
resulted from the abscessed tooth that had not been treated. This young 
man died.
  When one thinks about the loss of a child over something that started 
as a toothache, it is heartbreaking, but it is not by any means an 
isolated case. At the end of Deamonte's life, the State of Maryland and 
the U.S. Government ended up paying hundreds of thousands of dollars 
for emergency care, for intensive care, for life support, to no avail, 
for want of $80 to $100 to find a dentist who would care for Deamonte.
  I commend the authors of this bipartisan bill for their work and for 
bringing forward a practical, fiscally responsible compromise that will 
allow us to reauthorize this important program and expand coverage. I 
am eager to see that it is signed into law.
  I am disappointed, however, that the bill we are considering this 
week fails to include the Legal Immigrant Children's Health Improvement 
Act, which I introduced with Senator Snowe. Senator Snowe and I have 
been working on this legislation for a number of years. This bipartisan 
bill would give States the flexibility to provide the same Medicaid and 
CHIP coverage to low-income legal immigrant children and pregnant women 
as is provided to U.S. citizens. I underscore that. We are talking 
about legal immigrant children and legal pregnant women.
  I believe we should provide this flexibility to States because the 
current restrictions prevent thousands of legal immigrant children and 
pregnant women from receiving preventive health services and treatment 
for minor illnesses before they become serious. Families who are unable 
to access care for their children have little choice but to turn to 
emergency rooms, and this hurts children and pregnant women, plain and 
simple.
  I urge my colleagues to support my amendment to lift the ban on 
Medicaid and CHIP coverage for low-income legal immigrant children and 
pregnant women.
  I also am disappointed that some of my colleagues have expressed 
concern

[[Page 22019]]

about States, such as New York, New Jersey, and others, that have 
chosen to cover children above 300 percent of the poverty level. The 
legislation we are considering on the floor of the Senate would allow 
New York to continue doing this and receive the CHIP matching rate. We 
should not punish children and their families who live in high-cost 
areas and who need health care coverage.
  I encourage my colleagues to vote against any effort to undermine the 
extension of health care in high-cost States where it costs more, as we 
heard from Senator Cantwell in her statement on the floor, to provide 
the same coverage and treatment one would get elsewhere in our country.
  I am proud we are debating a bill to expand health care to 3.2 
million children, but the fact is, there should be no debating the 
moral crisis of 9 million children without health care, no debating the 
moral urgency of strengthening our health care system for children and 
all Americans.
  Ultimately, the answer will be in a cost-effective, quality-driven, 
uniquely American program that provides health care to every single 
man, woman, and child in our country. But until we get to that point, 
it is imperative that the Congress pass this bill before we go out for 
recess and send it to the President, with the hope that he will sign it 
into law.
  I also wish to mention another issue we urgently need to address. 
Last week, the bipartisan Commission on Care for America's Returning 
Wounded Warriors, chaired by former Senator Bob Dole and former 
Secretary of Health and Human Services Donna Shalala, issued its final 
report on the need to reform the medical care that our troops and 
veterans receive.
  The Commission found in an excellent report--it is not one of these 
commission reports that just takes up a lot of space on the shelf. It 
is very pointed, with six specific recommendations, and it found that 
one of the most important ways to improve care for injured 
servicemembers is to improve support for their families. That is why I 
introduced a bipartisan bill, the Military Family and Medical Leave 
Act, with Senators Dole, Mikulski, Graham, Kennedy, and Brown, to 
implement a key recommendation of the Commission. We have offered this 
as an amendment to the CHIP legislation.
  The Family and Medical Leave Act was the first bill signed into law 
under the Clinton administration. It came about because of a lot of 
hard work, led by Senator Dodd in the Senate, and others, and it has 
proven to be enormously successful, helping more than 60 million men 
and women who try to balance the demands of work and family.
  I believe it is time to strengthen the act for military families who 
find themselves in a very difficult situation. They should be given up 
to 6 months of leave to care for a loved one who has sustained a 
combat-related injury.
  Currently, these spouses, parents, and children can receive only 12 
weeks of leave under the Family and Medical Leave Act. All too often, 
this is just not enough time, as injured servicemembers grapple with 
traumatic brain injuries, physical wounds, and other problems upon 
returning from Iraq, Afghanistan, and elsewhere. In fact, 33 percent of 
active duty, 22 percent of reservists, and 37 percent of retired 
servicemembers reported to the Commission that a family member or close 
friend had to leave their home for extended periods of time to help 
them in the hospital. About 20 percent said family or friends gave up 
jobs to be with them to act as their caregiver. This is a step that we 
can take immediately that will make a real difference.
  Many of us have been to hospitals in our own country--Walter Reed, 
Brook Army Medical Center--and other places in the world, such as 
Landstuhl in Germany, where we have seen our wounded warriors. There is 
absolutely no doubt that having the support, assistance, and comfort of 
a family member during that process when a young man or woman who has 
served our country is brought from the battlefield to the hospital 
makes a big difference in recovery and rehabilitation.
  I think all of us agree that not only do our men and women in uniform 
make tremendous sacrifices on our behalf, so do their families. As a 
nation, we have a duty to provide them with the support they deserve.
  Expanding access to health care for children and providing better 
support for our military families comes down to basic values that we as 
Americans hold dear. I think we all agree every child deserves a 
healthy start and every man or woman who wears the uniform of our 
country deserves more than words of support. The promise of America is 
rooted in these values, and I am very proud to support the bipartisan 
legislation expanding health care for children, and I urge my 
colleagues to join me and Senators from both sides of the aisle who are 
supporting our military families who are caring for those who have been 
injured in service to our country.
  Finally, we hope on the other end of Pennsylvania Avenue there will 
be a change of heart; that the President will decide to sign this 
legislation and relieve the burdens of ill health and inadequate access 
to health care that haunt the lives of so many American families.
  Mr. President, please support this effort in every way possible by 
signing the legislation that will be sent to you.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I know Senator Hatch wishes to speak on 
the underlying bill, the Children's Health Insurance Program. He is on 
his way to the floor. In the meantime, I see the Senator from Michigan 
is here, a very valuable member of the Finance Committee. She works 
very hard. She would like to speak on this bill. I thank her for coming 
to the floor. I urge the Chair to recognize the Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Mr. President, again, as I said when we first took up 
this bill on Monday evening, I thank the chairman of the committee for 
his passion in bringing us to this point, he and the ranking member, 
Senator Grassley, as well as, of course, Senator Rockefeller with his 
deep commitment, and Senator Hatch as well.
  This is a truly bipartisan effort. It is the way we should be 
legislating--coming together. It is a compromise. If I were writing a 
bill by myself, I would add more dollars. There are Members on the 
other side of the aisle who would, in fact, do less. But it is a real 
compromise.
  I start out today speaking to the fact that it is a compromise. As a 
member of the Budget Committee, having worked with our chairman and 
members very hard to produce a budget resolution that really does 
reflect a new direction in values and priorities, I worked very hard to 
have us achieve a set-aside of $50 billion for children's health care 
in the budget resolution.
  In my heart of hearts, that is where I want to be. I also know that 
any significant expansion is a victory not only for us and for the 
Senate but, most importantly, for children and their families.
  I know there will be an effort to expand to the full amount that we 
all wish to do--I think on this side of the aisle, certainly, that is 
where we want to be, and our House colleagues have focused on that as 
well. But I also know that we have a President of the United States who 
shockingly has said that he will veto providing children's health care, 
an expansion of more than 3.3 million children to receive health care, 
children of working parents. The vast majority of them have a mom or a 
dad working one job, two jobs, maybe three jobs trying to make ends 
meet, but who can't afford health insurance, don't qualify for 
Medicaid, but find themselves desperately wanting to make sure their 
children have all that they need, as all of us want as parents.
  So we are in a situation where the President of the United States has 
indicated he does not share that view. His budget, in fact, is a budget 
that he proposed to us that would cut children. It would cut children 
who are currently

[[Page 22020]]

being provided health insurance. It would eliminate their health 
insurance. So on the Finance Committee, we came together under very 
strong bipartisan leadership to find a common ground, the middle 
ground, to be able to increase the number of children who receive 
health insurance and be able to make sure that the 6 million children 
who currently have health insurance are allowed to maintain that 
insurance. We have come to a compromise, and it is a compromise I 
support.
  As we face a potential veto from this President, it is critical that 
we have the strongest possible bipartisan vote coming from the Senate. 
If in fact the President follows through and vetoes this, I hope we 
will have enough votes to override that veto in a strong bipartisan 
spirit, the spirit that brought us together originally when the 
Children's Health Insurance Program was originally passed. I urge 
colleagues to support the Finance Committee version and what we have 
done as the best way to get us real health care expansion for children.
  Then we will come back, and I will be right back as a member of the 
Budget Committee next year, proposing again that we expand what we are 
doing to make sure that every child who does not have health insurance, 
whose family is working hard but doesn't qualify for Medicaid and 
doesn't have the ability to get private insurance, has the health care 
they need.
  We have, I understand, another proposal in front of us, an amendment 
that would take us backward. I understand Senator Lott has offered an 
amendment that has actually been dubbed the CLIP amendment, instead of 
CHIP--Children's Health Insurance Program--CLIP meaning ``Children 
Losing Insurance Program.'' Again, we don't need anything that is going 
to take us backward and have fewer children receiving health insurance.
  I want to see us make a major commitment to universal health 
insurance in the greatest country in the world so that everyone has the 
opportunity to be able to receive the health care they need. We should 
be striving to achieve nothing less than that.
  The Lott amendment, first, will cut children's health care and take 
us down the road of debating the number of policies individually that 
Members may support, policies I find great concern about, and policies 
that will actually increase the number of uninsured, such as expanding 
the health savings accounts. I urge colleagues to oppose the Lott 
amendment because it takes us in absolutely the wrong direction if we 
want to cover children of low-income working families, and if we want 
to make sure they have what they need to be able to grow up and be 
successful in America.
  I have also heard debate about the cost of this legislation, and it 
is important to look at what we are talking about in terms of our 
values and priorities when we debate any piece of legislation. 
Everything we do here is about values and priorities. Right now, every 
month, we are spending $12 billion in Iraq--$12 billion. Regardless of 
how any one individual feels about the war in Iraq, we are spending $12 
billion--not paid for, not a part of the budget--$12 billion a month. 
This bipartisan effort to provide health insurance for more than 3 
million more American children in this country is a cost of $7 billion 
a year--a year; less than what we are spending in 1 month in Iraq. That 
is the right value and the right priority. This is paid for, it is 
responsible and, most importantly, it is the moral thing to do in the 
greatest country in the world, in my opinion. This is not too much to 
invest in the future generation of America.
  Yesterday, the chairman and I, a number of us, had an opportunity to 
be with a wonderful woman, Kitty Burgett, from Ohio, who spoke about 
the importance of children's health care in her family. I know it was a 
very moving experience to hear her, and I wanted to share her story. I 
have certainly other stories from Michigan as well, but Kitty came to 
the Nation's capitol to share what the Children's Health Insurance 
Program has meant to her and to her family.
  Kitty is a widow whose husband died in 1990, leaving Kitty and her 
two young children without income or insurance. She had Social Security 
survivor's benefits, but even that little income put her and her 
children over the Medicaid eligibility levels, so they didn't qualify 
for low-income health insurance because of their survivor benefits. She 
started working but earned very little. Nonetheless, she purchased 
insurance for her children, because like all of us who are parents, she 
wanted to make sure her children had what they needed. She wanted to 
make sure if they were sick, she was able to care for them with health 
insurance. So she purchased that insurance, but the cost rose every 6 
months, and she finally had to drop it because of the cost. That is an 
uncommon story in America today.
  Then along came the Children's Health Insurance Program. Kitty 
immediately enrolled her children. She had a daughter who was 12. Her 
son was a bit younger. Her daughter then began to develop problems, 
and, ultimately, at age 15, was diagnosed with bipolar disorder. She 
was ill. She was hallucinating and she had major mood swings--as those 
of us who are familiar with that disease understand--from depression to 
highs and hallucinations. She couldn't concentrate at school. The 
Children's Health Insurance Program was there so Kitty could get her 
daughter some help. It covered her medications and therapy and 
eventually some new medicines that brought her illness under control. 
Her daughter is now 22 years old. She is married, she is working, and 
she is insured. She has an 18-month-old daughter named Scarlet. Kitty 
says the Children's Health Insurance Program kept her daughter from a 
lifetime of institutionalization, and, instead, she is a productive, 
contributing member of society and a loving mother to Scarlet.
  That is what this is all about, giving people in America--parents, 
the vast majority of whom are working--the ability to provide their 
children with the health care they need so they can go on to be 
successful, thriving, contributing adults in America.
  I might also mention I am very pleased that the bill in front of us 
expands the opportunity for what is called mental health parity, so 
that if there is insurance provided, mental health care will be a part 
of that. I congratulate Senator Kerry and Senator Smith, who have led 
that effort to expand us into the area of more adequately covering 
mental health care for children.
  This program covers children all over the country. It is interesting 
to note that there are more children uninsured in rural areas than in 
urban areas. This will make sure that, in fact, all of the children who 
qualify under this program are able to receive the health care they 
need. Right now, in Michigan, we have about 60,000 children who are on 
the Children's Health Insurance Program and another 90,000 who are 
eligible--who qualify right now under the program we wrote--but because 
funds aren't available for outreach, funds aren't available to do what 
is necessary, we are not able to provide those families, those 
children, with health insurance. This bill goes a long way to making 
that happen.
  I have heard so many stories from Michigan, and it touches your heart 
when you think about the way families are struggling to be able to care 
for their children at the same time costs are going up at every turn. 
We have folks who are working harder than ever: They turn around and 
gas prices go up; they turn around and their insurance premium goes up; 
they turn around again and look at the cost of college, and those costs 
have gone up. We addressed the cost of college last week. Those things 
go right to middle-income families--student loans and Pell grants and 
those programs that allow more people to have the opportunity to go to 
college and send their children to college.
  The reality is that on every side families are feeling squeezed--
working harder and costs going up and up and up. Children's health care 
is one way, another critical way, we can help families. I think of 
Chad, a gentleman in Michigan. He and his wife have two young children. 
He works for a small

[[Page 22021]]

landscaping business with an ``off season'' of 3 to 4 months in the 
winter when he is not working. If the couple purchased insurance 
through Chad's employer, it would be an additional $300 a month, which 
for them is not affordable. Through MIChild, which is our children's 
health program, both his sons are able to get the inhalers they need 
for their asthma. How basic, in America, in the greatest country in the 
world, to make sure that children can handle their asthma.
  I also heard from Pam, who is a full-time preschool teacher and 
mother. Her monthly premiums of $384 a month, or over $4,500 a year, 
take up over one-fifth, or 20 percent, of her pay. Through the MIChild 
program, she was able to get the specialized care she needed for her 
youngest daughter, who suffers from a rare seizure disorder.
  I could go on and on, but I will not. We all have stories of families 
who are wanting the best for their children, who want the American 
dream. They do not want to go to bed at night and have to say, please, 
God, don't let the kids get sick, don't let something happen tonight or 
tomorrow because I don't know what I am going to do--we don't have 
health insurance. We are the greatest country in the world and there is 
no excuse for any family finding themselves in that situation.
  We have in front of us a bill that is a true bipartisan compromise. 
For me, it is a step in the right direction to universal care, and an 
opportunity to come up with a uniquely American way to provide 
universal health care for everyone in America. I believe health care is 
a right, not a privilege, in the greatest country in the world, and we 
should act like that. This important legislation is part of keeping 
that promise.
  We started down the road with covering children whose parents are 
working, who do not qualify for low-income help through Medicaid 
because they are just above that limit, but aren't able to get the 
insurance they need for their families. We have children who qualify 
today but, because the resources aren't there, they are not able to get 
the health insurance they need. This legislation will say that more 
than 3 million more children--families--in this country will not have 
to go to bed at night worrying about whether their kids are going to 
get sick tomorrow.
  Finally, I say again that this is about values and priorities. Always 
it is about values and priorities. This is the right thing to do. It is 
the moral thing to do. When we find ourselves in the situation of 
spending $12 billion a month on the war in Iraq, not paid for, and in 
front of us we have the ability with $7 billion a year to cover over 3 
million more children with children's health care, the 6 million who 
have insurance now and over 3 million more in America, responsibly done 
and paid for, this is the right thing to do. It is the moral thing to 
do.
  This is a great success story, and I am very hopeful we will see a 
very strong bipartisan vote when this comes before the Senate for a 
vote.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from North Carolina.
  Mrs. DOLE. Mr. President, I ask unanimous consent that the pending 
amendment be temporarily set aside in order that I may offer an 
amendment.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The Senator may proceed.


                Amendment No. 2554 to Amendment No. 2530

  Mrs. DOLE. Mr. President, I call up amendment No. 2554, now pending 
at the desk, and ask for its immediate consideration.
  The ACTING PRESIDENT pro tempore. The clerk will report.
  The legislative clerk read as follows:

       The Senator from North Carolina [Mrs. Dole] proposes an 
     amendment numbered 2554 to amendment No. 2530.

  Mrs. DOLE. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The amendment is as follows:

(Purpose: To amend the Congressional Budget Act of 1974 to provide for 
 a 60-vote point of order against legislation that includes a Federal 
  excise tax rate increase which disproportionately affects taxpayers 
  with earned income of less than 200 percent of the Federal poverty 
                                 level)

       On page 217, after line 25, add the following:

     SEC. __. BUDGET POINT OF ORDER AGAINST LEGISLATION THAT 
                   RAISES EXCISE TAX RATES.

       Title III of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:


          ``POINT OF ORDER AGAINST RAISES IN EXCISE TAX RATES

       ``Sec. 316.  (a) In General.--It shall not be in order in 
     the Senate to consider any bill, resolution, amendment, 
     amendment between Houses, motion, or conference report that 
     includes a Federal excise tax rate increase which 
     disproportionately affects taxpayers with earned income of 
     less than 200 percent of the Federal poverty level, as 
     determined by the Joint Committee on Taxation. In this 
     subsection, the term `Federal excise tax rate increase' means 
     any amendment to any section in subtitle D or E of the 
     Internal Revenue Code of 1986, that imposes a new percentage 
     or amount as a rate of tax and thereby increases the amount 
     of tax imposed by any such section.
       ``(b) Supermajority Waiver and Appeal.--
       ``(1) Waiver.--This section may be waived or suspended in 
     the Senate only by an affirmative vote of three-fifths of the 
     Members, duly chosen and sworn.
       ``(2) Appeal.--An affirmative vote of three-fifths of the 
     Members of the Senate, duly chosen and sworn, shall be 
     required in the Senate to sustain an appeal of the ruling of 
     the Chair on a point of order raised under this section.''.

  Mrs. DOLE. Mr. President, nearly every Senator in this body agrees we 
should not increase the tax burden on low-income individuals and 
families. Unfortunately, the bill before us would do that by raising 
the tobacco tax by 156 percent. No other Federal tax hurts the poor 
more than the cigarette tax, according to the Tax Foundation. Of the 20 
percent of the adult population that smokes, around half are in 
families earning less than 200 percent of the Federal poverty level. 
Furthermore, a massive and highly regressive tax increase on an already 
unstable product is a terribly irresponsible way to fund the State 
Children's Health Insurance Program.
  My amendment is very simple. It creates a 60-vote point of order 
against legislation that includes a Federal excise tax increase that 
would disproportionately affect low-income individuals, defined as 
taxpayers with earned income less than 200 percent of the Federal 
poverty level.
  A majority of my colleagues say they oppose increasing the tax burden 
on lower income families, or even oppose tax increases outright. I, 
therefore, would expect that this commonsense amendment would receive 
tremendous support in the Senate.
  I ask unanimous consent that my amendment now be laid aside, with the 
understanding we will return to it at a later time.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I understand the Senator from 
Massachusetts, Mr. Kerry, is about to speak. As he gets ready to speak, 
there are a couple of points I wish to make. We are still working the 
numbers on the McConnell-Lott amendment. I wish to point out a couple 
of points.
  No. 1, the McConnell-Lott amendment, although it is advertised to do 
this, does not put kids first. Despite prohibiting coverage of 
nonpregnant adults and limiting all State income disregards, this 
legislation does not cover substantial numbers of additional children.
  On the surface, they think they may cover 700,000 additional kids, 
but we are trying to get the numbers from CBO and trying to determine 
the actual effect; whereas, the Finance Committee bill the CBO has 
analyzed very carefully it will cover an additional 4 million children. 
About two-thirds of those will be on Medicaid, and roughly a million 
will be under the Children's Health Insurance Program.
  The big difference is the different effects between the Finance 
Committee-passed bill and the McConnell-Lott bill on uninsured 
Medicaid-eligible children; that is, children today who are

[[Page 22022]]

not on Medicaid but are eligible--what is the effect of the two various 
approaches on those low-income kids.
  Again, I give the caveat we do not have all the actual language and 
do not have all the numbers exactly crunched by CBO, but a first 
analysis essentially looks like this. It looks basically like the 
McConnell-Lott bill will not add many new kids to be covered under 
Medicaid; whereas, the Finance Committee bill has about 1.7 million 
children now not covered under Medicaid who will be covered.
  It is complex legislation we are considering. This is a Children's 
Health Insurance Program. But as we work to get more kids covered under 
the Children's Health Insurance Program, by definition there are going 
to be more kids also covered under Medicaid--that is children whose 
income levels are so low they are covered under Medicaid as opposed to 
the Children's Health Insurance Program.
  There is a huge difference there. It looks like the McConnell-Lott 
bill will not help the very low-income kids who are currently eligible 
under Medicaid to be covered. In fact, the Finance Committee bill 
covers at least five times more.
  I might say a word about the so-called crowding out. Senators are 
concerned this legislation will have the net effect of encouraging some 
children, now under private health insurance, to drop their private 
health insurance coverage to take advantage of the Children's Health 
Insurance Program expansion. There are a couple of points about that.
  No. 1, under the McConnell-Lott amendment, it looks like their so-
called crowd-out ratio is even more adverse from their perspective than 
the crowd-out ratio under the Senate Finance Committee bill. I don't 
wish to belabor the point. It is roughly the same, roughly 30 percent, 
but their crowd-out rate is a little greater on a percentage basis as 
to how many kids are there who will drop private health insurance for 
the Children's Health Insurance Program. But theirs is no better in 
fact a little worse, from that perspective.
  Also, it is important and worth noting that when Congress passed the 
Medicare Modernization Act a few years ago and it provided for the Part 
D benefits for senior citizens, CBO said the crowd-out rate for that 
program would be much higher--and it was. I think there is one estimate 
beginning at 75 percent. I think it dropped to around 40 percent. I 
might not be entirely accurate on those numbers, but it is much higher 
than the 30 percent predicted under the Finance Committee CHIP bill and 
also about the same under the McConnell-Lott substitute.
  In addition to that, we on the Finance Committee wanted to reduce the 
so-called crowd-out as much as we possibly could. We asked the 
Congressional Budget Office, especially the Director of the Budget 
Office, Peter Orszag, to tell us on the committee what did we have to 
do on this legislation; tell us how we should write it to minimize 
crowd-out as much as we possibly can, be as efficient as we possibly 
can. He told us what to do and we did it.
  In the Finance Committee markup, when asked about crowding out; that 
is, kids moving from private health insurance coverage over to the 
Children's Health Insurance Program, he said you have done it 
efficiently. You have done it as well as you can do it.
  I wish to make the point very clear. While we are helping children, 
while we are helping low-income kids get health insurance--as we 
clearly should--we also do not want to disrupt the private industry any 
more than need be.
  It is important to remember that States are given power to decide how 
they want to administer the Children's Health Insurance Program. It is 
up to the State. Some States add it to Medicaid. Some States have 
separate programs. Most States use health insurance companies to 
administer the health insurance program, the Children's Health 
Insurance Program, with copays and deductibles, and so forth. So those 
who on the surface might be concerned if their ideology is it should be 
private health insurance, not the Children's Health Insurance Program, 
should not be too concerned, frankly, because we have gone the extra 
mile to make sure that so-called crowd-out is minimized as much as we 
possibly could.
  I will have other points to make later on about the McConnell 
substitute. Basically, I wish to say it states that if you are at 200 
percent poverty or a little above 200 percent of poverty, despite what 
we anticipated when we passed this legislation in 1997, I am sorry, you 
can't go above 200 percent if you want to have the benefit of the 
Children's Health Insurance Programs match rate, which is a little more 
beneficial to the States than the Medicaid match rate. That is not 
right. So many States are at least above 200 percent of poverty. I 
think that is wrong.
  The other major thrust of the McConnell substitute is if you are 
above 200 percent of poverty, you have to go into the private market. 
That encourages them very strongly. That is not right either. 
Fundamentally, the Children's Health Insurance Program was written 
first, in 1997--again, it is a block grant program that gives States 
flexibility and recognizes that every State is different.
  So often Senators say we should not enact one size fits all. I have 
heard that 100 times around here. Basically, that is correct--not 
always but basically. Senators who are advocating McConnell-Lott say 
one size fits all, basically, not recognizing that different States 
have different costs of living, some States are much more expensive to 
live in than others.
  I saw a chart the other day that showed if you take 200 percent of 
poverty and matched that against the cost of living in various States 
in our country, in some States, the parity level would be maybe down 
around, oh, say, 150 percent of poverty. But there is one State that 
was 300 percent. If you translate the 200-percent nationwide figure to 
what the cost of living is in that State, it comes out to 300 percent. 
I think that is fair because different States are so different.
  I ask unanimous consent, now, that the pending amendment also be 
temporarily laid aside so Senator Kerry may offer an amendment.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Massachusetts is recognized.


                Amendment No. 2602 to Amendment No. 2530

(Purpose: To provide sufficient funding and incentives to increase the 
                   enrollment of uninsured children)

  Mr. KERRY. Mr. President, I call up amendment No. 2602.
  The ACTING PRESIDENT pro tempore. The clerk will report the 
amendment.
  The assistant legislative clerk read as follows:

       The Senator from Massachusetts [Mr. Kerry], for himself, 
     Mr. Bingaman, Mr. Sanders, Mr. Casey, Mr. Menendez, Mr. 
     Durbin, Mr. Reed, Mr. Brown, and Mr. Whitehouse, proposes an 
     amendment numbered 2602 to amendment No. 2530.

  Mr. KERRY. I ask unanimous consent the reading of the amendment be 
dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. KERRY. Mr. President, let me begin first of all by thanking the 
distinguished chairman of the finance committee on which I have the 
pleasure of serving, whose leadership has been critical in bringing 
this bill to the floor. He and Senator Grassley, Senator Rockefeller, 
and Senator Hatch deserve the thanks of children all across America, of 
all those advocacy groups fighting for children's health care, and 
certainly of our colleagues who care about it and have been fighting 
for it for a long time. They have shown real leadership in bringing 
about an important compromise by fashioning a bill that was reported 
out of committee with bipartisan support.
  We all understand how difficult that can be, sometimes. Sometimes the 
negotiations in our committee are out of balance because of the 
membership of the committee and you may have a different feeling when 
you finally get to

[[Page 22023]]

the floor. So I applaud the Senator from Montana. I will say up front, 
I know that if he had his druthers, he would vote for this on the floor 
of the Senate now. I also know when you are the chairman and you 
fashion a compromise in your committee, you have to stick with your 
compromises. Everybody here understands how that works. So I recognize 
that this is an amendment that is difficult for him in the context of 
this overall bill.
  But I ask my colleagues to think about this amendment outside of the 
inside game of the Senate. I ask my colleagues to think about this 
amendment outside of the parliamentary agreements that have to be made 
in order to get something out of the committee and actually get it to 
the floor so we can all consider it. But I also ask my colleagues to 
remember that when it gets to the floor, we have a chance to vote as 
Senators, all of us--not as members of the committee. Certainly, the 
vast majority of the Senate is not bound by what happened in a 
committee. We are bound by our responsibility, each and every one of 
us, to our constituents in our States and to our beliefs about what is 
best for the country.
  I believe, first of all, the legislation that the Senator from 
Montana and the Senator from Iowa, Senator Grassley, have brought to 
the floor is important for the country. I think everybody agrees on 
that. I think this bill is going to pass with a pretty significant 
vote, ultimately, at its current $35 billion level. But as we debate 
the future of health for our children, I think we have a responsibility 
to think about it above and beyond the compromising process of the 
Senate.
  I believe we have to think about it in macro policy terms and also--I 
know the word gets bandied around here on the floor, and it doesn't 
always have a lot of meaning anymore--in ``moral'' terms. We have a lot 
of difficulty sometimes translating what is moral in most people's eyes 
into legislation. But the fact is I heard Senators on both sides of the 
aisle, and particularly some of those most responsible for helping to 
negotiate this on the other side of the aisle--I have heard them say we 
have a moral imperative to take care of children's health care. I have 
heard them say we ought to be covering all children.
  Of course, we ought to try to cover all children, but isn't it a 
shame that we can't seem to do that because it costs too much. The 
Senator from Mississippi came to the floor and spoke about this. He 
talked about how some want an increase of $50 billion or more and 
suggested that I approach this purely with an attitude where I say 
let's decide how many kids we ought to cover, and it does not matter 
what it costs, let's go pay for it. Well, that is a little bit of a 
misinterpretation of what I have actually said about it. I have said we 
ought to decide if we think it is worthwhile to cover all children, and 
then see if we can pay for it. I did not say pay for it no matter what. 
See if we can pay for it, but at least decide what your priority is.
  If your priority is to cover children which is an important moral 
imperative, it has a value to our society, it makes a difference to the 
lives of children, to the lives of the community, the cost of 
hospitals, the cost of health care, the ability to learn, the ability 
to grow up and be a full citizen, you measure those and you come to the 
conclusion hey, this is a good idea, we ought to do this for all kids. 
Then, you have an obligation to begin to weigh where the money comes 
from and what the choices are with respect to what you spend money on.
  The Senator from Mississippi suggested we have to worry about the 
cost of the program and who pays for it. Yep, we do, I say to my 
friend. And he is a good friend, the Senator from Mississippi. We do 
have to worry about it. But let's measure what people appear to be 
worried about. Let's measure about why children's health care is a 
priority.
  First, I want to do the ``why.'' What we do here with respect to 
children is not a Democratic priority or Republican priority. It ought 
to be the priority of every single Senator. I know most of the Senators 
here have families, have children, and are deeply concerned about kids 
and understand these issues.
  The real face of this debate does not belong to Senator Baucus or 
Senator Grassley or Senator Rockefeller or Senator Hatch or anyone else 
who is here arguing about this. The real face of this debate belongs to 
young kids all across our country who suffer enormous debits on a 
lifetime basis because they do not have health care.
  The face of this is somebody like 9-year-old Alexsiana Lewis and her 
mother, Dedra, who come from Springfield, MA. Senator Kennedy--
incidentally, I honor Senator Kennedy's work in this, as we all ought 
to, because it was his visionary leadership that helped to create the 
S-CHIP program in 1997. He has constantly been working to build bridges 
to bring people together to try to sustain and expand the program ever 
since.
  Senator Kennedy and I went to the Children's Hospital in Boston, a 
famous hospital where kids come from all over our country. And the 
stories of curing and caring that are exhibited in that hospital on a 
daily basis are just extraordinary. Well, we met there Alexsiana Lewis 
and her mother. Alexsiana, 9 years old, was losing her vision due to a 
very rare eye disease. Her mother, Dedra, had lost her health 
insurance, like millions of Americans. We have about 45 to 47 million 
Americans who have no health care at all right now; 9 million of them 
are children.
  Dedra lost her health insurance. Why did she lose her health 
insurance? She lost her health insurance because she cut back on the 
hours she was working in order to be able to take care of her child who 
had this rare disease. And here is what she said at that meeting with 
Senator Kennedy and myself.
  She said: ``If I did not have Mass Health right now''--that is the 
Massachusetts health program we have in place now funded by S-CHIP--
``my daughter would be blind.''
  So my question to my colleagues in the Senate is very simple: 
Somewhere in your States all across this country there is another 
Alexsiana Lewis, or there is another Dedra who is cutting back on her 
job. There are going to be about 5.7 million children who do not get 
any coverage when we finish passing this legislation.
  Now, my question is, is that the choice of the Senate measured 
against the other choices that we could make? Is it our choice that it 
is OK for an Alexsiana to go blind? Is it OK in your State for some 
child to have a chronic ailment who will not get the early 
intervention, the early care, and as a result will probably wind up 
with a lifetime impairment that will require that child to have special 
needs education for the rest of their life?
  I went out to the State of Washington a couple of years ago. I had 
recently introduced my Kids First Health Care Plan. And we had about 
1,200 people show up. The chief pediatrician for the State of 
Washington came to this event in Seattle. She stood up and told the 
story of a 12-year-old child who was disruptive in the classroom. 
Ultimately, they kicked the child out of the classroom because the 
child was disruptive. They thought the child was just acting out. 
Ultimately, that child finally, for the first time, got to a doctor and 
they found that the child was suffering, not acting out. The child had 
a chronic infection which spread to the eardrum, and this chronic 
infection was creating such pain that the child was acting out due to 
the pain. Now, at the final moment where they diagnosed what was wrong, 
they found out that child indeed would have a hearing impairment for 
the rest of that child's life. No health insurance and acting out in 
class leads to teacher responding and the child finally gets diagnosed 
as hearing impairment and will require special needs education. What is 
the rationale? What is the rationale for saying all we can afford is 
$35 billion over five years, at a moment when people across this 
country are losing faith in the ability of Washington to be responsible 
and make responsible choices on their behalf?
  I think it is important that we answer that question properly. And I 
will

[[Page 22024]]

tell you, when I look at some of the choices we have, it is pretty hard 
to answer how we are answering it properly. Let me give a few examples 
to my colleagues. This is a choice the Senate is going to make. If the 
alternative minimum tax relief is extended, as everybody expects it 
will be, tax cuts for those earning over $1 million a year will cost 
$43 billion in 2007 alone. Think about that.
  We are saying we cannot afford to cover children to the tune of an 
additional $15 billion over 5 years, but we can give $43 billion of tax 
cuts next year to people earning more than $1 million a year. That is 
obscene. It is ridiculous. It has absolutely no basis in economic 
argument, and it certainly has no basis in any kind of moral or decent 
argument.
  If you were simply to restore the tax cut to the level before 2001, 
to only taxable income above $1 million, you would have $44 billion and 
you could insure children. You would be affecting 0.21 percent, of all 
taxpayers with positive tax liability in the United States. That is one 
choice.
  Here is another choice Congress seems to be content to make. 
Currently, major integrated oil and gas companies are eligible for the 
domestic manufacturing deduction, which reduces their corporate tax 
rate. In other words, we know fossil fuel is contributing to global 
warming, but we nevertheless are willing to continue our own dependency 
on it and give a tax break that encourages people to be able to do what 
they are going to do anyway because the marketplace is showing that the 
price of energy is such. These are some of the most profitable 
companies in the world.
  But oh, boy, give them a tax break instead. There is absolutely no 
valid reason whatsoever that the most profitable oil companies in the 
world ought to be receiving a subsidy, a deduction, at this time when 
they are reaping record profits. But guess what, the Finance Committee 
tried to repeal it and the rest of the Senate did not agree. This 
deduction cost $9.4 billion over the next 10 years, but we do not have 
enough money for children.
  We didn't close a loophole in our Tax Code for the poor fuel 
economy--we actually reward gas-guzzling SUV manufacturers. They get 
$13 billion worth of tax breaks to produce the most gas guzzling cars 
on the road, the worst fuel efficiency of any car, and we are 
subsidizing that over children. I do not get it.
  I think most Americans, if they had a list of the things that the 
U.S. Congress gives to big business over children, would laugh at the 
language they hear when they hear people say: Oh, we have to cover 
children. There is a real value to covering all of these children.
  Here is another one. Most American families do not get this one. If 
you are a company, you can defer paying U.S. taxes on any foreign 
income. So you can be an American company and just keep your income 
drawing offshore, and you do not pay any tax. It can accrue year to 
year. And repeal of this provision is about $53 billion over 10 years. 
Also, it is a huge incentive for companies to take their, you know, 
subsidiaries and other companies offshore and just grow their profits 
offshore at the expense of American jobs.
  There is a long list of choices, similar choices: $12 billion a month 
in Iraq, going into the sixth year of the war in Iraq; now we are in 
the fifth year of the war, now a policy that everyone in the world 
understands is not working. I believe there is a better proposal.
  Now, again, I say $35 billion, of course, is better than nothing. But 
it is incredible to me that we are in this position where the 
administration is talking about vetoing $35 billion, and we are not 
willing to do what is necessary to really get the job done.
  Let me say that I am pleased that there is a provision that I 
authored with Senator Smith and Senators Kennedy and Domenici to ensure 
that there is mental health parity in this State Children's Health 
Insurance Program. And parity for mental health treatment is a very 
significant and very much needed improvement in SCHIP.
  Instead of discriminating against mental health, which is effectively 
what we are doing today, we can offer services that actually improve 
children's performance in school, that keeps them out of trouble in the 
juvenile justice system, and helps them lead better lives, filled with 
a lot more opportunity and promise.
  But $35 billion over 5 years, let me ask colleagues to measure that. 
Why have we decided to spend $35 billion at all? Why do we have a 
program called the Children's Health Insurance Program? If it is worth 
spending $35 billion, doesn't the same rationale apply to the rest of 
the children who do not have health insurance?
  Where is the big hand of God coming down and saying: You all over 
here, you get health insurance; and you over here, you do not because 
we think it is more important that millionaires get a tax cut. We think 
it is more important that gas-guzzling vehicles get a tax break, and we 
think it is more important that oil companies with the biggest profits 
in the country get their money. That is the choice. That is what is 
happening.
  We have some colleagues who just do not want to bend. That is why 
this agreement had to be reached. I understand the Senator from Iowa--I 
am not blaming Senator Grassley from Iowa. I respect what he has tried 
to do. He held the line to get the $35 billion.
  I respect what Senator Baucus had to do because we are struggling to 
get votes. If you don't get over 60 votes, you can't do something. But 
I think some of those folks who are reluctant to sort of embrace 
reality ought to step back and question this.
  Let me come to another point. I have told my colleagues how we pay 
for this. First of all, the $35 billion is paid for with a cigarette 
tax. The cigarette tax I am in favor of, but we know, unfortunately, it 
is also regressive in a certain way, though hopefully it deters people 
from smoking. But a whole bunch of poor folks and folks moving to the 
middle class or folks in the middle class are stuck with their habit 
and smoke, and they are going to pay a lot of that tax. We would love 
it if it stopped them from smoking, but we all know that is not going 
to happen automatically. So here we are looking at how else could you 
get more kids covered.
  What is important about my amendment is that it covers the kids who 
are eligible for Medicaid. It has a more efficient avoidance of the 
topic we have heard debated, the crowd-out. People are talking about 
not encouraging people who currently have private insurance to drop the 
private insurance to get covered by the State insurance. We obviously 
don't want that to happen. The fact is that my amendment targets the 
coverage toward those at 200 percent of poverty or below. So you are 
mostly targeting Medicaid-eligible children. It is astonishing to me 
that those are the kids most in need of it, and they are still left out 
if we don't pass this amendment. We are trying to get the poorest of 
the poor. We are trying to get the kids on Medicaid. We still don't 
fully cover the kids on Medicaid with the $35 billion, even though, 
obviously, it is an improvement. I will vote for the improvement, and I 
will vote for the bill. But I still believe we ought to be doing more.
  I just went to Fall River, MA, the other day to visit a bunch of 
workers. We have 900 workers there who have been laid off permanently, 
let go from a plant, Quaker Fabric, that closed. It closed, 
incidentally, on a weekend's notice, despite the fact that we have a 
law about plant closings. They are supposed to let workers know ahead 
of time what is happening. I went to visit with these people. The 
biggest single question on their minds was: What am I going to do about 
my health care? How am I going to cover my kids? What am I going to do? 
I met people who worked there for 35 years, 27 years, 25 years, all at 
the same place. They were loyal to the plant, and their 2-week vacation 
started on a Friday. On Monday, they got a call and they were told: The 
plant is closing. Sorry. That is it. What is more important--covering 
their children or making sure people who earn more than $1 million a 
year get $43 billion worth of tax cuts?
  Astonishingly, the President of the United States is threatening to 
veto new money for this program. Even at

[[Page 22025]]

$35 billion, he is threatening that. That means the choice the 
President wants to offer is either Congress can do not enough or do 
nothing at all. I don't think that is the appropriate choice.
  The President has also initiated a disinformation campaign--I guess 
disinformation campaigns are not new, but it is another disinformation 
campaign--to denounce this bill as a larger Democratic strategy or plot 
to somehow massively federalize medicine. I understand the President 
offered to veto it before he had even read it. Confronted with a 
bipartisan compromise to extend health coverage to half of the 9 
million American children without insurance today, the President 
apparently only sees some sort of a leftwing conspiracy to try to 
federalize health insurance. It is almost laughable. I don't think 
anybody really believes that is what is about to go on, but it sure is 
one of those scary phrases that create a knee-jerk response in certain 
sectors of the body politic.
  The SCHIP program is, like Medicaid before it, a Federal-State 
partnership. It is not a Federal program; it is a Federal-State 
partnership. Ironically, it happens to use private providers as the 
principal people involved to provide the service. So it is a Federal-
State-private sector partnership. It is very hard to understand how the 
specter of ``federalism'' somehow can get in the way of that.
  Another misleading statement we have heard is that SCHIP is a 
Democratic Trojan horse for socialized medicine. I have to laugh at 
that. I was here when we did the 1994 debate on health care. I did not 
sign on to the plan that was offered by the White House in 1994. There 
were a number of problems. It doesn't matter what they were. I didn't 
sign on. I worked hard with Senator Bill Bradley, with Senator John 
Chafee, Senator Bob Dole, and others. We had a compromise that, in 
fact, if it had been adopted, it had a back-end mandate with the 
private sector being tapped to provide additional health insurance to 
Americans. I believe we could have passed it, but there wasn't the mood 
for a compromise at that point in time. Had it passed 4 years ago, we 
would have been at about 99 percent of Americans covered by health 
insurance. That was the opportunity which was missed.
  But one thing I learned, you ain't going to see socialized, 
Government-run health care in America probably during our lifetimes. It 
is just not in the makeup. There are plenty of ways to put health 
insurance out there that are more affordable. I offered one of those 
ways in 2004. That is as viable and as urgent today and, frankly, as 
compelling today as an approach where you can reduce the cost of all 
premiums, take catastrophic health insurance off the backs of 
businesses and Americans, and lower the cost of health insurance, 
provide unbelievable streamlining of the delivery of the system, and 
let every American choose where they want to go. It is far more 
efficient than what we have today.
  This red herring, phony debate, straw debate is inappropriate to the 
cause of children. It doesn't do justice to any of us.
  It also is ironic that some of the most significant efforts to expand 
the Children's Health Insurance Program have come from Republican 
Governors. The President's former budget director, Mitch Daniels, the 
current Governor of Indiana, has recently expanded eligibility for 
children's health insurance to 300 percent of the Federal poverty level 
or roughly $60,000 for a family of four. Something is seriously wrong 
when as good a numbers-cruncher as Mitch Daniels and as tough a budget 
critic, as we all know, can go out to Indiana, which is a pretty 
centrist conservative State, and wind up expanding health insurance for 
kids up to 300 percent of poverty. There is a real disconnect in this 
debate.
  The President likes to claim the new program is somehow going to push 
families like those from private insurance to government health care. 
But Governor Daniels and a lot of Governors like him understand that is 
not the case. With the cost of private insurance for that same family 
approaching $12,000 a year, the real choice for most American families 
today is either SCHIP or no health care at all because of the current 
rise in costs. In fact, the National Governors Association this past 
week sent yet another bipartisan letter to the President stating their 
support for the bipartisan reauthorization bill that provides increased 
funding for SCHIP now moving through the Senate.
  Finally, SCHIP is not Government run. The vast majority of SCHIP and 
of Medicaid enrollees receive their coverage through private insurance 
plans working under contract with the States to administer benefits. 
So, far from socialized medicine, it represents the kind of commonsense 
public-private partnership that ought to be a model for greater health 
care reform.
  A lot of families I have met all across the country are scared they 
will not have adequate health care for their kids. The President's 
response to that was--I think about a week ago--Well, they have health 
care. They can just go to the emergency room. I don't know how many 
Senators have been to emergency rooms lately. First, they are all 
overcrowded. I know that at Mass General, which is one of the best 
hospitals in America, in Boston, sometimes it is so crowded it takes 
hours to get people processed except for the most traumatic who come 
in. You have people on gurneys in the halls of hospitals all across 
America, different waiting periods. It is extraordinary what has 
happened. The degree to which emergency rooms have become the primary 
care facility for Americans is shocking. Hospitalized children--this is 
important--without health insurance are twice as likely to die from 
their injuries as those with coverage. Uninsured kids are only half as 
likely to receive any medical care in a given year.
  We all go to schools and talk to teachers, and we go into 
communities. We have townhalls, and we listen to voters. I can't tell 
my colleagues how many times I have heard a teacher tell me how 
difficult it is to teach a whole class of kids, which is usually an 
overcrowded class of kids, where many of those children don't have 
health care. We know that kids who have health care do 68 percent 
better in school. Here we are, a country that is struggling with an 
education system that is not keeping up with competitors around the 
world. We don't graduate enough scientists or engineers, researchers, 
and so forth. One of the things it is related to, in terms of the 
choices children have in their long-term education, is whether they get 
health care and screening early.
  Someone who has health care is more likely to get an early diagnosis 
of whatever the problem is. If you are a child and you have an 
irregular heartbeat or a hole in your heart or you have some other 
disorder, early diabetes onset or even autistic tendencies, if you 
don't get to a doctor and the parent doesn't see those indices and 
isn't able to understand them for what they might be and get somewhere 
to get the care, the odds are that child is going to wind up costing 
everybody a lot more, not to mention what is going to happen to that 
child's life.
  I hope my colleagues will take a hard look at this. I hope the 
President will reconsider his decision to veto it. I know Senator 
Baucus and Senator Rockefeller have negotiated the best bipartisan 
package they could. Again, I commend them for doing so. But here on the 
floor of the Senate, we have an opportunity to work our will as a 
Senate. We have an opportunity to make a different statement. I believe 
we ought to be investing at least $50 billion. The Senate passed in its 
budget--this is in the budget today--$50 billion for children's health 
care. The only reason it has come to the floor at $35 billion is 
because some people refuse to let it come out of committee or take any 
shape other than that at this moment in time.
  The best way to finance that $15 billion is to do what is fair and to 
make one of those choices we are called on to make. There are countless 
choices in this budget. We have 27,000 pages or so--I think more than 
that now--of Tax Code that fill volumes. Most of those pages do not 
apply to average Americans. Most of those pages apply to those who have 
been able to lobby

[[Page 22026]]

Washington, to those who have been able to bring their cause to this 
city.
  These are children. Children's lobbies reflect a lot of different 
organizations, but it seems to me we have an opportunity to enroll the 
lowest income of uninsured children by increasing the bonus payments 
available to States so they meet or surpass their targets. We don't 
mandate them to do so. We leave the discretion up to the States. They 
have wide discretion with the waivers they have today as to how they 
administer the programs. They have proven themselves very capable and 
very creative in doing so.
  I hope, as a matter of priority, we make a bipartisan down payment of 
no less than $50 billion toward health care coverage for all our 
children. The only excuse for not spending more is saying: Oh, we 
cannot afford that. When somebody says we cannot afford that, then you 
have to look at what we are choosing to afford. That is the real test 
of the balance of what we care about and of where we are willing to put 
our votes.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Sanders). The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I rise for two reasons: one, to give the 
compromise that is before the Senate a defense against Senator Kerry's 
amendment; and then to comment on the bill generally, and mostly to 
comment to some of my fellow colleagues on the Republican side of the 
aisle in relation to what I consider unfair criticism of this 
compromise.
  I do not rise to find fault with the goals Senator Kerry has put 
forth. I do not even find fault with some of his arguments about 
loophole closings. I might feel compelled to argue against the marginal 
tax increases he might want to have, but right now I will concentrate 
on his view of expanding this compromise, not questioning his motives, 
and not raising any question about the sincerity of his wanting to do 
more--except reflecting on the 4 or 5 months Senator Baucus and I have 
been putting this bill together, we have all had some rude awakenings.
  Those rude awakenings are that what we put together as a $50 billion 
package, when it was first scored came back much higher than $50 
billion. So to get everything everybody wants in $50 billion is very 
difficult. The other thing is a philosophy I had, that somehow with 
something less than $50 billion we would be able to cover every kid 
under 200 percent of poverty, and we found out that was not possible.
  I am sure we both--from Senator Kerry's point of view and from my 
point of view--went into this whole discussion with a great deal of 
good intent and finding out that it may be a little more difficult than 
we anticipated.
  So only with that caveat I ask Senator Kerry to consider, I now want 
to say why we ought to defend the compromise that is before the Senate.
  I appreciate Senator Kerry's goal of covering more kids. The bill we 
have today insures 3.2 million kids who do not have coverage today. I 
am very proud of that effort, and I am not going to warm to any 
suggestion that we have not done enough. The Finance Committee bill 
does so through a new incentive fund, and it is a proposal both sides 
of the aisle support. It is a compromise.
  The incentive fund is a product of months of work. We built on ideas 
that were formed by another bipartisan couple--Senator Rockefeller on 
one hand for Democrats, Senator Snowe on the other hand for 
Republicans. We took those ideas that Senator Rockefeller and Senator 
Snowe had and reshaped them into what we think represents a very 
efficient and cost-effective way to increase coverage for children.
  As Senator Kerry may recall, during the markup of the Senate Finance 
Committee, the Congressional Budget Office Director Peter Orszag 
characterized the incentive fund ``as efficient as you can possibly get 
per new dollar spent.''
  Simply throwing money at States is not an effective strategy for 
covering more kids. Cost is an object. The bill that is moving in the 
House does cover 1 million more kids who are not currently covered than 
the Senate bill. But they do so while spending $12.2 billion more than 
we do--getting back to the efficiency and effectiveness statement of 
the CBO Director Peter Orszag. I will leave it to my colleagues to 
decide for themselves whether they think $12.2 billion for a million 
kids is cost effective. But I can assure you, the cost will leave us 
then--if we do that--without a bipartisan bill, and maybe not the 
chance of getting anything through, other than an extension. It has 
been stated, even from our Republican colleagues who do not like the 
waiver process, that is bad policy.
  The Finance Committee bill then--I am begging Senator Kerry to 
understand--is the best of the possible. The left wants more; the right 
wanted a lot less. We can make speeches or make legislation. Making 
speeches does not get any kids covered. Making legislation does. Our 
compromise does that.
  I urge my colleagues to keep on the right track for making 
legislation; that is, doing the art of the possible. I oppose this 
amendment and urge my colleagues to do the same.
  Now, Mr. President, I would like to speak on the bill. I start out by 
referring to a chart that I hope we have in the Chamber that has been 
used by a lot of Republican colleagues over the last 2 or 3 days. This 
was in relation to speeches that were given yesterday by many of my 
colleagues who are sincere in their approach.
  They refer to this as the ``cliff chart.'' Everything to the right of 
the green is after this legislation expires. They want you to believe 
we do not take into consideration anything about the future. They are 
making out this is an unrealistic proposal we have before you, because 
following that red line up into the future, they maintain it is going 
to cost more than we can afford. I want to say how this approach is 
intellectually dishonest.
  I have a tremendous amount of respect for the Senators who have been 
giving these speeches, and I can identify a couple. There are probably 
more who have been giving these speeches, but I want my colleagues to 
know I respect Senator Gregg, the ranking Republican on the Senate 
Budget Committee. The Senator from Mississippi, Mr. Trent Lott, our 
assistant minority leader, I think has referred to it. I respect his 
views. But I think everybody ought to take into consideration what we 
are going to do. I have a chart that is going to lay this out.
  In this particular instance, we clearly are on different sides of 
this argument. There has been a lot of talk around here about how the 
Senate Finance Committee bill is funded. This chart was used in that 
discussion. Taking a hard look at how bills are financed is a good 
thing. Maybe we do not do that often enough. So let me focus on the 
criticism that has been made about how this SCHIP bill is financed. We 
need to step back and look at the whole picture. That is what I am 
begging my colleagues to do. The SCHIP program is a pretty small part 
of that picture.
  The thing about SCHIP is that it is not like Medicaid or Medicare. 
How many times have you heard the people using this chart refer to it 
as if it is an entitlement? It is not an entitlement we are discussing 
today. Or maybe if people do not understand the term ``entitlement''--
it is not a permanent program, such as Medicare and Medicaid because 
they are entitlements. SCHIP is not. So when the program expires, it 
truly ends. The day after the authorization ends, poof, there is no 
more SCHIP program. That is true of any program that sunsets. But 
Medicare and Medicaid do not sunset. They are entitlements. SCHIP is 
reauthorized for 5 years. That is 5 years on top of the original 10 
years it was authorized. So this year it is sunsetting. That is not an 
entitlement. It is an expiring program.
  While I know most of us in this Chamber would no sooner let the 
Department of Defense expire than we would let SCHIP expire, that is a 
simple fact. And because it is an expiring program, it is subject to a 
very particular budget rule. That budget rule does not fit this chart. 
That budget rule says the Congressional Budget Office must score future 
spending for the program based upon the last year of the program's 
current authorization.

[[Page 22027]]

So the baseline for SCHIP for the next year is $5 billion. That is 
under existing law. If we pass this legislation, that would not be 
true. But for what is law right now, in the future, they are going to 
score that at $5 billion. For the next 5 years, the baseline--let me 
say again--is $5 billion. For the next 10 years, the baseline for SCHIP 
is $5 billion. It is actually $5 billion a year forever.
  Does anyone in this Chamber think the budget rule governing SCHIP is 
realistic? Well, of course it is not realistic. But that is the way the 
budget process and the Budget Office must work under existing law. So I 
am not here to kid anybody.
  According to the Congressional Budget Office, 1.4 million children 
would lose coverage if we simply reauthorized SCHIP at the baseline of 
$5 billion into the future. Who among us would go home and tell our 
constituents that we individually voted to reauthorize the SCHIP 
program--reauthorize it, yes. If you stopped there, they would think: 
Well, you did a good thing. What you are doing right now, you continue 
to do. But if you did that, what you would be doing, without telling 
them--but they would soon find out; you do not fool the American 
people--1.4 million kids would lose coverage.
  So when the Finance Committee went to work to reauthorize this bill--
Senator Baucus and I, with the help of Senators Hatch and Rockefeller--
we had this problem: The baseline only assured $5 billion a year in 
spending into the future. It was unrealistic.
  Let me digress and point to a problem the Agriculture Committee has 
this year exactly the same way. We did not spend all the money in the 
agriculture bill last year, so we are working on a baseline that is $15 
billion less than it was in 2002, the last time we wrote a farm bill. 
So this is not just the case of health care for kids. A lot of 
committees get caught this way.
  But we do have the realistic fact that costs continue to increase in 
SCHIP, even though the $5 billion was frozen in the baseline because of 
the budget rules.
  So what did we have to do? We had to come up with the money to keep 
the current program afloat. That meant we had to find at least $14 
billion to keep the current program afloat. That is right, of the $35 
billion in funding in this bill, $14 billion is put into SCHIP to 
maintain the current program. That is $14 billion to maintain coverage 
for kids who are currently enrolled.
  Do you know what the White House wanted us to believe all this year 
since they submitted their budget? That you could do that $14 billion--
maintaining the current program--for the $5 billion they put in their 
budget.
  Now, those people down at OMB have to be smart enough in advising the 
President that you cannot do for $5 billion a policy of doing what we 
are doing now, and even expanding a little bit, for $5 billion when, in 
fact, it costs $14 billion. To a very real extent, this is the same 
kind of situation my good friend from New Hampshire, Senator Gregg--
when he was speaking--was complaining about. The current baseline was 
not realistic. That created a hole in the budget we had to fill. In our 
case, it was a $14 billion hole to fill, if you want to maintain 
current policy.
  So what did we do? Well, we did what you have to do if you are 
responsible and deliver on what you say you are going to do. We filled 
it. It is that simple. We had to comply with the budget rules.
  What people forget around here is the Director of the Congressional 
Budget Office is like God, and everybody who works in the Budget Office 
can also be little Gods because what they say has to be followed, and 
if you don't follow it, you know what you have to do? You have to do 
almost the impossible around here. You have to have 60 votes to get 
around it. Should they have that much power? Well, if you are going to 
have any budget discipline, they have to have that kind of power. But 
it is that simple. We had to fill that hole. We had to comply with the 
budget rules, so we did. Do those budget rules make sense? Well, I 
think I have indicated they probably don't, but that is a question for 
the Budget Committee to answer, Senator Gregg's committee, Senator 
Conrad's committee, not the Finance Committee. We have to abide by it.
  There is another budget rule that the Finance Committee was required 
to follow. That rule is called pay-go, which people around here know is 
short for pay-as-you-go financing. It means the bill needs to cover its 
6-year costs and 11-year costs, and that makes sense after all. This 
bill proposes new spending, and because it proposes new spending, you 
have to pay for it, or have 60 votes. This bill does pay for it. This 
bill complies with the budget rules. It complies with the pay-go 
requirements.
  Now, the SCHIP reauthorization we are debating is only a 5-year 
authorization. That means 5 years from now it will sunset. Congress 
will have to go through the process of reviewing it. To remind people 
it is not an entitlement, Medicare and Medicaid doesn't get a review 
every so often forced upon them. They may get a review by Congress but 
instituted by Congress, not forced upon Congress by a sunset.
  As I think everyone knows, this bill is paid for with an increase in 
the tobacco tax. This is similar to the original SCHIP bill when it was 
created under the Republican-controlled Congress in 1997. Now, similar 
to 1997, when the Republicans did it, we had a problem with how the 
tobacco tax works. The revenue from the cigarette tax is not growing as 
fast as health care costs, so that means the revenue-raiser is not 
going to grow as fast as the cost of health care, generally, and 
specifically in this instance, the costs associated with the Children's 
Health Insurance Program.
  So the Finance Committee did what was required to do to comply with 
the pay-go budget rule. The Finance Committee bill reduces SCHIP 
funding to just below the funding that is in the current baseline. That 
means the Finance Committee in 5 years will have the same problem we 
face in putting this bill together today. They will have to come up 
with the funds to keep the program running because the tobacco tax over 
the years is not going to bring in enough revenue to keep up with the 
increased costs of health care. That is just like the $14 billion we 
had to keep and find to keep the current program running with no 
changes.
  It is true we are covering even more low-income kids in this bill. 
That is a good thing. But it also means the Finance Committee in 5 
years will have a bigger job to keep the program running at that rate. 
They will have more kids to keep covering and health care costs will be 
even higher than they are today. This is for the Finance Committee to 
face in the next 5 years. Of course, during that 5-year period of time, 
I hope we get a lot of reform of health care in the United States that 
reduces costs, gets the uninsured covered, so we are not just dealing 
with SCHIP. Of course, what we have to face in 5 years is similar to 
the job the Finance Committee had today to continue the SCHIP program. 
So it is nothing new. But I think some are getting the impression from 
some of my colleagues who use this chart that this is something new--
some gimmick to get around budget rules. But my good friend from New 
Hampshire, Senator Gregg, has expressed serious concern about the bill, 
and I think we should at least take a moment and look at his concerns 
in proper perspective.
  So I go back to one of the charts Senator Gregg has used. Here is the 
chart used to raise the issue. It shows only the funding in the Finance 
Committee bill. I think looking at it like this paints a distorted 
picture. As we all know, the SCHIP program was created to supplement 
the Medicaid Program. The goal of the program was to encourage States 
to provide coverage to uninsured children with incomes just above 
Medicaid eligibility. So to put my colleagues' concerns in perspective, 
we should look at SCHIP spending as it relates to Medicaid spending. So 
I would like to draw my colleagues' attention to a new chart that 
represents figures for the future from SCHIP, as well as from Medicaid, 
so everyone can fully appreciate the consequences of our SCHIP bill in 
the context of the Medicaid Program, which SCHIP supplements. So take a 
closer look.

[[Page 22028]]

  Let's start with this little green line at the bottom. That is 
current law, the green line that goes along the very bottom of the 
chart. It is a pretty straight line across the chart. The green line 
represents the SCHIP baseline under current law. As I have already 
discussed, it is $5 billion each year for the next 10 years and as far 
into the future as you can go. If you don't change the law, that is the 
way it is.
  Now let's look more closely and honestly at the actual problems we 
are facing. The massive orange area, as indicated, above the green line 
is Medicaid. This is the projected Medicaid spending for the next 10 
years. It is a lot bigger than SCHIP. Then, on top of that, we are 
looking to add new spending for the SCHIP bill, and that is the blue 
line above the Medicaid indicated by the orange. Again, it is not very 
big. It is quite obvious it is not very big. As you can clearly see, 
costs are growing at a rapid pace overall. The overwhelming driver of 
the costs is what? It is Medicaid. We have a very big problem. 
Entitlement spending is growing, and in future years we are going to 
struggle to keep these programs afloat. That is why I would not agree 
to do a $50 billion SCHIP bill. I thought it was too much spending. I 
am not particularly happy with spending $35 billion, but as I have 
said, this bill is a compromise, and it is $15 billion less than what 
the Democratic budget approved.
  So let's focus on the total obligations of the Federal program. This 
chart, when you look at the whole picture, puts things in perspective. 
Now, remember, all that fire and brimstone about the awful cliff that 
was on the previous chart, the awful cliff that this bill brings before 
the Senate, where is that cliff, you might ask, on the chart I put 
before my colleagues. If you look closely, right here where the blue 
line on top goes down gradually to beyond the green line, if you look 
at the blue there where it dips down a little bit, that little dip to 
the right of the dotted vertical line is what my good friend from New 
Hampshire is so exercised about. So this little blue line is what the 
debate is all about. The little blue line is this legislation before 
us. The little blue line is creating all this rancor. But it looks a 
little bit different here, doesn't it, than it did on that cliff chart 
I showed you ahead of time.
  Let me tell my colleagues then what the Finance Committee bill--this 
little blue line--is not; not what it is but what it is not. Looking at 
this dip, this is not a government takeover of health care. Looking at 
this dip, this is not bringing the Canadian health care system to 
America. Looking at this dip in the blue line, this is not the end of 
the world as we know it.
  While I concede that allotments under our bill in the years beyond 
the 5-year reauthorization do not behave as described in my friend's 
chart, I don't think it warrants the heated rhetoric we are hearing 
during this debate yesterday and today and probably tomorrow. SCHIP is 
not the real fiscal problem we have. The problem is the big orange 
area. That is Medicaid. The ranking member and I worked together--I am 
referring now to Senator Gregg, the ranking member of the Budget 
Committee. He and I worked together last year on the Deficit Reduction 
Act to try to rein in Medicaid, and I am proud of the work we did. We 
also found out how hard it is to dial back entitlement spending, even 
in a Republican-controlled Congress and even with special procedural 
protections we call reconciliation. We only succeeded in shaving $26 
billion over a 10-year period on Medicaid spending.
  The problem of entitlement spending is still there, and SCHIP is a 
pebble next to the boulders of Social Security, Medicare, and Medicaid. 
Do we have a funding issue? Yes. There is no denying that. We had one 
today that was the $14 billion hole that we had to fill if we were 
going to do what the President said he wanted to do with $5 billion. 
The Republican Congress created that hole in 1997, I am sad to say, but 
the Finance Committee filled that hole and produced a bill that 
complies with the budget rules. I am confident the Finance Committee in 
5 years will do the same thing.
  I think it is also important to point out we have so many far bigger 
problems in health care today that we need to deal with. If I am 
supposed to infer from Senator Gregg's speech that this is supposed to 
be the opportunity to do something about the problems of entitlement 
spending, I should point out the obvious: The substitute we expect to 
vote on does absolutely nothing about the entitlement spending but make 
a big deal out of it.
  So I appreciate Senator Gregg's remarks. They are not without some 
merit, but you have to put them in context. I don't think they fit the 
crime we are accused of committing.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. REED. Mr. President, I request time from the Democratic side.
  The PRESIDING OFFICER. There are no controlled time limits at this 
time.
  Mr. REED. Mr. President, first let me begin by commending Senator 
Baucus and Senator Grassley and their colleagues, Senator Hatch and 
Senator Rockefeller, for extraordinary work. This effort represents 
great legislating based upon principled compromise to achieve a noble 
objective, which is to provide health coverage to the children of 
America. I can't think of a more laudable effort than that which has 
been led and spearheaded by both Senator Baucus and Senator Grassley. 
They deserve our praise and our support.
  I am here today to lend my support to the expansion of the CHIP 
program, the Children's Health Insurance Program, to support this 
endeavor which is so critical to the health of the country, literally 
and figuratively. It is not only a sensible policy in terms of 
investing in children, it is also morally compelling.
  What more lofty objective can we have than to give children access to 
health care, to be able to grow up in this country knowing they can 
receive medical attention when they need it?
  We are in a situation now where, remarkably, the Nation's level of 
poverty is growing. It is higher now than it was in 1970. We have not 
had a President since Lyndon Johnson try to tackle this issue head on. 
This bill recognizes that there are families who don't have the 
resources to buy health insurance, but they have a claim as Americans 
and as citizens to at least have their children covered. I hope we can 
do that by passing this legislation.
  It is estimated there are 37 million Americans in poverty, 13 million 
of whom are children. These are not merely statistics; they are our 
neighbors in every State in the Union. They are youngsters who we hope 
one day will grow up healthy and strong to participate not just as 
workers in this economy but as productive citizens of this great land. 
To do that they need access to health care.
  We also know that children without access to health care fare very 
poorly in school and have difficulties. These difficulties become more 
and more complex, and they compound over the years. In fact, one of the 
strongest arguments for this legislation is that it makes sense as an 
investment. It is better to pay now rather than later, in terms of 
social disruption and serious health problems. That is something I hope 
even the most hard-nosed colleague in the Senate will appreciate.
  One of the consequences of this issue of growing poverty and the 
bifurcation of income between the rich and the rest of us in what we 
all consider to be the ``land of opportunity,'' sadly, is that 
opportunity is not as evident or as palpable as it was in the past. One 
of the great engines of opportunity for any individual, in addition to 
education, is health and the ability to seize these opportunities--
work, education, and service to others.
  Again, I think this is an incredibly important piece of legislation. 
We have to do more. We have to recognize there are families who are 
working two jobs--mothers and fathers working 50, 60, 70 hours a week--
and still they don't have the resources necessary to pay for the 
increasing cost of health care for their children or themselves. They 
are squeezed between paying the rent, providing food for the family, 
and are looking, many times, for ways to cover the cost of health care 
for their children.

[[Page 22029]]

  I am very proud to have been one of the original cosponsors of CHIP 
in 1997. We were fortunate in Rhode Island to have on the Finance 
Committee Senator John Chafee, who was one of the leading advocates of 
the program. As Senator Grassley suggested, this program was crafted 
with a bipartisan effort in 1997, and one of the great leaders in that 
was John Chafee. In many respects, we are here today--both of us--to 
renew his commitment to the children of America.
  Over the past decade, this program has been an unequivocal success. 
It has reduced the number of low-income uninsured children in this 
country. It has done what it said it would do, and it has done it well. 
In Rhode Island, we have a combined Medicaid/CHIP program called 
RIteCare. Our program has been instrumental in reducing uninsured 
children, and it made a difference for hard-working families in my 
State. While this program made great strides, there is still much more 
work to be done.
  I want to take a few moments to address some of the issues raised 
about the Senate Finance Committee agreement and talk to some of the 
points raised in this Chamber criticizing that agreement. I believe 
this agreement is not only sound policy, but it addresses a major 
concern in the country. The proposal before us would achieve several 
key objectives supported by the overwhelming majority of Americans.
  First, it preserves coverage for all 6.6 million children presently 
covered under the CHIP program. Second, it renews the original intent 
of the program by making a real commitment to cover an additional 3.2 
million children who are eligible for coverage but not enrolled. These 
two important goals are achieved by allocating $35 billion over 5 
years. The original program was financed through the Federal cigarette 
excise tax, and the proposal before us continues to use this mechanism.
  The bill also addresses a problem with the formula that was beginning 
to plague a growing number of States, including my State of Rhode 
Island. Last December, I joined a number of my colleagues in crafting 
an agreement to redistribute unexpended funds from some States and 
redirect them to States, such as Rhode Island and Georgia and New 
Jersey, that were rapidly approaching budget shortfalls because they 
exceeded their CHIP allotment.
  The Finance Committee, recognizing this issue, has made a proposal 
that institutes needed changes in the formula used to calculate State 
CHIP allotments so Congress is not required to resort to eleventh hour 
deals to shift money from one State that hasn't used it to other 
States. That is an important change to the legislation. The bill sets 
aside a portion of funds in case of contingencies, such as what was 
experienced during Hurricane Katrina.
  Lastly, the bill tackles a challenge that States have been struggling 
with since the CHIP program began 10 years ago; that is, reaching 
children who are uninsured and eligible for coverage but are not 
enrolled. The bill provides incentive funds and flexibility for States 
to overcome the many economic, social, and geographic barriers that 
hinder millions of uninsured children who deserve health insurance 
coverage.
  My home State of Rhode Island is a perfect case in point. While Rhode 
Island ranks 10th nationally in the lowest number of uninsured 
children--we are very proud of that; in fact, we would like to move up 
in the ranking from 10 to 1--a recent report by Rhode Island Kids Count 
indicates that of the estimated 18,680 uninsured children in the State, 
11,275 of them were eligible for children's health insurance coverage 
but were not enrolled. We should enroll all eligible children; that 
should be our goal. We have to reach these children and, frankly, this 
legislation will help States become more proactive and successful in 
enrolling children.
  There has been criticism directed at the bill. Let me take a moment 
to respond to some of the criticism. There has been concern about the 
cost of the package. I understand that alternative versions of the 
Children's Health Insurance Program reauthorization will be offered by 
others in the Chamber during this debate. Some of these bills will have 
very enticing names, like Kids First, but we should not be fooled by 
it. The substance of these amendments does everything but put kids 
first. It won't even maintain the minimum coverage that we have today. 
Some of the 6.6 million children who are enrolled today will lose out 
in these alternatives. Rather than expanding coverage, it will contract 
coverage. We don't want to head in the other direction; we want to move 
forward.
  Similarly, others have balked about the $35 billion price tag. I 
remind my colleagues that our Senate budget resolution allocated $50 
million for children's health insurance coverage. The Senate Finance 
Committee, the chairman and ranking member, labored mightily and came 
up with the best possible proposal they could get through the 
committee, and it is a principled proposal. I salute it. But I was 
disappointed that the committee left on the table $15 billion that 
could have been used to insure more children. I have joined Senator 
Kerry in his amendment to restore it. Again, in terms of our budget 
priorities, the proposal before us today is even less than what was 
supported in the budget resolution. For those who say it is too 
expensive, that suggests this hasn't been very carefully considered and 
indeed it was, unfortunately, somewhat winnowed down.
  Perhaps the most poignant reference is that, while we were talking 
about $35 billion over 5 years for children's health, we are spending 
$10 billion a month in Iraq. That says a lot about how we have to begin 
to reshape our priorities. I don't believe we are spending too much on 
children when it comes to this particular legislation.
  Some have expressed displeasure over using the Federal cigarette 
excise tax to finance the package. The bill would gradually raise the 
tax 61 cents, up to $1, over a 5-year period. This is consistent with 
the original financing mechanism for the Children's Health Insurance 
Program in 1997. But there is something else interesting here. 
Cigarette smoking has been identified for decades as one of the chief 
public health problems in this country, particularly when children 
start doing it. It is a threat to the health of the Nation, and I doubt 
if there is anyone in this Chamber who has not had at least one family 
member's health affected adversely by smoking. I listened to Senator 
Enzi speak passionately in the Senate Health, Education, Labor and 
Pensions Committee last week about his father's smoking, which led to 
his demise, and it also affected his mother.
  When you raise the price of a product, you curtail the amount of it 
that is purchased. We are using market forces to help us do something 
that we should do: reduce the rate of cigarette smoking. Using market 
mechanisms in this way, not only to raise resources for health 
insurance for children, but to lower the number of people who engage in 
smoking will save public health dollars that are being spent to care 
for people who have lung cancer, emphysema, and other respiratory 
diseases caused by smoking.
  There is another concern that has been raised, which is that the 
agreement grossly expands the CHIP program to parents and childless 
adults, when in fact the bill does quite the opposite. The bipartisan 
agreement actually ends the administration's practice of providing 
States waivers to cover parents and childless adults. To date, 14 
States have received waivers to cover parents and childless adults, 
including my State of Rhode Island. In fact, Secretary Leavitt just 
approved a 3-year extension of Wisconsin's waiver allowing adult 
coverage. Frankly, I believe that States deserve the ability to take 
these steps. I am disappointed that more States won't be able to do it. 
This bill acts as a check on that administrative authority. It 
deliberately, at this time, restricts the number of parents and 
childless adults who can join this coverage.
  As my colleague, Senator Menendez, mentioned earlier, research shows 
a strong correlation between parental coverage and the enrollment of 
eligible children. Once again, the policy behind enrolling parents is 
sound. But this bill, rather than grossly expanding parental coverage, 
begins to restrict that

[[Page 22030]]

coverage. Under the agreement, States with existing coverage expansion 
waivers will be given a period of transition, and no new States will be 
granted the opportunity to extend coverage under CHIP. This seems like 
a reasonable response to these concerns, but I hope as we go forward we 
might be able to look at the logic behind parental coverage policies as 
a way to ensure that the whole family--particularly children--are 
covered.
  The proposal also rightly grants States the option to cover pregnant 
women. Good prenatal care is essential to overall child health and 
well-being, as well as reducing the number of low birth weight and 
premature babies. Given the fact that the United States is actually 
behind most developed countries, and even some developing countries, in 
terms of these indicators, this step is certainly warranted and 
overdue.
  Finally, Members seem to have great consternation over the fact that 
children's health coverage produces some level of crowding out of 
private insurance coverage, and the bill is a giant step toward 
Government-run health care. Again, the rhetoric seems to be at odds 
with the reality of what is in this bill. I note that most enrollees in 
public insurance are actually covered through private plans, where 
States take the money and reimburse the private insurer. The Finance 
Committee proposal takes the additional step of including something 
called premium support. It essentially gives States the ability to 
offer subsidies for children who are eligible for CHIP coverage but 
have access to employer-sponsored coverage.
  In my State, we have had this experience. We have a program called 
RIteShare. The program has enabled thousands of Rhode Island families 
who otherwise could not afford to remain in private insurance coverage 
to do so with a little help from the State. It is a marginal 
contribution to their private health insurance, which allows them to 
stay in the private market. This proposal, again, goes a long way 
toward addressing the issue of potential crowding out.
  I believe this bipartisan agreement represents a very strong step 
forward to facilitate outreach and enrollment of low-income children. 
It is not a perfect legislative proposal, but it is an important one 
based on principled compromise. It reinforces our commitment to 
children's health. I am amazed the President is already suggesting he 
might veto it, despite overwhelming public support, and despite the 
compelling economics that are behind investing in children's health.
  I hope that we will by our votes demonstrate that this is a bill 
which should not be vetoed but should be passed quickly so children can 
continue to enjoy access to health care in our country.
  We all understand that our future is really about our children. They 
will be the leaders years from now, and we all hope and wish that they 
will grow up strong, able to seize the opportunities of this Nation. 
Beyond hoping and wishing today, we can help make that a reality by 
voting for this important legislation. I urge all my colleagues to join 
me in doing so.
  Finally, I would like to take another moment. As colleagues, we come 
to the floor, we debate issues and legislation we have sponsored, but 
the details are worked out by staff members long into the wee hours of 
the morning. We read speeches prepared by very dedicated staff members.
  I have the rare privilege of saluting someone who has worked with me 
for so many years. Lisa German Foster has been with me since January 
1996 when I joined the Senate. She is leaving to pursue other 
endeavors.
  She started in my office as an unpaid intern and has become 
recognized here as one of the preeminent staffers with respect to 
health care issues and one of the most decent and humane individuals 
one will ever meet. I salute her for her work on this bill, on child 
health and immunization, on the bone marrow registry, on tobacco 
legislation.
  She is a native of my home State of Rhode Island, in Narragansett, 
but I think she is firmly ensconced in Washington, DC, with her husband 
Bill and children Aidan and Brady.
  Lisa, on behalf of all of us here, thank you for your good work.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I join with those who assert that 
working Americans are carrying too difficult a burden when it comes to 
health insurance, that the governmental supplements and assistance we 
provide to help people get health insurance are aberrational, 
unprincipled, counterproductive, bureaucratic, and often just unfair.
  A person's health care is more dependent on where he or she works 
than anything else. If you happen to work for the Government, you are 
in pretty good shape. If you work for some big company, you are in good 
shape. But people live in fear that they might lose their job, and more 
than just losing their job, they may lose their health care. They don't 
like that. Families are worried about it. People sometimes refuse to 
take better jobs because of fears that they will lose their health 
insurance.
  Prices are exceedingly high for people who are not part of big plans, 
Government programs and policies, and big company plans. That is just a 
fact. The same person can end up paying twice as much if they run a 
small business or work for a small business that doesn't provide 
insurance, and you cannot be guaranteed you will even get it. Sometimes 
the premiums are more than twice as much.
  The President talked about this issue in his State of the Union 
Address when he talked about tax credits and ending the disparity we 
now have in health care. It is an absolute problem.
  I was pleased to support the program offered by Senator Enzi, the 
small business health plans, the so-called associated health plans that 
would help small businesses to pool their resources and get cheaper 
rates. This could add 1 million people to our insured rolls without any 
increases in taxes.
  We have a problem out there, we really do. So, sure, there is no 
doubt SCHIP is helping children in need, and there is no doubt our 
current system is not working fairly and something must be done to fix 
it. But just adding to this bureaucratic program without any principled 
fix in the abuses that are contained in it strikes me as very odd. I do 
not approve of it. I just do not approve of that at all.
  It is a system that is brutal on the self-employed, brutal on the 
person who works for a small business that does not provide insurance. 
It is not legitimate, it is not right, and we absolutely need to do 
something to fix it. This odd program that came together some years ago 
was never, in my view, a particularly sound program. It is just maybe 
an attempt to fix something that won't work.

  What we really need, if my colleagues want to know the truth, is a 
program to allow all Americans to have an insurance policy that is not 
dependent on where they work. We should allow them to pay tax-free 
dollars just like employers can. If they have lower income, the 
Government helps them make the premium payments and they keep that 
policy whether they are working or they are not working. They take it 
with them, and they are not being terrorized all the time by the fear 
of losing their health insurance.
  We can do that. Senator Coburn has talked about this idea, I know, 
and Senator Corker, Senator DeMint all those who worked on this issue. 
The Department of Health and Human Services worked on it. We ought to 
be doing that. That is what we ought to be thinking about and talking 
about instead of putting new wine in old wine bottles, trying to 
reinvigorate a program that has some fundamental problems and, as I am 
going to point out, is unprincipled and counterproductive in a number 
of ways.
  I believe we absolutely could have a portable plan of health 
insurance which would be something that would excite all Americans and 
make people feel so much more comfortable with their health insurance. 
That is what I would like to see us move to.
  It is said that this is not an entitlement, but it is close to an 
entitlement.

[[Page 22031]]

If we are not making needed reforms to preserve this benefit for those 
in need, why isn't it an entitlement? Who is going to cut and eliminate 
health care for children and those in need? We are missing an 
opportunity to have real reform now.
  I know one can argue this case a lot of different ways, but I will 
just say, when we have my wonderful colleague, Senator Grassley, whom I 
admire so much and who is personally a very frugal person, saying: 
Well, this chart which Senator Gregg, the former chairman of the Budget 
Committee, produced showing that when it is scored out here, there is 
no money for it after the fifth year, as if it is going to drop to 
virtually zero--we know that is not going to happen, and, in fact, 
Senator Grassley said we will have to find the money 5 years from now. 
But they wrote the bill in that way so it wouldn't score as costing as 
much as it is really going to cost. It is a gimmick. It is a classic 
gimmick, that is exactly what it is. It is a bit discouraging, I have 
to tell my colleagues, when I have a colleague I admire as much as 
Senator Grassley taking that position on the bill.
  Let me ask a few questions about this legislation that point out some 
of the failures in principle and good policy.
  If this is a children's health insurance program, why does it cover 
adults? There is no ``A'' in it; it is SCHIP; it doesn't say adults. 
Clearly, SCHIP has been abused by some States that have expanded the 
program to cover adults when the goal of the program from the beginning 
was to cover children. That is what people talk about. In fact, there 
are 670,000 adults participating in SCHIP. Some States are spending 
over half of their SCHIP money on adults, including adults without 
children. One-third of covered adults are not even parents.
  One might say: Why do you care that the State has this program? 
Because the Federal taxpayers are paying 65, 70, 80 percent of it. It 
is a federally conceived program and substantially federally funded 
program.
  Fourteen States provide health insurance through SCHIP, the State 
Children's Health Insurance Program, for adults. The Government 
Accountability Office--that is our watchdog analysis group--reports 
that nearly 10 percent of SCHIP enrollees nationwide are adults. In 
Wisconsin, 66 percent of enrollees are adults. Seventy-five percent of 
the SCHIP funds are spent on adults, and we pay the bulk of that money. 
Sixty-one percent of the funds are spent on adults in Minnesota, where 
87 percent of enrollees are adults, according to the Heritage 
Foundation. Illinois spends 60 percent of their money on adults; Rhode 
Island, 57 percent; and New Jersey, 43 percent.
  This year, 13 percent of all SCHIP funds will go to adults who are 
not expectant mothers. About 30 percent of these adults are not even 
parents. Of the 14 States projected to spend more than they were given, 
allocated in 2007, 5 cover children not considered low income, and 5 
cover adults other than expectant mothers.
  The CMS goal and HHS goal was to end the adult waivers by 2009, but 
this bill basically blocks the ability for that to happen.
  No. 2, I ask this question: If this program was created to help lower 
income children, why are some States covering middle- and high-income 
children and adults? Isn't this an indication that the program has gone 
far beyond what its original concept was? Isn't this typical of big 
Government programs, how they grow and take over more and more, and 
pretty soon become a Government-dominated system?
  I don't think that is the way for us to go. Rich States are getting 
richer under this program. States are not stupid; they have figured out 
how to make the program work to their advantage. If they have the 
money, they make it work to their advantage, if they can make their 
match. The definition of low income, therefore, has been manipulated. 
The SCHIP statute defines a low-income child--this is what it says:

       A child whose family income is at or below 200 percent of 
     the poverty line for a family of the size involved.

  So it is supposed to be for, and was created in the fundamental 
statute to be for, those at or below 200 percent of poverty. I will 
talk about what that means in a minute. That is a pretty decent income, 
but we are going way above that. However, States are allowed to 
disregard parts of a family's income. They can just disregard it. These 
income disregards can mean, for example, that $50,000 of a family's 
income simply doesn't count, making many more children and adults 
eligible who are not low-income people.
  New Jersey disregards all income between 200 and 350 percent of the 
poverty level. How do they do that? I am not sure. They got a waiver, 
apparently. Senator Allard presented an amendment to fix the problem of 
income disregards. It was defeated, of course. New Jersey just 
disregards the income between 200 and 350 percent of the poverty level.
  Ten States and the District of Columbia now cover children in 
families with incomes of up to 300 percent of the Federal poverty 
level. In those States, SCHIP provides health insurance for children in 
a family of four earning up to $61,950. That is a pretty good income. 
The program, in its current form, provides health insurance for 
children in those families. New Jersey has extended eligibility to 
$72,000 for a family of four--350 percent of poverty level. New York 
recently voted to extend eligibility to families of four earning up to 
$82,000--400 percent of poverty level.
  This is supposed to be a program for the poor. It basically is a 
program for the poor in most States--it is in my State. Some 
legislative proposals on SCHIP would allow all States to expand SCHIP. 
Some of these proposals we are floating around here would allow all 
States to go to 400 percent of poverty level, which would make 71 
percent of all American children eligible for public assistance through 
Medicaid or SCHIP.
  This bill will allow New York to cover people at 400 percent of the 
poverty level. Now, the bill says 300 percent, and that is what they 
will say here on the floor, that it is 300 percent, but the 
grandfathered-in program covers New York, and they are at 400 percent, 
which means we will be subsidizing that.
  Mr. BAUCUS. Will the Senator yield for a question?
  Mr. SESSIONS. Yes, I would be delighted. I hope I am wrong.
  Mr. BAUCUS. Are there any States that cover 400 percent of poverty?
  Mr. SESSIONS. That do what?
  Mr. BAUCUS. That cover children at 400 percent of poverty.
  Mr. SESSIONS. I understand New York has passed a law that would do 
that.
  Mr. BAUCUS. No, that is not correct.
  Mr. SESSIONS. It hasn't taken effect yet, but I understand they have 
passed it.
  Mr. BAUCUS. No. Is it true if a State wants to cover, say, above 300 
percent of poverty, is it true the State has to get concurrence with 
the Secretary of HHS?
  Mr. SESSIONS. Yes.
  Mr. BAUCUS. Has New York received that concurrence?
  Mr. SESSIONS. My understanding is that under the current law, the 
Department of Health and Human Services believes it may have to grant 
that waiver, and nothing in this bill would prevent it; is that not 
correct?
  Mr. BAUCUS. Actually, I would not say it is 100 percent incorrect, 
but HHS has discretion, as HHS had discretion granting other waivers 
which the Senator is concerned with, and, frankly, this Senator is 
concerned with. As the Senator knows, this bill is designed to crack 
down on the effect of those waivers and prevent any future waivers with 
a lot of the adults I know the Senator is concerned about.
  I wished to make the point that no State covers at 400 percent of 
poverty today. Secondly, if New York does seek 400 percent--if any 
State seeks 400 percent, it has to get the concurrence of the Secretary 
of HHS.
  Mr. SESSIONS. Well, I will say this without doubt, Mr. President. 
Amendments have been offered, I believe already and will be offered, to 
make sure New York would not be able to get the 400 percent. Because 
the Federal taxpayers in my State of Alabama, where

[[Page 22032]]

we provide SCHIP to children under 200 percent of poverty, we are going 
to be subsidizing that, and I don't see any reason for us to do that. 
But under this bill it can continue, if Health and Human Services is 
correct, and their lawyers tell them they can't deny this request.
  I will agree they probably should have been more aggressive in 
denying some of these things and litigating, if need be.
  Mr. BAUCUS. Will the Senator yield for another question?
  Mr. SESSIONS. I will do my best to answer the Senator's question.
  Mr. BAUCUS. I appreciate the willingness of the Senator to engage in 
a dialogue. Is it true, first, that the match rates States are getting; 
that is, the Federal proportion and the State proportion, are more 
favorable to States under the CHIP program than it is under Medicaid?
  Mr. SESSIONS. I believe that is correct.
  Mr. BAUCUS. The Senator is correct. That is correct. Is it also true 
that, on average, the differential is about 30 percent? That is, the 
match rate that States get under the Children's Health Insurance 
Program is about 30 percent better, from the State's perspective, than 
the State gets from Medicaid; is that also true?
  Mr. SESSIONS. I believe so.
  Mr. BAUCUS. It is true.
  Mr. SESSIONS. I know the distinguished committee chairman probably 
knows that pretty well.
  Mr. BAUCUS. It is true it is about 30 percent. Is it also true that 
different States have different costs of living?
  Mr. SESSIONS. That is correct.
  Mr. BAUCUS. And so some States--
  Mr. SESSIONS. Although as the days and years go by, less and less 
perhaps.
  Mr. BAUCUS. Different States have different costs of living. Some are 
more expensive to live in than other States.
  Although the Senator is correct that States have set their 
eligibility rates at 300 percent of poverty, that actually, at that 
point, States no longer receive the Children's Health Insurance Program 
match rate, which is 30 percent higher on average than they receive in 
Medicaid. They can go to 300 percent or above 300 percent, but if they 
do--if they do--isn't it also true they get a much lower match rate 
than they receive today; that is, at the CHIP rate rather than the 
Medicaid rate?
  Mr. SESSIONS. My understanding is the Senator is correct; that is, at 
least in Medicaid those rates, as you cover certain extras, you get a 
lower percentage rate. I am unsure of the exact details about how that 
is applied in SCHIP, but I understand there is a differential.
  I would suggest to my colleague, though, that what we have done is 
created a system that incentivizes States to spend because they are 
getting a very substantial--65 to over 80 percent--match to cover 
things they wouldn't otherwise cover because it is money given gratis 
from the Federal Government; is that not correct?
  Mr. BAUCUS. Well, if the Senator is asking me the question, that is 
true, as in the case of Medicaid but reminding us that we are talking 
about very low-income kids here.
  Mr. SESSIONS. Well, reclaiming the floor, the GAO did a study that 
criticized this aspect of Medicaid some time ago, and it made some 
news; that the net effect of all this is that, on a percapita basis, 
people in higher income States are getting more out of Medicaid than 
they are in poorer States, on a fairly substantial basis. They have 
criticized that policy. Some of those same policies based on that 
unprincipled approach to health care are at work in this bill.
  Again, the Federal Government would pick up a substantial percentage 
of what New York may get if they go to 400 percent. But 350 and 300 
percent is, I think, a bit much anyway. For example, about 70,000 
upper-middle-class-income families who pay the alternative minimum tax 
would also qualify for SCHIP under this bill. The program, I think, as 
a matter of policy, encourages irresponsible spending.
  Think about this: States who use up all their allotment, many of 
which obviously are those giving out their richest benefits, profit 
from States such as Alabama, who are very careful with their spending 
and stay within their allotments. In years past, if Alabama didn't use 
all the allotment given to them--and they have to match a portion of it 
to get that money--that money was redistributed to States who spent 
more. This is, I think, unfair and not good, sound policy. It has 
encouraged States to overspend while punishing States who have been 
conscientious about controlling spending.
  Of the States which exceeded their allotment and that have asked for 
bailouts, adults accounted for 55 percent of those States' enrollees, 
according to the Government Accountability Office. Those States that 
have exceeded their allotment, that have reached back into the pool and 
have gotten more money, the GAO has found that about 55 percent of what 
they pay out goes to adults. Not to children--adults. This bill does 
not stop that in an effective way. It had an opportunity to, and it did 
not.
  Of the 18 States projected to have shortfalls for 2007, 7 have SCHIP 
eligibility that is above 200 percent of the poverty level. So the 18 
States who were projecting they were going to spend above their 
eligible amount, they are the ones that have the highest eligibility 
rate. Four of those States--Maryland, Massachusetts, Missouri, and New 
Jersey--are at or above 300 percent of the poverty level, so you are 
talking about subsidizing health care for a family of four earning 
$60,000 per year.
  In addition to taking leftover money from fiscally responsible States 
such as Alabama, some States that have expanded their programs beyond 
the scope of the original program have asked the Government to bail 
them out with new money. In other words, there is not enough leftover 
money. Not enough leftover money now that they can scoop up from frugal 
States such as Alabama to take care of their spending, so now they are 
asking and demanding more money from the Federal Government to match 
whatever they want to do.
  It is a classic example of an out-of-control Federal program running 
amok. I have to tell you that is not good policy.
  Five States have taken 83 percent of Government bailout funding for 
2006 and 2007, and 14 States received part of this funding. This is the 
extra money Congress has appropriated to fill their deficits. Only 5 
States have gobbled up 83 percent of these funds, with 14 States 
receiving part of this funding. But out of $720 million, Illinois 
received $237 million, New Jersey $164, Rhode Island--small Rhode 
Island--$84 million--high-income State, that is--Maryland $31 million, 
and Massachusetts $77 million.
  So it is the high-benefit, high-tax States that are sucking up money 
out of the fund, and they want more and more. This bill does not deal 
with that.
  The bill only worsens the problem of States who are overspending as 
it creates a contingency fund. Now, the contingency fund is 
specifically designed to provide this additional funding to States that 
run out of money because they have covered too much and there is not 
enough Federal matching money for them. I think we better name this 
contingency fund the ``Federal Fund to Encourage SCHIP Overspending.'' 
Maybe that would be the right title for it.
  As Secretary Leavitt has said, this section indicates that either the 
allocation formulas that determine how much money States get are wildly 
inaccurate or we do want States to overspend. It seems like that is our 
goal. That is why people are suggesting this is a subtle way to have 
the Federal Government take over a larger and larger portion of health 
care in America.
  A further example of bad SCHIP policy is federally subsidizing 
infrastructure for States to develop government-sponsored universal 
health care. Many States, such as Pennsylvania and Vermont, have 
already begun the process of instituting a universal health care 
program. I think it is unfair to tax people in the frugal States to pay 
for rich health care plans for the wealthy in other States. That is not 
a good policy.

[[Page 22033]]

  About 45 percent of American children are currently enrolled in 
Medicaid or SCHIP, though only 37 percent are in families earning less 
than 200 percent of the Federal poverty level.
  This is the third question I would ask. CBO estimates that about half 
of new SCHIP enrollees from this legislation now have private 
insurance. So my question is: Why would we spend taxpayers' money to 
insure people who are already insured? This bill would decrease private 
health insurance coverage. It would encourage people to leave their 
plans. It seeks to take kids away from private coverage and move them 
to government-run health care. Parents would be financially motivated 
to take their children off private, usually employer-sponsored plans, 
and put them on a taxpayer-supported plan. Those children would then 
have to be supported by the taxpayers; whereas, before they were 
covered by their own private insurance plan.
  A recent report by CBO estimates that SCHIP has reduced the uninsured 
in the target population--those we wanted to reach who are uninsured, 
low-income children--by only 25 percent. That is the CBO saying that. 
The target group that was uninsured--low- income children--we have 
reduced those uninsured by only 25 percent. I think this is because a 
lot of children now in SCHIP, and in many States adults, are people who 
used to be on private health plans. Between 50 percent and 75 percent 
of Medicaid expansion funds in the 1990s were spent on people who would 
have been privately insured, according to the economist Jonathan 
Gruber. That is a big number. I don't know if it is accurate, but that 
is what he concluded--between 50 percent and 75 percent of Medicaid 
expansion funds--were spent on people who would have been privately 
insured.
  One study found that 60 percent of the children who became eligible 
for SCHIP had private coverage in the year before the SCHIP plan began. 
That is a stunning number; 60 percent of the children who became 
eligible for SCHIP had private insurance the year before. CBO found 
that among newly eligible populations--the higher income families who 
would be covered by this bill--one child will drop private coverage for 
every new uninsured child who is enrolled in the public program. That 
is a stunning number.
  Overall, for every 100 children whom this bill would enroll in SCHIP, 
50 of those children would come from private insurers. So half of the 
children we are going to be covering would be coming from private 
insurance plans. I don't think that is good policy, unless it is your 
goal to diminish private insurance and further take over the private 
sector with Federal plans.
  These are conservative estimates, since the studies failed to 
calculate the crowd-out effect for adults who switched to Government 
plans. A recent study----
  Mr. BAUCUS. Will the Senator yield on that point for a question?
  Mr. SESSIONS. I will be pleased.
  Mr. BAUCUS. A question designed for Senators to have more information 
about the basic point the Senator was talking about, crowd-outs, which 
the Senator understands is people on private insurance leaving private 
health insurance to go to the program that Congress may have enacted.
  Does the Senator have any idea--I found this very interesting--when 
Congress passed the Medicare Modernization Act, which included Part D 
drug benefits--I don't know whether the Senator voted for that bill. I 
assume the Senator voted for that.
  Mr. SESSIONS. I did vote for that.
  Mr. BAUCUS. Does the Senator know at that time what the so-called 
crowd-out was? In fact, put it this way: Does the Senator know what 
percent of people who at that time were on private health insurance who 
might then have gone to a program the Government offered? Does the 
Senator have any idea--I am not saying the Senator should know. Does 
the Senator have any idea what was estimated at that time when we 
passed that bill what the crowd-out would be?
  Mr. SESSIONS. Responding to the question of the Senator, I do know 
that you, as one of the authors of that bill which I did support, did 
create provisions to minimize that and deliberately took steps to 
reduce the amount of crowd-out that would occur.
  Mr. BAUCUS. The Senator is correct.
  Mr. SESSIONS. I am sure some would occur. Of course there was a 
feeling and observation on that from the beginning that this was a 
trend in the country.
  Mr. BAUCUS. Correct. There is no real official conclusion of what the 
actual crowd-out has been. But does the Senator know the basic 
unofficial statistic is about 66 percent; there was about a 66-percent 
crowd-out under the Medicare Modernization Act?
  Mr. SESSIONS. I am not aware of that. I know my mother didn't have 
any coverage. She was glad to get the prescription drug benefits.
  Mr. BAUCUS. I want to ask another question. Does the Senator know 
what the anticipated crowd-out was when this Children's Health 
Insurance Program was originally enacted in 1997? What was the 
estimated crowd-out then, when we passed this bill in 1997?
  Mr. SESSIONS. I am curious. I don't know.
  Mr. BAUCUS. It is about 40 percent. And does the Senator know what 
the actual experience has been? About between 25 and 50 percent are the 
best numbers we can get.
  Mr. SESSIONS. That is not so much--
  Mr. BAUCUS. Between 25 and 50.
  Mr. SESSIONS. I am pretty close to the estimate.
  Mr. BAUCUS. You are close. Does the Senator know that when we wrote 
this bill we asked the CBO Director, Peter Orszag, to tell us in the 
Finance Committee what we have to do to minimize the phenomenon of 
crowding out? Of course the Senator doesn't know we asked him, but does 
the Senator know when we asked Peter Orszag during the markup--it is on 
the public record--were we extremely efficient and minimized the crowd-
out as much as we possibly could, does the Senator know Mr. Orszag 
said, Yes, we were extremely efficient and minimized crowd-out as much 
as we possibly could?
  Mr. SESSIONS. I didn't. But I will respond by asking this question: 
If we have crowded out prescription drug coverage for seniors, if we 
crowd out private insurance in Medicaid for low-income people, if we 
crowd out regardless of income concerns in general Medicare, and if we 
now crowd out more children and even adults under a children's plan, 
who is going to be left in private coverage?
  Mr. BAUCUS. Let me answer that question by asking this question in 
return: Would the Senator want even more crowd-outs under a different 
approach? All experts say if we try to address more coverage for low-
income kids through private coverage that the crowd-out would be even 
greater. Would the Senator want that greater crowd-out to occur, 
compared with the Children's Health Insurance Program?
  Mr. SESSIONS. I would respond with this question: Isn't it true, if 
you are setting eligibility at 400 percent of poverty, or 350 percent, 
or 300 percent of poverty, you are going to crowd out more people with 
insurance than if you are actually taking care of poor people who are 
less likely to have insurance?
  Mr. BAUCUS. I respond to the Senator, I have forgotten the exact 
statistic, but intuitively the answer is the one the Senator is 
suggesting, but actually the fact is, as we established earlier, no 
State has 400 percent of poverty. No State does. No State does. But for 
those States above 300 percent, the kids who are actually covered, the 
greatest preponderance of kids covered is still low-income kids. I say 
of all the beneficiaries to date under the Children's Health Insurance 
Program today, 91 percent are children at or below 200 percent of 
poverty.
  This program is for kids. I know all this concern about adults and I 
share the Senator's concern about adults. I share it very strongly. We 
worked very hard on this bill to cut down adults, as the Senator knows. 
Childless adults are phased out after 2 years and parents are much 
lower--get a poorer rate. The third category of adults, pregnant women, 
there is a State option.
  But the biggest concern, I am sure, of the Senator from Alabama is 
childless

[[Page 22034]]

adults. This is supposed to be a kid's program, not an adult's program. 
We say, OK, after 2 years you are off. As the Senator also knows, back 
in the Deficit Reduction Act, when that was passed, we prevented HHS 
from granting any waivers for childless adults in the future.
  Mr. SESSIONS. I thank the distinguished chairman for his insights. It 
has been a good dialog. I would go back, fundamentally, to the remarks 
I made at the beginning. Our present health care system is not working 
well. I believe a simpler system, if taken as part of the idea of 
equalizing tax deductions and tax credits for all Americans--and it 
would require spending from the Government to do that--if we did that 
in an effective way, every person could then choose their own insurance 
policy covering themselves as they wish. I think it would be a far more 
preferable way than taking a children's program and expanding it in a 
significant way.
  There is no doubt. CBO has scored that for every child who is in this 
bill who would be enrolled in SCHIP, 50 percent of those children would 
come from private insurance coverage. That is a conservative estimate. 
It is a big deal. Fifty percent of the people who would be picked up 
under this plan would come from families where they are already 
covered.
  The National Bureau of Economic Research, an independent group, 
estimates the crowd-out rate for SCHIP to be as high as 60 percent. Of 
10 million children, about 50 percent of the children in families with 
incomes below 200 percent of the poverty line have insurance. This is 
the number for the lowest income group. We would normally expect and do 
expect that higher income levels would have higher crowd-out effects. 
In fact, CBO--our own Congressional Budget Office--the one we have to 
rely on for information, estimates that 77 percent of the children in 
families at 200 percent to 300 percent of the poverty level already 
have private coverage. How about that? And 89 percent of children in 
families with incomes between 300 percent and 400 percent of poverty 
have private coverage, as do 95 percent of children in families above 
400 percent of the Federal poverty level, according to our own 
Congressional Budget Office, which I assume our distinguished chairman 
does not disagree with. I mean he doesn't dispute those numbers.
  Our goal should not be to take insurance away.
  I will conclude. I know others are here prepared to speak. I have 
enjoyed the dialog.
  I am not comfortable with the some of the ways we are proposing to 
take care of children and the way we are taking care of adults in a 
children's program and the way we are dealing with a broken Federal tax 
policy with regard to the uninsured. I was on a task force appointed by 
former majority leader Bill Frist, Dr. Bill Frist, to deal with the 
uninsured. We wrestled with it a number of ways. One of the ways we 
could have gotten a million people covered was through the association 
health plans, the small business health plans that my colleagues on the 
other side of the aisle managed to block.
  Now we are moving more money, more, I guess, new wine in old wine 
bottles here. I think we need to break out of this mentality and create 
a system where you own your health insurance policy and you take it 
with you if you change jobs. I would note that the average American 
worker has had nine jobs by the time he or she is 35. Likewise, we 
ought to have savings accounts that people can take with them whenever 
they move from job to job and provide as much security and stability 
and assurance as we can possibly provide the working American families 
today.
  Middle-class families are getting hit at both ends here. They are 
required to pay more taxes. They are not getting the benefits. They are 
working hard. If they are not working for a big company or the 
Government, they are paying a very high price for their health 
insurance.
  We ought to work on these things, and if we did so, we might be 
surprised how many people might come on the insured rolls.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. McCaskill). The Senator from Montana.
  Mr. BAUCUS. I am not going to belabor this crowd-out issue. A lot of 
people watching are probably asking what in the world is crowd-out. For 
those wondering what in the world crowd-out is that we are talking 
about here, basically it is how many people of those this legislation 
covers--how many people would be crowded out of private health care 
insurance. That is, if they are on private health care insurance today, 
how many would leave private health insurance to go to the Government 
program.
  A couple of points here. No. 1, those who might be inclined to vote 
for the McConnell substitute know this, but actually the so-called 
crowd-out is greater in the McConnell-Lott proposal than it is on a 
percentage basis under my bill. On a percentage basis, under the 
McConnell-Lott bill, more people would be leaving private health 
insurance to go to the Children's Health Insurance Program.
  Second, the figure we hear is 1 to 1. That is not accurate. That is 
selective use of the tables. If you look at the real facts, at the 
bottom line under CBO's estimates, they actually say it is more in the 
neighborhood of--it is not 50 percent that is represented here, but 
actually it is about 30 percent.
  It also has been represented here that maybe under tax credits, which 
is a better way to go to cover health insurance, the implication is 
there will be less crowd-outs. Well, let me just point out that there 
is a fellow named John Gruber, and he is an MIT professor, a health 
economist. He is often quoted by the President. Professor Gruber is 
often quoted by President Bush in this general area. What does 
Professor Gruber say? He says that the tax credit crowd-out is, in his 
estimate, 77 percent. Much higher.
  So for those concerned about the so-called crowd-out, I would think 
they would like the underlying bill because of all of the approaches we 
have discussed here, there is less crowd-out in the underlying bill 
than in the substitute or under the Kyl-Lott amendment and much less 
than would be the case under a tax credit approach to help low-income 
kids. I think the record should show that so Senators have full 
information and those watching this debate, wherever they may be, also 
have the facts before them.
  Madam President, I suggest that the Chair recognize Senator Murray.
  The PRESIDING OFFICER. The Senator from Washington.
  Mrs. MURRAY. Madam President, all children should be able to see a 
doctor when they are sick, and all children should be able to get the 
medicine they need to make them better. When a kid gets a cut or 
requires stitches or comes down with a fever or an earache or with any 
imaginable problem, they should be able to get help, period. 
Unfortunately, today in America, the richest and most successful 
country ever, that is not the case. In fact, millions of American 
children do not have health insurance today, which means millions of 
American children cannot see a doctor when they are sick and millions 
of American children do not get the medicine they need to get better. 
As wages remain stagnant, as the cost of living--heat, food, clothing, 
college tuition, doctor's visits--increases, more and more parents 
today are unable to afford health care, and the ranks of uninsured 
children are growing.
  This tragedy can only be described as a shame. It is unquestionably 
our moral obligation as Americans to correct it. It does not matter if 
you are Republican or Democrat, progressive or conservative--making 
sure our children get health care is the moral thing to do. Now, most 
of us in the Senate know this, and we are working now to do the moral 
thing--support reauthorizing and improving the Children's Health 
Insurance Program, or CHIP, which takes massive steps forward to giving 
our kids better health insurance in this country.
  This bill will ensure that the 6.6 million children who are enrolled 
in CHIP continue receiving care, and it provides

[[Page 22035]]

3.2 million uninsured children with coverage. As a result, over the 
next 5 years, the number of uninsured children in America will drop by 
more than a third. It also strengthens the program by increasing 
funding for States that need the most help. You know, in recent years 
under President Bush's watch, many of our States have faced funding 
shortfalls, jeopardizing the coverage of countless children.
  This bill also provides an emergency fund to cover unexpected 
shortfalls arising from economic downturns or emergencies. In fact, the 
Congressional Budget Office, which is a nonpartisan group of experts, 
predicts that 800,000 children now covered by CHIP or children's health 
insurance will lose coverage over the next 5 years unless there is an 
increase in funding above the base amount required.
  This legislation which is before the Senate today provides $100 
million as well for outreach and enrollment efforts that increase the 
participation of children in the Children's Health Insurance Program. 
It includes a national campaign to help raise awareness of the 
Children's Health Insurance Program and the targeting of our children 
in rural areas with high populations of eligible but unenrolled 
children today. Another outreach effort will provide funds for 
translation and interpretation service for CHIP, so minority children, 
especially Native Americans and Hispanics, will become more aware of 
this program.
  Finally, this authorization plan provides my home State of Washington 
with the funding and flexibility we need to provide more children with 
quality health care.
  This bill is a big win-win for Washington State and the many families 
who struggle to provide care for their children today. One of the 
smartest parts of this plan is that the money for these initiatives--
$35 billion over 5 years--comes solely from a 61-cent excise tax 
increase on cigarettes and other tobacco products. No other programs 
are cut; Social Security is not raided; the deficit will not be 
increased.
  Not only will this bill provide millions of American children with 
health care, but it is estimated that it will lead 1.7 million adult 
smokers to quit smoking, and that will cause a 9.2-percent decline in 
youth smoking and will prevent over 1.8 million kids from becoming 
smokers. So when you provide health care to millions of children and 
lead millions of young people to stop smoking or to never pick up a 
cigarette, this bill is a win-win for our country and for our children.
  I think it is very important that I thank my colleague, Senator Max 
Baucus, for his tireless work on this issue and for all of America's 
children. Without his determination, we would not be so close to 
providing more of our kids with health care.
  It is also important to note that this bill is bipartisan. Senator 
Grassley has worked very hard, along with Senator Baucus, in creating 
this legislation. It was passed out of committee on a commendable 
bipartisan basis.
  Another big supporter of this bill on the floor has been Senator 
Hatch, who was a cosponsor, actually, of the original 1997 bill.
  I listened to him as he recently said:

       We are trying to do what is right by our children who are 
     currently not being helped by our health care system. If we 
     cover children properly, we will save billions of dollars in 
     the long run. Even if we did not, we should still take care 
     of those children.
  Senators Grassley and Hatch are not alone on their side of the aisle. 
Many of our colleagues realize that supporting this legislation is the 
moral thing to do. Unfortunately, however, President Bush does not 
agree, and he has, amazingly, threatened to veto this bill. Now, he is 
going to be out there giving his reasons for the veto. He is going to 
make complicated arguments and throw some numbers around. But the 
bottom line is, the moral line is that vetoing this bill will endanger 
coverage for millions of children who are currently enrolled in our 
Children's Health Insurance Program, and a veto will deny millions of 
kids who would become covered under the bill a chance to see a doctor 
when they are sick. It seems, sadly, the moral light President Bush 
says guides his decisions has dimmed.
  I wish to share the following story with President Bush and with any 
Senators who might be thinking about voting against this bill.
  This is Sydney. Sydney and her mom Sandi DeBord live in Yakima, WA. 
Sydney has cystic fibrosis. Sydney's mom recently wrote to me. She 
talked about her daughter and the importance of the Children's Health 
Insurance Program, which allowed Sydney to get the care she needed, 
which extended her life and allowed her to live her short life to the 
fullest.
  Mrs. DeBord wrote to me, and I want to read to you what she said. 
These are her words:

       My daughter has a life-shortening genetic condition called 
     Cystic Fibrosis. With quality health care I believe her life 
     has been extended and she has been able to enjoy 9 years of 
     quality life.
       Of course, she spent many weeks in the hospital on life-
     saving IV antibiotics during those 9 years, and not a day 
     goes by that she does not have to endure taking a bucket full 
     of medicine. But despite the obstacle in her way, she is a 
     happy child living life to the fullest.
       She is active, she does well in school, has many friends, 
     and loves to sing and dance. However, none of that would be 
     possible if it was not for the quality health care she 
     receives as part of the CHIP health care. I know for a fact 
     that without this bit of assistance, her life would end much 
     sooner due to the inability to afford quality health care for 
     her.
       As her parent, it frightens me to even think some day she 
     may be without health care coverage if programs like CHIP are 
     no longer available.

  She said:

       I write to ask you to reauthorize the State Children's 
     Health Insurance Program and ensure the program is adequately 
     funded to provide high quality health care for children with 
     Cystic Fibrosis.

  I hope President Bush and opponents of this bill will listen to this 
story. I hope they take a chance to look at Sydney and the life in her 
eyes and the life she has been able to live. I know Mrs. DeBord hopes 
they are listening as well.
  It is our moral duty as Americans to ensure our kids can see a doctor 
when they are sick. The bill in front of us today fulfills that duty. 
It ensures that children covered by CHIP remain covered, and it ensures 
that millions without insurance today are going to get it.
  I strongly urge my colleagues to do the moral thing and support the 
reauthorization of this Children's Health Insurance Program.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Madam President, as everybody knows, I have been in the 
CHIP battle since the beginning. I just want to pay a great deal of 
tribute to the distinguished chairman of the committee, Senator Baucus; 
the distinguished ranking member, Senator Grassley; and, of course, 
Senator Rockefeller.
  In the beginning instance of CHIP, my good friend, Senator Kennedy, 
and also Senator Snowe, my dear friend--all of these people had a lot 
to do with the CHIP bill from the beginning. And I have to say that the 
original Hatch-Kennedy bill became the CHIP bill back in 1997, and, of 
course, it has come all of this way to today where we are looking for 
renewal.
  There are some facts that really ought to be put into the equation 
here today, and I thought I would just spend a few minutes on some of 
the facts regarding CHIP.
  No. 1: The Children's Health Insurance Program reauthorization is not 
full of budget gimmicks. The Senate Budget Committee has certified that 
this legislation complies with pay-go rules of both the 6- and 11-year 
base under the pay-go rule. The Congressional Budget Office has 
reviewed its 5-year and 10-year expenditures and revenue raisers and 
believes they are balanced on an on-budget basis. This bill is a 5-year 
authorization and is fully paid for with offsets. This bill is not a 
10-year reauthorization, and that is an important point to remember. 
The CHIP program must be reauthorized in 5 years.
  Fact two: Some have indicated that the Children's Health Insurance 
Program reauthorization imposes up to a $10 tax on a cigar. Well, the 
tobacco tax included in our bill prorates tobacco rates or taxes on 
cigars. The tax

[[Page 22036]]

imposed on cigars is based on the price of a cigar. In very few 
instances will an individual cigar be taxed at $10.
  Another fact: The Children's Health Insurance Reauthorization Act 
does not increase the crowd-out rate. There is crowd-out because there 
is always going to be crowd-out when you try to solve some of these 
very serious problems. Although, because we are covering more children, 
some have concern that the crowd-out rate will increase, according to 
CBO, the fact is that the crowd-out rates will not increase.
  Another fact: The Children's Health Insurance Reauthorization Act 
prohibits the Federal Government from granting future State waivers to 
cover nonpregnant adults through CHIP. Our bill puts the emphasis back 
on low-income, uninsured children. Simply put, our bill puts an 
immediate stop to States being granted future waivers to cover 
nonpregnant adults.
  Let me give you another fact: The Children's Health Insurance Program 
Reauthorization Act eliminates enhanced Federal matching rates for 
nonpregnant adults. At the beginning of fiscal year 2009, States will 
receive lower Federal matching rates for childless adults, and in 
fiscal year 2010, childless adults will not be covered under CHIP. At 
the beginning of fiscal year 2010, only States with significant 
outreach efforts for low-income uninsured children will receive 
enhanced match rates for parents; others will receive the lower 
Medicaid match rate, or FMAP, for adults.
  Starting in fiscal year 2011, all States will receive a lower Federal 
match rate for parents. Those States covering more lower income kids 
will receive REMAP--that is the mid-point between the CHIP matching 
rate and the lower Medicaid matching rate. Other States will receive 
FMAP for CHIP parents.
  Another fact: The Children's Health Insurance Program Reauthorization 
Act provides lower matching rates to States for those individuals 300 
percent of the Federal poverty level and above who are covered under 
CHIP, thus penalizing States that want to cover higher income children.
  Under the current CHIP bill, States receive an enhanced Federal 
matching rate for all income levels. Our bill discourages States from 
covering higher income individuals in the CHIP program. After enactment 
of our bill, States that have new waivers approved to cover 300 percent 
of the Federal poverty level and above would only receive a lower FMAP 
payment for higher income individuals.
  Let me give one more fact, and then I will make some other points. 
The Children's Health Insurance Program Reauthorization Act is an 
effective children's health program and a small part of the overall 
cost of health. CHIP is not an entitlement program. That is something a 
lot of people don't understand. We drafted it that way because I didn't 
want it to be an entitlement program. Now some say we will never be 
able to stop it. That may be because it works. It has saved literally 
millions of children. It is a capped block grant program, where States 
are given flexibility to cover their low-income uninsured children.
  According to CMS, the agency that has a lot to do with health care, 
in 2005, we spent a total of $1.98 trillion on our Nation's health care 
system. Private expenditures were $1.08 trillion. The Federal 
Government's expenditures were $900 billion. Total Medicare spending 
was $342 billion in 2005, according to CMS, and Medicaid was $177 
billion in Federal dollars. Our bill today funds CHIP at $60 billion 
over 5 years. That is the $25 billion base figure and an additional $35 
billion to cover more children. This is a fraction of the total cost of 
health care in our country to provide care for low-income, uninsured 
children. Covering these children is worth every cent. We spend almost 
$2 trillion on health care, and the equivalent of $12 billion a year is 
what this program will cost, out of $2 trillion in health care, $900 
billion of which happens to be Federal dollars. Only $12 billion goes 
to these kids, mainly children of the working poor who earn enough that 
they don't qualify for Medicaid but don't have enough money to buy 
private health insurance.
  That is what a lot of people don't seem to understand. The CHIP bill, 
up to now, has worked quite well in spite of the waivers, which I 
believe should not have been granted in many respects by the last two 
Administrations. But I have to say this program has worked very well.
  I also wish to let everybody know that I support S. 1893, the 
Children's Health Insurance Program Reauthorization Act. Over the past 
few days, I have been listening to the floor debate on the bill being 
considered on the Senate floor this week. I have to admit, at some 
points during the debate, the descriptions I am hearing don't even 
sound like the bill I introduced with Senators Baucus, Grassley, and 
Rockefeller. Indeed, I believe there have been many allegations by 
opponents of S. 1893 that are not accurate. Therefore, I would like to 
take a few minutes to correct the record so my Senate colleagues hear 
from both sides before making a final decision on how to vote on this 
bill later this week.
  First, I take issue with the point that our legislation is full of 
budget gimmicks. I made that point before, but I will remake some of 
these points. The Senate Budget Committee has certified this 
legislation does comply with pay-go rules on both the 6-year and 11-
year bases under the pay-go rule. In addition, the Congressional Budget 
Office Director, Dr. Peter Orszag, told us in last week's Finance 
Committee markup that CBO reviewed the bill's 5-year and 10-year 
expenditures and revenue raisers, and CBO believes they are balanced on 
an onbudget basis. In addition, this bill is a 5-year authorization 
that is fully paid with offsets. This is how our rules operate. Those 
who talk about its 10-year impact fail to note this bill is not a 10-
year reauthorization. That is an important point to remember. They 
argue that it will be very expensive in 10 years. Who knows? I can't 
tell you what it is going to cost in the remaining 6, 7, 8, 9, 10 years 
not covered by this bill, but we should all be working to try and keep 
costs down. We have to look at the CHIP program again in 5 years and 
reauthorize it.
  I assure my colleagues that when writing this bill, we did everything 
possible to comply with the budget rules, and any assertion to the 
contrary is plain false. Further, I wish to remind my colleagues that 
when CHIP was established in 1997, we had a set amount of money and, as 
a result, the budget baseline did not assume any rate of growth for the 
CHIP program. Additionally, the budget rules did not consider the fact 
that health care costs are rising by 9 percent each year. That is not 
CHIP's fault. In many respects, that is our fault in the Congress due 
the way we run things around here.
  Some would say that is why we shouldn't have CHIP. I guess that is 
why we shouldn't have any Federal programs, if that is the argument. 
The fact is, CHIP has worked abundantly well to help the most 
vulnerable people in our society, our children. I want to see that 
continue.
  The budget rules also did not consider the increasing number of 
children enrolling in the CHIP program. Therefore, there is only $5 
billion per year for the CHIP program in the budget baseline. To me, 
this number is unrealistic, and I think anybody who looks at it would 
agree. It creates a situation which is extremely frustrating because 
health care costs continue to increase in the CHIP program just like 
every other health care program is going up 9 percent a year. That is 
somewhat of a victory because it used to go up 13 percent a year. As a 
result, we had to come up with the money to keep the current program 
functioning, not to mention additional sums for providing coverage to 
uninsured, low-income children without health care. There are many 
incidents of young children who don't have health care beyond the CHIP 
program or that haven't been covered by the CHIP program.
  To keep the program running as it currently exists, it will cost the 
Federal Government $14 billion. We fixed the problem by addressing the 
shortfall. Simply put, we had to comply with the budget rules in this 
bill, and we did. So in 5 years, the Congress will have to come up with 
money to keep

[[Page 22037]]

the program operating, similar to the challenge we are facing with our 
$14 billion deficit right now.
  We need to be realistic. Since CHIP is not a permanent program and 
not an entitlement program, we in Congress have an even bigger job to 
keep the program running efficiently in the next 5 years. The current 
budget rules do not include a realistic rate of growth after the 
program expires. I can only conclude, then, with this bill, we are 
doing the best we can under very difficult circumstances for some of 
the most vulnerable people in our society, our children, the ones left 
out of the Medicaid process and whose parents don't earn enough money 
to buy insurance.
  Another issue I have heard being raised is that our legislation will 
raise tobacco taxes on cigars to $10 a cigar. Let me make one thing 
perfectly clear. The Children's Health Insurance Program 
Reauthorization Act does not impose a $10 tax on each cigar. In fact, 
the tobacco tax included in our bill prorates tobacco taxes on cigars. 
The tax imposed on cigars is based on the price of the cigar. In very 
few instances will an individual cigar be taxed at $10, and those who 
can afford that kind of cigar can afford the taxes.
  I know Senators are concerned about what some term ``crowd-out.'' 
Crowd-out is having individuals who are currently covered by private 
health insurance drop their private health insurance to be covered by a 
government program.
  This was my concern, as it was for Senator Kennedy, when we enacted 
CHIP originally. It is a valid concern today as well. But allegations 
that this bill increases the crowd-out rate are untrue. According to 
CBO, the fact is, the crowd-out rate will not increase for the basic 
CHIP program. While crowd-out does remain a serious problem, the crowd-
out rate is not worsened by our bill. People will turn to whatever is 
better for them. If the CHIP bill is better for these kids, they are 
going to turn to it. I don't think we can blame them for that. Of 
course, the argument is that this is the camel's nose under the tent 
for one-size-fits-all socialized medicine. No, it isn't. But some want 
to make it that type of a program. I believe the House may be well on 
its way to trying to make it that, but we don't in this bill.
  In fact, during the Senate Finance Committee markup last week, CBO 
Director Peter Orszag told us the crowd-out rate for this bill is the 
same as the crowd-out rate for the original CHIP program. In addition, 
the CBO Director told us that in the absence of a mandate, this 
approach is as efficient as you can possibly get per dollars spent to 
get a reduction in the number of uninsured children, the goal of the 
CHIP program. This is because the incentive fund which was created in 
this bill to reward States for lowering the number of uninsured, low-
income kids is designed so it provides a payment per child only for new 
Medicaid children as opposed to new CHIP children. This is helpful with 
crowd-out, first, because Medicaid is for lower income kids who are 
less likely to have the option of private coverage, so tilting toward 
Medicaid is beneficial. Second, the payments for the incentive fund 
payments are graduated. In other words, they are not based on random 
noise. The combination of these two is an efficient outcome.
  According to CBO, the approach we take in our bill is probably the 
most efficient way to have new dollars spent to reduce the number of 
uninsured children.
  Another issue that continues to be raised is adult coverage under 
CHIP. Unfortunately, the opponents of the bill have not been very clear 
about how adults are treated under this legislation. If I were the only 
one drafting the bill, which obviously I am not, I would like to see 
all adults removed from the CHIP program today, or tomorrow, to be a 
little more precise. I don't think they have any business receiving 
health care through a program created for low-income, uninsured 
children. In fact, I am very disappointed with our administration for 
continuing to grant Federal waivers to States to cover adults through 
CHIP. This has been extremely frustrating to me. Of course, our 
original language allowed them to do it, but we never dreamed for a 
minute they would allow some States to have more adults on this program 
than children. Not only is that ridiculous, that was never 
contemplated. But that is what has happened.
  This legislation addresses this matter by phasing childless adults 
off the CHIP program and lowering the Federal matching rate for parents 
and States who currently are covered under the CHIP program. Recently, 
Senators Grassley, Roberts, and I wrote both the President and my good 
friend, Health and Human Services Secretary Mike Leavitt, urging the 
administration to stop granting States any new adult waivers. I was 
pleased to hear back from Secretary Leavitt regarding adult waivers. I 
truly believe the letter Senators Grassley, Roberts, and I sent to the 
President and Secretary Leavitt, along with the CHIP reauthorization 
bill we drafted, made some impact with the administration. I am 
encouraged that the administration says it does not intend to approve 
any new adult waivers or renew any waivers for adults. I am also 
encouraged to see the administration is making progress toward removing 
adults from the CHIP program. However, these decisions should have been 
made a long time ago. I take issue with the point that our legislation 
will actually reverse the progress the administration is making with 
the States. I truly believe that one of the reasons the administration 
is finally moving forward on this is due to the pressures it has 
received from Congress to remove adults from the program. I look 
forward to working with the administration to make this a reality.
  To be fair, most of these waivers were granted before Secretary 
Leavitt took over at that position. I don't want to particularly blame 
him, but some waivers have been approved afterwards as well. I think 
the same crowd down there has been doing it and, of course, Secretary 
Leavitt has been the one who some would blame, although I think 
unjustifiably.
  The Children's Health Insurance Program Reauthorization Act prohibits 
the Federal Government from granting future State waivers to cover 
nonpregnant adults through CHIP once and for all. Simply put, our bill 
puts an immediate stop to States being granted future waivers to cover 
nonpregnant adults. Our bill puts the emphasis back on low-income, 
uninsured children. As one of the original authors of the CHIP program, 
I am here to tell Senators we did not create CHIP for adults. I wish we 
could do more for the working poor adults, but we do not have the 
money, and this program was not created for adults. We created CHIP for 
low-income uninsured children.
  On a related matter, our legislation also eliminates enhanced Federal 
matching rates for adults, with the exception of pregnant women.
  Today, under CHIP, States receive an enhanced Federal matching rate 
for those covered under CHIP. The Medicaid Federal medical assistance 
percentage, known as FMAP, ranges between 50 percent and 76 percent in 
fiscal year 2006; the CHIP FMAP ranges from 65 percent to 83.2 percent.
  At the beginning of fiscal year 2009, States will receive lower 
Federal matching rates for childless adults, and in fiscal year 2010, 
childless adults will no longer be covered under CHIP. With regard to 
parents, at the beginning of fiscal year 2010, only States that have 
covered more low-income uninsured children or have undertaken 
significant outreach efforts for low-income uninsured children will 
receive enhanced match rates for parents; the others will receive the 
lower Medicaid match rate, or FMAP, for adults.
  Starting in fiscal year 2011, all States will receive a lower Federal 
matching rate for parents. Those States covering more lower income kids 
or with significant outreach efforts will receive REMAP. That is the 
midpoint between the CHIP matching rate and the lower Medicaid matching 
rate. The other States will receive FMAP for CHIP parents.
  Many have also raised concerns about the income eligibility level of 
those covered by CHIP.

[[Page 22038]]

  The Children's Health Insurance Program Reauthorization Act provides 
lower matching rates to States for those individuals with incomes at 
300 percent of the Federal poverty level and above who are covered 
under CHIP, thus penalizing States that want to cover higher income 
children.
  I might add, the original bill had us at 200 percent of the Federal 
poverty level, and approximately 90 percent of the children covered by 
CHIP were 200 percent of the federal poverty rate and below.
  Today, States receive an enhanced Federal matching rate for all 
income levels. Our bill discourages States from covering higher income 
individuals in the CHIP program. Once our bill is enacted, States that 
have new waivers approved to cover individuals 300 percent of the 
Federal poverty level and above would only receive the lower FMAP 
payment for these higher income individuals.
  To me, this is dramatic improvement over current law which allows 
higher income individuals to receive the same Federal matching rate 
provided to States for covering low-income children through the CHIP 
program.
  Finally, I emphasize that the CHIP program is an effective children's 
health program and a small part of overall health care costs. I make 
that point one more time. CHIP is not an entitlement program. It is a 
capped, block-granted program where the States are given flexibility 
and control, to cover their low-income uninsured children. It is 
totally voluntary on the part of a State to participate and offer CHIP 
program benefits to its residents.
  According to CMS, in 2005 we spent a total of $1.98 trillion on our 
Nation's health care system. Private expenditures were $1.08 trillion, 
and $900 billion in Federal dollars. Total Medicare spending was $342 
billion in 2005, and Medicaid was 177 billion in Federal dollars.
  Our bill today funds CHIP--for 5 years--at $60 billion over the 5-
year period. It is a fraction of the overall health care costs. If you 
want to divide it by 5, it is $12 billion a year out of a $2 trillion 
expenditure in this country for total health care, and out of a $900 
billion Federal expenditure for health care. This $12 billion per year 
is a fraction of the cost, or should I say, this $60 billion over 5 
years is a fraction of the cost to provide care for low-income 
uninsured children.
  Now, I think it is pathetic for people to argue that this is running 
out of control when we are trying to cover kids who have not been 
covered, as well as those who have--when it costs, like I say, $12 
billion a year out of $900 billion spent by the Federal Government. I 
wish we had a better system in the sense that the private sector could 
take care of everybody. I think part of our problem is we have too much 
Federal Government involvement. But the fact is, for the CHIP program 
to be reauthorized, it is a very minuscule amount of money compared to 
the $900 billion, every year, the Federal Government pays for health 
care coverage.
  Covering these children is worth every cent. If we do not take care 
of these children, these low-income uninsured children, these kids are 
going to have serious health care problems in the future, and it is 
going to cost the federal government a lot more than what reauthorizing 
the CHIP program is going to cost us. We have to look forward to the 
future and do everything in our power to help these children.
  It is my hope that I have cleared up some of the misconceptions that 
my colleagues may have regarding the bill the Senate is considering 
this week.
  Mr. President, I will yield the floor. I apologize that I have taken 
so long, but I wanted to clear up some of these misconceptions about 
the CHIP bill that have been stated on the floor by some of my 
colleagues. I know they are very sincere, and I know they want to be 
fiscally responsible. But to argue that $12 billion a year or $60 
billion over 5 years is too much money to pay for our children--when we 
are spending $2 trillion on health care--I think that makes our point, 
the distinguished Senator from Montana and I have been trying to make, 
even more resilient and effective.
  The PRESIDING OFFICER (Mr. Obama). The Senator from Montana.
  Mr. BAUCUS. Mr. President, first, I thank Senator Hatch. He has been 
very hardworking and dedicated to the goal of trying to find a 
balanced, bipartisan solution to help expand the Children's Health 
Insurance Program. I compliment him very deeply for all of his terrific 
work.
  Mr. HATCH. I thank my colleague.
  Mr. BAUCUS. He has just gone above and beyond. Senators and the 
people from the State of Utah, I think, should know that. He has done a 
super job.
  I know a number of Senators have been seeking to speak, and I want to 
protect them. So I ask unanimous consent that the following Senators be 
recognized in the following order: first, Senator Nelson of Florida, 
then Senator Thune of South Dakota, and then Senator Lautenberg of New 
Jersey.
  Mr. KERRY. Mr. President, reserving the right to object.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. I will not object. I would just like to ask if I might be 
recognized first to simply make a unanimous consent request on a 
modification and send it to the desk. I will not speak.
  The PRESIDING OFFICER. Are there any objections?
  Without objection, it is so ordered.


                    Amendment No. 2602, as Modified

  Mr. KERRY. Mr. President, I ask unanimous consent that my amendment 
No. 2602 be modified, as sent to the desk, and that be the pending 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment, as modified, is as follows:

       At the end, add the following:

TITLE IX--IMPROVED INCENTIVES TO ENROLL UNINSURED CHILDREN AND PROTECT 
                       EXISTING COVERAGE OPTIONS

     SEC. 901. IMPROVEMENTS TO THE INCENTIVE BONUSES FOR STATES.

       Paragraphs (2) and (3) of section 2104(j), as added by 
     section 105(a), are amended to read as follows:
       ``(2) Payments to states increasing enrollment.--
       ``(A) In general.--Subject to paragraph (3)(D), with 
     respect to each of fiscal years 2008 through 2012, the 
     Secretary shall make payments to States from the Incentive 
     Pool determined under subparagraph (B).
       ``(B) Amount.--The amount described in this subparagraph 
     for a State for a fiscal year is equal to the sum of the 
     following amounts:
       ``(i) First tier above baseline medicaid enrollees.--An 
     amount equal to the number of first tier above baseline child 
     enrollees (as determined under paragraph (3)(A)(i)) under 
     title XIX for the State and fiscal year multiplied by 6 
     percent of the projected per capita State Medicaid 
     expenditures (as determined under paragraph (3)(B)) for the 
     State and fiscal year under title XIX.
       ``(ii) Second tier above baseline medicaid enrollees.--An 
     amount equal to the number of second tier above baseline 
     child enrollees (as determined under paragraph (3)(A)(ii)) 
     under title XIX for the State and fiscal year multiplied by 
     35 percent of the projected per capita State Medicaid 
     expenditures (as determined under paragraph (3)(B)) for the 
     State and fiscal year under title XIX.
       ``(iii) Third tier above baseline medicaid enrollees.--An 
     amount equal to the number of third tier above baseline child 
     enrollees (as determined under paragraph (3)(A)(iii)) under 
     title XIX for the State and fiscal year multiplied by 90 
     percent of the projected per capita State Medicaid 
     expenditures (as determined under paragraph (3)(B)) for the 
     State and fiscal year under title XIX.
       ``(3) Definitions and rules.--For purposes of this 
     paragraph and paragraph (2):
       ``(A) Tiers above baseline.--
       ``(i) First tier above baseline child enrollees.--The 
     number of first tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in subparagraph (C)) enrolled during the 
     fiscal year under the State plan under title XIX; exceeds
       ``(II) the baseline number of enrollees described in clause 
     (iv) for the State and fiscal year under title XIX, 
     respectively;

     but not to exceed 2 percent of the baseline number of 
     enrollees described in subclause (II).
       ``(ii) Second tier above baseline child enrollees.--The 
     number of second tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in subparagraph (C)) enrolled during the 
     fiscal

[[Page 22039]]

     year under title XIX, as described in clause (i)(I); exceeds
       ``(II) the sum of the baseline number of child enrollees 
     described in clause (iv) for the State and fiscal year under 
     title XIX, as described in clause (i)(II), and the maximum 
     number of first tier above baseline child enrollees for the 
     State and fiscal year under title XIX, as determined under 
     clause (i),

     but not to exceed 7 percent of the baseline number of 
     enrollees described in clause (i)(II), reduced by the maximum 
     number of first tier above baseline child enrollees for the 
     State and fiscal year under title XIX, as determined under 
     clause (i).
       ``(iii) Third tier above baseline child enrollees.--The 
     number of second tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in subparagraph (C)) enrolled during the 
     fiscal year under title XIX, as described in clause (i)(I); 
     exceeds
       ``(II) the sum of the baseline number of child enrollees 
     described in clause (iv) for the State and fiscal year under 
     title XIX, as described in clause (i)(II), the maximum number 
     of first tier above baseline child enrollees for the State 
     and fiscal year under title XIX, as determined under clause 
     (i), and the maximum number of second tier above baseline 
     child enrollees for the State and fiscal year under title 
     XIX, as determined under clause (ii).

       ``(iv) Baseline number of child enrollees.--The baseline 
     number of child enrollees for a State under title XIX--

       ``(I) for fiscal year 2008 is equal to the monthly average 
     unduplicated number of qualifying children enrolled in the 
     State plan under title XIX, respectively, during fiscal year 
     2007 increased by the population growth for children in that 
     State for the year ending on June 30, 2006 (as estimated by 
     the Bureau of the Census) plus 1 percentage point; or
       ``(II) for a subsequent fiscal year is equal to the 
     baseline number of child enrollees for the State for the 
     previous fiscal year under this title or title XIX, 
     respectively, increased by the population growth for children 
     in that State for the year ending on June 30 before the 
     beginning of the fiscal year (as estimated by the Bureau of 
     the Census) plus 1 percentage point.

       ``(B) Projected per capita state medicaid expenditures.--
     For purposes of subparagraph (A), the projected per capita 
     State Medicaid expenditures for a State and fiscal year under 
     title XIX is equal to the average per capita expenditures 
     (including both State and Federal financial participation) 
     for children under the State plan under such title, including 
     under waivers but not including such children eligible for 
     assistance by virtue of the receipt of benefits under title 
     XVI, for the most recent fiscal year for which actual data 
     are available (as determined by the Secretary), increased 
     (for each subsequent fiscal year up to and including the 
     fiscal year involved) by the annual percentage increase in 
     per capita amount of National Health Expenditures (as 
     estimated by the Secretary) for the calendar year in which 
     the respective subsequent fiscal year ends and multiplied by 
     a State matching percentage equal to 100 percent minus the 
     Federal medical assistance percentage (as defined in section 
     1905(b)) for the fiscal year involved.
       ``(C) Qualifying children defined.--For purposes of this 
     subsection, the term `qualifying children' means, with 
     respect to this title or title XIX, children who meet the 
     eligibility criteria (including income, categorical 
     eligibility, age, and immigration status criteria) in effect 
     as of July 1, 2007, for enrollment under this title or title 
     XIX, respectively, taking into account criteria applied as of 
     such date under this title or title XIX, respectively, 
     pursuant to a waiver under section 1115.''.

     SEC. 902. OPTIONAL COVERAGE OF OLDER CHILDREN UNDER MEDICAID 
                   AND CHIP.

       (a) Medicaid.--
       (1) In general.--Section 1902(l)(1)(D) (42 U.S.C. 
     1396a(l)(1)(D)) is amended by striking ``but have not 
     attained 19 years of age'' and inserting ``but is under 19 
     years of age (or, at the option of a State, under such higher 
     age, not to exceed 21 years of age, as the State may 
     elect)''.
       (2) Conforming amendments.--
       (A) Section 1902(e)(3)(A) (42 U.S.C. 1396a(e)(3)(A)) is 
     amended by striking ``18 years of age or younger'' and 
     inserting ``under 19 years of age (or under such higher age 
     as the State has elected under subsection (l)(1)(D))'' after 
     ``18 years of age''.
       (B) Section 1902(e)(12) (42 U.S.C. 1396a(e)(12)) is amended 
     by inserting ``or such higher age as the State has elected 
     under subsection (l)(1)(D)'' after ``19 years of age''.
       (C) Section 1905(a) (42 U.S.C. 1396d(a)) is amended, in 
     clause (i), by inserting ``or under such higher age as the 
     State has elected under subsection (l)(1)(D)'' after ``as the 
     State may choose''.
       (D) Section 1920A(b)(1) (42 U.S.C. 1396r-1a(b)(1)) is 
     amended by inserting ``or under such higher age as the State 
     has elected under section 1902(l)(1)(D)'' after ``19 years of 
     age''.
       (E) Section 1928(h)(1) (42 U.S.C. 1396s(h)(1)) is amended 
     by striking ``18 years of age or younger'' and inserting 
     ``under 19 years of age or under such higher age as the State 
     has elected under section 1902(l)(1)(D)''.
       (F) Section 1932(a)(2)(A) (42 U.S.C. 1396u-2(a)(2)(A)) is 
     amended by inserting ``(or under such higher age as the State 
     has elected under section 1902(l)(1)(D))'' after ``19 years 
     of age''.
       (b) Title XXI.--Section 2110(c)(1) (42 U.S.C. 1397jj(c)(1)) 
     is amended by inserting ``(or, at the option of the State, 
     under such higher age as the State has elected under section 
     1902(l)(1)(D))''.

     SEC. 903. MODERNIZING TRANSITIONAL MEDICAID.

       (a) Four-Year Extension.--
       (1) In general.--Sections 1902(e)(1)(B) and 1925(f) (42 
     U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended by 
     striking ``September 30, 2003'' and inserting ``September 30, 
     2010''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect on October 1, 2007.
       (b) State Option of Initial 12-Month Eligibility.--Section 
     1925 (42 U.S.C. 1396r-6) is amended--
       (1) in subsection (a)(1), by inserting ``but subject to 
     paragraph (5)'' after ``Notwithstanding any other provision 
     of this title'';
       (2) by adding at the end of subsection (a) the following:
       ``(5) Option of 12-month initial eligibility period.--A 
     State may elect to treat any reference in this subsection to 
     a 6-month period (or 6 months) as a reference to a 12-month 
     period (or 12 months). In the case of such an election, 
     subsection (b) shall not apply.''; and
       (3) in subsection (b)(1), by inserting ``but subject to 
     subsection (a)(5)'' after ``Notwithstanding any other 
     provision of this title''.
       (c) Removal of Requirement for Previous Receipt of Medical 
     Assistance.--Section 1925(a)(1) (42 U.S.C. 1396r-6(a)(1)), as 
     amended by subsection (b)(1), is further amended--
       (1) by inserting ``subparagraph (B) and'' before 
     ``paragraph (5)'';
       (2) by redesignating the matter after ``Requirement.--'' as 
     a subparagraph (A) with the heading ``In general.--'' and 
     with the same indentation as subparagraph (B) (as added by 
     paragraph (3)); and
       (3) by adding at the end the following:
       ``(B) State option to waive requirement for 3 months before 
     receipt of medical assistance.--A State may, at its option, 
     elect also to apply subparagraph (A) in the case of a family 
     that was receiving such aid for fewer than three months or 
     that had applied for and was eligible for such aid for fewer 
     than 3 months during the 6 immediately preceding months 
     described in such subparagraph.''.
       (d) CMS Report on Enrollment and Participation Rates Under 
     TMA.--Section 1925 (42 U.S.C. 1396r-6), as amended by this 
     section, is further amended by adding at the end the 
     following new subsection:
       ``(g) Collection and Reporting of Participation 
     Information.--
       ``(1) Collection of information from states.--Each State 
     shall collect and submit to the Secretary (and make publicly 
     available), in a format specified by the Secretary, 
     information on average monthly enrollment and average monthly 
     participation rates for adults and children under this 
     section and of the number and percentage of children who 
     become ineligible for medical assistance under this section 
     whose medical assistance is continued under another 
     eligibility category or who are enrolled under the State's 
     child health plan under title XXI. Such information shall be 
     submitted at the same time and frequency in which other 
     enrollment information under this title is submitted to the 
     Secretary.
       ``(2) Annual reports to congress.--Using the information 
     submitted under paragraph (1), the Secretary shall submit to 
     Congress annual reports concerning enrollment and 
     participation rates described in such paragraph.''.
       (e) Effective Date.--The amendments made by subsections (b) 
     through (d) shall take effect on the date of the enactment of 
     this Act.

     SEC. 904. REPEAL OF TOP INCOME TAX RATE REDUCTION FOR 
                   TAXPAYERS WITH $1,000,000 OR MORE OF TAXABLE 
                   INCOME.

       (a) In General.--Section 1(i) of the Internal Revenue Code 
     of 1986 (relating to rate reductions) is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:
       ``(3) Exception for taxpayers with taxable income of 
     $1,000,000, or more.--
       ``(A) In general.--Notwithstanding paragraph (2), in the 
     case of taxable years beginning in a calender year after 
     2007, the last item in the fourth column of the table under 
     paragraph (2) shall be applied by substituting `39.6%' for 
     `35.0%' with respect to taxable income in excess of 
     $1,000,000 (one-half of such amount in the case of taxpayers 
     to whom subsection (d) applies).
       ``(B) Inflation adjustment.--In the case of the dollar 
     amount under subparagraph (A), paragraph (1)(C) shall be 
     applied by substituting `2008' for `2003' and `2007' for 
     `2002'.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

[[Page 22040]]

       (c) Application of Egtrra Sunset.--The amendment made by 
     this section shall be subject to title IX of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 to the same 
     extent and in the same manner as the provision of such Act to 
     which such amendment relates.

  Mr. KERRY. I thank the Chair and thank my friend.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, first of all, before the 
Senator from Utah leaves the Chamber, I want to say that I listened to 
him, and I appreciate his leadership. This is one of the most important 
programs. It was created back in 1997, when the Senator from Utah took 
a leading role, along with the Senator from Montana. It is truly a 
bipartisan program, and it is one that has met with great success.
  As it was created in 1997, this Senator happened to be the elected 
State treasurer and insurance commissioner of Florida, of which in that 
position I chaired the health insurance program for children that had 
been set up separate from this program. This program just all the more 
enabled us in Florida to add that many more children to receive health 
care, particularly health care at a time that is so important in their 
lives, when those little minds are beginning to learn and those little 
bodies are beginning to build.
  So I just want the two Senators on the floor to know how much I 
appreciate it.
  Since 1997, even as the percentage of uninsured adults has increased, 
the rate of low-income uninsured children has decreased by over a 
third. As a result, these insured children, in large part because of 
this program, have been afforded better access to primary and 
preventive care, better quality of care, improved health, and even 
improved school performance.
  In our State, over 300,000 children received health insurance through 
Medicaid or CHIP last year, and those children were able to enjoy these 
benefits. But over 700,000 children in Florida remain uninsured. This 
legislation before us is the best opportunity to expand coverage to a 
significant portion of those 700,000 children in Florida and millions 
of low-income uninsured children throughout the country.
  We have seen how successful this program can be, and we are aware of 
how many more children should be allowed to participate. So 10 years 
after the creation of the program, now we have the opportunity to pass 
this bipartisan bill that reauthorizes and further strengthens this 
very popular program.
  This legislation is bipartisan. It is going to bring health care to 
millions of children. While many of us in this Chamber have supported 
an additional $50 billion for this program, I believe the $35 billion 
allocated in this legislation is a fair compromise. With that money, we 
can still accomplish an increase of more than 3 million children newly 
insured under the program.
  I also support the inclusion of legal immigrant children and pregnant 
women in the program, and I was disappointed to see it was not included 
in this legislation. Under current law, legal immigrants who have been 
in this country for less than 5 years are not eligible to participate 
in Medicaid or CHIP, despite the fact they pay taxes to support those 
programs. As a result, the preventive effects of health insurance are 
not being realized for them. I am concerned, as so many of us are, that 
we are going to end up paying much more in the future for health 
problems that could have been treated early on. I understand there will 
be an amendment that will be offered to include legal--legal--
immigrants in this reauthorization, and I am going to support that 
amendment.
  Now, another concern I have is a portion of the tobacco tax. It is 
not the tobacco tax. If you have to find a source of revenue, then this 
is the place to do it. But I want to emphasize the increase in the 
tobacco tax, as a whole, is quite appropriate as a funding mechanism 
for this legislation. It is going to have significant, positive impacts 
on health. It is going to save billions of dollars in health care 
costs, and it is going to reduce the prevalence of smoking among kids, 
whom this bill is designed to protect. But there is a portion that is 
not fair, and that is the tax that is applied with some inequity across 
product lines. Unbeknownst to most people, Florida is the largest cigar 
manufacturing State in the country and serves also as the main port of 
entry for premium handmade cigars into the United States. There are 
approximately 30 cigar manufacturers and importers based in Florida 
which employ 4,000 workers and thousands more in support industries. I 
hope some of these problems with the tax which cause many multiple 
thousands of a percentage increase in the tax on those cigars is going 
to be addressed in this bill, and what is not addressed in this bill 
can be addressed in conference.
  Despite some concerns, this bipartisan legislation is a strong bill 
with much to its credit. It will institute a more streamlined funding 
process and it will provide for improved child health quality measures, 
and will give States such as ours important opportunities for 
expansion.
  We have the opportunity to do something that is morally unassailable, 
and that is to expand access to health care to a significant number of 
low-income children. I believe this bipartisan legislation is the best 
way forward, and I look forward to casting my vote in favor.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from South Dakota.


                   Modification to Amendment No. 2593

  Mr. THUNE. Mr. President, I ask unanimous consent that the Lott 
amendment be modified with the changes at the desk.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The modification is as follows:


                  modification to lott amdt. no. 2593

       Strike TITLE III.


                Amendment No. 2579 to Amendment No. 2530

  Mr. THUNE. Mr. President, I ask unanimous consent to call up 
amendment No. 2579.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Dakota [Mr. Thune], for himself, Mr. 
     Lott, Mr. Cornyn, and Mr. DeMint, proposes an amendment 
     numbered 2579 to amendment No. 2530.

  Mr. THUNE. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To exclude individuals with alternative minimum tax liability 
                  from eligibility for SCHIP coverage)

       At the end of title VI, add the following:

     SEC. ___. EXCLUSION OF INDIVIDUALS WITH ALTERNATIVE MINIMUM 
                   TAX LIABILITY FROM ELIGIBILITY FOR SCHIP 
                   COVERAGE.

       (a) In General.--Section 2102(b), as amended by this Act, 
     is amended by adding at the end the following new paragraph:
       ``(6) Exclusion of individuals with alternative minimum tax 
     liability.--Notwithstanding any other provision of this 
     title, no individual whose income is subject to tax liability 
     imposed under section 55 of the Internal Revenue Code of 1986 
     for the taxable year shall be eligible for assistance under a 
     State plan under this title for the fiscal year following 
     such taxable year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

  Mr. THUNE. Mr. President, I am pleased to be here today in support of 
the Kids First Act, which is being referred to as the McConnell-Lott or 
Lott-McConnell alternative, which will in the long run, in my view, do 
more to lower health care costs and help the underlying expansion bill 
we are debating here today. Let me say also it is frustrating that 
instead of debating a reauthorization of a very popular program--the 
SCHIP program--Members on both sides of the aisle are being asked to 
support a new program, a brandnew program, that will cover children and 
adults at 300 percent of the poverty level--and some at even higher 
levels.
  Let me tell my colleagues a little bit about the makeup of the 
uninsured population in my State of South Dakota. Right now, 
approximately 2.6 percent of the children in my State are uninsured, or 
approximately 5,000 children. This percentage does not include

[[Page 22041]]

the approximately 5,000 Native American children who receive their 
health care from the Indian Health Service. It is very important to 
break down these statistics in each State since the needs vary greatly 
in each State and from region to region.
  For example, of the approximately 5,000 uninsured children in South 
Dakota, a number of these children are currently eligible but not 
enrolled in Medicaid or SCHIP. In other words, in my State, a number of 
our uninsured children are actually at or below 200 percent of the 
Federal poverty level. This SCHIP expansion bill under consideration 
doesn't focus on these children. Instead, it channels more money to 
cover children from families at higher incomes.
  I mention these facts because I am concerned that the underlying bill 
misses the most key problems in my State for the uninsured, and it 
misses the basic goal to make sure that eligible low-income children 
are able to take full advantage of our safety net health care programs. 
If our goal is to simply put all children--or even all families, for 
that matter--in South Dakota, insured or uninsured, into Government 
health insurance, and make thousands more families in my State 
dependent on the Government for their health care, and limiting more 
choices for families and parents in my State, then that is an entirely 
different goal, and it is a goal I don't share.
  Let me expand on that a little bit, if I might, to give an idea of 
what the uninsured problem is in its totality in South Dakota. 
Currently, according to our State, there are approximately 61,000 
uninsured individuals--an uninsured rate of the adult population of 
about 9 percent. I have already discussed the statistics for children, 
so let me do so for adults. In a recent survey done by the State of 
South Dakota, the adult uninsured population breaks down in the 
following way: Of the total number of uninsured adults--approximately 
53,390--13,401 are not employed. That amounts to about 25 percent. This 
means that approximately 70 percent of the uninsured adults in my State 
are actually working. If you break down that number even further, most 
of that number--31,000 out of 37,000--are employed, working 30 or more 
hours a week. They are not part-time workers.
  About 10,500 of these employed and uninsured individuals are self-
employed. We happen to have a large number of self-employed farmers and 
ranchers and business owners in my State who simply cannot afford 
health insurance.
  But the uninsured population in my State could purchase insurance if 
it were more affordable. There are huge steps we could take to bring 
down the cost of insurance in my State for all of those small business 
employees and self-employed and cover even more uninsured, and without 
expanding a government program with tax increases.
  Also, the cost to insure a child or adult under the SCHIP program is 
three to four times the cost of insuring a child with private 
insurance. That is an inefficient way of covering people who are 
uninsured. Already today, about half of our country's children are on 
public insurance. That is not sustainable, and it makes it nearly 
impossible in the State of South Dakota--a very rural State--already 
with more limited options than others when it comes to health care 
access to have a vibrant health care insurance market.
  I was in the House of Representatives when the current SCHIP bill 
passed in the Balanced Budget Act of 1997. I voted for that. I voted 
for other reforms as a Member of the House of Representatives and since 
coming to the Senate. Frankly, I think the debate over health care 
needs to be engaged in this country, because we have way too many 
people who are uninsured. Our health care costs in this country now are 
a couple billion dollars--we have heard that repeated throughout the 
debate on the floor today--or about 16 to 17 percent of our gross 
domestic product. That is an enormous amount of money that is spent on 
health care in this country.
  I think we have to ask ourselves: What can we do to make reforms in 
the health care system that will lower costs, make health care more 
accessible to more people in this country, and make sure that the ranks 
of the uninsured decrease rather than increase?
  One of the things I supported as a Member of the House of 
Representatives is small business health plans--expanding access to 
tax-advantaged accounts that allow people to own and take control of 
their own health care, such as health savings accounts. In fact, small 
businesses make up most of the employers in my State. In 2003, 
according to the Small Business Administration, there were 20,400 
employer firms with fewer than 500 employees, which represented 96.9 
percent of employer businesses in my State and employed approximately 
63 percent of the nonfarm private workforce. The alternative I referred 
to--the McConnell-Lott alternative that will be offered--will allow for 
small business health plans, a proposal that will do much more for my 
State in the long run and strengthen our private health insurance 
market in the future. Small business health plans would allow small 
business associations to band their members together to purchase more 
affordable insurance, which increases their bargaining power to get 
better benefits at better prices such as big businesses currently get.
  This proposal also gives small business health plans the flexibility 
to provide a variety of uniform benefit packages across State lines, 
which is the only way small business associations could provide new 
options affordably. As a result, this proposal would reduce the cost of 
health insurance for small employers by about 12 percent, or $1,000 per 
employee, according to a respected actuarial firm. The bill would also 
cover more than 1 million uninsured Americans and working families or 1 
out of every 12 people who live in a family headed by someone who works 
for a small company. The Congressional Budget Office states that three 
out of every four small business employees would pay lower premiums 
under the McConnell-Lott alternative than under current law.
  What I want for South Dakota is for more people to have control over 
their health care, more options for their care, and more competition in 
the insurance market to help bring prices down. In fact, last week I 
introduced a bill to expand access to private long-term care insurance 
by allowing individuals with IRAs or 401(k)s to withdraw funds penalty 
free to pay for long-term care premiums. This is extremely important in 
South Dakota and across the country where many seniors have to spend 
down their life savings to pay for long-term care or to qualify for 
Medicaid.
  Mr. REID. Mr. President, could I ask the distinguished Senator from 
South Dakota if I could interrupt for a unanimous consent request?
  Mr. THUNE. I yield to the majority leader.
  Mr. REID. I yield a couple of minutes to Senator Baucus for the 
unanimous consent request.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I ask unanimous consent that at 6 p.m. the 
Senate vote in relation to Senator Dole's amendment No. 2554; that 
following that vote the Senate vote in relation to Senator Bunning's 
amendment No. 2547; that following that vote the Senate vote in 
relation to Senator Lott's amendment, as modified, No. 2593; and 
following that vote the Senate vote in relation to Senator Kerry's 
amendment No. 2602, as modified; that there be 2 minutes for debate, 
equally divided, prior to each vote; that no other amendments be in 
order prior to these votes; that any amendment not disposed of remain 
debatable and amendable, and that the time between now and 6 p.m. be 
equally divided between the two leaders or their designees.
  The PRESIDING OFFICER. Is there objection?
  The Senator from Idaho is recognized.
  Mr. CRAIG. Reserving the right to object, I only want to speak to the 
division of the time between now and the proposed schedule of votes. I 
had come to the floor hoping to gain 10 minutes,

[[Page 22042]]

and I wonder--the Senator obviously who is speaking now and the other 
Senator who has time reserved, if we could have some understanding in 
the allocation if it is possible for me to be able to speak for up to 
10 minutes?
  Mr. BAUCUS. First, Mr. President, I modify the unanimous consent 
request to say that after the first vote, there be 10 minutes between 
votes--that they be 10-minute votes.
  The PRESIDING OFFICER. Is there objection?
  Mr. BAUCUS. Mr. President, I will do my best to allocate time from 
one of the remaining speakers so that the Senator from Idaho could 
speak as much as he can. We are trying to use the time as best we can 
between now and 6 o'clock.
  Mr. REID. Mr. President, if I could interrupt, Senator Thune was 
speaking and I would ask, how much more time does the Senator need?
  Mr. THUNE. I say to the majority leader that I can wrap up my remarks 
speaking to the amendment specifically, but I am sure within the next 
10 minutes.
  Mr. REID. How much time does Senator Craig need?
  Mr. CRAIG. I would hope to have somewhere near 10 minutes, if 
possible.
  Mr. LAUTENBERG. Mr. President, I would ask whether it is understood 
that I would have up to 15 minutes, and I don't think I will need that 
long, but I do make that request.
  Mr. BAUCUS. Mr. President, the order has been Senator Nelson and 
Senator Thune--excuse me, the Senator from Florida, Senator Thune, and 
Senator Lautenberg. I think given the time, if the Senators understand 
the three remaining speakers have a total of a half hour, we can work 
that out. The Senator would get at least 10 minutes, and depending upon 
the length of time other Senators speak, he may get more. Senator Thune 
still has the floor.
  The PRESIDING OFFICER. Is there objection?
  Mr. LAUTENBERG. Reserving the right to object, Mr. President, I 
thought we had carved out an understanding.
  The PRESIDING OFFICER. Under the current agreement, Senator Thune has 
the floor, and the Senator from New Jersey, Senator Lautenberg, will 
follow. We are free to modify that agreement if there is no objection 
to add the Senator from Idaho for additional time.
  Mr. CRAIG. Mr. President, I will not object. Let's get these Senators 
talking so we don't burn up any more slack time.
  The PRESIDING OFFICER. Is there objection to the request, as 
modified?
  Without objection, it is so ordered.
  The Senator from South Dakota may proceed.
  Mr. THUNE. Mr. President, let me again pick up where I left off in 
regard to the cost of health care, both health care in the sense that 
we all need it, and as we get into retirement age, Medicare, but I was 
also making reference to long-term care in some legislation I 
introduced recently with regard to that.
  It is important that affordable, long-term care insurance allow 
individuals to plan for their later years as well. More competition in 
the long-term care insurance market would mean more options for South 
Dakota's families and seniors, not to mention reductions in Federal 
spending. So putting the politics of Government on health care versus 
private insurance aside--and again, I believe that is a debate this 
Senate is going to have to join in the not too distant future, because 
I believe this is where the debate actually today is taking us. We are 
growing the amount of Government health care out there, pushing aside 
the options for private health care insurance. Frankly, I believe the 
thing that differentiates our country from those around the world and 
why people come here for health care rather than going to other 
countries is because we have the best health care in the world.
  We have a robust free market-based system that allows for innovation 
and for research and comes up with literally the best therapies in the 
world. I want to continue to make that market work. I don't want to 
make it harder for citizens in my State to get health insurance in the 
private marketplace. I fear that as we go down this road, we are 
starting to look at what, in effect, will be a major debate raging; it 
is raging across the country, but it will ultimately be dealt with 
here, and we will decide whether we want to have a government-run, 
bureaucratic health care system or whether we want to preserve the 
market-based system that has worked so well for us in the past. I don't 
want to make it harder for citizens in my State to choose and afford 
the insurance plan that is best for them.
  Finally, I don't want to support doubling the size of this particular 
program, which, after 5 years, is going to have to be paid for with 
substantial tax increases on all Americans, because I think as we all 
know when you reach 2013, there is a cliff there, and at some point 
that issue is going to have to be dealt with because there is a huge 
funding shortfall under the proposal that is on the floor before us 
today.
  I support the McConnell-Lott alternative, which reauthorizes the 
current SCHIP program and also helps lower health care costs for all 
Americans and because it allows for small business health plans and 
other types of alternatives that can be used by allowing South Dakotan 
small businesses to pool together to purchase more affordable health 
insurance and make further needed improvements to the underlying SCHIP 
program for children, as well as providing long-term solutions for 
lowering the cost of health care for all Americans.
  I also wish to speak on amendment No. 2579, which I offered. Under 
this bill, the Congress will be making it possible, as my colleague 
from Montana pointed out earlier--it is not the case today, but there 
are some States around the country where this bill expands the 
underlying amount, or income eligibility, up to 300 percent of the 
Federal poverty level. But there are States which have waiver requests 
that would allow them to go to 400 percent of the poverty level. There 
is not anything in the underlying bill that prevents that from 
happening. That would make it possible for people to be put on the 
rolls of the SCHIP program for health care who are not only low income 
but who at the same time are subject to the alternative minimum tax, or 
the AMT, which is a tax intended for individuals and families who are 
wealthy.
  Let me repeat that. Under the bill, individuals eligible for SCHIP--
one of our Nation's safety net health insurance programs--may also be 
hit with the alternative minimum tax, which is meant to ensure that the 
wealthy in our society are paying their fair share of taxes. 
Effectively, the Federal Government could consider you poor under the 
SCHIP program for the purpose of providing you free health insurance, 
while at the same time the Internal Revenue Service considers you 
wealthy because of the level of income you make, so that you would have 
to pay higher taxes.
  My amendment is pretty straightforward. It simply says that if a 
family finds out when they file their taxes that they are subject to 
the AMT, then the State in which they reside has to remove them from 
its SCHIP program by the following fiscal year. In other words, you 
cannot be eligible for both. You cannot be both rich and poor at the 
same time.
  The SCHIP program should be preserved as a program for low-income 
children, for those who need it. This amendment is simply intended to 
ensure we continue focusing on that fact.
  I remember, as I said, this debate from 1997, when we decided to 
create the SCHIP program. I was in the House at that time, and I 
supported the creation of this program to help the uninsured who have 
incomes too high to qualify for Medicaid. But I also remember the 
concerns of my colleagues that down the road we would be faced with 
pressure to expand the program. That is what has happened for decades 
with entitlement spending in this country. We know we are facing a 
fiscal crisis already in Medicare and Medicaid that cannot be solved 
with more Government expansion. Yet here we are today

[[Page 22043]]

debating how much to expand a government safety net program for the 
uninsured, which originally was supposed to serve only low-income 
children.
  Of course, my amendment today also points out the fallacy of the 
alternative minimum tax. Under current law, if we don't enact another 
``patch'' or comprehensive AMT reform, middle-income families 
everywhere will be hit with this tax, and some people on SCHIP might 
even hit both. This amendment is not simply to point out we have a 
looming AMT problem, which we all know must be paid for, my amendment 
points out the mixed intentions of the underlying bill. If you want to 
make this debate about low-income children, let's do that, but if we 
want to expand eligibility for SCHIP for families making up to $62,000 
or $82,000 for a family of four, if waivers are granted, then let's 
have a debate on the uninsured. Let's not kid ourselves that this bill 
doesn't take us closer to government-run, government-dominated 
universal health care for lower, middle, and upper income families.
  I welcome the debate on the uninsured. There are so many things we 
can do to help lower the cost of prescription drugs and increase 
competition and portability in the health insurance market and help our 
small businesses and the self-employed in our States afford their 
health insurance. It is these ideas we need to discuss in a debate in 
this Chamber--an open and honest debate on the merits of a government-
run system or one with competition, choice, and affordability. The 
estimated 61,000 uninsured adults and children in my State and the over 
40 million uninsured around the country makes it imperative to this 
Congress to have that debate.
  The amendment I offered, amendment No. 2579, would make it very clear 
under this bill that if somehow someone gets to an income level where 
they are running afoul of the alternative minimum tax or are considered 
wealthy or rich in this country, they are not also then considered poor 
in a sense that they qualify for the SCHIP program. That seems to be an 
inherent contradiction in this particular legislation.
  I hope the Members of the Senate will support my amendment. It will 
improve the underlying bill.
  I yield back the remainder of my time.
  Mr. BAUCUS. Mr. President, I know the Senator from New Jersey wishes 
to speak. He has a very deep interest in one of the amendments. He 
wants to speak for 15 minutes. Maybe he can speak a little less than 
that. I would appreciate it.
  Mr. LAUTENBERG. I will try to do that.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.


                           Amendment No. 2547

  Mr. LAUTENBERG. Mr. President, we are going to soon be voting on an 
amendment proposed by Senator Bunning. I rise to register my opposition 
to that amendment, and I hope my colleagues will follow me.
  I come to the floor to defend the health and well-being of 3,000 
children in the State of New Jersey who would have their children's 
health insurance stripped away from them by the Bunning amendment.
  Our mission this week is to pass a bill to expand health coverage for 
our Nation's children. But instead of focusing on providing more 
coverage for children, the Senator from Kentucky has targeted 3,000 
children in my State to take their coverage away.
  None of us has any asset we treasure more than our children. None of 
us enjoys anything more than the smiles of our kids when they are 
feeling good and are in good health. That is why, when we see an 
attempt to remove health care from a modest-income family's children, 
who care so deeply about them, I wonder what it is that we are truly 
about.
  This amendment is an assault on children from working families who 
require health care coverage. To think that while we spend $3 billion 
each and every week on the Iraq war, there is an unwillingness to 
provide the necessary funding to keep all our kids healthy regardless 
of their income situation. This one focuses on modest-income people. It 
is amazing that while we pledge to protect our people from harm, we 
shun the opportunity to shelter our children.
  I wish to make our request clear to my colleagues, and I want them to 
recognize that we in New Jersey always pay our way fully; we more than 
pay for the incredibly high cost of living in New Jersey. Our health 
care costs are among the highest in the Nation. Keeping our people 
healthy is a primary mission in our State. We have had stem cell 
research going back decades. Our pharmaceutical companies constantly 
research for new medicines to benefit the well-being of people across 
this country and the world.
  The Bush administration has recognized the higher costs in New Jersey 
and explicitly granted our State the right to provide health care to 
children at the level it currently does. New Jersey is not trying to 
beat the system or get health coverage for its children in a way that 
is unfair to other States--not at all. The State of New Jersey is 
legitimately trying to provide health insurance to children, 
recognizing the distinct economic characteristics of our State.
  The Bunning amendment is particularly discouraging, given New 
Jersey's support when it comes to helping other States in need. We know 
that other States have different needs than we do, and we have unique 
challenges we face as well. Time and again, New Jersey taxpayers are 
asked to shoulder the burden and help other areas of the country that 
are in need. In fact, for every dollar New Jersey gives to the Federal 
Government, we only get back 55 cents in Federal spending programs. 
Compare that with States such as Kentucky, for example, which for every 
dollar paid gets $1.45 back. Some States get up to $2 back for each 
dollar they pay.
  Whether it is the universal service fund for telephones, essential 
air service in aviation or other programs, New Jersey gives far more 
than it gets back.
  I want to be clear. I support many of these programs for other 
States. I recognize this occurs because New Jersey is a State with a 
higher-than-average income and higher-than-average costs compared to 
other States.
  But we care as much about our children as other people do across the 
country. More than anything, we want our kids to be healthy.
  There are 3,000 children in New Jersey who are depending on Senators 
to oppose the Bunning amendment--3,000 children who are looking to all 
of us to let them continue to have health care.
  The Bunning amendment is contrary to everything we are trying to 
accomplish on the floor this week. If that amendment is adopted, this 
bill will be tainted with the legacy of taking health insurance away 
from children who need it but whose families cannot afford to supply it 
on their own.
  I have many families who come in to see me and bring their children 
with them. I welcome them with open arms. There is nothing I find more 
satisfying than to see parents and their children together. They come 
in often with diseases that are difficult, such as autism, diabetes, 
and asthma. Not only do these children require a lot of love, 
affection, and attention but, unfortunately, very often it is at a cost 
that few families can bear. I want to help those kids, those families, 
and I reach out to them in any way I can. I want stem cell research to 
be available. I want more money spent on general health research.
  I hope my colleagues will reject this amendment on a bipartisan 
basis. I commend the chairman of the Finance Committee and the ranking 
member for the work they did. They overwhelmingly rejected the 
amendment of the Senator from Kentucky on a bipartisan vote. This 
amendment that has been authored by the Senator from Kentucky flies in 
the face of the good judgment of the Finance Committee. I hope my 
colleagues will reject this amendment, the Bunning amendment, once 
again when it gets to the Senate floor.
  I am pleased to yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.

[[Page 22044]]




                           Amendment No. 2593

  Mr. KYL. Mr. President, I will speak briefly to the Republican 
alternative--the amendment that will be voted on later as a 
comprehensive alternative to the bill. Unlike the Finance Committee 
bill, the Republican alternative achieves the following goals:
  First, it reauthorizes SCHIP and preserves health care coverage for 
millions of low-income children.
  Secondly, it adds 1.3 million new children to SCHIP coverage.
  Third, it provides $14 billion in new SCHIP allotments over the $25 
billion baseline over the next 5 years.
  Fourth, the offset is with no new tax increases and, importantly, in 
contrast in the committee bill, no gimmicks to meet the budget 
considerations.
  Next, it includes funds for SCHIP coverage from fiscal year 2013 to 
2017. This is important because the Finance Committee bill, in 
comparison, uses a budget gimmick to reduce the SCHIP funding spending 
over that critical period of time. As a result, the Republican 
alternative includes more money for SCHIP over 10 years--$85.1 billion 
as compared to the Finance Committee bill of $81.7 billion.
  Next, it minimizes the reduction in private coverage by targeting 
SCHIP funds to low-income children. It doesn't provide the coverage for 
the adults or children for higher income families who may have access 
to private health care insurance, as does the committee bill. In fact, 
I note that according to CBO, for the newly eligible people to be 
covered, there is a one-for-one crowd-out effect by the committee 
product. That is to say, for every new family brought on for SCHIP 
coverage, there is one that goes off private health insurance coverage. 
That is not a goal to which we should be aspiring.
  Next, the Republican alternative promotes market-based health 
reforms, such as small business health plans and health savings 
accounts.
  Finally, it requires a Treasury Department study on ways to make the 
tax treatment of health care more equitable, something the President 
raised in his State of the Union speech earlier this year and which we 
do need to study to come up with a more equitable tax system.
  For all these reasons, I urge my colleagues to support the Republican 
alternative. I note that it is very simple in terms of the two choices 
that confront the Senate: one, a budget buster that does not protect 
SCHIP coverage over 10 years and represents an open-ended financial 
burden on American taxpayers and takes a significant step toward 
Government-run health care, or a fiscally responsible SCHIP 
reauthorization that preserves coverage for millions of low-income 
children that is fully offset without budget gimmicks or tax increases 
and promotes market-driven health reforms.
  To me, the choice is very clear. The Republican alternative is the 
right solution for everyone. I urge its adoption by my colleagues.
  The PRESIDING OFFICER. Who yields time? The Senator from Vermont.


                           Amendment No. 2602

  Mr. SANDERS. Mr. President, I will be very brief. I rise in support 
of the Kerry amendment. I do so for two reasons. No. 1, while I applaud 
Senator Baucus and Senator Grassley for their work on expanding health 
insurance to 3.2 million more children, we should be aware that 
expansion only increases coverage for one-third of children in this 
country who are uninsured. This is the United States of America, and we 
should not continue to be embarrassed by the fact that we remain the 
only country in the industrialized world that does not provide health 
insurance for all of our children. Going forward for 3.2 million 
children is undoubtedly a step forward. We have, however, a long way to 
go, and the Kerry amendment would take us closer.
  The second point I wish to make deals with national priorities and 
the direction in which we believe our country should go.
  I hear that a lot of my friends are talking about the expense 
involved in providing health insurance to our children. This particular 
bill would cost us $35 billion over a 5-year period. Is $35 billion a 
lot of money? It is. Is it worth spending that money to cover 3.2 
million children? It is. Yet I find it ironic that the President of the 
United States and others are telling us we cannot afford this 
expenditure at the same time that many--the President, certainly--are 
telling us we need to repeal completely the estate tax, which only 
applies to the wealthiest two-tenths of 1 percent of our population. If 
we were to repeal the estate tax, one family, the Walton family who 
owns Wal-Mart, would receive tax breaks worth $32.7 billion for one 
family. So the debate today is whether we spend $35 billion to cover, 
over a 5-year period, 3.2 million children or, as the President and 
others would have us do, give $32.7 billion in tax breaks to one 
family. This is an issue of national priorities.
  Very briefly, because I see my friend from Iowa standing, it seems to 
me we have to move not only to provide health insurance for all our 
children, but, in fact, we need to move to a national health care 
program that guarantees health care for every man, woman, and child in 
this country, and we can.
  I conclude on that note. This is a moral issue. We have to cover our 
children. This is an issue of national priorities. For all of those who 
think we are spending too much money, they may want to think twice 
about the hundreds of billions of dollars in tax breaks they have given 
to the wealthiest 1 percent and the ideas they have for the future.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, if it is OK, I yield to the Senator from 
Idaho.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, this week the Senate is engaged in an 
extremely important debate about the direction we as a Congress want to 
take in ensuring health care for all Americans.
  I recognize that the bill we are debating this week is literally one 
that focuses on children's health. But, I believe the design of this 
legislation and who we are targeting tells us something about how the 
majority in the Senate believes we should provide health care for all 
of our citizens.
  This bill lays out one way to provide health care coverage in this 
Nation. It says ``increase taxes, increase government spending, and 
have the Government provide all health care plans.''
  That is a failing formula. And now we are going to use that tax-and-
spend formula to move further down the road towards socialized 
medicine.
  Under this bill, middle-class taxpayers in Idaho will be supporting 
health insurance for some families making more money than they are.
  I strongly oppose the Finance Committee legislation. Instead, I will 
vote for the McConnell-Lott alternative bill.
  Let me make it clear that I support reauthorizing the SCHIP program 
to ensure that low-income children have health insurance. No one should 
conclude that my vote against this bill is a vote against insuring poor 
children. My vote is a vote against massive tax increases and out-of-
control spending. It is against a tax-and-spend policy that more than 
doubles the cost of a program for poor children so we can cover those 
with higher income. And it is against a budget gimmick that leaves an 
unfunded liability of $40 billion in just 5 years.
  A little history and few facts are in order.
  When a Republican Congress and a Democratic President set out in 1997 
to insure low-income children, we talked about 10 million uninsured.
  At that time, there were about 20 million children on Medicaid. So we 
needed to cover about 10 million kids with the SCHIP program or 
Medicaid.
  Today, there are 36 million children enrolled in either Medicaid or 
SCHIP. Sounds like we achieved our goal and more.
  Yet some of my colleagues on the other side of the aisle say we are 
still 9 million short. Somehow, we insured 16 million more kids in the 
last 10 years and we have made no dent in the

[[Page 22045]]

problem? Or have we moved the goal post? I think we have moved them.
  That is why I am pleased that Senators McConnell, Lott, and others 
have offered an alternative that keeps this program focused on the 
group it was created to serve--low-income children.
  The Republican alternative will reauthorize the SCHIP program for 
another 5 years. Again, all of us favor providing health insurance to 
low-income children. It will also correct some of the policy problems 
with the current program and make some changes to the Finance Committee 
approach.
  First and foremost, the Republican alternative will provide, coverage 
for all children at or below 200 percent of the Federal poverty level. 
That is the goal of the Children's Health Insurance Program.
  The Finance Committee bill will increase the coverage allowance to 
300 percent of the poverty level and, in some cases, allow coverage of 
even higher incomes than that.
  In addition, the Republican alternative will stop the waivers that 
have led to the current situation where a children's health insurance 
program covers about 700,000 adults.
  Also, the Republican alternative will provide $400 million in 
outreach funding. This funding represents the key to the philosophical 
difference between the Republican bill and the Finance Committee bill.
  Our bill demands that Government stay focused on the population in 
need. We shouldn't just raise the coverage ceiling. Let's go out and 
find the one's who are already eligible and have no insurance. And then 
let's enroll them.
  Further, the Republican alternative would make sure that we have a 
consistent definition of income. No longer can States simply 
``disregard'' all kinds of income in an effort to enroll higher income 
people. Frankly, the practice of disregarding income so that nonpoor 
citizens qualify for poverty programs is fairly offensive.
  The other important aspect of the Republican alternative is that it 
addresses health care coverage in a larger context.
  Let's face it, uninsured children are just the tip of the health 
insurance problem in this Nation.
  We are once again tinkering around the edges rather than taking on 
systemic reform. The Democratic tinkering moves us in the direction 
they want for the Nation--socialized medicine.
  Republicans have a better idea.
  The bill will provide much needed relief to small business to allow 
them to provide health care benefits to their employees.
  Nearly 60 percent of the 45 million uninsured Americans today are 
employed by, or reliant on, small business. In other words, if we can 
help small business insure their employees, then we can make a 
significant dent in the total number of uninsured Americans.
  I just do not see how we can take up the issue of health care and 
health insurance and not talk about one way we can truly help insure 
Americans. Of course, my colleagues on the other side of the aisle 
don't want to do that because it doesn't take us further down their 
road towards socialized medicine.
  I don't want to go down that road. So I will vote for the Republican 
alternative. It is fiscally responsible, it focuses the SCHIP program 
on those it was created to help, and it takes a larger look at the 
problem of health insurance for all Americans.
  I urge my colleagues to support the McConnell-Lott amendment.
  Mr. President, I ask my colleagues to support the McConnell-Lott 
alternative so we do not begin a progressive march down a road toward 
socialized medicine.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, the alternative Senator Craig just spoke 
about is the amendment I wish to speak against. I am a Republican, but 
I am part of the bipartisan effort to pass this SCHIP bill. So I will 
tell my colleagues on both sides of the aisle why the Lott amendment, 
or the Republican alternative, should not be accepted.
  First of all, I commend the people who authored the alternative 
because all ideas ought to be considered. It is creative, and it is 
thoughtful. It certainly contributes to the debate. In reading through 
it, I am struck by the similarities between this proposal and the 
bipartisan bill before the Senate that I am backing. Both proposals 
increase funding for State allotments. Both proposals largely base the 
new allotments on State projections. Both proposals limit the 
availability of allotments to 2 years. Both proposals restrict coverage 
for nonpregnant adults. Both proposals prohibit new waivers for adult 
coverage. Both proposals provide funds for outreach and enrollment 
activities. Both proposals include additional State options for premium 
assistance.
  Lest my colleagues think I am attacking them with faint praise, I do 
acknowledge there are significant differences in the approaches between 
the Republican alternative and our bipartisan bill that is before the 
Senate.
  The position taken by the Lott amendment is that SCHIP has been a 
successful small program that covers about 6 million kids in 2007 and 
should not cover many, if any, more. The position of the Lott amendment 
is that any increase in the enrollment of children should be limited to 
the relatively better off SCHIP kids and not cover the poorer Medicaid 
kids. That is a perfectly reasonable position for them to take, but 
that is the biggest difference between the Lott amendment and the 
bipartisan proposal that is referred to as Grassley-Baucus.
  The difference is that the amendment supporters cannot claim that it 
increases coverage for any of the 4 million uninsured children who are 
eligible and entitled to Medicaid, the kids who need it most. In fact, 
not only does the Lott amendment do virtually nothing to improve 
coverage for the 4 million children eligible for Medicaid, but it adds 
insult to injury by reducing the Medicaid Program by over $10 billion 
to pay for an expansion of SCHIP.
  Let me put this another way. The Lott amendment drains billions out 
of the Medicaid Program, which is a program that covers the poorest of 
the poor, and it redirects that funding to SCHIP, a program that covers 
kids and families who make too much to qualify for Medicaid. It is the 
old issue of robbing Peter to pay Paul. The Senate Finance Committee 
bill, on the other hand, covers 1.7 million kids eligible for Medicaid 
but not enrolled.
  At this point, it is important to reiterate for colleagues that the 
Senate Finance Committee bill does not expand Medicaid. The bill does 
not change eligibility for Medicaid one single bit.
  The Senate Finance Committee bill does include the very precise and 
targeted incentive funds that Director Peter Orszag of CBO concluded is 
``as efficient as you can possibly get per new dollar spent.'' This 
incentive fund helps increase coverage of 3.2 million uninsured 
children. The Lott amendment, however, does not increase coverage for 
the lowest income children and actually causes some individuals, 
including children currently enrolled in SCHIP, to lose coverage.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. BAUCUS. Mr. President, I yield whatever time the Senator from 
Iowa desires.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, we simply, then, have an honest 
disagreement on whether we want to cover additional low-income kids. 
Some Members do; some Members do not. I am on the side that wants to 
cover additional low-income children who are eligible for coverage. It 
is as simple as that.
  The other main difference is the income eligibility for children. 
Right now, 91 percent of the SCHIP funds are being spent on kids at or 
below 200 percent of poverty. Under current law, States have the 
flexibility to adjust their income eligibility to respond to rising 
health care costs and the cost of living within a particular State 
because it differs so much between California and Iowa, to name two 
States.
  The Lott amendment imposes a ``Washington knows best'' mentality

[[Page 22046]]

regarding a State's ability to determine what income within that State 
is most appropriate. And then it goes one step further: It reduces the 
Federal match for covering kids above 200 percent of poverty. There are 
18 States that currently cover kids above 200 percent of poverty. Under 
this proposal, a State currently receiving the enhanced match under 
SCHIP for coverage of eligible children would see that match reduced 
for those very same children.
  While I would prefer that all States focus on children at or below 
200 percent of poverty, the fact remains that $42,000 a year for a 
family of four is a lot harder to get by on in some States than in 
other States. By imposing this new requirement that States limit 
eligibility, the Lott amendment would cause kids to lose coverage. The 
table CBO sent us on the Lott amendment confirms that. I am sorry, but 
in a bill designed to cover kids, cutting them off is a step in the 
wrong direction.
  The Finance Committee bill takes a different approach. The committee 
bill would lower the Federal payments to States that choose to cover 
kids over 300 percent of poverty level. States that go above that limit 
would only get the regular Medicaid match. Those States wouldn't get 
the enhanced Federal match under SCHIP for these higher income kids. So 
the Finance Committee bill creates a disincentive for States to go in 
that direction.
  Some have alleged that the Senate Finance Committee bill would permit 
States to cover kids and families who make over $80,000. That is false. 
What the Finance Committee bill does is allow States that have passed 
State laws to increase eligibility to be grandfathered at the SCHIP 
match as it is right now. There are no States that do that today. So it 
is incorrect to say that the Finance package expands coverage for these 
higher income kids. That just is not accurate.
  Right now, the only State that is even proposing to go as high as 400 
percent of poverty is New York, and their State plan amendment still 
must be approved by the Bush administration. The Bush administration, 
not Congress, has to decide whether to approve that coverage.
  So let me repeat. The Senate Finance bill would only permit New York 
to get an enhanced match for kids and families over 83 percent a year 
if this administration approves their plan, and it gives my colleagues 
on this side of the aisle who don't want that to happen a chance to 
lobby the Secretary of HHS to make sure it doesn't happen.
  Given the criticism they leveled against the Finance plan, I would be 
shocked if they did approve it. I will wait and see, however, if their 
actions match their rhetoric.
  Wrapping up, let me just say again that the Lott amendment has many 
similarities that I have delineated for the Senate--many similarities 
to the Finance Committee package. I commend them for their work in 
putting together this proposal, and I would hope that since their 
amendment has so many similarities to the Senate Finance Committee 
bill, perhaps they will take another look at the policies in our 
bipartisan package. There are key differences in the two approaches, 
however. I appreciate my colleagues' work in pointing out these 
differences. I, for one, am happy to stand on the side of covering kids 
rather than cutting them out, and I support giving States flexibility.


          Amendments Nos. 2540 and 2541 to Amendment No. 2530

  Madam President, I call up for consideration two amendments by 
Senator Ensign, amendments Nos. 2541 and 2540.
  The PRESIDING OFFICER (Ms. Cantwell). Without objection, the clerk 
will report.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley], for Mr. Ensign, 
     proposes amendments numbered 2540 and 2541 to amendment No. 
     2530.

  Mr. GRASSLEY. Madam President, I ask that further reading of the 
amendments be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments are as follows:


                           amendment no. 2540

    (Purpose: To prohibit a State from using SCHIP funds to provide 
coverage for nonpregnant adults until the State first demonstrates that 
 it has adequately covered targeted low-income children who reside in 
                               the State)

       On page 58, between lines 16 and 17, insert the following:
       ``(d) Cover Kids First Implementation Requirement.--
     Notwithstanding the preceding subsections of this section, no 
     funds shall be available under this title for child health 
     assistance or other health benefits coverage that is provided 
     for any other adult other than a pregnant woman, and this 
     title shall be applied with respect to a State without regard 
     to such subsections, for each fiscal year quarter that begins 
     prior to the date on which the State demonstrates to the 
     Secretary that the State has enrolled in the State child 
     health plan at least 95 percent of the targeted low-income 
     children who reside in the State.''.


                           amendment no. 2541

(Purpose: To prohibit a State from providing child health assistance or 
health benefits coverage to individuals whose family income exceeds 200 
percent of the Federal Poverty Level unless the State demonstrates that 
  it has enrolled 95 percent of the targeted low-income children who 
                          reside in the State)

       At the end of title I, add the following:

     SEC. 112. COVER LOW-INCOME KIDS FIRST.

       Section 2105(c) (42 U.S.C. 1397ee(c)), as amended by 
     section 602, is amended by adding at the end the following 
     new paragraph:
       ``(12) No payments for expenditures for child health 
     assistance or health benefits coverage for individuals whose 
     gross family income exceeds 200 percent of the poverty line 
     unless at least 95 percent of eligible low-income children 
     enrolled.-- Notwithstanding any other provision of this 
     title, for fiscal years beginning with fiscal year 2008, no 
     payments shall be made to a State under subsection (a)(1), or 
     any other provision of this title, for any fiscal year 
     quarter that begins prior to the date on which the State 
     demonstrates to the Secretary that the State has enrolled in 
     the State child health plan at least 95 percent of the low-
     income children who reside in the State and are eligible for 
     child health assistance under this State child health plan 
     with respect to any expenditures for providing child health 
     assistance or health benefits coverage for any individual 
     whose gross family income exceeds 200 percent of the poverty 
     line.''.

  Mr. GRASSLEY. Madam President, I yield the floor.
  Mr. BAUCUS. Madam 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. McCONNELL. 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. McCONNELL. Madam President, I am going to proceed just for a few 
moments on my leader time.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                        FISA Modification Effort

  Mr. McCONNELL. Madam President, the ranking member of the 
Intelligence Committee, Senator Bond, and I, will be introducing and 
later placing on the calendar a bill related to the FISA modification 
effort that has been underway on a bipartisan basis over the last few 
weeks.
  Senator Bond and I will be, as I said, placing in the Record, and 
then subsequently doing a rule XIV placing it on the calendar, a 
proposal that the administration thinks makes sense to deal with the 
modifications that everyone seems to agree in principle need to be made 
to the FISA procedure.
  With that, I don't know that I can yield leader time to somebody who 
isn't a leader, so let me just say that having given that notice, we 
will be placing that on the calendar for later this evening.
  Mr. REID. Madam President, just a brief comment on the distinguished 
Republican leader's statement.
  As we speak, there are meetings going on to see if we can resolve 
this matter in a manner that is acceptable to Republicans and Democrats 
in the Senate, and of course then we have to also be concerned about 
the House. Senator McConnell and I were in a meeting early this morning 
with individuals, including Admiral McConnell, and we hope something 
can be worked out.
  We waited a little longer than I wanted, waiting for Admiral 
McConnell's papers to come here this afternoon, but they are here and 
they are being reviewed. I spoke to Senator

[[Page 22047]]

Levin just a few minutes ago. There is nothing serious, but Senator 
Rockefeller has been with his wife today on a minor problem, but it was 
necessary he not be here. So we are trying to work our way through 
this.
  Hopefully, we can resolve this. It is something important, we are 
going to do everything we can, and we hope all sides will be 
reasonable. At this point they have been. It is an issue we certainly 
need to resolve, if at all possible, before we leave for our August 
recess.
  Mr. McCONNELL. Madam President, if I may, let me just commend the 
majority leader on his observations. I know people on both sides of the 
aisle are working intensely on this issue, and I, too, hope and believe 
we will get it resolved by the end of the week.
  I did, however, want all Members of the Senate to be aware of a 
proposal that the administration feels very strongly would get the job 
done in the hopes that it would enjoy bipartisan support. Senator Bond 
and I will address the details of it after the votes, and I will rule 
XIV it onto the calendar at that point.
  I yield the floor.


                           Amendment No. 2554

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes equally divided on amendment No. 2554, offered by the Senator 
from North Carolina.
  Mrs. DOLE. Madam President, increasing the tax on tobacco unfairly 
burdens low-income Americans. My amendment is simple: It creates a 60-
vote budget point of order against any legislation that includes a 
Federal excise tax increase that would unfairly affect low-income 
individuals, defined as taxpayers with earned income less than 200 
percent of the Federal poverty level.
  According to the Centers for Disease Control report from 2003 to 
2005, 28.5 percent of smokers were classified as poor--below 100 
percent of the Federal poverty level--and 25.9 percent of smokers were 
classified as near poor--between 100 and 200 percent of the Federal 
poverty level. As these numbers clearly show, the tax increase proposed 
in this bill unfairly falls on the shoulders of those who can least 
afford it.
  I am urging my colleagues to acknowledge that the proposed tax 
increase is an irresponsible and fiscally unsound policy. I urge my 
colleagues to support the fact that this has a negative impact and is 
disproportionately hard on the poor.
  Madam President, I ask for the yeas and the nays.
  The PRESIDING OFFICER. Is there a sufficient second? There appears to 
be.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Madam President, I understand the Senator does not like 
the way we are paying for this bill. The more appropriate response 
would be for the Senator to offer an amendment to strike it or to find 
some other way to pay for it. I do not think it is wise for this body 
to enact another procedural hurdle as we consider legislation generally 
here; that is, another hurdle that would block attempts for us to help 
people in the States we represent. I don't think that is needed.
  Secondly, this is the wrong time to consider changing Senate 
procedure. The more appropriate time is during consideration of the 
budget resolution, when the Senate has all the budget issues before it. 
I don't think it makes any sense to put another procedural obstacle 
before us to make it more difficult for Congress to respond to the 
needs of the American people.
  I encourage Senators to, therefore, not support the amendment.
  The PRESIDING OFFICER. The question is on agreeing to the amendment. 
The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from South Dakota (Mr. 
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 32, nays 64, as follows:

                      [Rollcall Vote No. 289 Leg.]

                                YEAS--32

     Allard
     Barrasso
     Bond
     Bunning
     Burr
     Chambliss
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Hagel
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Martinez
     McConnell
     Nelson (NE)
     Sessions
     Shelby
     Thune
     Vitter
     Voinovich
     Warner

                                NAYS--64

     Akaka
     Alexander
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Coburn
     Conrad
     Corker
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Grassley
     Gregg
     Harkin
     Hatch
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--4

     Brownback
     Johnson
     McCain
     Rockefeller
  The amendment (No. 2554) was rejected.
  Mr. BAUCUS. Madam President, I move to reconsider the vote.
  Mr. GRASSLEY. Madam President, I move to lay that motion on the 
table.
  The motion to lay on the table was agreed to.


                           Amendment No. 2547

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes equally divided on amendment No. 2547 offered by the Senator 
from Kentucky.
  Mr. BUNNING. Madam President, my amendment is simple. It strikes the 
exemption for New York and New Jersey to get Federal dollars for 
covering families above 300 percent of poverty. No other State in the 
country gets that kind of an exemption. New Jersey's SCHIP program 
covers families up to $72,000 a year, 350 percent. New York is planning 
on covering families making up to $82,000 a year. It has not yet been 
approved by HHS.
  Why should people in every other State subsidize Government health 
care for families in New York and New Jersey at these higher incomes? 
My amendment does not kick kids off SCHIP. The State can still cover 
them at their Medicaid matching rate. It is the State's choice. If 
people in these two States think this is a priority, then they should 
be willing to pay more for this type of benefit. I am sure New York and 
New Jersey are expensive areas to live. But those States have more 
resources and a larger tax base than others. I urge a ``yes'' vote on 
my amendment.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from New Jersey.
  Mr. LAUTENBERG. Madam President, we listened to the comments from our 
colleague from Kentucky about how much New Jersey or New York can 
afford. But I will tell you this, New Jersey, for each dollar that it 
sends down to the Federal Government, it gets barely half of it back. 
But not in Kentucky. In Kentucky, if they send in a dollar, they get 
$1.45 back. We cannot compare things. We cannot compare costs of 
living. The poverty level for a four-person family is $20,000. That 
means their income is about $5,000 a month. In New Jersey, after taxes, 
housing, and other costs, they're left with about $865. And yet their 
health care costs average above $2,000.
  As a consequence, with $2,000 a month for health care costs, every 
family is burdened up until almost the highest of incomes. So we ask 
fairness. Here we are trying to expand health care for children, and 
our colleague wants to take that away. This is not fair, it is not 
right, and I hope we will defeat this soundly.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Montana.
  Mr. BAUCUS. Madam President, I move to table the Bunning amendment 
and ask for the yeas and nays.

[[Page 22048]]

  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 South Dakota (Mr. 
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 53, nays 43, as follows:

                      [Rollcall Vote No. 290 Leg.]

                                YEAS--53

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Grassley
     Harkin
     Hatch
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Salazar
     Sanders
     Schumer
     Snowe
     Stabenow
     Tester
     Webb
     Whitehouse
     Wyden

                                NAYS--43

     Alexander
     Allard
     Barrasso
     Bennett
     Bond
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Gregg
     Hagel
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McConnell
     Murkowski
     Roberts
     Sessions
     Shelby
     Smith
     Specter
     Stevens
     Sununu
     Thune
     Vitter
     Voinovich
     Warner

                             NOT VOTING--4

     Brownback
     Johnson
     McCain
     Rockefeller
  The motion was agreed to.
  Mr. BAUCUS. I move to reconsider the vote and to lay that motion on 
the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 2593

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided on amendment No. 2593, as modified, 
offered by the Senator from Mississippi.
  Mr. LOTT. Madam President, the Baucus bill we have before us is a $35 
billion increase over the current $25 billion, a $60 billion bill. Our 
Kids First alternative amendment targets children. SCHIP does not have 
an A in it. We should not move steadily toward more and more higher 
income children and adults being included in the program. This one is 
targeted to children. The cost is $9 billion above the $25 billion in 
the baseline. It will cover an additional 1.3 million children over the 
next 5 years. This 40-percent increase would maintain children 
currently enrolled and insure 2.2 million more children by 2017 than is 
in the underlying Baucus bill. It also includes the small business 
health plans, which I believe would lead to the coverage of an 
additional 10 or 20 million people who work for small businesses that 
now cannot get coverage. There is no tax increase in this provision. It 
is paid for by equalizing the State match for Medicaid administrative 
expenses at 50 percent.
  Mr. McCONNELL. Madam President, the State Children's Health Insurance 
Program was created to target the health care needs of poor children 
whose families made too much to be eligible for Medicaid but were still 
in danger of not being able to afford private health insurance.
  SCHIP is in many ways successful, as last year, 6.6 million children 
had health care coverage thanks to it, including more than 50,000 in 
the Commonwealth of Kentucky. From 1996 to 2005, the rate of children 
living without health insurance in America dropped by 25 percent.
  So as the Senate turned to debate the reauthorization of this 
Federal/State partnership, I had hoped that all of my colleagues would 
focus on SCHIP's true goal: covering children. Unfortunately, that is 
not what the Finance Committee's bill does. This bill is a dramatic 
departure from current SCHIP law that will significantly raise taxes, 
increase spending, and lead to Government-run health care.
  At a time when the people of America have made clear that they want 
us to reduce Government spending, Democrats are going to spend $112 
billion of the taxpayers' money. And part of this increase will go 
toward people that SCHIP was never meant to cover, as this proposal 
will allow more adults to piggyback onto a children's health program.
  So Senators Lott, Kyl, Gregg, Bunning, and I have proposed an 
alternative measure I hope all of my colleagues will consider. Our Kids 
First Act will refocus SCHIP to help the people it was designed to 
help: low-income children.
  The Kids First Act will reauthorize SCHIP for 5 years and would 
ensure that children enrolled in SCHIP stay covered by adding $14 
billion in funding above and beyond the baseline SCHIP budget.
  Our alternative will add 1.3 million new kids to the SCHIP program by 
2012. By contrast, the Finance Committee bill actually begins reducing 
kids' coverage in 2012 and results in fewer children having SCHIP 
coverage in 2017.
  Our alternative also provides $400 million over the next 5 years for 
States to spend on outreach and enrollment for low-income children who 
are eligible but not on SCHIP, so we can enroll them. This money will 
help guarantee that SCHIP dollars go toward the low-income kids the 
program is meant to help.
  The Kids First Act takes several measures to make health insurance 
more affordable and cost-effective. For instance, it encourages premium 
assistance to aid parents in buying private health insurance for their 
children.
  It also includes the small business health plan legislation we 
considered in the 109th Congress. Of the 20 million working Americans 
who do not have health insurance, nearly half work in firms of 25 or 
fewer.
  Small business health plans would allow those firms to band together 
across State lines, increase their bargaining power and afford better 
health care coverage for their employees.
  Finally, our alternative ensures that the taxpayers' dollars are 
spent appropriately by decreasing the number of adults who can take 
advantage of the program.
  While considerably less expensive to the taxpayers than the Finance 
Committee's bill, it is worth noting, that many States, including 
Kentucky, would fare better next year under the Kids First Act than 
under the committee bill.
  Our plan is fiscally responsible and focuses Government assistance on 
those who really need it. It reauthorizes and improves upon a program 
that works instead of transforming it into a license for higher taxes, 
higher spending, and another giant leap toward Government-run health 
care.
  It can receive a Presidential signature, and it deserves this 
Senate's support.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Madam President, effectively, the Lott amendment is 
actually going to cause in some States a reduction in kids who are 
covered. It is very nominal, a slight increase overall. It does not 
begin to address the 6.6 million kids we need to cover under CHIP, as I 
think most of us want to. The basic point is, this amendment has lots 
of other provisions in it which I do not think we should appropriately 
consider at this point. The small business health plans, HSAs, is a 
debate for another day. It has nothing to do with the Children's Health 
Insurance Program. I don't think it is wise to put those battles on the 
backs of kids. We should get this legislation passed. It helps kids. It 
cuts back adults. It is moderate. It cuts back on some excessive 
coverage in some States, but it is

[[Page 22049]]

unwise to radically restructure health insurance with the health 
insurance provision as well as HSAs.
  Mr. LOTT. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be.
  The question is on agreeing to the amendment. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from South Dakota (Mr. 
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
  The PRESIDING OFFICER (Mr. Casey). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 35, nays 61, as follows:

                      [Rollcall Vote No. 291 Leg.]

                                YEAS--35

     Alexander
     Allard
     Barrasso
     Bennett
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Ensign
     Enzi
     Graham
     Gregg
     Hagel
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Martinez
     McConnell
     Sessions
     Shelby
     Stevens
     Sununu
     Thune
     Vitter
     Voinovich
     Warner

                                NAYS--61

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Bond
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Coleman
     Collins
     Conrad
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Grassley
     Harkin
     Hatch
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Tester
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--4

     Brownback
     Johnson
     McCain
     Rockefeller
  The amendment (No. 2593), as modified, was rejected.
  Mr. REID. I move to reconsider the vote.
  Mr. DURBIN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I have spoken to the distinguished 
Republican leader. I have spoken to the two managers of the bill. I 
think it would be appropriate to announce at this time there will be no 
more rollcall votes tonight. However, if people have a desire to offer 
amendments, the managers are willing to talk to you about those 
amendments. They need some idea of who else wants to offer amendments. 
You can hear from them.
  My main purpose in making this statement is announcing there will be 
no more rollcall votes tonight, after this next vote, of course.


                           Amendment No. 2602

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided on amendment No. 2602, as modified, 
offered by the Senator from Massachusetts, Mr. Kerry.
  The Senator from Massachusetts.
  Mr. KERRY. Mr. President, in the underlying bill, we have made a 
decision to insure some 3.3 million kids who are among the poorest in 
the country. But we still have about 5.7 million kids who will not get 
covered. So you have 9 million kids without coverage, and this bill 
will seek to insure 3.3 million.
  What my amendment seeks to do is recognize that if you have a 
rationale that says it is worthwhile to insure all those kids, we also 
ought to be insuring the additional 1 million kids who are Medicaid 
eligible who will not be insured under this bill.
  So my amendment seeks to do what we said we would do in the original 
budget resolution, where we allocated $50 billion to insure children. 
It pays for it by not granting to those earning more than $1 million a 
year a continuation of their tax cut next year. That is how you pay for 
it.
  Mr. President, .18 percent of all Americans will be affected in an 
effort to guarantee that the poorest of the poor children in America--
Medicaid eligible--will be eligible for health care coverage.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I am not going to speak to the substance 
of the amendment but to the process. This bill is a bipartisan approach 
where a lot of different points of view were brought together to a bill 
that can pass this Senate. We have people on the left for whom $50 
billion might not be enough money. We have people on the right for whom 
anything over $5 billion was too much money. We have come out at $35 
billion. This is a well-balanced, well-thought-out compromise.
  Compromise is the essence of getting things done. You have to bring 
people in the Senate to the center to get things done or nothing is 
going to get done. In order to get this job done, we have to defeat 
this amendment, regardless of the merits of it.
  I yield back.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  Mr. KERRY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from South Dakota (Mr. 
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Arizona (Mr. McCain).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 36, nays 60, as follows:

                      [Rollcall Vote No. 292 Leg.]

                                YEAS--36

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Cantwell
     Cardin
     Casey
     Clinton
     Collins
     Dodd
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Sanders
     Schumer
     Tester
     Whitehouse

                                NAYS--60

     Alexander
     Allard
     Barrasso
     Baucus
     Bennett
     Bond
     Bunning
     Burr
     Byrd
     Carper
     Chambliss
     Coburn
     Cochran
     Coleman
     Conrad
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Dorgan
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lott
     Lugar
     Martinez
     McCaskill
     McConnell
     Murkowski
     Nelson (NE)
     Roberts
     Salazar
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Thune
     Vitter
     Voinovich
     Warner
     Webb
     Wyden

                             NOT VOTING--4

     Brownback
     Johnson
     McCain
     Rockefeller
  The amendment (No. 2602), as modified, was rejected.
  Mr. BAUCUS. Mr. President, I move to reconsider the vote.
  Mr. GRASSLEY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


             Amendments Nos. 2558, 2537, and 2562, En Bloc

  Mr. GRASSLEY. Mr. President, en bloc, I want to do for Senator Graham 
and for Senator Kyl three amendments, and I call up en bloc amendments 
Nos. 2558, 2537, and 2562.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The amendments are as follows:

[[Page 22050]]




                           amendment no. 2558

  (Purpose: To sunset the increase in the tax on tobacco products on 
                          September 30, 2012)

       Beginning on page 218, strike line 5 and all that follows 
     through page 220, line 2, and insert the following:
       (a) Cigars.--Section 5701(a) of the Internal Revenue Code 
     of 1986 is amended--
       (1) by striking ``($1.594 cents per thousand on cigars 
     removed during 2000 or 2001)'' in paragraph (1) and inserting 
     ``($50.00 per thousand on cigars removed after December 31, 
     2007, and before October 1, 2012)'',
       (2) by striking ``(18.063 percent on cigars removed during 
     2000 or 2001)'' in paragraph (2) and inserting ``(53.13 
     percent on cigars removed after December 31, 2007, and before 
     October 1, 2012)'', and
       (3) by striking ``($42.50 per thousand on cigars removed 
     during 2000 or 2001)'' in paragraph (2) and inserting 
     ``($10.00 per thousand on cigars removed after December 31, 
     2007, and before October 1, 2012)''.
       (b) Cigarettes.--Section 5701(b) of such Code is amended--
       (1) by striking ``($17 per thousand on cigarettes removed 
     during 2000 or 2001)'' in paragraph (1) and inserting 
     ``($50.00 per thousand on cigarettes removed after December 
     31, 2007, and before October 1, 2012)'', and
       (2) by striking ``($35.70 per thousand on cigarettes 
     removed during 2000 or 2001)'' in paragraph (2) and inserting 
     ``($104.9999 per thousand on cigarettes removed after 
     December 31, 2007, and before October 1, 2012)''.
       (c) Cigarette Papers.--Section 5701(c) of such Code is 
     amended by striking ``(1.06 cents on cigarette papers removed 
     during 2000 or 2001)'' and inserting ``(3.13 cents on 
     cigarette papers removed after December 31, 2007, and before 
     October 1, 2012)''.
       (d) Cigarette Tubes.--Section 5701(d) of such Code is 
     amended by striking ``(2.13 cents on cigarette tubes removed 
     during 2000 or 2001)'' and inserting ``(6.26 cents on 
     cigarette tubes removed after December 31, 2007, and before 
     October 1, 2012)''.
       (e) Smokeless Tobacco.--Section 5701(e) of such Code is 
     amended--
       (1) by striking ``(51 cents on snuff removed during 2000 or 
     2001)'' in paragraph (1) and inserting ``($1.50 on snuff 
     removed after December 31, 2007, and before October 1, 
     2012)'', and
       (2) by striking ``(17 cents on chewing tobacco removed 
     during 2000 or 2001)'' in paragraph (2) and inserting ``(50 
     cents on chewing tobacco removed after December 31, 2007, and 
     before October 1, 2012)''.
       (f) Pipe Tobacco.--Section 5701(f) of such Code is amended 
     by striking ``(95.67 cents on pipe tobacco removed during 
     2000 or 2001)'' and inserting ``($2.8126 on pipe tobacco 
     removed after December 31, 2007, and before October 1, 
     2012)''.
       (g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is 
     amended by striking ``(95.67 cents on roll-your-own tobacco 
     removed during 2000 or 2001)'' and inserting ``($8.8889 on 
     roll-your-own tobacco removed after December 31, 2007, and 
     before October 1, 2012)''.


                           amendment no. 2537

     (Purpose: To minimize the erosion of private health coverage)

       At the end, add the following:

     SEC. __. DELAY IN EFFECTIVE DATE.

       Notwithstanding any other provision of this Act, this Act 
     and the amendments made by this Act shall not take effect 
     until the day after the date on which the Director of the 
     Congressional Budget Office certifies that this Act and the 
     amendments made by the Act, will not result in a reduction of 
     private health insurance coverage greater than 20 percent.


                           amendment no. 2562

  (Purpose: To amend the Internal Revenue Code of 1986 to extend and 
modify the 15-year straight-line cost recovery for qualified leasehold 
 improvements and qualified restaurant improvements and to provided a 
15-year straight-line cost recovery for certain improvements to retail 
                                 space)

       On page 217, after line 25, insert the following:

     SEC. 61_. EXTENSION AND MODIFICATION OF 15-YEAR STRAIGHT-LINE 
                   COST RECOVERY FOR QUALIFIED LEASEHOLD 
                   IMPROVEMENTS AND QUALIFIED RESTAURANT 
                   IMPROVEMENTS; 15-YEAR STRAIGHT-LINE COST 
                   RECOVERY FOR CERTAIN IMPROVEMENTS TO RETAIL 
                   SPACE.

       (a) Extension of Leasehold and Restaurant Improvements.--
       (1) In general.--Clauses (iv) and (v) of section 
     168(e)(3)(E) of the Internal Revenue Code of 1986 (relating 
     to 15-year property) are each amended by striking ``January 
     1, 2008'' and inserting ``January 1, 2009''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after December 31, 
     2007.
       (b) Modification of Treatment of Qualified Restaurant 
     Property as 15-Year Property for Purposes of Depreciation 
     Deduction.--
       (1) Treatment to include new construction.--Paragraph (7) 
     of section 168(e) of the Internal Revenue Code of 1986 
     (relating to classification of property) is amended to read 
     as follows:
       ``(7) Qualified restaurant property.--The term `qualified 
     restaurant property' means any section 1250 property which is 
     a building (or its structural components) or an improvement 
     to such building if more than 50 percent of such building's 
     square footage is devoted to preparation of, and seating for 
     on-premises consumption of, prepared meals.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to any property placed in service after the date 
     of the enactment of this Act, the original use of which 
     begins with the taxpayer after such date.
       (c) Recovery Period for Depreciation of Certain 
     Improvements to Retail Space.--
       (1) 15-year recovery period.--Section 168(e)(3)(E) of the 
     Internal Revenue Code of 1986 (relating to 15-year property) 
     is amended by striking ``and'' at the end of clause (vii), by 
     striking the period at the end of clause (viii) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(ix) any qualified retail improvement property placed in 
     service before January 1, 2009.''.
       (2) Qualified retail improvement property.--Section 168(e) 
     of such Code is amended by adding at the end the following 
     new paragraph:
       ``(8) Qualified retail improvement property.--
       ``(A) In general.--The term `qualified retail improvement 
     property' means any improvement to an interior portion of a 
     building which is nonresidential real property if--
       ``(i) such portion is open to the general public and is 
     used in the retail trade or business of selling tangible 
     personal property to the general public, and
       ``(ii) such improvement is placed in service more than 3 
     years after the date the building was first placed in 
     service.
       ``(B) Improvements made by owner.--In the case of an 
     improvement made by the owner of such improvement, such 
     improvement shall be qualified retail improvement property 
     (if at all) only so long as such improvement is held by such 
     owner. Rules similar to the rules under paragraph (6)(B) 
     shall apply for purposes of the preceding sentence.
       ``(C) Certain improvements not included.--Such term shall 
     not include any improvement for which the expenditure is 
     attributable to--
       ``(i) the enlargement of the building,
       ``(ii) any elevator or escalator,
       ``(iii) any structural component benefitting a common area, 
     or
       ``(iv) the internal structural framework of the 
     building.''.
       (3) Requirement to use straight line method.--Section 
     168(b)(3) of such Code is amended by adding at the end the 
     following new subparagraph:
       ``(I) Qualified retail improvement property described in 
     subsection (e)(8).''.
       (4) Alternative system.--The table contained in section 
     168(g)(3)(B) of such Code is amended by inserting after the 
     item relating to subparagraph (E)(viii) the following new 
     item:

(E)(ix)...........................................................39''.

       (5) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

  Mr. GRASSLEY. I yield the floor.
  The PRESIDING OFFICER. The Republican leader is recognized.
  Mr. McCONNELL. Mr. President, I thank the Senator from Maryland for 
allowing me to proceed, and I will not be too long.
  I ask unanimous consent that I be allowed to proceed as in morning 
business, to be followed by Senator Bond.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                  Measure Read the First Time--S. 1927

  Mr. McCONNELL. Mr. President, I understand that S. 1927 is at the 
desk and I ask for its first reading.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 1267) to amend the Foreign Intelligence 
     Surveillance Act of 1978 to provide additional procedures for 
     authorizing certain acquisitions of foreign intelligence 
     information and for other purposes.

  Mr. McCONNELL. I now ask for a second reading and, in order to place 
the bill on the calendar under the provisions of rule XIV, I object to 
my own request.
  Mr. BAUCUS. Mr. President, I object.
  The PRESIDING OFFICER. Objection is heard.
  The bill will receive its second reading on the next legislative day.
  Mr. McCONNELL. Mr. President, yesterday the Director of National 
Intelligence came to Capitol Hill and implored Congress once again to 
modernize the Foreign Intelligence Surveillance Act. He was echoing the 
warnings of the entire intelligence community, which has told us that 
current law--

[[Page 22051]]

current law--prevents us from collecting a significant amount of 
intelligence that could be vital in protecting us from another 
terrorist attack.
  The latest National Intelligence Estimate makes clear that the 
greatest terrorist threat to the United States is al-Qaida. Their 
intent to attack us is undiminished since 9/11. They have gained 
recruits and strength in the Middle East. They continue to adapt and 
improve their capabilities, and we must continue to adapt and improve 
our ability to swiftly detect their movements and their plots.
  One of the most effective tools we have had in doing this over the 
last 6 years is our electronic surveillance program. The Foreign 
Intelligence Surveillance Act gives us the legal framework for 
monitoring terrorists electronically without impinging on the civil 
liberties of Americans. But the law is badly out of date.
  Since FISA was enacted, sweeping advances in technology have upset 
the balance that Congress struck in 1978, and the law that was written 
to protect Americans while ensnaring terrorists must be changed as 
well.
  The targeting of a foreign terrorist overseas should not require a 
FISA warrant. That was never the intention of the original legislation. 
Yet this is what the law, as written, currently requires. The 
intelligence community has told us they are hamstrung by the existing 
law, and in a significant number of cases, our intelligence 
professionals are in the unfortunate position of having to obtain court 
orders to collect foreign intelligence concerning foreign targets 
located overseas.
  The facts here are not in dispute. Our Nation faces an alarming 
intelligence gap, a situation in which the intelligence community every 
day is missing--missing--a significant portion of what we should be 
getting in order to protect the American people here at home. We should 
not adjourn until we have closed this gap. We must act quickly in a 
bipartisan manner and let the appropriate committees come back and 
review FISA and other matters related to the legislation in a more 
comprehensive manner.
  We should not return in September knowing that we have failed in our 
duty, and we pray that we don't have cause to regret our inaction. Let 
there be no doubt: If we had the foresight in August of 2001 to enact a 
law that would have exposed the plot that was being hatched against us 
then, the vote to approve that law would have been cast unanimously and 
without hesitation--unanimously and without hesitation. None of us 
would have shrunk from that duty. Six years later, the duty remains.
  There is little we can do in the Senate from day to day that can 
immediately and decisively improve the security of this country. But by 
passing a FISA modernization bill that the President can sign before we 
go home for recess, we will have done just that. We need to act on this 
legislation now. We should not adjourn until we have closed this gap, 
until we have fixed this outdated law.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Missouri is recognized.
  Mr. BOND. Mr. President, I thank the minority leader because he has 
brought to the attention of this body a measure of critical importance. 
Right now, we are missing a very significant portion of the signals and 
intelligence we could capture on al-Qaida and other terrorist 
organizations threatening to do harm to the United States. The reason 
is because the existing Federal Foreign Intelligence Surveillance Act 
doesn't fit in with today's technology.
  The Director of National Intelligence has asked us--begged us--to 
make these changes. He submitted a proposal to the Intelligence 
Committee in April, and then he came before our committee in May. He 
came and briefed as many Members of the Senate who wanted to show up 
last month, and 42 members did, and they understood the importance.
  In my tenure as a member of the Intelligence Committee, I have spent 
a considerable amount of time looking at issues regarding FISA 
modernization. Since I became vice chairman, I have worked closely with 
Chairman Rockefeller to ensure that our oversight of this measure and 
this program has been comprehensive. We have held numerous hearings. 
Most of us have gone out and watched how the protections are 
implemented and where the information is collected at the NSA.
  The DNI's proposal came up to us, and in April he warned that the 
current text of FISA is causing significant intelligence gaps during a 
period of increased threat. We all know that the threat of al-Qaida is 
severe now. We cannot afford to go home, to leave this place, and not 
take off the artificial barriers that prevent NSA from keeping our 
country safe.
  The DNI has now provided us with a bare-bones FISA modernization 
proposal. It doesn't deal with all of the problems we in the 
Intelligence Committee must deal with later on in this session. We must 
do it.
  Last night, we had a proposal delivered by Senator Rockefeller that 
did not come from the members of the Intelligence Committee. It was a 
counterproposal to provide what he argued was a temporary legislative 
fix to FISA. Unfortunately, the counterproposal will not close these 
significant intelligence gaps that the DNI has told us about. Instead, 
it requires the Government to get a FISA order when a foreign target 
communicates with a significant number of persons and calls into the 
United States. That, to me, is going in the wrong direction. We don't 
need to stop and get a court order to protect the privacy of a 
terrorist who is making lots of calls into the United States. That is 
moving in the wrong direction.
  Our enemies are not naive. They understand our laws sometimes better 
than we do. They would realize that all they had to do, if they wanted 
to cover their tracks while a lengthy FISA court application procedure 
was done, is make a whole lot of calls to people in the United States 
to trigger the requirement.
  It would be an unnecessary and enormous burden on the intelligence 
assets and operators. We don't want people who play an essential role 
in fighting terrorism to spend the bulk of their time processing stacks 
of FISA applications on foreign targets. We want them to do the 
intelligence work to keep our country safe.
  Well, as a result of the proposal made by Senator Rockefeller, and 
others, the DNI was able to accommodate a number of these proposals and 
adopted their proposal for FISA court review of the procedures. They 
put a 6-month sunset on it. They added the DNI, Director of National 
Intelligence, to the authorizing process for acquisition of foreign 
intelligence. This is what is before us. The minority leader has 
presented it. I am proud to be a cosponsor.
  The debate is about whether targeting foreigners overseas should 
require a FISA order. That was never the intent of the FISA 
legislation. It was intended solely to protect the fourth amendment 
rights of persons inside the United States--not foreign targets.
  FISA needs to be modernized. Technology has changed. It is now no 
longer covered. The DNI's approach takes into account the changing 
technology and has adopted the reasonable suggestions made in the 
proposal made by Senator Rockefeller, and others.
  Congress needs to act on this legislation, please, before we get out 
of town. Don't leave town leaving the NSA deaf to significant terrorist 
information that might save our country from attack.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I want to move things along here and set 
an order of speakers. I ask unanimous consent that Senator Mikulski be 
recognized to speak for 5 minutes; following that, Senator Chambliss be 
recognized to speak for 5 minutes. Following him, Senator Brown be 
allowed to speak for 8 minutes; following him, Senator Coburn, for 10 
minutes; following that, Senator Webb be allowed to speak for 10 
minutes.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.

[[Page 22052]]

  The Senator from Maryland is recognized.
  Ms. MIKULSKI. Mr. President, I, too, rise to comment on the FISA 
situation in which we find ourselves, because we want to be very clear 
that patriotism, adherence to the Constitution to defend the Nation 
against all enemies foreign and domestic, is not a partisan issue; that 
as our distinguished colleague from Missouri has spoken to--and I know 
the Senator from Georgia will--we are all on the Intelligence 
Committee, and we know what the real deal is in the sense of a very 
dangerous time facing our country.
  We on this side of the aisle want to assure both our colleagues and 
the American people that we want to make the reforms in FISA before we 
go out as intensely as do our colleagues who are speaking tonight. We 
want to make those reforms so that we, too, give the intelligence 
community the power to go after and catch the terrorists and to be able 
to pump for the information they need to protect us, rather than a 
bureaucracy.
  As a member of the Intelligence Committee, I feel it is my first duty 
to make sure they have the tools they need to protect the Nation. That 
means not only the financial resources to hire the best people and have 
the best technology, but it also means they have the legal framework in 
which to operate. But, indeed, a legal framework is what we need. We 
believe that in functioning within a legal framework, we are able to 
bring to bear all of the very important resources that are needed, both 
from the private sector as well as from the public sector.
  I agree with my colleagues that as we come into August, we have a 
certain level of anxiety. All of us know, as we look back on 2001, that 
if in fact we could have done something to protect or stop what 
happened on that terrible day, September 11, we would have done it. We 
know that right now, this minute, we have another rendezvous with 
destiny and we will meet that. In meeting that rendezvous, we will 
arrive at a legal framework that is constitutionally compliant, that 
will enable the Intelligence Committee to be able to do what it needs, 
without being shackled by more bureaucratic mandates. There are many 
proposals. The details of why we would support them or raise a question 
are better discussed in a more classified forum.
  Should the approach be bipartisan? You bet. I have worked with the 
Senator from Missouri. I know how he brings pragmatism, common sense, 
and very sound legal analysis to the discussion. This is not about 
politics. This is about the people and protecting the people we were 
sworn to protect. So I believe we will be proceeding. I am prepared, if 
necessary, to cancel my plans. But I believe if we work hard and are 
inclusive and approach it with common sense, we will focus on what is 
the end game here, which is to do the right thing to protect us.
  Mr. President, I have fought for children's health care for a very 
long time, going back to my days as a social worker and also as a young 
House Member. This bill is what we hoped for and dreamed for--those of 
us who worked in social work and foster care and child abuse--to make 
sure kids had eyeglasses and hearing aids and so forth. And for all 
those adolescents who need to discuss things with doctors, this would 
be an open door. For all those handicapped children, this is what we 
need.
  I salute the chairman and ranking member on this bipartisan solution. 
We have done this in a way that we can pay for it. At the end of the 
day, over an additional 3 million children will have health care. I 
salute my colleagues.
  A few months ago, we had a little boy die in Maryland because he 
didn't have access to dental care. He had an oral infection that spread 
through his blood. So tomorrow when I vote, I vote for Deamonte, and 
for all others like him. I support the bill.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I ask the Senator from Georgia to yield so 
that I may speak for a few minutes. I am sorry I wasn't on the floor to 
listen to the speech of the Senator from Kentucky, the Republican 
leader, dealing with FISA.
  Let me say briefly, we got the bill and the rule XIV late this 
afternoon. Ours is almost completed. We are working on it in my office, 
and the Speaker has to sign off on some of these things. It could take 
a little while before we are able to file this.
  I so appreciate the Senator from Maryland. She is a woman who takes 
tremendously difficult jobs as a Senator. She has been a valued member 
on more than one occasion on the Ethics Committee, doing some of the 
most difficult work we have had to do on ethics in the entire history 
of the country. And then as far as her serving on the Intelligence 
Committee, she has been exemplary. I depend on her for information on 
what to do. A lot of times these meetings are held, and you need 
direction as to what we need to do on the Senate floor because what 
goes on in the Intelligence Committee is all secret. I admire and 
respect her so much because she helped us get to the point where we 
are.
  We are going to come back with the proposal that we will file, a rule 
XIV, as the Republicans did theirs. It is meeting the expectations of 
the American people. One of the things we have going for us with this 
repair of FISA is Admiral McConnell. We trust this man. He is a man who 
speaks in a language we understand. He is direct and concise. Because 
of that, I think we can work something out. I just spoke to the vice 
chair of the Intelligence Committee, Senator Bond. We talked about the 
fact that ours will be laid down, and theirs is already laid down. 
Certainly, we should be able to work something out. We are all trying 
to obtain the same goal: to be able to protect ourselves from the evil 
people in the world who are trying to do harm to us as a country and 
individually and others from around the world.
  We are going to proceed in good faith to try to get this done, and 
hopefully sometime in the next little bit, we will be able to file our 
legislation and what we call rule XIV so we are matching what the 
Republicans did this afternoon.
  The PRESIDING OFFICER. The Senator from Montana.


                Amendment No. 2557 to Amendment No. 2530

  Mr. BAUCUS. Mr. President, if I may have the indulgence of the 
Senator from Georgia, I ask unanimous consent that the pending 
amendment be set aside, and on behalf of Senator Specter, I call up 
amendment No. 2557.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The assistant legislative clerk read as follows:

       The Senator from Montana [Mr. Baucus] for Mr. Specter, 
     proposes an amendment numbered 2557 to amendment No. 2530.

  Mr. BAUCUS. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To amend the Internal Revenue Code of 1986 to reset the rate 
        of tax under the alternative minimum tax at 24 percent)

       On page 217, after line 25, insert the following:

     SEC. 61_. REDUCTION IN RATE OF TENTATIVE MINIMUM TAX FOR 
                   NONCORPORATE TAXPAYERS.

       (a) In General.--Clause (i) of section 55(b)(1)(A) of the 
     Internal Revenue Code of 1986 (relating to noncorporate 
     taxpayers) is amended to read as follows:
       ``(i) In general.--In the case of a taxpayer other than a 
     corporation, the tentative minimum tax for the taxable year 
     is--

       ``(I) 24 percent of the taxable excess, reduced by
       ``(II) the alternative minimum tax foreign tax credit for 
     the taxable year.''.

       (b) Conforming Amendment.--Subparagraph (A) of section 
     55(b)(1) of such Code is amended by striking clause (iii).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

  Mr. BAUCUS. I thank my friend from Georgia. I yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia.


                           FISA Modernization

  Mr. CHAMBLISS. Mr. President, I rise tonight to support the McConnell 
legislation that has been submitted relative to FISA modernization and 
say,

[[Page 22053]]

first, that I associate myself with the remarks of the Senator from 
Maryland. She has been a huge asset on the Intelligence Committee. She 
does her homework, she works hard, she studies the issues. She is 
exactly right. This is not a partisan issue by any means. This is truly 
an American issue because it is an issue that allows us to continue to 
protect Americans and allows us to do the best job we possibly can in 
the intelligence community to ensure we do not suffer another attack on 
American soil.
  Unfortunately, we cannot guarantee that will not happen, but the fact 
is, we need this updated, even though it is temporary, FISA modernized 
to allow our intelligence community to gather the type of information 
from the bad guys who are certainly out there getting up every day and 
making plans to attack assets of America, whether they are abroad or 
whether they are assets in the United States.
  It is simply necessary that we take advantage of the technology that 
is available today that was not available at the time the original FISA 
statute was implemented and passed into law, and that we make sure we 
are giving our intelligence community all the tools they need to do 
their job in a very professional manner.
  There is a threat out there. The Secretary of the Department of 
Homeland Security has expressed recently that a threat exists, that he 
has a gut feeling something may happen. There are a lot of factors 
timewise and otherwise that make us feel that might be the case. Who 
knows. We cannot step into the minds of the bad guys who are out there.
  I will say one thing about this legislation. It does not invade the 
privacy of any group except one, and that is the terrorists. We need to 
invade the privacy of the terrorists. This bill is something that if it 
had been in place, if the tools had been in place in 2001, who knows 
whether we could have stopped the attack that took place on September 
11. But what we do know is that certain phone calls were made by some 
of the 9/11 hijackers, and if we had in place a program that we now are 
operating under, it is very likely that we might have picked up on some 
of those phone calls.
  This legislation, again, gives our intelligence community tools which 
they can use to gather information only from those people who are 
making plans to carry out a terrorist attack against the United States 
or against our allies or in some country where we have assets.
  I appreciate the cooperative spirit that, obviously, we are seeing 
from folks on the other side of the aisle. This is truly one of those 
times we need to come together in a bipartisan way and, obviously, we 
are going to make this fix to make sure our intelligence community can 
do their job in a very professional way.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. BROWN. Mr. President, I begin by thanking Chairman Baucus for his 
terrific work on perhaps the most important domestic legislation this 
year, and that is the Children's Health Insurance Program. I thank the 
Senator from Pennsylvania also, the Presiding Officer tonight, for his 
terrific work leading our freshman class on this issue. We know how 
important it is to the people, whether it is Montana, Pennsylvania, 
Maryland, Georgia, or any of the States represented here tonight.
  The children's health insurance bill meets the most basic need of 
American families. Nothing should stand in the way of this bill moving 
forward. Children too often suffer and some die because they do not 
have access to health care. In a nation as wealthy as ours, that is not 
just irresponsible, it is immoral.
  Today we have the opportunity to do the right thing for American 
families, for parents, for children. Without health insurance for their 
children, parents too often face impossible choices--go to the doctor 
when their child is sick or pay the grocery bill or the electric bill 
or the rent. These are the choices that families are forced to make--
cruel choices.
  In 1996, when Congress created the Children's Health Insurance 
Program, with a Democratic President and a Republican Congress, there 
were nearly 11 million uninsured children in the United States. In 
Ohio, my State, there were roughly 305,000 uninsured children. Today, 
thanks in large part to the Children's Health Insurance Program, those 
numbers have been reduced substantially--fewer than 9 million 
nationwide and roughly 236,000 in Ohio.
  The Children's Health Insurance Program is directly responsible for 
covering 6.6 million children across the country and more than 200,000 
children in Ohio in Athens, in Ashtabula, in Warren and West Lake, in 
Marion and Maple Heights. That is good, but it is not good enough. Mr. 
President, 150,000 low-income children, most of whom have working 
parents, in Ohio, do not have health insurance. This bill does the 
right thing on mental health, requiring parity between mental and 
physical health benefits.
  I would like to share a story I heard yesterday that should remind us 
of the importance of this provision. In 1990, Kitty Burgitt's husband 
died suddenly, leaving her to care for her 5-year-old daughter and 2-
year-old son as a single mother in Canton, OH, a city in the northeast 
part of my State. Her Social Security survivor benefits were considered 
too much to qualify for Medicaid. Six years later, Congress created the 
Children's Health Insurance Program. Kitty immediately enrolled her 
children in that program.
  Given the initial strict income eligibility provisions of the 
program, Kitty was forced to turn down raises and refuse the additional 
hours at work that she wanted to work to keep her children enrolled, to 
keep them insured.
  When her daughter was in the eighth grade, she started experiencing 
mental health problems. Then her daughter became suicidal. The 
Children's Health Insurance Program covered her treatment, which then 
was extensive. Imagine what it would have been like for Kitty if she 
had no way to help her daughter. No parent should ever feel that 
helpless. No parent should ever be forced to watch powerlessly as her 
child, or his child, suffers.
  Thankfully, because of the Children's Health Insurance Program, 
Kitty's daughter did receive the treatment she needed. Today her 
daughter is healthy and happy. As Kitty herself wrote recently:

       Today my daughter is 22, happily married with a beautiful 
     daughter of her own--

  Kitty's granddaughter--

     and has a good job as a restaurant manager.

  If we do our job this week and pass this bill, we will hear more 
success stories such as this one in the future.
  Some of my colleagues raise concern over this bill's income 
eligibility levels. I believe it is important, however, for each State, 
with its own unique set of circumstances, to have the flexibility to 
offer coverage to those it deems in need. The State makes that 
determination.
  In my State of Ohio, for instance, Governor Strickland and the State 
legislature have taken it upon themselves to raise the eligibility 
limit for the Children's Health Insurance Program to 300 percent of 
poverty level. That 300 percent is not living in the lap of luxury. It 
means a parent still cannot afford health insurance in a job where they 
are 300 percent of poverty without some help from the Children's Health 
Insurance Program.
  This means little boys, such as Marco Rodriguez, will finally have 
health insurance. Marco lives in Marion, 20 to 30 miles from where I 
grew up. He is 9\1/2\ years old. His father died last year. His mother 
works full time. This is Marco's mother. But her job does not offer 
health insurance. She cannot afford private coverage. Her income is 
just over 200 percent of poverty, roughly $24,000 a year. She works 
hard, is raising her child, she is widowed, and she makes $24,000 a 
year. Of course she cannot afford health insurance on that income. It 
is not enough to pay for food, rent, and clothing--barely--and private 
health insurance.
  So Marco, like all too many children, has been going without health 
insurance. What if something happens? One

[[Page 22054]]

major medical emergency for Marco could mean financial catastrophe for 
his mother, his family--for both of them.
  If we do our job this week, Ohio will be able to cover Marco come 
January 2008.
  Others have voiced concern over the cost of this reauthorization. It 
was a bipartisan initiative 10 years ago, with a Democratic President 
and a Republican Congress and an overwhelming number of Democrats, 
myself included, in the House of Representatives and Senate voting for 
it. We all agree this program has been a success.
  The investment we made in 1996 has proven to be a wise one. And still 
too many of my friends on the other side of the aisle hesitate. They 
hesitate about our Nation's children. They say: We like the program, 
but it is too expensive or, We have other priorities. But this is about 
priorities. And the questions are pretty simple.
  Should Congress provide for billionaire tax breaks or health 
insurance for our children? Should we provide for billions, literally 
billions in no-bid contracts in Iraq or health insurance for our 
children? Should we provide for Medicare privatization and oil company 
subsidies or health insurance for our children?
  It is time for Congress to get its priorities straight. We should 
pass the Children's Health Insurance Program.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Virginia.


                Amendment No. 2618 to Amendment No. 2530

  Mr. WEBB. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside in order that I might bring up my amendment No. 
2618 to the bill.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The assistant legislative clerk read as follows:

       The Senator from Virginia [Mr. Webb] proposes an amendment 
     numbered 2618 to amendment No. 2530.

  Mr. WEBB. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To eliminate the deferral of taxation on certain income of 
     United States shareholders attributable to controlled foreign 
                             corporations)

       At the end of title VII, insert the following:

     SEC. __. ELIMINATION OF DEFERRAL OF TAXATION OF CERTAIN 
                   INCOME OF CONTROLLED FOREIGN CORPORATIONS.

       (a) In General.--Section 952 (relating to subpart F income 
     defined) is amended by adding at the end the following new 
     subsection:
       ``(e) Special Application of Subpart.--
       ``(1) In general.--For taxable years beginning after 
     December 31, 2007, notwithstanding any other provision of 
     this subpart, the term `subpart F income' means, in the case 
     of any controlled foreign corporation, the income of such 
     corporation derived from any foreign country.
       ``(2) Applicable rules.--Rules similar to the rules under 
     the last sentence of subsection (a) and subsection (d) shall 
     apply to this subsection.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of controlled foreign 
     corporations beginning after December 31, 2007, and to 
     taxable years of United States shareholders with or within 
     which such taxable years of such corporations end.

  Mr. WEBB. Mr. President, I strongly support this bill. As an initial 
matter, I express my thanks to Senators Baucus and Grassley for their 
hard work on this bipartisan bill which will help provide health 
insurance to millions of children nationwide and hundreds of thousands 
of children in my home State of Virginia.
  For too long in this country, low-income families have been unable to 
afford health insurance for their children. Reauthorizing this program 
helps meet this urgent need. But, unfortunately, this bill does so by 
singling out one form of conduct, tobacco smoking, and then taxing many 
of the very same people the program is intended to assist.
  Not only are lower income workers more likely to smoke, they spend a 
greater percentage of their income on tobacco when they do because an 
estimated half of American smokers come from the same income groups as 
those families who are eligible for this program. In my view, this 
amounts to robbing Peter to pay Paul.
  Additionally, the very form of conduct that we are supposedly 
attempting to discourage has become the same form of conduct that we 
are implicitly hoping will continue to finance this program. I find 
this logic odd. At some level, I find it counterproductive to the very 
goals of the legislation that is before us.
  And here is another problem. This is a targeted tax on commercial 
transactions that are disproportionately engaged in by people with 
lower incomes. At the same time, our country is experiencing a vast 
accumulation of wealth amongst our highest income earners.
  Income disparities in this country are at levels that we have not 
seen for at least 70 years. Moreover, corporate profits are at an all-
time high as a percentage of our national wealth, while wages and 
salaries on our working people are at an all-time low.
  There is, in my view, a better way, a fairer way to pay for this 
program. That is why I have offered this amendment.
  Under the Federal Tax Code, American corporations are allowed to 
defer payment of American taxes on the profits earned by their overseas 
subsidiaries. Under current law, taxes on the business income of 
foreign subsidiaries are not payable until the profits are repatriated 
back to the American parent corporation and, in reality, this means 
they are not going to be paid at all.
  Companies can defer ever paying taxes in the United States by keeping 
their income overseas and making money from it indefinitely. The Tax 
Code, in other words, creates an incentive to move jobs overseas, to 
not invest in American operations, and also provides a method to 
shelter overseas profits from fair taxation.
  In just one recent example reported by the New York Times, a major 
biotech corporation--Amgen--with offshore subsidiaries used American 
tax laws to escape hundreds of millions of dollars in taxes, taxes that 
should have gone into the American treasury. Although this corporation 
reported that 80 percent of its billions of dollars of sales occurred 
in the United States, it paid only 22 percent of American taxes on its 
profits. This corporation got away with this specifically because of 
American tax policies, like many other corporations do today.
  My amendment would eliminate this deferral provision in the Tax Code. 
This critical reform would discourage these companies from moving 
American investments and jobs to foreign tax havens and raise the 
revenue necessary to expand the Children's Health Insurance Program. 
This reform also would protect American workers by reversing the 
consistent flow of American jobs that corporations are outsourcing 
abroad.
  I have been unable at this point to receive an official estimate of 
the revenues this amendment would raise, but I have consulted multiple 
credible sources and have no doubt this amendment would raise the new 
funds needed under the new policy, which are approximately $7 billion a 
year. These sources include the Joint Committee on Taxation, which 
estimated last year that deferral would raise $6.4 billion in 2008 and 
rise to $7.5 billion by 2010. It also includes the President's own 
budget proposal for fiscal 2008, which estimates that tax expenditures 
for the deferral of income of this sort would be $12.8 billion in 2008 
and rise to $16.7 billion in 2012.
  Opponents of this amendment would argue that deferral is needed to 
avoid corporate exposure to double taxation. However, in my view, that 
is a disingenuous argument. American corporations investing overseas 
currently receive a tax credit, a Federal tax credit, for their payment 
of foreign taxes of up to 35 percent. My amendment does not affect the 
availability of this credit and therefore would not result in double 
taxation, nor does my amendment affect in any way the current 
provisions regarding allocation of corporate expenses, which are 
related but separate.

[[Page 22055]]

  Some opponents might contend this is a new tax. But this is not a new 
tax. This is a way to reclaim monies that already should have been paid 
into the National Treasury by companies earning skyrocketing profits. 
This amendment closes a loophole.
  The Children's Health Insurance Program is probably the greatest 
achievement of our Congress in terms of health care insurance in the 
past decade. It has provided cost-effective health coverage to more 
than 137,000 children in Virginia in 2006 and millions of children 
across the country, reducing the number of uninsured children by one-
third. We must, however, further strengthen our investment in 
children's health coverage. Millions of children remain uninsured. That 
is why this legislation is important.
  I urge my colleagues to seize this opportunity to help children from 
America's low-income families, but I respectfully argue that we need to 
do so not with a regressive tax on people who have little ability to 
pay but, instead, by eliminating a corporate tax provision that would 
be one small step toward restoring fairness in our society and 
reinforcing the proper notions of how our Government should operate.
  I ask my colleagues to support this amendment.
  I yield the floor, and 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. 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.


                             Cloture Motion

  Mr. REID. Mr. President, I send a cloture motion to the desk.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the substitute 
     amendment No. 2530 to Calendar No. 58, H.R. 976, the Small 
     Business Tax Relief Act of 2007.
         Harry Reid, Max Baucus, Bernard Sanders, Jeff Bingaman, 
           Ted Kennedy, Maria Cantwell, B.A. Mikulski, Barbara 
           Boxer, Daniel K. Inouye, Christopher Dodd, Patty 
           Murray, Benjamin L. Cardin, Barack Obama, Kent Conrad, 
           Dick Durbin, Ken Salazar, Blanche L. Lincoln, Jack 
           Reed.


                             Cloture Motion

  Mr. REID. Mr. President, I send a cloture motion to the desk.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on Calendar No. 58, 
     H.R. 976, the Small Business Tax Relief Act of 2007.
         Harry Reid, Max Baucus, Bernard Sanders, Jeff Bingaman, 
           Ted Kennedy, Maria Cantwell, B.A. Mikulski, Barbara 
           Boxer, Daniel K. Inouye, Christopher J. Dodd, Patty 
           Murray, Byron L. Dorgan, Barack Obama, Kent Conrad, 
           Dick Durbin, Ken Salazar, Blanche L. Lincoln, Jack 
           Reed.

  Mr. REID. Mr. President, 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. KYL. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Salazar). Without objection, it is so 
ordered.


                           Amendment No. 2537

  Mr. KYL. Mr. President, I know the majority leader is going to be 
coming here shortly to conclude today's activities. Prior to that, let 
me comment a little bit on an amendment that has been offered on my 
behalf by Senator Grassley, amendment No. 2537. It is an amendment 
which deals with the so-called crowd-out effect of the Finance 
Committee bill.
  The crowd-out effect has to do with the people who are covered by 
private insurance today who would be crowded out of private insurance 
and going onto the SCHIP program, the Government program under the 
bill. The problem is that under the bill, all of the newly eligible 
people under the program are replaced literally one for one from 
private insurance to the Government program. In other words, a child or 
a family who is on private insurance today, for every one of those 
children or families who is on private insurance, when the Government 
program is expanded, they will leave the private insurance market. It 
is a one-for-one transfer. We should not be offering more Government 
benefits for insurance to cover children or anyone else when the effect 
of that is for every new person covered to have somebody leaving the 
private insurance market. The object here is to cover people with 
insurance, to allow them to have access to good care through insurance. 
We do not solve any problem at all when we take somebody who already 
has insurance and bring them into a new program.
  The CBO estimates that between 25 percent and 50 percent of all the 
eligible SCHIP recipients are crowded out of the private insurance 
market. In other words, for every 100 people on private insurance 
today, between 25 and 50 of them will leave private insurance to go to 
the SCHIP program as it is expanded. As I said, for the newly eligible, 
it is a one-for-one transfer. Why is that a good idea?
  This amendment which I have offered says that if the effect is more 
than 20 percent in the crowd-out, that is to say that through this 
program, more than 20 percent of the people who are covered leave 
private insurance to be covered by this new program, then it does not 
go into effect. But it does go into effect if the so-called crowd-out 
effect is less than 20 percent.
  For the life of me, I don't know why we would spend an additional $35 
billion to replace people who are already covered. That does not 
represent a sound and efficient use of taxpayer dollars.
  Let me make it clear that I support the reauthorization of SCHIP. I 
have supported the Republican alternative. But I believe the Finance 
Committee bill represents not just a reauthorization but an expansion 
of the program which, as the chairman himself acknowledged, is another 
step toward universal coverage.
  We do not need to be taking people off private insurance to enroll 
them into this program. The problem, and I will be very brief, is that 
the people who are added are people generally of higher income, and we 
are adding a group of adults as well. Those are people who generally 
are more covered by insurance today. So it is logical that, as CBO 
says, for every one person who is covered today, one person leaves that 
coverage to go to the SCHIP program under the committee bill. It is 
estimated that there will be about 600,000 in this category. In fact, 
CBO shows that a one-for-one replacement means that for 600,000 newly 
insured individuals, 600,000 individuals go off their private coverage.
  As I said, that simply makes no sense. It seems to me what we should 
be doing instead is providing coverage for people who do not have 
private insurance coverage. That would be a much better use of taxpayer 
dollars.
  To conclude the point, there are two reasons why this is happening 
that are not problems with the alternative, the Republican alternative 
that was voted on that failed. But they are problems with the Finance 
Committee bill. The first one is that the Finance Committee bill allows 
States to enroll children from higher income families, the very ones 
who have greater insurance coverage today. We have already talked about 
the New Jersey experience, for example, and the New York experience, in 
that regard--people at 350 percent to 400 percent of the poverty level, 
between $60,000 and $80,000 in income for a family of four. Those 
people, by and large, are already covered by insurance. Not only is 
there no reason to provide them SCHIP coverage, but we are simply 
crowding people out of the private sector into this program.

[[Page 22056]]

  If my colleagues want to avoid the crowding-out effect, it seems to 
me we should be focusing on the truly needy, the low-income children, 
not children from higher income families.
  Second, the Finance Committee bill allows States with existing 
waivers to continue enrolling parents. CBO stated:
  No studies have estimated the extent to which SCHIP reduces private 
coverage among parents so the available estimates probably 
underestimate the total reduction in private coverage.
  According to CBO's own numbers, this is a big problem. It seems to me 
we should be focused on solving that problem rather than simply adding 
to the problem as the Finance Committee does. If we are serious about 
minimizing the erosion of private coverage, then we should direct SCHIP 
funds to low-income children and not add adults; as the Budget 
Committee chairman said not too long ago, there is no ``A'' in SCHIP. 
Otherwise, CBO estimates that over 2 million individuals will go off 
private coverage under the Finance Committee bill.
  Let me state that again: 2 million individuals who currently have 
private insurance will go off that private insurance onto this new 
program or onto the program that is added to by the Finance Committee 
bill. Why would we do that? It doesn't make sense.
  My amendment will be dealt with tomorrow. We will have a chance to 
further debate it and, as I said, all it provides essentially is if 
more than 20 percent of the people who are enrolled come from the 
private insurance sector already, then the program would be in abeyance 
until that number is reduced below 20 percent.
  I also note there were several articles recently written that I think 
describe the general problem as well as this specific problem. There 
are three in particular I would like to have printed in the Record at 
the conclusion of my remarks.
  I will ask unanimous consent that the following pieces be printed in 
the Record. One is a piece by John Goodman called ``Insurance Folly,'' 
in the Wall Street Journal; another is a Wall Street Journal opinion in 
the ``Review & Outlook'' section, dated July 30, called ``The Newest 
Entitlement,'' and third is a column in my hometown newspaper, the 
Arizona Republic, an editorial, August 1, by Bob Robb, which I think 
correctly notes the problem I have discussed and issues with the 
Finance Committee bill.
  I ask unanimous consent these three published items be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     [From the Wall Street Journal]

                            Insurance Folly

                          (By John C. Goodman)

       The State Children's Health Insurance Program (Schip) was 
     originally a Republician program to provide health insurance 
     to children in near-poor families who did not qualify for 
     Medicaid. Democrats now want to expand Schip to children of 
     the middle class.
       Their efforts to do so are rightly being resisted by the 
     White House, but Senate Finance Committee Republicans have 
     already caved on an unwise compromise to make more people 
     eligible for Schip.
       On the surface, congressional Democrats appear to be 
     rescuing children from the scourge of uninsurance. The 
     reality is quite different. If they get their way, millions 
     of children will have less access to health care than they do 
     today, and the same will surprisingly be true for many low-
     income seniors.
       Studies by MIT economist Jonathan Gruber show that public 
     insurance substitutes for private insurance and the crowd-out 
     rates is high. In general, for every extra dollar spent on 
     Medicaid, private insurance contracts by 50 cents to 75 
     cents. For Schip, depending on how it is implemented, private 
     insurance could contract by about 60 cents.
       These findings make sense. Why pay for something if the 
     government offers it for free? Under congressional proposals 
     to expand Schip, the crowd out would likely be much worse. 
     The reason: Almost all the newly eligible beneficiaries 
     already have insurance.
       The Senate bill would expand the eligibility for coverage 
     under Schip to families with incomes 300% above the federal 
     poverty level ($62,000), from its present ceiling, 200% above 
     the poverty level. House Democrats want to push coverage to 
     400% ($83,000 annual income).
       Yet almost eight of every 10 children whose parents earn 
     from 200%-300% more than the poverty level already have 
     private health-care coverage, according to the Congressional 
     Budget office (CBO). At incomes between 300% and 400% more 
     than poverty, nine of every 10 children are already insured.
       What about the eight to nine million children currently 
     uninsured? Nearly 75 percent of them are already eligible for 
     Medicaid or Schip, according to the CBO. So the main result 
     of the Democrats' proposal to expand Schip will be to shift 
     middle-class children from private to public plans.
       Why is that bad? One reason is that most Schip programs pay 
     doctors at Medicaid rates--rates so low that Medicaid 
     patients are having increasing difficulty getting access to 
     health care. Anecdotal evidence suggests that U.S. Medicaid 
     patients already must wait as long for specialist care and 
     hospital surgery as in Canada.
       Many doctors won't see Medicaid patients. Among those that 
     do, many will not accept new patients. As a result, children 
     who lose private coverage and enroll in Schip are likely to 
     get less care, not more.
       There is also the issue of who exactly will be covered. 
     Republicans want to restrict Schip to children. The Democrats 
     want adults covered as well. Even under the current system, 
     children's health insurance is increasingly a ruse to cover 
     adults. Minnesota spends 61% of Schip funds on adults. 
     Wisconsin spends 75%.
       Seniors will suffer from Schip expansion too. When millions 
     shift from private to public coverage, not much happens to 
     the overall rate of uninsurance. But the government's cost 
     soars. Where's the money to come from? One idea popular with 
     some House Democrats is to reduce federal payments to 
     Medicare Advantage plans. These plans provide comprehensive 
     coverage to low-income seniors who can't afford supplemental 
     insurance to fill all the gaps in Medicare. One in five 
     seniors has enrolled in these plans and one in four of those 
     is a minority. In the House of Representatives, health care 
     for this group is a great risk.
       The proposal to expand Schip comes at a time when health-
     care spending already poses a serious threat to the federal 
     budget. The Medicare trustees tell us that the program's 
     unfunded liability is six times that of Social Security. The 
     CBO predicts that on the current course income tax rates paid 
     by the middle class will reach 66% by midcentury and the top 
     marginal rate will reach 92%.
       So what do congressional Democrats plan to do about this 
     problem? Ignore it.
       A key provision of the 2003 Medicare Modernization Act says 
     that when Medicare's finances deteriorate to a certain level 
     (that level is already reached), the president must propose 
     an appropriate reform and Congress must fast-track the 
     proposal. Yet one senior Democratic legislator--as yet 
     unidentified--wants the Schip bill to repeal that provision.
       In a way, repeal makes a certain sense. If the ship is 
     going down anyway, why spoil the fun?
                                  ____


             [From the Wall Street Journal, July 30, 2007]

                         The Newest Entitlement

       The State Children's Health Insurance Program sounds like 
     the epitome of good government: Who could be against health 
     care for children? The answer is anyone who worries about one 
     more middle-class taxpayer entitlement and a further slide to 
     a government takeover of health care. Yet Schip is sailing 
     toward a major expansion with almost no media scrutiny, and 
     with Republicans in Congress running for cover.
       Schip was enacted in 1997 to help insure children from 
     working-poor families who make too much to qualify for 
     Medicaid. In the intervening years, the program reduced the 
     rate of uninsured kids by about 25% but has also grown to 
     cover the middle class and even many adults--and it gets 
     bigger every year. Schip expires in September without 
     reauthorization, and Congressional Democrats want to enlarge 
     its $35 billion budget by at least $60 billion over five 
     years.
       State Governors from both parties are also leading the 
     charge--and for their own self-interested reasons. Schip 
     money is delivered as a block grant, which the states match 
     while designing their own insurance programs. All cost 
     overruns, however, are billed to the federal government, 
     which is on the hook for about 70% of Schip's ``matching 
     rate.'' This offers incentives for state politicians to make 
     generous promises and shift the costs to the feds, or to toy 
     around with costly universal health-care experiments. And 
     since the states only get 57 cents on the dollar for 
     Medicaid, they are working hard to transfer those recipients 
     to Schip.
       This self-interest explains a recent letter from the 
     National Governors Association demanding ``urgent action'' on 
     Schip, which got lots of favorable play in the press. Yet 
     these are the same Governors who have been moaning for years 
     about rising entitlement burdens, which is what Schip will be 
     soon enough. Particularly egregious was the signature on the 
     letter of Minnesota Governor Tim Pawlenty, a Republican who 
     regards himself a conservative health-care maven and should 
     know better.
       This ``bipartisan'' cover is serving Democrats in Congress, 
     who want to liberalize Schip eligibility as part of their 
     march to national health care. The Senate Finance Committee 
     has voted 17-4 to increase Schip

[[Page 22057]]

     spending to at least $112 billion over 10 years. Not only 
     does it use a budget trick to hide a payment hole of at least 
     $30 billion, it proposes to offset the increase by bumping up 
     the cigarette tax by 61 cents to $1 pack.
       House Democrats are putting the finishing touches on their 
     own plan, making the cigarette tax somewhat lower to win over 
     tobacco state members. Instead, the House is proposing to 
     steal nearly $50 billion from Medicare Advantage, the 
     innovative attempt to bring private competition to senior 
     health care.
       Michigan's John Dingell explains that ``these are not 
     cuts'' but ``reductions in completely unjustified 
     overpayments''--which will come as news to insurers that 
     offered coverage plans based on certain funding expectations. 
     The ``overpayments'' he's referring to were passed expressly 
     as an incentive for companies to offer Medicare Advantage in 
     rural areas with traditionally fewer insurance options--and 
     are intended to be phased out over time. Democrats apparently 
     want to starve any private option for Medicare.
       In any case, the actual costs of Schip will overwhelm these 
     financing gimmicks. Like all government insurance, Schip is 
     ``covering'' more children by displacing private insurance. 
     According to the Congressional Budget Office, for every 100 
     children who are enrolled in the proposed Schip expansion, 
     there will be a corresponding reduction in private insurance 
     for between 25 and 50 children. Although there is a net 
     increase in coverage, it comes by eroding the private system.
       This crowd-out effect is magnified moving up the income 
     scale. In 2005, 77% of children between 200% and 300% of the 
     poverty level already had private insurance, which is where 
     the Senate compromise wants to move Schip participation. New 
     York State is moving to 400% of poverty, or some $82,000 in 
     annual income. All of this betrays the fact that the real 
     political objective of Schip is more government control--
     HillaryCare on the installment plan.
       We'd have thought Capitol Hill Republicans would understand 
     all this, especially with the White House vowing to veto any 
     big Schip expansion. But we hear the GOP lacks the Senate 
     votes for a filibuster and perhaps even to sustain a veto. 
     GOP Senators Mitch McConnell and Jon Kyl are backing an 
     alternative to account for population growth and reach the 
     remaining 689,000 uninsured children that Schip was intended 
     to help. Republicans would be wise to support this version, 
     or they'll take one more step to returning to their historic 
     minority party status as tax collectors for the welfare 
     state.
                                  ____


               [From the Arizona Republic, Aug. 1, 2007]

                    Dem Health Plan a Burden on Poor

                             (By Bob Robb)

       The reauthorization of the State Children's Health 
     Insurance Program illustrates the difficulty of having a 
     sensible policy discussion in the context of American 
     politics, as currently practiced.
       According to congressional Democrats, opposition to their 
     reauthorization proposals means support for allowing low-
     income children to go without health care.
       According to Republicans, the Democrats are proposing 
     socialized medicine on the installment plan.
       A sensible policy discussion begins with what the debate 
     isn't about: health insurance coverage for low-income 
     children.
       SCHIP was intended to provide federal subsidies to insure 
     children up to 200 percent of the federal poverty level, or a 
     family income of about $40,000 a year. The program expires 
     this year and needs to be reauthorized.
       No one opposes reauthorization for its intended purpose. 
     The Bush administration has proposed reauthorization for this 
     targeted population with an extra $5 billion in funding over 
     the next five years, over the current base of $25 billion.
       The problem is that SCHIP has expanded beyond its original 
     scope, as so often happens with federal programs. In the 
     early years, many states couldn't use all their SCHIP money, 
     so the feds permitted excess funds to be used by other states 
     to extend coverage to children beyond 200 percent of the 
     poverty level and even adults.
       In Arizona, the SCHIP plan is called KidsCare. A Government 
     Accountability Office study found, however, that 56 percent 
     of the people enrolled in ``KidsCare'' were actually adults.
       Fifteen states now provide SCHIP coverage for children 
     above 200 percent of the federal poverty level, and 14 states 
     cover adults.
       Congressional Democrats propose not only to fund these 
     existing expanded programs but provide enough funding for 
     other states to substantially expand eligibility, as well. In 
     all, Democrats are proposing to more than double SCHIP 
     funding, allowing universal coverage up to 300 percent of the 
     federal poverty level, as Gov. Janet Napolitano has proposed 
     for Arizona.
       That would provide coverage up to a family income of about 
     $60,000 a year. Since the median family income in the United 
     States is just over $46,000, this reaches well into the 
     middle class.
       Here, a confusion surfaces between the issues of universal 
     access and federal subsidies. There are a lot of middle-class 
     American families that have difficulty obtaining health-
     insurance coverage. Every state, however, can provide 
     universal access by allowing buy-ins to its Medicaid program.
       The question SCHIP reauthorization poses is whether the 
     federal government should be subsidizing the health insurance 
     of middle-class families. There doesn't seem to be any 
     justification for it, particularly funded the way 
     congressional Democrats are proposing.
       To pay for the SCHIP expansion, Democrats are proposing to 
     raise tobacco taxes by up to 61 cents a pack.
       Tobacco taxes are highly regressive. So, basically, 
     Democrats are proposing to tax the poor to pay for the health 
     care of the middle class.
       Tobacco taxes are also highly uncertain. Health-care 
     advocates like them because the evidence is that they do 
     reduce consumption. However, states and the federal 
     government have already loaded up various programs, many 
     involving health care and children, on their backs. The odds 
     are very strong that tobacco taxes will not produce the 
     revenues being obligated.
       Now, Republicans are making these points. But they also are 
     employing a scare tactic of their own, that Democratic 
     proposals are basically socialized medicine on the 
     installment plan.
       However, government programs to provide subsidized access 
     to what is still a private system of health-care providers 
     are very distinct from European-style national health-care 
     systems. Moreover, federal tax policy also heavily subsidizes 
     private, employer-provided health insurance. So, this is not 
     a clean choice between public and private approaches.
       At the end of the rhetoric, however, congressional 
     Democrats aren't proposing to reauthorize a program to insure 
     low-income children. Instead, they are proposing a massive 
     expansion of subsidized health care to middle-class families, 
     funded by a large increase in heavily regressive tobacco 
     taxes.
       That's an unwise, unfair and fiscally risky scheme.

  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. CASEY. Mr. President, we are going to close for the night. I do 
wish to make a couple references to my friend from Arizona on this 
issue. I know he will be offering his amendment tomorrow. We will 
discuss and debate it more. But I have to say we have been hearing a 
lot of these arguments all week about crowd-out. I would say, 
respectfully, a lot of Americans feel crowded out right now because 
they have no health insurance. It is a terrible crisis in the life of 
too many Americans. We can debate this, and I think the numbers show 
there is a lot more crowd-out in Medicare Part D, and that was voted 
overwhelmingly by the last Congress.
  I think there is still a lot of debate to go on this, but I have to 
say there are still some people on the other side of the aisle who have 
been debating different points of this legislation all week--but they 
have their insurance. They are called Senators and their families. They 
have insurance. I do, the Presiding Officer does, the Senator from 
Arizona has insurance as a Member of the Senate. I am tired of some of 
the arguments we have heard. I do not attribute them to this Senator, 
but too often arguments have been made all during this week as a way to 
block this legislation from going forward. I think it is about time we 
got to a vote.
  Too often, in the last couple days, all we have heard are ways to 
slow this down, to impede the progress. We have heard misinformation 
about poverty level numbers, that people above 300 percent of poverty 
are getting children's health insurance right now. That is not true 
under this program.
  I think we will have more time to debate this, but we have seen a lot 
of crowding out already. The American people have had to suffer. I 
think it is a question worthy of debate. But I hope when all the 
debating is over, all the speeches and all the debates on both sides 
lead to what the American people expect from this legislation, which is 
that we cover 3.2 million more American children. That is the question 
before the Senate. We are either going to do that or not.
  Unfortunately, there are some people here who want to agree with the 
President. If the President's proposal on children's health insurance--
make no mistake; if we rubberstamp the President, 1.4 million American 
children will lose their health insurance. That is the choice. That is 
the choice for people on both sides of the aisle.
  I am pleased that in the Finance Committee we had consensus, a 17 to 
4 vote. The choice is very clear: Support

[[Page 22058]]

the President's proposal, 1.4 million kids lose their coverage; support 
the bipartisan children's health insurance initiative, 3.2 million 
children more than the 6.6 are covered. That is the way to go for 
America.
  We can have a debate tomorrow about a couple of points. But this 
debate is going to end this week, and we better leave this town having 
supported 3.2 million American children getting their health insurance.
  Mr. SPECTER. Mr. President, I voted against Senate amendment 2538 to 
the State Children's Health Insurance Program reauthorization because 
of the critical need to provide health insurance to 3.3 million 
additional children under this program. This vote should not be 
misconstrued as a vote against National Institutes of Health, NIH, 
funding but as recognizing the need to provide health insurance to 
children.
  This amendment would transfer the additional $35 billion for 
children's health insurance into a fund for NIH to increase medical 
research. As ranking member and chairman of the Labor, Health and Human 
Services, and Education Appropriations Subcommittee, I have ardently 
supported doubling funding for NIH. The fiscal year 2008 Senate Labor, 
Health and Human Services, and Education appropriations bill provides 
$29.9 billion for NIH.
  While I support an increase in NIH funding, it cannot be at the 
expense of providing much needed health care to America's children.
  I yield the floor.
  Mr. President, 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. CASEY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________