Date: 2007-08-01
Speaker: TRENT LOTT (republican)
Chamber: S

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 ift 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 programs current authorization. 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 - baselinelet me say againis $5 billion. For the next 10 years. the baseline for SCHIP is $5 -billion. It is actually $5 billion a year for-: ever. 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 programreauthorize 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 thembut they would soon find out. you do not fool the American people1.4 million kids would lose coverage. So when the- Finance Committee went to work to reauthorize this billSenator BAucus and I. with the help of Senators HATCH and ROCKEFELLERwe 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 increa se 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 billionmaintaining the current programfor 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 ofsituation my good friend from New Hampshire. Senator GREG6--whon he was speakingwas 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 dont.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 dont. but that is question for the Budget Committee to answer. Senator GREGGs committee. Senator CONRADS 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 paygo. which people around here know is short for payasyougo financing. It means the bill needs to cover its 6year costs and 11year 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 paygo requirements. Now. the SCHIP reauthorization we are debating is only a 5year 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 doesnt 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 Republicancontrolled 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 revenueraiser is not going to grow as fast as the cost of health care. generally. and specifically in this instance. the costs associated with the Childrens Health Insurance Program. So the Finance Committee did what was required to do to comply with the paygo 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 lowincome 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 5year period of time. I hope we get a lot of reform of health care in the United States that reduces costs. gets the uninsuredcovered. 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 isnothing new. But I think some are getting the impression from. some of my colleagues who use this chart that this is something newsome 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 SCRIP 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 SCRIP bill inthe context of the Medicaid Program. which SCRIP supplements. So take a closer look. Lets 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 dont change the law. that is the way it is. Now lets 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 SCRIP 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 SCRIP bill. I thought it .was too much spending. I am not particularly happy with spending $35 billion. but as Ihave said. this bill is a compromise. and it is $15 billion less than what the Democratic budget approved. So lets 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. doesnt it. than it did on that cliff chart I showed ydu ahead of time. Let me tell my colleagues then what the Finance Committee billthis little blue lineis 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 5year reauthorization do not behave as described in my friends chart. I dont 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 togetherI am referring now to Senator GREGG. the ranking merfmber 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 Republicantontrolled Congress and even with special procedural protections we call reconciliation. We only succeeded in shaving $26 billion over a 10year period on Medicaid spending. The problem of entitlement spending is still there. and SCRIP 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 GREGGS 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 GREGGS remarks. They are not without some merit. but you have to put them in context. I dont think they fit the crime we are accused of committing. I yield the floor.