William Cohen

Mr. COHEN

Mr. COHEN. I thank my friend for his comments. I point out this body has gone on record saying no more than 20. Whether or not the Senator agrees with the need for the Seawolf--that is a debatable matter obviously--the fact is that the Senate has gone on record that no more than 20 B-2 bombers should be built. And here we are at least opening up the prospect of a new line of more B-2's at a time when, in the outyears, I do not know where the money is going to come from. I know that the Senator from Alaska, the Senator from Hawaii, have been creative over the years in coming up with money that is necessary to fund our programs. But if you look past the year 2000, I do not know that even he and the Senator from Hawaii can be persuasive enough for their colleagues to say we have to appropriate that kind of money. By the way, looking at the SCN account, the Navy's shipbuilding and conversion account--and the Senator from Alaska can correct me on this--we have roughly $4 billion in the SCN account. And in order to meet the Navy's needs, by the year 2000, it is going to go up to----

Mr. COHEN. I thank my friend. As I indicated before, we are going to be going in the SCN account, the shipbuilding account, from $4 billion, roughly, up to $15 billion in the year 2000 and beyond to get the ships that the Navy indicates it is going to have to have in order to meet its requirements. I do not know where that money is going to come from. I do not know how we are going to have enough money in the shipbuilding account at the turn of the century, and I am not sure there will be a Congress willing to vote the money to fund it. That is one reason why I raise the issue on the B-2. I am at least consoled somewhat by the Senator's statement that it is not the intent of the appropriators to open up a new line but rather it is the intent to leave it up to the President to decide whether he is going to overrule his own Secretary of Defense and Chairman of the Joint Chiefs, both of whom indicated they do not need the B-2 or want it given the cost requirements of the program. I thank the Senator for yielding me this time.

Mr. COHEN

Mr. COHEN. I will withhold.

Mr. COHEN. Mr. President, during the Senate debate on the budget reconciliation bill I offered an amendment with my colleague from Arkansas, Mr. Pryor, to retain strong Federal standards for nursing homes and I am pleased that the Senate-passed budget reconciliation bill maintains the tough Federal standards that are currently in place to protect elderly and disabled individuals living in nursing homes. The continuation of OBRA '87 nursing home standards in the Senate bill is a major victory for today's 2 million nursing home residents, and tomorrow's growing elderly and disabled population. A few weeks ago I chaired a hearing of the Senate Special Committee on Aging to examine the need for strong Federal quality of care standards in nursing homes. The testimony from family members and expert witnesses convinced me more than ever that the Federal Government must continue to play a central role in monitoring and enforcing nursing home standards. The law provides a framework through which facilities can help each resident reach his or her highest practicable physical, mental, and general well-being. It also provides critical oversight and enforcement of nursing home standards, following years of evidence that the States simply did not make enforcement of nursing home standards a high priority. While the bill originally reported by the Finance Committee required that States include certain quality of care provisions in their Medigrant State plans, I had strong concerns that many of the important OBRA '87 provisions were eliminated and that the bill lacked adequate Federal oversight and enforcement of nursing home standards. Therefore, I worked with the Republican leadership and many of my colleagues on both sides of the aisle to ensure that this bill keeps intact the standards, enforcement, and Federal oversight now contained in current law. During the debate on the reconciliation bill and since its passage, the nursing home standards provisions contained in the Senate bill have been attacked as inadequate and a return to the days when nursing home residents were tethered and overdrugged. It is unfortunate that my colleagues on the other side of the aisle have chosen to play on the strong emotions and fears of families of nursing home residents. They argue that the waiver provision included in the Senate-passed bill is a veiled attempt to gut nursing home enforcement. I want to assure my colleagues that, while I would prefer that a waiver not exist, this is simply not true. An article appeared today, entitled, ``GOP Health Reforms Leaving Nursing Homes Behind. Both the House and Senate Budget Plans Propose a Wholesale Repeal of Important Nursing Home Standards First Passed in 1987,'' paints a distorted picture of the facts. The headline leaves the clear impression that both the Senate and House plans are callous and have turned their backs on nursing home residents. The article then goes on to attack the waiver process in the Senate bill as a plan to eliminate the Federal nursing home standards which we have all fought so hard to achieve. Let me set the facts straight for the record. First, the Senate bill continues Federal standards and enforcement. To lump the Senate provisions as being as bad as the House bill is simply unfair. The Senate recognized the need to maintain Federal law and did so in its reconciliation bill. Second, the Senate-passed bill does provide for States to receive waivers from the Federal nursing home reform law, but these are provided in only very limited circumstances. Specifically, a State may apply for a waiver of standards only if its standards are equal to or more stringent than the Federal requirements. The amendment clearly indicates that no such waiver is allowed unless the Secretary approves the waiver, and only if the standards are equal to or more stringent than the Federal standard. Further, the provision specifies that waivers allowed under this section in no way waive or limit the Federal Government's enforcement of tough nursing home standards, patient protections, and other provisions of OBRA '87 against the States or the nursing homes. Under the Senate-passed bill, even if a State obtains a waiver, the Federal Government retains the authority to go into specific facilities and impose penalties. Specifically, the Federal Government can still: perform look back inspections, through which the Federal Government reinspects a percentage of nursing homes already inspected by the States to determine if the States are adequately enforcing OBRA '87; enter any nursing home facility to ensure compliance with OBRA; terminate a facility's certification for Medicaid if conditions in the facility causes an immediate harm to residents; fine a facility if the nursing home is not complying with Federal law; terminate or suspend a waiver of any State that is not enforcing the Federal nursing home standards or has standards weaker than the Federal law. Colleagues on the other side of the aisle argue that the Secretary does not retain these rights and that the Federal Government is unable to enforce Federal standards against individual facilities. I maintain that this is simply not correct under the language of the Senate-passed provision and have been urging the leadership to clarify this in conference so there will be no doubt of the intent. Rather than working constructively to support and clarify this language, however, those on the other side of the aisle have decided that they can score more political points if they provide strained readings of the provisions, energize opposition among the nursing home patients' groups, and paint a picture of all Republicans trying to roll back standards and enforcement. The fact is that States are now allowed to apply more stringent standards than the Federal Government under current law. So the waiver really gives nothing to a State--other than the option of requiring nursing home standards that are tougher, with the Federal Government looking over the shoulder of the State and facility every [[Page S 16989]] step of the way. While I strongly share the concern of my colleague from Arkansas that States have not had a good history of enforcing standards in nursing homes, the law should not automatically assume that tough enforcement by States--with full monitoring and full enforcement by the Federal Government of standards--is absolutely impossible. Some critics also question whether a State could receive a waiver if its standards as a whole--rather than each and every standard--for nursing homes were equal to or more stringent than the Federal standards. I believe that the language in the Senate-passed bill means that each standard must be equal to or more equivalent to the Federal standards in order to qualify a State for a waiver. Again, I would support language to even further clarify that this is the intent--but we should do this in an effort to clarify and strengthen the bill, rather than suggesting that there is a veiled effort to create loopholes for nursing homes. In addition, under the Senate-passed bill the Secretary is given 120 days to approve or disapprove a waiver application from a State. Opponents challenge this provision as perhaps allowing a State waiver to go into effect by default if the Secretary does not act within this time frame. This interpretation is a far stretch, since as my colleagues well know, under current law similar waivers are not granted by default if the Secretary does not expressly approve the waiver. As I stated on the floor during debate on the reconciliation bill, I am pleased that the amendment that I cosponsored to preserve the current Federal law on nursing home standards was adopted and I supported the Roth amendment to the bill only because I believe that the waiver provisions contained in it do not undermine strong Federal enforcement and standards. I assure my colleagues that I will continue to press for strong Federal standards and enforcement, and will not support a conference report on the budget reconciliation bill that I believe will dilute either Federal standards or Federal enforcement against States or individual facilities. Mr. President, I intend to support the motion of the Senator from Arkansas, but I also want to indicate I believe that there has been a distortion of what the Senate did last week. The indication is that somehow the Republicans have been less than concerned about nursing home residents and their rights and the standard that will be applied to make sure that at the very highest levels we maintain Federal enforcement obligation. I wish to assure my colleague from Arkansas that the measure which passed--both measures--and I supported, and the Republican substitute, will insist upon standards that States can measure up to are higher than Federal standards. We still retain Federal enforcement rights. I believe you are insisting there be no waivers, but I wish to assure you that Republicans, by no means, are going to tolerate any diminution of either standards or enforcement by the Federal Government.

Mr. COHEN. The proposal that was voted last week in the Senate allowed for States that either had equal to or greater standards to apply for a waiver that could be granted but only if the Federal Government retained enforcement standards, enforcement rights. That is the measure we debated.

Mr. COHEN

Mr. COHEN. Mr. President, the Istook amendment before the Senate today presents a difficult issue because the principles fueling both sides of the debate have some merit. On the one hand, organizations that are subsidized by the Federal Government should not be allowed to lobby the Government or engage in unlimited grassroots political activism. When highly subsidized organizations are actively participating in political activities, the public perception is that taxpayer funds are being used for partisan purposes. This perception if formed even if there are safeguards in place to prohibit the use of Federal funds for lobbying or political campaigning. On the other hand, our political process would suffer if nonprofit groups were restrained from engaging in public debate. These organizations represent millions of Americans who do not have the time or ability to monitor day-to-day events in Congress or their State legislatures, but want their interests to be represented on issues ranging from environmental protection to the right to bear arms. To place severe restrictions on the ability of these organizations to analyze legislation, testify at public hearings, comment on pending regulations, and advocate their views in the political arena would not only deprive policymakers of valuable expertise, but would leave many Americans without an effective voice in the political process. In my view, our Tax Code does a fairly good job of balancing these competing principles. Section 501(c)(3) of the Code allows taxpayers to deduct contributions to charitable organizations. Since virtually all the revenue of these 501(c)(3) organizations are federally subsidized through the Tax Code modest limitations are placed on the organizations' lobbying and grassroots activities. However, in recognition of the important role that charitable organizations play in our society, they are allowed to comment on regulations that affect them, join litigation that implicates their interests, and communicate with their members on political issues without limitation. The Simpson-Craig amendment to the Treasury-Postal appropriations bill made an important modification to the Tax Code. The amendment applies to tax-exempt nonprofit corporations, which, under section 501(c)(4) of the Tax Code, are allowed to lobby without limitation. Under the amendment, 501(c)(4) organizations with annual revenues in excess of $10 million would no longer be permitted to both lobby without limitation and receive Federal grants. I support this change in the law because I do not believe that large organizations engaged in substantial lobbying activities should be eligible to receive taxpayer funds. If an organization wants to apply for Federal funding, it should be required to submit to the restrictions on lobbying activities contained in section 501(c)(3) of the Code. The Istook amendment, however, would have a much more sweeping impact on nonprofit organizations. It would affect every organization that receives Federal grant money, as well as, organizations that believe they may wish to apply for grants in the future. In addition, the Istook amendment places limits on a broad category of activities that have never been regulated by the Federal Government before such as filing an amicus brief, writing a letter to the editor, or providing office space to an affiliate organization. Most significant, the Istook amendment would impose a byzantine set of reporting requirements on nonprofit corporations. Each organization would be required to establish separate accounts to keep track of how much money it spends on lobbying and political advocacy, since the amendment imposes different monetary thresholds on each category of activity. They would also be required to determine whether any corporation or organization they do business with spends more than 15 [[Page S 16859]] percent of their funds on political advocacy, because, if so, any funds transferred to such an organization counts toward the grantee's advocacy threshold. Through this provision, the sponsors of the Istook amendment have imposed a new recordkeeping requirement on virtually every private corporation in the country. The Istook amendment will cause many more problems than it would solve. If there are nonprofit organizations that are abusing their tax status or misusing Federal grantees, adjustments to the Tax Code such as the Simpson-Craig proposal may be necessary. But there is no reason to impose such a restrictive and burdensome new law on a sector of society that does much good work and plays an important role in our democracy.

Mr. COHEN

Mr. COHEN. Reserving the right to object, Mr. President. As I understand it, then, after the one motion to strike the Commerce Department provision, which will take very little time, there will be one other motion to strike everything else, so that those of us--at least myself--would not have an opportunity to express my support for including a balanced budget within a 7-year timeframe and a prohibition against delving into any Social Security and pension funds, and limited to that, I would have to accept the other provision added by the House. In other words, it is either all or nothing after we delete the Commerce Department provision.

Mr. COHEN

Mr. COHEN. Mr. President, I wish to announce that the Subcommittee on Oversight of Government Management and the District of Columbia, Committee on Governmental Affairs, will hold a hearing on Thursday, November 16, at 2:30 p.m., in room 342 of the Dirksen Senate Office Building, on S. 1224, the Administrative Disputes Resolution Act of 1995.

Mr. COHEN

Mr. COHEN. Mr. President, I want to register my opposition to the provisions of the Transportation appropriations conference report that exempt the Federal Aviation Administration [FAA] from Government-wide procurement and personnel rules. These provisions were included by the Appropriations Committee in the Senate passed bill at the recommendation of the FAA and will take effect on April 1, 1996, unless the Congress enacts preemptive FAA reform legislation before then. The FAA asserts that these exemptions are necessary because personnel and procurement laws have stood in the way of modernizing the FAA's Air Traffic Control System. The FAA's failure to modernize the system, however, is not rooted in the Federal procurement and personnel systems. Instead, it is a symptom of a widespread and serious management deficiency which permeates the FAA. Numerous GAO reports and DOT Inspector General reports over the last 5 years have outlined the problems the FAA has had in modernizing its air traffic control system. These reports have consistently cited poor management, not the procurement or personnel systems, as the primary cause of FAA's failures. I understand and share the frustration with the lack of progress at the FAA. The air traffic control system designed to keep our skies safe is crumbling, and each failure of the system leads to a chorus of calls for action. Regrettably, however, out of frustration at the FAA's inability to succeed in modernizing our air traffic control system, Congress is about to grant a special dispensation to an agency that has not earned it and is ill-prepared to accept the responsibilities that such an exemption will require. If the FAA was better at managing than denying there is a problem, defending its poor performance, and deflecting criticism away from the agency, we would have replaced our air traffic control system years ago and would not have 1950's and 1960's technology guiding our Nation's air traffic. I have been working over the past 3 years to enable Federal agencies such as the FAA to more effectively incorporate advanced computer technology into its operations. Last year, I issued a report that documented how the Federal procurement process contributes to the Government buying outdated technology but also how poor FAA management led to the disaster of the present air traffic control system. Specifically, FAA has failed in its modernization efforts, wasted billions of taxpayer dollars and still has not been able to update its computer systems since the mid-1960's due to consistently poor management. Meanwhile, the Nation's air traffic control system is wearing out. To keep the system running, the FAA must search Radio Shack for spare parts and buy vacuum tubes from Third World manufacturers because no one in the United States makes them anymore. While it takes the Federal Government an average of 4 years compared to 1 year in the private sector to buy new technology, 30-year-old FAA computers are failing with increasing frequency in Chicago, Dallas, New York and elsewhere across the country. While the Government's antiquated procurement rules definitely slow down the process and may add years to computer buys, the rules do not explain why the FAA has not modernized its systems in decades or explain how scores of other agencies have been able to work within the rules to replace antiquated vacuum tube computers and radars. I am working to accomplish reforms to the Federal procurement system. This year I introduced The Information Technology Management Reform Act of 1995 which was approved as an amendment to the fiscal year 1996 Defense authorization bill. The amendment includes significant changes to existing procurement regulations and procedures which would help agencies such as the FAA buy technology by providing relief from cumbersome requirements while ensuring a reasonable and responsible approach. Among other provisions, the amendment repeals the Brooks Act, authorizes commercial-like buying procedures, and emphasizes the results of the procurement process rather than the process itself while holding agencies like the FAA accountable for their results. The Senate is now conferencing this amendment with the House proposed procurement reform bill put forward by Representatives Clinger and Spence. The House has proposed serious reform in the area of streamlining the procurement process, conducting efficient competitions and making it easier to buy commercial products. I believe we will be successful in getting these proposals enacted into law and these reforms will give FAA the flexibility to effectively buy the technology it needs. These reforms, however, will not guarantee success. We can legislate the framework for effective management to take place, but we cannot legislate good management. While we need to reform the way the Government buys computers, the FAA's failure to modernize the air traffic control system is not derived from legislated procurement and personnel requirements. It is the lack of adequate planning and a constantly changing road map of where the FAA is going that has impeded completion of the modernization effort. This is caused by managers not knowing what they want and continually changing program requirements which drives up the cost to the taxpayer. The problem is that no one, including Congress, has ever held FAA's managers accountable for their failures. Management problems at FAA will not be solved by the exemptions contained in the appropriations bill. To the contrary, I believe the exemptions will result in more cost and less results. The exemptions do nothing to deal with the fundamental problem of poor management at the FAA. The proposed exemptions, in addition to lacking merit, also set a dangerous precedent. Having seen the FAA's success in avoiding accountability and obtaining special treatment, other agencies may seek similar legislative exemptions. If Congress acquiesces to these piecemeal approaches, the Federal Government will be plagued by conflicting and contradictory procurement laws and personnel systems which will make it harder--not easier--to do business with the Government. Industry will have to learn literally hundreds of procurement systems. The rational approach is to have one procurement system in the Government that addresses the problems which may be perceived to be unique to FAA, but are common in every agency. This conference report undermines ongoing efforts to enact Government-wide procurement reform, as well as rewards inept management at the FAA with exemptions from oversight rules when they are most needed. If the conference report is adopted, as I expect it will be, I urge the administration and FAA to use the new discretion authorized by the bill wisely and I urge my colleagues to hold FAA accountable for its progress in modernizing the Nation's air traffic control system. By absolving the FAA of its responsibility for past failures, Congress must now provide greater oversight of what FAA does with its new powers. The new authority under this bill will not go into effect if Congress enacts FAA reform legislation by April 1 of next year. When the Commerce Committee marks up its own bill to meet this deadline, I urge the committee members to look at what the Congress and the administration are doing to streamline the procurement process. They will then see that we are fixing the procurement system on a Gov- ernment-wide basis, and they can then focus on the real issue of managerial reform at FAA. For it is only through more effective management that the FAA will be able to efficiently and effectively modernize the air traffic control system and confront the other challenges to aviation safety in the 21st century.

Mr. COHEN

Mr. COHEN. Mr. President, I want to take this opportunity to address some of the Medicare and Medicaid provisions of this budget reconciliation legislation. For the past few months, the debate on Medicare has been rife with partisan fingerpointing. Democrats accuse Republicans of ravaging Medicare, while Republicans counter with charges that the Democrats are failing to restore solvency to the program. But the simple fact is that the Medicare hospital trust fund is going broke, and spending for Medicare part B--the optional program that covers seniors' doctor bills--is increasing at an unsustainable rate. Reasonable minds may disagree on how to resolve the looming crisis. But we cannot take the easy route and pretend to senior citizens--or Medicare providers--that the crisis will go away if we simply look the other way. Changes in Medicare are crucial if it is to survive at all for current and future senior citizens. The Republican budget plan takes the tough steps necessary not only to restore solvency to the trust fund but also to prepare Medicare for the 21st century. The President and congressional Democrats claim that $90 or $100 billion in savings will be sufficient to ``fix'' Medicare, and that the $270 billion in savings proposed in this bill cut too far and too deep. What the Democrats have proposed would certainly be more politically palatable. But their proposal falls far short of the reforms that will be necessary to prepare Medicare for the future. Guy King, the former chief actuary for the Health Care Financing Administration agrees with the Democrats that $90 billion will keep the trust fund solvent until 2006. But, by 2010, the year the baby boomers begin to retire, it will leave Medicare $309 billion in the red. It will be difficult enough to cope with this tidal wave of retirees when Medicare is solvent. It will be impossible if the program is over $300 billion short. Under Republican budget, Medicare spending will continue to grow at an average annual rate of 6.2 percent over the next 7 years--less than the current 10 percent rate of growth, but still twice the rate of inflation. In fact, per beneficiary spending in Maine will increase by almost $2,000 over the next 7 years. Equally important to controlling growth, the proposal will give beneficiaries more choice. The ``Medicare Choice'' plan contained in the bill closely resembles the Federal Employee Health Benefit program. Each year, Medicare beneficiaries will be given information on a number of plans available in their areas. They will then be able to elect to remain in the traditional fee-for-service plan or they can choose from a variety of other insurance options, such as health maintenance organizations, physician and hospital sponsored networks, or medical savings accounts. The proposal does include, for the first time, an ``affluence test'' that would require the wealthiest beneficiaries to pay a fairer share of the costs of the Medicare program. Taxpayers currently subsidize about 70 percent of the costs of Medicare beneficiaries' part B premium cost. The Republican plan phases out these taxpayer subsidies for upper-income retirees and eliminates them completely for individuals with incomes over $100,000 and couples over $175,000. I believe that this is fair. There is no good reason why a working family with an income of $40,000 should be subsidizing wealthy retirees earning more than four times as much. Further, the vast majority of Medicare beneficiaries will be unaffected by the change--about 98 percent of all Maine Medicare beneficiaries have an income below the ``affluence test'' threshold. I am very pleased that this budget bill includes tough anti-fraud legislation that I introduced earlier this year to help rid Medicare of the fraud and abuse that robs the program of as much as $15 billion a year. Specifically, the proposal creates tough new criminal statutes to help prosecutors pursue health care fraud more swiftly and efficiently, increases fines and penaties for billing Medicare and Medicaid for unnecessary services, over billing, and for other frauds against these and all federal health care programs, and makes it easier to kick fraudulent providers out of the Medicare and Medicaid program, so they do not continue to rip off the system. More importantly, the bill establishes an anti-fraud and abuse program to coordinate Federal and State efforts against health care fraud, and substantially increases funding for investigative efforts, auditors, and prosecutors by flowing back a portion of fines and penalties collected from health care fraud efforts to law enforcement. According to the Congressional Budget Office, these provisions will yield over $4 billion in scorable savings to Medicare--without costing a penny to senior citizens. I am convinced that the long-term savings are much greater, and that billions more will be saved once dishonest providers realize that we are cracking down on fraud, and that they can no longer get away with illegally padding their bills to pad their own pockets. The proposal also makes significant reforms in the Medicaid program. Like Medicare, Medicaid is one of our fastest growing entitlement programs. Over the past few years, Medicare spending has increased at an alarming rate. Between 1988 and 1993, program costs have more than doubled. From 1990 to 1992, Medicaid grew at an average annual rate of 28 percent, while private health care and Medicare costs grew at less than one half that rate. The current growth in Medicaid spending clearly cannot be sustained by either Federal or State budgets. In Maine, 22 cents out of every dollar spent by the State goes to pay for Medicaid, and next year, it may be even more. We simply cannot sit back and watch the program consumer get bigger and bigger bites out of the taxpayer dollar each year. Under this budget plan, the growth in Federal Medicaid spending-- which is now just over 10 percent a year--would be limited to a 7.2 percent growth rate in 1996, 6.8 percent in 1997, and 4 percent for the remaining 5 years. The plan achieves the necessary savings by converting Medicaid into a block grant which would guarantee only a lump sum payment to the States with very little in the way of strings. While I strongly support increased State flexibility with regard to Medicaid, I believe that some Federal standards should remain in place to help ensure quality and to maintain some protections for vulnerable populations. This is especially important given the fact that the Federal Government will be committing nearly $800 billion in Federal dollars over the next 7 years toward the Medicaid program. Therefore, I worked to ensure that guarantees of coverage for low- income children, pregnant women and the disabled--including the disabled elderly--were included in the final package. I am pleased that the bill as amended by the Senate includes provisions to provide these minimum guarantees to our vulnerable citziens. I am also pleased that the final bill includes provisions that I and other moderate Republican Members authored, namely, a requirement that States continue to pay Medicare premiums for low-income Medicaid beneficiaries and requirements that States apply the same solvency requirements on Medicaid providers as on private sector plans. I am also pleased that this package provides has incorporated several of the provisions included in my legislation. The Private Long-Term Care Family Protection Act of 1995 to improve access to long-term care services. The legislation takes a big step forward in creating incentives for older Americans and their families to plan for future long-term care expenses and [[Page S 16043]] removes tax barriers that stifle the private long-term care insurance market. As Chairman of the Senate Special Committee on Aging, I know the obstacles many disabled older Americans and their families face paying for necessary long-term care. Despite heroic caregiving efforts by spouses, children and friends, many disabled Americans do not receive the appropriate medical and social services they desperately need. Families are literally torn apart or pushed to the brink of financial disaster due to the overwhelming costs of long-term care. While approximately 38 million people lack basic health insurance, almost every American family is exposed to the catastrophic costs of long-term care. In fact, less than 3 percent of all Americans have insurance to cover long term care. Sadly, many families are under the erroneous impression that their current insurance or Medicare will cover necessary long-term care expenses. It is only when a loved-one becomes disabled that they discover coverage is limited to acute medical care and that long nursing home stays and extended home care services must be paid for out-of-pocket. This bill encourages personal responsibility and makes it easier for individuals to plan for their future long-term care needs. It provides important tax incentives for the purchase of long-term care insurance and places consumer protections on long-term care insurance policies so quality products will be affordable and accessible to more Americans. A strong private long-term care market will not only give individuals greater financial security for their future, but will ease the financial burden on the Federal Government for years to come, as our population ages and more elderly persons need long-term care services. In addition to providing better access to long-term care services, this bill incorporates a demonstration project I introduced last year to explore ways to better integrate long-term care with the rest of the health care system. Today, many of the most expensive, chronically-ill elderly and disabled Americans are eligible for both Medicare and Medicaid services. While these programs may cover most of their necessary care, patients are often faced with a bias toward institutional care and a maze of complex and often incompatible policies and rules. The demonstration project included in this bill will allow up to 10 States to pool Medicare and Medicaid dollars for the purpose of creating a more balanced and cost-effective acute and long-term care delivery system. These projects will help States develop ways to better manage the care of high cost beneficiaries and offer elderly and disabled Americans full integration of services, including case management, preventive care and interventions to avoid institutionalization whenever possible. I am also very pleased that this bill now maintains the tough Federal standards that are currently in place to protect elderly and disabled individuals living in nursing homes. Placing a parent, spouse, disabled child, or other loved one in a nursing home is one of the most agonizing decisions a family ever faces. Even once at peace with that decision, the nagging fear that a loved one may not receive adequate care, or may be abused or neglected in a nursing home, continues to haunt families nationwide. The continuation of OBRA '87 nursing home regulations is a major victory for today's two million nursing home residents, and tomorrow's growing elderly and disabled population. This week I chaired a hearing of the Senate Special Committee on Aging hearing to examine the need for strong Federal quality of care standards in nursing homes. The testimony from family members and expert witnesses convinced me more than ever that the Federal Government must continue a central role in monitoring and enforcing nursing home standards. Witnesses shared with me heart-wrenching stories of how their family members were overdrugged, placed in physical restraints, and left to sit in their own waste while in nursing homes. I was also handed a picture by a daughter of one nursing home patient that showed a bloody, oozing bed sore that I will not soon forget. The basis for this Federal nursing home standards law is simple, strong, and clear: that residents in nursing homes which receive Federal Medicare or Medicaid dollars should be treated with care and dignity. The law provides a framework through which facilities can help each resident reach his or her highest practicable physical, mental, and general well-being. It also provides critical oversight and enforcement of nursing home standards, following years of evidence that the states simply did not make enforcement of nursing home standards a high priority. While the Finance Committee bill required that states include certain quality of care provisions in their Medigrant State plans, I had strong concerns that many of the important OBRA '87 provisions were eliminated that the bill lacked adequate Federal oversight and enforcement of nursing home standards. Over the past few days I have worked with the Republican leadership and many of my colleagues on both sides of the aisle to ensure that this bill keeps intact the standards, enforcement and Federal oversight now contained in current law. No family member should have to lie awake at night worrying if their loved-ones are being abused or neglected in a nursing home. This bill gives nursing home residents and families peace of mind that their rights are protected and that the Federal Government will be ensuring States continue to enforce quality standards for nursing home care. The bill provides for states to receive waivers from the Federal nursing home reform law only in tightly crafted circumstances. Specifically, a State may apply for a waiver of standards only if its standards are equal to or more stringent than the Federal requirements. The amendment clearly indicates that no such waiver is allowed unless the Secretary approves the waiver, and only if each standard is equal to or more stringent than the Federal standard. Further, the provision specifies that waivers allowed under this section in no way waives or limits the Federal Government's enforcement of tough nursing home standards, patient protections, and other provisions of OBRA 87. Mr. President, while I believe that this package includes many important steps toward reforming Medicare and Medicaid, there are some elements of the proposals that I do not support. During the course of the debate on the bill, I have supported amendments and worked to incorporate provisions aimed at striking a more appropriate balance between Federal responsibility and State flexibility, and ensuring protections for our most vulnerable populations. This effort is far from complete and I will continue to work toward achieving the goals of deficit reduction and Medicare and Medicaid reform. Mr. President, let me address the issues raised by my colleague from Arkansas, since he and I have worked for many years in dealing with the nursing home reform. It was called OBRA 87, but it is basically the nursing home reform that we worked 15 to 17 years to get passed. We held a hearing this week in the Aging Committee in which we, once again, reaffirmed the need and saw the need to maintain strong Federal standards over nursing homes in our country--not only standards, but enforcement, oversight and enforcement procedures. This is not, as some might think, a last-minute attempt to weaken and dilute what was done this morning. I should tell my colleagues that I have been working for the past 3 or 4 days with the majority leader and his staff, anticipating that we would have a debate, understanding the House of Representatives wants no standards imposed. They want to turn it over to the States entirely. In anticipating that, I went to the majority leader saying, this is important to me, it is important to us, it is important to the country. We need to develop these standards and do it in a way that we can have broad, bipartisan support. So that has been something we have worked on for the past 3 days. In fact, we worked until last night midnight trying to work out the language. So I just want to assure my colleagues on the other side, this is not something that has been concocted in [[Page S 16044]] the dark of the night in order to weaken what was done this morning. I supported strongly what was done this morning. This particular measure reaffirms the need to have OBRA 87 standards. We want the nursing home reform standards we passed in 1987. We finally started to get the civil monetary penalties imposed as of July of this year. We finally have some bite into those standards. I do not want to see those thrown overboard. I said to my colleagues on this side of the aisle that we need these standards. Let us reaffirm our support for them. Let us reinsert OBRA 87, as such, and we can make some changes in some of the paperwork and the burdens that the nursing home industry has complained to us about. I think my colleague from Arkansas will agree that we have had these complaints. No law is perfect. We have tried to modify laws over the years to make sure that, if we overreach, if something is too burdensome, too costly, or duplicative, we make changes. So we made some minor changes which I think are positive as far as I am concerned. The one apprehension I had is in the point raised by my friend from Arkansas; that is, ``If States show that they have standards equal to or greater than. . .''--I saw that as a red flag and said, wait a minute, I do not want to create that much of an exemption. I am not sure where the enforcement is going to lie. I worked very hard late last night with my staff and with the majority staff to make sure that any State--and I do not know of any State that has the same or better ones than the Federal ones. But assuming States come forward, as they have not in the past, and raise their standards to those at the Federal level, if they can establish that, and if they can satisfy the Secretary of Health and Human Services that they have done that, that does not mean they are free and clear to go forward and then abuse their patients. I insisted that the Federal Government still retain oversight and still retain enforcement responsibilities. I believe that is in the law itself, in the language--that the Federal Government would still have the ability to go in to find out if there are violations and to enforce penalties. I know my colleague from Arkansas disagrees with that interpretation. But that is specifically what we worked out last evening. I believe that is in the language itself. I will yield to my friend if he has a question.

Mr. COHEN. If you look on page 38 under section (D): No Waiver of Enforcement. A State granted a waiver under subparagraph (A) shall be subject to (i) the penalty described in subsection (b); (ii) suspension or termination, as determined by the Secretary, of the waiver granted under subparagraph (A); and any other authority available to the Secretary to enforce the requirements of section 1919, as so in effect. What we have done in this section is to say that just because you get a waiver, you are not free from the enforcement provisions here. The Federal Government retains the authority to go in and impose those penalties. Were that not in there, I would not be supporting this. Let me say one other thing to my colleagues. As I indicated before, the House has no such protection. We passed the measure we supported this morning by, I think, three votes. It is my belief--and I support what we did this morning, and I reaffirm that action--that we are going to be in a much stronger position with a majority endorsing what we are doing here and going to the conferees and saying we want this provision, and it will remain in the bill, and we will have it when it goes to the President.

Mr. COHEN. I thank the Senator for yielding. If I could point out what is also in this measure that has not been talked about in the last few moments. No. 1, there are set-asides for the QMB program. I think everyone is familiar with what I am talking about. That is in the manager's amendment. There is a requirement that States impose strong solvency standards on Medicaid providers. That is in this amendment. There is an increase in Medicaid funding. That is in this amendment. There is more money for Medicare in direct education payments, and allows for more causes of action to enforce Medicaid provisions. What was not talked about in terms of this measure is the following: We, under this measure, are imposing the nursing home reforms on the States. OBRA 1987 will remain in effect. That is what this amendment contains. No. 2, not only do we have the same standards in effect, we also have enforcement in effect. Those two key points have to be made. The States are required to comply with the national standards, and those enforcement standards remain in effect. There is a waiver provision contained on page 38. And I call all of the attention of my colleagues to it. What it says is, if a State does in fact have equal to or greater standards, they [[Page S 16048]] may qualify or try to apply for a waiver. They can do that. If they have penalties that are equal to or greater than what is in the Federal law, they can apply for the waiver. The Secretary of HHS has 120 days, in which time he either grants it or denies it. And assuming he or she grants it, he or she still retains the authority to go in there and impose penalties upon the State if there is any deviation from the standards. They can suspend and terminate the institution. They can terminate the waiver. No. 3, at the bottom of the page, please look at it. ``Any other authority available to the Secretary to enforce requirements of section 1919.'' That is OBRA. That says the Secretary of HHS still has all of the authority to enforce every single provision in OBRA '87, all the way up to the change we made as of this date. So, I want to assure my colleagues I would not be supporting this if I did not believe that we for the first time have the majority saying we want to maintain OBRA '87. We want the same standards. We want the same enforcement levels. We will provide some opportunities for a waiver, but only if they measure up to what we expect, and then the Secretary retains the authority to impose every single penalty. So in many ways we give more authority to the Secretary under these circumstances. So, please, I hope everyone will not mischaracterize what is being done here.

Mr. COHEN

Mr. COHEN. Mr. President, I have enormous respect for my Republican colleagues for producing this historic budget. For the first time in a generation the Senate is presented with a plan that actually balances the budget. Earlier this year, opponents of the balanced budget amendment charged that the amendment was a gimmick designed to allow Members to say they support a balanced budget without having to explain exactly how to achieve this. I am proud that these critics have been proven wrong. Despite the loss of the balanced budget amendment, this Republican Congress has persevered in producing a specific plan to balance the budget in 2002-- the same year called for in the balanced budget amendment. The spending cuts called for in this plan are significant, and many of them are well overdue. My concern is with the tax cuts. I do not think we should be cutting taxes at the same time we are trying to balance the budget. Trying to do both at once is like driving with one foot on the gas and the other on the brake. I think the tough cuts proposed in this plan would be more easily justified without the tax cuts. Any way you look at it, because of these tax cuts, the Federal Government will have to borrow $245 billion more over the next 7 years than it otherwise would. This is particularly troubling in light of the fact that, if no changes are made in the Federal budget, children born today will face a lifetime tax burden of 82 percent. Such a tax burden is clearly unsustainable and intolerable. Paying for tax cuts with borrowed money is really more of a tax deferral than a tax cut. At some point, future taxpayers will be forced to pay back the $245 billion and their tax burden will be higher than it otherwise might be. If the effect of borrowing money for tax cuts today is to increase the tax burden on future generations, the entire purpose of balancing the budget is undermined. We will still be asking our children to foot the bill. Balancing the budget is itself a tax cut in that it would relieve families of the hidden taxes associated with servicing the national debt. Interest on this debt costs the average household over $800 a year. Balancing the budget more quickly and forgoing a deficit- financed tax cut would ease the burden of these hidden taxes. Balancing the budget more quickly would also lower interest costs for mortgages and student loans--saving families thousands of dollars. Congress must focus on increasing the national savings rate. The surest way to achieve this goal is by reducing the deficit and by fundamentally reforming the tax code. The tax cuts proposed in the pending bill would frustrate both of these goals. The Tax Code would be complicated further and the deficit would be $245 billion larger. Let me be clear. If not for the budget deficit, I too would support a broad-based tax cut. I am no fan of higher taxes. I opposed President Clinton's deficit plan because it relied too heavily on tax increases and not enough on spending cuts. It is one thing to oppose further tax increases. It is quite another, however, to support large tax cuts in the face of looming deficits. While the size of the tax cuts prevent me from voting for this budget, I appreciate the willingness of the majority leader, Senator Domenici and Senator Roth to work with me and other Senators to make some important changes to the bill affecting the education and Medicaid programs. In addition, important Federal nursing home standards were maintained. While these improvements were substantial, they could not offset my overarching concerns with cutting taxes by $245 billion at this time. I am confident that the Senate will have an opportunity to consider another balanced budget plan this year. The budget in its current form will almost certainly be vetoed by the President. Subsequent to this veto, I look forward to working with my colleagues to craft a new plan that maintains the goal of balancing the budget without cutting taxes by $245 billion.

Mr. COHEN

Mr. COHEN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. COHEN. Mr. President, I was here listening to the distinguished Senator from South Carolina talking a moment ago. As always, I am impressed with his vigor, vitality, and enthusiasm and, indeed, his stamina. I also found myself in agreement with much, if not most, of what he was saying. I agree that we should vote yes on deficit reduction, and I see my friend from New Mexico here. I want to tell him how much I admire him personally, the job he has done and the work that he has put in over the years on the Budget Committee, the years he has spent dedicating himself to budget reductions and trying to achieve a balanced budget for this country. So I do not want him in any way to regard the comments I might make in the next few moments as being in derogation of my respect and admiration for him. I agree with what Senator Thurmond said; we have to vote yes on deficit reduction. I believe that. I believe we have to vote yes on cutting spending. I believe we have to vote yes on reforming programs which have heretofore been regarded as untouchable, being third rails we cannot touch. I think we have reached the point in our history where we have to look at virtually every program and not decide that any of them are immune from reform, from trimming, from cutting, maybe even elimination. But there are other items in this package that I do not support. I do not support drilling in ANWR. I do not support opening that up. I do not, frankly, support calling for tax reductions at a time when we are calling for deep budget cuts. For me, it is the equivalent of putting our foot on the brake and putting our foot on the pedal at the same time. It is a personal decision on my part. I feel that I can support virtually all the cuts that are necessary to achieve a balanced budget by the year 2002. I was pleased to hear President Clinton indicate that he, No. 1, believes we should strive for a balanced budget. Initially he said 10 years, then it was 9 years, and now I believe it is even 7 years. I think that is quite a concession on his part, that he agrees that we ought to have a balanced budget within a 7-year timeframe. The dilemma that I face is like that of several other of my colleagues. This may be the only vehicle to date that we have for achieving a balanced budget by the year 2002. This may be only part of the process that is underway. This may be act II of a three-part drama that has to be played out that was initiated by the Contract With America, as being part one in its adoption, and part two being our deliberations and debate, and, ultimately, votes here in the Senate and conference with the House, to present a package that will be sent to the President that most, if not all, of us anticipate will be vetoed by the President because it does not include some of his priorities. That may be act II. Ultimately, we have to come to act III, which is where we sit down with the President and work out our differences--again, being committed to a balanced budget by the year 2002. So I will listen with some interest as we proceed throughout the evening and into tomorrow as to whether or not I can support the final package. But I indicate today, as I did last evening, I think it is inappropriate that we have massive tax reductions at a time when we are trying to balance the budget and cut the deficit to achieve a balanced budget by the year 2002. And so I intend to support various amendments that will be offered. I may, in fact, offer an amendment to strike the tax cuts in their entirety. But it may be that that matter has already been debated long enough on the Senate floor. It is my personal judgment that we ought to do everything we can to make the reductions that we have long deferred in making, that we ought to do it within a 7-year timeframe, that we should support our chairman in his efforts for what he has done to produce that. But I must say, Mr. President, that I have great reservations about calling for substantial tax reductions at the same time we are asking for substantial cutbacks in programs. So I will listen with interest as we proceed throughout the evening and tomorrow. But I indicate my great admiration and respect for Senator Domenici and the effort he has undertaken to produce a reconciliation package that, perhaps, is only part two or act II of the three-act drama that has to be played out.

Mr. COHEN. Mr. President, ordinarily I find myself in agreement with the Senator from Iowa, dealing with health care fraud, but I must say in this particular circumstance I have to rise in opposition, not because I am opposed to what he is seeking to do but rather I believe that while his proposal for addressing fraud and abuse in the health care system has merit, they also compromised some of the more important facets of the health care fraud bill we were successful in including in the Finance Committee package as such. For the past several years, we have been holding hearings. As a matter of fact, it was a report that the minority staff issued on health care fraud which produced the estimates from GAO, as well as our own staff, showing that there is $100 billion being lost annually in our health care system. As far as the Federal portion of that, it is anywhere from $27 to $40 million, depending on which Federal programs are included. We are losing billions of dollars through our health care system through fraud now. What we have tried to do in the proposal that was agreed to by the Finance Committee is to structure it in a way that actually produces savings--this $4.2 billion. The amendment of the Senator from Iowa, as I understand it-- unfortunately, because of the time limitations we have, I believe some of my provisions have been deleted that are in the health care fraud bill. I am advised that CBO has concluded that this dilutes some of the $4.2 billion in savings. One of the justifications for persuading the Finance Committee to include the health care fraud bill that I had authored was to get some savings. CBO now scores it at $4.2 billion. This at least raises a question as to whether or not we have diluted that and it calls into question in terms of how much we will save. The Senator from Iowa may use a different method of calculating those savings. What we have tried to do is structure it in a way which we could get the provider groups to agree. This has been no easy task. We have met with provider groups, with consumers, with health care advocates, with the FBI, with the Justice Department, with the White House. We put together a package which we believe enjoys broad support which has been scored as saving $4.2 billion. Under these circumstances, I find myself compelled to rise in opposition not because I am opposed to what the Senator from Iowa seeks to do, but by virtue of the fact this may undermine to some degree and dilute to some degree, which I do not know what extent, the $4.2 billion which has currently been scored by CBO. For those reasons I rise in opposition to the amendment of the Senator.

Mr. COHEN. We are basically in accord with what we are seeking to do, but I have been advised that CBO indicates this would reduce the $4.2 billion by----

Mr. COHEN. Will the Senator yield? I indicate my support for the amendment.

Mr. COHEN. Mr. President, I thank my friend. I rise in support of the Chafee amendment. Senator Chafee has tried valiantly to include the poorest of the poor in our system, and for anyone to object to having the disabled included--I might say, it does not go far enough perhaps, because as I understand the Senator's amendment, it includes pregnant women and children and does not include elderly; it includes disabled but it leaves it up to the States to define what ``disabled'' is. I know the Senator was eager to use the SSI determination for ``disabled.'' Is that the Senator's amendment?

Mr. COHEN. My understanding is now you have included the definition that has been acknowledged under the SSI determination.

Mr. COHEN. Then please let me lend my strong support for that, and I want to thank my friend from New Mexico for allowing me a moment or two to express my support.

Mr. COHEN. I believe I will get 2 minutes to speak.

Mr. COHEN. Mr. President, let me specifically address the issue whether or not this is a political effort on the part of my colleague and friend from Arkansas, Senator Pryor. We had a hearing this morning dealing with nursing home standards. I want to say, for the benefit of all who are here, I have been working with Senator Dole, Senator Chafee, Senator Snowe, and others, to try to make sure that the standards that were set in place by OBRA 1987 go back into place, that we have Federal standards and Federal enforcement of the nursing home rights, as such. Senator Dole has been most amenable to that. I think Senator Chafee is correct that we have actually made some improvements in cutting back on some of the things that do not need to be there, that are costing money and are duplicative. One issue remaining in my mind is, in fact, the extension of the waiver, so- called, to the States that have higher standards than required by Federal law. The concern I have is that if such standards are so high that they therefore would apply for a waiver, what in fact would be the role of the Federal Government as far as oversight and enforcement? If there will be strict oversight and enforcement, I would recommend we support the bill that we offered as part of the managers' bill. If, however, that is a major loophole that would be seen as such by those in the business itself--the nursing home industry, providers and consumers--I would have problems supporting the substitute contained in the managers' bill. I have not seen the language. I think Senator Dole is correct. We ought to put this off until tomorrow so we can compare the language. If we are satisfied there will be adequate oversight and enforcement authority retained by the Federal Government, I would recommend to my colleague from Arkansas that we accept the managers' bill.

Mr. COHEN. Mr. President, the anti-fraud provision in the Finance Committee measure has been the product of over 3 years of effort on my part. I have had to work with Justice, FBI, the White House, providers, consumers, and they support the provision as written. In addition to that, there is a deletion under my bill which would allow the criminal fines imposed under the violation to go back into the Medicare trust fund. That is deleted under the Senator's amendment. I urge that we reject this amendment for a variety of reasons but, most of all, because it would make a last-minute change over something that is accepted by virtually everybody.

Mr. COHEN

Mr. COHEN. Mr. President, I wish to announce that the Special Committee on Aging will hold a hearing on Thursday, November 2, 1995, at 10:00 a.m., in room 562 of the Dirksen Senate Office Building. The hearing will discuss Medicare and Medicaid fraud.