Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I hope it is not wrong for me to say who wants to speak. Senator Harkin wanted 10 minutes, and Senator Dorgan wanted me to save him 10 minutes. I urge they or anybody else who would want time from me to come over. That is all the time I am going to use right now.

Mr. GRASSLEY. I yield myself a minute and a half. Madam President, this amendment and this discussion both are not about the cost of production of agricultural commodities. This amendment and this discussion are about payment limits and the need to prevent public funds from being used by the biggest producers to become even larger by bidding up cash trends and capitalizing their extra profits from production into land values. There is public interest in this being the result of Federal farm programs, and all except the very largest farmers know that and support this effort. Focusing on costs of production is totally meaningless, unless one also includes the revenue from production. Every crop has a different set of numbers on cost and a different set of numbers on revenue produced. Those numbers vary from crop to crop, and, to a degree, vary from region to region and year to year. The farm program support levels have never been set on the basis of cost of production or on profitability, taking revenue into consideration. Support levels have been set by the Congress, not by some index based on cost of production. Moreover, this is not about inefficiency, as some have argued for years. The largest producers, with extra profit from their size or scale, from discounts received in input, and from premiums received for volume production are not passed along to consumers. Those extra profits are used to bid land away from midsize and smaller operators. Keep in mind that these programs are not entitlement programs. The purpose is to stabilize the sector and provide an income supplement when commodity prices are low. I yield the floor.

Mr. GRASSLEY. Madam President, I yield 2 minutes to the Senator from North Dakota and 15 minutes to the other Senator from North Dakota.

Mr. GRASSLEY. Mr. President, I yield 2 minutes to the Senator from North Dakota.

Mr. GRASSLEY. Mr. President, I seek time, but I do not have the authority from the floor manager.

Mr. GRASSLEY. Mr. President, I yield myself 10 minutes.

Mr. GRASSLEY. I will yield myself 10 minutes of that.

Mr. GRASSLEY. Mr. President, first of all, I want to make very clear, regarding some of the concerns that have been expressed in support of this amendment, I thought we took them into consideration 2 years ago-- did take them into consideration in their policy. I think now that things are rolling out I am even more confident of what we did. So that would apply also to the issues raised here, whether or not beneficiaries have the ability to make decisions about their care, the type of plan they want to be in. We knew beneficiaries would need to have good resources to learn about the benefits. We have, for instance, a State Health Insurance Information Program that has counselors who can provide one-on-one counseling. CMS has developed a network of community-based organizations to do the same thing. AARP is holding meetings--all over the country, I believe, but I see them noticed in our newspapers all the time. It seems like a massive number of meetings that my senior citizen constituents have gone to. Do I think nobody could fall through the cracks? Perhaps so. But I think they would have to be people who are very isolated. I know CMS is taken through the mail, and presumably everybody has an address that gets mail. We have taken very good care to make sure people are notified through the mail. If there is one place where there might be a problem, that is the extent to which States might not have everybody in their files. But I have even been satisfied that CMS has been working on that problem for a long period of time. So because we have thought about these things, I rise to oppose the amendment by the distinguished Senator from Washington. When we worked on the Medicare Modernization Act, which established this drug benefit program, every State Governor wanted beneficiaries who have Medicaid and Medicare coverage, dual eligibles, to get their prescription drugs through Medicare. Members of both sides supported this approach. They said Medicare has been a universal benefit, available to all beneficiaries since its inception. The Medicare drug benefit should then be no different. Those who supported covering dual eligibles under the Medicare drug benefit noted that these beneficiaries would have nothing, no prescription drug coverage, if a State chose to end its Medicaid prescription drug benefit, which it could do. As Senator Hatch said, we even considered an amendment, supported by 47 Senators, to make the benefit available to all Medicare beneficiaries, including Medicare beneficiaries with Medicaid coverage. For those of us who ultimately supported this approach in the final bill, did we think that we could just wave a magic wand to make the transition happen? As I said, we did not think that. Transitions like this are not easy. We knew that. The Centers for Medicare and Medicaid Services, the agency responsible for making this transition happen and administering the program over a long period of time, knew it would be a big task to transition all those folks into Medicare. That is why the agency started working on a transition plan--with States and advocacy groups--more than a year ago. In May, the agency issued a 44-page strategy for transitioning this group of beneficiaries into the Medicare drug benefit. That strategy lays out in great detail the steps that the agency will take to ensure continuity of coverage for this vulnerable group of beneficiaries. First and foremost, these beneficiaries will be assigned to a Medicare prescription drug plan with their coverage effective on January 1st. Folks refer to this as auto-enrollment. This process will prevent any gap in coverage for these beneficiaries. The agency worked with States to develop lists of dually eligible beneficiaries. These lists have undergone rigorous scrutiny to ensure their accuracy and completeness. Letters informing beneficiaries about the upcoming changes went out today. It clearly states that beneficiaries should choose a plan, but if they don't, they will be assigned to the plan listed in the letter. The agency included some additional information in a question and answer format. The first question is, ``What should I do now?'' Among other things, the answer says that beneficiaries should find out which plans cover the prescriptions they take and the pharmacies they want to use. I know that folks are concerned that a beneficiary might toss aside their letter--we have all done that with mail. That is why pharmacists will have access to the beneficiaries and their assigned plan. So on January 1st, when a beneficiary goes to a pharmacy, the pharmacist can fill that prescription under that plan. Now, some people are concerned that a beneficiary will be assigned to a plan that doesn't cover a drug they need, and they won't find out until they go into the pharmacy. In its transition guidance to plans, the agency strongly recommended that plans provide for temporary ``first fill'' of 30 days to provide a transition supply to meet the immediate need of a beneficiary. This is a common practice today. Any plan that chooses not to do this, had to provide the agency with sufficient detail on how it would ensure that new enrollees stabilized on a drug not on the plan's formulary would continue to have access to the drugs they need. For example, a plan not using the first-fill could have procedures in place to contact enrollees in advance of their initial effective date in order to identify their needs. All of these alternative plans were subject to the agency's approval. In addition the agency carefully reviewed all of the plans' formularies to ensure that dually eligible beneficiaries would have good access to the drugs they need. Many plans around the nation cover nearly all of the top 100 drugs used by seniors. The agency also required plans to cover all or substantially all drugs in six classes that include drugs most commonly used by seniors. I also know there is concern that a dually eligible beneficiary might be assigned to a plan that doesn't cover a drug they need or include their pharmacy in its network. That is one reason why the Centers for Medicare and Medicaid Services sent the letters out now. Dually- eligible beneficiaries can still pick whatever plan they want for their coverage on January 1st, but if the don't make an affirmative decision, then they will have coverage through the plan to which they been assigned. And if that plan doesn't work for them, they can switch plans at any time throughout the year. Any time. I was among the Senators who voted against the amendment in the Senate, but I obviously agreed to the provisions hammered out in the conference committee. Now is not the time to change the provisions. Letters have gone out to beneficiaries. Plans have submitted their proposals to the government based on the specifications in the law. Changes now could lead to increased cost for all beneficiaries and Government. Members argued with great passion as to why this group of beneficiaries should have their drug benefit covered by Medicare. Members of the conference committee worked to make that happen. The Senate bill was bipartisan and it passed by a vote of 76 to 21. The bill that emerged from conference was bipartisan and passed by a vote of 54 to 44 with the support of 11 Democrats and 1 Independent. The bill passed because we recognized that if we asked seniors to wait for a perfect bill, that they were going to be left waiting for a long, long time. The AARP and more than 300 patient advocacy and health care organizations endorsed the final product. The AARP said the final bill ``helps millions of older Americans and their families,'' and is ``an important milestone in the nation's commitment to strengthen and expand health security for its citizens. . . .'' The prescription drug benefit is affordable and universal. It will cover about half the cost of prescriptions for the average beneficiary. Dually-eligible beneficiaries will have almost all their drug costs paid. After years of hard work on both sides of the aisle, Republicans and Democrats came together to pass the Medicare Modernization Act. Now is not the time to reopen this issue. The Centers for Medicare and Medicaid Services has worked hard to implement the new program. Any changes at this point will almost certainly delay the drug benefit from implementation. In thinking about the months of negotiating this package, I can tell you that there is no interest from this Senator to reopen and renegotiate the new Medicare drug benefit now. The time for delay is over. The new Medicare drug benefit was a bipartisan product, it is law, and it is set to begin for all beneficiaries, who have waited long enough for this important benefit. I agree that every step needs to be taken to ensure that there is no disruption in coverage for these vulnerable beneficiaries. I believe those steps are being taken. It is my understanding that a number of folks think that this transition will be too confusing for beneficiaries. In my opinion, having some drugs covered by Medicare and some by Medicaid will be even more so. I urge my colleagues to vote against this amendment.

Mr. GRASSLEY. Madam President, I ask for 15 seconds. We can restore what we cut to family farmers in the resolution. We can allow young farmers to get into farming and lessen dependence on Federal subsidies. I hope my colleagues will support this commonsense amendment. I yield the floor and reserve the remainder of my time. I ask people who want to speak in support of the amendment to please come to the floor so we can expedite this debate. I might say that I have all sorts of respect for the Senator from Georgia. He is a tough competitor.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I ask unanimous consent that the following Senate Finance Committee interns and fellows be granted the privileges of the floor during consideration of the Deficit Reduction Omnibus Reconciliation Act of 2005: Brad Behan, Melissa Atkinson, and Catriona Johnson.

Mr. GRASSLEY

Mr. GRASSLEY. I would like to yield 1 minute.

Mr. GRASSLEY. Yes, I will.

Mr. GRASSLEY. For a question or comment.

Mr. GRASSLEY. Go ahead. You interfered with me. Go ahead.

Mr. GRASSLEY. Mr. President, I get a little tired of people on the other side of the aisle making the point that tax cuts are responsible for the deficit we have, when you consider we inherited a recession from the previous administration, and we had September 11, and because of the catastrophe of September 11, income to our Federal Treasury went down from $2.1 trillion to $1.75 trillion. That went on over a period of 3 years before the economy turned around. Then, to find fault with the tax cuts of 2001 and 2003, a person no less than Chairman Greenspan said those tax cuts were what turned this economy around. And turning the economy around, we have $274 billion more coming into the Federal Treasury in the year 2005 than we did in 2004. And then, especially when you measure deficits by gross national product, our deficit now is less than it was in 1993 under Clinton. Our deficit now is less than it was under Reagan in 1982, and a lot less in the case of 1982. Now, what I rise for is this: the justification that was made this morning that we are having this reconciliation bill, cutting expenditures, so we can cut taxes. We are not going to cut taxes any more. We have done that in 2001 and 2003. That tax policy is what turned this economy around and brought in $274 billion more this year than last year, even $70 billion more in the last 10 months than we estimated back in February would come in this year. But the case the other side is making that we want to have further tax cuts--if we take no action, what they want to do is have an automatic tax increase. We have a lot of tax provisions that are going to sunset this year. If we do not keep tax policy the way it is, we are going to have a tax increase. Now, they like to have more money coming in so they have more money to spend. I would like to have somebody on the other side of the aisle tell me how high taxes have to be to be high enough to satisfy their appetite to spend money. I have never heard that. But the fact is, they can have a tax increase and not even have to vote for it. So we have to take action between now and the end of the year to make sure the existing tax policy, that was good for the economy, keeps this economy going, as Chairman Greenspan has given those tax cuts credit for where we are. I want to tell my colleagues what is going to happen if we do not take action before the end of the year to continue the tax policies that would otherwise sunset, that somehow they do not want us to continue. Our objective is to preserve current levels of tax relief. These tax increases would occur if my friends on the other side of the aisle--and maybe even an occasional Republican or two--have their way and thwart the reconciliation bill in the process. First, the tax relief plan continues the hold harmless provision of the alternative minimum income tax. This piece of the plan, the largest, I might add, is worth about $30 billion to 14 million American families. You can see by this chart, if we do not take action, we are going to have about 5 million middle-income taxpayers paying more taxes next year because they will get hit by the alternative minimum income tax. I want to remind everybody that the alternative minimum income tax was meant to hit the very wealthy, who were taking advantage of every tax loophole they could and not paying any tax, that they ought to pay something. But it was never meant to hit middle-income America. We are going to have in my State of Iowa 65,000 more Iowans pay tax they were never supposed to pay if we do not take action between now and December 31. Look at all the places where I wish I could think of all the people who have been complaining the most about what we are talking about. But the point is--North Dakota, for instance, I think it ought to be pretty obvious. Do you want 13,364 North Dakotans to pay additional tax if we do not take action before the end of the year?

Mr. GRASSLEY. Well, I am glad to hear that. But I have heard different rhetoric from the other side. And Michigan is here, if I can find Michigan. We ought to put things in alphabetical order, but it does not matter. It does not matter. You are going to have tens of thousands of people or hundreds of thousands of people paying additional tax if we do not take action. Now, that is just one provision. We reduce the capital gains from 20 percent down to 15 percent, and we have been told that is already figured into the stock market. Do we want to let the middle-income taxpayers pay a higher capital gains tax? I do not think so, because there are so many middle-income people now who are investing through their IRAs, through their 401(k)s, that we do not want them to be hit by this. We have the tax deductibility of college tuition. We have the small savers credit. We have the small business expensing provisions that are going to sunset at the end of the year. All of these provisions have been bipartisan. Millions of American taxpayers rely on these provisions. Do my friends want to take away the deductibility of college tuition for middle-income Americans that is capped at $60,000? These people who are sending their kids to college ought to have, beyond December 31 of this year, the ability of taking advantage of that deduction. We have the small savers credit. Do my friends want to take away the expensing of equipment for small business? I don't think so. But they would lead you to believe that we want to cut taxes for the rich. The plan addresses expiring business and individual provisions that we call extenders. These provisions include the research and development tax credit, State sales tax deductibility, and the deductibility of teachers' out-of-pocket expenses. Do the people who say we are going to give tax cuts to the wealthy consider our teachers, who pay out-of- pocket expenses for the classroom, that they ought to not have the tax deductibility for that? That is going to end December 31.

Mr. GRASSLEY. Mr. President, this bill includes a 1.0 percent payment update to physicians for 2006. This was done to maintain beneficiary access to physician services. After all what good are Medicare benefits if you can't get in to see a doctor. Within the bill, the impact on the part B premium is calculated based on all the provisions that affect Part B. This amendment would only hold the beneficiary harmless from the impact caused by the physician update. Other provisions included in the bill would increase Part B spending and there are other provisions that decrease Part B spending--so why should we single out physicians? In June, Senator Baucus and I sent a letter to the Office of Management and Budget calling for removal of Part B drugs from the physician payment formula. This letter was signed by 87 additional Senators from both sides of the aisle. If the administration were to remove Part B drugs from the formula--it would also increase the Part B premium over a number of years. This letter did not suggest the need for a hold harmless. I wanted to point this out to my colleagues who supported this letter. Some may feel that the Medicare drug premiums along with the Medicare part B premium may be a significant cost burden to beneficiaries. However, CMS recently announced that Medicare drug premiums will be lower than expected. The average monthly premium will be $32.20. That is $5 less per month than previously estimated. Even if the part B premium is increased in 2007, the increase is nothing close to the $5 saved in the prescription drug premiums. And keep in mind that the part B premium increase does not affect low- income beneficiaries. Their premiums are paid for by the government. In fact, I worked hard to extend the QI program so Part B premiums would be covered. Currently, 16 percent of beneficiaries enrolled in Part B receive this assistance and more are eligible. In addition, a MedPAC survey issued earlier this year found that 22 percent of beneficiaries already had trouble getting an appointment with a new primary care physician and 27 percent reported delays in getting an appointment. Payment cuts to physicians will only make these existing access problems worse. I am also opposed to the provision used to pay for this amendment. Regarding Medicaid MCO rebate, this amendment would in effect increase the rebate paid by drug manufacturers by making the rebate available to Medicaid managed care plans. The bill we are considering today increases the rebate paid by drug manufacturers to States through the Medicaid program to 17 percent. The bill also closes a pair of loopholes that have the impact of increasing the rebate. First, we require the best price of an authorized generic to be considered in the brand name drug's best price calculation. That will have the effect of increasing the rebate. Second, we require physicians to notify the State Medicaid program of what drugs the physician administers in the office. Under current law, States are permitted to collect rebates on the drugs but nothing in statute requires physicians to disclose that information. As a result, States miss out on the appropriate rebate. When all these policies are taken into consideration, we have increased the rebate paid by drug manufacturers by $1.7 billion. Now I understand my colleague might not think that's enough, but I would encourage you to look at a CBO report put out this past June examining the price of name brand drugs. That report shows that the effective rebate being paid by drug manufacturers is actually 31.4 percent not 15 percent. I am also concerned about the substantive implications of your offset. These Medicaid health plans are private businesses that can negotiate low drug prices. I think it runs contrary to the policy this committee passed in the MMA to allow the plans to negotiate the best deal they can get and then give them a rebate on top of that. Yes, I do realize the Medicaid Commission accepted your offset in its recommendation, but I am quite certain the Medicaid Commission stamp of approval would not win your support for other proposals we could be considering today. We have looked at this area and come up with responsible policy that addresses loopholes. I don't think we need to further increase the rebate beyond what is already included in the bill. Therefore, I urge my colleagues to oppose the amendment and the offset that funds it.

Mr. GRASSLEY. Mr. President, I am going to speak against the amendment by the Senator from Arkansas, but I want to make clear that I do not object to the substance of the amendment. I am in a position where I have to have a reconciliation. I want to show sympathy for what she is talking about but defending what I have in my mark and also express--and I am summarizing now--that I hope somewhere between now and the final consideration of the reconciliation we are able to take out Katrina relief that I have in mine, do it more broadly, as Senator Baucus and I have tried to do, but right now I am not in a position to do that. I hope to move that along, and so today I am a little bit opposite of the Senator and a little bit opposite of Senator Baucus.

Mr. GRASSLEY. Mr. President, I thank the Senator from Arkansas for her kind remarks. As I explained, because things have to be compromised in order to get anything done here, it tends to be the majority party's responsibility to move along reconciliation. In that vein, I am somewhat different from the Senator from Arkansas, even though I have sympathy and even though I have spoken in support of it and even though I have worked with Senator Baucus on what she wants to accomplish. So momentarily and throughout this reconciliation bill I have to oppose the amendment by my friend and colleague from Arkansas. We, of course, Mr. President, were all deeply moved by many of the stories that we have heard on the floor, particularly the stories that the senior Senator from Louisiana tells us about. And it is not only her State but Mississippi and Alabama, stories about people who have lost everything--their homes, their jobs, and, worst of all, more than 1,000 people have died. I am keenly aware that those who have suffered the most are our most vulnerable citizens: the infirm, the displaced, the disabled, and families on welfare. Our hearts go out, as well, to all the others who have suffered so much as a result of this terrible disaster. I understand the need to act, and my colleague, Senator Baucus, and I came together very quickly--now I think 2 months ago almost--well, at least 6 weeks ago--very quickly, in a bipartisan way, in response to my own leader's desire that we move very quickly to respond to this, as he had a news conference the Wednesday after Labor Day, on behalf of those most vulnerable individuals and families who have suffered so greatly. You know that it is a priority for me to assist those affected by Hurricane Katrina, and I think Senator Baucus and I came up with a very good package, and I remain committed to it.

Mr. GRASSLEY. Go ahead.

Mr. GRASSLEY. Let me say here that for those people who don't see everything that is going on in the Chamber, we just had a Democrat apologize to a Republican, and a Republican apologize to a Democrat. Everything here is not everybody at each other's throat. And I say that to the public at large because we do get along even though we disagree sometimes. Anyway, I had this reconciliation package come out of my committee, and we are going to it now. And in the provision that we passed we were able to include what I consider a downpayment of what the Senator from Arkansas and the Senator from Louisiana want to accomplish. In their judgment, it is not enough, but it is moving the ball down the road in a way I hope that will get some help to people who need it. This provision in the reconciliation legislation then makes that downpayment to respond to the health care needs of low-income families affected by Hurricane Katrina. This is a placeholder for spending on the hurricane victims because I believe it is extremely important that we address the needs of those so affected. The legislation provides $1.8 billion to protect Medicaid benefits in Alabama, Louisiana, and Mississippi. The legislation provides targeted temporary relief to parishes and counties affected by the hurricane. The legislation reimburses States fully at 100 percent of their share of Medicaid costs for any claim paid for medically necessary health care for evacuees. This Federal Medicaid funding increase is temporary. It begins on August 28, 2005, the day the hurricane hit, and ends on May 15, 2006. This is targeted relief for 1.9 million people. It focuses its assistance to the people who need it the most. I want to be clear, I would prefer to do our full bill on the Senate floor outside the reconciliation process in what we call emergency measures. I remain deeply disappointed in the people who have stood in our way, and they are on my side of the aisle. In my judgment, this administration's stand as well on this has just been plain wrong, and I have said that in committee, and I have said that in news conferences. Would I like to do more? Certainly. But to do more means that you must pay for it. Frankly, I am concerned about how the Senator from Arkansas is paying for this amendment. While I support taking funds out of FEMA to pay for Katrina relief, doing so on a reconciliation bill is not germane. So, Mr. President, the provisions in the reconciliation bill provide assistance for the next 8 months for 1.9 million people, and that is a very good start. It is crucial that we do it this way, and we will get it done this way. At least this much will get done. I encourage my colleagues to support this provision in my bill and, consequently, I ask them to vote against the amendment by the Senator from Arkansas. I yield the floor.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I very much thank Senator Judd Gregg, chairman of the powerful Budget Committee, for his leadership and for doing what has not been done in this Senate, it is my understanding, since 1997: We have a budget reconciliation bill that will reduce the deficit by changing programs that are either appropriated or on automatic pilot that tend to never get reviewed as often as they should in order to watch the taxpayers' money wisely. Senator Gregg's commitment to fiscal discipline has informed and defined this process, and I am grateful for his efforts. As he just did, I congratulate the chairmen of seven other authorizing committees whose titles of this bill, along with the Finance title that I am going to talk about, comprise this giant legislation that we call reconciliation that Senator Gregg successfully reported last week. I know that it was not easy for the chairmen of these eight committees to reach consensus and to move their titles forward. These chairmen and the members of their committees have every right to be proud of the work they have done achieving savings but also implementing policies that will help American workers. Today, we have saved nearly $40 billion over 5 years--to be more accurate, $39.1 billion over 5 years--and that is $4.1 billion more than Congress even directed these committees to do back in April when the budget was adopted. Considering the 8 years since this has been done, this is a significant accomplishment and one of which we ought to be proud. Many of the proposals in my committee's title, as well as the other titles of this bill, have bipartisan support. Some of them have been proposed by the administration in its budget which came out last February. While I am hopeful that during the debate this week, we will be able to persuade a number of Democrat Members to vote in favor of this bill, I recognize that the budget process is often a partisan exercise and that we will be able to count on few, if any, votes from the Democrat side of the aisle. As the chairman of the Senate Budget Committee made very clear with his chart that was blank, we have not seen a Democrat proposal. Why? Because they do not want to bite the bullet and do what is hard to suggest from their point of view--how to reduce the deficit--unless it might be by raising taxes because often that is their solution, whereas I myself have never come to the conclusion that the American public is undertaxed. I never have my taxpayers telling me that they are undertaxed. The problem of the budget deficit is that Congress overspends. In developing my part of this budget reconciliation proposal, I attempted to address a number of bipartisan priorities. These efforts were acknowledged by my colleagues during last week's Senate Finance Committee markup, and I want those members of the Finance Committee to know that I appreciate their kind words. Rather than having their kind words, I would rather have had those Democrats vote for this bill coming out of my committee rather than having it come out on an 11-to-9 partisan vote. The Finance Committee portion represents nearly a year's worth of work on behalf of members of my committee and the staffs of the respective members, as well as committee staff. The Senate Finance Committee title achieves a net of $10 billion in savings from Medicare and Medicaid by reducing wasteful spending and by closing loopholes. The Finance title also targets resources to preserving and improving Medicaid, the State Children's Health Insurance Program, and Medicare. In particular, the Medicaid provisions in the title will also produce additional resources for States in operating their Medicaid Programs. In so doing, this bill protects Medicaid benefits for the most vulnerable of our society. The Senate Finance Committee title cracks down on Medicaid fraud and abuse by encouraging States to aggressively pursue Medicaid fraud by implementing in the respective States, beyond the 13 that have done it, State false claims acts, which in comparable legislation at the Federal level is the single most important tool that U.S. taxpayers have to recover the billions of dollars stolen through fraud every year. In addition, my Finance Committee title requires suppliers that do business with Medicaid to have a false claims act education program so that those with evidence of fraud against Medicaid know they may pursue these claims on behalf of the Government and help to recover stolen funds. In order to fight Medicaid fraud, the Senate Finance Committee title dramatically increases resources to fight fraud and abuse in Medicaid. This then will protect State and Federal budgets and generate substantial savings from this investment. My committee's title also achieves savings by helping State Medicaid Programs obtain millions in payments owed by third-party payers each year. It also produces savings by ending drug manufacturers' gaming of the system by closing the authorized generic loophole so that appropriate rebates are paid to the States. The Senate Finance Committee title helps preserve services to beneficiaries by ending overpayments to pharmacies, by reforming the broken system used to reimburse pharmacists for prescription drugs, which is based on the flawed average wholesale price formula, costing taxpayers lots more money than it should. There have been 13 reports in the last 5 years dealing with an average wholesale price formula done by the Congressional Budget Office, the Inspector General's Office, and from the Government Accountability Office, all calling for reforming the Medicaid pharmacy payment formula and ending overpayment for prescription drugs. These overpayments have been costing the States, as well as our Federal Government, billions of dollars needlessly. The bill also includes provisions to protect rural pharmacies and encourage greater use of cost-saving generic drugs. In addition, my portion of this reconciliation bill balances the savings derived from pharmacy payment reforms with an increase in the rebate paid to State Medicaid Programs by drug manufacturers from 15.2 percent to 17 percent. On the Medicare side, the Finance title calls for the phaseout of the budget neutral modification to the MedicareAdvantage risk adjuster. This provision will help ensure that the health status risk adjuster required by the Balanced Budget Act of 1997 meets its objective of providing accurate payment to plans based on their enrollees' health. The title also repeals the MedicareAdvantage regional stabilization fund. There are concerns about these provisions, and some people have argued that we should not touch the MedicareAdvantage Program. In response, I point out that the phaseout of the risk adjuster was announced three times: first in February in the President's budget; second, with the 2006 rates; and again in the September CMS factsheet. So plans submitted their bids knowing full well that the phaseout was going to happen. When we worked on the Medicare Modernization Act--and that was in 2003--the idea was that if the funds were not needed, then the dollars were to be returned to the U.S. Treasury. We have strong regional preferred provider organization participation. Regional preferred provider organizations are in 21 out of the 26 regions into which the country has been divided. Regional preferred provider organizations have several other safeguards to make sure they are available. The base MedicareAdvantage rates have been fixed. There are risk corridors, network adequacy requirements, the essential hospital fund, and a moratorium on local PPOs. The title does not affect any of these safeguards, so we feel this money going back to the Federal Treasury under this bill is the right thing to do. The Finance Committee title of this bill also preserves access to health care for seniors in Medicare by providing a 1-percent payment update to all providers paid under the Medicare physician fee schedule. This replaces a 4.4-percent payment cut that physicians are scheduled to receive in 2006 under the existing formula. So we change that formula to make sure that the 4.4-percent cut does not go through. On top of that, there is a small increase for our physicians. The Part B premium is affected due to changes included in the title that affect Part B spending. While some provisions lower Part B spending, other provisions increase the spending. However, there is no effect on the Part B premium paid by our seniors until the year 2007. It is also important to keep in mind that the Part B premium increase does not affect low-income beneficiaries. In fact, I worked hard to extend the QI Program so that Part B premiums would continue to be covered for these individuals. Avoiding the physician payment cut has strong support in the Senate. In July of this year, 89 Senators from both sides of the aisle sent a letter to the White House Office of Management and Budget calling for the removal of Part B drugs from the physician payment formula. This change, which the administration has the authority to make, would permit Congress to address the longstanding programs with the Medicare formula for reimbursing physicians. Certainly, we are all concerned about any impact on Part B premiums, but this Senate is almost unanimous in its support of addressing this, as evidenced by the 89 signatures calling for changes in the formula that were sent to the administration. To be clear about this, the changes in the physician fee called for in that letter would also increase Part B premiums to our senior citizens. It is important that we take steps to maintain access to physician services in the Medicare Program. The benefits in Medicare are not worth much if beneficiaries cannot find a doctor when they need one. Another important area addressed by the Senate Finance Committee is long-term care costs. Recognizing that long-term care costs account for significant spending in the Medicaid Program, this bill makes key provisions in long-term care for seniors and the disabled. Consistent with a proposal put forth by President Bush, this bill includes a ``money follows the person'' rebalancing demonstration program. This program would direct grants to States to increase use of home- and community-based services rather than institutional care, and it would eliminate barriers that prevent or restrict the flexible use of Medicaid funds so that individuals may receive support for long-term services in a setting of their choice. This is empowering people. The title also provides new options for private coverage of long-term care through the long-term care partnerships and promotes the availability of programs of all-inclusive care for the elderly in rural areas. The Finance Committee title also addresses a number of Medicare priorities while also achieving savings in other areas of Medicare. To begin, being mindful of the unique needs of rural residents and the facilities that serve them, the title protects access to Medicare services for rural beneficiaries. First, the title would extend the hold-harmless provisions for the small rural hospitals and sole community hospitals from implementation of the hospital outpatient prospective payment system. Second, it would expand coverage of additional preventive benefits under the Federal qualified health centers. Third, it would extend the Medicare Dependent Hospital Program, which provides financial protections to rural hospitals with less than 100 beds that have greater than 60 percent of their patients coming from Medicare. Another issue I suspect we will hear a good deal about during this debate over the next few days is the impact that Hurricane Katrina had when it devastated hundreds of thousands of our fellow Americans. The title would provide for a much needed downpayment to those States that have suffered as a result of Hurricane Katrina. I am committed to ensuring that the families who have suffered so greatly as a result of this national tragedy receive the services they need to rebuild their lives, and the States which have been affected are made whole. The Finance Committee title of this bill also provides funding to strengthen and improve the Medicaid and State Children's Health Insurance Program. As my colleagues know, as many as 23 States are projected to experience shortfalls in the Children's Health Insurance Program over the next 2 years. The national total of these State Children's Health Insurance Program shortfalls is near $1 billion. The Senate Finance Committee title includes temporary provisions that will stem these State shortfalls and ensure that States are not forced to curtail or end their Children's Health Insurance Program coverage for vulnerable low-income children. In order to continue to improve the Medicaid and Children's Health Insurance Programs, the Senate Finance Committee title in this reconciliation bill also includes outreach and enrollment efforts so that children eligible for public health assistance receive that assistance. This legislation also addresses a fundamental flaw in our current Medicare payment system. Right now, Medicare payment policies do not encourage high-quality care. In other words, doctors get the same reimbursement and hospitals get the same reimbursement whether they are doing the highest quality of care or whether they do not care, and people are always going back into the hospital because the job is not done right the first time. So we have come to the conclusion that we need to reward quality and we need to provide incentives to invest more in health care information technology and other efforts that will improve health care quality. This reconciliation bill does just that. This bill implements recommendations from the Institute of Medicine and also from the Medicare Payment Advisory Commission. These provisions are based on the bipartisan Medicare Value Purchasing Act, which is S. 1356, introduced by me and my Democratic colleague, the leader on the other side of the aisle of the committee, Senator Baucus of Montana. The legislation creates quality payments under Medicare for physicians and other providers, including hospitals, health plans, skilled nursing facilities, home health organizations, and end stage renal disease facilities. Finally, the Senate Finance Committee title includes the Family Opportunity Act. The Family Opportunity Act was motivated by the circumstances of individual families--the Melissa Arnold family of Iowa and the Dylan Lee James family. You could say they are representative of hundreds of thousands of families. Both are families we use as an example of those who relied on Medicaid health services for their children with disabilities, and both families ended up risking eligibility for Medicaid as a result of financial eligibility rules that continue to create disincentives for parents to work and stay working and even improve their employment opportunities. Acute need persists for the Family Opportunity Act. It is just as important today as it was over the past several years that I have been fighting to get the Family Opportunity Act law. I have heard from a number of families in Iowa and across the country, speaking of the imperative to enact the Family Opportunity Act. They tell me about their son or daughter or grandchild, and how much they love their child or grandchild and how important it is to tell their story. They tell about the illness or disability that their families have been struggling with for years. Then they describe how dad and mom could comfortably support their family but must remain poor, even unemployed, in order that their child receive the health care coverage they need. These parents want to work and provide for their families but must put the health care of their child first. If we are able to successfully pass the legislation--we have been able to pass this legislation in the Senate, but it did not get through the House of Representatives. If we are successful again, we will achieve important savings that help put our fiscal house in order as well as preserve benefits and ultimately expand access through the Family Opportunity Act for families in Iowa and across the Nation. The Finance Committee title of this bill achieves significant savings in Medicare and Medicaid by reducing wasteful spending and closing loopholes. It then directs much of these savings to make improvements in these programs that expand access to health care services, protect health care coverage for kids, and protect access to Medicare beneficiaries. But the bottom line is more than $10 billion in savings in existing programs or additional money being recouped from fraud or money coming in from fees. The bottom line to the Federal deficit is $10 billion. I have two summaries of the Finance Committee title. I ask unanimous consent that they be printed in the Record.

Mr. GRASSLEY. Mr. President, I yield the floor. I suggest the absence of a quorum.

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