Orrin Hatch

Mr. HATCH

Mr. HATCH. First of all he says he's down to 3.2 million that he says they are truly uninsured. First off, the Senator says the 3.7 million are Medicaid eligible. That's what he said. But here is what the CBO said: 10.5 million uninsured kids, 3 million Medicaid--let me just read it right out of there. Here is what the CBO says: According to widely quoted estimates, about 10.5 million children through the age of 18, or 14 percent, are uninsured. At least 3 million of them are thought to be eligible for Medicaid. That is the CBO. That is what we rely upon around here. So my friend from New Hampshire is using numbers somewhat different from the CBO. I still do not understand how anyone can seriously believe that $16 billion is adequate to take care of 10.5 million uninsured kids. I will go into that for just a minute, but let me just say this. First of all, the amendment we filed is not a bill, it is strictly numbers. A bill will have to be formed from it. The question is whether we should fund beyond the $16 billion provided for in this bill--which I praise, but which is totally inadequate to do what many of us in this body would like to do, including many on this side. Over time, I think that will be the case. Let me just make this case. By the way, talking about mandates, that is not part of our amendment. It was not part of our bill either. I might add, it is pretty tough to call a block grant to the States with the States setting eligibility standards a great big bunch of new Federal bureaucratic Lyndon Johnson type things. We fought very hard to get to a block grant status. I remember the same type of arguments I went through on child care a number of years ago, until it passed unanimously on the floor here. The reason it did is because it was right and it did what was right. And our goals here are right. And they do what is right. And it is time for people to wake up and pay attention and do something about these problems. Let me just talk about the Medicaid cuts in the budget. It makes sense that the $16 billion children's health initiative in the budget will be put back into the lowest income children. I commend the Budget Committee for that, particularly those eligible for Medicaid, since the budget agreement cuts $14 billion out of Medicaid. Much of the $14 billion is expected to come from cuts to the disproportionate share of hospital payments, or DISH, which are funds to States to reimburse those hospitals which serve a disproportionate share of Medicaid and other low-income patients. So the loss to children, where they have taken from DISH to get $16 billion, is somewhere between $7 billion to $10 billion. So it is not a full $16 billion. We are robbing Peter to pay Paul. That may be justified. I still commend the Budget Committee for trying to do something here, but it certainly does not cover the problems that some are saying it covers. These cuts are taking away money that the States currently have to ensure that children, the elderly and the disabled are cared for in the hospitals. Reducing these funds, as I have mentioned, will likely hurt children if additional funding is not put back into the Medicaid Program to care for these children. Without the additional funding in the Medicaid Program, States will be forced, or may be forced, to cut back on services to children, and I estimate that to be $7 billion to $10 billion. It may be more. The Budget Committee made a good start by allotting $3.2 billion a year over the next 5 years to the Finance Committee to cover children's health, to cover those eligible for Medicaid and to strengthen Medicaid. Let's be realistic what the $3.2 billion a year can and cannot do. I think it is important my colleagues understand the Congressional Budget Office is coming in with very conservative estimates on the number of children who will be served under various congressional proposals. For example, CBO estimated the Medicaid 12-month, continuous eligibility proposal will cost $14 billion if implemented by every State. That alone is almost all of the money in the budget resolution. CBO has also told us they estimate the cost for a child-only insurance policy to be somewhere between $1,000 and $1,200 a year. If true, the average $3.2 billion a year in the budget would only cover about 3 million kids, far short of the 5 million targeted in the resolution and still 5 million short of those who need to be taken care of. Or, if you look at it another way, the Federal share of Medicaid costs for a child is about $860 on average this year. According to the Employee Benefit Research Institute, there are 4.7 million uninsured children whose parents make less than 125 percent of the Federal poverty level. That is $19,500 for a family of four. We, who make $134,000, continually complain about how hard it is to maintain two homes here and there and pay for all the things we pay for. Can you imagine what a family making less than $20,000 can do? By simple calculation, to cover those kids under Medicaid would cost $4.2 billion, about $1 billion more a year than is included in the budget resolution, and that is just some of the kids. This still would leave the vast majority of children of working parents above the 125 percent of poverty level uncovered. While $16 billion is a substantial start, and I commend my colleagues, as I have just shown, it is just not enough to do the whole job. Some will point out our original bill called for $20 billion in spending. They will ask, why is more than an additional $4 billion needed? Are you saying that this is a $36 billion problem, and, if that is so, why didn't you ask for that originally? These are fair questions. Let me answer them. The short answer to this concern is that we need these resources to help the next generation of Americans to be healthy adults. The fact is that the $16 billion in the budget resolution is not enough. When Senator Kennedy and I originally introduced the CHILD bill, we set a spending limit of $20 billion for services and $10 billion for deficit reduction. We hoped to target up to 5 million families not on Medicaid--I said not on Medicaid--and that is important. We are also cosponsors of the Chafee-Rockefeller-Jeffords CHIPS bill, which is estimated to cost at least $15 billion, perhaps even more. This Medicaid bill is targeted to help 5 million kids, although there are already about 3 million of Medicaid-eligible children who are not enrolled. So we see these two bills as compatible--the CHIPS bill improves basic Medicaid, and our bill would be added on top of that. There is, obviously, a close connection between the two. That is why, in our amendment, we decided to divide the money equally between each of the two committees, Labor and Finance, to work out an integrated approach. So to make wild comments that this bill is going to mandate this, mandate that, take away the powers of the States, when the original Hatch-Kennedy bill does not do that, is irrelevant to this debate, because if we adopt the Hatch-Kennedy amendment, we will have enough money to make a real dent in these problems. The fact is that $16 billion is a good start, but let's not kid ourselves, it is not enough, especially combined with the Medicaid cuts in the resolution, and that is why our amendment should be adopted. I understand that the Senator from New Hampshire and others are opposed to my CHILD bill. Most of his reasoning is wrong, though, but we will debate that at a more appropriate time when we actually get to fleshing out a CHILD bill. This is not a vote on the CHILD bill. Our amendment intends that the money be used for the same purposes as those outlined in the bipartisan budget agreement. That is, for one or both of the following: Medicaid, including outreach activities providing continuous 12-month eligibility, restoring eligibility for disabled children losing SSI under the welfare bill, and, this is also part of the budget resolution, a mandatory capped State grant program to finance health insurance for uninsured children. That grant program will be designed by the Labor and Finance Committees. We hope it will be like the CHILD bill, but it may not be. But we are going to work to try and make it what we said we would do. Under our amendment, $18 billion in program funding will go to the Labor Committee. Will the Senator yield me 1 more minute?

Mr. HATCH. I am speaking on Senator Kennedy's time.

Mr. HATCH. Mr. President, I sent this amendment to the desk on behalf of myself and Senator Kennedy. This is well known as the Hatch-Kennedy amendment. I think everyone in the Senate ought to know that. It is an amendment that we have worked out over a 6-month period, or longer, and one that I think deserves consideration in every sense of that term. The amendment that Senator Kennedy and I offer today addresses what I consider to be a top priority of this Congress: making sure America's kids are healthy. The Hatch-Kennedy amendment calls for an increase in the tobacco excise tax to fund additional spending for children's health insurance. We have made enactment of a bipartisan children's health insurance bill a top priority this Congress, and plan to press forward at every opportunity if the Senate does not act in a responsible manner. This amendment is the right thing to do, and I urge its adoption. Specifically, our amendment would raise $30 billion in revenues through a 43-cent tobacco excise tax increase. Twenty billion dollars will be used for services to uninsured kids, and $10 billion for deficit reduction. We intend that the money be used for the same purposes as those outlined in the bipartisan budget agreement; that is, for Medicaid and for a mandatory capped State grant program to finance health insurance for uninsured children. Under our amendment, $18 billion in program funding will go to the Labor Committee, and $2 billion to the Finance Committee, to be added to the $16 billion already in the budget resolution. That means each committee will get $18 billion to work on complementary programs to help the poor and near poor. To pass this amendment--and this is an uphill battle we face--we need to have the will to do two things. First, we must recognize that we need to help children from America's working families, as well as the poorest of the poor. About 88 percent of uninsured children come from families where at least one parent is employed. Don't forget that. Eighty-eight percent of these kids live in a family where one parent works, at least. The majority of these kids will not be addressed by any Medicaid bill. Second, in order to help these forgotten children, we need to have the courage to take on some very powerful special interests. When we started this fight I knew that Big Tobacco would not just roll over and play dead. And they have not disappointed me. If we demonstrate one thing by this vote today let it be this: we are sending a message today that Senator Kennedy and I and the other supporters of this bill will stand up for children and against Big Tobacco. Senators, who do you stand with? Joe Camel, or Joey? That is what it comes down to. What the Senate must do today is decide whether we are going to protect Joe Camel, or whether we are going to protect Joey. Let our votes today be the answer. Now I am certain that those speaking in opposition to our amendment will offer a lot of complicated reasons why our amendment is deficient. But as they talk, ask yourself who should be protected: Joey or Joe Camel? Sometimes the logic of something is just so simple that no amount of obfuscation, legal mumbo-jumbo, technical economic jargon, and procedural objections can fool the American public. I expect that some will come to the floor today and say that this budget resolution is the wrong time and place for this legislation. One of their objections will be that the bill includes $10 billion in deficit reduction. Some will argue that this is not needed in a balanced budget document. Those who make that argument simply do not take into account the fact that the interest payments on the accumulated annual deficits--the $6 trillion national debt--now consume 15% of annual Federal spending. This is as much as we spend for our national defense. Having managed the floor debate for the balanced budget amendment that fell 1 vote short of the 67 necessary votes, I have a special place in my heart for the ``LD'' part of the CHILD bill: lowering the deficit. Once again, think of Joe Camel and Joey. Frankly, as a conservative Republican I am proud to have convinced so many Democrats to cosponsor legislation that provides $1 for deficit reduction for every $2 devoted to program costs. If this model is adopted in other areas, not only will we more quickly reach the goal of a balanced budget, but we will also be better able to face the formidable challenges of entitlement reform and financing the national debt. Our amendment has two very basic and extremely important goals. The Hatch-Kennedy healthy kids amendment benefits American families, working families so that they can get health care. The healthy kids amendment helps reduce the deficit and reduce our debt service requirements. Our amendment will help millions of kids get a healthy start in life. As it stands now, we know that too many American children do not get the benefits of health insurance. The General Accounting Office recently made a number of important observations about this problem. In House testimony, the GAO said: In summary, we have found that while most children have health insurance, almost 10 million children lack insurance. Between 1989 and 1995, the percentage of children with private coverage declined significantly--part of an overall decline in coverage of dependents through family health insurance policies. The GAO concluded: Had this decrease not occurred, nearly 5 million more children would have had private health insurance. From these observations of GAO, I think it is fair to say that there is a big problem in the area of children's health insurance, and unless we do something about it, it is bound to get bigger. Who are these 10 million children? These uninsured kids come from working families. At least 88 percent of those kids come from families where at least one parent is working. Many live in families whose income is just above the Medicaid limit, but they do not make enough money to provide health insurance for their kids. Who are the Hatch-Kennedy kids? I will tell you who they are. They are, in large part, the children of good, hard-working families who make too much for Medicaid and not enough to buy their own health insurance. This chart shows you that there is a pronounced spike in the number of uninsured Americans who live in that $20,000 to $30,000 working- class income bracket. This is the family income range of many of these families who stand to benefit from the Hatch-Kennedy amendment. It is clear to this Senator that there is a problem to be solved. These are uninsured Americans. Some are saying we do not need this amendment. The budget negotiators did a good job, in my opinion, in including a significant amount of new spending for children's health--$16 billion in this budget resolution. That is a good start, and I praised them for it. No question about it. But the fact is there are about 10 million kids in the United States without health insurance, and I believe that the budget resolution probably will not cover even half of them. I think it is important that my colleagues understand the Congressional Budget Office is coming in with very conservative estimates on the number of children who will be served under various congressional proposals. For example, the CBO, Congressional Budget Office, has estimated that the Medicaid 12-month, continuous eligibility proposal would cost $14 billion alone if implemented by every State. That alone is almost all of the money in this budget resolution. Or, if you look at it another way, the Federal share of Medicaid costs for a child is about $860 on average this year. According to the Employee Benefit Research Institute, there are 4.7 million uninsured children whose parents make less than 125 percent of the Federal poverty level. That is $19,500 for a family of four. How can they afford insurance? By simple calculation, to cover those kids under Medicaid would cost $4.2 billion, about $1 billion more a year than is included in this budget resolution, and that is just the Medicaid kids. There are 7 million here who are not. And this would leave the vast majority of children of working parents under 125 percent of poverty level uncovered. While I admit $16 billion is a substantial start and I commend my colleagues on the Budget Committee, it is just not enough to do the whole job. Many of us are also cosponsors of the Chafee-Rockefeller-Jeffords-Breaux CHIPS bill, which is estimated to cost at least $15 billion, perhaps even more. This Medicaid bill is targeted to help 5 million kids, including the 3 million or so Medicaid-eligible children who are not enrolled because they do not know enough to get enrolled. We see these two bills as compatible. The CHIPS bill improves basic Medicaid, and our bill would be added on top of that to take care of these uninsured kids who do not qualify. There obviously is a close connection between the two. That is why in our amendment we decided to divide the money equally between each of the two committees, Labor and Finance, and to work out an integrated approach. Let me also take a few minutes to explain my views about using a tobacco tax as the revenue source for our amendment. There can be no doubt that smoking and tobacco use are major public health problems. By any measure they are costly. Smoking is our Nation's No. 1 preventable health cause of death. There are about 48 million Americans who smoke. About 2 million Americans use other tobacco products like chewing tobacco. There are 3 million kids who smoke. Consider these smoking facts. Smoking causes cancer and is addictive. One out of five cancers is caused by smoking; four out of five lung cancers are caused by smoking; 3,000 kids are starting to smoke every day; 50 percent of all smokers begin before age 15, 90 percent before the age 18; 419,000 American smokers die annually. Just think about it. Of those 3,000 young Americans who start smoking every day, at least half of them are going to become nicotine addicts. Tobacco accounts for more deaths than homicide, car and airplane accidents, alcohol, heroin, crack and AIDS combined. In fact, cigarettes are a major cause of fire fatalities in the United States. In 1990, cigarettes were responsible for about one-quarter of all deaths associated with residential fires. This represented over 1,000 deaths in our society. Every day nearly 3,000 young Americans become regular smokers. Eventually, 1,000 will die early from tobacco-related diseases. Unfortunately, cigarette smoking is on the rise among the young. About 8 in 10 smokers begin to use tobacco before age 18 and about one-half of all smokers started at age 14 or earlier. According to a 1994 CDC report, tobacco costs our society $100 billion annually--$50 billion in direct medical costs. Of 24 billion cigarette packs sold in 1993, $2.06 per pack in medical care costs. Of this, 89 cents was paid by public sources; $10 billion Medicare, $5 billion Medicaid, $4.75 billion other Federal, and $16.75 billion higher insurance premiums. Just think about that. The price of cigarettes devoted toward taxes has slipped over the last three decades and, even with the increase we propose today, will actually be lower proportionately once this bill is enacted than it was in 1964 when Surgeon General Luther Terry reported for the first time that smoking causes cancer. As a conservative, I am generally opposed to tax increases. I firmly believe that the Federal Government should spend less and that the American people should keep more of their money that they earn in our economy. Yet the statistics about tobacco use and costs that I cited above, I believe, make the case that tobacco products are imposing external costs onto society that are not adequately reflected in the price of these inherently dangerous products. Simply stated, the producers and consumers of tobacco products are not paying for the full costs of this product. When I balance the opportunity that we have in terms of helping to provide health insurance and services for children, coupled with the significant deficit reduction component against my natural aversion to raising taxes, I come down in favor of this financing mechanism with the tobacco tax or, as I call it, a user fee because only those who smoke are going to pay this tax. And 50 percent of them, according to the recent polls, are for this tax realizing that smoking causes a lot of detriment to society. If we are going to commit ourselves to addressing the problem of adequate health care for children, then it is essential that we identify how this program is going to be funded. I knew I was going to take the heat on this one, but I strongly believed that it was the fiscally responsible thing to do, and I still think this is the case. Accordingly, let me pose to my colleagues this question. What do you believe is a better offset? From what program do you suggest we take the money? Now, I am willing to listen and discuss this issue but, quite frankly, I have not heard from anybody concerning a viable alternative financing source. Let us get to the real issue here. Smoking is dangerous for our public health, and it is dangerous for our economy. It hurts the kids we are trying to help. That is the crux of our amendment here today. Many of the critics of our proposal have seized on this amendment today to express concerns which were raised earlier about the Child Health Insurance and Lower Deficit Act. A lot of those charges against the bill are in error, as I am prepared to debate here today. But the fundamental question today is not should we pass the Hatch-Kennedy child bill. Rather, the more pertinent question before the body is should we do more for children's health? The answer, totally clear to this Senator, is ``most definitely.'' I consider children's health to be a top priority issue for this Congress. I think the American people expect that of us. My colleagues may be interested in a Wall Street Journal-NBC News poll taken between April 26 and 28 of this year. The question was posed as follows: Two Senators, a Republican and a Democrat, have proposed increasing cigarette taxes by 43 cents a pack and giving much of the money raised to help States provide health insurance for uninsured children. Based on this description, do you favor or oppose this plan? The response was astounding. I ask unanimous consent that it be printed in the Record.

Mr. HATCH. Reserving the right to object, I didn't hear the request.

Mr. HATCH. Thank you, Madam President. I thank my friend from New Mexico. Madam President, I listened to the earlier remarks of the Senator from New Hampshire, and I believe that my colleague has either misread or mischaracterized many aspects of the CHILD bill. Let me set the record straight. First, despite what the Senator from New Hampshire and other Senators may have alleged here, nothing in this bill mandates any State to participate. Let's go through some of the other erroneous accusations that have been made by those who oppose the bill. First, they said it created an entitlement program. This totally ignores the fact that the bill states explicitly ``Nothing in this title shall be construed as providing an individual with an entitlement under this title.'' Moreover, the States themselves establish eligibility criteria for this voluntary block grant program. The bill explicitly provides that participating States need not provide subsidies to otherwise subsidy- eligible children, even according to their own criteria, if funds are not adequate. Funding for the program is automatically reduced if revenues are insufficient to cover costs including the cost of deficit reduction. Some have said this bill creates new mandates on States. Participation in this program is purely voluntary for States. The program maximizes State flexibility and merely establishes reasonable requirements for States choosing to participate to assure that Federal funds meet program objectives, in the same way as such other health block grant programs as the substance abuse block grant, the maternal and child health block grant, and the preventive services health block grant operated. There is nothing new about this. This is the way you write a grant program. Then, opponents of the bill said it mandates the Medicaid benefits package. The facts are that the States choosing to participate in the program are expected to provide the benefits for children that the State already provides under the State Medicaid program. We advanced this proposal recognizing the importance of potential sensitivity of this issue and have indicated our willingness to modify this section if better ideas emerge. And we will certainly do that. Medicaid benefits include services that are particularly critical for children such as broad coverage for preventive benefits. Children meeting the State eligibility requirements in families that receive insurance through employer-based plans are eligible for subsidies to cover the employee coinsurance and copayment attributable to the children and such employer-based plans need not comply with the Medicaid package of benefits. The limits on cost sharing under Medicaid are not mandated. Another claim that has been made here today, on more than one occasion, is that the CHILD bill eliminates any future Medicaid waivers. The fact is that, first, if a State chooses not to participate in the CHILD Program, the law will have absolutely no effect on its ability to receive a Medicaid waiver. In other words, the provision will only affect participating States. If a State chooses to participate in the CHILD Program, it must not cut back on the existing Medicaid eligibility requirements for children. We did this to assure that States use program funds to cover additional children, rather than replace existing State funding responsibilities under Medicaid. This has nothing to do with Medicaid managed care and expanded Medicaid coverage, the two major subjects of Medicaid waivers. Another claim that has been made is that the bill mandates abortion funding for teens because the program requires benefits the equivalent of those under Medicaid. As a Senator who is proud of his pro-life voting record, I would never do anything to advance the cause of those who wish to expand abortion coverage. I do not believe that my bill would cover abortions. As an appropriated program, the CHILD bill would be subject to annual appropriations and would fall under the Hyde amendment prohibitions relating to abortion services. I know that some of my colleagues are disappointed in having to consider this amendment today. Some believe it would break the budget deal. Others are fearful of a tax increase. My purpose is simple: I am exercising my rights as a Senator to amend this budget and increase funding for children. Why can't we just get a vote on this one way or the other? Let me just say that I worked with the chairman of the Budget Committee for many years when I was on the Budget Committee. I know that he worked very hard in achieving this budget agreement, and I commend him for it. In fact, I admire him for it. I was not part of that negotiating team. But I am still a U.S. Senator who should be allowed to have a vote on his amendment. As I understand the situation, we are now in the process of allowing Senators who were not part of the Budget Committee or part of the budget negotiating team to review what the leadership of the Congress and the administration have agreed upon. Our job today is to review this deal, use our judgment and decide whether we support this agreement. What it comes down to is that the sponsors of this amendment believe it improves the budget package. We get $10 billion more in deficit reduction under our amendment. And we help about 5 million more kids who aren't helped. For the life of me, I cannot understand what is the matter with that. What is so difficult about that? Why can't we help these kids? I agree that the $16 billion in the bill is a good provision. I feel good about that. But much of that money--as much as $14 billion--will be in effect taken from other existing programs for seniors and kids that are important--such as the disproportionate share hospital program. So what we are doing here is taking moneys that have been used to help the poor and other people and put it another category to help the poor. Well, I am happy to have the $16 billion in additional funding for kids, and the recognition that there is a problem here. But that still will only solve the problems probably for the 3 million kids who qualify for Medicaid and who the CHIPS bill is designed to help. But I keep asking myself, ``What about the 7 million kids who weren't covered?'' Perhaps there will be enough funding to cover some of them. But there are at least 5 million, probably 6 million--and maybe as high as 7 million--who are not taken care of. That is all we are trying to do here. And we are recommending a block grant to deal with the problem, a block grant just like the many other health and social services block grants that have worked very well through the years. I understand that one of the key areas of concern relates to the benefit package. Having been through the victorious battle over the flawed Clinton health care proposal in 1993-94, I know full well all the baggage that a Washington-dictated benefit package carries. When I introduced the CHILD bill, I stated my willingness to work with the Governors and others to see whether an alternative to the Medicaid benefit plan would be acceptable to all parties. I remain willing to do so. I think Senator Kennedy as well has said that he is aware that this is a sensitive issue which needs to be addressed. Perhaps an explanation of why I agreed to the Medicaid package will be helpful to everyone here. First, there was the practical concern of moving the legislative process forward that I felt argued against an endless series of ``reinventing-the-wheel'' type meetings to come up with a benefits package. I have been through that before. As you can appreciate, this would have touched off a time-consuming siege by the various medical provider specialty groups arguing that their specialty merited inclusion. Second, on the merits, while I remain open to be persuaded otherwise, I am unaware of a children's health insurance model clearly superior to the current Medicaid standard with its children's early and periodic screening, diagnosis, and treatment--EPSDT--component. As you know, the general standard of EPSDT is that medically necessary services be provided. On its face, it is difficult to fault this principle. While I understand the view that EPSDT is too generous compared with other health insurance plans as implemented by the States and interpreted by the courts, I think it incumbent upon those who make this criticism to specify precisely what services should not be included in the benefits package. I am open to that. Such a dialog, if grounded in specifics, could only have a salutary effect on the refinement of the CHILD bill and perhaps for the Medicaid Program as well. I expect that the Governors will have something to say about this topic after they develop their principles for child health insurance which we expect to see at the end of the month. I plan to hear what they have to say and continue to work with them. We have to keep in mind that our amendment addresses the problem of children from poor families where parents work but just do not earn enough money to provide for health insurance. We ought to be ashamed not to solve this problem, when we solve so many other problems that are a lot less important than this one. I don't see why we should have this big donnybrook or why we should be fighting so vigorously over this. We ought to just do it. And we can do it--fully funded--by asking the one community that many experts acknowledge has caused $50 billion to $100 billion in unnecessary costs annually to help pay for the problem. With that, I will be happy to yield the floor.

Mr. HATCH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. HATCH. Will the distinguished Senator from New Mexico yield?

Mr. HATCH. I send an amendment to the desk.

Mr. HATCH. Mr. President, I ask unanimous consent that the time on this amendment be allocated to me as the prime sponsor of the amendment.

Mr. HATCH. If I may just finish? I apologize for taking so much time, but let me make this point, since my State was mentioned and since I think the statements were not completely accurate. Under our bill--which as Senator Nickles pointed out earlier is not even the subject of our amendment today--participating States would use Federal grants to help working parents with incomes too high for Medicaid buy private health insurance or purchase care through a Community Health Center for their children. So Utah could use the Federal funds under the CHILD bill to supplement the current privately supported Blue Cross/Blue Shield Caring program for children, which serves over 1,000 children. This program provides a base on which to greatly expand subsidized private health insurance coverage. And I know this is true, because I am one of those who helped get that program up and running. I might also add, just for my good friends and colleagues, the distinguished majority leader and the Senator from New Hampshire, the Utah program has endorsed the Hatch-Kennedy bill. I think that is just something that needs to be said.

Mr. HATCH. I think it should be pointed out to the majority leader that our bill does not interfere with the innovative programs in Utah and many other States which are doing so much to help children get health care. I think it is important to underscore that even with the great Caring program, there are still 56,000 kids in Utah who are not covered. This is in spite of the Utah Governor's substantial efforts as well. And I might add that throughout the country similar efforts are occurring. If the Senators believe that the language of my bill is not clear on this point, I am open to suggestions on what we can do here. But I think that a much larger point bears repeating. The budget includes a reduction in spending of about $14 billion for Medicaid. Clearly, everyone recognizes that most of the reductions will probably come from the disproportionate share program, or DSH. There are not many other offsets within the Finance Committee. At the same time, the budget includes $16 billion in new money for children's health care initiatives. It seems reasonable to assume that the Medicaid reductions will come from DSH--which, after all, is a program for the poor--and the increase will be given back to the poor in the form of Medicaid improvements or a mandatory grant program. So it looks to me like a fairly good percentage of the $16 billion in new money will end up being taken from another program serving poor children and seniors. Don't get me wrong. I think it is a wonderful thing for the budget to include the $16 billion. But if you analyze the numbers, you will see that that amount probably will cover the 3 million kids who currently qualify for Medicaid but are not enrolled, and maybe even a few more. But I doubt it will even cover 5 million in a meaningful way, as the budget document suggests. And that still leaves 5, 6, or 7 million kids who are not covered. All I am saying is this. We are not interfering with any of those 33 State programs. This bill does not interfere with them. In fact, it builds on existing State efforts.

Mr. HATCH. Will the distinguished majority leader yield?

Mr. HATCH. Mr. President, I also suggest that everybody vote for this amendment. That is fine with me. We will just vote for it. I am prepared to take it, but if not, then let's vote, and we will go from there. Mr. DOMENICI addressed the Chair.

Mr. HATCH. I ask unanimous consent that I be allowed 30 seconds.

Mr. HATCH. I normally would not get this argumentative, but, to be honest with you, I have heard some of the worst arguments against this bill that I have ever heard in any Senate proceeding. This morning I read a New York Times article, ``Citing Lost Cigarette Revenue, GOP Fights Child Insurance.'' I could not believe what I read: Republican senators today attacked a children's health insurance bill, saying the higher Federal tax it would put on tobacco would cost the states more than $1 billion in revenue annually by cutting cigarette sales. The measure, proposed by Senators Orrin G. Hatch, Republican of Utah, and Edward M. Kennedy, Democrat of Massachusetts, calls for raising the current 24-cents-a-pack Federal tax to 67 cents to pay for subsidized insurance for children of the working poor. The sponsors of the bill intend to offer it on Wednesday as an amendment to the budget resolution. Here is where it is interesting: The Republican Policy Committee, an arm of the leadership, today called the sponsoring Senators' intentions ``admirable'' but misguided, ``because states depend to a great degree on excise tax revenue.'' The committee estimated that decreased smoking resulting from the tax increase would cost states and localities $6.5 billion over five years. ``Even if one believes that decreased demand for tobacco is positive from a societal view, it still has negative fiscal aspects for the States,'' the committee said. Let me tell you, that is really something. I had just heard about this recent policy analysis put out by the Republican Policy Committee about the ``unforeseen effects'' of the tobacco tax. I was not exactly proud to be a Republican under those circumstances. I am sure some of my colleagues wish I were not today. But I am going to be because I believe in the Republican Party and I believe in what we stand for and I believe in taking care of kids. I believe in helping those who cannot help themselves. Let's start taking the money away from those that can but won't help themselves. As my colleagues may be aware, on April 23, the Republican Policy Committee issued a report entitled, ``The Complex Problem of Insuring Uninsured Children.'' This report, revised on May 1, noted that this is the first in a series of RPC papers devoted to this issue. We can only hope that this most recent May 16 piece of tortured logic is the last of this series unless more compelling analyses are forthcoming. Here is the point that is entirely missed. It would be a great thing for the public health of this country and particularly for the health of young Americans if tobacco tax revenues dropped substantially because tobacco is the single greatest preventable threat to our Nation's public health. No one should be so protective of lower tobacco taxes because the taxes might raise more revenues, any more than the public would support appointing Dr. Kevorkian as a Surgeon General in an attempt to achieve Medicare savings. I look forward to economists studying in detail the analyses of the May 16 RPC paper. It seems to me that the tobacco companies would have liked to have been able to have included this somewhat mysterious line of reasoning in their public comments to the FDA rules pertaining to the regulation of tobacco sales to minors. I wonder how much of the supposed $6.5 billion in lost revenues to States that they say will happen comes in the form of illegal sales that are quite literally poisoning and hooking our youth. I also want to know what Governors publicly take the position that State tobacco revenues are more important than the public health. I doubt many of the 20-plus attorneys general involved in lawsuits to recover State Medicaid funds attributable to tobacco-related illnesses would agree that a decrease in tobacco consumption is a bad idea. It seems to me that the title of the May 16 report, ``Unforeseen Effects of the Much-Touted Tobacco Tax Should Be Changed,'' frankly, it would be better titled, ``The World Turned Upside Down.'' I will be interested to know what the experts on the Joint Tax Committee and other groups, how they will view this RPC analysis. If I were not just a humble country lawyer from out West, I would almost get the feeling that somebody told the analysts at the RPC to trash the tobacco tax in any way possible. I have been around here for 20 years, better than 20 years. I have been trashed by more gifted analyses than this. Let me close this portion of my thoughts by saying that if I could get a list of Senators who are withholding support of our amendment due to the reasoning contained in the RPC document, I would immediately enter into discussions with my cosponsors. I think it is probably safe to say that if this is what it takes to attract more supporters to our measure, we can probably shift some of the funds marked for Federal deficit reduction to indemnify the States from potential revenue losses to any decrease in tobacco uses. Who are these Senators? Senator Kennedy and I would like to talk to you. Now the Republican Policy Committee is implying that it is more important to preserve tobacco excise taxes than the health of our children because we will get people, especially children, to quit smoking in the process. We know that every time smoking goes up 10 percent, 7 percent of the kids will never touch a cigarette. Are we to sacrifice people's health and lives to preserve tobacco excise taxes? Would we rather have excise taxes than healthy citizens in our States? Those who argue this way seem to want to maintain big tobacco revenues at the expense of the life and health of our citizens. Now, I find this appalling because all Senator Kennedy and I are offering is legislation that will result in good health for smokers and which will help children. The arguments of the opponents are logically flawed. Their interest in maintaining State tax revenues at a certain level is more important to them than the health and welfare of the citizens in our States. When it gets to the point that we are so ideologically constipated that we place the preservation of State tobacco revenues above the welfare of our American citizens, then we need to rethink our philosophy. I have to say I would have been willing to sit down and discuss this matter with anybody, reasonably, on how to handle this. I have to admit that I am probably irritating everybody around here. But I am irritated, too. If you want to play this game, we can just have one vote after another from here on in until the end of the process, and we will finally get our vote. If it means day and night, I will be here. I have done it before. I can do it again. All I want is some consideration for our side. In all honesty, I don't think we have had much. We are talking about kids here. We are talking about the poorest of the poor kids not on Medicaid, and about Medicaid kids, too. We are talking about doing something right--doing something for people who cannot help themselves and doing it by raising money from the industry that is causing a lot of the troubles. I also have to tell you that 72 percent of all adults in this country think this is the right thing to do. And even 50 percent of all smokers think it is the right thing to do. There isn't a better tax cutter in this body or one more zealously devoted to it than Orrin Hatch. Don't tell me about raising taxes, or cutting taxes. I have been for every tax cut I can get. I was one of the few who voted against the 1986 tax increase in the Reagan years and the Bush tax increase when it came up. I voted against that even though I was brought down to the White House and asked to vote for it. I sincerely told the President I couldn't do it. So I have the credentials on tax cutting. I was one of the original supply-side proponents and went all over this country to 36 States for then-Governor Reagan arguing for tax cuts. Here we have something that could be done to rectify some of the problems of our society without a cost to 80 percent of American taxpayers--only about 20 percent would pay this--and you would think the whole world was coming to an end. I really believe that if big tobacco were smart, they would come and say we ought to do this. People out there would respect them, and there would be more of an interest in trying to work out their difficulties with them. I have to say that I am getting a little frustrated. This is an important issue. It shouldn't be treated trivially. So we will just see what happens. Unless I can be shown some better way of getting this amendment considered and having an up or down vote on it, then we are just going to keep fighting this battle until we get that vote. I am open to the suggestions of my colleagues. I am open to sitting down with them to talk to them and see what can be done. But until then, this is the way it is going to be here. We may lose here today. But, if we do, it won't be for the lack of trying, and it won't be the last time we try either. It isn't going to end, even if it is right up to the end of the Congress. I just want to notify everybody now. I do not want any arguments next year that somebody is going to be hurt by this debate because I have notified this body that I plan to press the issue. I want to thank my colleague from Massachusetts for yielding to me. I yield back to my friend from Massachusetts.

Mr. HATCH. Will the Senator yield?

Mr. HATCH. May I ask my colleague another question? Is it not correct that all we are saying here is that we would like to have a vote, win or lose, on our amendment today? If we win, that makes it easier for us to go through the process. Naturally, any good legislator should want to do that if you really believe in what you are doing. I have to say both of us believe in what we are doing. That is true, is it not?

Mr. HATCH. I have been listening to the Senator and I think anybody who understands the parliamentary situation knows we can get a vote. It may take a few days, but we can get a vote. I do not want to have that kind of a confrontation, but if that is the way it is, then that is the way it is. I am prepared to accept the Domenici amendment and probably some of the future amendments, and I am prepared to vote. That still does not resolve the problem that the distinguished Senator and I have been trying to solve, am I right?

Mr. HATCH. I thank my colleague. I think that the Democratic leader has made a very compelling case. The amendment we are offering does not break the budget agreement. He summarized three points basically. No. 1, our amendment, just like the Domenici amendment, embodies no new health care program but builds on the existing monies in the budget resolution. No. 2, although our amendment alters the revenue numbers by raising the tax on tobacco there is no excise tax in the body of the text. It is my understanding that such language would not be in order. I think it would also raise serious constitutional questions about a tax originating in the Senate. I think my colleagues understand that point. No. 3, as I am pleased to recognize, as Senator Daschle has noted, our amendment does not worsen the deficit. In fact, it lowers the deficit. You would think that my colleagues on both sides of the aisle would be interested in doing supporting this language, especially on a balanced budget resolution. Keep in mind, although this budget resolution claims to balance the budget, the U.S. Government will still have a $6 trillion national debt. The Hatch-Kennedy amendment would reduce that debt by $10 billion more over the next 5 years. Frankly, for these reasons I believe that our amendment is fully consistent with the budget resolution as described by the distinguished Budget Committee chairman. Let us not use as an excuse to avoid an important vote on a major public health problem that we are somehow trying to break the agreement on the budget resolution. My amendment helps the budget. And, in the end, we will be helping 10 million uninsured children who otherwise will not have the help we can provide them today. Let me also be very candid here with respect to the strategy. We all know that if we do pass this amendment, it will probably have to be included in the reconciliation bill. If we do not pass the Hatch- Kennedy amendment today, I understand--and I believe it is probably accurate--that it will take 60 votes to do it on a reconciliation bill. I am not saying we cannot get the 60 votes, but naturally we would like to be able to have it in the budget resolution so that we do not have to have that hurdle. If I have some advice for my colleagues on my side of the aisle, I would suggest you acknowledge that $16 billion is not enough, especially when you, in a sense, rob Peter to pay Paul. We will end-up taking DSH moneys that were to be used for the poor and using many of them for a new program of children's health. At that, the $16 billion will not take care of more than what the Chafee-Rockefeller-Jeffords-Breaux bill provides. It will take care of maybe 3 million kids who are eligible for Medicaid but are not enrolled, but it does not take care of the 7 million kids who are not eligible for Medicaid but can't afford health insurance. So those who believe that they are doing the right thing by upholding this so-called budget agreement when, in fact, my amendment does not break the agreement, may be making it even more difficult to pass legislation that would help poor children in working families. One of my colleagues said, you have won Senator Hatch because you got $16 billion in the budget resolution. I admit that I am very pleased with this result and that it is a step in the right direction. And, in fact, that money would probably not be there in the budget resolution had it not been for the efforts of those Senators who support the CHILD legislation as well as other proposals. I commend my colleagues on the Budget Committee for doing providing the $16 billion. Unfortunately, that amount will not provide the necessary financial commitment needed to ensure those children most in need. Senator Domenici's substitute amendment to my amendment essentially strikes out all the moneys raised in my bill for children. In effect, the substitute amendment is what is already contained in the budget resolution for children's health--and nothing more. Frankly, if you look at that amendment, basically it says on page 3, line 3, where we had increased the amount by $16 billion, it strikes out $16 billion; page 3, line 4, it strikes out the money; there on page 3, line 5, it strikes out the money; there on page 3, line 6, it strikes out the money there, right on down through the whole amendment. So all they are saying is they are going to limit new spending for children's health to $16 billion, whether that is adequate or not. I think we have made better than a good case that it is inadequate. I think we made a case that every Senator in this Chamber ought to be able to support. It is time to resolve this problem. We are going to have to resolve it. You know, the odds have been very heavily against us from the start on this thing in the budget context. But I hope that those who are supporters of the Hatch- Kennedy bill will stand up, and I hope that there are others who may be supporters who will think this through and realize that it is a good amendment to support. I yield the floor.

Mr. HATCH. Will the distinguished minority manager yield me time?

Mr. HATCH. Plus the equivalent for others.

Mr. HATCH. Forty-three cents.

Mr. HATCH. Will the Senator yield?

Mr. HATCH. I yield back the remainder of my time. Amendment No. 307 to Amendment No. 297 (Purpose: The Bipartisan Budget Agreement of May 15, 1997, as implemented in this resolution, would spend $16 billion over five years (to provide up to 5 million additional children with health insurance coverage by 2002). The funding could be used for one or both of the following, and for other possibilities if mutually agreeable: (1) Medicaid, including outreach activities to identify and enroll eligible children and providing 12-month continuous eligibility; and also to restore Medicaid for current disabled children losing SSI because of a new, more strict definition of childhood eligibility; and (2) A program of capped mandatory grants to States to finance health insurance coverage for uninsured children. The resources will be used in the most cost-effective manner possible to expand coverage and services for low- income and uninsured children with a goal of up to 5 million currently uninsured children being served)

Mr. HATCH. How much time do we have?