Jon Kyl

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Ohio (Mr. Voinovich).

Mr. KYL. The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Ohio (Mr. Voinovich).

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. KYL. The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. KYL. The following Senator is necessarily absent: the senator from New Hampshire (Mr. Gregg).

Mr. KYL. Mr. President, I am not going to be laying down an amendment at this time but, rather, speaking generally about the legislation while another amendment is being prepared. I wanted to share some data that we became aware of today, a new Gallup poll, which confirms what some of us thought, which is the more the American people see about this stimulus bill, the angrier they are getting and the more they believe it is both wasteful and ineffective. It is interesting that only 38 percent of the American people support this bill as written, while 54 percent say it needs major changes or should be scrapped entirely. In other words, 54 percent of the American people are in agreement that this bill should not move forward as it is, that it needs major changes. That is what Republicans are proposing with the better ideas that we want to present during this debate. It is interesting as well that Independents, who were queried by even greater numbers, believe the bill either needs major changes or should be rejected outright. Fifty-six percent of Independents concur with that. Most Americans said they think the stimulus package either will not have any effect on their personal lives or will have a negative effect on their personal lives. A mere 12 percent said it would make their lives a lot better. That is the point that many of us have been making. People need something that will make their lives better. They are hurting all over this country. It is a shame, when we have an opportunity to do something about it, to waste a trillion dollars that we do not have and that our children and grandchildren are going to have to pay back for something that will not achieve its objectives. What I would like to do is speak to some of the problems with the bill that we believe will not work, will not stimulate the economy, will not create jobs, and some of the areas that are simply wasteful Washington spending. We have heard of some of these items. Again, many of these items the bill spends money on have an argument for them. But it is our view they should go to the Appropriations Committee, and they should present these programs to compete with all of the other programs which may also have degrees of worthiness. When the Appropriations Committee says: Here is the top line of the budget for each of our Government departments, then compete within that line for the program you want to spend your money on. If you are worthy enough, then you will get funded. If you are not, you won't. This bill simply takes all comers and says: Let's put it in a so-called stimulus bill, whether it has any stimulative effect or not. I will give a couple examples. More cars for government employees; this is another bailout for the auto industry. We are going to do trail maintenance for ATVs. Maybe that is a good idea. But that should probably compete in the budget that ordinarily it would be funded from. I know one of my colleagues is very strongly committed to the idea that we should provide some funding for Filipino veterans of World War II who assisted our troops. That may be a very worthy objective, but nobody can argue it belongs in this bill. Those are folks in the Philippines. It is not going to create American jobs or stimulate the American economy. We could go on and on with other examples. The point is, this is more wasteful Washington spending. American taxpayers are not against paying taxes, not against having the Government spend money if necessary, but they don't want us to waste the money. When we have a crisis on our hands, when they need help, to have us then just take the 8 years' worth of things we would love to do and haven't been able to get approval for yet and tuck them into this bill as spending and call it stimulus is bad policy. Abraham Lincoln had a great saying: If you call a tail a leg, how many legs does a dog have? Of course, the answer is four. Calling it a leg doesn't make it a leg. That is the point. Calling these things stimulus doesn't make them stimulus. They should not be in this bill. There are other things that suggest the bill would not work. We have had experience with this before. The centerpiece of the tax item in the bill is a tax rebate. Never mind that 26 percent of the people who receive this tax rebate don't pay Federal income taxes. The problem is, the same kind of tax rebate in the amount of $600 last year did very little to stimulate the economy, even though that is why it was done. All economists agree that somewhere between 10 and 20 percent of the money got spent, and the rest of it was plowed into savings. The reality is, that is a good thing because Americans' personal budgets are overleveraged just as our businesses are. People have far too much debt on their credit cards, for example. They need to be getting that debt paid down and begin saving a little more. So it is no wonder they would take these tax rebates and put them in the bank or pay off a credit card rather than going out and spending. That is a good thing for them personally, and it is what we have to have happen for the recession to finally end. But in terms of stimulating spending, it is not a good thing. It obviously does not stimulate spending. Martin Feldstein, who actually testified before the Finance Committee in favor of the last stimulus, has now written that, of course, the experts who predicted it would not work were correct, it did not work. He is now very much of the view that we should not repeat that mistake in trying to stimulate the economy. The problem is, we are talking about well over $100 billion which, therefore, will not achieve the purpose of stimulation. So these are why, when the American people see money being spent on things that have no business in this bill--it is more wasteful Washington spending--when they see huge amounts of money going toward an effort to create jobs that would not do that, they scratch their heads and say: Why are these politicians in Washington wasting an opportunity to help us? Why don't they really get to something that will help us? There are things that can help. Republicans have some better ideas about how to craft this legislation so it will actually achieve the objective we want. The bottom line is, rather than spending $1.3 trillion on this bill, we should be providing tax incentives that will create jobs. We should use the Tax Code to encourage beneficial behavior to encourage people to work and save and invest and create jobs. That leads me to the next subject. Our colleagues on the other side of the aisle like to say that a significant percentage, maybe 36 percent, of this bill is taxes. Again, what is tax relief? I don't think you can call tax relief rebates when they are scored by the joint legislative committee as spending. So we have a difference of opinion. Even if only a quarter of it is tax policy, what kind of tax policy is that? Mr. President, 2.3 percent of the amount of the total bill is spent on tax incentives for businesses so they can write off their equipment purchases and so on that might conceivably enable them to hire more people. That is inadequate. One of our better ideas is to enhance those current provisions, expand them so that more businesses will be able to hire more people and produce more and thus help us to get out of the recession. There are a variety of ideas that will be presented as amendments. One of them is an idea that some of our House colleagues have: by simply reducing by 7 percentage points the tax that small businesses pay, we believe significant new jobs will be created because small businesses create the jobs. Big businesses are trying to hold their own right now, but they are losing jobs, and they have not been the job creators. It is the small businesses that have historically created jobs. We believe that reducing their tax liability just by this modest 7 points--talking about businesses with 500 or fewer employees--you will have thousands and thousands of employers who will be able to buy the new equipment, be able to market their product or in some way be incented to hire additional people. That is how we create more jobs. We think we ought to focus on where this problem started and where a significant part of the problem remains, and that is in housing. In fact, housing values are continuing to decline. We know the collapse in the housing market is what started all of this. But there is nothing that goes to the heart of that problem which remains. In Arizona, we continue to see housing values decline. I talked to realtors and others last weekend. In some cases, over 50 percent of what they are doing is foreclosures and short sales in anticipation of foreclosure. So the market is in very bad shape. One of the Republican ideas--in fact, we have a couple of different approaches--is trying to provide a floor so housing values don't decline any more, so that people are incented to either refinance their existing mortgage or to be able to afford a new mortgage, and at the same time that this would help individuals put more money in their pockets. Because of the savings they would achieve with a lower interest rate mortgage over 30 years, it would also help to clear up the problem we have all heard about in the secondary market, the so-called toxic assets backed by mortgage-backed securities, the value of which nobody apparently can figure out. If most of the people would refinance their existing mortgages at a lower rate, say, 4.2 percent, all of the holders of those mortgages would be paid off. They would all have cash. They could either reloan it or they could prop up their balance sheets. All of this would be very helpful, and we would then know exactly what is left. What is left are the toxic mortgages, and there are other programs that will be dealing with that. I believe the President's Treasury Secretary, Secretary Geithner, is poised to talk about that next week. There are other plans the FDIC and others have. Certainly, the TARP funding that has been voted on is supposed to help go to those toxic assets, the people who are allegedly underwater; that is to say, the value of their home is less than the amount they owe on their mortgage. It is really a two-part problem. The Republican ideas are designed to get at that problem, the problem that caused this whole collapse in the first place. Most experts believe it has to be solved before we can genuinely begin to work our way out. There is another problem with the bill; that is, there is bad policy in this bill. For example, on the infrastructure, we have Davis-Bacon requirements. This adds to the cost of all of these projects. I remember a few years ago in the little town of Sierra Vista in southeast Arizona there was a facility to help women with dependent children or families that needed aid. If they had built the structure to do this, they couldn't afford it because of the additional cost that Davis-Bacon imposes on wages to construct a building. So they bought a mobile home instead, and because they were buying a mobile home, it wasn't a construction cost. They saved thousands of dollars on the facility. Was it best to have a mobile home for this facility? No, it wasn't. They should have had an actual building. That is the problem with this particular policy. I forget the amount of money that it cost, but it is significant. On health policy, there is the comparative effectiveness research which, in an op-ed in the Washington Post last Friday, George Will commented would dramatically advance Government control and rationing of health care. This is not good policy. There is the neighborhood stabilization plan, $2.25 billion. This is the same kind of funding that could go to entities like ACORN, which we stopped when we dealt with this last June in the housing legislation. But it is tucked into this legislation, it is a lot of money, it is bad policy, and it ought to be taken out. The Washington Post, last Friday, editorialized about the education expenditures here. They said: Ordinarily, we would support more money to support education, but this is a wasted opportunity to reform education so that we can actually use this new money to better benefit. Otherwise, we are simply throwing more money at the problem. Part of the quotation from the Washington post was we ``will be wasting more than money.'' What they meant was the opportunity. There is an opportunity here to really do some good, and rather than just throw more money at a problem, why don't we take advantage of the opportunity to really do something to reform it? This gets me back to the point with regard to how these bills should compete in the appropriations process. We have a process--it is well established in the House and in the Senate--to deal with competing appropriations. They go over these bills very carefully. Ordinarily, they have to make some tough choices, to say: This program will go into the bill, and this one, unfortunately, is going to have to wait for another year or it is going to have to be reformed before we are going to spend the money. That regular-order process is what we should be using in this case. This bill creates something like 34 new Government programs. Now, those two are the kinds of things that are scrubbed carefully in the regular appropriations process. Ronald Reagan once said: The closest thing to immortality in Washington is a new Government program. Once created, it is awfully hard to get rid of. Of course, there is a lot more mandatory spending in the bill, spending that allegedly exists for only 2 years, but actually we know there is no way after 2 years Congress is going to come back and cut. In fact, going back to the so-called make work pay credit--this $500- per-taxpayer rebate--most of the experts agree this temporary tax rebate is not going to change behavior and stimulate spending. So what is the answer? Well, of course--wink, wink, nod, nod--it is really going to be permanent. Now, nobody wants to put that on paper because the score, the cost, would be astronomical. This body would be embarrassed to pass it, and it would not pass it. But once it is in there for 2 years, do we think we are going to eliminate it? No. In fact, the authors of it justify it, saying: Well, it actually will work because it is not really going to be temporary. We are really going to make it permanent. That is what we have to be very careful of in this legislation--committing ourselves to hundreds of billions of new expenditures, ostensibly temporary--some not even ostensibly temporary; they are actually identified as mandatory spending for the next 10 years--but many of them ostensibly temporary but will, in fact, be a permanent program. One of the reasons I believe the program will not work is because less than half of all the discretionary funding is spent by the year 2011. Now, I hope by the year 2011 this recession is over. But you cannot call it a stimulus when more than half of the discretionary spending does not even begin to be spent until the year 2011. So another one of the Republican ideas, that of my colleague, John McCain, is to say: Look, you have to spend this within this period of time. If you do not, then that authority lapses, and we are not going to spend that money. I think that is a very sensible way to look at it. Just one other comment on the tax title. We talk about the extension of these energy tax credits. Apparently, windmills did not get enough in the way of tax credits, so we are going to extend their tax credit for another 3 years. You can argue whether that is good policy, but you cannot very well argue that extending it beyond 1 year is immediate spending. By definition, you are talking about the second and third year. On this point, Dr. Christina Romer, who is President Obama's head of the Council of Economic Advisors, and, by the way, at last count, about 320 other economists, including some Nobel laureates, has made the point that tax cuts are far more effective in this environment than is additional Government spending. To this, I just have to say, this appears to be a new concept here in trickle-down economics, where the Government will spend close to a trillion dollars--just get it out there--and hopefully some of it will trickle down to regular people. That is not the best way to help people who are hurting in this economy. So we have talked about things that will not work in the bill. We have talked about excess spending in the bill. We have talked about things that are not going to really stimulate the economy or create more jobs. In fact, the cost of the jobs, if you just take the cost of the bill and the number of jobs created, according to estimates of the sponsors of the bill, for each Government job created, it is $646,000. That is a lot of money to create a job; in the private sector, $242,000. This is not an efficient, effective program, and I do not believe we can afford a $1.3 trillion mistake, especially since we are playing with the money our children and grandchildren are going to have to pay back. Let's eliminate the wasteful spending, and let's deal with the things that have to be dealt with first, such as the housing crisis, and create tax policy that will make sense long into the future and will actually help businesses create more jobs to help the people of our country today.

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Florida (Mr. Martinez).

Mr. KYL

Mr. KYL. Mr. President, I wish to speak in favor of the Bunning amendment, which I hope we will be able to vote on a little while later this afternoon. It is a very simple amendment that sets the maximum amount for eligibility under the SCHIP program at 300 percent of poverty. In other words, we set the poverty level in this country three times that amount that would be the qualifying level for a family to qualify their kids under the SCHIP program. That is a lot more than what was originally intended when the SCHIP program was put in effect, but it is a level that represents the maximum for all but two States in the country. Most States are somewhere around 200 percent of poverty. My State of Arizona is exactly at 200 percent of poverty. The State of the chairman of the committee, who is from Montana, is now at 175 percent, although I understand there is legislation that will take that up to 250 percent. So with the States bunched around primarily the 200 percent of poverty level, some now at the 300 percent, that represents a good compromise on where the limit should be set, and we need to set the limit for a variety of reasons I will go into in a moment. Let me tell you what the implications of the amendment would be. There are only two States that would have to cut back under the program. In fact, they would not have to actually cut back in the coverage of children, they would simply follow the same rules as everyone else, and their reimbursement would be at the Medicaid rate rather than the higher SCHIP rate for these higher income kids. So they could still cover them; they just don't get quite as much reimbursement from the Federal Government in order to do it. Now, there would be some savings as a result of these two States not having Federal funding at the SCHIP level, and that additional savings, under the Bunning amendment, could be put into outreach and enrollment grants to help find eligible, uninsured, low-income children. The reason for that is, the whole point of the program is low-income children. Yet there are millions of low-income children who are not enrolled in the program. We have to find them, we have to get them enrolled. That will cost some money. So the savings that are achieved in this amendment would go toward that end. The third and basic point here is that the Bunning amendment ensures we keep our promise to preserve the SCHIP coverage for low-income children and ensure parity amongst the States. If we have a limit of 300 percent, not all of the States would want to go to 300 percent but they would know they could do that. If they wished to keep it below 300 percent, they would be paying less. They would be receiving less from the Federal Government, but it would be uniform for everyone. As I said, I think Senator Bunning is wise to set it at this level, even though that means the average family of four has $66,000 in income. That is hardly low income or poverty level. But $66,000 of income would cover families who clearly could use the help. It is obviously very generous. It is clearly way above poverty, so I do not think Senator Bunning goes very far in limiting this to 300 percent of poverty. These numbers translate to 200 percent of poverty is $44,000 income per year. Of the two States that are above the 300 percent, one is New Jersey at 350 percent. That translates into $77,175 a year. The other is New York at $88,200 per year. We can all have some disagreements in this body, but nobody can argue that $88,000-plus in income is a poor family, is a poverty or low- income family. That is not what this program was designed to cover. Add to that, you can add in $40,000 for expenses for transportation and clothing and housing and so on, and you can actually get above $120,000 in income and qualify for this low-income program for kids. That is not right. One thing I know that folks in Arizona, folks in New Mexico, folks in Montana all say when they look to Washington is: We know we need to pay income taxes, we know we need to spend money on things, but stop wasteful Washington spending. I think sometimes they may view our spending as more wasteful than it is, but the reality is there is a lot of wasteful spending here. This is a lot of spending beyond what was the original intent of the legislation. When I talk in Arizona about low-income kids, people nod their heads and say, yes, we need to help low-income families with kids. If I said to them so that means $120,000 a year--most of the families in Arizona don't make $120,000 a year, let alone calling that low income. It is not. If only for truth in advertising purposes, we should support the Bunning amendment and, again, he sets the level at 300 percent of poverty or $66,000. In one sense you would have a tough time defending that as a low-income program. But that is where he set it. At least nobody can contend that he is trying to be too cheap here. Mr. President, $66,000 a year for a family of four to qualify for a low- income poverty program I think is quite generous. I think I indicated I would answer a couple of questions here about why we need to do this. One argument for the folks in New Jersey is we have a higher cost of living in those States. Of course it is not twice as high. It does not cost twice as much to buy a car in New York or New Jersey or Arizona, so that argument only goes so far--and it is about ``this'' far. Second, what these States have done is cover more kids at higher income levels because it is easier. Think about it. You expand the program to cover a lot of high-income kids. You can find those kids. It is the very low income we are having the trouble finding. Those are the ones who need to get registered in this program, but they are hard to find. They are in our Indian reservations, in our inner cities, and maybe some out in farm country in Montana or wherever. That is who we should be focused on here. It is easy to say let's raise this up to families making $88,000 a year. Sure, you can find those kids. But the fact you are then enrolling more kids in the SCHIP program doesn't mean you are getting the ones who need the care the most. There is another problem with that. The Congressional Budget Office notes that with these higher income family kids, there is a one-to-one ratio from adding a child onto SCHIP and losing health insurance coverage in the private sector. For every one child who is added on, a child loses health insurance coverage from an employer. The ratio generally is between 25 and 50 percent, but at the higher income level it reaches a one-to-one ratio. This is the crowdout effect we were talking about before. It doesn't do us any good to add somebody to the Government-run program if the only effect of that is to cause them to lose their insurance policy from their family's employer. You have not helped anybody in that case. All you have done is transferred the expense from the employer to the taxpayer. In the case of these high-cost States such as New York and New Jersey, the people of New Mexico or Arizona or Montana, for example, are paying twice as much for those kids as they are for the kids in their own State. We are sending money from Arizona to New York. Arizona has it at 200 percent of poverty, or a $44,000 income level. New York has twice that, $88,000. The net effect of that is Arizonans are simply sending money to New York to take care of the New York kids. That is not fair. That was not what this program was originally designed to do. What Senator Bunning has done is say let's cap it, not at some low level but the relatively high level of 300 percent of poverty, $66,000 a year. If they want to cover kids higher than that, they can, but they are reimbursed at the somewhat lower Medicaid rate than the SCHIP rate, and he takes the savings from that and helps us fund the kids who need the coverage, the low-income kids. I cannot for the life of me see why any of us, except perhaps the four Senators from New Jersey and New York, would not support this amendment. The only two States that would suffer at all under this amendment are those two States because they have chosen to go far above what the other States provide in terms of coverage. They can still cover the kids, as I said, they just don't get quite as much money from taxpayers in other States to do that. Why wouldn't those of us from the other States support the Bunning amendment? It is going to be very hard for some people to go home to their constituents when those folks say, Why didn't you support the Bunning amendment? Why should I have to pay money for somebody making $88,000 in New York State to cover these higher income kids when that probably means that their employer takes the obligation he has and moves it over to the taxpayers? This is not very logical. The Bunning amendment is a modest attempt to get the program back to its original intent, slightly less expensive, to generate some funds to get the low-income kids in, and have more equity among the States. I cannot think of an amendment that would more reasonably try to deal with all these problems, and I do urge my colleagues, for a moment here, let's put partisanship aside. The President has urged us to do that. We don't have to have just partisan votes on all of these amendments--all the Democrats vote no, all the Republicans vote aye. That doesn't get us anywhere. I hope my colleagues on the other side of the aisle will put on their independent thinking hats. If they need to say something to the leadership or whatever--look, this is a reasonable amendment, I am going to support it--then do that. We do not have to be in lockstep here. It may be that there is a Republican amendment that deserves to be supported. This is one. I urge my colleagues, let's approach this independently. This is a good amendment. Let's support it. I hope my colleagues will consider doing that when we vote on the Bunning amendment a bit later on this afternoon.

Mr. KYL

Mr. KYL. Madam President, I ask unanimous consent that the pending business be laid aside for the purpose of my offering amendment No. 46.

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

Mr. KYL. Mr. President, this amendment deals with a problem we have discussed before, the so-called problem of crowdout. This problem was dealt with in the amendment by my colleague Senator McConnell. But the Senate did not see fit to adopt that amendment, so I have now offered the amendment to specify that as to this one specific problem, hopefully, we can get together and resolve it. First of all, what is ``crowdout''? Put simply, the more individuals you enroll in a Federal health program such as SCHIP, the more you crowd out or displace from employer-sanctioned or sponsored coverage. In other words, the more opportunity there is for the Government program, fewer employers will offer insurance to their employees. The Congressional Budget Office actually did a study of this in May of 2007, and here are some of the things they said: For every 100 children who enroll as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children. So that is between 25 and 50 percent will leave private insurance to come to SCHIP. They said: The potential for SCHIP to displace employer-sponsored coverage is greater than it was for the expansion of Medicaid because the children eligible for SCHIP are from families with higher income and greater access to private coverage. Again, that is from CBO. Unfortunately, we have exacerbated this problem because, as I had explained earlier, in the underlying bill we have actually allowed some States to cover families with very high incomes. For example, there is an exception for two States: New Jersey and New York. New Jersey will be allowed to continue covering children from families earning as much as $77,175 per year. New York will be allowed to cover children from families earning as much as $88,200 per year. That is 400 percent of poverty. Making matters worse, the committee counsel acknowledged that States can exploit a loophole in the current law whereby a State may disregard thousands of dollars' worth of income in order to make a child eligible for SCHIP. So you add these numbers together. If we set an income level for New York, for example, of $88,200, and then the State disregards an additional $40,000 worth of income for expenses such as clothing or transportation or the like, then children whose families earn over $130,000 would be eligible. Not only, obviously, is that wrong, not only is it unfair for those of us who come from States that cover half that number--in other words, our citizens would be subsidizing the coverage at twice as much as a State such as Arizona provides--but it will also exacerbate the problem of crowdout because these are higher income families more likely to have insurance coverage that would then devolve to the SCHIP program. So this is the essence of the problem of crowdout, the problem we are seeking to deal with.

Mr. KYL. I am happy to yield.

Mr. KYL. Madam President, if I can take 4 minutes, that will be fine.

Mr. KYL. Madam President, yesterday I spoke to this issue and detailed the reasons the underlying legislation is not a good bill and why the substitute that is being offered by Senator McConnell will be a much better approach to this issue. I want to reiterate one of these points because of a question a reporter asked me out in the hall. We talked about the massive number of people, 2.4 million people, who will leave their private insurance coverage in order to participate in this Government-run program. It is called the crowdout effect. The reporter said: Does it appear to you that this is just one more step toward Government-run health care for Americans? I said: Well, you can certainly conclude that. The reason I said it was because there were efforts last year to try to fix this problem. Everybody acknowledges there are almost 2.4 million people who will leave private health insurance coverage because, obviously, the businesses that are paying for that today would not have to pay for it if their employees go to this Government-run program. It, obviously, makes sense for them, therefore, to drop the coverage. The reason I said what I did is because there is a way to handle this. We tried to deal with it last year. When the legislation was finally--the final version was written, it was written by the chairman of the committee and by other Democratic leaders in the House and in the Senate. It was approved by both Houses. It included the language that dealt with this crowdout effect. Now, it was not very meaningful language, from my perspective, but at least it was a recognition of the problem. Surprisingly, that language was dropped from this bill, and I never have been able to figure out why. So I offered an amendment in the committee to reinsert the same language that the chairman and other Democratic leaders had put together to deal with this problem. On essentially a party-line vote, my amendment was defeated, so the problem remains. And it is the one of many problems in the underlying bill. The point of the Kids First Act, which is Senator McConnell's alternative, is that it is targeted and it is a responsible reauthorization to preserve health care coverage for millions of low- income children. That is what the program is all about. That is what we should be doing. Unlike the underlying bill, the McConnell amendment adds 3.1 million new children to SCHIP. It minimizes the reduction in private coverage, as I said before, by targeting SCHIP funds to low-income children and not high-income families who have access to private coverage. And importantly, it is offset without new tax increases or a budget gimmick as is the underlying bill. So I think my colleagues and I have two choices here, either a budget buster that does not protect SCHIP coverage for low-income children, represents an open-ended burden on taxpayers, and takes a significant step toward Government-run health care, or a fiscally responsible SCHIP reauthorization that preserves coverage for low-income children and is fully offset without a tax increase, and minimizes the effect on employer-sponsored health coverage. The answer is clear, the Kids First Act is the right solution, and I urge my colleagues to vote yes on the McConnell amendment. The PRESIDING OFFICER (Mrs. Hagan.) The Senator from Montana is recognized.

Mr. KYL. The following Senator is necessarily absent: the Senator from Georgia (Mr. Chambliss).

Mr. KYL. The following Senator is necessarily absent: the Senator from Georgia (Mr. Chambliss).

Mr. KYL. Mr. President, well, that is exactly the point of my amendment. The bill the Senator from Kansas voted for last year had section 116 language in it. The Senator is precisely correct about what it did. That was not Republican language. That was drafted by the chairman of the committee and the leadership in the House, Democratic leadership, and supported by Members on both sides of the aisle when that bill passed. But in writing the bill this year, they dropped that language. Now, I do not know why they dropped it, but it was dropped. All my amendment does is to add back that language. I have not changed a comma or a period or a semicolon. I took the language they drafted last year, in the bill that passed, and reinserted it in this bill.

Mr. KYL. Mr. President, I would. If I could ask the Senator from Texas, who has one of the pending amendments, if he wants to speak on his amendment, I will yield.

Mr. KYL. I thank the Chair.

Mr. KYL. The following Senator is necessarily absent: the Senator from Louisiana (Mr. Chambliss).

Mr. KYL. The following Senator is necessarily absent: the Senator from Georgia (Mr. Chambliss).

Mr. KYL. Mr. President, this amendment which I laid down before the last two votes deals with the problem of crowdout, the problem CBO identified, that for every 100 children who enroll as a result of SCHIP, there is a corresponding reduction in private insurance coverage of between 25 and 50 percent. In fact, CBO's number, their estimate, as a result of people leaving private coverage and going into the Government program as a result of this bill, is nearly 2.5 million individuals. That is what this amendment seeks to address. The amendment is the identical language in the bill that was written by the House majority last year, passed when that bill then came back over to the Senate, passed this body, was sent to the President, and he vetoed the language. It was not written by Republicans, it was written by Democrats, and it attempted to deal with the problem of crowdout. I will describe that after a while. It is not the language I would have preferred, but at least it recognizes the problem. As a result, I ask my colleagues, what is wrong with the language? Why do we not want to address this problem of crowdout? Since I borrowed your language, didn't change a period or a comma, what is wrong with including that in this bill? The chairman of the committee noted that 69 percent of the Senators voted for the original bill that did not have the language in it. True. But also, whatever similar number voted for the bill after it passed the House, that did have the language in it. But that is not the important point. The important point is that, recognizing there was a problem, the House, along with the chairman of the committee here in the Senate, wrote the language, put it in the bill, yet did not include it in the legislation that is pending before us. That is why I have offered this amendment--the same language--to try to deal with this problem. I was told the Senator from Kansas had a question he wanted to ask, and I yield for the purpose of a question.

Mr. KYL. Mr. President, I will be happy to.

Mr. KYL. Mr. President, the reason for the disparity is this: CBO says 2.5--2.4, to be exact, 2.4 million people will lose coverage from their private health insurance as a result of this legislation. For the higher income, it is almost a 1-for-1, and that is the 400,000 number the Senator from Kansas is talking about. Literally, for every person who is added, a person is dropped.