Jay Rockefeller

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I am pleased to join the distinguished chairman of the Select Committee on Intelligence in presenting S. 1025, the proposed Intelligence Authorization Act for fiscal year 2004, which will begin on October 1, 2003. I would like to join the chairman in noting the bipartisan manner in which the committee approaches its legislative work, and congratulate him for his leadership in maintaining that tradition. The bill has two main functions. First, the bill authorizes the appropriation of funds for the intelligence and intelligence-related activities of the Central Intelligence Agency, the Defense Intelligence Agency, the National Security Agency, the FBI, and other intelligence elements of the U.S. Government. For the first time, the intelligence component of the Department of Homeland Security is included in the annual intelligence authorization. The actual appropriation of funds, of course, must be made in separate appropriation legislation that will follow, within the parameters set by this authorization legislation. Second, the bill establishes or amends legal authority for the intelligence community or directs the preparation of reports by the Director of Central Intelligence or heads of components of the intelligence community. The classified nature of United States intelligence activities prevents us from disclosing publicly the details of our budgetary recommendations. Accordingly, nearly all our budgetary recommendations are in a classified annex. The annex is available to all Members of the Senate, either at the Intelligence Committee or S-407 in the Capitol. Ten years ago this November, I joined a majority of Senate colleagues in voting to express the sense of Congress that the aggregate amount requested, authorized, and spent for intelligence and intelligence- related activities should be disclosed to the public in an appropriate manner. The House opposed the provision. I continue to believe we should find a means, consistent with national security, of sharing with the American taxpayer information about the total amount, although not the details, of our intelligence spending. One reason is illustrated by this year's intelligence authorization report in the House. The House committee found that the U.S. intelligence community has been recovering from cutbacks in budgets, personnel, and capabilities that followed the cold war. But how can the American people know, in a timely way, not years later, when there are cutbacks? How can they make their opinions known unless the President and Congress give them basic information on the overall size of the intelligence budget? Further, in holding the intelligence community accountable for performance, citizens should know the Nation's overall investment in intelligence. We are on the threshold of important decisions about the future of the U.S. intelligence community. Last week's 911 report of the congressional intelligence committees has shed additional light on major problems of U.S. intelligence before the terrorist attacks of September 11. As it works toward its final report next year, the independent National Commission on Terrorist Attacks Upon the United States, building on the foundation laid by the joint inquiry, will be adding information and insights. And the Senate and House Intelligence Committees each are in the midst of extensive examinations of U.S. intelligence on Iraq. It is fair to say, I believe, that rarely before have we had as much information about the performance of U.S. intelligence. With that knowledge comes a responsibility, for the intelligence committees, Congress as a whole, the intelligence community, and the President, to complete the improvements that the facts show are required. But we do not have the luxury to wait for further reports to begin reforms. Al- Qaida and other terrorist organizations cannot be expected to take a holiday while additional studies are done, and so we must take critical initial steps now. The need for improving information sharing and the need for enhancing intelligence community analyses were high among the recommendations of the joint 911 inquiry. Last November, the Congress took a key step in improving information sharing in establishing, in the Department of Homeland Security, a Directorate for Information Analysis and Infrastructure Protection. Last month, on the favorable recommendation of our committee, the Senate confirmed retired Marine Corps General Frank Libutti to be Under Secretary in charge of that Directorate. As set forth in the Homeland Security Act, he is to have access to law enforcement, intelligence information, and other information from Federal, State, and local agencies, and is to integrate that information to identify terrorist threats to the U.S. homeland. The President took a further and somewhat different step in integrating threat information, in ordering this past January the establishment of a Terrorist Threat Integration Center under the Director of Central Intelligence. The successful integration of terrorism threat information--including ensuring that terrorism threat matters do not fall between a crack between the Homeland Security Directorate established by Congress and the Center established by the President, is a great organizational challenge facing the intelligence community this year. Our managers' amendment calls for a comprehensive report on the operations of the Homeland Security Directorate and the Terrorist Threat Integration Center. The Congress should use that information as a basis for vigorous oversight and further legislation if needed. Our need to integrate information is not limited to terrorism threats. It extends across the spectrum of U.S. intelligence. To that end, section 314 directs the Director of Central Intelligence to carry out a pilot program on the advisability of permitting intelligence analysis of various elements of the intelligence community to access and analyze intelligence from the databases of other elements of the intelligence community. Our bill requires that the program include National Security Agency signals intelligence, but also authorizes the Director of Central Intelligence to extend it to other intelligence units. The program is to enhance the intelligence community's capacity for ``all source fusion'' analysis in support of its functions. The Director of Central Intelligence and the Secretary of Defense are to assess the pilot program and report to Congress. Another provision, section 334, will start a process for Presidential review, and then congressional consideration, of policies and regulations that may impede sharing, for national and homeland security purposes, of classified information among Federal agencies, and between them and State and local governments or the private sector. To increase the number of trained intelligence analysis, section 315 directs the Director of Central Intelligence to carry out and report to Congress on a pilot program on the feasibility and advisability of preparing selected students, through a program similar to the Department of Defense's Reserve Officers' Training Corps, for employment as intelligence analysts. Greater integration in the intelligence community is an imperative that goes beyond information sharing and analysis. Another long-term objective of the bill, set forth in section 335, is to improve coordination between the Department of Defense and the intelligence community concerning strategic and budgetary planning. With the growing importance of intelligence to military operations, the Department of Defense should recognize the contribution the Director of Central Intelligence can make in the development of national military strategy. Three sections of our bill address important information security and counterintelligence issues. Section 331 addresses the danger posed by disloyal cleared insiders who have access to vulnerable computers and computer systems, as exemplified in the Brian Regan and Robert Hanssen espionage cases. The bill directs the submission of a report by the Director of Central Intelligence and the Secretary of Defense which describes in detail what steps are being taken to eliminate these threats, including any budget requirements to address shortfalls. Section 332 calls for a report on security clearance procedures in the Federal Government. Our report notes that most publicly known instances of foreign espionage in the United States have involved persons who legitimately obtained clearances before deciding to betray our country. The committee has identified as a subject for assessment, the relative risks of disloyalty before clearance and after clearance. We need to learn from the experience of past betrayals. Accordingly, the committee is asking that a joint report of the Director of Central Intelligence and Secretary of Defense recommend how background investigations might in the future be better targeted to historically verifiable counterintelligence vulnerabilities. Section 336 addressed a further security vulnerability, namely, the extent of the dependence of the United States on computer hardware or software manufactured overseas. Our report notes that most leading suppliers of hardware and software to the United States are countries that the FBI indicates are engaged in economic espionage against us. Section 336 would direct the Director of Central Intelligence to submit a report to assist Congress in developing policies that address this new vulnerability. Finally, I would like to make an observation about our committee's future work on intelligence legislation. There are important issues identified by the joint 9/11 inquiry, including fundamental ones about the leadership of the intelligence community, that must be on our agenda for future action. The joint inquiry recommended that Congress establish a Director of National Intelligence who, in addition to being the President's principal adviser on intelligence, shall have the management, budgetary, and personnel powers needed to make the entire U.S. intelligence community operate as a coherent whole. The joint inquiry recommended that in order to ensure this leadership, Congress should require that no person may simultaneously serve as both the Director of National Intelligence and as CIA Director or as the director of any other specific intelligence agency. Earlier this year, a member of our committee, Senator Feinstein, introduced legislation on that subject. And Senator Graham has now introduced legislation, which I am privileged to cosponsor, that includes Senator Feinstein's bill as part of a comprehensive measure to implement the recommendations of the joint inquiry. Our Committee's present bill is a good downpayment on the reforms that we should be considering in the time ahead. I urge both the passage of the intelligence authorization bill as well as renewal of our commitment to work together on the continuing task of improving our intelligence community.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I am pleased to be an original cosponsor of the ``9-11 Memorial Intelligence Reform Act'' which Senator Bob Graham is introducing today to implement the recommendations of the Joint September 11 Inquiry of the Senate and House Intelligence Committees. I expect that this important legislation will be referred to the Select Committee on Intelligence, on which I serve as vice chairman. I am committed to working with the Chairman and our colleagues to ensure that the matters addressed in the bill receive the full consideration and action that our national security requires. I expect that other committees, such as the Committee on the Judiciary, will have an interest in some matters covered by the bill, and I look forward to working with them. The 9-11 Memorial Intelligence Reform Act covers matters ranging from the basic structure of the U.S. intelligence community to improvements in the sharing and analysis of intelligence information, reforms in domestic counterterrorism, and other issues identified in the course of the Joint Inquiry. For some matters, notably on reforming the leadership structure of the intelligence community, the bill proposes specific reforms. For various other matters, the bill calls for executive branch reports that can be the basis for subsequent congressional action. There are two principal aspects of our work ahead. The first is to systematically and thoroughly examine the steps that the President, the intelligence community, and other departments and agencies have taken to correct deficiencies in U.S. intelligence and counterterrorism. The Joint Inquiry's recommendations were first announced last December. In the months ahead, we should call on the agencies of the intelligence community, and other components of the executive branch, to report on their concrete measures, both since September 11 and since our recommendations were made public, to correct deficiencies. We should then assess those reports and Administration testimony in committee hearings. Our second task is to consider reform proposals, including those in Senator Graham's bill. In that regard, I should make clear that the answers proposed in the bill are not the last word on any of those subjects. They are, instead, a beginning point for the Senate's consideration of measures to correct the problems identified by the Joint 9-11 Inquiry. As we address these important tasks, it will be essential that the Congress and the American public have the benefit of the best ideas available. We will welcome proposals by the administration, by other Members of Congress, from the National Commission on Terrorist Attacks Upon the United States, and concerned citizens. Important ideas should not be bottled up anywhere. They should be put on the public table. In that regard, I urge the President to release the intelligence reform recommendations that former National Security Adviser Brent Scowcroft has made to the administration. In public testimony before our Joint Inquiry in September 2002, General Scowcroft testified, in response to a question that I asked him, that in May 2001--before September 11, the President had established a process to review the intelligence community. General Scowcroft testified that he chaired the external panel of that review, but that he could not get into much detail because his report was still classified. It is time, I believe, finally to declassify that report to the extent possible. The Congress and the American public should have the benefit of that distinguished public servant's insights about intelligence community reform.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I am pleased to be an original cosponsor of the ``9-11 Memorial Intelligence Reform Act'' which Senator Bob Graham is introducing today to implement the recommendations of the Joint September 11 Inquiry of the Senate and House Intelligence Committees. I expect that this important legislation will be referred to the Select Committee on Intelligence, on which I serve as vice chairman. I am committed to working with the Chairman and our colleagues to ensure that the matters addressed in the bill receive the full consideration and action that our national security requires. I expect that other committees, such as the Committee on the Judiciary, will have an interest in some matters covered by the bill, and I look forward to working with them. The 9-11 Memorial Intelligence Reform Act covers matters ranging from the basic structure of the U.S. intelligence community to improvements in the sharing and analysis of intelligence information, reforms in domestic counterterrorism, and other issues identified in the course of the Joint Inquiry. For some matters, notably on reforming the leadership structure of the intelligence community, the bill proposes specific reforms. For various other matters, the bill calls for executive branch reports that can be the basis for subsequent congressional action. There are two principal aspects of our work ahead. The first is to systematically and thoroughly examine the steps that the President, the intelligence community, and other departments and agencies have taken to correct deficiencies in U.S. intelligence and counterterrorism. The Joint Inquiry's recommendations were first announced last December. In the months ahead, we should call on the agencies of the intelligence community, and other components of the executive branch, to report on their concrete measures, both since September 11 and since our recommendations were made public, to correct deficiencies. We should then assess those reports and Administration testimony in committee hearings. Our second task is to consider reform proposals, including those in Senator Graham's bill. In that regard, I should make clear that the answers proposed in the bill are not the last word on any of those subjects. They are, instead, a beginning point for the Senate's consideration of measures to correct the problems identified by the Joint 9-11 Inquiry. As we address these important tasks, it will be essential that the Congress and the American public have the benefit of the best ideas available. We will welcome proposals by the administration, by other Members of Congress, from the National Commission on Terrorist Attacks Upon the United States, and concerned citizens. Important ideas should not be bottled up anywhere. They should be put on the public table. In that regard, I urge the President to release the intelligence reform recommendations that former National Security Adviser Brent Scowcroft has made to the administration. In public testimony before our Joint Inquiry in September 2002, General Scowcroft testified, in response to a question that I asked him, that in May 2001--before September 11, the President had established a process to review the intelligence community. General Scowcroft testified that he chaired the external panel of that review, but that he could not get into much detail because his report was still classified. It is time, I believe, finally to declassify that report to the extent possible. The Congress and the American public should have the benefit of that distinguished public servant's insights about intelligence community reform.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, this week, we have heard from many of the Administration's representatives, including several who testified before the Foreign Relations Committee on Tuesday, that our reconstruction efforts in Iraq are going much better that we read in the press reports, especially in the north and the south of the country. I don't dispute that: I was in Iraq earlier this month, and I saw the really remarkable efforts U.S. troops and our reconstruction authorities are making. But I want to state clearly: Out in our states, public support is ebbing much more quickly than one reads in the Washington media. There is growing concern about the steady and growing stream of combat fatalities and, as importantly, a sense that we have no strategy for stopping them. There is great frustration over the extension of military tours of duty in Iraq, something that is especially disruptive to the National Guardsmen and Reservists who are playing such an important role in Iraq. Last week, for example, an Air National Guard unit from Charleston, the 130th Airlift Wing, was told that rather than have the entire unit return to West Virginia in Early August, as scheduled, half the unit will need to stay on in the Middle East until the end of the year. And before the members of the 130th could even inform their families directly, their relatives back in West Virginia learned this disappointing news from the local papers. There is increasing unease about the cost of our financial commitments in Iraq, particularly at a time of growing domestic deficits, and our failure to line up significant international contributions. Americans are a patient people. Our 50-year commitments to Korea, Japan, and NATO attest to that. But the American people insist on information. Our international engagements have succeeded where past Presidents have laid out what our national mission is, how our vital interests are involved, what we anticipate the cost may be, and what our plans are for an exit strategy or to get other countries to share an equitable portion of the burden. When we don't have that, public support vanishes. There is a tendency among some in Washington to dismiss this as some sort of ``Somalia syndrome.'' But it is not just a passing phenomenon--it's a fundamental part of who we are as a people. It reflects that contrary to some of the characterizations out there, Americans are not naturally imperialists, and we are not warmongers. And while we believe other people should enjoy the freedoms we cherish, we are not seeking to remake the world in our image. We support our global commitments when we feel America's vital national interests are at stake, and that this is part of a clear and coherent strategy by our political leadership. When America went to war in March, it commanded the support of a significant majority of Americans. But the administration must realize: It is in danger of losing that support. One can see it in the polls; I definitely hear it when I return to West Virginia. And the change is most pronounced in many people who supported the war back in the spring. They are losing confidence that the administration has a strategy to get our young men and women out of Iraq, and to ensure their safety up until that point. And it is leading some people to clutch at optimistic, maybe even unrealistic ``quick fix'' solutions, like suggesting we dump the entire Iraq operation into the lap of the United Nations, when Kofi Annan has basically said the U.N. has no interest in taking up the U.S. role in Iraq. This worries me deeply. America's willingness to stay the course in Iraq isn't a partisan issue. It is, I believe, a vital national priority. America created the current situation in Iraq, and we must make it succeed. It is a fundamental test of American security and American credibility, and it is being watched closely by our foes and our friends alike. If America withdraws from Iraq before we are able to reconstitute a solid Iraqi government backed up by strong political institutions, we will leave behind a chaotic situation that will quickly become a textbook for other enemies who wonder how to defeat America when our combat forces are unstoppable. And if the reconstruction in Iraq does not lead to a stable state, it will become impossible to line up allies for future such operations. Even the handful of countries working with us to make Iraq succeed--the British, and the Spaniards and Italians, and the Poles--wills steer clear of us. It is not too late to turn this around. But is will require clear, consistent communication from the very top of this administration. In recent weeks, we have learned, in rather haphazard ways, from various administration officials, that we are facing a guerrilla war in Iraq that is targeting American troops with increasing precision, that the financial cost of our occupation is running at twice the level projected, that troop deployments in Iraq will likely be extended, and that some of the countries we were hoping would help share the burden in Iraq are getting cold feet. And frankly, getting complete information has been like pulling teeth, and only reinforces the growing perceptions that decision are being made in a reactive way. I'm sure there are some people who are telling the President, ``stay away from the bad news''--and that is why it is left to officials like Jerry Bremer or General Abizaid to do the honest talking. The American people need to hear, from the President, not just what a great job our troops did in the initial combat phase, but also why many of our predictions were wrong; what the administration plans to do about it, including getting more international support; and why it is important that we not let these setbacks deter us. Unless we hear some plain, honest talking from the President about how we are dealing with the post-combat challenges in Iraq, I am convinced there will be dramatic further erosion in support for staying the course in Iraq. And I think that is something none of my colleagues here in the Senate would feel good about.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, for almost a week now the Senate has been debating the appropriations bill for the Department of Defense. Several amendments have been offered regarding the need to determine the accuracy of our pre-war intelligence and the use of that intelligence by the Executive--specifically, a reference in the President's State of the Union message that has now been acknowledged to be erroneous. I want to take a few minutes to comment on some of these continuing questions regarding the accuracy of pre-war intelligence which became a part of the public debate soon following the invasion of Iraq. I have worked with Chairman Roberts to find a bipartisan approach to reviewing these issues. On June 20 we reached agreement on the terms of reference for what was by then an ongoing inquiry. I had proposed a broader, more formal approach but after some discussion agreed to proceed with a structured review and see where the information led us. The committee has been poring through the volumes of material provided by the intelligence community and interviewing relevant officials, and has held two closed hearings and one briefing. But as this process has moved forward it has become increasing clear that a business as usual, oversight review is not going to be able to address our expanding appreciation of the scope of the problem. Every day brings new information, often from the press, which requires us to make sure that we have the right charter and organization for this inquiry. Tuesday it was the story, reported in the Washington Post, that a four-star general was sent to Niger last year to inquire about the security of Niger's uranium. According to the article, the general said that he came away convinced that Niger's uranium stock was secure. Obviously, there is much to be learned about this. Why was he sent? What was his mission? Who was aware of the trip? And what happened to the general's report when he returned? This revelation follows on the heels of a week of accusations, denials, admissions and recriminations among the senior members of the administration's national security team about who was responsible for language related to Iraqi uranium purchases appearing in the President's 2003 State of the Union speech. By week's end, Director Tenet had stepped forward to accept responsibility. His statement, however, raised many other questions about how this information was handled by those outside the intelligence community. The credibility of the intelligence related to Iraq and Niger first came to public attention in March when the IAEA determined the documents supporting the charges to be fraudulent. I immediately asked Director Mueller to have the FBI investigate the counterintelligence implications of this revelation. Subsequently, Senator Roberts joined me in asking the Inspectors General at the CIA and State Department to investigate how this information was handled by the intelligence community. These investigations, however, will answer only questions of how we came into possession of these documents and what the intelligence agencies did with them. They cannot, because of the reach of these investigative organizations, deal with the questions that have dominated the public debate in recent days. How did information, known to be dubious at best, find its way into the President's State of the Union speech? Who is responsible for inserting the information? Were reservations properly conveyed to senior officials? If not, why not? If so, why were those reservations not heeded? It seems clear that the White House staff played a key role in this episode. Unless we follow the evidence wherever it leads, we will end up reporting to the American people only part of the story. And the Niger episode is just the first example of what we can expect as we get further into this process. I am committed to a complete, bipartisan investigation that covers the full spectrum from collection to the analysis and use of prewar intelligence about Iraq. I believe that the Senate Intelligence Committee has the authority to conduct that investigation. But it has to be willing to use the full authority that the Senate has given it, or to ask the Senate if it needs any additional authority. We should bite the bullet and authorize a formal investigation, explicitly state that it will examine the full range of activities concerning prewar intelligence--which includes the use of that intelligence--and provide for the direction, organization and resources that will assure a complete and probing examination of all facts. In short, it is now clear that this is not an ordinary oversight review but should be a full-fledged investigative effort, with a clear charter and with sufficient staffing and resources. We must do whatever is necessary to get to the bottom of this, and answer the fundamental questions of how intelligence was used to support this war.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, today I rise to express my opposition to any proposed changes to Head Start that would dismantle the program. I understand the Bush administration is attempting to turn the Head Start program into a State block grant. A block grant is an amount of money that the Federal Government gives to the States for a specific purpose. Head Start is a well-respected program with a record of success. It is a comprehensive program that helps disadvantaged children and their families with early child development, literacy and health screenings. Why would we want to block grant a successful program? Too often block grants become an excuse to cut funding in the future. I do not believe that Head Start would be improved by changing successful local programs by imposing a new layer of administration at the State level. I am distressed to know that so many children of low- income families will be denied the opportunity to enhance their early childhood development. The Head Start program was designed to help communities meet the needs of underprivileged preschool children from ages three to five and their families. Head Start provides diverse services in four areas-- education, health, parent involvement, and social services. Head Start's educational program is designed to meet the needs of each child, the community served, and its ethnic and cultural characteristics. Every child is involved in a comprehensive health program, which includes immunizations; medical, dental, and mental health; and nutritional services. An essential part of Head Start is the involvement of parents in parent education, program planning, and operating activities. Finally, specific social services are geared to each family. The West Virginia Head Start Association represents 24 Head Start programs statewide. Each Head Start program is unique in providing services to their families to meet the specific needs in the community. In 2000-01, West Virginia Head Start programs received funding to enroll 6,700 children. Over the years, I have enjoyed visiting local Head Start programs to visit with children and meet with parents, teachers and staff about the importance of early education. From the early stages of the Head Start program, Head Start has expanded to include services for pregnant women and children under the age of 3. The goal of Early Head Start is to encourage the development of infants and toddlers by assisting parents in recognizing their value as the caregiver and teacher of their children. Early Head Start provides services in and out of the home to families with young children and expectant families. They include parent education, nutrition services, case management, and support groups for parents. In 2000-01, West Virginia received funding to enroll 325 children in 12 counties. Early childhood development provides a safe and structured learning environment that prepares our sons and daughters to succeed to the best of their abilities regardless of ethnic background and income level. Since 1965, the program has been providing services to increase a child's readiness for school. Rather than restructuring Head Start, we should build on its success and invest in professional development, quality and expansion to cover more children. It is disappointing that the Bush Administration is trying to reorganize Head Start rather than investing in its strengths. I hope that the Senate will take a bipartisan approach to the reauthorization of Head Start, and build on the success of Head Start, not dismantle it. When I was Chairman of the Children's Commission years ago, our bipartisan Commission called for full funding of Head Start so that all eligible children were served. Serving all children and continuing to invest in quality should be our goals for the reauthorization of this program so that our children truly enter school ready to learn.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Madam President, as the Medicare prescription drug debate draws to a close, I would like to take a few moments to give my colleagues my honest assessment of this legislation. I join many of my colleagues in recognizing how difficult it has been for the managers of this bill to hold to a proposal that fits within a $400 billion budget constraint. In that respect, they are to be commended for their discipline. But for my part, I believe that constraint, combined with the fervent intent by some to move Medicare to a private insurance model, has produced a bill that is fatally flawed. Seniors will not get the affordable, meaningful prescription drug coverage they expect because the majority of Members seem to have concluded that we cannot break the $400 billion barrier. I think it is a false choice. The actual prescription drug benefit in this bill is inadequate to meet the needs of more than 40 million Medicare beneficiaries and eventually America's seniors are going to figure that out. The fact of the matter is that $400 billion is simply not enough to buy an adequate benefit. But we already knew that--our debates last year made that abundantly clear. I believe that insisting on the capped amount of $400 billion for a Medicare drug benefit as a precondition of moving a new benefit through the legislative process serves as a convenient excuse. It means this drug benefit is sure to fail to meet seniors' real drug coverage needs. It also means that we will only cover 20-25 percent of seniors' drug costs. What is worse, the complicated structure of this bill will cause seniors to be angry and confused by the benefit--and they will be entitled to be. This is not the straightforward guaranteed Medicare prescription drug benefit seniors have been repeatedly promised. There is no standard premium and there is no uniform benefit. For the first time under Medicare there is no universal coverage for all Medicare beneficiaries. This bill falls fall short of what seniors expect and need. Let's take a few minutes to look at how the shortcomings of this bill will become apparent to a Medicare beneficiary--a senior or disabled person who enrolls in this benefit. For illustrative purposes, let's take an 80-year-old West Virginia widow living at 250 percent of the poverty level. Assume this widow spent her entire career working for the same employer. Since her retirement, her employer has provided her with a fairly generous drug benefit--$150 deductible, $10 copays, and catastrophic coverage. However, once the Senate's proposed drug benefit is enacted, she becomes one of the 37 percent of Medicare beneficiaries who currently receive good employer-sponsored coverage who lose that coverage. That is because the way this bill works her former employers' contribution to her drug costs are meaningless because they do not count toward her catastrophic limit. I want to note here that, during the health care reform debates of more than a decade ago, one of the few things that we seemed to agree on was that we should not disrupt the health care coverage that Americans already rely on. My friends on the other side of the aisle, in particular, were quite adamant about that point. Well, this bill would not just disrupt the drug coverage for millions of seniors, it would completely strip the drug coverage from 4.5 million seniors who have employer-sponsored coverage today. It will strip their employer-sponsored coverage and leave them with an inferior drug benefit which is either less generous or more expensive. I offered an amendment to correct this problem, but it failed just 2 days ago. To return to my example, as a result of having lost her employer- sponsored coverage, this 80-year-old senior decides she has to enroll in the new drug benefit next year--in 2004--only to find out that it will not be implemented until 2006. There is a discount drug card, but it is not substantially better than the discounts she gets today--and it is far worse than the drug benefit she used to receive from her former employer. This widow spends the next 2 years trying to figure out whether it is to her benefit to enroll in this new Medicare prescription drug benefit. But she can't really make an informed decision because she has no idea what the premium will be or what the benefit will actually look like. She decides to enroll in the voluntary benefit having been told that if she waits to enroll she will have to pay a very harsh late enrollment penalty. This particular 80-year-old senior lives in West Virginia, so let's assume that no private insurers enter the area to provide a drug benefit. That has been my State's experience with the Medicare+Choice Program and I have no reason to believe that this proposal will produce a different outcome. My illustrative senior citizen enrolls in the fallback. Her sister, however, lives in northwestern Ohio and has enrolled in a Medicare Advantage Plan. For the first time under Medicare, the West Virginia widow and her sister in Ohio have a different Medicare benefit and are paying a different premium for that benefit. In addition, her sister is being offered additional benefits like a catastrophic limit on her medical expenditures and disease management. These additional benefits are not even being offered to the West Virginia senior because she remains in traditional Medicare. Now, fast forward 1 year and assume that private insurers decide to enter West Virginia. The fallback plan she received through traditional Medicare disappears and she is required to enroll in a private insurance plan. She cannot see the doctor she was seeing because he is not in the private insurer's network. She cannot go to the pharmacy she usually visits--the one that is right down the street--because it is also outside the network. She can't have the drug she was taking because it is not on the insurers' formulary. Again, fast forward, this time it is 2 years later. Let's assume that the private insurers did not make enough profit to continue to provide a drug benefit in West Virginia--then what happens? The now 83-year-old widow will have to start the process all over again. What is worse is that each senior will face a different calculation in determining how this bill will or won't help them. Senior citizens with incomes of 135 percent of the poverty level should theoretically pay no deductible, 5 percent cost sharing up to $4,500 in total spending, 10 percent cost sharing between $4,500-$5,800 and 2.5 percent cost sharing above $5,800. But this bill has an asset test that will prevent millions of seniors from getting the low-income subsidies in this bill. If a senior owns a burial plot worth $1,000, a $3,000 Treasury bill, and a vehicle worth $6,000--indeed, if a senior owns anything that adds up to over $10,000 in assets, not including his or her home, the cost sharing they have to pay will double. Our Nation's neediest seniors, those with incomes 74 percent of Federal poverty, will not be permitted to enroll in the new Medicare prescription drug benefit at all. Even though these low-income seniors are Medicare beneficiaries, they will not be eligible for this particular Medicare benefit because they are now eligible for Medicaid. They will be discriminated against for the very first time under this new Medicare benefit. Seniors who are forced to remain in Medicaid may well end up seeing their drug coverage dramatically cut back. With our Nation's economy still fairly stagnant, State budget situations remain dire. In some States, dual-eligible Medicare beneficiaries may only have coverage for three prescriptions per year, regardless of their medical needs. Put simply, the Medicare drug benefit the Senate is about to vote on has fatal flaws. The following is a list of 10 fatal flaws that, combined, persuade me this bill should not get my vote. 1. The drug benefit has no national premium. CBO estimates that $35 will be the national average premium. That number appears nowhere in the legislative language. It is a projection, a best guess--and it certainly could be higher. 2. Under this prescription drug plan, the premium will vary in every region of the country, perhaps State by State, and there is no limit on how high it can be. We defeated an amendment that would have limited the variation to no more than 10 percent above the national average, but it failed. 3. Private insurers will actually decide what the premium will be. And, this premium will grow each year by the rate of increase in drug costs--that is roughly 10-12 percent increases every year. That means seniors in 2008 could well be paying $50 a month for their drug premium alone--and that is on top of the cost of their deductible and copayments. 4. There is no requirement for private plans to offer a standard benefit-- private plans are only required to offer an actuarially equivalent benefit. That means West Virginians and other rural beneficiaries may not have access to the same drug benefit that other seniors will have--again, for the very first time under Medicare seniors in some States won't get the same benefits as seniors in other States. I am not very confident that West Virginia seniors will end up with the better benefit--we never do. 5. The bill currently has a completely unstable fallback. Under this proposal, the only time a beneficiary will have the option of receiving coverage through Medicare is if there are not at least two bids from private insurers to serve a region. There is no guaranteed Medicare prescription drug benefit of the kind I believe seniors fully expect. Moreover, if private insurers do not enter an area, the fallback moves into place for 1 year. The next year, a new bidding process begins, and if two plans show up, the Medicare fallback disappears. Private insurers can then change or terminate coverage every 2 years. This means that seniors, especially seniors in rural areas where preferred provider organizations or PPOs and private plans are not likely to come to the table, may end up bouncing between a fallback, then a private plan, and then back to a fallback. Back and forth, back and forth. All the while, this senior will be forced to change doctors and pharmacists, their cost sharing will be changing, as may their premiums. The Senate prescription drug plan we are considering leaves the big HMOs and insurance companies in charge. 6. There is a significant gap in coverage. That gap is $1,300-- seniors pay their monthly premiums but get no drug benefit in that gap. Two amendments to address this problem did not achieve sufficient votes for passage. One was an amendment to eliminate this gap. Another one would have said that seniors would not have to pay premiums when they were not receiving any benefit. The failure of these two strengthening amendments means that under this legislation, if a Medicare beneficiary has $5,900 in drug spending per year, by October 7 of that year, their benefit will run out. That beneficiary will continue to need the drugs each day for the rest of the year but her benefit will run out on October 7. Fifteen million Medicare beneficiaries will fall into the gap. 7. Low-income seniors who are eligible to receive a drug benefit under Medicaid will not be eligible for the Medicare prescription drug benefit, as I illustrated in my earlier example. This means that 43,000 West Virginians will not be eligible for this Medicare prescription drug benefit. Millions more across America won't be eligible for this Medicare benefit even though they paid their whole lives into the Medicare program rightfully expecting that it would cover their health care costs. 8. Again, under this legislation, CBO estimates that 37 percent of Medicare beneficiaries who currently receive a drug benefit from their employer will lose that coverage because of the way this legislation defines out-of-pocket costs. 9. This proposal requires private insurers to provide beneficiaries with a catastrophic limit on expenditures for medical benefits, disease management, chronic care services and preventive benefit. But, such benefits are not made available to beneficiaries remaining in traditional Medicare. Everyone keeps arguing that these private plans will provide better, more comprehensive, preventive care. But, the fact is that this bill precludes the traditional Medicare from providing better, more coordinated care. There is no reason that traditional Medicare cannot provide the same level of care as a private plan--at a significantly lower administrative cost, I might add--but not if we preclude it from doing so. 10. And if those reasons weren't enough, consider what is headed our way in conference: today, the House will include in its prescription drug bill new tax shelters for health care, that disproportionately help the rich and undermine employer-based health insurance coverage . . . the very system that the vast majority of Americans depend on for their health care and a voucher system for Medicare beneficiaries beginning in the year 2010. Under this system, seniors would receive a defined contribution payment rather than a defined benefit. In other words, rather than defined benefits beginning in 2010, seniors would receive a set premium payment--like a voucher--from the Government. We need to think about what we are doing here. In my judgment, every Member of Congress should think about this benefit from the perspective of their beneficiaries. This proposal is a great opportunity for seniors to shop for new coverage every few years. If you have the utmost faith in private insurers to provide good health coverage to elderly Americans and the disabled, then this is the plan for you. This plan puts private insurers in the driver's seat by giving them flexibility to vary premiums and change or terminate coverage every 2 years. But, as far as providing long-term security, this proposal fails. Finally, several Members have come to the floor and claimed that this proposal is just a downpayment--that we will be able to revisit the benefit over the years and make it more generous. That is simply untrue. We have an administration that is intent on large tax cuts, that is focused on the minimization of Government and that is committed to the privatization of the Medicare Program. Most every amendment offered during this debate to improve this benefit has lost. I don't know why any senior would believe that we will be able to revisit this program and make it better. We should take the time to get it right.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, this next amendment has to do with dual eligibility. Never in the history of Medicare have we precluded Medicare beneficiaries from being Medicare beneficiaries. In the underlying bill, for the very first time, we do. The people I refer to are called dual eligibles. Their average income is $6,500 a year. They tend to be over 85, single women, and very sick. They are on Medicaid. Medicaid, however, is optional according to the States. We know the States to be broke. The fastest growing expense they face is Medicaid. So they are cutting the benefits. They are cutting Medicaid. They will continue to do that. The States have no choice but to cut Medicaid. Some will do it because they wish to, all will do it because they have to. When that possibility is gone, there is no place for these poorest of the poor to go. They are then, under the underlying bill, precluded from being Medicare beneficiaries. That is wrong. In my budget-neutral amendment I attempt to fix it. I hope my colleagues will support the amendment.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I thank the distinguished ranking member of the Finance Committee. Amendment No. 975, As Modified Mr. President, in accordance with the agreement just entered into, I send a modification of my amendment to the desk and ask for its immediate consideration.

Mr. ROCKEFELLER. Mr. President, this amendment ensures that the Medicare prescription drug benefit we are debating is, in fact, truly universal. It is a principle we have all espoused over the years. The underlying bill, which we are debating, precludes Medicare beneficiaries who are eligible for Medicaid from enrolling in the Medicare drug benefit. That would be the first time ever that Medicare beneficiaries would be, in fact, precluded from being Medicare beneficiaries. The group, which is referred to as dual eligibles, consists of those who are the poorest seniors. They are those who have incomes below 74 percent of poverty. If my colleagues are interested, that income level is $6,645. That is their total gross income. The majority of them are single. The majority of them are women who are in poor health and more likely to be over the age of 85. Precluding these people is wrong, and my amendment would fix it. I am happy to say the amendment is budget neutral. I will explain that in a minute. Prescription drugs are optional as a benefit under Medicaid. We all know that. States can limit the number of prescriptions they make available. Some allow two or three prescriptions per year. They can cap the benefits. They can charge any copayments they want. They can end it altogether. So you have States, predictably, already in a situation with very different Medicaid levels. Because of our financial situation nationally, and in our States, Medicaid is always going to be the very first benefit which will be cut. It has already happened, and will happen substantially more over the coming years. I remind, again, my colleagues these are the poorest of the poor, the oldest of the old, and the sickest of the sick we are talking about. I strongly urge my colleagues to provide all of the seniors in their States with the benefit of a real Medicare drug benefit by supporting this amendment. If a State gets to the position where it is simply unable to continue with prescription drugs under the Medicaid program, and they virtually eliminate it, that poor person, below 74 percent of poverty--which is just a little bit over $6,000 a year--has nowhere else to go. Always-- including presently--that person can return to Medicare. This underlying bill would preclude that from happening. My amendment would fix that in a budget-neutral fashion. I hope my colleagues will support this amendment which I consider one of the most moral and humane of amendments that has come before this body on this issue. I thank the Presiding Officer.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. I hope we will pass my amendment. It is worse for employees. It is worse for employers. I hope my colleagues will support the amendment.

Mr. ROCKEFELLER. Mr. President, I yield 3 minutes to the Senator from Connecticut.

Mr. ROCKEFELLER. Mr. President, the argument made by the Senator from Pennsylvania is interesting because what he is basically saying is that it is more important that corporate America not be allowed to keep one out of three of their people they currently sponsor, who are retirees who worked for them and who have been getting health benefits from them, out of the picture. He talked about the cost to corporate America. My sort of worry is about the cost to the U.S. Government. That is what we do if we don't pass my amendment; we just dump everything on the U.S. Government. So this amendment will make sure we do not jeopardize the drug coverage of millions of retirees, one out of every three, who already receive drug coverage from employer-sponsored plans. This amendment is going to ensure that the contributions made on the beneficiaries' behalf by their former employers count toward that beneficiary meeting the catastrophic limit. That is not now the case. Employer-sponsored retiree health benefits are the single greatest source of coverage for retirees--the Presiding Officer understands what I am saying--the single greatest source of retiree health benefits available. In fact, 37 percent of all retirees who have corporate- sponsored plans simply lose them if this does not pass.

Mr. ROCKEFELLER

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

Mr. ROCKEFELLER. Will the Senator yield?

Mr. ROCKEFELLER. I thank the Senator, and this is in the form of a question. I fully understand the constraints of the $400 billion, as the chairman of the Finance Committee indicates, and I think we all understood that to do a full prescription drug benefit, it was going to take substantially more than that, particularly if one included other matters. But would the Senator not agree that there are really two ways of looking at dual eligibles and their dependence now upon Medicaid which is paid by the States? Up until the fairly recent past, States were doing very well and Medicaid benefits, to some degree, were expanding. I reflected on that as to my State. The other way of looking at it is to look at what is happening to Medicaid now in the States because of the balanced constitutional amendment requirements and because of the fiscal condition of the States, which is getting worse every single day, and the fact that Medicaid is the fastest rising cost in any State government budget, and the fact that the States have complete control over what happens to the Medicaid benefit. So would the Senator from Iowa not agree that if a State using Medicaid, which is a combination of State and Federal funds, nevertheless decides to cut--since that is optional within the State, under the Government's control, that the Governor can cut that and indeed has done so, as we have been reading and hearing about, and indeed can limit coverage, cap coverage and therefore cut back tremendously on the so-called drug coverage that the chairman of the Finance Committee was extolling? I agree that if we were in a flush time and the States were able to afford a good drug benefit under Medicaid and use it for that particular dual-use population, the Senator is right, but I think we are looking now at a period of a number of years where we are not going to be in that situation. I think that puts the dual eligibles, 74 percent or less of poverty, at terrible risk, and that is not something I associate with my understanding of the values of the Senator from Iowa, whom I so much respect.

Mr. ROCKEFELLER. I apologize for not speaking through the Presiding Officer before, but will the Senator from Iowa yield for only one additional question?

Mr. ROCKEFELLER. The Senator has responded simply by saying he would have to answer it in 50 different ways because there are 50 different States. To that I say yes, and all of them are either in the process of or will be in the process of cutting Medicaid and, therefore, the dual beneficiaries. I ask the Senator from Iowa, is there not a further consideration, and that is when we are dealing with this maximum poor number of people under Medicare, or Medicaid in the case of the dual eligibles, we are also dealing with something which has not been discussed on this floor or indeed was not discussed in the Finance Committee at any length at all, and that is a really frightening problem of assets that, for example, one can apply, one can be under this program up to 130 percent of poverty. Then there is another one that says you can be under this Part B plan up to 160 percent of poverty, but if your assets reach over $4,000, assets which you maintain, you are then kicked from the lower to the upper bracket without any discussion. There is enormous penalty, for example, for owning a car, for owning anything. You would not be living in rural Calhoun in West Virginia without a car. Your home is exempted but nothing else is. At one point I was thinking of offering an amendment--and I may still do so--exempting burial plots from the asset test that would be applied to poor people. I ask the Senator from Iowa if he would say a word on this whole question, adding to the dual eligibles and deciding if--as he said, we have to pick our priorities--we are going to leave it to the States, even though I argue that States will cut that. Is it not also bringing up this whole subject of the assets of the poor families and the effect on them if they become ineligible for the bracket in which they belong and, therefore, cannot afford prescription drugs.

Mr. ROCKEFELLER. Mr. President, before offering my amendments, I am going to discuss both of them because they are being reviewed, at this point, in the majority cloakroom. But I am going to be offering two amendments this afternoon in order. The first amendment I will offer is to ensure that all Medicare beneficiaries will be eligible for this new drug benefit, including low-income Medicare beneficiaries who are currently eligible for Medicaid and Medicare. They are known as dual eligibles. The underlying bill precludes Medicare beneficiaries--makes it impossible for Medicare beneficiaries--who are eligible to receive a drug benefit through Medicaid from, in fact, enrolling in the Medicare drug benefit program. This group is referred to as the dual-eligible group. They are the poorest seniors under Medicare. They are below 74 percent of poverty. That is their income level. A disproportionate share of them--to wit, 42 percent--are minorities. Women make up the majority of them all. Many are likely to have a poor education, live alone, and have more than two chronic illnesses. The underlying bill precludes these folks that I have just talked about--these duel-eligible beneficiaries--from receiving the Medicare drug benefit. As a result, this prescription drug benefit is not, in fact, at all a universal bill. Now, that is important in a lot of ways. One is philosophical and the other is extremely practical. The philosophical one is that in 1965, when we created Medicare, it was created as a universal benefit to all who qualify. It was the promise that society made to our seniors: That if you work, if you make your payroll contributions, then you, at the proper time, qualify for Medicare regardless of where you live, regardless of how old you might be, or your income. As I have noted before, the underlying legislation, for the first time in the history of the Medicare Program, would prohibit some Medicare beneficiaries from receiving a Medicare benefit. My amendment would make the Medicare prescription drug benefit a universal benefit by adopting the provisions that were, in fact, contained in the tripartisan proposal introduced last summer. It would eliminate the exclusion of Medicaid beneficiaries and make the new Medicare Part D drug benefit--that is the new part we are creating--available to all Medicare beneficiaries regardless of income. Medicaid would be the secondary payer for Medicare beneficiaries eligible for Medicaid wrapping around this new Part D drug benefit and its low-income protections. Again, this is exactly the same construction the majority of my Republican colleagues supported in the Grassley-Snowe-Hatch-Jeffords- Breaux Medicare bill that was voted on by the full Senate last summer. The National Governors Association sent a letter to Chairman Grassley and Senator Baucus which said the following about the exclusion of some of these seniors, that is, the dual-eligible seniors, those at 74 percent or below the poverty level, from Medicare: The nation's Governors oppose this approach. It is not good health policy. It is not good precedent. A major reason that States currently have a long-run structural problem in their fiscal outlook is that they have absorbed responsibility for dual eligibles. They go on to say: This provision will continue to shift appropriate federal costs to the states. Governors Patton of Kentucky and Kempthorne of Idaho went on to say: If the dual eligible populations continue to be a joint responsibility, states will be forced to cut the optional (Medicaid) benefits and populations--mostly women and children--which are a key investment in the future. The President agrees. In a speech he recently gave on Medicare, he said: And all low-income seniors should receive extra help so that all seniors will have the ability to choose a Medicare option that includes a prescription drug benefit. The Medicare prescription drug legislation being considered by the House of Representatives would shift the entire drug bill to Medicare. It is not on a frequent day that Chairman Thomas and I are in full agreement. But he does say such a shift ``ensures that all seniors across the country will have access to affordable prescription drugs, while alleviating much of the burden that states now confront.'' I say to my colleagues, as I indicate, I am not always in agreement, but we are going forward directly together on this policy, I hope. The current system is uncoordinated and sometimes conflicting in terms of coverage policies. It actually creates worse health outcomes for people on both Medicaid and Medicare, either one. Fully integrating a key benefit for prescription drugs into Medicare is a critical first step toward improving the current system's flaws. It needs to be clearly understood by my colleagues that Medicaid in the hands of Governors, which I had the honor of being at one point, is subject to whatever their whims might be. It is subject to budget pressures. Remember, they have to balance the budget. We don't; they do. And they frequently do it on the backs of Medicaid beneficiaries-- that is, that part of these Medicare-Medicaid dual eligibles--so they can increase the number of prescription drugs which are available under Medicaid in their State. They can change it in many ways because the programs vary widely. Not only is it unfair to exclude the poorest seniors from part of the Medicare program, it is a raw deal for some of our neediest seniors. Prescription drugs are, as I said, an optional benefit under Medicaid. States can and do limit the number of prescriptions. Some States only cover three drugs or they could charge any copayments they want. Remember, what we are looking at here is a group of people who are below 74 percent of poverty which is clearly in single-digit gross income. So the patchwork of the benefits varies tremendously from State to State. For seniors who have worked all their lives, paid into the Medicare system, it is not fair for them to be at the mercy of State coverage decisions. If you look around the country right now, the fastest growing expense of any State is Medicaid, part of this dual-eligible conundurm, and those programs are being cut. You can see it, read about it, and hear about it. So it is highly volatile, and it is not safe health care policy. Medicare has failed in its efforts to provide comprehensive prescription drug coverage to seniors ever since the repeal of the Medicare Catastrophic Act in 1988. Virtually all advances in drug coverage for seniors since then have been delivered not by us but by the States. While at the same time the States have been cutting back in recent years, they have also made improvements. We have done nothing. They have done whatever has been done. Without some long-term restructuring of the State-Federal partnership for this population, this dual-eligible, 74-percent-of-poverty-minus population, much of the advances the States have made will be lost. All Medicare beneficiaries deserve to receive Medicare benefits. There should be no exceptions for drugs. It would be very bad precedent to make Medicaid pay for items that are clearly the responsibility of Medicare except at the present and in this bill for one particular discrete population. The intention is for this amendment to be budget neutral. I would like to say it is budget neutral, but I cannot in that I asked CBO for a cost estimate last week and I do not yet have one. This is a concern and an agony shared by many. Once we have this estimate, we will either conclude that we can go ahead because we will know it is budget neutral or I will be happy to work with the chairman and ranking member on appropriate offsets. I urge my colleagues to provide all the seniors in their States with the benefit of real Medicaid drug benefit by supporting this amendment. I will at the appropriate time ask that it be acted upon. I am awaiting a particular series of sheets of paper but in the meantime, in the minute or so that will require, I send to the desk an amendment and ask for its immediate consideration.

Mr. ROCKEFELLER. Mr. President, I also have the amendment for which I just spoke. I ask unanimous consent that that be brought to the desk for its consideration and the pending amendment be set aside.

Mr. ROCKEFELLER. Mr. President, I wish to proceed with the amendment I was going to offer first but which will be my second amendment. That also will await the decision of the leadership. Mr. President, I come to the floor again to offer an amendment that will ensure that contributions made on a beneficiary's behalf by their former employers count toward that beneficiary meeting the catastrophic limit. Let me just say, as I begin this, in our Finance Committee deliberations, it was this amendment which caused more stir, more angst, more sense of, oh, my heavens, we have not really done this, have we? We could not have made this mistake involving this many people. The amendment was handled in Finance--without success, from my point of view. Nevertheless, I was urged by colleagues on both sides of the aisle to bring this amendment to the floor because it has enormous implications. That will become apparent, hopefully, as I complete my statement. This amendment is needed to protect the existing coverage of literally millions and millions of retirees who have earned drug coverage through their employer. That means they have been employed much of their lives by their employer and they have now retired and they are Medicare beneficiaries and the employer gave retiree benefits. We are accustomed to this in chemical, steel, and many other industries. But there is a problem that has arisen. As much as we want to provide a new drug benefit for these seniors, we should not disrupt the basically foundational employer-provided drug coverage so many seniors have today. It is the largest source of drug coverage in the country and it is an honorable and a good one. It would be a very great mistake for my colleagues to walk away from this system and one that we would all very much regret. Mr. President, in saying that employer-sponsored retiree health benefits are the largest single source of coverage for retirees, I simply say that one in every three Medicare beneficiaries is affected by the amendment I am now discussing. They will either lose their coverage or they will not, depending upon how this amendment is disposed. Drug costs constitute 40 to 60 percent of employers' retiree health care costs. That is a lot. And steep price increases are prompting employers to, one, eliminate drug benefits in some circumstances; secondly, cap their contributions; thirdly, drop retiree coverage altogether. We all know this is a phenomenon of American life that has been going on in recent years. Employers need immediate relief for their retiree prescription drug costs. A Medicare prescription drug benefit should relieve some of the burden on employers by covering a retiree's cost after a certain catastrophic limit. I recognize this gets technical, but it is profound. Instead, this benefit extends the amount of time before a retiree reaches that catastrophic benefit of about $4,000 by not being able to count as the employee's contribution--in fact, the employer's contribution toward that end is very substantial. Therefore, the employer receives no real relief from this benefit and is forced to drop the coverage they currently provide their retirees, leaving Medicare to pay the entire cost. I think I do not have to explain that that means the Federal Government has to pick up even more of the cost of Medicare and prescription drugs than would otherwise be the case, for example, if this amendment were to pass. The bill we are considering on the floor today exacerbates the current downward trend in retiree benefits by extending the amount of time the beneficiary relies on the employer before reaching the catastrophic limit. What does that say? It says if you extend the amount of time the employee has to keep paying and paying toward his catastrophic limit for a much longer time, there is therefore much more out-of-pocket costs to the employee. This legislation discriminates against Medicare beneficiaries with employer-provided coverage with a trick definition--that is what is used--of out-of-pocket costs known, uninterestingly, as the ``true'' out-of-pocket costs. This plan would not allow any spending by employers to count toward meeting the catastrophic limit. In this way, the underlying legislation limits the overall spending by the Medicare Program at the expense of employers who offer retiree coverage. The result is CBO estimates, as I indicated, that 37 percent of beneficiaries currently receiving a drug benefit from their employee will lose that coverage. Additionally, it extends the amount of time, as I have indicated, a beneficiary has to reach the catastrophic limit, exposing them to additional and more and more costs. I think we should all agree that one of the goals of this legislation should be to encourage employers who are currently providing drug coverage to their retirees to continue, in fact, to do so. It should reward and strengthen those employers because the benefit they are providing goes a long way toward helping American seniors afford prescription drugs. The legislation should not force employers to drop their coverage by making their contribution on a beneficiary's behalf meaningless or, rather, by not concluding that the employer's contribution as part of the retiree's expenditures counts toward the catastrophic limit. In other words, simply take what the employer contributes to this, include that on top of what the employee contributes, and you have a much better count toward the money that is spent toward getting to the catastrophic limit and the rate at which you get there. Without adoption of my amendment, this plan penalizes employers who are trying to do the right thing by providing retiree health benefits. It is not in anybody's best interest for employers to decide that contributions for prescription drug coverage just keep retirees from reaching the catastrophic drug limit. Without modifying how employer contributions are treated under this legislation, we are ultimately threatening retiree coverage and driving millions more seniors to obtain Medicare coverage from their employers. My amendment removes the so-called true out-of-pocket concept and replaces it with a real out-of-pocket concept which better reflects the seniors' true drug spending. According to CBO, the true out-of-pocket approach is a significant component of why employers drop coverage. Again, the underlying bill is the reason why 37 percent of those covered by their employers will be dropped. That I am trying to eliminate. Therefore, eliminating the true out-of-pocket expenses will go a long way toward keeping employers in the business of providing drug coverage for their retirees. Mr. President, I urge my colleagues to adopt this amendment. I expect that the retirees in our States may well end up with a less comprehensive or more expensive prescription drug benefit as a result of this legislation should we fail to adopt this amendment. I thank the Presiding Officer and yield the floor.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, today I rise to commemorate the 140th birthday of the great state of West Virginia. On this day, 140 years ago, West Virginia was born amidst the conflict of the Civil War. In 1964, I came to West Virginia as a VISTA worker and spent 2 years in Emmons, WV. Those 2 years changed my life and I decided to make West Virginia my home and make public service my career. Over the years, I have been proud to serve the people of West Virginia in various ways and I feel very privileged to represent West Virginia in the Senate. On West Virginia Day, I believe it is important to reflect upon our State's rich history, scenic beauty, and its hard-working, independent citizens who truly reflect our State motto, ``Mountaineers are always free.'' West Virginia's scenic trails and winding roads make it one of the most beautiful States in the country. Its mountainous terrain, breathtaking scenery, and raging rivers make it perfect for hiking, skiing, biking, rafting, fishing, and many other types of recreation. West Virginia truly earns the travel slogan of ``wild and wonderful''. The small farms and growing industry of early West Virginia set it apart from the tobacco plantations of eastern Virginia. West Virginia was made up of large numbers of immigrants, along with rugged, hard- working frontiersmen and women who instilled the values and ideals that West Virginians embody today. The people of West Virginia remain its greatest asset. West Virginians are industrious, ambitious, open, and fun-loving people. They value equality and liberty which tie them to both our State and country. West Virginians have been some of the most innovative and creative people, contributing to all aspects of American society and culture. After his family left Virginia and slavery for a better life west of the mountains, Booker T. Washington was raised in Malden, Kanawha County, WV, and began working in the salt furnaces at the age of seven. He rose up from slavery and illiteracy to become the foremost educator and leader of Black Americans at the turn of the 20th century. He founded the Tuskegee Normal and Industrial Institute, later known as Tuskegee University. Jerry West was born in Cabin Creek, WV and attended West Virginia University, where he was a two time All-American basketball player. After he won a gold medal for the U.S. Olympic team in Rome in 1960, he moved west to play for the Los Angeles Lakers. He excelled throughout his playing career, gaining a reputation as a perfectionist. He helped the Lakers win a championship in 1972 and was elected to the Basketball Hall of Fame in 1979. Col. Ruby Bradley, a native of Spencer, WV, was the most highly decorated woman ever to serve in the U.S. military. Her military record included 34 medals and citations of bravery, including two Legion of Merit medals, two Bronze stars, two Presidential Emblems, the World War II victory medal, and the U.N. Service Medal. She was also the recipient of the Florence Nightingale Medal, the highest distinction given by the International Red Cross. She was a U.S. Army nurse and a POW for 2 years in the Philippines and was known as the ``Angel in Fatigues'' at Santo Tomas Internment Camp in Manila. On July 2, 2002, she was laid to rest at Arlington National Cemetery. These three West Virginians are but a few representative examples of the kind of talented, successful, courageous, and independent people in our great State. Their lives and stories provide a glimpse into the spirit of our State, and they also serve as an inspiration to the young people in our State today. The natural beauty, the people of West Virginia, and their countless achievements should be celebrated and remembered every day. As we strive to promote our economic growth, I hope we will also be mindful of our responsibilities to preserve what makes our state so special, the values and character of its people. I hope all Americans have the opportunity to experience some of West Virginia's beautiful vistas and to meet the wonderful people I have come to know and love throughout my service to West Virginia. I am proud to represent my home State of West Virginia and am honored to be able to recognize the 140th anniversary of the Mountain State.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I would like to speak briefly on the underlying amendment. We are here to consider legislation that is going to create a much needed prescription drug benefit. We have been here to consider that matter for some years now. We have 41 million seniors and disabled people in this country who require and need that benefit. So it is a momentous time. It is also a moment of opportunity, which we will either grab or not grab, where we can craft a prescription drug benefit that provides the coverage seniors desperately need, coverage that is both affordable and reliable for all seniors. I intend to offer amendments--not now, but later--that will improve the proposed coverage and delivery system for the Medicare prescription drug benefit so that this bill will better meet the real needs of our senior citizens. In 1965, this Nation recognized that health care costs were the primary reason that one-third of our Nation's seniors lived in absolute poverty. With the establishment of a universal health care benefit for seniors, financed through both individual payroll tax contributions and the General Treasury--the Medicare program--we lifted most American seniors out of poverty. That is something to be profoundly proud of, but it is the work of our predecessors. And now there is work for us to do. Medicare is one of America's great achievements, but it has long needed to include a prescription drug benefit. At the time Medicare was enacted, prescription drugs were not a popular form of treatment. Now they are a critical part of health care. A Medicare prescription drug benefit is something I have heard seniors tell me they want and need almost every time I have ever run into them or have had meetings with them in my State. And I daresay the Presiding Officer has had the same situation in his State of Kentucky. I have worked on this for nearly 2 decades as a Senator, and we are perhaps at the point--or perhaps we are not. I don't know. I hope so. Fifteen years ago, Congress acted to provide a catastrophic drug benefit under Medicare. The fact of the matter is, it was a very good bill. I led the fight on this floor three times to defeat repeal by the House because it was a very good benefit. There has never been anything that approached that in terms of catastrophic drug benefits since that time. However, seniors did not understand the bill because we did not do a good job of putting it out to them, and we passed it perhaps too quickly. So the catastrophic benefit was rejected by the very people that it was intended to help through the votes of their elected representatives. We should not repeat that experience. We should do our very best as the legislative process moves forward to offer a benefit that will be widely welcomed by Medicare beneficiaries and by their families. This will be a very hard thing to do, working with only $400 billion, as that is not the full cost of what we need. But that is what we have. We are operating, therefore, under a very tough budget constraint. I understand and accept that. But I think we should keep in mind that if we can achieve more than 50 votes for a Medicare prescription drug benefit, we might be able to achieve more than 60 votes to pay for a strengthened drug benefit. We shall see whether the Senate is able to successfully amend this proposal over the next several days, weeks, whatever the situation will be. For my part, I remain committed to fight to improve the Medicare prescription drug benefit that is before us because I know the need is tremendous. The average total gross income for the average Medicare beneficiary in West Virginia is about $10,800. My guess is for the State of Kentucky, it is not a great deal more. It probably is somewhat over that, but $10,800 in West Virginia. If they have various kinds of internal problems, they may be paying $3-, $4-, $5,000. That doesn't give them very much to live on. When I talk about this, I think about senior citizens in Mingo and Raleigh Counties in West Virginia; Charleston and Weirton, in Martinsburg and Parkersburg. They want and expect a prescription drug benefit that will meet their needs, and they have that right. I would like to believe that 2003 could be another landmark date in the passage of Medicare legislation that will improve the basic health of more than 40 million Americans. But even as I say that, I need to acknowledge that there are a few things in this bill that are very troubling to me and which may well make the difference between a welcome and sustained Medicare drug benefit and a long road of complaints and criticisms from the very people we are, in fact, trying to help. Let me take a minute to talk about a couple of them. There is a substantial gap in coverage under this bill. That gap is about $1,300. Under the bill, there will still be times when seniors are paying a premium and receiving no benefits whatsoever. We should eliminate that coverage gap. I fundamentally disagree with the notion that we should pay private insurers more than traditional fee-for-service Medicare to deliver a drug benefit. Either they are more efficient or they are not. If they have marketing costs, well, then that has to be factored in, but there is no reason to pay private insurers more than other providers. All Medicare beneficiaries should get the same benefit. They should pay the same premium, just as they do under Part A or Part B. There should not be different benefits or premiums for Medicare beneficiaries just because they happen to live in West Virginia or Montana or, on the other hand, in New York or California. Seniors who don't have access to a private insurer or choose to stay in traditional Medicare should be able to still receive additional benefits such as a catastrophic limit on their medical expenses. We should do our best to make sure that employers do not drop coverage because there is not a sufficient incentive for them to continue providing this coverage to their retirees. That should not be an excuse. We could fix this by allowing employer contributions to count toward the out-of-pocket costs seniors currently are paying. In addition, I have serious concerns about the fallback in the proposal. It is, in my judgment, unstable. Under this proposal, if there are not at least two quality bids for plans to serve a region, as we all know by now, the fallback moves into place for 1 year. The next year, a new bidding process begins. And if two plans show up, the fallback disappears. This means seniors, especially seniors in rural areas where PPOs and private plans are not likely to come or perhaps have not ever been, may end up bouncing between a fall back, then a private plan the next year, and then back to a fallback. All the while seniors will be forced to change doctors and pharmacists. Their cost sharing will be changed, and there will be other changes. This will be of profound concern to them, confusing to them. I think it is a frightening scenario which takes me back to the catastrophic bill to which I referred a few moments ago. I don't think that kind of coverage represents a stable, genuine, or guaranteed fallback for seniors. Finally, there have been a number of Members on the floor of the Senate referring to this as a universal drug benefit. We should all be very clear this is not a universal drug benefit. In fact, this legislation specifically excludes some Medicare beneficiaries from enrolling in the Medicare drug benefit. Those Medicare beneficiaries who are low income, 74 percent of poverty or below, and therefore, qualify to receive a drug benefit under Medicaid, are excluded from enrolling in the Medicare benefit. This is the first time in the history of the program that we would prohibit some Medicare beneficiaries from receiving a Medicare benefit. Not only is it unfair to exclude the poorest seniors from part of the Medicare Program, it gives them a bad deal. Prescription drugs are an optional benefit under Medicaid. States can and are limiting the number of prescriptions. Some States only cover three drugs or charge any copayments that they choose to or that they have to. Since 1965, Medicare has provided a universal benefit to all of its beneficiaries. That has been its magnificent social contract. It is the promise that society made to our seniors: If you work and make your payroll contributions, then you get Medicare, regardless of where you live, how old you are, or what your income might be. This legislation--for the very first time in the history of the program--would prohibit some Medicare beneficiaries from receiving a Medicare benefit. We should provide all seniors with a dependable Medicare guarantee of prescription drug coverage. That is what seniors expect when we tell them we are giving them a Medicare drug benefit. And we should make sure that they have a drug plan they can always count on, even if some believe private plans are the future of the program. I have a word on the pending Daschle amendment. The current Senate plan offers no protection against varying premiums. The estimate that is given, $35 as an average premium, is precisely that. It is an estimate. The proposed legislation gives PPOs broad discretion in assigning premiums. Senator Daschle's amendment will limit variations in the amount the beneficiaries have to pay to only 10 percent above the national average, no matter where they live. So it does not limit the amounts plans could charge as a whole; i.e., the total premium. It would also not prevent lower premiums. Stable premiums limit seniors' cost of liability and complement the provisions of the fallback plan. Stable premiums increase the safety net for seniors in geographic regions where private insurers are less likely to offer affordable coverage. This amendment is especially important for seniors who live in rural areas because it is in rural areas where private insurers are more likely to charge higher premiums to offset the increased costs associated with benefit deliveries. Stable premiums do not inhibit competition. Instead they increase the safety net for seniors. Beneficiaries in rural areas, such as West Virginia, are often older and sicker. Competition among private insurance plans in these areas is likely to be less under any circumstances. Seniors' ability to plan for prescription drug expenditures within their limited budgets hinges upon a great degree of certainty. That is what seniors depend on. Their ability to have this assurance should not be decided by private HMOs, who respond to market forces and attempt to correct deficiencies by varying and fluctuating premiums. Seniors should not have to wait and see what private insurance companies are going to charge them from year to year. I support Senator Daschle's amendment. He is working to pass a Medicare package--as we all are--that works for all Medicare beneficiaries no matter where they live. I yield the floor.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Mr. President, I am very proud today to join my colleague, the Senator from Maine, Ms. Collins, in introducing the Homeland Security Grant Enhancement Act of 2003. This legislation will bring much-needed coordination to the fund application process for our first responders and State and local officials. The coordination of grant programs called for by this bill will go a long way to make certain that those who will be first called upon to deal with a threat to the security of the United States will be better prepared to face it. By enacting the Homeland Security Grant Enhancement Act, we can free municipal governments and first responders of bureaucratic guesswork, allowing them to focus instead on training and execution of response plans. Currently, Federal programs within the Department of Homeland Security, the Department of Justice, the Department of Health and Human Services, and other Federal agencies provide our first responders with a basic level of support with respect to training and equipment procurement. However, in order to receive this support, State and local officials often must complete separate emergency plans and redundant grant application forms. The information demanded by the various homeland security plans is frequently similar; nonetheless, different Federal agencies require grant applicants to start from square one in each case. The Homeland Security Grant Enhancement Act of 2003 will put an end to this inefficient practice. Our bill creases an interagency committee, composed of representatives from the Department of Homeland Security, the Department of Health and Human Services, the Department of Transportation, the Department of Justice, and the Environmental Protection Agency, as well as any other department or agency deemed necessary by the President, to eliminate duplication in planning requirements and to simplify the application process. The committee will engage in a three-step process to accomplish this goal. First, within 2 months, it will compile a list of the homeland security assistance programs, identifying planning and administrative requirements for each program. Second, it will conduct a 4-month review of these requirements. Finally, within 8 months, it will report to Congress and to the President with recommendations as to how to streamline and standardize requirements. In order to provide first responders with the support they need, our bill also creates a Homeland Security Information Clearinghouse. The clearinghouse will work with the interagency committee to make grant information available to first responders and local officials, easing the application process. Many State and local agencies, as well as firefighters, police, and emergency service officials, have found the Homeland Security Act provides insufficient guidance from Federal agencies as to the use of government funding and technical expertise in order to meet security needs. Through the clearinghouse, our bill will provide the coordination needed to locate grant information and other resources within the Federal Government. Easy access to this kind of information will improve immeasurably our State and local agencies' ability to deal with potential threats. First responders have also cited the Homeland Security Act's lack of guidance regarding how Federal dollars can be spent and to whom these funds can be allocated. Neither the Homeland Security Act nor the Department of Homeland Security's efforts to implement the law has done much to relieve this problem. Our bill seeks to remedy this by streamlining the Office for Domestic Preparedness homeland security grant process from as many as 12 deliberate steps to just 2 commonsense requirements. When enacted, the Homeland Security Grant Enhancement Act will put in place grant application processes that are much more efficient and user-friendly. State and local authorities will be called upon to develop a single, 3-year homeland security plan that outlines vulnerabilities and capabilities. Federal grant programs will be reconciled to establish a process for a more logical allocation of resources to meet State and local needs. Local agencies or government officials will then apply for funds based on this plan, which can be revised each year pending approval by the Secretary of Homeland Security. These steps will lead to greater ease in securing funding for local police, fire, and emergency service departments. This means greater security for West Virginians and all Americans. Perhaps more importantly, this will make certain that State and local officials and first responders are all included in the homeland security planning process, allowing them to access funds and equipment in a timely and efficient manner. Our legislation requires that 80 percent of homeland security funding and resources will reach the local level within 60 days of allocation. The bill encourages flexibility in the use of these funds by authorizing local officials to determine their allocation to planning, equipment, exercises, training, or other homeland security functions. In order to ensure that rural States are included in Federal grant programs whose eligibility criteria sometime favor urban areas, the Homeland Security Grant Enhancement Act follows a procedure that benefited my State of West Virginia earlier this year when we partially funded first responder programs in the Emergency Supplemental Appropriations bill. As with that legislation, our bill provides that any State whose application for funding through this grant program is approved will receive a minimum of .75 percent of the total amount appropriated for homeland security in a given fiscal year, thereby providing an adequate preparedness funding baseline for all States. The Secretary, acting in cooperation with congressional appropriators, would naturally exercise the authority to make upward adjustments with the remaining funds. However, the .75 percent baseline will make certain that rural first responders are not left out. At the same time, this mechanism will see to it that areas facing higher risk and greater vulnerabilities might receive more funds. Rural areas will not be left out, but areas that are home to elements of the Nation's critical infrastructure, as well as areas with higher population density--both of which are the most likely targets for international terrorists--will be safeguarded. Finally, this bill also provides a logical flexibility for Federal officials who oversee unspent funds previously appropriated to the Office for Domestic Preparedness. Rather than allowing this money to sit idle while our first responders clamor for adequate funding, this legislation will enable DHS to dispense funds to those States that obtain a waiver from the Secretary. Funds earmarked for one purpose, such as training, may then be used to pay costs associated with another first responder need, such as equipment. I commend the Senator from Maine for her close personal attention to the matter at hand, and for her hard work in putting this legislation together. She has worked closely with many of the groups who will benefit directly from this legislation. While many of these organizations do not endorse legislation, the approach we offer today has been supported by the National Governors Association, the National Conference State Legislatures, the Council of State Governments, the National Association of Counties, the National League of Cities, the International City/County Management Association, and the International Association of Fire Fighters. I believe the Homeland Security Grant Enhancement Act will greatly improve coordination between the various agencies that distribute homeland security funds to our States, communities, and first responders. Relevant information will flow more freely and the grant application and funding process will become more clear and more flexible. While we have made great strides in our efforts against international terrorists, stifling their ability to conduct operations, the danger of an attack remains. This legislation improves efficiency within a multiagency bureaucracy, easing the burdens on those who are charged with defending the homeland. These changes will also better prepare our first responders to meet the threats they face.

Mr. ROCKEFELLER

Mr. ROCKEFELLER. Will the Senator yield time?