William Roth

Mr. ROTH

Mr. ROTH. I would be happy to yield to the Senator from Oregon.

Mr. ROTH. The gentleman, my good friend from Kansas, is correct. I share his concern for residents of the inner cities across the country. The Finance Committee does indeed intend for ProPAC to study the effects of these changes on inner city hospitals that provide the access to care for those areas.

Mr. ROTH. Yes.

Mr. ROTH. That is correct.

Mr. ROTH. The Senator is correct. As part of the Senate Finance Committee's deliberation with the House on the Medicare provisions of the conference, we intend to request, and ultimately, include that requirement in ProPAC's annual report to Congress.

Mr. ROTH

Mr. ROTH. Mr. President, I certainly understand and sympathize with the concerns raised by Senators D'Amato and Moynihan. I have received a number of letters from Members on both sides of the aisle that reflect the concerns you have voiced today. In addition, I have received many letters from Governors noting their strong opposition to terminating the low-income housing tax credit. anwr

Mr. ROTH. I thank the Senator from Arizona. I know that this is a very important issue for him. It is among a number of trade issues which must be dealt with by the committee in coming months. The Senator from Arizona has my assurance that the Fiance Committee will take up H.R. 1642--the House-passed bill dealing with this issue--the next time it meets to deal with trade issues, and that I will make every effort to have it reported out favorably.

Mr. ROTH. Yes; that is a correct statement.

Mr. ROTH. I thank Senator Campbell. I would be happy to answer his question.

Mr. ROTH. First of all, Mr. President, I think it is important to understand that 45--45--of the 50 States are better off under the Senate amendment than they are under the House. And I would just like to make passing reference to the three States that are said to have Democratic Senators. Just let me point out that in the case of California, it is up $700 million from the House; Florida is up $1.3 billion from the House, and Minnesota is up $500 million from the House. Now, one of my distinguished colleagues on the other side mentioned the treatment for seven States on page 36. And I just want to point out that six of these seven States that get additional amounts have one Republican Senator and one Democratic Senator. That was not based on partisanship. It was based upon need. And that is the point I wish to make. In concluding, the statement was made that we are using the savings from Medicare and Medicaid for a tax cut. That is pure demagoguery. There is no truth to that. As a matter of fact, the President's board of trustees, long before we talked about tax cuts, said we had to do something about the trust funds for Medicare. And that is what we are doing with this legislation.

Mr. ROTH. Recently announced by the administration for 1996 for programs under the Finance Committee's jurisdiction that are updated by the CPI-W. The CBO baseline assumes the CPI-W would be 3.1 percent. Mr. President, I yield the floor.

Mr. ROTH. To improve the Medicaid formula which was adopted by the Finance Committee. Under the modification, each State's base would be the higher of, first, fiscal year 1995 spending, minus all payments to disproportionate share hospitals; second, fiscal year 1994 spending, including all disproportionate share hospital payments, plus 3.4 percent; or, third, 95 percent of fiscal year 1993 spending minus all disproportionate share hospital payments. Each State's funding would increase by 9 percent for fiscal year 1996. And beginning in fiscal year 1997, each State's base would be increased by a growth rate determined by a formula subject to floors and ceilings. The ceilings have been modified by this amendment. We have tried to give more funds to the high-growth States by raising the growth ceilings in future years. States would be able to carry over a credit of unused Federal funds for 2 consecutive years on a rolling basis. And after 2 years, unused funds from the previous years would begin to go into a redistribution pool. States can apply for additional funds from this redistribution pool. Finally, the amendment strikes section 2116 of the bill limiting causes of action under Federal law. Finally, the provisions in this amendment are paid for by adopting the 2.6 percent cost-of-living adjustment recently---- Thirty seconds?

Mr. ROTH. The first modification would modify the Federal quality standards for nursing homes under Medicaid. We have worked with Senator Cohen on this modification, and he is supportive of these changes. The modification would reduce the costly and duplicate requirement that States perform preadmission screening and annual resident review. In addition, a modification to the nurse aide training requirements would make it easier to train nurse aides in rural areas. The amendment would allow States with equal or stricter nursing home standards to seek a waiver from the Secretary of HHS to use the State standards in lieu of the Federal standards. However, the Secretary of HHS would continue to enforce State compliance with the Federal standards. States not in compliance with the Federal standards would be assessed a penalty of up to 2 percent of their Federal Medicaid funds. Second, the amendment creates a Medicare-Medicaid integration demonstration project to permit Medicare and Medicaid funding to be combined to provide comprehensive services through integrated systems of care to elderly and disabled individuals who are eligible for both programs. Third, the amendment creates a separate set-aside for low-income Medicare beneficiaries. This set-aside would be in addition to the set- asides already in the bill for pregnant women and children, the disabled and the elderly. Under this provision States would be required to spend a minimum amount on Medicare premiums for low-income Medicare beneficiaries. The amount States must spend must be at least 90 percent of the average percentage spent on Medicare premiums under Medicaid over fiscal years 1993 through 1995. Fourth, the amendment requires States to apply the same solvency standards for health plans under Medicaid as the States set for health plans in the private sector. And, fifth, the amendment modifies the distribution formula under the Medicaid program. Let me start by saying we have worked very hard to improve the Medicaid formula----

Mr. ROTH. The----

Mr. ROTH. Mr. President, this amendment includes modifications in Medicare and Medicaid. The first change in the Medicare provisions establishes a fully prospective payment system for skilled nursing facilities within 2 years. Now, until this new skilled nursing home prospective system is implemented, the amendment changes how Medicare will pay nursing homes for nonroutine services. The change establishes payments based on each nursing home's cost in 1994 with an inflation adjustment. The second change in the Medicare provisions is a slower phase-in for changes in Medicare's indirect medical education payments to teaching hospitals. Mr. President, this amendment also makes several modifications to the Medicaid provisions in the bill.

Mr. ROTH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. [[Page S 16039]]

Mr. ROTH. Mr. President, I send an amendment to the desk.

Mr. ROTH. Five minutes.

Mr. ROTH

Mr. ROTH. Mr. President, a financial debt is not the only threat that hangs over the heads of future generations. There is a threat to their environment, as well. A threat we must address. We have a moral duty to give them a world that has clean water and clean air, and open vistas where wildlife can thrive. One of the opportunities of every American citizen is to enjoy the wealth of beautiful public lands. It is my desire that as we work through this budget reconciliation we take great care not to jeopardize one of the most spectacular places in America: the coastal plain of the Arctic National Wildlife Refuge. There is a provision in the budget that provides for oil and gas lease sales in this sanctuary. Located in the northeastern corner of Alaska, this unique piece of our natural heritage is bordered on the north by the Arctic Ocean and Beaufort Sea, and on the south by the snow-capped Brooks Range. As a lead sponsor of S. 428, the bill that designates the coastal plain of the Arctic National Wildlife Refuge as wilderness area, I am concerned by a provision in this budget reconciliation bill that uses revenues taken from sales of leases to drill the coastal plain. My concern arises on two levels: first, that the budget is assuming revenue from a pristine wilderness area; and second, that the revenue raised from drilling in this wilderness area [[Page S 15995]] will not amount to be such a significant amount of money that it could easily be found elsewhere. Mr. President, as I have said before, the best thing we have learned from nearly 500 years of contact with the American wilderness is restraint, the need to stay our hand and preserve our precious environment and future resources rather than destroy them for momentary gain. For this reason, I have been active in the effort to designate the refuge coastal plain of Alaska as a wilderness area. And I am not alone. Only 4 years ago, Congress rejected the idea of sacrificing a prime part of our national heritage, the Arctic National Wildlife Refuge, for what most likely will be a minimal supply of oil. The Arctic National Wildlife Refuge is an invaluable region with wildlife diversity that has been compared to Africa's Serengeti. As I have said in earlier statements, the Alaskan wilderness area is not only a critical part of our earth's ecosystem--the last remaining region where the complete spectrum of arctic and subarctic ecosystems comes together--but it is a vital part of our national consciousness. It is a place we can cherish and visit for our soul's good. It offers us a sense of well-being and promises that not all dreams have been dreamt. The Alaskan wilderness is a place of outstanding wildlife, wilderness, and recreation, a land dotted by beautiful forests, dramatic peaks and glaciers, gentle foothills and undulating tundra. It is untamed--rich with Caribou, polar bear, grizzly, wolves, musk oxen, Dall sheep, moose, and hundreds of thousands of birds--snow geese, tundra sands, black brant, and more. In all, about 165 species use the coastal plain. It is an area of intense wildlife activity. Animals give birth, nurse and feed their young, and set about the critical business of fueling up for winters of unspeakable severity. Addressing my second concern--that the revenue raised from drilling in this wilderness area will not result in such a significant amount of money that it could not be found elsewhere--let me say that the estimated revenue is only two tenths of 1 percent of the total savings. And that is why I am here today, to support the Baucus amendment that will prohibit the leasing of the coastal plain of ANWR to pay for deficit reduction. This amendment is consistent with the current law--with the dictates of Congress--law that prohibits oil and gas drilling in the coastal plain of ANWR. It is also consistent with agreements that we have made with Canada to preserve and protect this wilderness area, especially the habitat and culture of the native people who live in the area. This amendment prevents oil and gas leasing in the coastal plain of ANWR without hearings in Congress. It does not preclude future development of this area, but only prevents Congress from using these savings from oil and gas leasing in the current budget process. The coastal plain--where the oil and gas leasing would occur--is the biological heart and the center of wildlife activity in the refuge. It is a critical part of our Nation's preeminent wilderness and would be destroyed by oil development. There are those who may think the northern coast of Alaska is too remote for use to worry about. I urge them to read the Congressional Records from the 1870's. The men who initially urged the Congress to protect a place called Yellowstone were subject to ridicule. Why, critics asked, should we forgo the opportunity to dig up minerals from the area? It is a remote place, and few Americans will ever venture there. Today, as we wrestle with America's future, let us be as far-sighted as that Congress eventually proved to be. Let us not cash in a unique piece of America for a brief, hoped for a rush of oil. Let us protect the coastal plain of the Arctic National Wildlife Refuge. Forever. Mr. President, I believe that we should not allow revenues to be used in this budget that are supposed to come from doing something that Congress has not allowed. This is how is should be done. The Baucus amendment accomplishes this purpose. And I encourage my colleagues to support this important effort.

Mr. ROTH

Mr. ROTH. I move to lay that motion on the table. The motion to lay on the table was agreed to. list of extraneous matter (the Byrd Rule)

Mr. ROTH. Mr. President, excess pension assets do not belong to employees. The reason for this is that under a defined benefit pension plan, the employer promises to pay an employee a fixed monthly retirement benefit. Under current law, after these benefits are fully funded the employer can take out excess assets upon plan termination. Excess pension asset transfers will not reduce or jeopardize workers' pensions. Only the most overfunded pension plans will be allowed to transfer excess pension assets. According to a former chief actuary of the PBGC, only 1 percent of plans covered by the PBGC terminate in a given year without sufficient assets. And after the passage of the stringent funding rules in last year's GATT legislation, it is reasonable to expect the incidence of plan failures will decrease in the future. The proposal also contained several provisions designed to guard against plan underfunding. First, employers are required to keep a substantial cushion of excess pension assets in the plan. And I point out this is the same measure that President Clinton proposed for retiree health transfers in the Retirement Protection Act of 1994. The other side has attacked this proposal. But is it not interesting that their own President proposed the same measure that is contained in the legislation before us tonight. The minimum cushion is 125 percent of plan liabilities, and in many cases the cushion is as high as 150 percent of plan liability. In fact, a national actuary firm prepared a study that concluded that more than 70 percent of the overfunded plans will be subject to a cushion greater than 125 percent of plan liability. At these funding levels, the pension plan will always be at the full funding limit. In fact, plans at the full funding limit are not permitted to make new contributions to the pension plan. Plan trustees are required to use a plan asset valuation method that results in the largest asset cushion. And, to guard against fluctuations in interest rates and stock market values, the proposal requires plan trustees to use January 1, 1995, or the most recent valuation date before the transfer, whichever results in the largest asset cushion. Employers must use the excess assets to fund ERISA-protected employee benefit plans that cover a broad group of employees. That is a most important point that must and should be understood. Employers can only take out the excess assets to fund other ERISA-protected employee benefits that cover a broad group of employees. That is just common sense. And the plans that can be funded with excess assets are limited to--and let me spell them out--other retirement plans of the employer, including underfunded retirement plans; active and retiree health plans; child care; disability; and educational assistance. This is a good plan, and, for that reason, I must oppose amendment of Senator Kennedy. Mr. KENNEDY addressed the Chair.

Mr. ROTH. Mr. President, I rise in opposition to the amendment proposed by Senator Dorgan. In doing so, let me say at the beginning, I am not happy with companies that move abroad to a tax haven or cheap labor for the purpose of manufacturing products that are sold back to the United States. None of us can be happy with the export of American jobs. At the same time it is important to understand that we are in the global economy and that if we are to provide well-paying, good jobs for our people, it is important that we become a vital force in the global economy that is now emerging. The United States must become competitive in this global economy. My concern with the Dorgan amendment is that in hearings held before the Finance Committee in the past, Treasury has testified that this kind of legislation is very difficult to administer. It has been pointed out, for example, what do you do in the case of a plant that sells both to the United States and to other companies abroad? Obviously, we want to encourage American business to compete in foreign markets, but would that company be entitled to the deferral, or how would you administer it? Let me say that it is my intent, upon the completion of reconciliation, to look at a number of these important and complex international trade questions. We have purposely avoided in this reconciliation containing any amendments or provisions dealing with foreign trade or international matters. And as I have indicated, one of our reasons for taking this approach is that this is a matter of extreme complexity, of greatest importance to our economy and the creation of jobs in America. For that reason, we have not, as I said, included any provisions involving international trade matters in this legislation. For that reason, the Dorgan amendment is not appropriate as part of this legislation. Again, let me say that it is my intent as chairman of the Finance Committee, which has jurisdiction over trade, that we will be holding a series of hearings dealing with the kind of problems that are raised by this amendment. But until we have a better idea of how to address this problem so that we do not, in the process of trying to correct one problem of people fleeing abroad to tax havens that sell back here, that we do not hurt those who are going abroad for a legitimate purpose, to become competitive in international markets. So, for these reasons, I must respectfully disagree with this amendment. I yield back any remaining time.

Mr. ROTH

Mr. ROTH. Mr. President, why after shackling American middle-class families with the largest tax increase in history, has Bill Clinton finally admitted that he made a mistake? Why does his confession come just days before Congressional Republicans are scheduled to meet in conference to finish one of the largest tax cut proposals since the Kemp-Roth income tax rate reductions brought our economy roaring back in the 1980's? Because Bill Clinton knows his taxes did not deliver on his promise to improve the economy, bring down interest rates, and thereby reduce the deficit. Tax increases never do. History proves that increases actually poison economic growth while tax cuts unlock capital, encourage savings, improve investment, and create jobs, opportunity, and growth. Kemp-Roth led to the longest peacetime economic expansion in history. Eighteen million jobs were created, along with four million new businesses. Family income rose and home ownership boomed as interest rates and inflation fell. At the same time, Treasury revenues doubled, not because Americans were paying a higher percentage of their income to taxes, but because Americans had higher incomes. We must unlock this kind of growth again. Only by creating an environment where our economy can expand can we simultaneously cut the deficit and meet necessary Government obligations. Last spring the House passed a 7-year $354-billion tax reduction package, 76 percent of which, would go to family relief, and 24 percent to job creation. The plan offers a $500-a-child tax credit, encourages savings and investment, and offers other incentives for economic growth. The proposal recently passed by the Senate Finance Committee cuts taxes by $245 billion, offers relief for our middle class--with over 70 percent of the $245 billion going to families making less than $75,000 a year--and, like its House counterpart, contains incentives that will encourage savings, investment, capital formation, and business growth. These provisions mean more jobs for Americans, greater economic security for our families, and stability in our communities. Of the $245 billion Senate relief package, a full $223 billion will go to families. The remaining $22 billion will strengthen businesses and lead to increased employment opportunity. It will also improve America's ability to compete in the global community, with other nations that provide their businesses with strong incentives to compete with us. The four pillars of both proposals are: First, a $500 child tax credit; second, restoration and strengthening of Individual Retirement Accounts; third, relief from overbearing estate taxes on families and businesses; and, fourth, reduction of the top rate of capital gains on individuals and corporations. These measures meet our promise to the American people that in Washington we will change business as usual. The current system double- taxes savings, thwarts investment, hinders productivity, increases prices, stifles wages, and hurts exports. It is complex, controlled by special interest groups, and places disincentives on work. Our proposals represent a major step toward correcting these deficiencies, and because we have cut spending, our bill balances the budget while making room for tax relief. The House has acted. Now, the full Senate must pass the Finance Committee's proposal. Following a House-Senate conference to iron out any differences between the bills, both Chambers must pass this historic reform, and the President must sign it into law. Americans need relief. Our economy needs a shot in the arm. Even Bill Clinton has admitted as much. We call on him to join us in our efforts to unleash the potential our economy has to move us into a bold and exciting future. He admits he made a mistake. Working together, we can fix it. Martin Feldstein, former Chairman of the President's Council of Economic Advisers and professor of economics at Harvard University spells out in a very livid fashion what the 1993 tax increases really did in an article in The Wall Street Journal. I request that article be included in the Record in its entirety.

Mr. ROTH

Mr. ROTH. Reserving the right to object, may I finish?

Mr. ROTH. Mr. President, as I was stating, that is what this reconciliation package is all about--the future. As Lincoln said, ``The struggle of today is not altogether for today--it is for a vast future, also''--a future that I believe will be very bright if we succeed in our endeavors here today. Our objective is to strengthen the American Dream--in our homes, in our schools, in our communities, in our States, and all across the land. Some have said that the dream is dead, that our children cannot expect to lead a better life than that led by their parents. I strongly disagree. However, I do believe that in order to meet the domestic challenges before us--as we look to put our house in order here at home--as we seek to maintain influence and leadership abroad, that we must reinvent America to reflect the profound changes that are taking place throughout the world as well as here in the United States. We must build on principles that are tried and proven and good. We know what works. We know what's failed. And we cannot march boldly into the future with blueprints prepared for the past. This reinventing of America must be thorough, it must create a nation that is compassionate, responsible, and economically viable from the houses in our neighborhoods to the Houses of Congress. It must encourage self- reliance, risk-taking, and the confidence that diligent labor will be rewarded with security and even greater opportunity for reward. These are the principles that built America, and they are the principles that will see us into a bright and expansive new millennium. Mr. President, I yield the floor. Mr. MOYNIHAN addressed the Chair.