Floor Statement of U.S. Senator Chuck Grassley of Iowa
Ranking Member of the Committee on Finance
Senate Passage of the Children’s Health Insurance Program Reauthorization Act
Thursday, September 27, 2007
Mr. President, the Congress is poised to pass the reauthorization and improvement of the children's health insurance bill on a substantial bipartisan basis. In the House of Representatives, 40 Republicans who had voted against the House bill voted in support of this compromise bill. The Senate is, once again, poised to pass this bill with strong bipartisan support. This is a bipartisan compromise. It has broad support from Republicans and Democrats. It will help as many as 4 million low income uninsured children. About half the new money is just to keep the program running. The rest of the new money goes to cover more low income children. It provides better options for families to afford employer coverage. It takes even more steps to address crowd out. It phases adults out of the program. It discourages states from covering higher income kids. It rewards states that cover more of the lowest income kids. It puts the lowest income children first in line.
Here's what it's not: It's not a government takeover of the health system. It does not undermine immigration policy. It's not expanding the program to cover high income kids. It’s a good bill. I urge my colleagues to support this important bill for children.
Yesterday, the Ranking Member of Senate Budget Committee made some remarks on the Senate floor about the children's health insurance bill pending before the Senate. I would like to address the issues raised by my friend and colleague, Senator Gregg. Senator Gregg repeatedly referred to the children's health insurance bill as leading to a nationalize system of health care. He said, “The goal here is to radically expand the size of a public insurance program to families who are doing quite well - families making up to $80,000 who may not have children or whose children may already be insured by the private sector - because they want to move more people onto the public insurance system because they want to have a nationalized system.” Mr. President, I have one simple question to ask all the critics of this bill who, when confronted with the actual policies in this compromise respond by shrieking: “$80,000!! $80,000!!!” And that question is - if this bill became law tomorrow, how many families earning $80,000 a year would be eligible for CHIP. The answer is: None. As they say in baseball: You can look it up.
I have one simple question to critics who, when asked to respond to what is actually in black and white in the bill, react by screaming: “National health care! Socialized medicine!” And that question is -- under what contorted reasoning is a capped block grant inclusive of policies that prohibit new waivers for parents, phases childless adults completely off the program and limits matching funding for higher income kids, nationalized health care? I guess you can call something, anything you want, but in Iowa you can't call a cow a chicken and have it be true.
Now, on the issue of the so-called "Budget Gimmick" that the Ranking Member of the Budget Committee also spoke to, I have this response. Senator Gregg said yesterday, “There’s the problem that there is a scam going on, a scam in this bill as to how it's paid for. This chart reflects the increased cost of the bill as it goes forward, but in order to adhere to their own budget rules, which they claim so aggressively to be following, such as pay-go, they have to take the program in the year 2013 from a $16 billion annual spending level down to essentially zero. In other words, they are zeroing out this program in the year 2013. That's called a scam.”
Now, Mr. President, I am a proud member of the Senate Budget Committee. I believe in fiscal discipline and spending restraint. I agree that under a Republican controlled Congress, spending was out of control. Part of the reason why Republicans lost control of the Congress is because we were unable to control spending. I believe that part of the reason that the President is threatening to veto this bill is that he is trying to play catch up for failing to veto six years of spending bills. I agree that fiscal discipline ought to be applied to spending bills and that we should pay some attention to the level of spending and to how spending is financed. Don't get me wrong, that is a good thing. But the place to start is with Appropriations measures, NOT the SCHIP bill.
So let me focus on the criticism that has been made about how this SCHIP bill is financed. We need to step back and look at the whole picture. The SCHIP program is a pretty small part of that picture. The thing about SCHIP is that it is not like Medicaid or Medicare. It is not a permanent program. Medicare and Medicaid are permanent programs. They are entitlements. SCHIP isn't. Now, there were some who wanted to turn SCHIP into an entitlement program. The House bill would have lifted the cap on the national allotment for SCHIP and extended the program forever. I fought hard to maintain the block grant for SCHIP and to ensure that the program did expire, so that in the future, Congress can evaluate and improve SCHIP, just as we are doing now. So, despite the best efforts of House Democrats, under the compromise bill when the program expires, it truly ends.
SCHIP is an expiring program. Let me say that again; SCHIP is an expiring program. While I know most of us in this chamber would no sooner let the Department of Defense expire than we would let the SCHIP program expire, that is a simple fact. And because it is an expiring program, it is subject to a very particular budget rule. That budget rule says that CBO must score future spending for the program based on the last year of the program's current authorization. So the baseline for SCHIP for next year is $5 billion. For the next five years, the baseline for SCHIP is $5 billion. For the next ten years, the baseline for SCHIP is $5 billion. It is actually $5 billion a year forever. That's right, forever!
According to CBO, over a million children would lose coverage if we simply reauthorized SCHIP at the assumed baseline. Who among us would go home and tell your constituents you voted to reauthorize the SCHIP program, but over a million kids lost coverage. That is not politically viable. During consideration of the Senate Finance Committee bill, there was an SCHIP alternative that included an increase in SCHIP spending of $9.5 billion over five years. Even the Members who opposed the Finance bill acknowledged that $5 billion was not enough. Everyone knows that the current baseline is not realistic. That created a hole in the budget we had to fill. So, what did we do? We filled it. It's that simple. We had to comply with the budget rules. So we did. Do those budget rules make sense? Well, that is a question for the Budget Committee, not the Finance Committee. The Budget Committee sets those rules and they are not for the Finance Committee to change.
There is another budget rule the Finance Committee was required to follow. That rule is called PAYGO which people around here know is short for "pay as you go" financing. It means that the bill needs to cover its six-year cost and the 11-year cost. And that makes sense after all. This bill proposes new spending and we should pay for it. And this bill does. This bill complies with those budget rules. It complies with the PAYGO requirement.
Now, the SCHIP reauthorization we are debating is only a five-year authorization. As I think everyone knows, the bill is paid for with an increase in the tobacco tax. This is just like the original SCHIP bill when it was created under a Republican-controlled Congress in 1997. Now, just like in 1997 when Republicans did it, we had a problem with how the tobacco tax works. The revenue from the cigarette tax is not growing as fast as health care costs. So that means the revenue raiser is not growing as fast as the cost of SCHIP. So the Finance Committee did what it was required to do to comply with the PAYGO budget rule. The Finance Committee bill reduces SCHIP funding to just below the funding that is in the current baseline.
That means that the Finance Committee in five years will have the same problem we faced in putting this bill together today. It will have to come up with the funds to keep the program running. It is true we are covering even more low-income kids in this bill. That's a good thing. Assuming that Congress does not tackle the increasing problematic issue of health care costs across the board, the Finance Committee, in five years, will have a bigger hole to fill. They will have more kids to keep covering and health care costs will be even higher than they are today. That is for the Finance Committee to face in five years. That is just like the job the Finance Committee had today to continue SCHIP. This is really nothing new. Now, my friend and colleague, for whom I have great admiration, has, once again, distorted the so-called “cliff” in the compromise CHIP bill. He has, once again, produced a chart that shows a dramatic decline in funding for this program.
Here is the chart used to raise the issue about financing of the compromise bill which is largely the Senate Finance Committee bill. It shows only the funding in the Finance Committee bill. The approach this chart takes reminds me of the story of seven blind men trying to describe an elephant. Each described a different part of the elephant: tusk, tail, ear, leg, but none could describe the whole elephant. They couldn't see the whole picture. We need to look at the whole picture. As we all know, the SCHIP program was created to supplement the Medicaid program. The goal of the program was to encourage states to provide coverage to uninsured children with incomes just above Medicaid eligibility. So to put my colleague's concerns in perspective, we need to look at the whole picture. We need to look at SCHIP spending as it relates to Medicaid spending. I'd like to draw your attention to this chart. So everyone can fully appreciate the consequences of our SCHIP bill in the context of the Medicaid program which it supplements, I want you to take a close look at this.
Let's start with this tiny little green line at the bottom. You have to squint to see it. The green line here represents the SCHIP baseline under current law. As I have already discussed, it is $5 billion each year for the next ten years and forever actually. Now let's look more closely and honestly at the actual problem we are facing. This massive orange area above it is Medicaid. No one needs to squint to see this. This is projected Medicaid spending for the next ten years. It’s a lot bigger than SCHIP. Then on top of that, we are looking to add new spending to SCHIP. The new spending is represented by the little blue line right here. Again, you almost have to squint to see it. As you can clearly see, costs are growing at a rapid pace overall. The overwhelming driver of the cost is not the relatively small increase and then decline of CHIP spending under the compromise bill - that is a blip on the radar compared to the massive increase of Medicaid spending.
We have a big problem here, Mr. President and it is not going away. Entitlement spending is ballooning out of control and in future years, if we do not act, we are going to struggle to keep these programs afloat. When you look at the whole picture it puts things into perspective. Now, remember all that fire and brimstone about the awful cliff in the compromise bill? The way that it continues to be described, you'd think the world was about to end. Now, looking at the big picture, where exactly is that cliff you might ask? Again, you'll have to squint, really hard but if you strain your eyes and look really closely, right here, that little dip just to the right of the dotted vertical green line is what my good friend from New Hampshire is so exercised about.
So this little blue line is what this debate is all about. This little blue line is the funding in the compromise agreement. This little blue line is what all the fuss is about. Seems like a whole lot hollering is going on over a dip that is hard to even see.
Let me tell you what the Compromise Agreement -- this little blue line -- is not. This is not a government takeover of health care. This is not socialized or nationalized medicine or anything like that. This is not bringing the Canadian health care system to America. This is NOT the end of the world as we know it. To suggest that this little blue line and this tiny dip is the dismantling of the US health care system boarders on the hysterical. While I concede that allotments under our bill in the years beyond the five year reauthorization do behave as described in my friend's chart, I don't think it warrants the heated rhetoric we are hearing today.
SCHIP is not the real fiscal problem here. The problem is that big, big orange area. It's Medicaid. Senator Gregg and I worked together in the Deficit Reduction Act to try to reign in egregious Medicaid spending and I am proud of the work we did. We also found out how hard it is to dial back entitlement spending. Even in a Republican-controlled Congress and even with the special procedural protections in a reconciliation bill, we only succeeded in shaving off $26 billion in Medicaid spending over a 10-year period. The problem of entitlement spending is still out there and SCHIP is a pebble next to the boulders that are Social Security, Medicare, and Medicaid.
I am very hopeful that once we are done with the CHIP debate, we can roll up our sleeves and get down to the business of tackling health care reform on a much larger scale. I know that Senator Wyden wants to take this on, and I want to join him in this bipartisan effort. As I have said many times, I had hoped that we could have used the debate on SCHIP to focus on these larger issues of health care reform and the uninsured. I tried to engage my colleagues on the other side.
I was repeatedly thwarted in that effort and told that SCHIP had to get done first. Well, hopefully we can get SCHIP done and then turn to the bigger issues, so that the next time the Congress has to tackle CHIP, this big orange block won't be so huge. So, in closing, I appreciate my friend's remarks. They are not without some merit. But put into context, I don't think they fit the crime we are accused of here. I yield the floor.
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