"Above all, this budget is good news for the next generation. We have a responsibility to pass along to our children and grandchildren the same opportunity we inherited to achieve the American dream. A balanced federal budget is key to providing an opportunity for economic prosperity.
"Balancing the federal budget for the first time since 1969 will bring lower interest rates for home mortgages, car payments and student loans. Lower interest rates are vital to the capital intensive business of farming. What's more, the tax relief provided in this budget will let hardworking families keep more of what they earn. Right now, 38 percent of a typical family's income goes to pay federal, state and local taxes. That's too high," Grassley said.
Grassley said this bill, the biggest tax decrease in 16 years, will provide well-deserved relief. "It will help families build for the future with education IRAs, for example," Grassley said. The budget will allow parents to establish an education IRA for each child and make nondeductible contributions of up to $500 annually. Income will accumulate tax-free and withdrawals will be tax free if used for undergraduate or graduate education expenses.
Grassley emphasized that reaching and maintaining a balanced federal budget will require continued fiscal discipline. "I plan to act as a watchdog during the next five years to make sure Congress and the President keep this commitment," he said.
Grassley also said that the budget plan "begins the very important work of saving and strengthening Medicare for those who depend on the program today and for those who will depend on it in the very near future. As chairman of the Senate Committee on Aging, I am committed to addressing the significant challenges we will face when the baby boomers begin retiring in the year 2010."
Grassley served as a member of the conference which reconciled the balanced budget proposals advanced by the House of Representatives, the Senate and the White House. Grassley is a member of the Budget Committee and the tax-writing Senate Finance Committee, where he worked to secure many measures important for Iowans.
The Grassley-sponsored provisions include:
Grassley fought for a change to the complex Medicare formula, and won. His Medicare Equity and Choice Enhancement Act of 1997 will raise the floor in the national formula used to reimburse providers for patient care to $367 per person per month. They will establish a 50/50 national/local blended payment rate for managed care entities. This rate is a critical tool in improving payment to areas where Medicare services are less costly, as in Iowa.
"The bottom line is, Iowans pay the same 2.9 percent payroll tax. Medicare is a national program. We shouldn't be punished for providing high quality care at a reasonable price. This formula change breaks down the barriers that keep older, rural Iowans from fair treatment and access to health care services," Grassley said.
According to Grassley, a person qualifies for PACE when he or she becomes nursing home- certified by Medicaid. Instead of entering a relatively high cost nursing home individuals are cared for by an interdisciplinary team. That team includes a primary care physician, a nurse, a social worker, a rehabilitation therapist, a home health worker, and others. They coordinate the care for the medical and social needs of the older person.
"With PACE, older Americans receive better care. They get to stay in their own homes. And the coordination results in savings for taxpayers," Grassley said.
It also contains Grassley's Rural Health Improvement Act of 1997 to allow "critical access" hospitals with fewer than 15 beds to apply for waivers from certain Medicare regulations designed for larger, full-service hospitals. Grassley said the added flexibility will help keep open the smaller hospitals which often are the only source of emergency care within 30 miles.
The budget included Grassley's legislation to increase the availability of quality health care in America by requiring Medicare to reimburse nurse practitioners and clinical nurse specialists for services they are licensed to perform. The Primary Care Health Practitioner Incentive Act of 1997 will establish direct reimbursement in all settings at 85 percent of the physician reimbursement schedule. Under current law, only a supervising physician may be reimbursed. Grassley said current law limits the ability of nurses to serve in rural areas.
Grassley also won approval for his Physician Assistant Incentive Act of 1997 to provide the same new reimbursement protection to physician assistants under Medicare. "By allowing these qualified health care professionals to operate independently, they may be able to establish a practice in a small town otherwise unable to support a full-time physician," Grassley said.
Finally, the budget adopted by the Senate today contains Grassley's legislation to protect access to acute care for rural Americans. The Rural Health Care Protection Act of 1997 will help Sole Community Hospitals remain viable. It also enhances Medicare payments to Rural Referral Centers which provide sophisticated care to patients referred from community hospitals within their regions.
In addition, Grassley said his estate tax reform will fix a problem with cash rents for special use valuation by allowing family members to cash rent real estate that is subject to a special use valuation agreement to a member of the family without triggering estate tax recapture.
Finally, the Grassley-sponsored estate tax reform will establish that two percent interest will be payable on estate tax attributable to the first $1 million in taxable value of closely-held businesses. And that 45 percent of the regular interest rate will apply to the estate tax attributable to closely-held businesses in excess of $1 million. The bill provides that interest on installment payments will no longer be deductible. And it allows judicial review for Internal Revenue Service (IRS) determinations regarding installment payment of estate tax.