October 25,2005

Grassley Describes Chairman’s Mark of Spending Reconciliation Bill

Statement of Senator Chuck Grassley
Senate Finance Committee Markup
To Achieve the Committee’s Reconciliation Instructions to Reduce the Growth of Outlays as
Contained in H. Con. Res. 95
Tuesday, October 25, 2005

I call the committee to order. Today we meet to consider the Senate Finance Committee’stitle of the Deficit Reduction Omnibus Reconciliation Act of 2005. This mark captures billions ofdollars in savings and additional revenues for the states through reformed pharmacy policies andimproved drug rebate practices. These savings do not affect any beneficiary or service underMedicaid. In fact, the chairman’s mark increases and preserves coverage under Medicare andMedicaid. It would provide improved access to health care for over 500,000 disabled children andit would save states from having to cut back or eliminate coverage for over 697,000 low incomebeneficiaries currently enrolled in the SCHIP program. The following illustrates the dramatic savingswe achieve -- if states used their savings under this mark to provide for both state costs and thefederal match, they could cover a total of 610,000 additional children for the next five years underMedicaid. I had hoped to be joined by my friend and partner on the committee, Senator Baucus. Ibelieve that the Finance Committee functions best when Democrats and Republicans work togetherand craft policy based on compromise and mutual agreement. I began this process with theanticipation that Senator Baucus and I could agree on a proposal that improves and strengthens theMedicaid program. I am disappointed that extenuating circumstance prevented Senator Baucus fromcontinuing our work together on this legislation.

I understand that a number of members are very concerned that the Congress has not actedon legislation vital to help the thousands of families who have had their lives devastated byHurricane Katrina. I share their strong desire to move Hurricane Katrina relief legislation as soonas possible and I have been working very hard to clear the way for Senate consideration of theHurricane Katrina relief. I draw my colleague’s attention to the Hurricane Katrina Medicaidprovisions in the chairman’s mark. I want to empha that this is a down-payment on the help weshould provide to the states of Mississippi, Louisiana and Alabama and the other states affected bythis terrible disaster. I intend to continue working so that we can enact legislation that would directadditional relief to these states. I would hope that Congress would act on the Emergency Health CareRelief Act separately from this reconciliation process. If that occurs, then provisions related toHurricane Katrina that are included in the chairman’s mark would no longer need to be included.

Again, I regret that the Senate’s inaction on Hurricane Katrina relief is a principal reason whySenator Baucus is unable to support moving forward with a budget reconciliation package at thistime. However, I do note that a number of provisions in this legislation are bipartisan proposals thatSenator Baucus and I agree on. In particular, he and I worked together to develop the Medicare ValuePurchasing Act, which is included in this bill. And we worked together to address the moratoriumon specialty hospitals which is also included. Regardless of the fact that Senator Baucus is not ableto support the mark before the committee today, I appreciate his ongoing comity and good will. Isincerely appreciate the fact that even when we disagree, Senator Baucus supports the effort to keepthe process going.

The mark before the committee represents nearly a year’s worth of work on the part ofmyself, members of the committee and our staffs. It is a carefully crafted compromise. Because itis a compromise, not every member on the committee got everything he or she may have wanted.Now, I want to point out that the chairman’s mark makes a number of improvements over currentlaw. It achieves significant budget savings and makes real progress in getting a handle on the federaldeficit which threatens our economic security. It reduces wasteful and unnecessary spending anddirects these savings where they are needed the most. Because we are able to achieve gross savings,above the net needed to meet our reconciliation instructions, we were able to direct funding toimprove access to health care to vulnerable populations. I think it bears repeating that this markwould ensure the continuity of health coverage for over 697,000 low income children by providingfunding to states that face shortfalls in the State Children’s Health Insurance Program. Additionallythe mark includes several provisions that would expand outreach and enrollment activities, to geteligible children covered through SCHIP or Medicaid.

The mark would expand Medicaid benefits for approximately 500,000 children through theFamily Opportunity Act, so that parents of severely disabled children can earn above poverty levelwages and still maintain vital services for their children. I would note that the Family OpportunityAct has broad bipartisan support and is cosponsored by 13 members of the Senate FinanceCommittee. This has been a priority of mine for several years and I am very optimistic that we willsee enactment of the FOA by year’s end. Additionally, we include funding for the “Money Followsthe Person” rebalancing demonstration program which would allow individuals currently ininstitutions to transition to a home and community based setting.

The chairman’s mark also provides new options for private coverage of long term carethrough long-term care partnerships as well as providing improved access to health care for seniorsand individuals with disabilities in Medicare. It helps protect rural beneficiaries of Medicare andpreserves access to community hospital care by ending unfair competition from physician-ownedlimited service hospitals. These important program improvements are possible because of the savingsthat are achieved through the other important provisions in this package. The chairman’s markincludes provisions that would help state Medicaid programs obtain millions in payments owed bythird party payers. It makes a number of significant reforms to the pharmacy payment system, closedrug rebate loop holes and cracks down on Medicaid fraud and abuse.

This is responsible policy thatis long over-due. Finally, I would like to thank all the members of the Finance Committee and theirstaffs for their hard work on these important issues. I am impressed by the degree of expertise andinsight of my colleagues on this committee. We may disagree on specific provisions. However, Iam convinced, that no matter the differences in our approach, we share a common goal: and that isto improve the lives and well being of our constituents and our nation as a whole. I look forward toa lively debate on these issues that will continue over the coming weeks.