Statements on Introduced Bills and Joint Resolutions S. 565

S. 565. A bill to improve homeland security, prevent tax increases, support education and health care, and
strengthen the economy; to the Committee on Appropriations.

Mr. EDWARDS. Mr. President, I rise today to introduce the Homeland Protection and Tax Hike Prevention Act of 2003.

As I speak, State governments face a budget gap of $80 billion in 2004, according to the National Governors Association. My own State of North Carolina must close a $2 billion deficit this year, the third year in a row that we have faced a deficit of $1 billion or more. There is an additional $30 billion deficit in 2003 that, for most States, must be closed before the fiscal year ends in June. Cities and towns face a similar budget pinch. The likely result in many States will be steep tax increases and budget cuts.

Because most States have seen two or three lean years in a row, the easiest cuts and sources of revenue have already been tapped. States already closed nearly $50 billion in deficits for 2003. According to Standard and Poor's, "With rainy day funds having been depleted rapidly over the past three years, few options remain other than tough cuts or revenue increases."

The State and local budget crisis is a serious threat to our economy. State spending cuts and tax increases equaling $100 billion would directly lower GDP growth by one percentage point, according to the Center on Budget and Policy Priorities. According to the Center, "The only way this blow to the economy can be mitigated is through federal fiscal relief for the states."

Millions of Americans across the Nation will be directly affected by State tax increases and budget cuts. For example, Kansas is considering new taxes on hair stylists, theaters, and doctors. Missouri is now taxing pharmacies. In fact, policymakers in 15 States are already calling for tax increases of approximately $14 billion in 2004.

New York budget proposals would raise class sizes and cut 43,000 early education slots in New York City. Florida may take away medical coverage for 26,000 low-income people. In California, hundreds of nursing homes are in danger of bankruptcy, according to the Washington Post. San Diego may close fire stations.

Portland, OR, will likely trim its school year by 24 days. Oregon State police are laying off 129 troopers and abandoning 24-hour patrols. The Multnomah county jail will release as many as 500 inmates early. Medical benefits will be eliminated for 8,000 elderly and disabled people.

This is wrong. It's wrong for the people being hurt. And it is wrong for our economy. That's why I am proposing the Homeland Protection and Tax Hike Prevention Act of 2003. This bill would enacts a State relief plan I first described last November. It gives States and cities a total of $50 billion, allowing them to avoid raising taxes and protect critical priorities in public safety, education, and health care.

First, my legislation would provide $10 billion to states and major cities to strengthen homeland security. We have a whole range of homeland security priorities that we ought to be meeting but we haven't. Although our domestic readiness begins with first responders, they are not getting the training and equipment they need to respond to an attack with speed, skill, and strength. Our public health system isn't fully prepared to respond to biological attacks. We need to modernize an emergency warning system that is terribly out of date so we can reach Americans at any time, day or night.

Our infrastructure is exposed. There are 500 large skyscrapers, 250 major arenas and stadiums, and countless train, subway, and automobile bridges and tunnels. Many of these facilities have vulnerable ventilation systems, poor emergency exits, and inadequate fire retardants and blast-resistant materials. Security at nuclear and chemical plants and over shipments is still too lax. At 123 chemical plants, a toxic chemical release would endanger a million people or more.

We need to meet all these priorities, and we can ought to meet them through a partnership between Washington, states, and local communities. This bill goes a long way toward doing that by providing $10 billion for homeland security.

Next, today's bill would provide States $10 billion through higher Medicaid reimbursements. Higher Medicaid reimbursements can dramatically help State budgets. It can also address serious inequities in the way Medicaid funds are distributed today. The legislation is based on Senator Rockefeller's excellent proposal. It maintains last year's Medicaid matching rate where rates are declining and provides an additional modest, temporary increase in the matching rate. This short-lived relief will help states balance their budgets and protect children and seniors who rely on Medicaid.

Last but not least, my bill will give States and local governments $30 billion in general relief. In return for this aid, State and local governments must agree not to cut K-12 education funding or raise college tuition faster than inflation for low- and middle-income families.

Across the Nation, States and cities are struggling with more needs and less revenue. Washington is not doing its part to help. Instead, we have created new demands through the No Child Left Behind education reform law and the Federal special education laws, without delivering the resources needed to meet those demands. We ought to help States and localities meet those demands, and this bill will do that.

The Homeland Protection and Tax Hike Protection Act will strengthen our homeland security and prevent states and cities from raising taxes and cutting schools and health care. I hope my colleagues will join me in supporting it.

I ask unanimous consent that the text of the bill be printed in the RECORD.