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The State Children's Health Insurance Program

Floor Speech

Location: Washington, DC

THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM -- (House of Representatives - October 17, 2007)


Mr. GARRETT of New Jersey. I thank the gentleman from Iowa for coming to the floor and speaking on SCHIP. I was on the floor earlier this evening, as you may know, with Dr. Gingrey. We were speaking about earmarks. After us, the other side of the aisle began their talk about SCHIP. I was hoping to interject when they were on the floor but that was not possible. So I'm glad you bring this issue up.

Let me touch on one point you are talking about. That is the cigarette tax. You made a generalized statement. Let me give you an actual number here. The SCHIP program, of course, is intended to benefit the low-income and the indigent children. The question is how is this being funded? You had correctly stated it is going to be funded by a cigarette tax. You generalized the statement that the cigarette tax generally falls disproportionately on the poor. And that actually is correct.

A study was done in 1990. It said that people who made under $10,000 per year paid almost twice as much in cigarette taxes as those who made $50,000 and above. So there is the irony. We are trying to provide a health care program for the poor. And on whose back is it going to be placed? It is going to be placed and paid for by those very same poor people who are paying a substantially higher cigarette tax.

The study goes on to say that there are other adverse impacts to raising the cigarette tax. One of them you wouldn't necessarily think of. But when you raise the taxes that high, much higher, a higher Federal cigarette tax, the study says, will lead to more violent crime. The foundation's chief economist has documented that higher cigarette taxes fuel black-market activity, including truck hijackings and other armed robberies. In 2003 he said, for example, 200 cases of cigarettes in a modest-sized transport truck would have a retail value in New York City of around $1 million and would be a tempting market for thieves. So these are the side issues you don't hear about when you hear the bumper sticker rhetoric from the other side.

The other thing that you don't hear from, and I will yield back at any moment if the gentleman has a point to make here I see with his signs or charts. Another interesting point is the need for the overall program. I don't want to get bogged down in numbers and you are better facilitated with the charts there. But let's take a look at where we have been over the last 20 years when we talk about children in need. In 1987, now look at 1997 and 2002. In 1987, child poverty rate in this country was 18.7 percent. The eligible children who were eligible for programs, at that time, 20.3 percent. So just about the same numbers who were eligible for some sort of a government program such as Medicaid were at the same approximate number who were in the child poverty rate. In 1996, you go ahead about 10 years, those numbers now are about 20 percent in the poverty level, 28 percent eligibility, that means we have now reached a point where more kids were eligible for government assistance than were actually classified as childhood poverty. Flash ahead now to 2002, the rate now of overall childhood poverty rate, 16.7 percent, eligibility though for government assistance and Medicaid and the like, government health insurance, 47.1 percent. We have gotten to the point where almost half of the kids in this country are now entitled to welfare payments.

You had on your other chart when I came in here a neat little acronym for what SCHIP was. We have to call it what it really is. H.R. 976, SCHIP expansion, Socialized Clinton-style Hillary-care for Illegals and Their Parents, SCHIP. Well, that's true. And another way of calling it is welfare. We have gotten to the point where almost half the kids in this country are now eligible for Hillary-care, welfare, whereas the poverty rate for these children has actually decreased during that period of time to around 16.7 percent.

We have gone in the right direction in this country as far as reducing the number of all kids who are in poverty, but we have vastly exceeded what the actual need is.

Mr. KING of Iowa. I thank the gentleman from New Jersey. While you are here, a question arises in my mind and perhaps you are more astute in the nuances of history, and neither of us were here during the nineties when the welfare to work, the welfare reform program was put into place. I pose this question. There is a part in my recollection I am not certain about, but it seems that one of the criticisms to welfare reform, getting people off of welfare and putting them on work, ``workfare'' we often called it, and there was significant success in some of the States. Wisconsin got a lot of publicity, I think, that launched Governor Tommy Thompson on a pretty successful path. Also, in my State we did a very good job and very successful working in conjunction with the policy established here out of Congress.

But it is my recollection that a component in the master plan to succeed in welfare reform was that if you took people off welfare and they couldn't afford health insurance for their children, they would be more likely to stay on welfare and less likely to work. So that was one of the components of the psychology in creating the SCHIP program in the first place, dialed in at 200 percent of poverty.

I would ask the gentleman from New Jersey if that is consistent with your recollection.

Mr. GARRETT of New Jersey. That is absolutely consistent with my recollection.

Another aspect of it was at the time that the master plan as you described it at that time was to be more, was to be broader than what eventually transpired, and that was to include the block grant type arrangement for Medicaid, as well. Had we done that, we would not be in this budgetary crisis that we find right now where Medicaid has continued to have gone up, and the States actually would have been in a better situation than they are right now. Just as with Medicare, just as with the welfare reform movement, when the States were issued a block grant and given the significant flexibility that they had with the set dollar amount, the States were able to use the ingenuity of their States to actually decrease the enrollment of their welfare recipients and at the same time actually since the dollar limit remained the same, the per capita number per recipient actually went up. So those individuals who had the most need, if you will, had the most difficulty climbing out of their condition and their plight that they were in, you had a larger dollar value that you are able to apply to their particular condition.

Had we done the same thing as this Republican Congress at the time intended to, but we were stopped, as you recall; President Clinton put up the roadblock to it. We could have done the exact same thing with Medicaid, done it in a flexible block grant arrangement to the 50 States. The Governors of those States would have no strings attached to it whatsoever. They could have decided who and how they were going to get into it. You could have had an SCHIP-type arrangement where you allowed them to go into privatized health insurance programs. The benefit there would of course be, just as a side issue, that you would not be squeezing out the private sector marketplace. You would be opening up and creating greater competition and you would not be having this dilemma that we are facing right now. That was all the possibilities we had back in 1996. We lost it at that time because of President Clinton and what he was trying to do.

Mr. KING of Iowa. Mr. Speaker, I thank the gentleman.

Mr. Speaker, I put this poster up. This shows the different levels in the maximum income levels for qualifications in Iowa income today, which I think is representative across the country. This is the number that I spoke about earlier. This is current law as it is applied in Iowa today, a family of four qualifying for the State Children's Health Insurance Program subsidy dollars making $51,625 a year. We also have significant number of kids that qualify, not just in Iowa, but across the country, that are not recruited, they are not signed up under this program.

Now, I am going to operate under the theory that if the family has sufficient income or if they have the health insurance that's provided through their employers, they may well not want to complicate their plan and they may be a lot happier taking care of their own health insurance premiums. I am happy if they are.

Mr. Speaker, it isn't my job to come here to this United States Congress and ask people to be more dependent upon the tax dollars that we are squeezing out of the working people in America. That is all the taxpayers in America have to contribute to this. So we want to take care of the poor people, take care of those at that threshold of Medicaid, but we chose that number to be at 200 percent, and because of waivers, we are at $51,625 for that family of four in Iowa.

This is what the Pelosi Congress passed; the first pass off the floor that went to the Senate, which set Iowa at $103,250 for a family of four. Who in the world thinks that that is poverty, a six-figure income for a family of four, that is a poverty level where you can't sustain your own income or you can't sustain your own responsibilities for health insurance. By the way, who's making that kind of money that doesn't have some kind of arrangements for health insurance?

Well, there is an answer to that, Mr. Speaker. In one of those posters, I think it's this handy poster behind here. Before I go to the next poster, I want to ask the gentleman from New Jersey, at this 400 percent of poverty here, the 300 percent, for 200 here, what kind of creativity does New Jersey have and what one might expect on a chart if one had this set-up for the New Jersey residents.

Mr. GARRETT of New Jersey. Well, New Jersey, as you may know, has not gone up to the 400. New York is, I think, the only State that as of current law, not the bill just approved by the House, under current law, New York has attempted to go up to 400 percent. New Jersey is at 350 percent, which puts us at around, for a family of four, $72,000. Now the median income is around $61,000 or $62,000 for the State of New Jersey, which means you're at the average.

Mr. Speaker, so what are we saying here? We are saying that even those who are above average in income are now going to eligible for socialized welfare payments. Once a month they will get a welfare payment. It won't be in the form of a check, like a normal welfare payment coming to you to cash. Instead, it will be delivered directly to the insurance company, or other method.

What that means is this. For every ten people that you wish to enroll under the plan under the Pelosi method, approximately six those people will already have insurance. So in that last chart you would say up in the $103,000 range. Every ten new children that you bring into the program, these six over here already had insurance. You're only adding these four children over here. But you're doing it at a tremendous cost. You're using taxpayers' dollars now to pay for those children who maybe their parents are making $103,000.

Wouldn't it be so much better if those tax dollars were going to try to find a way to make sure that these four kids had all the, not only insurance, but also the actual health care, which is a question that I think you were bringing up before, because at the end of the day that is really what we should be focused on, making sure those kids have health care. Because it does those four kid absolutely no good just to make sure that they have insurance if they can't find a doctor to treat them.

How many people do you know of, senior citizens who have Medicare and go out and try to find a doctor to accept their Medicare payments, and they find out there's no Medicare doctors receiving Medicare recipients. How many people do you know that are on Medicaid right now, which is an insurance policy, and try to go out and find a doctor who says they are still taking Medicaid patients, and they are not taking them.

Mr. Speaker, we have done nothing if we simply have insured four new children under this SCHIP program if it's set up in such a manner that there is nothing else to facilitate more doctors to be out there to actually get care. We have done nothing to improve the health care coverage, all we've done is a sound bite for the Democrats, saying we improved insurance coverage.

Mr. KING of Iowa. Mr. Speaker, I thank the gentleman.

Mr. Speaker, as you spoke, I put up this chart that tells us about what level of health insurance is there for kids. As you go up the chart here, and I will draw the line at 300 percent of poverty, 77 percent have health insurance; at 400 percent, 89 percent. Then actually up to 400 percent, 89 percent do. Once you reach the level that was passed off here by the majority in this Congress, there are only five percent of the kids that don't have health insurance.

So what were we trying to fix that covered 95 percent of those kids? What was it that had a greater value to this society than people being able to make their own decisions with their own money. I will argue again, this lays the cornerstone for socialized medicine and it pushes kids off of their own private health insurance.

The CBO has some numbers that shows for everyone that would be picked up and put on health insurance, there is another one that has their own health insurance that they will be leveraged off of it. A one-to-one ratio. In that number are 2 million kids that are currently insured by this current program, the bill that will come up again tomorrow, where we will sustain the President's veto. Should we fail to do that, there will be 2 million kids in America that will lose their own private health insurance because their decision will be made let the government pay for it instead.

I call that irresponsible. I call that poor policy. If you believe in socialized medicine, if you believe in a managed economy, if you believe in a managed society, if you believe in less freedom and more dependency, then make the argument, make the argument, Democrats. If that is your vision, stand up and say so. But instead they say no, it is not about socialized health care. This is about kids.

Well, I care about my kids. I care about their future, Mr. Speaker. I care about my grandchildren and their future. And when I hear my colleagues over on this side of the aisle talk about the legacy that we are shaping here on the floor of the United States Congress, they are thinking about the legacy that has been handed to us, down from God through the hands of our Founding Fathers, on to that document where they pledged their lives, their fortunes and their sacred honor, which is the Declaration, and on to the Constitution, this great legacy that has flowed to us, God's gift of freedom, is being diminished day by day on the floor of the United States Congress, trading off our freedom for dependency, trading off our freedom for, even today with the FISA debate, less security.

What is the vision here on the other side of the aisle? I want to hang onto those gifts that we have. I want my children to have more opportunities than I had, not less. I don't want to diminish those opportunities by taking away from them their freedoms, taking away their decisionmaking, making them so dependent that they lose their vitality, that they forget that they have to go out and work, earn, save and invest and plan for and manage their own future.

Even Jimmy Carter said back in about 1976 that people that work should live better than those who don't. Too bad he didn't follow through on that philosophy. But that was a memorable quote that I thought was a memorable one that he made when he was campaigning for President back in Iowa back then, that people that work hard and plan have to have some reward, and if you take their reward away, the hard-earned sweat from their brow, and you require them to pay the Alternative Minimum Tax, because you say you made too much money and the tax rates we made aren't good enough to get all the money we want out of you, so we will add this extra Alternative Minimum Tax on here, and 70,000 of those families have to have the health insurance for their children subsidized because you set up a policy that is closed and cross the loop from independents, from progressive tax, to socialism, then we are here to say, Mr. Speaker, that is wrong.

I take that stand and I draw that bright line. That is wrong. I want freedom. I want personal responsibility. I want to reward the people that make their own decisions. They need to have the freedom that comes with the dollars that they earn to the maximum extent possible.

I will be happy to yield to the gentleman from New Jersey.

Mr. GARRETT of New Jersey. Just one point on this issue of freedom and the opportunities that come from it and therefore the incentives that also lead to it.

We spoke just a moment ago with regard to the 1996 welfare reform package. Back when that was done, one thing that did impact the Medicaid program was a change to who was entitled to benefits. So in the 1996 Medicaid reform, they eliminated Medicaid benefits for noncitizen immigrants. Noncitizen immigrants. That means someone in the country legally, not illegal immigrants, but people in this country legally, so they are non-citizens and immigrants, they were eliminated from getting Medicaid coverage.

Now, the critics of the proposal you may recall at that time said wait, wait, wait. If we are going to take this class of people who are otherwise eligible economically income-wise out of the pool that are eligible for Medicaid, we know what is going to happen. Their health condition is going to deteriorate, and, as importantly, their coverage level is going to go down.

But you know what? For just the point you were saying, the increase in freedom, that did not occur. There was now a new incentive. Since they were not eligible to get Medicaid anymore, there was an incentive to do just what you say, to go out work, either get a job that had health insurance provided for it, or, if not, get a job that paid enough that they were able to buy insurance or do something to the health insurance.

So the result of that group being excluded from Medicaid coverage at that time, from 1996 forward, was an increase in insurance coverage for that class of individuals.

That is what we learned from expanding freedom, expanding opportunity, providing an incentive, as opposed to what is in the socialized Clinton-style health care for illegals and their parents SCHIP plan, is a disincentive and a phasing out and pushing out for the opportunities for individuals.

Mr. KING of Iowa. I thank the gentleman from New Jersey, and I take you north of the border. We started to hear in the news in the last week or so something that has been brought to our attention here in this Congress where we have some Interparliamentary exchange, and I have sat down with the Canadians perhaps 3 years ago.

They pressed the case that we need to do a better job of controlling our borders because we had people pouring into the United States, coming here illegally, and once they got established here, they realized there were welfare benefits to be had in Canada. And they were having thousands, at that time, about 3 years ago, they had about 50,000 illegal immigrants that they said had poured through the United States and into Canada and they were putting too much pressure on their welfare system.

So I asked the question in that meeting, what percentage of those that arrive sign up and qualify for welfare? Their answer was, Mr. Speaker, virtually 100 percent of them, because that is how the Canadian laws are set up as a magnet.

If you saw in the news this past week, there is a community there not too far north of the border into Canada that has started to raise an issue, and they said they are enclaves that are being created here with illegal immigrants that have been illegal in the United States that have gone on into Canada because the welfare benefits are better.

They interviewed some of them on the street where they laughed and smiled about how it was that their welfare check came on time, there weren't so many snags and snafus in the welfare system in Canada, and they were glad to be there despite of the winters.

That was the message I got, Mr. Speaker. And I think that study in sociology that the gentleman from New Jersey (Mr. Garrett) has laid out speaks to that, that people will follow a path, and if you grant them a safety net, that is fine. It fits the standards I think of the American people. But when you crank that safety net up, at some level the safety net becomes a hammock. Then they rest back in the hammock and they lose their desire to produce, there is not a reason any longer. So the merit that comes from having to produce, of having that responsibility, is part of what gives us a vitality in this country.

As I started this discussion out in the beginning, I talked briefly about the defeat of communism, the defeat of socialism, the collapse of the Soviet empire, because they found out that a managed economy and socialism didn't work. That when you let people earn, save, work, invest, and they decide when they make their purchases and they decide how they go about doing that, that creates opportunities in a free market system.

You simply cannot manage an economy without it. It manages itself under the free market system, and people have an incentive to go to work because there is a reward for that work. If you take that reward away and you do the great leveler and you make the argument like is being made in this Socialized Clinton-style Hillary-care for Illegals and their Parents, if you make the argument that you make too much money, we are going to take it. And, by the way, we are going to take all of that that comes down someplace in the middle, and then we are going to subsidize your expenses on up to that point, and in fact we are going to cross them to where we are going to tax you on the alternative minimum tax and provide health insurance for your kids, that is the definition of the nanny state. That is a definition of socialism, and that is a definition for a nation losing its vitality, its confidence, its ambition. And the sum total of the individual productivity in America under this plan, Mr. Speaker, goes down. American people will not work as hard. They will not be as prudent and as responsible under this program that they have brought off this floor in this Pelosi Congress, and that diminishes all of us.

We need to be about raising the average individual productivity of all of our people and the quality of our life and raising our own personal responsibility. It is not just economic, Mr. Speaker, it is cultural. It is the work ethic. We used to call it the Protestant work ethic until we figured out that the Catholics got with that program pretty good, too.

But we went to work and we raised our families. We understand that is our first responsibility, then our neighborhood and our community. Also our schools and our churches and our States and our country. God, then country, make this a better place than it was when you came. That is the charge that has been handed to us because we are such grateful beneficiaries of this American Dream that has been passed to us. And we squander it under this program.

We diminish all of us when we increase the dependency, especially when we can't make an honest argument, an argument that speaks to the issue, an argument that says over there, if they just stand up and say ``I am for socialized medicine,'' at least the Presidential candidates, the Democrats, have done that.

They haven't quite done that over there yet. They want to change the subject matter. They are for socialized medicine. We are for freedom. We are for the kids.

I yield to the gentleman.

Mr. GARRETT of New Jersey. Mr. Speaker, I should point out that the dependency and the loss of freedom is not only for the individual, it is for the State, too. What CHIP does is create an incentive for States to add more people onto the program since there is a 3 to 1 ratio as far as the dollars. The State spends $1, and they get basically a 3 to 1 ratio in dollars from the Federal Government.

That means that the State is no longer incentivized to do other creative things to actually improve the health of the kids in the State, just so they can turn around and say we are getting Federal dollars to put the kids on health insurance. So not only do we disincentivize or take away incentives from individuals, we take away incentives from the States to do the right things for themselves. We see it in New Jersey. I am sure you see it in your State.


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