[Title I] Broadband

This title throws nearly $3 billion into the air and hopes the right people catch it when it falls out of the sky more like manna from heaven than money taken away from working families. If the point of this exercise was to meet the President’s call for bipartisan ideas that stimulate broadband deployment and the economy, we do not believe that the inclusion of controversial provisions on open access, minimum speeds, and build-out requirements meets such goals. These provisions are not bipartisan, and they harm rather than advance the stated goal. “Open access” is not even defined in the legislation. The speed requirements are unrealistic at best, and at worst they are neither competitively nor technologically neutral. Possibly worst of all, these conditions combine to discourage companies from participating in the stimulus plan.

This title has its priorities upside down. Why else would it send 75 percent of the grants to “underserved areas” and give totally “unserved areas” the leftovers. Most people know what some service is, and what no service is, and they know the difference. This bill either doesn’t know the difference, or gets it exactly backwards. In fact, the fair case can be made that all the money should go to unserved areas. Those are the places that need the most help, since there is apparently no market-based business case to deploy there yet. At least in underserved areas, a market appears to be developing. Moreover, sending money to underserved areas simply subsidizes one set of providers as they compete against others. Government’s role is not to put fingers on the scale. The Majority rejected an amendment offered by Mr. Blunt that would have addressed this disparity on a party line vote.

Lastly, this title cedes far too much discretion over a $3 billion program to unelected officials at the Federal Communications Commission (FCC). Not only does the public not know who they are, Congress doesn’t know who they are. At the moment, only three of the five seats on the Commission are filled, and two of the sitting members must leave if they are not renominated and reconfirmed in short order. Yet the bill leaves it to the FCC to define what “unserved” and “underserved” areas are. It is irresponsible for Congress to allocate $3 billion in this fashion.

Elsewhere in the stimulus package Congress is apparently considering allocating $650 million to pay for the disaster that delaying the digital television transition will cause. Delaying the transition is not necessary, and will cause more harm than good by confusing consumers and jeopardizing spectrum earmarked for public safety and wireless broadband services. It will also cost government and industry millions of more dollars to change five years worth of previous planning. Ensuring that the DTV transition goes forward on February 17, 2009, is perhaps the nation’s quickest, most realistic chance of creating a broadband stimulus and creating jobs. To top it off, legislation delaying the DTV transition has not even passed, so we may be allocating $650 million with nothing to spend it on.

[Title II] Energy Provisions

The most egregious provision in the energy title is one that attempts to promulgate a policy to preserve utility profits at the expense of energy-saving consumers. In order for a state to receive energy efficiency grants, a governor would have to notify the Secretary of Energy that his state is trying to institute a system in which utilities’ fixed costs are covered by consumers, independent of energy usage. Under this concept, consumers who follow our persistent advice to consume less energy will see their bills either stay the same or actually rise. Families who buy appliances rated high for energy stinginess will be punished for their good intentions and expensive investments. We believe that consumers should be rewarded when they save energy, not penalized so that electric utility companies can be supported in the luxe style to which they have become accustomed. Mr. Barton proposed an amendment to remedy this injustice; it was rejected on a party-line vote by the Majority.

The energy title fails to address important sources of energy that are essential to stimulating our economy. This title — which authorizes $22.1 billion in spending for renewable energy, transmission projects, and increased energy efficiency — completely neglects almost 70 percent of our country’s electricity supply. Mr. Upton proposed an amendment designed to stimulate zero-emissions energy which did not pass. Mr. Shimkus’s amendment to add carbon capture and sequestration for coal-fired generation to the list of energy project categories to the proposed temporary program for rapid deployment of energy projects also was rejected. Republican Members’ position is that a true stimulus should stimulate all American energy, a suggestion that the Majority rebuffed as too wide-ranging for the narrow focus of the $22.1 billion in stimulus dollars. The Majority totally failed to address energy from America’s most abundant source — coal — and its cleanest — nuclear. The Majority’s energy mark-up resulted in a package that overstimulates a small area of our economy and neglects the energy sources that provide the most jobs right now, that ensure energy security, and that will provide clean energy for years to come.

Smart-grid technology is extremely promising. It holds the possibility of increasing efficiency throughout the electricity system and giving consumers more control over their own electricity use. However, language was added in Chairman Waxman’s substitute which would limit the grants only to recipients using open internet-based protocols and standards, when available. This language, if passed, would result in Congress picking technology winners and losers, without any hearings or discussions. Smart-grid technology is still developing, and there is more than one standard being tested. Forget about paper versus plastic or VHS versus Betamax—the ramifications of determining the industry standards and protocols for deployment of smart grid technology are monumental in comparison. Given the importance of this issue, the one thing that is clear is that smart-grid standards and protocols should be carefully considered and not added as a last-minute afterthought to the Chairman’s substitute with absolutely no discussion or consideration.

The Majority is equally misguided in their position that stimulating the economy should involve micro-managing state and local building codes. The majority proposes $8.4 billion in energy efficiency grants and loans. Rather than funding states and localities to enforce the currently existing energy efficiency codes, the Majority insists on micro-managing states and localities by mandating adoption of the most recently published version of the International Energy Conservation Code or its equivalent for residential buildings, and the ANSI/ASHRAE/IESNA Standard 90.1-2007 or equivalent for commercial buildings. Mr. Stearns proposed an amendment that would provide grant funding to empower states and localities to enforce the codes that they have chosen in the best interests of their states. The choices for cost-effective energy efficiency technology should be determined by those closest to the building site, not a wide-sweeping federal code. Nevertheless, the Majority insists that states should be forced to conform to a model code to receive the grants.

The mark-up highlighted the need for changes to the Energy Independence and Security Act of 2007 (“EISA”), as evidenced by the rejection of all Minority-offered amendments, including:  Mr. Walden’s amendment to correct the definition of renewable biomass so advanced biofuels derived from woody material gathered from federal lands and other private lands can be counted towards the renewable fuels standard; Mr. Gingrey’s proposed amendment to strike Section 526 of EISA, which restricts procurement and acquisition of alternative fuels; and Mr. Shadegg’s proposed amendment to remove the Davis-Bacon provisions from Section 545 of EISA. While the Majority members agreed with the need for an all-encompassing revision to EISA, they stopped short of actually supporting any of the Minority amendments to make improvements to EISA. We hope the Majority lives up to its commitments to revisit EISA and look forward to working with them, when that time comes.

[Title III] Health Insurance for the Unemployed

This title permanently extends COBRA coverage to any person 55 or older who loses their job or to any person that has worked for a company for at least 10 years. This will lead to greater cost for the employers that currently provide health care coverage to their employees and a reduction in employer sponsored health care.

In addition to the change in length to COBRA eligibility, this title establishes a new government subsidy of 65 percent of COBRA premium costs for the first 12 months of coverage. Unfortunately, the bill lacks the thoughtful approach of legislation that results from regular order. The new program for COBRA subsidies does not contain an income test or an asset test. In tough economic times it is unconscionable that we would ask the average American to have their tax dollars transferred to the wealthiest in this country. An amendment was rejected that would have capped eligibility for the government subsidy at $100,000 in annual income and a total of $1 million in assets on a party line vote.

We are pleased that the Majority accepted an amendment that would have capped eligibility for the new government subsidy at $1 million in annual income. We believe this level is still too high, but as previously mentioned, efforts to impose a lower income threshold were rejected.

The legislation expands the Medicaid program to new groups of individuals. The “temporary” Medicaid option is funded 100 percent by the federal government and has no regard to a person’s income or asset levels. An amendment to limit the program to individuals with incomes below $1 million in the previous year was rejected.

Medicaid has historically been administered by the states and funded jointly by the states and the federal government. Although there are significant reports of persistent fraud and abuse in the Medicaid program, as reiterated in a recently released study by the Government Accountability Office (GAO), states had the incentive to protect their investments in the program, and they succeeded in getting more money with less reform. The new Medicaid expansion would provide 100 percent of the financing for the program not just for medical services but also for administrative costs. This is a dangerous precedent that will undermine the already unsustainable Medicaid program. Unless there is significant state investment in the program, there will be little or no incentive for the state to govern the program efficiently and ensure that federal taxpayer dollars are being spent responsibly.

An amendment also was rejected that would have provided a premium subsidy for individuals in the new Medicaid expansion so they could enroll in a health plan of their choice. Individuals in Medicaid should have the same options to receive better heath care as those receiving the new COBRA subsidy. The Committee has repeatedly heard of instances where Medicaid fails patients. Many doctors will not participate in the program. Patients must linger on waiting lists or drive miles to find a doctor who takes Medicaid patients.

[Title IV] Health Information Technology

We support the adoption of health information technology and believe its increased adoption will lead to reduced medical errors and improved patient outcomes. However rushed adoption of non-interoperable health information technology could actually impede its deployment.

Although the legislation purports to be an economic stimulus package, the bonus payments for using electronic health records do not go out until 2011 with penalties for not using electronic health records going into effect in 2016. How these are supposed to stimulate a cure for the present recession is a medical mystery. Given that payment incentives are not distributed until 2011, the legislation should have been considered through regular order to ensure that health information technology is disseminated efficiently and effectively.

[Title V] Medicaid Provisions

In what may be considered a fitting coincidence, on the same day that legislation designed to increase the federal share of the costs of the Medicaid program by $98.5 billion over the next two years was favorably reported by the Energy and Commerce Committee, the Government Accountability Office released a report stating that the Medicaid program remained on GAO’s list of “high-risk” programs because of “growing concerns about the quality of fiscal oversight, which is necessary to prevent inappropriate program spending.”  Unfortunately, GAO’s concern about the future stability of the Medicaid program is directly contrasted by the provisions in Title V of the American Recovery and Reinvestment Act of 2009, which, other than expanding taxpayer coverage of family planning items and services, only serves to temporarily prop up an unsustainable, broken program.

When Senator Mark Warner (D-VA) was the governor of Virginia and the chairman of the National Governors Association, he correctly stated that the unsustainable growth of Medicaid spending has every state and the federal government “on the road to a meltdown.”  His solution was to update the severely outdated rules and regulations and allow state governments the flexibility to run their programs with increased levels of innovation, efficiency, and accountability. The Republican Members of the Committee on Energy and Commerce believe that Senator Warner was correct in both his assessment of the problem facing Medicaid as well as its solution. In contrast, the proposed solution put forward by the Majority ignores the impending meltdown of the Medicaid system and places a finger in the leaking dam with a proposal to temporarily shift more of the costs of the Medicaid program onto the federal government in exchange for a commitment from the states that they will not reduce their eligibility criteria below where they were on July 1, 2008. While, states retain the flexibility to cut payment rates to the rapidly decreasing number of health care providers that still participate in the Medicaid program and the flexibility to reduce the number of items and services that are covered in Medicaid, states accepting any of the temporarily increased reimbursement rates are prohibited from reforming their eligibility criteria, unless — of course — a state would like to expand its eligibility.

Proponents of this legislation like to claim that it is necessary because states cannot afford the expenses of their current Medicaid programs. However, simply dumping more federal dollars into an unsustainable status quo is not the answer. State officials must be held accountable for the performance of their programs, and states that continue to administer their programs in the same inefficient manner that created the current crisis should not be rewarded with additional federal funds.

The Republicans on the Energy and Commerce Committee are deeply concerned that this legislation will create a very troubling situation on January 1, 2011, when the temporary increases in reimbursement expire. Under the legislation reported out of the Committee, states will be prevented from making certain necessary reforms to their programs and will have additional federal dollars with which to expand their Medicaid enrollment to new populations. As a result, short-sighted state officials may take the bait and expand their Medicaid program while blissfully ignoring the fact that the billions of dollars worth of increased reimbursement rates will come to an abrupt halt on December 31, 2010. Clearly, if a state cannot afford its Medicaid program today, it is reasonable to assume that this same state will not be able to afford an even larger, more expensive Medicaid program on January 1, 2011. This is why the Republican approach of reforming the Medicaid program and demanding accountability from state officials is the better approach for the American taxpayers, health care providers, and the current and future generations of Medicaid beneficiaries.

The Minority was disappointed that an amendment offered by Dr. Gingrey requiring all states to verify the identity of all applicants for Medicaid coverage was defeated by the Majority. Given the tens of billions of dollars of state and federal Medicaid funds that are lost each year to criminally fraudulent claims and fraudulently enrolled beneficiaries, this amendment would have been an important provision to enable states to continue their current Medicaid program without making cuts to benefits or eligibility.

Joe Barton
Roy Blunt
Steve Buyer
George Radanovich
Joe Pitts
Mary Bono Mack
Greg Walden
Lee Terry
Mike Rogers
John Sullivan
Michael Burgess
Marsha Blackburn
Phil Gingrey
Steve Scalise