Statements and Speeches

Open Executive Session on "The American Recovery and Reinvestment Act"

Opening Statement - Senate Finance Committee

Jan 27 2009

Today, we face very tough and unparalleled challenges — a collapsing housing bubble that has triggered an economic downturn, hemorrhaging capital markets that have reduced access to credit, a growing loss of confidence in our banking system that has undermined our nation’s financial foundations, budget and trade deficits that are spiraling out of control and threaten future economic growth, an uneasy dependence on oil from hostile governments that threatens both our security and the future of our planet, and health care that costs too much but covers too few.

And we face these, and many other, challenges all at the same time — which is, to some degree, unprecedented.

Yet, however daunting these hardships may seem, I’m pleased to be working with my colleagues on this Committee in our efforts to help fix them. I believe the work done on this legislation by the Chairman, senators, and staff on this Committee goes a long way toward tackling some of our key economic problems, and I’m looking forward to supporting this bill.

I believe that how we address these grave problems may well affect generations to come. We must be smart about it, and the legislation we’re considering today reflects that.

To begin with, we’re all aware that remaining fossil-fuel dependent will not move this country forward on the right path.  We need a new paradigm. Our nation must move away from fossil fuels and towards domestically produced clean energy, while conserving far more energy than we do today.  I applaud our Chairman for putting us on the right path.

This legislation extends production tax credits for wind, biofuels and other renewable sources of energy – crucial for Delaware renewable projects like Bluewater Wind to be competitive and get off the ground.

The bill provides tax credit bonds to help finance state and local government initiatives designed to reduce greenhouse emissions – like initiatives happening in Delaware.

And I applaud the Chairman for including manufacturing tax credits for renewable energy technology production.   In my opinion, it would be a tragedy if we were to provide all these incentives for companies to produce wind, solar, and plug-in electric vehicles, and then have to rely solely on foreign manufacturers to make them.

Creating a strong, domestic clean energy industry will help reduce our growing reliance on foreign oil and fossil fuels while unchaining our economy from the whims of hostile governments.

In fact, if we’re smart about it, we can end up strengthening our nation’s economy, create hundreds of thousands of new “green” jobs, and create products and technology that we can export around the world.

However, the effectiveness of this legislation is not limited solely to alternative energy and “green” jobs. This bill addresses many other key challenges as well.

I know that, like my state of Delaware, many of your states also are projecting budget deficits of extraordinary numbers.   For this fiscal year, Delaware projects a $152 million budget gap; and for next fiscal year, we are bracing ourselves for a $600 million budget shortfall.

As a former governor, I know what it means to balance a state budget and the hard decisions that have to be made in order to do so.  Many of our states, in fact over 40 of our states, find themselves in similar scenarios.

As our unemployment continues to rise and while we ride out this economic crisis, Delaware and, I suspect, many states represented at this markup will begin to see their Medicaid enrollments increase in kind. In fact, we already have seen it. Without this much needed FMAP assistance—many Americans may find themselves in a situation worse than the one they are currently facing.

As part of the Chairman’s Mark, we are providing a lot of money to states in the form of a temporary increased FMAP—$86 billion—but this is funding that states desperately need to continue providing the necessary health services to low-income Americans in our states.

Like all of you, I am hearing stories from folks back in my state about the strains this current economic situation is placing on our Medicaid and other low-income programs.  Medicaid represents 18% of Delaware’s state budget and next year, the Medicaid deficit alone is $118 million—which means Delaware’s Medicaid office must find 10-15% of savings within its program.

Since December 2007, Delaware’s Medicaid program has been growing at a steady rate of 4% and as people lose their COBRA and unemployment benefits run out—Delaware and many other states anticipate a significant increase in their Medicaid enrollments.

Because Medicaid enrollments sometimes lag behind job losses by several months, it is likely that our Medicaid programs have not seen the true increase in their population.  Just yesterday, our Medicaid program shared with my office that they are receiving an increased number of calls from Delawareans who want to apply for Medicaid.

It would be easy to place the blame on states for this economic situation, but I believe the economic crisis we are facing is a national one.  And in an economic crisis that is national in scope, we must provide (if only in part)—solutions at the federal level.  I believe that FMAP assistance to states, partially based on a state’s economic situation, is the right answer to ensure that states can continue to provide health services to our most vulnerable citizens.

In addition, this assistance will allow states like mine to avoid or to reduce the need to raise taxes, a step that most of us prefer to avoid in the midst of the economic downturn.

Also on the health care front, I’m pleased to see that, as part of this stimulus package, we are doing our part to advance health information technology in our health care system.  We all know that health IT, if properly implemented, will cut down on medical errors and duplicative tests, improve the quality of health care, and reduce overall health costs. In short, it will save lives and some money while making health companies more productive.

The Office of the National Coordinator for Health Information Technology will play a critical role in implementing a comprehensive health information infrastructure that provides proper standards and an interoperable system. With President Obama’s leadership, I’m optimistic that our health care system will soon be able to utilize all the benefits that come from an interoperable health information infrastructure.

However, health IT cannot be effective without a workforce in place that can manage the technology, as well as properly trained providers who know how to use it.  Currently, we have workforce shortages in most areas within health IT — from the health information managers that move the information through the system to health IT technicians.

I filed an amendment to this bill that would require the Office of the National Coordination for Health Information Technology to prepare a report that addresses future health IT workforce needs in a health system that uses a comprehensive health information infrastructure. Although this amendment is not germane to the Finance Committee markup today, I hope to work with the Chair and the Managers of the stimulus package when this bill comes to the Floor to incorporate this much-needed language.

Although interoperability, standards, and privacy are all key factors in advancing health IT, in order to see the true benefits of a widely used health IT system — we must have a workforce that knows how to move the information through the system, and we need health care providers who know how to best maximize health information technologies.

In addition to addressing our nation’s health care needs, I think it’s critical to highlight just how much the Middle Class stands to benefit from this tax legislation. For example, about 95 percent of families will receive a $1,000 refundable tax credit. The bill also expands on the tuition tax credit to help families who are finding it harder to send their children to college. And the bill encourages families who are looking to buy their first home by expanding on a tax credit that Congress first passed last yearto ensure its broader use.

Altogether, I believe that these and other tax incentives in this legislation will address many of these concerns and, most importantly, help America’s Middle Class families, many of whom are feeling increasingly anxious about worsening economic conditions.

Finally, along those same lines, I am delighted to see Chairman Baucus and Senator Grassley working together to include an expanded Trade Adjustment Assistance provision in this bill. It is an extremely important safety net for those displaced by trade. But thinking longer term, it is the first step to rebuilding the bipartisan coalitions we need to continue to break down trade barriers for American products.

In closing, I want to emphasize one more thing. I recognize how important this fiscal stimulus package is. It is critical that the package is large enough to stimulate consumer and business demand and help spur an economic recovery. That’s why it’s important that we pass the legislation before us today.

However, it is also important to emphasize that, in the long run — after this economic crisis passes — we have to return to living within our means. In the long run, fiscal discipline is crucial to economic growth, critical to our national competitiveness, and vital to the prosperity of future generations.

Yet, in the coming decades, our fiscal policies are jeopardizing the prosperity of our children, and our children’s children. Given the growth in health care costs, combined with the retirement of the Baby Boom generation, the challenges to our nation’s fiscal position will only become more daunting – and they will become tougher to solve as each year passes.

That is why, ultimately, these issues must be addressed sooner rather than later. I look forward to working with the Chairman and my colleagues in confronting those challenges, too, as we move forward in the months and years to come.