SENATOR HUTCHISON DISCUSSES THE SMALL BUSINESS TAX RELIEF ACT

The purpose of the SCHIP program is to provide health insurance benefits to children in families who make too much to qualify for Medicaid but not enough to afford private insurance. We define that criteria as families up to 200 percent above the Federal poverty line. The current Federal poverty line for a family of four is $20,650. The Federal poverty line for Hawaii and Alaska is a little higher. Two hundred percent, then, would be $41,300.

My State of Texas maintains its SCHIP program consistent with the original purpose and therefore allows a family of four making $41,300 to qualify for SCHIP coverage. When my constituents see the bill before us allowing families of four making up to 300 percent of the Federal poverty line, which is $61,950, to qualify for Government-supported health care, many believe this is going too far. They certainly take issue with families making up to 400 percent of the poverty line, which would be $82,600, receiving Government-funded health insurance.

I have heard the supporters say that allowing coverage above 200 percent of the Federal poverty line argue that the cost of living in certain areas necessitates higher Federal poverty level coverage. One only has to utilize the various cost-of-living calculators on the Internet such as those found on bankrate.com or CNN/Money to see that a salary in one area of the country can be worth a very different amount than in another. The cost-of-living calculators adjust income by comparing the cost of housing, utilities, and transportation, all of which have a significant impact on the actual need of the family.

For example, in this chart, you see that the cost of living in Austin, TX, would be $40,000, whereas after you add housing, utilities, and transportation, if you compare that to the cost in Washington, DC, it would be $58,697, or rather the salaries would be commensurate after you add the cost-of-living indicators in it.

The bill before us does not make a direct connection between the cost-of-living standards and approvals of SCHIP plans beyond the 200 percent Federal poverty line restrictions. It doesn't seem right to arbitrarily allow coverage of families beyond 200 percent of the Federal line if there is no relationship to the cost of living. If $41,300 of family income in one State is equal to a higher amount in another due to a cost of living that exceeds the national average, my proposal would accommodate that. Why don't we say in this legislation that similarly situated families will be treated similarly. That is what my amendment would do.

Under my amendment, the Secretary of Health and Human Services will be required to factor in the cost of living in States that are seeking to cover families above 200 percent of the poverty line. Utilizing the most recent index data from the Council for Community and Economic Research, the Bureau of Labor Statistics and the Bureau of Economic Analysis, the Secretary shall adjust the Federal poverty line throughout specific areas in those States that reflect the actual cost of living in those specific areas. The Secretary could then approve families up to twice the new adjusted Federal poverty line, accounting for a higher cost of living in that area.

The Secretary would break down the analysis by county or metropolitan statistical area to ensure that States with high-cost areas in some parts of the State and low-cost areas in other parts of the State would not receive the same amount. This does what I think everybody has said we need to do, and that is adjust if there is a cost-of-living increase, but not lump it State by State.

In my State of Texas, there will be metropolitan areas with a higher cost of living. So if my State wanted to go above the 200 percent, the Secretary could factor in where there needed to be an adjustment. If it were over the 200 percent in a metropolitan area such as Dallas, it might be a different calculation than if it is in a rural area, say Lubbock. This seems to me to equalize the unfairness of a whole State getting the higher rate through a waiver which the bill before us is trying to mitigate by putting a limitation on the percent above the poverty line that a State may go, but why not do it by SMSA--the Statistical Metropolitan Area--or by county, where you can get the adjustment that is right and fair.

My amendment is very simple. The 200 percent of the poverty line, when adjusted for the cost of living in a specific area, could equal $45,000, it could equal $50,000, or it could be right at the poverty line. If you needed to go above it, the Secretary would be able to say in New York City, for instance, there should be an adjustment, but in upstate New York, perhaps not.

So this is the amendment. I think this brings reasonableness, rationality, and equity to approvals beyond the nonadjusted Federal poverty limits. If you do not go above the 200 percent which is in the law, you would never have to make these adjustments. There are certainly metropolitan areas that have a legitimate claim to a higher cost of living, but it does not necessarily mean the whole State should be given that kind of adjustment, and it would be more reasonable for the taxpayers throughout America to know that the people were getting the adjustment if they needed it, but not if they didn't.

Thank you, Mr. President. I yield the floor.
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