President Clinton Warns Governors that Congress Risks Nation's Fiscal Discipline

July 10, 2000

Today, at the National Governors’ Association summer conference, the President will challenge the Congress to reject fiscally irresponsible tax cuts that would threaten investments in urgent health care priorities such as a voluntary and affordable Medicare prescription drug benefit. He will make the case that the Republican leadership’s tax strategy threatens Medicare reforms, insurance coverage expansions, and long-term care initiatives that represent sound economic and social policy. He will point out that, because of the reforms brought to the Medicaid and Medicare programs, and the surpluses they helped create, the nation can add a voluntary prescription drug benefit to Medicare and still spend substantially less on health care over the next decade than was projected when he first came into office.

The President will also highlight the progress states have made in extending affordable insurance for more than 2 million children. However, he will encourage the nation’s Governors to move aggressively take advantage of existing options to streamline eligibility and enrollment processes to enroll all those eligible for Medicaid and S-CHIP. To that end, the President will reiterate his opposition to Congressional proposals to reduce state funding for S-CHIP and state welfare programs, release a report promoting school-based outreach and announce that this month, the Department of Health and Human Services will issue guidance on approving S-CHIP 1115 demonstration waivers that expand coverage to uninsured children and their parents.

CONGRESS RISKS THE NATION’S FISCAL DISCIPLINE: TAX PLANS WOULD JEOPARDIZE CRITICAL INVESTMENTS IN HEALTH CARE. The Congress has adopted a strategy of passing tax cuts piece by piece. The tax cuts already passed by the House would spend over $550 billion of the surplus. If the Republican Congress continues on this path, they could pass tax cuts that would spend the entire on-budget surplus and more leaving no money for America’s priorities, including crucial investments in health care.

MORE EFFICIENT MEDICARE AND MEDICAID SPENDING HAS MADE A MAJOR CONTRIBUTION TO TODAY’S SURPLUS. The Clinton-Gore Administration has overseen the biggest economic turnaround in the nation’s history. The success in slowing health inflation has strengthened the economy, helped balance the budget and pay down the national debt, and extended the life of the Medicare Trust Fund, while saving hundreds of billions of dollars that should be used to help meet the nation’s health care challenges.

When the President took office, spending in Federal health programs was growing at over 12 percent per year. Because of strong program management, improved efficiency, reductions in fraud, and low health care inflation, federal health spending for 1993 through 2000 has been a total of a half a trillion dollars lower than projected. Similarly, reduced Medicare and Medicaid spending projections account for nearly one-third of the improvement in the projected federal budget outlook since 1993. Not only has this has helped to eliminate the deficit and buy down the national debt, it has extended the life of the Trust Fund by 25 years. He will stress that Medicare and Medicaid should continue to be prudently managed through competitive reforms.

TAKING MEDICARE OFF-BUDGET AND INVESTING IN HEALTH CARE IS SOUND ECONOMIC AND SOCIAL POLICY. Now that the Federal government is on a fiscally sound path, Medicaid and Medicare programs have become more efficient, and the life of the Medicare Trust Fund has been secured for a quarter century, the President will issue a prescription for maintaining fiscal discipline while investing in health care. He will:

PRAISE STATES WITH INNOVATIVE S-CHIP ENROLLMENT AND OUTREACH PRACTICES. The President will praise states for their progress in implementing the S-CHIP program, and note that the strong enrollment trends reported over the past year appear to be continuing into 2000 (although data from all states is not yet in). From the first quarter of FY 1999 to the first quarter of 2000, enrollment increased by more than 80 percent in 43 states. During that time period, 19 states reported that their enrollment had more than doubled, and 9 of those states reported that their program enrollment had tripled. The President will commend states that have eliminated burdensome eligibility requirements, shortened application forms, and streamlined the enrollment process.

In addition, the President will release a new report by the Departments of Health and Human Services, Education, and Agriculture that details recommendations and best practices for school-based outreach activities. This new report details strategies for motivating schools to adopt outreach as part of their mission and highlights promising state practices for identifying and enrolling eligible children through school systems.

CHALLENGE STATES TO SHOULDER THE RESPONSIBILITIES ASSOCIATED WITH THE IMPLEMENTATION OF WELFARE REFORM. While committing to protect S-CHIP and TANF funding from devastating cuts, the President will reiterate his concerns about families inappropriately losing their Medicaid when they leave welfare and enter the workforce. He will also call on the states to use TANF dollars responsibly and not as a means to reduce their own investment in welfare reform. Although states have cut the welfare rolls in half and millions of families have moved from welfare to work, more needs to be done to help those families remaining on welfare to move into the workforce and to help low-income working families succeed on the job. The President will also praise states that have responded to these challenges by identifying existing problems and redesigning their eligibility systems to correct them.

ANNOUNCE NEW S-CHIP WAIVER POLICY. The President will also announce that, later this month, the Department of Health and Human Services will release guidance on its new 1115 waiver policy for the State Children’s Health Insurance Program (S-CHIP). The Administration will approve waivers that demonstrate innovative approaches to covering uninsured children and, to the extent that states have succeeded in covering uninsured children, uninsured parents. States can access unused state allotments for this purpose. This flexibility will help meet the mutual goal of using state-based approaches to reducing the number of uninsured.



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