Jeff Bingaman United States Senator from New Mexico

Thank you for inviting me to speak here today.  I’d like to thank Speaker Lujan for his invitation.  And thank Governor Richardson and all members of this legislature for your hard work to serve the people of New Mexico.

I would like to talk about two issues that I believe will dominate the agenda of the 111^th Congress, health care and energy, and briefly describe the prospects for progress on each of these issues.

Let me first take a moment to discuss what this Congress has worked on so far.  The economy is foremost on all of our minds these days.  Millions of jobs have been lost nationwide and too many have been lost here in New Mexico.

In Washington we have enacted two major laws that will help families in New Mexico during these difficult economic times. 

The first bill is the expansion of SCHIP.  This bill dramatically increases the amount of federal health dollars New Mexico receives.  Our allocation will jump to $196 million this year, a 277 percent increase.  Across the nation, the SCHIP expansion allows an additional four million people to receive health care.

The other new law is, of course, the economic recovery legislation.  The law is expected to generate 22,000 jobs here in New Mexico and it will provide additional unemployment benefits for the 70,000 New Mexicans who have lost their jobs in this recession.  Over 690,000 families here will receive up to $800 from the Making Work Pay Tax cut, and 36,000 families will be eligible for a tax credit to make college more affordable. 

New Mexico will also receive:

• $252 million for highway funding, $27 million for public transit, and $50 million for water and wastewater projects,
• $259 million for local schools, colleges, and universities through the State Fiscal Stabilization Fund, and $5.7 million for Head Start,
• Over $62 million for weatherization assistance, and other state energy programs.
• $30 million for Southwest border law enforcement agencies to address drug-related criminal activity,
• And approximately $70 million for critical repair work on the levees in Dona Ana County.

In total, New Mexico will receive nearly $2 billion dollars in stimulus funds.  However, many of these funds will be lost if they are not promptly applied for a put to use.  Additionally, the law also includes $7 billion nationwide in competitively awarded grants to increase broadband access in rural and underserved areas.   I urge you to act quickly so that New Mexico can get its fair share of those funds.

Our state’s energy industry will also benefit from the new Clean Technology Manufacturing Tax Credit that I was able to include in the economic recovery bill.  This new credit will offer manufacturers of advanced energy products, like solar panels and algae-derived biofuels, a tax credit equal to 30% of their capital expenditures.  This credit can go a long way to promote the creation green manufacturing jobs and strengthen renewable energy industries across the state.

Finally, the economic recovery bill will also increase the Federal Government’s Medicaid Payments to New Mexico by $630 million over the next two years.  Coupling this with our new CHIP dollars, these funds will allow us to provide health care coverage to tens of thousands of New Mexicans who currently do not have health insurance.  The legislation also includes $21 billion in federal funding to pay for 65% of the cost of newly unemployed individuals to continue their employer sponsored health care coverage through federal “COBRA” provisions.  Finally, the bill includes nearly $20 billion in funding and incentives to assist health care providers throughout the nation in developing comprehensive health information technology.  I know that this legislature faces some very difficult decisions during this session to address this nearly $600 million dollar budget shortfall that is expected.  I urge you to make the most of the opportunity created by the additional federal health care dollars that are provided in this legislation.  Of course the new federal laws come with maintenance of effort requirements that New Mexico must meet in order to receive these health care funds.  I urge you to be sure to meet those maintenance of effort requirements so New Mexico can maximize its use of the funds available to us.

Let me turn now to the two main issues that I think this Congress will work on.  We have a rare opportunity to address the big problems that afflict our country, especially in the areas of health care and energy.  President Obama has said these are two of his top priorities.  I believe the American people and a large bipartisan majority in Congress agree that we should act to deal with each of them.

Energy Policy

Energy policy will be the first of these two priorities that we will work on.  We all recognize that we must make significant changes to how we produce, transmit and use energy.  Our long term goal is to shift our economy away from greenhouse gas emitting fuels and towards clean and renewable energy sources.  Doing this will increase our energy security by making us less dependent on foreign oil, and will buffer our economy against the price shocks we have felt in recent years.  At the same time, this shift in our energy system can create tens of thousands of jobs in clean technology industries, from manufacturing to installation to research and development.  New Mexico has been a leader in addressing these issues and Governor Richardson and this legislature deserve credit for showing the way for other states and the federal government to follow. 

I would like to discuss five broad energy challenges that I think this Congress must and will address.  Briefly, these challenges are to

1.      Improve energy efficiency from where we currently stand

2.      Better deploy clean energy technology

3.      Increase energy innovation

4.      Maintain adequate long-term supplies of oil and natural gas

5.      Lessening the environmental impact of our energy system.

Let me describe a few of the policies I hope we can enact to address these issues.

Increase Energy Efficiency:

Increasing our energy efficiency will yield both environmental and economic benefits.  In the transportation sector one of the most important things we did in the Energy Policy Act of 2007 was to increase CAFE standards for the first time in 30 years.  We need to build on this and help the Detroit automakers produce fuel-efficient vehicles.  And we need to put the right incentives in place for customers to buy these vehicles, especially now that gas prices have fallen.

The building sector uses over one third of the energy and two thirds of the electricity consumed in this country.  Through this energy use, buildings account for 40 percent of the carbon dioxide emissions we produce.  We need to promote the adoption of modern, energy-saving building codes across the country.  Energy audits and the retrofitting that follows create good jobs in the communities that undertake them and we need to have policies in place to encourage more focus on increased energy efficiency.

Development of Clean Energy Technology:

The next energy challenge is to better deploy clean energy technologies.  One way to increase the demand for and speed up the deployment of clean energy technologies is to adopt a strong national renewable electricity standard.  Again, New Mexico helped show the way to the rest of the country with regard to the renewable portfolio standard we have here.  I have advocated for a national renewable electricity standard for many years, and I think we finally have an opportunity to see that proposal enacted into law.

Congress will also work to implement a smart and robust national transmission grid that will allow us to make better use of clean energy technologies.  An improved grid is essential if the nation is to take maximum advantage of the potential solar power in New Mexico and our neighboring states.  I see significant bipartisan sentiment growing in the Congress to address the tough planning, siting, and cost issues that have prevented us from developing a strong national electricity grid. 

Energy Innovation:

The third energy challenge is to increase energy innovation in this country.  Again, New Mexico is already leading in this area.  From the basic research in batteries, storage, and lighting being done at the labs, to the production of renewable energy intellectual property by firms such as Advent Solar and the potential for algae-based biofuel production in Las Cruces by Sapphire Energy, our state has a broad and deep capacity for innovation.  Nationally, we should work to improve every stage of the innovation process. 

Conventional Fuels:

Our fourth obvious challenge is to maintain adequate production of conventional fuels like oil and natural gas.  Our nation’s transition to newer forms of energy will take many years, and oil and gas remain an essential part of our energy system.  New Mexico’s independent oil and gas producers will continue to play an essential role in meeting our country’s energy needs. 

The Challenge of Climate Change:

The final energy challenge I want to discuss is the challenge presented by climate change.  In this area, as well, Governor Richardson and this Legislature have shown admirable leadership in recognizing the importance of this issue to our state and taking steps to find real solutions.  

Nationally, it is imperative that we enact legislation to put a price on the right to emit greenhouse gases.  I believe the 111th Congress will take up climate change legislation and we will need to have a robust, bipartisan dialogue about how that legislation should be structured.  Figuring out the best regulatory regime for a cap-and-trade system has proven very difficult.  Frankly, for as much time as many of us in Congress have spent trying to understand this issue we are still uncovering new complexities that we need to understand and resolve.

Since almost all human-caused carbon dioxide emissions are related to energy production, transportation and use, I’m persuaded that a forward looking energy bill in the early part of this Congress is an excellent opportunity to set the stage for enactment of cap and trade legislation.

Health Care Reform

Health care reform is the other major issue the 111th Congress must address.  The goal of national health care reform is to make meaningful and affordable health care available to everyone in our country. As you well know this is a crucial issue for us here in New Mexico.  We have the second highest rate of uninsured people of any state, trailing only behind Texas.  Many of our citizens who live in rural areas don’t have sufficient access to health care providers.   

There is broad support among the public for the idea that everyone should have access to health care that is meaningful and affordable.  Already, bipartisan efforts in Congress are underway to craft legislation to achieve this goal.  And we in Congress have the added motivation to act before a 20 percent cut in Medicare physician payments is scheduled to take effect on January 1st of next year.

There is lively debate throughout the country about what health care reform should look like.  I would like to make a few points about the course we should follow.

First we need to find a way to ensure that health care is affordable to all.   At its core, national healthcare reform must be focused on capping Americans’ out of pocket healthcare expenses at a reasonable level. 

Second, we need to establish minimum benefits for health care coverage.  Right now, many New Mexicans who have health insurance may actually be underinsured because their health benefits don’t cover the costs of the treatments they need.  Many people only discover they are underinsured when they become sick -- that is, when they can least afford the additional medical costs. 

Third, we need to focus on controlling the growth in the cost of health care.   As a nation, we spend much more on health care as a percentage of our GDP than any other industrialized nation, even though these countries provide universal health care coverage to their citizens.  These costs are an excessive burden on businesses, on families, and on the federal budget.  Moreover, at the rate they are currently growing, health care costs will double as a percentage of our GDP by 2050. 

To effectively control health care costs we need to devote more resources to preventing health care problems.  Primary care is a key part of prevention.  Regular visits to a primary care doctor can detect and treat diseases early before they require expensive interventions.  While we are the world’s leader in many medical specialties like neurology, other countries do a much better job of providing consistent high-quality primary care.  Experts believe this may be one reason why our health care costs are so much greater than the health care costs in other countries and why Americans often suffer more from chronic illnesses.

And the final point I’d like to make is that in the median and long term, our ability to reduce the annual increase of health care costs is dependent upon whether we reform our health care system to cover everyone. 

Your intuition would make you think that as a nation, we would have less health care costs and less growth in health care costs if we provide coverage to fewer people.  And I think it is true that in the short term it will cost us more as a nation to adopt a health care system that covers more Americans.  But the growth in health care costs in the median and long term cannot be constrained in a system that leaves out 20 percent of our population.

Experts argue that if we don’t adopt a system that covers everyone, then younger, healthier people choose not to pay into the health care system.  That means that health coverage will be more expensive for those who are covered because insurers will not be able to balance the higher costs of covering the sick with the lower costs of covering the healthy.  Moreover, when someone without coverage gets sick, part of the cost of that care is paid for by the rest of us through higher medical costs.  I believe the solution is to move the to a system in which everyone has a basic level of coverage. Only by doing so can we begin to limit the growth in healthcare costs.                   

None of these issues, whether related to energy or to health care, are easy to resolve.  But be assured that those of us who have the privilege to represent New Mexico in Washington are working to make progress in solving them. 

Again I congratulate each of you on the good work you are doing here in the Roundhouse in this legislative session. 

I look forward to working with you, Governor Richardson, and with each of you in this Legislature, to ensure that the people of New Mexico are well served. 

Thank you.