Clinton Medicare Increase For Puerto Rico Advances… Statehood President To Help Democrats In Contrast To "Democrat" Acevedo

October 4, 2002
Copyright © 2002 THE PUERTO RICO HERALD. All Rights Reserved.


The Democratic and Republican leaders of the Senate Finance Committee this week sponsored a bill that would close half of the gap between the treatment of Puerto Rico hospitals and the treatment of hospitals in the rest of the country under the program funding health care for the aged.

The legislation would change the formula for Medicare payments for in-patient hospital services in Puerto Rico from 50% of the rates for services that apply elsewhere and 50% based on Puerto Rico cost factors to 75% of the national rates and 25% local cost factors. The change could increase the payments some $30 million a year, with the amount increasing as costs rise.

The bill by Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Republican Charles Grassley (R-IA) revived a proposal made in 2000 by then President Bill Clinton.

The proposal won broad bipartisan acceptance in 2000. Lobbying by then Puerto Rico Governor Pedro Rossello (statehood party/D), Resident Commissioner Carlos Romero Barcelo (statehood party/D) and the Puerto Rico Hospital Association won endorsements from Senator Rick Santorum (R-PA) and Republican leaders of the House of Representatives as well as support from key Democrats.

The proposal was blocked, however, by then Senate Majority Leader Trent Lott (R-MS), who worked -- and continues to work -- closely with now Puerto Rico Governor Sila Calderon ("commonwealth" party/no national party).

Baucus and Grassley included the proposal in a compromise measure intended to break a multi-year deadlock between Democrats and Republicans in Congress on Medicare reforms. The deadlock is primarily attributable to differences over Medicare prescription drug benefits that arose when Clinton proposed the Medicare reform in 2000.

The Puerto Rico proposal was included the Baucus-Grassley bill because it has continued to be considered one of the needed Medicare reforms and because of lobbying by the Puerto Rico Hospital Association. In fact, Baucus and Grassley made the proposal acted after Calderon’s Resident Commissioner in Washington, Anibal Acevedo Vila ("commonwealth" party/D) gave up hope of further progress on the issue this year.

Acevedo had pressed for the proposal in the House but had less success.

Largely due to the efforts of House Ways and means Committee Ranking Democrat Charles Rangel (NY), a House bill would increase the Puerto Rico hospital services formula to 75% of the national rate and 25% local cost factors but phase in the increase over five years beginning with the fiscal year that starts October 1, 2003. The Baucus-Grassley bill would change the formula effective the fiscal year that began this week.

Prompted by the Puerto Rico Hospital Association and Romero, Clinton successfully proposed changing the formula from 75% Puerto Rico cost factors and 25% national rates in 1997 to the current 50/50 formula. The Clinton Administration also changed the method of calculating the Puerto Rico cost factors. Each change increased payments in Puerto Rico about $22 million a year, with the amounts increased for inflation.

The Baucus-Grassley bill would also increase Puerto Rico funding under the program funding health care for the needy. The measure would increase the cap on Medicaid funding in Puerto Rico 2.6%, almost $4.6 million this fiscal year. It would also increase Medicaid funding in some other areas of the country.

Puerto Rico’s Medicaid funding is only about one-sixth of what it would be if the territory was a State. The amount, which is changed yearly for inflation is about $192 million currently.

The 1997 bill which changed Puerto Rico’s Medicare hospital payments formula also included a Clinton proposal substantially increasing the cap on Medicaid funding in Puerto Rico. The increase was $30 million, adjusted for inflation. With inflationary increases, it is responsible for about a quarter of the Medicaid funding Puerto Rico is receiving just six years later. Former Resident Commissioner Romero is also due much of the credit for the 1997 Medicaid increase.


Puerto Rico statehood party president Carlos Pesquera met this week with Democratic National Committee Chairman Terry McAuliffe and committed to campaign across the United States for Democrats for Congress this year and for President in 2004.

Pesquera’s offer presented a sharp contrast from the position taken by Resident Commissioner Acevedo. Acevedo recently declined to support New York Democratic gubernatorial candidate Carl McCall against incumbent Republican George Pataki, who has been helpful to Acevedo’s sponsor, Governor Calderon.

The McAuliffe-Pesquera meeting also presented a contrast from McAuliffe’s unsuccessful efforts to lure Calderon into the Democratic Party. Calderon declined saying she was "a Puerto Rican" and would not join a United States political party. She also, though, has wanted to stay neutral to try to counter the influence at the White House of Republicans in Puerto Rico who are members of the statehood party and to continue on working terms with Republicans in Congress like Senator Lott.

Pesquera became a Democrat following the lead of then Governor Rossello, whom he served as Transportation Secretary. With Rossello’s backing, then President Bill Clinton offered to raise funds for Pesquera and then Vice President and Democratic presidential candidate Al Gore agreed to do a campaign event with Pesquera during Pesquera’s campaign to succeed Rossello as governor in 2000.

After Calderon was elected, McAuliffe sought her allegiance to help with Democratic Party fundraising and party efforts to appeal to new citizen Hispanic voters after being pushed to do so by Bronx, NY Democratic leader Roberto Ramirez, and Puerto Rico Democratic Committee Chairman Eudaldo Baez Galib.

Democratic National Committee leaders, including Ramirez, have cooled towards Calderon after several developments in addition to McAuliffe’s being rebuffed by Calderon.

    • Calderon publicly supported Patkai and launched an election-year voter registration drive in New York with him – enraging New York Democratic leaders of Puerto Rican heritage. Rivera resigned from the Democratic national Committee and is also helping Pataki.
    • Calderon has quietly tried to help the President’s brother, Jeb Bush, win re-election as governor in Florida.
    • Major Democratic National Committee fundraiser and longtime McAuliffe friend Miguel Lausell -- a "commonwealth" party member – decided Calderon was making unsupportable mistakes and had unrealistic objectives in federal relations.
    • Alvaro Cifuentes, former top aide to and continuing confidant of former Governor Rossello, was elected Chairman of the Hispanic Caucus of the Democratic National Committee and has developed the Caucus as a force within the Committee.
    • Puerto Rico Senate statehood party leader, Kenneth McClintock a member of the Democratic National Committee, organized Democratic statehooders in Puerto Rico to support McCall and other Democratic candidates in the States.

Lausell was among those present at the McAuliffe-Pesquera meeting. Lausell, meanwhile, was tapped by McAuliffe to help lead the party’s Hispanic fundraising efforts as it works towards the 2004 presidential elections. The assignment came as a part of Lausell’s designation as Chairman of the party’s Hispanic Business Council.

Additionally, Lausell – like Rossello and Cifuentes – remain close to Gore who may again become the democratic presidential nominee in 2004 and other key national Democratic party leaders.

While losing ground with national Democratic Party leaders, Calderon has not made great inroads into the national Republican Party. President Bush’s aides do not trust her because of the anti-federal and erratic positions she has taken on issues and because of her antipathy towards Puerto Rico Republicans, including fellow "commonwealth" party member Representative Jorge DeCastro Font, who left the "commonwealth" party because of her positions. They are, however, trying not to offend her before next month’s elections because of the help she is giving to Pataki and Jeb Bush and because of the influence exerted at the White House by her top lobbyist in Washington, Bush political confidant Charles Black.

While they privately suggest they will be less deferential after the 2002 elections, what they will actually do remains to be seen. President Bush will face re-election in 2004 and will want Puerto Rican votes in Florida particularly and Black will, presumably, remain close to the Bush political operation.

The White House has been neutralized on most Puerto Rico issues because of the conflict between its political allegiance to and policy agreements with statehood party Republicans on one hand and Calderon’s support of Pataki and Jeb Bush and representation by Black on the other.

Because of this it is not surprising that Pesquera, a cautious leader, further committed to the national Democratic Party at a time when there is a Republican President and House of Representatives and a chance that the Senate will swing back to a Republican majority. National Democratic leaders such as Senate Majority leader Tom Daschle and House Minority Leader Dick Gephardt as well as Clinton and Gore have done more that agrees with statehood party positions than the Bush Administration and Republican leaders like Senate Minority Leader Lott even though the Republican national platform favors statehood while the Democratic national platform simply commits to work for a Puerto Rican choice that includes nationhood as well as statehood.

The "Washington Update" appears weekly.

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