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D.C. and District Talk

" FY 2005 Budget Passes House
On Thursday the House passed the federal budget for 2005. Some of the key spending details included:
o Defense. The military is funded at the President's requested level of $402 billion for FY 2005. Additionally provides for up to $50 billion in FY 2005 for war costs.
o Homeland Security. Provides for a $2.8 billion increase in discretionary budget authority - fully accommodating the President's requested increase.
o Medicare. Fully funds Medicare reform with prescription drugs enacted last year.
o Veterans. Provides for $1.2 billion increase over the President's request - with none of the fees in the President's budget.
o Education. Provides funding to accommodate increases in priority programs, including special education, Title I, and Pell Grants.
o Other Initiatives. Also creates special deficit-neutral reserve funds to help manage legislative initiatives including: health insurance for the uninsured; health insurance for disabled children and survivor benefits for widows of retired military.
o Taxes: Reconciles $27.5 billion in FY 2005, which would allow the extension of the current $1,000 per-child tax credit; current marriage penalty relief; and the current 10-percent tax bracket.

For more information on the FY 2005 budget please visit http://www.house.gov/budget/.

Constituent Corner

" New Bullet Proof Vests for 19th District
I am pleased to announce that United States Department of Justice has provided grants to 18 police and sheriff's departments throughout the 19th Congressional District. The grants are for the purchase of bulletproof vests. This is an opportunity for the federal government to partner with local communities to protect the law-enforcement personnel that work for us every day.

The Bulletproof Vest Partnership Grant Act gives jurisdictions with fewer than 100,000 residents funding priority. This year, there were sufficient funds to provide the maximum award to these jurisdictions. The maximum grant is for 50 percent of the vests' cost.

Jurisdictions in the 19th District receiving funding are:

Auburn - $2,150.00 for seven vests;
Carrollton - $1,710.00 for four vests;
Centralia - $1,927.00 for seven vests;
Christian County - $5,850.00 for 18 vests;
Collinsville - $1,169.92 for three vests;
Effingham - $2,060.00 for six vests;
Greene County - $2,100.00 for six vests;
Greenville - $495.00 for two vests;
Jefferson County - $7,470.00 for 20 vests;
Litchfield - $312.50 for one vest;
Maryville - $1,596.00 for seven vests;
Mount Vernon - $3,437.50 for 10 vests;
Pawnee - $1,617.50 for seven vests;
Rochester - $1,185.00 for six vests;
Salem - $847.56 for four vests;
Trenton - $368.00 for two vests;
Troy - $4,600.00 for 16 vests; and
Vienna - $1,060.00 for six vests.

For more information on the Bulletproof Vest Partnership Grant, please visit http://vests.ojp.gov/index.jsp.

" Prescription Drug Card Seminar
My office will be hosting a seminar on June 3, 2004 to better explain how seniors can take advantage of the new prescription drug discount cards. A representative from the Centers for Medicare and Medicaid Services, http://www.cms.hhs.gov/, will also be attending. I encourage everyone who is a recipient of Medicare or has a loved one who plans to use the drug discount card to attend the seminar at one of the following locations on June 3:

Effingham Senior Center
10:30 a.m. - 11:30 a.m.
209 South Merchant Street

Clay County Senior Center - Flora
1 p.m. - 2 p.m.
218 South Main

Rolland Lewis Community Building - Mt. Vernon
City Park
3 p.m. - 4 p.m.

We look forward to seeing everyone there and answering your questions! Please contact Holly in my Harrisburg office if you have questions about the seminars. She can be reached at 618/252-8271.

" Medicare Approved Drug Discount Card Delivering Discounts
I'm pleased to announce that the first analysis comparing the Medicare-approved drug discount cards with the current prices for prescription medicines shows savings of at least 10 to 17 percent for brand name drugs and far larger savings for generic drugs compared to the average prices paid by all Americans. These statistics also include Americans with access to lower drug prices through public and private insurance plans, according to the Centers for Medicare & Medicaid Services (http://www.cms.hhs.gov/).

All Medicare beneficiaries, except those who have outpatient drug coverage through Medicaid, can now enroll in a Medicare-approved drug discount card program. Beneficiaries who enroll by the end of May will be fully eligible for the discounts and financial assistance beginning in June. The card sponsors may charge an annual enrollment fee of no more than $30, though many cards have lower fees and some have no fee. There is no enrollment fee on any card for people who qualify for the $600 credit.

Beneficiaries can compare the prices of drugs offered by the drug cards at www.medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227) to help them compare the discounted prices negotiated by the card sponsors, as well as the enrollment fees, and other discount card features. They can also compare the prices of drugs being charged at their local pharmacies and find out the cards the pharmacies honor. The card sponsors provide the pricing and pharmacy information to CMS and that information is being updated weekly.

" Gas Prices
I wanted to take this opportunity to address the rising gas prices that are affecting consumers throughout the country. Gas prices are 54.6 cents per gallon higher than they were in mid-December 2003, and 51.6 cents per gallon more than at this time a year ago.

As you may know, the federal government does not fix the price of gasoline or fuel oil. Such a practice has been found to have detrimental effects. I believe that the marketplace and the law of supply and demand largely determine the price of this and many other goods and services in this country.

Prices from state to state may differ because of the amount of tax placed on this commodity. Taxes collected on a gallon of gasoline amounted to 42.7 cents, including 18.4 cents per gallon in federal taxes, and 24.3 cents per gallon in volume-weighted average state taxes. There was also talk of increasing the national gasoline tax by 5 cents to in order to pay for more road construction. I joined 23 of my colleagues in a letter in opposition to this increase.

During the most recent price spikes, interest in our national energy policy has been renewed. Several issues have entered the national, and local, debate such as the role of OPEC and the Middle East, refining capacity, increasing our conservation efforts, drilling for new oil in Alaska, increasing domestic production and increasing renewables. I address each of those issues below.

OPEC has been pumping less oil in recent months, but has recently stated that they would increase production in the coming months. The recent problems in the Middle East have caused oil prices to jump on the New York Mercantile Exchange as people have become worried that the tensions will begin to engulf other Arab nations. The United States has very little say in how OPEC sets productions levels. The best way for us to impact OPEC is to increase our own domestic production. It would surprise many that Illinois produces over 11 million barrels of oil each year. In fact, one of the largest producing wells in the lower 48 states is located in Southern Illinois.

Another reason for large price spikes in Illinois is refining capacity in the state. Two Premcor refineries have recently closed and the other refineries will be undergoing major modifications to comply with new environmental rules regarding sulfur in gasoline. This year, refinery capacity in Illinois will be at 889,000 barrels per day, which is 150,000 barrels less than just 2 years ago. The result is that we will have to depend on more gasoline being shipped through pipelines from other parts of the country. The fact that two refineries going down can have such a huge impact on price shows us that we need to build more refineries in our country. In the early 1980's we had over 350 refineries in the U.S., today we have only 153. But oil companies are really unwilling to build more because of the amount of capital needed to build one. At the same time, communities don't want new refineries near them. Either way, no new refineries are being built, despite the fact that every year we have more and more demand for gasoline.

Our country's demand for oil also plays a large role in determining price. This year, our demand will likely be about 163 billion gallons of oil. That figure is likely to increase to 196 billion a year in only ten years. That is an increase of almost 98 million barrels a day! Frankly, it was difficult for the U.S. to get OPEC to increase production by 800,000 barrels a day, let alone an additional 98 million barrels. We have become a nation overly dependent on oil, from SUV's to our increased air travel. The biggest complaint is that the automakers make cars that are not fuel efficient. That isn't the problem; the problem is that we, the consumer, buy cars that are not fuel efficient. Consumers need to demand more efficient cars and cars that run on renewable fuels, like ethanol. Once they do, the automakers will make those cars. More government regulation is not the answer here. If we don't cut our demand, we will have to live with the fact that oil prices will continue to rise.

Drilling for new oil in Alaska is a hot topic here in Washington. I support opening a small section of the Arctic National Wildlife Refuge (ANWR) to drilling, and voted for the President's energy policy when it came before the House last Congress and this year as well. Unfortunately, the ANWR provision was taken out of the bill during the negotiations with the Senate. If allowed, this secure domestic resource of oil could yield an estimated 16 billion barrels of oil per year. Clearly, our national reliance on foreign oil has led our nation to depend on OPEC. Without new sources of domestic oil production our reliance will continue to grow. I know there are deep concerns about the impact drilling activity would have on ANWR. However, to add some perspective to the debate, allowing drilling in this region would be comparable to placing a small airport in an area of land that is the size of the State of North Carolina. ANWR is by no means the answer to our energy problems, but it is one of the solutions that we need to be looking at if we want stable and affordable energy.

When prices for gasoline dropped to $10 a barrel in 1998, small oil producers around the U.S. (and especially in Southern Illinois) were forced to cap their wells and close their businesses, resulting in less domestic production. Prior to 1990, the U.S. relied on foreign oil for about 35% of our energy supply, this year that figure will be almost 60%. We need to develop ways to keep small, U.S. oil producers in business when oil prices are low. Congress included language in energy bill to help these small, domestic oil and gas producers.

Since coming to Congress, I have fought hard to increase the use of renewable fuels, like ethanol and biodiesel, in our nation's energy supply. The U.S. House included language in the energy bill that would increase the use of renewable fuels across the country by 5 billion gallons a year. Unfortunately, the energy bill is being stalled in the U.S. Senate. The language would also get rid of the "boutique fuel" issue by eliminating the 2% oxygen requirement for certain parts of the country. The amendment will result in decreasing our need for foreign oil, lowering gas prices, improving air quality, and increasing markets for our farmers. The big surprise was that this language is actually supported by the oil industry, thanks in large part to President Bush and Vice President Cheney who have been supporters of ethanol and biodiesel since they came into office. For every percentage increase in renewable fuel use, there will be a percentage decrease in the amount of foreign oil we use. The energy bill is a win-win for everyone. For more information on energy sources, please visit http://www.eia.doe.gov/.

I know that this is a lot of information, but the answer to lower fuels prices in not an easy one. We will have to lower our demand, drill for new oil in certain areas of our country, and force ourselves to become less reliant on foreign oil by increasing our use of renewable fuels. If we work together on this issue it is my hope that we will soon see relief.

" American Legion Poppy
Using the Poppy as the memorial flower for American heroes who died while serving our country, is a tradition which began in the years following the First World War. Veterans returning to their homes in this country remembered the wild poppies which lined the devastated battlefields of France and Flanders, and the soldiers of all nations came to look upon this flower as a living symbol of the sacrifices made by their comrades killed in action.

Returning servicemen brought with them memories of the battlefield poppies, and the flower soon took on a sacred significance. The poppy soon became a symbol of honoring the dead and assisting the living victims of war.

Illinois is one of only two states that has its hospitalized veterans manufacture the poppies themselves. All of the proceeds over the expenses from the sale of the poppies are returned to the veterans and their families through this important program. They will be distributed throughout the 19th district this weekend. For more information on the Poppy program and its history, please visit http://www.legion-aux.org/programs/docs/poppy/poppy.html.

" Open Office Hours in Effingham
As part of my ongoing effort to make myself as accessible to my constituents as possible, I will be holding Open Office Hours in Effingham next week. I encourage you to drop by and share your problems and concerns with me. Appointments are not required, though they are appreciated in order to give me time to adequately address your concerns; if you would like to make one, please call or (618) 344-3065.
Here is the location and time:
o Effingham, May 28th - Friday, May 28th, I will be in the Effingham County Office Building on 101 N. 4th Street in the First Floor Conference Room from 1:30 p.m. to 3:00 p.m.
For more information on Open Office Hours, please visit my web page at www.house.gov/shimkus/openoff.htm. Hope you drop by and chat with me!

Legislative Week in Review

" H.R. 4359 - Child Credit Preservation and Expansion Act of 2004
This bill, which I cosponsored, amends the Internal Revenue Code to repeal the scheduled reductions in the amount of the child tax credit for taxable years beginning in 2005 through 2009 (from $1,000 to $700 in 2005 through 2008 and $800 in 2009). It also makes the $1,000 credit amount permanent.

" H.R. 4200 - National Defense Reauthorization
On Thursday, the House approved H.R. 4200, the National Defense Authorization Act for Fiscal Year 2005, on a bipartisan 391 to 34 vote. The legislation authorizes $422 billion for the Department of Defense and the national security programs of the Department of Energy. H.R. 4200 contains an additional $25 billion to be appropriated for fiscal year 2005 in support of the war on terror's operational costs, personnel expenses and the procurement of new equipment.

I sponsored an amendment to this legislation that allows the Secretary of the Army to establish a Combat Service Recognition Ribbon to recognize participation in combat by members of the Army, regardless of branch. Qualifications would be similar to that of the Navy Combat Action Ribbon, but would be made by the Secretary of the Army. It sets up a recognition ribbon for every member of the Army that is involved in combat that meets the criteria to receive the Combat Service Ribbon. You can find more information on this legislation, by visiting http://thomas.loc.gov/ and searching for HR 4369, my original bill on this issue.

Anticipated Action on the House Floor Next Week

" Congress will be in recess until June 1st. Keep your eye on http://www.congress.gov/house.html for a floor schedule as soon as it becomes available.

Did You Know?

" Fuel Economy Information
I am happy to introduce a new website that will help Americans get more information on how to improve fuel economy. The site, www.fueleconomy.gov, has useful information that will help people find the cheapest gas locally, everyday suggestions for saving gas, and to find and compare cars for their fuel efficiency. I encourage everyone to check this site out and learn about how you can get your dollar to stretch as far as possible.

Thank you for the interest in my newsletter! Remember to tell your friends about it as well--they can sign up on my web page at <http://www.house.gov/shimkus>.

Sincerely,

Congressman John Shimkus

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