Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in this day and age, there is simply no denying that our economy is very much a part of a global economy and affected by it. Gone are the days when businesses relied solely on growing their customer base for domestic markets. Today, 95 percent of the world's consumers live outside the United States, and we are producing for those consumers as well as domestic ones. One action that would help our economy improve at a faster rate would be to increase trade opportunities overseas for American businesses and farmers. Increased trade helps create jobs, increase incomes, and expand opportunities for innovation. As we have seen over the course of history and also repeating what President John F. Kennedy often spoke about, free and fair trade helps all boats rise; That is to say, countries willing to lower their trade barriers and allow fair and competitive trade will see growth in their economies. However, history also shows even among nations with good relations, trade disputes still arise. That is why we need a forum to settle international disputes such as the World Trade Organization does. The WTO allows American businesses a place to take complaints against unfair trade barriers and have a judicial result. For 19 years Russia has worked toward entry into the World Trade Organization. Now they are in the World Trade Organization. I support Russia being in the World Trade Organization. As the world's eleventh largest economy with over 140 million citizens, it is obviously an important market for U.S. businesses and farmers looking to expand their overseas markets. Some of Iowa's heavy equipment manufacturers are already exporting millions of dollars of equipment to Russia. Agricultural equipment manufactured in facilities all around Iowa is being used by Russian farmers as they look to increase their agricultural efficiency and productivity. The World Trade Organization accession process afforded us an opportunity to address Russian tariffs against our products. In the accession agreement, Russia has agreed to lower its tariffs for these construction and agricultural equipment products. That obviously means increased exports and an increase in good American jobs. By far the largest percentage of Iowa exports to Russia consists of grains, meats, and other agricultural products being produced by Iowa's farmers. Russia's accession into the WTO has been an important issue for our pork producers, for our cattlemen, and for our grain farmers. Iowa's farmers are some of the best in the world. They are truly helping to feed the world. Expanding opportunities in overseas markets is vital to the future of American agriculture. Russia has been and I think will continue to be an important market for our farmers. But it does not come without its challenges. Russia has repeatedly raised barriers to the U.S. imports based upon restrictions not supported by sound science. So now I am going to tell you about some problems I have with Russia, even though I want Russia to be in the WTO and I want this legislation to pass so it can be fully implemented. I will share some things we have problems with regarding Russia. Let us take pork exports as an example. In 2008, U.S. pork sales to Russia totaled over 200,000 metric tons. Since that time exports have fallen nearly 60 percent due to Russia's reduced import quota and questionable sanitary and phytosanitary restrictions. I am pleased our trade negotiators were able to negotiate a satisfactory tariff rate quota for our pork. But this administration under President Obama has fallen short in its obligations to stand with U.S. farmers on these sanitary and phytosanitary standards; in other words, standing up for using sound science instead of some illegitimate reason for keeping our products out of Russia. I have communicated time and again what I expected of this administration because they have to negotiate for us. In June 2011, I led a bipartisan letter with Senator Nelson of Nebraska and 26 other Senators to Ambassador Kirk requesting his negotiators follow the steps we have taken during consideration of past WTO accessions. I referred to China and Vietnam as examples for this administration to follow. When these countries joined the WTO, we used these opportunities to obtain firm sanitary-phytosanitary commitments from those countries that went beyond the WTO sanitary-phytosanitary agreement. In particular, we obtained further commitments in areas of meat inspection equivalence. In addition, in June of this year, I sent another bipartisan letter with Senator Nelson of Nebraska and 32 other Senate colleagues to President Obama again laying out our request that he stand for American farmers and demand more of the Russian Government on sanitary- phytosanitary issues which would very much benefit our agriculture products going into Russia. As we know, this administration did not use the accession process to fully address these crucial issues so they have to be addressed outside of this process where we do not quite have the leverage we would otherwise have. That is why I requested language that is in this legislation to require our trade negotiators to keep working with these unfair trade barriers and report to Congress on their progress. Our farmers are some of the very best in the world. We cannot allow their products to be discriminated against based upon arbitrary nonscientific and unjustifiable reasons. In addition to the concerns I repeatedly raised on sanitary- phytosanitary issues, there are other issues at stake with Russia. It is a shame that we are handling this bill in a lameduck session when time is so limited. This bill should have been debated at a time when the Senate could more fully evaluate the current course of our relationship with Russia. Russia continues to cause challenges in regard to Syria, Iran, and other regions of the world where the United States and our allies are trying to do what is right in the name of human dignity and also in the name of national security. I am concerned with Russia's own human rights issues. That is why I am very glad the Magnitsky provisions are in this bill. As ranking member of the Senate Judiciary Committee, I remain troubled by the lack of progress Russia has made on protecting intellectual property rights. Furthermore, Russian officials need to step up their efforts in combating cyber crimes. There continues to be a large number of cyber attacks that originate from within Russia's borders. All that being said, I realize having Russia in the WTO is a very positive step. One of the goals of international trade is to build upon relationships between nations. Having Russia in the WTO fold will hopefully benefit our nations as we work together on so many issues that concern us, plus, as I have stated before, having the WTO forum available to help our businesses and farmers when disputes arise is important. I have said I want Russia in the WTO. I have said there are good opportunities for us there. I just spoke as to why I think there are problems with Russia that need to be worked out. President Putin is not going to pay any attention to what I say, but I want him to know these are issues of the re-Sovietization of the country and I do not like it. I favor this bill; I favor working with Russia. But they are becoming more of a problem. I look forward to hearing from our trade negotiators in the not too distant future on their progress in getting Russia to remove the unjustifiable barriers to our agricultural products. Furthermore, as President Obama looks toward other trade initiatives in the future, I hope this accession process will be a lesson. This process could have been better, in other words, using the leverage the United States has during these accession negotiations to get a lot of these disputes settled as we did with China and Vietnam that we have not fully done with Russia. The President has called on Congress to pass this legislation for some time. But his lack of consultation with Congress and disregard for the concerns raised by this Senator and other Members has only served to delay this whole process. We cannot keep approaching trade issues in this fashion. This administration needs to have real and substantive consultation with Congress. Furthermore, when there are opportunities to stand for American businesses and farmers against unfair trade barriers such as the sanitary and phytosanitary issues in Russia, the President needs to seize that opportunity the same way it was seized in the case of Vietnam and in the case of China's accession. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, there has been a lot of discussion lately about how the Senate is not working properly. This is evident to even a casual observer. On the other hand, to understand how the Senate was intended to work and what has gone wrong requires some knowledge of the history and the rules of the Senate. I would put more emphasis upon the history than the present rules of the Senate, particularly the history and purpose of the Senate expressed in the Federalist Papers by the people who were advising the States at that point, the colonies, to approve the Constitution. To many people, this subject, no doubt, seems arcane and confusing. The simplistic explanation we get from the other side of the aisle--and it is a steady drumbeat--is that Republicans are filibustering everything just willy-nilly; thereby, grinding the Senate to a halt. Various vague and nefarious motivations are suggested as to why Republicans would do such a thing, but the point they want Americans to take away is that Republicans are abusing the filibuster. This message has been repeated ad nauseam by Democrats in the hope it will sink into the public's consciousness by rote. In fact, the story goes that Republicans have so abused the filibuster, the Democrats have no choice but to take it away, even if it means violating the Senate rules in order to change the rules. Can you imagine a political party saying it is OK to ignore the rules or to change the rules? In order to discuss this topic, it is very important to establish what we mean by the word ``filibuster'' and how it fits into how the Senate operates today and has operated historically. I hope everyone will bear with me as we try to understand this because I ultimately want to get down to how the proposed changes to the Senate rules threaten the very principle underlying our system of government, particularly the checks and balances within our system of government. First, I have a legitimate question: What is a filibuster? We talk about it so much that we would think it referred to a very specific activity that is easily understood by everyone. It can actually refer to different types of activities. Of course, this leads to confusion, and that confusion is reflected in some of the speeches from colleagues on the other side of the aisle, intentionally or not. When most Americans think of a filibuster, they probably think of Jimmy Stewart in the classic film ``Mr. Smith Goes to Washington,'' standing and talking without stopping for an extended period of time to delay proceedings and to take a lot of theater just to make a point. This is the classic understanding of a filibuster. Unless all Senators have agreed to waive Senate rules, it is a fact that a Senator who has been recognized to speak may retain the floor as long as he continues to speak. This is the basis in the Senate rules for a classic filibuster, but this is not the rule some Democrats want to change. When the Members of the majority party complain about how many filibusters the Republicans have engaged in, they actually mean how many times the Senate has voted on a motion to bring debate to a close, and that motion is called the cloture motion. When debate comes to an end, it also means no more opportunities for amendments. If Republicans don't agree to end debate and force a final vote when the majority leader decides we should end debate and vote, he calls that a filibuster. In fact, even when every single Republican votes in favor of ending debate, he still calls it a filibuster. It ends up in those statistics that add up to numbers that are not very intellectually honest. Think of Republicans voting in favor of ending debate and it is still called a filibuster. We just voted a day or two ago, 93 to 0, to end debate on the Defense authorization bill. Is he still going to call that a filibuster as well? How can he accuse Republicans of filibustering when he is the one who made the cloture motion? This is a key point. When the Democrats talk about Republicans launching a filibuster, it is important to note it is the Senate majority leader who almost exclusively makes the motion to invoke cloture. I understand it takes a petition of 16, but not very many Senators I know ever initiate such a petition unless the Republican leader, when we are in the majority, or the Democratic leader, when they are in the majority, provoked that. This means the number the majority leader is so fond of quoting as a number of so- called Republican filibusters is the number of times he has attempted to shut down debate and block further amendments from being considered. Again, we are talking about a process launched by the majority leader intended to shut off debate and amendments, not some process initiated by Republicans. If every time the majority leader made the motion to close debate we had been considering a bill for days or weeks with dozens of amendments and no end in sight, then there is a legitimacy to such a decision by the majority leader in the petition for cloture. He might then have a point. However, the recent history of the Senate cloture votes tells an entirely different story. The majority leader has filed a motion to cut off debate in the same day a bill has been taken up over 220 times since he became majority leader. How can this be justified, considering the history of the Senate and given that it is a deliberative body? He certainly cannot claim Republicans are delaying action with excessive debate when he moves to cut off debate before that debate has ever begun. As I said, by forcing a final vote, a cloture motion also ultimately cuts off the amendments. The right of a Senator to offer an amendment for consideration has been enshrined in the Senate rules from the very beginning. It is true that about half the cloture votes I cited were on the motion to proceed to consider a bill which is before the stage where amendments can be offered. I will say more on that point later. However, the majority leader has moved to cut off debate on amendments on a measure other than the motion to proceed over 100 times. In my judgment, he can hardly claim Republicans forced his hand by offering too many amendments when few, if any, amendments have even been considered when he attempts to cut off amendments. What is more, the majority leader has consistently used the tactic called filling the tree, where he offers blocker amendments that block any other Senator from offering their own amendments unless the majority leader or somebody speaking for him agrees to set aside a blocker amendment so the other Senator can offer an amendment. This way he is able to get in line first to put his blocker amendments in place because of a tradition that the majority leader has priority to be recognized by the Presiding Officer. This doesn't happen to appear anyplace in the rules. In fact, the rules make very clear that whatever Senator seeks recognition first should be recognized and that any Senator has a right to offer an amendment. This so-called filling the tree tactic was relatively rare before Senator Reid became majority leader, but he has made it routine. Technically, some germane amendments can be considered during a short window after cloture has been invoked and before final vote. But by using the blocker amendment tactic, along with a motion to invoke cloture, the majority leader can block any Senator from offering any amendment while shutting off debate. That means the Senate would take a final vote on a bill without a single amendment having been offered. The abuse of this tactic is at the heart of the Senate's current gridlock. This is confirmed by a chart--and I don't have a copy of this chart with me--published with a recent New York Times article. Here is what the caption said: The use of filibusters has risen since the 1970s, especially when Republicans have been in the Senate minority. That would tend to blame Republicans, but listen to the rest of this quote. But the most recent spike of Republican filibusters has coincided with the Democrats' unprecedented moves to limit amendments on the Senate floor. This doesn't even tell the whole story because much of the time the Senate majority leader doesn't have to actually use his amendment- blocking tactics. He simply informs Republicans he will block amendments or refuses to commit to allow Republican amendments before making the motion to consider a bill. In this all-too-common scenario, the majority leader tells the Republicans he intends to move to consider a bill and will immediately move to cut off debate on that motion. By the way, if we do vote to take up this bill, we will not be allowed to offer any amendments. So that kind of puts everybody on this side of the aisle in a take-it-or-leave-it situation. Why on Earth would Republicans take that deal and vote for cloture on proceeding to a bill on which we are told we will be allowed no input, contrary to the deliberative tradition of the Senate? Just to be clear, some Democrats have proposed eliminating the filibuster entirely. Others have proposals to limit it in various ways. Majority Leader Reid wants to start by eliminating it on the motion to proceed. But as we have seen, the real problem is the way Republicans have been blocked from participating in the process. If we are looking to reform how the Senate operates, maybe we ought to start by considering doing away with the tradition that the majority leader can block amendments. That is something which is already contrary to the letter of the Senate rules. Again, there is no doubt that the Senate is not functioning properly. However, the complaints I hear from Iowans are not that the Senate is considering too many amendments and working too hard to make sure the legislation we pass is worded properly. In fact, I hear quite the opposite. A great many Iowans have told me they are not happy with legislation being rammed through the Congress without their elected representatives even having an opportunity to read it. If Members of Congress don't have a chance to read a bill, we can bet the American public doesn't have a chance to understand it. I suppose that is fine if we believe we should pass a bill first and let the American people find out what is in it later, as Speaker Pelosi once famously suggested about the health care reform bill. We have to pass it, she said, and then we will find out what is in it. And then there is a rude awakening that now in this 2,700-page health care reform bill, we are finding out there are a lot of bad things in it, a lot of bad things that we warned the public about and warned the Democrats about as well. However, if one thinks, as I do, that we should be listening to those who elect us, one would have to conclude that a more deliberative process is needed, not less. The rules of the House allow for quick consideration of legislation, but the Senate is supposed to be different and historically has been different. When the majority leader says the Senate is not operating efficiently, he means we are not approving the legislation he wants on the timetable he demands. The simple historical fact is the Senate is not designed for that kind of efficiency. However, for a period after the 2008 elections, the Democrats had 60 Members in the Senate. That is enough votes to shut off debate and amendments without a single Republican cooperating. Naturally, the majority party couldn't resist the temptation and shut Republican voices out of every aspect of the legislative process because they had the votes to do it. Not only did they use their supermajority to prevent Republican amendments on the floor of the Senate, but since they didn't need Republican votes to pass a bill, they cut us out of the process of developing the legislation. In my experience as a former chairman and now ranking member, some of the best examples of bipartisanship happen at the committee level. The Senate committees are where Senators of both parties often work in a bipartisan way to delve into the details of the legislation and iron out imperfections. This is how most bills are supposed to be handled. I often tell people who are cynical about all the partisanship they see on TV that there is a lot of bipartisan work that goes on that they never see because only controversial things get on television. When a committee process is working and the Democrats and Republicans are working together to get a bill and everything is going smoothly, no journalist is going to pay any attention to that. But that goes on in the committee process, and that process can be dry and it can be technical. Senators of both parties sitting around a table discussing where to place a comma doesn't make the breaking-news alerts. Nevertheless, the committees are where much of the hard bipartisan work of the Senate is done. In recent years the Democratic leaders prefer to write bills behind closed doors without Republican input. I suppose the health care reform bill is the best example of that, but there are others as well. They have then used a parliamentary trick to bring them right to the Senate floor. I suppose I shouldn't use the words ``parliamentary trick'' because there is a rule XIV, but that bypasses the usual committee process where we build consensus between the political parties. If Republicans are shut out of having any significant input on the front end and are blocked from having any amendments on the back end, is it any wonder we don't vote for the majority leader's motion to cut off debate? Despite the bad blood caused by the tactics I have described, I had hoped and believed that after the 2010 elections, things would be different. When Americans elected Republicans to a sizeable majority in the House of Representatives--larger than any election since 1938--and at the same time enlarged our representation in the Senate to 47 Members, I thought the majority party would recognize that they had to work with Republicans. With 47 Members, it was no longer possible under the Senate rules for the majority party to shut Republicans out of the legislative process and still expect to ram their agenda through. So I naturally assumed the Senate would resume its usual tradition of bipartisan cooperation involving open debate and amendments from both sides--in other words, the way the Senate had historically functioned. The majority leader didn't see it that way and continued to shut Republicans out of the process. In fact, if he had allowed an open debate and amendment process on many of the bills he sought to bring up, we could have gotten a lot more accomplished than we have. One week in June last year, we passed four controversial pieces of legislation because that process worked. It involved Republicans seeking things. But most of the time that doesn't happen. Sure, it would have taken more time under that amendment process and the deliberative process to consider each bill than the majority leader might have preferred to be given to it. He and his caucus might also have had to vote on Republican proposals instead of only legislation of his choosing. But is there anything wrong with a Republican offering an amendment now and then, even if that amendment loses? Some Republican amendments might have embarrassed Democrats by forcing them to vote on issues they would rather avoid. Is there anything wrong with voting on some tough issues from time to time? Some Republican amendments might have attracted enough Democratic votes to actually pass. Perhaps that is exactly what the majority leader might want to avoid. He seems to want total control over the agenda. Majority Leader Reid has said as much in private. He told Senator McCain flatout that ``the amendment days are over.'' How can he say that? There is a longstanding tradition here in the Senate that all voices be heard and that amendments get full hearing regardless of the party of the sponsor. For example, tax and trade policies aren't exactly areas of natural agreement between the two parties. Despite that fact, when I was chairman of the Senate Finance Committee, I helped put together several bipartisan bills. I, a Republican, worked in partnership with Senator Baucus, a Democrat, to produce bipartisan bills that we could both live with. Even when we were starting with a bipartisan bill, Senator Baucus wanted to make sure his fellow Democrats had a chance to offer amendments, and I respected that, and if he were chairman, he would have respected that for us Republicans. It took a lot of time and effort, but that is what we have to do in the Senate if we actually want to get something done rather than simply blame the other side if we fail. The Senate has been called the greatest deliberative body in the world because it was specifically designed to proceed at a measured pace and guarantee that the rights of the minority party are protected from what political philosophers called the ``tyranny of the majority.'' In 1788, the father of the Constitution, James Madison, wrote in Federalist Paper No. 10: Complaints are everywhere heard from our most considerate and virtuous citizens, equally the friends of public and private faith and of public and personal liberty, that our governments are too unstable, that the public good is disregarded in the conflicts of rival parties, and that measures are too often decided not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority. In 1788 James Madison was warning us about the superior force of an overbearing majority, the reason the Senate was set up to make sure the overbearing majority of the other body, where the majority rules, didn't do stupid things. Those arguing for abolishing the filibuster sometimes talk about majority rule as though this is some fundamental principle. On the contrary, the aim of our Constitution is to protect the individual rights of all Americans, not the right of the majority to impose its will on an unwilling minority. In fact, James Madison was very concerned about what he called factions gathering together to impose their will on others. So I wish to quote again from Federalist No. 10. Before I start that quote, let me say for the benefit of people that I think when he used the word ``faction,'' for the most part he was speaking about political parties. If a faction consists of less than a majority, relief is supplied by the Republican principle, which enables the majority to defeat its sinister views by regular vote. It may clog the administration, it may convulse the society; but it will be unable to execute and mask its violence under the forms of the Constitution. When a majority is included in a faction, the form of popular government, on the other hand, enables it to sacrifice to its ruling passion or interest both the public good and the rights of other citizens. To secure the public good and private rights against the dangers of such a faction, and at the same time preserve the spirit and the form of popular government, is then the great object to which our inquiries are directed. That was a long quote, so let me say that in other words, Madison is saying that an important goal of the U.S. Constitution is to protect ``the public good and the private rights'' from a temporary majority trying to impose its will on the minority. This is evidenced throughout the Constitution. We call it checks and balances. We see it in the separation of powers between the three branches of government, and we see it in our system of federalism dividing power between States and the Federal Government. It also helps explain our bicameral legislative branch, and, of course, what I am talking about here is the unique structure of the Senate. In Federalist No. 62, also usually attributed to the father of the Constitution, James Madison, he explains: The necessity of a Senate is not less indicated by the propensity of all single and numerous assemblies to yield to the impulse of sudden and violent passions, and to be seduced by factious leaders into intemperate and pernicious resolutions. Examples of this subject might be cited without number; and from proceedings within the United States, as well as from the history of other nations. Madison wrote that in 1788, but it is still applicable in 2012. So kind of repeating, the purpose of the Senate is to save us from ``the impulse of sudden and violent passions, and to be seduced by factious leaders into intemperate and pernicious resolutions.'' There is a place for the passions of the moment in any republican form of government or any democratic society, and that place for the passions of the moment to be reflected is in our House of Representatives. But imagine if our only legislative body were the House of Representatives. Right now, that would mean Speaker Boehner would control the entire legislative agenda, and the priorities of the House Republicans would be the only legislation that would have a chance of passing. Then, once the Democrats gained control in some future election, Republicans would have virtually no ability to have their views considered. This is a teeter-totter approach to governing. This teeter-totter would not lead to thoughtful legislation that protects individual rights and balances the views of all Americans. You will also note that Madison references examples from proceedings within the United States at that particular time. Many State legislatures in the early days of our Republic were unicameral, with frequent elections and also with weak executives. This led to many instances where a temporary majority faction would gain control and quickly pass legislation that advantaged the majority at the expense of the minority. It is also the case that the Congress, under the Articles of Confederation, was unicameral, which caused a lot of instability as described, again, by Madison in Federalist 62: Every new election in the States is found to change one- half of the representatives. From this change of men must proceed a change of opinions; and from a change of opinions, a change of measures. But a continual change even of good measures is inconsistent with every rule of prudence and every prospect of success. The remark is verified in private life, and becomes more just, as well as more important, in national transactions. The staggering of the terms of Senators was partly done to provide stability, preventing temporary majorities from acting hastily and trampling on the rights of the minority. Only one-third of the Senators are up for reelection every 2 years, unlike the House of Representatives, where all Members are up for reelection every 2 years. Because only one-third of the Senators are up for reelection at once, it is less likely that one party can sweep the election and gain control of the entire legislative branch of government in one election. Here we see how the Senate was specifically designed to prevent the tyranny of the majority. In Federalist Paper 66, Madison, the father of the Constitution, continues his explanation of the unique role of the Senate--the unique role of the Senate-- . . . there are particular moments in public affairs when the people, stimulated by some irregular passion, or some illicit advantage, or misled by the artful misrepresentations of interested men, may call for measures which they themselves will afterwards be the most ready to lament and condemn. In these critical moments, how salutary will be the interference of some temperate and respectable body of citizens, in order to check the misguided career, and to suspend the blow meditated by the people against themselves, until reason, justice, and truth can regain their authority over the public mind? Now, I want you to contrast--with these quotes from Madison--the role the father of our Constitution says the Senate is intended to play to the present debate going on in the Senate that the rules ought to be changed and the majority leader's vision for how a newly altered Senate would operate. One faction, the Democratic Party, would be able to ram through massive pieces of legislation with little or no input from duly elected Senators who happen to be from another political party. And what if Republicans are not happy with being shut out of the legislative process at every stage? Well, the majority leader explained to one freshman Republican Senator: ``You can always vote against the bill.'' Not only does this take-it-or-leave-it approach effectively disenfranchise all those Americans who elected Senators from the minority party to represent their views, it also leads to poorly thought out legislation. Since the proposed changes to the Senate rules would make the body more like the House of Representatives, let's take another look at how that Chamber operates. Although the House is designed to reflect the will of the current majority, the trend toward the majority party shutting out the minority party in that body has increased over time. Some people trace this trend to the last decade of the 19th century when the Speaker of the House was a man named Thomas Brackett Reed. Then-Speaker Reed strengthened the power of the Speaker of the House of Representatives and sought to diminish the rights of the minority party. He once used his position to unilaterally change the interpretation of the quorum rule to prevent Members of the minority party from blocking a measure by refusing to vote in a quorum call. This incident was called the ``Battle of the Reed Rules.'' Then-Speaker Reed famously said: ``The best system is to have one party govern and the other party watch.'' This attitude earned that Speaker of the House, whose name was Reed--they called him Czar Reed. Do we really want another ``Battle of the Reed Rules'' like we had over a century ago in the House of Representatives? Wouldn't that be going backwards? Ironically, the House of Representatives under Speaker Boehner has actually allowed more opportunity for the minority party to affect legislation than the current Senate majority leader. Senate Minority Leader McConnell has cited data from the Congressional Research Service showing that the Democrat minority party in the House has had 214 occasions to affect legislation this year compared to only 67 for the Republican minority in the Senate. When the House of Representatives allows for more input from the minority party than the Senate, which is supposed to be the deliberative body, it seems to me something is very wrong. It is true that the cloture rule and the various different procedures that are called filibusters are not found in the Constitution. But changes to the Senate rules that some in the Democratic caucus are proposing would fundamentally transform the character of the Senate in a way that the Founders never intended and best expressed by James Madison. The proposed gutting of the Senate's historic rules and traditions threatens to replace the principle of the rights of the minority, so important to James Madison and our other Founders, with a new principle that the might of the majority makes right. The fact that the majority leader is contemplating doing so on a partisan basis by ignoring existing Senate rules is outrageous. Can you imagine ignoring the rules to change the rules? I know this unprecedented power grab makes even Democratic Senators uneasy. Other Democrats who find this proposal tempting and who have not yet served in the minority will find they have a rude awakening once they have to live under the new regime they might help create. To all my colleagues who might be inclined to support this fundamental transformation of the Senate, I will repeat once more Madison's warning about temporary majorities in the heat of passion enacting legislation: `` . . . measures which they themselves will afterwards be the most ready to lament and condemn.'' I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today, I'm proud to speak in support of the STEM Jobs Act of 2012, a bill passed by the House of Representatives last week. This bill would make available up to 55,000 green cards each year for foreign students who have received doctorates or master's degrees in science, technology, engineering, or math, also known as STEM, from a U.S. university. The bill would not increase overall immigration levels, but rather, would move our immigration system toward one in which we reward the best and brightest of the world with the chance to remain, live, and work in this country. Without a doubt, our immigration system is flawed. I have long argued that we need to enhance and expand legal avenues for U.S. employers to hire foreign workers. While I am a champion for rooting out fraud and abuse from many of our visa programs, I'm also supportive of finding ways to allow people to enter this country through legal channels. It makes sense to allow foreign students who have been trained and educated on U.S. soil to remain here. These students have advanced degrees in science, technology, engineering, and math, and this bill will ensure that we keep those highly skilled and sought-after students here for employers in need. Our economy cannot wait. We need to enact solutions today that create economic growth. We also have no reason to wait for next year's likely debate on immigration. Attracting and retaining high-skilled workers should not be a partisan issue. The senior Senator from New York has a similar proposal to grant green cards to STEM students. I can only assume that many people on the other side of the aisle would support this bill if the majority leader gave it a chance. Nearly 30 Democrats in the House crossed the aisle to help this bill pass last week. Finally, as we look ahead to immigration reform, it will be important to consider ways our policies benefit future generations, not just solve the problems of the day. Our immigration system should be structured in a way to recruit people with skills in STEM fields. This bill is a good first step to changing our system to a merit-based one. Enhancing our legal immigration channels should be a top priority, and I am committed to working on ways to do that for all sectors of the economy. I hope the majority will reconsider, and allow the Senate to call up and pass the STEM Jobs Act and send it to the President. It would be a signal to the American people that we can work together to enact needed immigration reforms. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the U.N. Convention on the Rights of Persons with Disabilities has the admirable goal of advancing the interests and rights of the disabled across the world. However, I have great concerns about acceding to this convention. I am also disappointed that the Senate will dedicate just 2 hours of debate to consider this convention, without the ability for any Senators to offer or consider worthy amendments. U.S. leadership in advancing and safeguarding the rights of the disabled is unmatched. The United States is the leader on disability issues. It's for this reason that the convention is modeled on the disability rights laws of the United States. However, I have serious doubts that simply joining the convention will lead to greater U.S. influence in promoting disability rights abroad. The ability of the United States to lead on this issue is not and should not be dependent upon joining this convention. We can lead on disability rights abroad because we lead on disability rights at home. Joining this convention will have no impact on the disability rights of Americans in this country. Americans with disabilities are already afforded the rights contained with the treaty. Many Federal and State laws protect the rights of the disabled, including the Americans with Disabilities Act. Even proponents of the convention acknowledge that it will not enhance the rights of individuals with disabilities in America. We have made great strides in disability policy in America. Laws which I authored, such as the Family Opportunity Act and Money Follows the Person, not only gave the disabled health care coverage but gave them real self-determination in that health care coverage. In the future, I will continue to work to protect coverage of the disabled during difficult budgetary times and work to find solutions for the disabled that allow for coordination of support services across all an individual's needs. While I respect the concerns and goals of supporters of this treaty, we should not let this take the place of focusing on problems and solutions here in America. However, becoming a party to the convention would subject the United States to the eighteen-member Committee on the Rights of Persons with Disabilities. This committee is created to monitor the implementation of the convention and provide conclusions and recommendations with regard to State Party's treaty reports. I have serious concerns about the infringement upon U.S. sovereignty by a committee tasked with providing criticisms and recommendations for the United States on our disability laws. Further, the convention raises additional concerns by unnecessarily including references in the area of ``sexual and reproductive health'' and the ``best interests of the child.'' These provisions call into question the purpose of the convention regarding abortion rights and the fundamental rights of parents to determine how best to raise their children. It is for these reasons, along with the decision of the majority leader to shut out the rights of Senators by prohibiting the consideration of any amendments, that I oppose this convention.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today, for only the fourth time in over 70 years, we will confirm a Federal judge during a lame-duck session in a Presidential election year. According to the Congressional Research Service, the Senate has confirmed judicial nominees during a lame-duck session in a Presidential election year on only three occasions since 1940. It occurred in 1944, 1980, and 2004. So for those who say we are treating this President differently, I would say we have treated him far better than most Presidents have been. This year we have already confirmed 31 District Judges and five circuit judges. That meets or exceeds the confirmations for Presidential election years in recent memory. That is more confirmations than we did in 2008; it exceeds the district confirmations in 2004 and ties the circuit confirmations for that year. It is the same number of district confirmations in 2000, and it is considerably more than we confirmed in 1996. So for the past five Presidential election years, this year stands near the top for judicial confirmations. Yet, despite that record, and despite the fact that we are about to confirm yet another district court nominee, all we hear from the other side are complaints. I must say, it makes it quite difficult to work cooperatively with the other side when, no matter what you do, all you hear are complaints. Lately we have heard the other side argue that since the President won reelection, we should not follow past practice, but rather we should confirm a large number of nominations during this lame duck session. The last time a President was reelected--President Bush in 2004--we heard a different tune from Democrats. That year the other side was in no hurry to confirm President Bush's nominees. In fact, only 3 judicial nominees were confirmed after the November 2004 election. That year, following President Bush's reelection, 23 judicial nominations that were pending either on the Senate Executive Calendar or in the Judiciary Committee were returned to the President when the Congress adjourned in December. Recently one of my colleagues on the other side stated, ``From 1980 until this year, when a lame duck session followed a presidential election, every single judicial nominee reported with bipartisan Judiciary Committee support has been confirmed.'' I suppose this is meant to imply there is some long record of routine confirmations following a Presidential election. But that is simply not the case. Let me tell my colleagues what that means: One Circuit confirmation in 1980 and 3 District confirmations in 2004. That's it. From 1980 through 2008, those four nominations represent the entire list. There were no such confirmations in 1984, 1988, 1992, 1996, 2000, or 2008. Furthermore, limiting this list to ``reported with bipartisan committee support'' fails to take into account that many judicial nominees in the past administration were subjected to a ``pocket filibuster.'' That means, of course, that they never had a hearing or opportunity to be reported out of Committee. So it is somewhat misleading to suggest the Senate routinely confirms nominees during Presidential lame-duck sessions of Congress. Again, the last time a President was reelected, only three of his nominees were confirmed following the election. Today we will add to that exclusive list, and the Senate has a time agreement for a vote on a second District nominee before we adjourn. This afternoon, we are considering the nomination of Paul William Grimm to be United States District Judge for the District of Maryland. With his confirmation, the Senate will have confirmed 159 of President Obama's nominees to the District and Circuit Courts. During the last Presidential election year, 2008, the Senate confirmed a total of 28 judges, 24 district and four circuit. This Presidential election year we have exceeded those numbers. We have confirmed five circuit nominees, and Judge Grimm will be the 32nd district judge confirmed. That is a total of 37 judges this year versus 28 in the last Presidential election year. So once again, I want to set the record straight, and I hope I have done so. Republicans have been more than fair to this President and his judicial nominees. Judge Grimm received his J.D. degree in 1976, graduating magna cum laude from the University of New Mexico School of Law. He began his legal career serving in the U.S. Army Judge Advocate General, JAG, Corps. After resigning his active duty commission in 1979, he established a general practice law partnership of Daniels and Grimm. In 1980, Grimm left the firm to serve as a prosecutor in the Baltimore County state's attorney's office. In this position, he handled both misdemeanor and felony cases. From 1981 to 1984, Judge Grimm served in the Maryland attorney general's office as the chief of litigation and administration for the Department of Licensing Regulation. Judge Grimm had his first prolonged stint in private practice serving as an attorney for the firm of Niles, Barton and Wilmer from 1984-1987. He was initially hired as an associate, but was promoted to partner in 1985. At Niles, Barton and Wilmer, he handled products liability cases, fidelity and surety cases, general tort cases, professional malpractice cases, and construction cases. In 1987, he joined Jordan, Coyne, Savits and Lopata as the managing partner of the Baltimore Branch. In 1991, he returned to Niles, Barton and Wilmer when Jordan, Coyne closed its Baltimore office. Throughout his time in private practice, his typical clients included government agencies, insurance companies, private corporations, partnerships, law firms, accounting firms, and individuals. In 1997, the U.S. District Judges for the District of Maryland appointed Judge Grimm to be a United States Magistrate Judge. In 2006, he was elevated to Chief United States Magistrate Judge. Judge Grimm has served as an Adjunct Professor of law at the University of Maryland, Francis King Carey School of Law, 1990-present, and at the University of Baltimore School of Law, 1997-present. The American Bar Association's Standing Committee on the Federal Judiciary has rated him unanimous well qualified. I support this nomination and congratulate Judge Grimm.

Mr. GRASSLEY. Mr. President, I yield back all time on this side.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak as in morning business.

Mr. GRASSLEY. Mr. President, today, America faces no greater threat to its growth and prosperity than our uncontrolled national debt. Currently, the country's debt exceeds $16 trillion. We are passing this amount of money on to our children and grandchildren to pay off. It is simply far too large a burden to be placing on them. As we move forward, it is clear that we must discuss spending. I know that President Obama is hyper-focused on increasing taxes as part of a deficit-reduction proposal. However, if we are serious about reducing our debt, we must talk about spending--not sometime next year, not only after we talk about taxes. We must talk about our spending Now. We need to have a thoughtful conversation that focuses on where our Federal spending most calls for control and containment. I would like to begin by drawing your attention to this chart I have in the Chamber. This chart from the Congressional Budget Office details noninterest spending as a percentage of GDP. We already know the significant role health care spending plays in our budget. Over the next decade, the Federal Government will spend over $7 trillion on Medicare and $4.5 trillion on Medicaid. Together these two programs account for one-quarter of the entire Federal Government's spending throughout the next 10 years. But look closely at the even longer term projections of our spending. According to the Congressional Budget Office, this middle graph-- Social Security, as a percentage of GDP--will remain relatively stable over the next 25 years. Noninterest spending, the bottom graph, as a percentage of GDP will also remain relatively stable over the same period. Now, look at this top graph. Over the next 25 years, spending on health care entitlements will basically double as a percentage of GDP. Unless we take a serious look at health care spending, we aren't genuinely acting to reduce our country's debt. Twenty-five years is not a lot of time. We need to be talking about health care spending now--not sometime next year, not just once we have discussed taxes; now. In Washington, we can get all wrapped up over semantic terms. Do we need Medicare and Medicaid reform? Should we call it restructuring, reorganization, improving and strengthening? To me, the terms are irrelevant and the conclusion is undeniable. We must gain control of health care spending. As we move forward in debt talks, I know a lot of attention will be devoted to taxes and revenue. Those conversations are important and should conclude with tax policy that fosters economic growth. But conversations about the health care entitlements should not be postponed or relegated to second-tier status, and they certainly should not be confined to cost reduction exercises that ignore the fundamental cost drivers. I have read reports of the savings in Medicare and Medicaid that President Obama has proposed. In my mind, they do little more than take cash out of the system without making fundamental changes necessary to bend the growth curve. Let's take a look at a few of those in the President's 2013 budget. There is increasing income-relating of Medicare premiums. That one takes more money from rich seniors. There is increasing copays for home health. That will increase costs for all seniors. There is getting bigger rebates from drug companies, even if it harms Part D. That one takes money from drug companies. There is cutting provider taxes in Medicaid. That one will take money from States at a time when the administration is encouraging them to expand Medicaid to cover childless adults. As an aside, I notice that the Washington Post had a banner editorial last Friday supporting a reduction in Medicaid provider taxes. I wish that the Post had been so helpful in 2006 when the Bush administration made a similar proposal. There is also something called a ``blended rate'' for State reimbursement under Medicaid. That breaks the promise to pay for 100 percent of the costs of those made eligible under Obamacare. These proposals will certainly reduce the Federal outlay in Medicare and Medicaid. However, these proposals will not solve the larger problem of health care spending growth. Instead, we should also focus on where our spending really is. I am fully aware that there is significant opposition from Democrats to Republican ideas like premium support for Medicare and block grants for Medicaid. I am not here promoting either of those ideas. But opposition to those ideas should not allow Democrats to walk away from the issue. We must address the growth of health care entitlements. I believe our Medicare and Medicaid spending problems can be explained in three straightforward charts. This chart I have in the Chamber is the first one. Here we look at the Federal Medicare and Federal and State Medicaid spending divided into three groups. On the left is spending by the Federal Government for people who are eligible only for Medicare. On the right is Federal and State spending for people only eligible for Medicaid. In the middle is Federal and State spending for people eligible for both Medicare and Medicaid, also known as dual eligibles or duals. This middle group, the duals, accounts for just over 10 percent of the entire Medicare and Medicaid population. However, there is more spending on duals than on the Medicare-only beneficiaries or the Medicaid-only beneficiaries. When we talk about the need to find ways to control spending on duals, it is for good reason. We must find ways to realign the disparate incentives of the federally run Medicare Program and the State-run Medicaid Programs. However, focusing on solutions exclusive to duals misses the fullness of the problem. For one, the duals are not a homogeneous population. While most people consider people on Medicare to be typically elderly, fully 38 percent of the duals are nonelderly. Also, while many of the duals are clearly high-cost, there are a large number of duals who utilize very few services. So while improvements to the care model that we use for duals are necessary, they are far from sufficient in reducing the totality of the growth driving health care costs. Consider this next chart, I have in the Chamber. In this chart, we see the most expensive individuals in the Medicare program. This is a population who has two to three chronic conditions and functional impairments. Among the most expensive Medicare beneficiaries, more than half--57 percent--qualify only for Medicare. Providing better coordinated care and reducing costs for high-cost beneficiaries is critical for the future of Medicare and Medicaid. I have strong reservations about splitting these two groups based solely on individuals' income. Proposals that give the States greater control of acute care services for the 43 percent who are duals, essentially, divide two similarly situated, expensive individuals between one Federal model and 50 States models based solely on their income. That makes no sense to me. A Medicare-only beneficiary may exhaust income and assets and become dually eligible. The separation between the two populations is arbitrary and artificial. Whatever we do to find a better model to coordinate care and reduce costs for high-cost beneficiaries, it needs to address all beneficiaries, not just duals. To find rational solutions to our health care spending, we must first accurately target the populations who incur the most significant expenditures. This includes individuals who are not only the duals but also those Medicare-only seniors with multiple chronic conditions and functional impairments. Finally I would like to draw attention to this chart I have in the Chamber. This final chart details spending on long-term services and supports in 2010. Two years ago, a total of $208 billion--8 percent of all U.S. personal health care spending--was spent on long-term services and supports. Among this spending, Medicaid, the single largest payer of such services, picked up 62.2 percent of the cost, while the private market paid for just over a third of it. With 80 million baby boomers entering retirement age, and 7 out of every 10 seniors needing long-term care at a certain point in their lives, the demand for those services will only increase and further drive health care spending if we don't take action. We must find ways to increase private spending and decrease public spending on long-term services and supports. If we are going to argue that we are reducing the growth of health care costs, we must actually do it. In closing, we have an opportunity before us. We can either make real changes to our health care entitlements that will impact the growth curve for years to come, or we can simply take cash out of the system and call it reform. We have to be willing to re-examine the effectiveness of our current overall Medicare and Medicaid structure. We should not be afraid to ask tough questions. Should Medicare and Medicaid be structured in a way that provides benefits to individuals in the most efficient and effective way possible? Are Medicare and Medicaid, in fact, structured in a way that guarantees we will spend Federal and State dollars inefficiently or ineffectively? When you look at the spending on duals, the spending on high-cost beneficiaries and the spending on long-term supports and services, I believe the answer to both questions is yes. Medicare and Medicaid proposals must address these three areas. President Obama hasn't come to the table yet. I know there are people telling us we shouldn't talk about health care entitlements now. We don't have a choice. Look at the numbers. Look at the spending. We only make the problem worse by putting it off. We can save Federal dollars by extracting more from beneficiaries, providers, and States, but that won't bend the long-term growth curve. We have to talk about solutions to actually lower the growth curve now. We are $16 trillion in debt. One of every four dollars we will spend in this next decade will be on Medicare and Medicaid. We will see health care entitlements double as a percentage of GDP in the next 25 years. If we want Medicare and Medicaid to not only survive but also thrive for the next generation, we need to be willing to ask fundamental questions and seek solutions that can affect the growth curve. I sincerely hope we are willing to look for solutions that can make a real difference. Mr. President, I suggest the absence of a quorum

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that Yajuan Lu, a health care fellow in my office, be allowed privileges of the floor for the remainder of the 112th Congress.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the Nation has lost a brave patriot who died defending freedom. Sergeant Joseph A. Richardson, who grew up in Algona, IA, was killed during a patrol in Paktika province, Afghanistan on November 16, 2012. He was clearly an accomplished, professional soldier as evidenced by his numerous awards, including: the Bronze Star Medal, Purple Heart, Army Commendation Medal, Army Good Conduct Medal, National Defense Service Medal, Afghanistan Campaign Medal with Campaign Star Iraq Campaign Medal with Campaign Star, Global War on Terrorism Service Medal, Army Service Ribbon, Overseas Service Ribbon, NATO Ribbon, and the Combat Infantry Badge. SGT Richardson's family released a statement that described Joe as someone who ``lived his life full of energy and with passion for everything he did.'' They also said that, ``He loved his job; he loved fighting for his country and our freedom.'' In fact, he demonstrated this by re-enlisting for six more years in the Army shortly before his untimely death. His love of country and willingness to serve marks Joseph Richardson as one of our nation's finest citizens, and his noble sacrifice immortalizes him among the ranks of our most honored war dead. We owe SGT Richardson and all those like him who have fallen in the name of liberty our infinite gratitude. We ought also to remember his family in our prayers, including his wife Ashley, his mother, Ginette, his father, Greg, and many other family and friends who will feel his loss very deeply. As those closest to Joseph Richardson remember the life of their loved one, it is incumbent on all Americans to preserve his memory and to reflect on the enormous price he and other like him have paid to preserve our free way of life.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Madam President, in less then 2 months, American taxpayers are set to experience one of the largest tax increases in American history. With the elections behind us, it is time for us to work together to reach an agreement that can pass both chambers of Congress and be signed by the President. Reaching an agreement won't be easy, but it must be done to avoid going head first off the fiscal cliff. By this time we are all aware of the Congressional Budget Office warning that failing to come together threatens to send us into another recession. An agreement is certainly doable, but all we hear about is what revenues Republicans are willing to put on the table. We need to hear what the President and my colleagues on the other side are prepared to tackle in regard to reforming entitlements that are the long-term drivers of our fiscal problems. That being said, we will not be able to reach an agreement if the other side continues to insist on punishing entrepreneurs and small businesses in the name of raising taxes on the ``wealthy.'' My colleagues on the other side of the aisle seem to believe that tax increases, particularly on high-income individuals, do not matter. They argue that raising taxes on the so-called wealthy will return us to the economic growth experienced at the height of the 1990s. This defies common sense. If you ask a business owner if raising his taxes will hinder his ability to grow his business, he assuredly will tell you they will. He understands that the more the government takes from him, the less he has to put back into his business. This is in line with the general understanding around here that taxes can be used as both a carrot and a stick to affect behavior. If you want to discourage behavior you impose a tax. If you want to encourage behavior you provide a tax incentive. For example, the excise tax on cigarettes has been increased to reduce the number of people smoking. A tax has been imposed on individuals for not purchasing insurance, so more will. Our tax code is littered with tax incentives to get people to do more of the things we like and less of the things we don't like. Individuals and businesses have and do respond to these incentives. Yet, if we are to believe the other side, when it comes to marginal income tax rates the influence of taxes ceases to exist. According to them, we can raise income taxes on the wealthy as high as we want with no ill effects for jobs and the economy. Well I have news for my colleagues; high marginal tax rates influence many factors that contribute to economic growth. Capital accumulation and the availability of a well trained labor force are two important factors influenced by taxes. Just as an increase in the excise tax on cigarettes leads to fewer packs of cigarettes being purchased, increasing taxes on capital reduces capital accumulation. Likewise, the more you tax labor the fewer hours worked you will get. In other words, taxes matter. Some of my colleagues on the other side have pointed to a Congressional Research Service report they claim proves raising the top marginal tax rate does not impact economic growth. There has been ample criticism of this one analysis that I will not go into here. But, even if one gives any credence to this one analysis, it must be viewed in light of a larger body of economic research that indicates higher taxes do hinder economic growth. This research confirms that high marginal rates reduce the hours worked and are a disincentive to small business owners and entrepreneurs. Among this research is a 2007 study by Christina Romer that found that a tax increase of 1 percent of GDP reduces economic growth by as much as 3 percent. According to this study, tax increases have such a substantial effect on economic growth because of the ``powerful negative effect of tax increases on investment.'' The last thing we need to do now is discourage business investment. Business investment has been stagnate. This has directly contributed to slower economic growth than in past economic recoveries. It has also contributed to weak job creation and wage growth. Raising marginal tax rates on entrepreneurs and business owners, thereby reducing their after-tax rate of return is not the answer. We need to give entrepreneurs and business owners the certainty they need to start investing again. The Organization for Economic Co-operation and Development has issued several reports analyzing how different forms of taxation impact economic growth. This OECD research found that income taxes significantly impact economic growth. According to this research, the most damaging tax was the corporate income tax followed by the individual income tax. The study further noted that highly progressive individual income tax rates are negatively associated with economic growth. The United States of course relies extensively on both corporate and individual income taxes. Our corporate rate of 35 percent is the highest in OECD countries, which is bad in its own right. But a large number of American businesses are taxed at the individual rate, not the corporate rate. We also already have a highly progressive tax system. In fact, according to a 2008 OECD study we have ``the most progressive tax system and collect the largest share of taxes from the richest 10 percent of the population.'' Currently, the top individual rate of 35 percent is the same as the top corporate rate. Starting in 2013, if the President has his way, the top rate goes up to 39.6 percent with the second highest rate scheduled to go up to 36 percent from 33 percent. When you consider the effects of the personal exemption phase-out and limitation on itemized deductions, the marginal effective tax rate jumps to over 41 percent. These tax increases will hinder the growth of small businesses, and of course, slower business growth means slow job growth. Evidence of this is documented by a 2001 study available from the National Bureau of Economic Research. This study looked at how the marginal rate cuts in the 1986 tax reform affected the growth of small firms. The study showed that businesses that experienced the largest marginal rate cuts saw their businesses grow the fastest. Conversely, the study concluded that when marginal tax rates go up, the growth of small businesses goes down. Similarly, a 2005 study conducted by the Small Business Administration found that ``lower marginal rates on entrepreneurial income encourage more entrepreneurial entry and lower rates of exit, and lengthen the duration of spells of activity.'' This means that if my colleagues are successful in raising the top two marginal rates there will be less entrepreneurial activity. Fewer people will seek to start their own business and more current business owners will be looking to close up shop. Further research confirms that high marginal tax rates leads to fewer hours worked. A 2008 study that appeared in the Journal of Monetary Economics and a 2004 study conducted by the Federal Reserve Bank of Minneapolis examined how taxes impact the labor supply across time and across countries. Both of these studies found that countries with higher marginal tax rates generally worked fewer hours. Conversely, those with low marginal rates worked more hours. In fact, these studies, controlling for other variables, found that the marginal tax rate accounted for the ``vast majority'' or ``preponderance'' of the difference in hours worked. Research by economist Michael Keane has highlighted that high marginal rates have the biggest impact on labor over the long-run. This is because of the effect of marginal rates on lifetime decisions. While a sudden increase in taxes may not lead to an immediate shift in current hours worked, it will impact future decisions. For instance, higher marginal rates will discourage the accumulation of human capital through work experience and training. His review of research in this area further concluded that the effect of high marginal tax rates is especially pronounced when it comes to women's participation in the workforce. There are many more examples of economic research that point to high tax rates hindering economic growth. For the sake of time, I am not going to go through all of them. Instead, I will ask unanimous consent to place a list of more than 20 studies in the Record. This is by no means an exhaustive list, but I believe these provide a good starting point for my colleagues who are interested in learning the truth about taxes. In sum, this research suggests that soaking the rich through an ever more progressive tax code will only reduce incentives for work and entrepreneurship thereby reducing economic growth. It means that for a couple deciding whether or not a spouse who left the workforce should go back to work, taxes matter; for an Individual who is considering investing in their own human capital through education or training to increase their earning potential, taxes matter; for a small business owner considering hiring employees, purchasing equipment, or expanding their business, taxes matter; for an entrepreneur deciding whether or not a business venture is worth pursuing, taxes matter. Let me turn to another argument used by my colleagues on the other side to support increasing taxes. This argument is that tax increases on the ``wealthy'' are necessary to reduce the deficit and balance the budget. The truth is there are not enough so-called rich people to make this happen. Based on 2009 tax returns, if you raised the top tax rate on income over $200,000 to 100 percent, you would still come short of covering the the $1.1 trillion budget deficit for fiscal year 2012. This back of the envelope calculation assumes that people will not work less or engage in tax planning or fraud to avoid such a confiscatory tax. I imagine my colleagues on the other side would even concede this would be the case with such a high rate. For people out there who think they don't have to worry about the President's proposals because you are not wealthy, my message to you is this: You should be worried, because in order to tackle the deficit and pay for all his proposed new spending; the President will have to increase taxes on individuals well under $200,000. The President of course claims that he wants a balanced approach to deficit reduction. He says we should do a combination of tax increases and spending cuts. So far he has been rather specific about his tax increases. However, he has not said much about entitlements that are going to be the main drivers of our national debt over the coming years and decades. The President needs to lead in this area to get a serious discussion rolling. He needs to begin offering serious solutions, not just attacking those that have been offered up by Congressman Ryan in his budget proposal. Given my tenure in Congress, I have learned to be skeptical when people around here start saying we will reduce the deficit by raising taxes now and cutting spending later. Especially when no specifics are articulated regarding what programs can be cut or what reforms they will accept for addressing entitlements. It's been my experience in these situations, the taxes always go up, but the spending cuts never happen. Professor Vedder of Ohio University, who has studied tax increases and spending for more than two decades, confirms this in recent research. Professor Vedder looked at tax increases and spending spanning from the end of WW II through 2009 and discovered that ``each dollar of new tax revenue has been associated with $1.17 in new spending''. If we are ever going to get a handle on the deficit, we are going to need to learn to live within our means. Spending as a percent of GDP has averaged about 20.5 percent since 1970. From 1998-2001, when we did balance the budget, spending as a percent of GDP averaged 18.5 percent. In fact we have never balanced the budget with spending as percent of GDP exceeding 20 percent. Spending under President Obama has averaged 24.5 percent of GDP. We must curtail our spending if we ever hope to balance the budget in the future. Some around here insist that cutting spending will be as damaging, if not more so, than increasing taxes. They use the rationale of spending multipliers pushed by some economists that suggest for every dollar of spending by the government we will get more than a dollar in economic activity. This theory is deeply flawed. Even if we assume the government spends money wisely with no fraud, waste or abuse--and that is a big if--it means one less dollar to be spent by the private sector. If this was solid economic theory our economy should be booming given all the money we have been spending around here. The truth is spending is not the solution to our problems, it is our problem. It is what got us into this mess in the first place. For my colleagues who are still wedded to the idea that tax increases are preferable to spending cuts, I recommend reading a recent study by Harvard Economist Alberto Alesina. Given the fiscal shape of many countries, Professor Alesina studied the impact of spending and tax policies put in place to address fiscal imbalances. His research concluded that ``fiscal adjustments based upon spending cuts are much less costly in terms of output losses than tax based ones. In particular, spending-based adjustments have been associated with mild and short-lived recessions, in many cases with no recession at all. Instead, tax-based adjustments have been followed by prolonged and deep recessions.'' This research paper comes on the heels of a paper he released in 2009. This paper similarly found that policies favoring spending cuts over tax increases are more likely to reduce the deficit. In the words of Professor Alesina, fiscal adjustments ``based upon spending cuts and no tax increases are more likely to reduce deficits and debt over Gross Domestic Product ratios than those based upon tax increases.'' These studies confirm what through shear common sense Winston Churchill knew more than a half century ago, ``for a nation to try and tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.'' In the coming weeks, I hope to work with my colleagues and the President to reach a bipartisan agreement to help put our country back on sound fiscal footing. However, as I said in the beginning, it can't be just one side of the aisle that is expected to come to the table. My colleagues on the other side must be willing to put real reforms to address entitlements and our out of control spending on the table. I ask unanimous consent the list to which I referred be printed in the Record.

Mr. GRASSLEY. I yield the floor. I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am getting the runaround from the inspector general at the Department of Defense, and my remarks, which are fairly lengthy, will be connected with that problem I am having. With sequestration looming on the horizon, Congress needs a truly independent Department of Defense audit oversight capability. We need it to root out waste. As my friend from Oklahoma, Senator Coburn, knows all too well, rooting out Department of Defense waste is no easy task. His new report identifies some excellent examples of waste ready for removal. I commend Senator Coburn for his outstanding work and stand ready to help him. But to successfully root out waste day in and day out, there must be a topnotch audit quality and capability in the hands of an inspector general who is ready and willing to use it effectively. I am reluctant to say this, but it needs to be said. I fear, and I suspect, that the independence of the inspector general's audit capability may have been compromised. I say this because of the story I am about to tell. This story is about a difficult audit, where the inspector general apparently got a bad case of weak knees and caved under pressure. The inspector general dropped the ball on an audit that should be a critical component in Secretary Panetta's good-faith effort to bring the Defense Department into compliance with the Chief Financial Officers Act. Today, the Department of Defense is the only Federal agency that cannot pass the test. So Secretary Panetta turned up the pressure. He wants to move the audit readiness date up to no more than 3 years from the congressionally mandated date of 2017 to 2014. This is a daunting task, which I spoke about here on the floor almost 12 months ago now, on December 11 of last year. I say it is a daunting task because there is a big pothole in the road the Secretary faces that he may not know about, hence the reason I am speaking. The kingpin of this initiative--the Department's flagship accounting agency known as the Defense Finance and Accounting Service--may not be ready to produce credible financial statements. It claims to have earned a clean opinion. Yet when its financial statements were put under the inspector general's microscope, they were found to be very lacking. They did not meet the prescribed audit standards. To make matters worse--far worse--all the evidence suggests the inspector general may have quashed this negative audit report, allowing the charade to continue unchecked. This oversight failure could leave a gaping hole in Secretary Panetta's master plan. Except for the Corps of Engineers, the Defense Finance and Accounting Service handles all the Department's financial transactions. It should be the foundation of Secretary Panetta's initiative. It was created over 20 years ago to clean up the Department's financial mess. It should be exerting leadership in this arena and showing the rest of the Department how to balance the books. Its audit needs to be as clean as a whistle. If the Department's central accounting agency can't earn a clean opinion, then who can earn a clean opinion? Today the central accounting agency's claim of a clean opinion may be hollow. The inspector general, who is responsible for making those judgments, rejected that opinion. The inspector general reviewed it and concluded that it did not pass muster. Unfortunately, the inspector general dropped the ball and quit before the job was done. The inspector general's report, known as a nonendorsement report, was finalized but never signed and issued. It was simply buried in some deep hole and covered with dirt. Were it not for whistleblowers who are in touch with my office, we might think the Defense Finance and Accounting Service's statements were somehow squeaky clean. I now have the nonendorsement report and other relevant audit workpapers, and they tell a very different story. The financial statements produced by smaller organizations, such as the Defense Finance and Accounting Service, are audited by certified public accounting firms. But this is always done under the watchful eye of the inspector general. In the end, the inspector general must validate those opinions produced by a CPA firm. The firm Urbach Kahn and Werlin, UKW, examined the defense accounting agency's statements. It awarded an unqualified opinion or passing grade. The inspector general, by comparison, reached a different opinion. It concluded that those statements did not meet standards. The inspector general announced that it would issue a nonendorsement report, but that report was never issued. That is why this Senator is here on the floor today. What happened to the nonendorsement report? All the evidence appears to indicate that the inspector general may have quashed the nonendorsement report. That assessment is based on a continuing review of all the pertinent documents. I would like to briefly review those facts so my colleagues can understand where I am coming from. Seven red flags have popped up on my radar screen. Red flag No. 1. The contract, which governed the audits in question, is a good place to start because it sets the stage for what followed. The contract was supposed to put the inspector general in the driver's seat. Section 3 of the contract clearly specifies that ``all deliverables are subject to final Department of Defense Inspector General approval.'' The opinion prepared by the public accounting firm was the main deliverable. Two members of the inspector general's audit team were designated as contracting officer representatives. They had exclusive authority to determine whether that opinion met audit standards and deserved endorsement and to approve invoices for payment. Unfortunately, as I will explain, none of the parties involved showed much respect for this contract. In fact, when the crunch came, they trashed it. Red flag No. 2. The inspector general's decision memorandum and final version of the nonendorsement letter, both dated February 16, 2010, contain compelling evidence. The evidence points in just one direction: There was a lack of credible audit evidence to justify a clean opinion. Both the inspector general's audit team and its Quantitative Methods and Analysis Division reported major deficiencies in the CPA firm's work. Once the inspector general determined that the CPA's audit opinion did not meet prescribed standards, the inspector general's representative prepared a nonendorsement letter and instructed that payments on outstanding invoices be stopped. Those decisions precipitated a classic bureaucratic impasse. Red flag No. 3. The impasse came to a head at the Defense Finance and Accounting Service's audit committee meeting held on January 27, 2010, where three options were considered: first option, the IG would issue a nonendorsement letter; second option, the CPA firm would do more work on accounts payable and undelivered orders issued; and third option, the IG would do additional work. Just 1 day later, January 28, a senior official from the Inspector General's Office, Ms. Patty Marsh, announced the results of the meeting. Ms. Marsh reported that a consensus was reached: No additional work would be performed. She then declared that the Inspector General's Office would issue a nonendorsement letter. Red flag No. 4. The Defense Finance and Accounting Service immediately implemented a series of measures that appeared to bypass and eliminate oversight by the inspector general. In what appeared to be overt defiance of the inspector general's decision, the accounting agency's Director of Resource Management, Elaine Kingston, in a letter to the accounting firm, unilaterally declared that her agency had ``proudly achieved an unqualified opinion.'' Kingston's letter was dated February 19. At that point, this opinion had been explicitly and unambiguously rejected by the inspector general, and Kingston knew it. She also authorized that all disputed invoices be paid. The invoices authorized for payment by Ms. Kingston were the very same ones previously rejected by the inspector general's contract officer representative. Their rejection was based on advice from the inspector general's legal counsel. Kingston's actions showed blatant disregard for the contract and authorized payments alleged to be fraudulent. Then, on April 15, the central accounting agency's contract officer, Normand Gomolak, effectively eliminated independent oversight by the inspector general. He issued a letter terminating the two inspector general contract officer representatives. A known flaw in the contract allowed this to happen. Gomolak's termination order was retroactive to January 27, 2010--the very same day the inspector general revealed its intention to issue the nonendorsement letter. It is as if Mr. Gomolak had superhuman powers and could reach back in time and wipe the nonendorsement report clean off the slate, like it never really happened. As one witness put it, ``DFAS virtually kicked us--the Inspector General--out of the contract, and without so much as a whimper from the duly designated junkyard dog.'' Red flag No. 5. Under the circumstances, the stop-work order blessed by the audit committee was not surprising. That it would be accepted and tolerated by the inspector general is astonishing indeed. The consensus reached was between the three main targets of the audit: the accounting agency, the CPA firm, and the chief financial officer, who supervises the central accounting agency--such a consensus, as it was. All appeared to share one common goal: Just simply stop the audit. That is a predictable response from audit targets, especially if there is something to hide. The inspector general's initial response was appropriate. The Inspector General's Office expressed a willingness to do more work, and when it became evident that was not a viable option, it declared that a nonendorsement letter would be issued. Of course, those were good moves. Unfortunately, however, the Inspector General's Office quickly began to backpedal and to align itself with the stop-the-audit coalition. First, it issued a stop-work order to the audit team. That occurred February 4. Then on April 13 the IG informed the accounting agency by telephone that the nonendorsement report would not be issued. This was, of course, a bolt out of the blue. Red flag No. 6. In a letter to me dated May 26, the Inspector General's Office attempted to provide a plausible explanation for why this report never saw the light of day. First, the letter suggested that a formal nonendorsement report was unnecessary because the Inspector General's Office had already informed the audit committee of its decision to nonendorse the opinion. Is the inspector general implying that Ms. Marsh's verbal nonendorsement announcement constituted de facto or unofficial nonendorsement? If that is indeed the case, then how come the central accounting agency still pretends to have earned a clean bill of health? There is something wrong with this reasoning. Failing to issue the nonendorsement report left the opinion under a dark cloud, where it remains today. In addition, the inspector general also suggested that doing a mere 2 to 3 weeks of additional work to finalize the nonendorsement letter would not have constituted a ``good use of audit resources''--that is, it would have been a waste of money. The need for 2 to 3 weeks of extra work appears to be a real stretch. I have the nonendorsement letter. It was finished. All it lacks is Ms. Marsh's signature. More importantly, however, the Inspector General's Office does not seem to understand either the purpose or the importance of this audit oversight project. For starters, I recommend the inspector general check section 7 of the contract. It states: The DoD OIG will perform oversight of the Contractor's work to support the decision about whether to endorse the Contractor's opinion report. That was the stated purpose of this costly audit project--to make a decision on endorsement. From day one, however, this was a significant effort to resolve a difficult and sensitive question: Did the Defense Finance and Accounting Service deserve a clean opinion--yes or no? Since the focus of this audit was the kingpin of Secretary Panetta's initiative in the first place, well, that makes this work inherently important. Red flag No. 7 and the last red flag. One of my main concerns about this entire matter is that it appears to point to a failure of oversight. So I ask this question: Did the Inspector General's Office cave under pressure and surrender its oversight responsibilities? By accepting and tolerating the central accounting agency's actions, the Office of the Inspector General appears to have allowed a Defense Department entity to effectively block its ability to perform one of its core missions; that is, auditing the books of a key defense agency. If true, this would be a cardinal sin for the inspector general. The central accounting agency allegedly violated the terms of the contract. It allegedly made fraudulent payments, and it unilaterally terminated oversight. Yet, in the face of such blatant defiance, the Inspector General's Office turned a blind eye to this challenge. So you have to ask the question, Why did the IG just roll over? Why did the IG fail to assert its independent audit authority? Stopping work at this critical juncture does not appear to have been a responsible oversight option. Why did top management fail to allow the oversight team to finish its work and render a decision on the opinion? Why quit when it was on the very edge of issuing a nonendorsement report on the flawed opinion? Was that report quashed to spare the chief financial officer another black eye for the unending accounting screwups or did the IG drop the ball because everyone involved knew these financial statements were in such bad shape they could never pass the test? While we may never know the reasons for what happened, I feel certain about one thing. On this audit, effective oversight collapsed. Congress and the citizens of this country need some answers, but one is paramount: Did the Defense Finance and Accounting Service earn a clean opinion? A simple yes or no. As the drive to audit readiness begins in earnest, and that is under Secretary Panetta's leadership, the Secretary and the Congress need a straight answer right upfront. Leaving it in limbo is unacceptable. In closing, I would like to emphasize one point. My inquiry is about some very important principles. True, the preparation of these financial statements and all the attendant audit work probably costs the taxpayers somewhere between $10 and $20 million. To the average American, those are big bucks. Since the audit came to nothing, waste surely occurred. Any waste, whatever it is, is unacceptable. But putting important principles at risk was as egregious as the dollar waste. What I am talking about are ethical standards, audit standards, and the integrity of the audit process. Those standards must be protected at all cost. That is one of the inspector general's jobs, to watchdog and follow those guiding principles. The record appears to show that these standards got trampled and this may have happened with the IG's knowledge and approval. That is what the evidence appears to suggest so far. If the integrity and the credibility of that process were undermined, then the effectiveness of one of our primary oversight weapons would be gravely impaired. When and if those lines are crossed, the inspector general and anyone else involved would be treading on dangerous territory. If such transgressions occurred, then there must be corrective action and accountability. When I complete this oversight investigation, I will submit a final report to Secretary of Defense Panetta. It will contain findings and recommendations for the Secretary's consideration. To facilitate this process, I ask Deputy Inspector General Halbrooks to answer all my outstanding questions promptly. In other words, I am getting tired of being jerked around. I yield the floor. I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I wish to thank several of my colleagues who have recognized me for casting my 11,000th vote yesterday. I want to acknowledge the fine things Senator Reid, the majority leader, said, Senator McConnell, the Republican leader, Senator Stabenow, Senator Harkin, and Senator Leahy, and I wanted them to know I appreciate very much the recognition they brought. I hope it is nothing special, because I believe I am just exhibiting the work ethic of Iowans generally, who work very hard. Reservation of Leader Time

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, we are again discussing the important topic of cybersecurity--a topic we all agree is of the utmost importance and worthy of our attention. Unfortunately, this is like the movie ``Groundhog Day.'' The majority continues to push the same flawed legislation that failed to garner enough votes for consideration just three months ago. No one disputes the need for Congress to address cybersecurity. However, Members do disagree with the notion this problem requires legislation that increases the size of the Federal Government bureaucracy and places new burdens and regulation on businesses. Enhancing cybersecurity is important to our national security. I support efforts to strengthen our Nation against cyber attacks. However, I take issue with those who have come to the floor and argued that those who don't support this bill are against strengthening our Nation's cybersecurity. As I said in August, disagreements over how to address policy matters shouldn't devolve into accusations about a Member's willingness to tackle tough issues. The debate over cybersecurity legislation has turned from a substantive analysis of the merits into a political blame game as to which side supports defending our Nation more. If we want to tackle big issues such as cybersecurity, we need to rise above disagreements and work in a constructive manner. Disagreements over policy should be openly and freely debated. Unfortunately, this isn't how the debate on cybersecurity proceeded. Instead, before a real debate began last August, the majority cut it off. This was contrary to the majority's promise earlier this year of an open amendment process to address cybersecurity. Aside from process, I also have significant substantive concerns with the bill. Chief among my concerns with the pending bill is the role played by the Department of Homeland Security. These concerns stem from oversight I have conducted on its implementation of the Chemical Facility Anti-Terrorism Standards, or the CFATS program. CFATS was the Department's first major foray into regulation of the chemical sector. DHS spent nearly $500 million on the program. Five years later, they have just begun to approve site security plans for the more than 4,000 facilities designated under the rule. I have continued to conduct oversight on this matter. Despite assurances from DHS that they have fixed all the problems with CFATS, I keep discovering more problems. On top of this concern, since the last vote in August, the chairman and ranking member of the Senate Permanent Subcommittee on Investigations have released a report criticizing DHS and the fusion centers they operate. The subcommittee report criticized DHS's fusion centers as ``pools of ineptitude, waste, and civil liberties intrusions.'' And that is the evaluation after DHS spent as much as $1.4 billion on this program. Given these examples, I am baffled why the Senate would take an agency that has proven problems with overseeing critical infrastructure and give them chief responsibility for our country's cybersecurity. Additionally, I am concerned with provisions that restrict the way information is shared. The restrictions imposed under title VII of this bill are a step backward from other information-sharing proposals. This includes the bill I have co-sponsored, the SECURE IT bill. The bill before us places DHS in the role of gatekeeper of cyber threat information. The bill calls for DHS to share the information in ``as close to real time as possible'' with other agencies. However, this will create a bottleneck for information coming into the government. Further, title VII includes restrictions on what types of information can be shared, limiting the use of it for criminal prosecutions except those that cause imminent harm. This is exactly the type of restriction on information sharing that the 9/11 Commission warned about. In fact, the 9/11 Commission said, ``the [wall] resulted in far less information sharing and coordination.'' The Commission further added, ``the removal of the wall that existed before 9/11 between intelligence and law enforcement has opened up new opportunities for cooperative action.'' Why would we even consider legislation that could rebuild these walls that threaten our national security? We haven't had any real debate on these issues. The lack of a real process in the Senate on this current bill amplifies my substantive concerns. In fact, this is eerily reminiscent of the debate surrounding ObamaCare. Here we are once again, in a lame duck session the week before Thanksgiving, tackling a serious problem that hasn't been given the benefit of the Senate's full process. I don't want cybersecurity legislation to become another ObamaCare. If we are serious about our Nation's security, then shouldn't we treat it as such? Additionally, the staff of the sponsors of the legislation before us continue behind-the-scenes efforts to negotiate changes to the bill we are being asked to vote on. If the bill sponsors are still negotiating changes, why don't we have the benefit of a full and open amendment process to try and fix it before we vote for cloture? It simply doesn't make sense. Instead, it appears today's vote is about something other than cybersecurity. It is yet another attempt by the majority to paint the minority as obstructing the work of the Senate. Most likely, this vote will be used simply as fuel for the majority's effort to dismantle the filibuster. So much for tackling cybersecurity without putting politics into the mix. This isn't the way we are supposed to legislate. The people who elected us expect more. How many Senators are prepared to vote on something this important, without knowing its impact because we haven't followed regular order? Are we to once again pass a bill so that the American public can then read it and find out what is in it? These are questions that all Senators should consider. And our citizens should know in advance what we are actually considering. If we are serious about addressing this problem, then let's deal with it appropriately. Rushing something through that will impact the country in such a massive way isn't the way we should do business. It is not good for the country and it is not good for this body. Thank you. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I, along with Senator Mark Kirk, intend to object to proceeding to the nomination of Richard Berner to head the Office of Financial Research within the Department of the Treasury. We will object to proceeding to the nomination because the Department of the Treasury has refused to respond to a letter Senator Kirk and I sent on October 2, over 6 weeks ago, regarding the Treasury Secretary's actions when he became aware of the manipulation of the London Interbank Overnight Rate, or LIBOR. The Department has also refused to provide the documents we requested. In addition, my staff has, on several occasions, attempted to schedule briefing times that are convenient for the Department. The Treasury Department has cancelled each of these briefings and failed to cooperate in rescheduling at a mutually agreeable time. Because everything from home mortgages to credit cards was pegged to LIBOR, its manipulation affects almost every American. Given the widespread effects of this manipulation, it is disturbing to see that the Treasury Department has thus far refused to answer basic questions and provide essential documents. It is critical for Congress to be able to ask questions and to have access to administration documents in order to conduct vigorous and independent oversight. It is unfortunate that this administration, which has pledged to be the most transparent in history, consistently falls short of that goal.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, Iowa has lost another native son fighting for our liberty on foreign soil. I am sad to announce that on Monday, November 5, just as our Nation was preparing to cast our ballots in the election, PFC Brandon Buttry of Shenandoah, IA, gave his life defending our freedom. He was only 19 years old but had felt a calling to join the military since he was a young child. I thank God for such patriots as Brandon Buttry. Without such brave and selfless Americans in each new generation, our liberty and way of life could not have been sustained. My prayers go out to his parents, Don and Pam, his many brothers and sisters, and all those who knew and loved Brandon. He is described as having a mischievous smile and a twinkle in his eye as well as a slight contrarian streak. By all accounts, he was liked by all who knew him, and I know he will be missed very deeply in his community. I understand he had an interest in American history, and his love of his country is evident from his deep desire to serve. He has now given the ultimate sacrifice on behalf of his fellow countrymen, and his name will be immortalized alongside all those other American patriots who have laid down their lives in the name of freedom.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the Supreme Court decision on the Affordable Care Act has put the brakes on Medicaid expansion for now. The Federal Government can no longer force States to expand their Medicaid programs. With the expansion and the billions of dollars that States would have had to spend on hold, and as we look at solutions to address our 16 trillion dollar national debt, now is a good time for us to step back and ask what role health care should play for States in our Federal system. Mr. President, as of today, the primary function of a state is health administration--not primary and secondary education, not public safety, not roads and bridges. According to the National Association of State Budget Officers, Medicaid is the single largest spending line in state budgets at 23.6 percent. The economic downturn and high unemployment have resulted in an increase in Medicaid enrollment as individuals lose job-based coverage and incomes decline. Medicaid enrollment increased by 5.1 percent during fiscal 2011 and is estimated to increase by 3.3 percent in fiscal 2012. In governors' recommended budgets for fiscal 2013, Medicaid enrollment would rise by an additional 3.6 percent. This would represent a 12.5 percent increase in Medicaid enrollment over this three year period. Medicaid enrollment surged during the economic downturn with enrollment rising by 7.2 percent from June 2009 to June 2010. Although Medicaid enrollment is easing for now, the implementation of the Affordable Care Act would have greatly increased the individuals served in the Medicaid program in 2014 and thereafter. The Affordable Care Act, as passed, required States to cover all childless adults beginning in 2014 under Medicaid that heretofore had not been covered. The expansion to 138 percent of the poverty level was expected to cover 16 million people. States would get 100 percent of the cost of new individuals enrolled paid for by the Federal Government for the first several years before the Federal payment levels for those new individuals would fall to approximately 92 percent. The Supreme Court rejected the mandatory expansion. Quoting from the Supreme Court ruling The threatened loss of over 10 percent of a State's overall budget is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion. The Government claims that the expansion is properly viewed as only a modification of the existing program, and that this modification is permissible because Congress reserved the ``right to alter, amend, or repeal any provision'' of Medicaid. But the expansion accomplishes a shift in kind, not merely degree. The original program was designed to cover medical services for particular categories of vulnerable individuals. Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level. A State could hardly anticipate that Congress's reservation of the right to alter or amend the Medicaid program included the power to transform it so dramatically. The Medicaid expansion thus violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion. As a result of the Supreme Court ruling, the Federal Government can no longer threaten the States with withdrawal of all Federal Medicaid funding if States do not expand their Medicaid programs. States now have the option to expand coverage. Several States have now suggested they will not expand in 2014. The Congressional Budget Office now estimates that only one-third of the potential newly eligible population will reside in States that choose to fully extend coverage. According to CBO, about one-half of the potential newly eligible population will reside in States that only partially extend Medicaid coverage. The remainder, about one-sixth of the potential newly eligible population, will reside in States that do not extend Medicaid coverage at all in the next decade. CBO's predicted Medicaid coverage under the Affordable Care Act has been reduced by 35 percent. Clearly CBO accepts the proposition that if States are not forced to extend coverage to the ACA mandatory population, they will not. Mr. President, right before the August recess my office released a report from the Government Accountability Office on State capacity to meet the Medicaid requirements under the ACA. It shows why CBO's skepticism is appropriate. The report discusses challenges States are facing with information technology, guidance from CMS, and the budgetary uncertainty of increased enrollment of those currently eligible for Medicaid. The GAO surveyed the States and found that the vast majority expect to have additional costs related to administering their current program, developing eligibility systems, enrolling newly eligible individuals and enrolling additional individuals who are currently eligible. The GAO focused particularly on the challenges faced by States in updating their eligibility systems. In the report, GAO found four main deterrents to States as they consider the challenge of expanding their eligibility systems to meet the goal of Medicaid expansion. First, many States face a lengthy procurement process as they look to upgrade their technology to handle expansion. Second, designing new eligibility systems is complex and may involve the replacement of existing, outdated systems. Third, States often have systems that operate across multiple programs further increasing the cost and complexity of upgrading. Fourth, as States have fought against their own budgetary problems, many have reduced personnel resources to manage projects as complex as Medicaid expansion. The GAO further found problems with the guidance CMS has been providing the States. 30 of the 36 responding to the GAO survey found that CMS guidance was only slightly useful or not useful at all. Mr. President, many outside observers have treated the expansion of Medicaid as a foregone conclusion, that States couldn't possibly turn down so much supposedly ``free money.'' The evidence from CBO and GAO is crystal clear. When the Federal Government is involved, there's no such thing as a free lunch. States absolutely can turn down the option to expand and every State faces a difficult decision in how they choose to move forward. However, Mr. President, the Medicaid expansion in the Affordable Care Act is not the only fiscal pressure States face from the health care administration. One of the most expensive and complex populations receiving Federal health care services are those dually eligible for Medicare and Medicaid, commonly referred to as DUALS. They are poorer, sicker and often in need of more extensive and expensive coordinated care. The inefficiency created in the misaligned incentives of the Medicare and Medicaid programs is frequently cited as one of the areas in health care in greatest need of reform. The Affordable Care Act created an office in CMS charged with creating demonstration projects to allow for greater coordination of dual eligibles. Those demonstration projects have been moving forward at breakneck pace with as many as 26 States looking to participate. Essentially all the demonstrations seek to give States greater control of the acute care of dual eligibles. CMS has legal authority under the ACA to take these demonstrations nationally if they are successful. Many outside groups are concerned about the size, scope and pace at which demonstrations are proceeding citing California's initial proposal to take control of one million dual eligibles as an example of the outsized nature of the demonstrations. In July, Senator Rockefeller wrote a strongly worded letter to CMS suggesting they should halt the demonstrations for similar reasons. Mr. President, no one argues that the way Medicare and Medicaid coordinate for dual eligibles works. Coordination today is akin to asking my wife and me to compose a letter with her writing the consonants and my writing the vowels. Giving the States greater control of duals may be the right answer, but when you consider the fiscal challenges faced by States, this should be a decision considered by Congress examining all possible alternatives rather than something occurring through regulatory action. Finally, the Affordable Care Act gives States broad leeway in creating State-based Exchanges. These State exchanges are the mechanism where people with incomes above Medicaid eligibility will go to get health insurance. It would be an understatement to say the States haven't moved very rapidly to get these Exchanges up and running. I do acknowledge that many States may have been waiting for the Supreme Court ruling before moving ahead with their Exchanges. However, I do think it remains equally plausible that States are moving cautiously as they look at one more role in health care where they are being asked to expand. Mr. President, for the States, health care is a chaotic mess. The Federal Government is asking the States to take greater roles in administering coverage for the uninsured in Medicaid, the dually eligible and the uninsured in the private sector. As we move forward in 2013, we will revisit, perhaps repeal, the Affordable Care Act. We will examine proposals to reign in the cost of our heath care entitlements. Mr. President, as we do so, I strongly recommend we step back and reconsider what is the appropriate role for health care in our Federal system. In July, Robert Samuelson wrote in the Washington Post about a proposal often associated with my friend from Tennessee, Senator Alexander, known as the ``grand swap.'' In this proposal, the Federal Government would assume all responsibility for Medicaid and the States would assume all responsibility for education. Samuelson raises the proposal because, in his words, Only the federal government can devise a solution to control health costs; concentrating government health spending at the federal level would intensify pressures to do so. States have tried mightily to control spending with at best partial success. For example, Medicaid reimbursement rates average only 72 percent of Medicare levels. The low rates have caused some doctors not to accept Medicaid patients. Mr. President, Samuelson raises a significant question, which Congress needs to consider in entitlement reform. Congress should consider what States should do in health care and what are reasonable expectations. If Congress wants States to administer benefits for the aged, blind and disabled, and low income individuals along with managing the exchanges for individuals with incomes up to 400 percent of poverty, Congress can do so. If health care is the primary responsibility of States, it is because of decisions made by Congress. If States are being asked to do so while also overseeing education, public safety, roads and bridges and meet in most cases a balanced budget requirement, Congress should temper its expectations regarding the resources States will be able to devote to health care. With significant restructuring of Medicare and Medicaid possible in 2013, we should use this as an opportunity to reconsider the role of the States in providing health care coverage inclusive of populations and services. What we ask of the States should be thoughtfully considered in any reform discussion.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, on Wednesday, the inspector general of the Department of Justice issued his report on ATF's Operation Fast and Furious. This report is a significant milestone for the family of Border Patrol Agent Brian Terry. He was killed in a firefight with illegal aliens who were armed with illegal guns from Fast and Furious. Attorney General Holder delayed any discipline for the officials responsible for Fast and Furious until after this report was released. The time for accountability has come. There are no more excuses for inaction. The inspector general's nonpartisan review confirmed virtually everything I heard from whistleblowers over the last year and a half. The Justice Department tried to push all the blame on the ATF and officials down in Phoenix, AZ, but the inspector general confirmed that senior officials in Washington ignored red flag after red flag. Senior officials in both the Justice Department and ATF knew or should have known that Operation Fast and Furious was putting guns into the hands of criminals. But they ignored the risk and failed to take steps to protect the public safety. The Inspector General also confirmed that there were major information-sharing failures between law enforcement agencies. We are still going through the nearly 500-page report, as well as 309 pages of new documents the Justice Department produced late Wednesday. However, I was surprised to learn from the report that Attorney General Holder testified that he doesn't remember the conversation with me about Fast and Furious in my office on January 31, 2011. That is when I handed the first letters to the Attorney General opening the investigation of Fast and Furious. I happen to remember that conversation. My staff told the Attorney General that day what whistleblowers had told us. Remember, whistleblowers got involved in coming to Congress because for months they were sending reports up from Phoenix to main Justice that selling guns illegally or encouraging our gun dealers to sell guns illegally was not a very smart thing for our Justice Department to do. And when they weren't listened to, these whistleblowers started coming to this Senator. Specifically, at that meeting with Holder, we discussed that two weapons the ATF let go in Fast and Furious were found at the murder scene of Border Patrol Agent Terry. I emphasized I was personally bringing it to his attention--meaning the attention of the Attorney General--because these were very serious and credible allegations, not just some run-of-the-mill letter that I send to departments generally. Yet even after that meeting, the Department didn't take this case seriously. The inspector general's independent report says so explicitly. We do not believe that the gravity of this allegation was met with an equally serious effort by the Department to determine whether ATF and the U.S. Attorney's Office had allowed the sale of hundreds of weapons to straw purchasers. The Justice Department claimed its process for writing letters to Congress was sound. But its response to me, in its February 4, 2011, letter, was false. That letter came back only 4 or 5 days after I first handed the letter to the Attorney General. The February 4, 2011, letter was false because DOJ later withdrew it and claimed it relied on bad information from the ATF and the U.S. Attorney's Office. However, the inspector general agreed with me that the Justice Department's response was seriously flawed--and not just the initial response. The inspector general also found that the Justice Department knew its initial reply wasn't true when it reaffirmed the denial of the whistleblower allegations in a May 2, 2011 letter to me. Instead of acknowledging it was wrong, the Department repeatedly doubled down on its denials. For example, Attorney General Holder said on multiple occasions since November 2011 that the wiretap evidence authorized by the Justice Department headquarters did not put senior leadership on notice that the ATF was walking guns. Most recently, on June 7 of this year, the Attorney General went before the House Judiciary Committee. At this point, many Members of Congress had obtained and read the affidavits, even though the Justice Department did not want us to see them. Members who reviewed them said that the affidavits contained evidence of gunwalking. But Attorney General Holder testified: I've looked at these affidavits, I've looked at these summaries. There's nothing in those affidavits as I've reviewed them that indicates gunwalking was allowed. The inspector general has read these same wiretap affidavits. Since the inspector general is independent and nonpartisan, that independent, nonpartisan conclusion is at odds with the quote I just gave you from the Attorney General, and that quote from the Attorney General comes from testimony before the other body. I quote from his report: [T]he affidavits described specific incidents that would suggest . . . ATF was employing a strategy of not interdicting weapons or arresting known straw purchasers. In fact, much of the inspector general's report is redacted because those affidavits are still under seal. Chairman Issa and I asked the Justice Department months ago to move to unseal them so the public could decide for themselves. Now the inspector general has joined Congressman Issa and this Senator, and is also calling for the Department to ask for permission of the court to release the affidavits. The Justice Department should have filed that motion months ago. Unsealing the affidavits will allow the American people and the Terry family to see the whole story. The details of those affidavits show that senior officials knew, or should have known, about gunwalking in Fast and Furious. The inspector general independently confirmed this point, quite contrary to Attorney General Holder's denials. Those denials by the Attorney General show either incompetence or lack of truthfulness. Congress created an explicit statutory duty for certain senior Justice Department officials to authorize all wiretap applications, not just those involved with Fast and Furious. Deputy Assistant Attorney General Jason Weinstein, who served directly under criminal division head Lanny Breuer, was one of the officials who approved some of these affidavits. Senior officials such as Mr. Weinstein tried to claim that they shouldn't be held accountable because they only read memos summarizing the wiretaps, not the full wiretap applications, as I think is required under law. But the inspector general found that Justice Department officials should review more than just the cover memo. He said that under the statute, they have the responsibility to be fully informed before authorizing wiretap applications. Yet the inspector general also found that even . . . a reader of the . . . cover memorandum would infer from the facts that ATF agents did not take enforcement action to interdict the weapons or arrest [straw purchasers]. So the memo Mr. Weinstein admits he did read indicated that ATF had walked guns, according to the inspector general. Back in September of last year, Attorney General Holder said at a press conference: The notion that somehow or other this thing reaches the upper levels of the Justice Department is something that . . . I don't think is supported by the facts. Maybe the Attorney General doesn't think someone who reports directly to the head of the criminal division is a senior official, but this Senator does. As a result of the inspector general's findings, Deputy Assistant Attorney General Weinstein has resigned. Mr. Weinstein should be held accountable, but he shouldn't take the fall for more senior officials who are also culpable. Mr. Weinstein reported directly to Assistant Attorney General Lanny Breuer. When the Justice Department sent its letter to me denying ATF ever walked guns, Breuer knew otherwise. He knew in 2010 about gunwalking in another case, Operation Wide Receiver. That was long before the allegations in Fast and Furious; yet he waited 9 months before e-mails about Wide Receiver were about to be produced to Congress before he publicly apologized for not doing more about gunwalking in the previous gun walking Wide Receiver. I asked Breuer whether he had seen the draft of the February 4 false letter to me. Breuer testified: I cannot say for sure whether I saw a draft of the letter that was sent to you. Now I will explain why that was a false statement that he made to me. A month after Breuer's testimony, the Justice Department released more documents showing that Breuer was sent five drafts of the letter before it was sent to me. He forwarded three of them to his personal e- mail account. Breuer still maintained in written responses that it was ``highly unlikely'' he had read the letter because he was in Mexico when it was sent. On this matter, the inspector general report contained a significant factual error. By the way, there aren't many errors in this inspector general's report. I compliment him for a very good job that he did. The report read: The OIG found no e-mail messages from Breuer in which he proposed edits, commented on the drafts, or otherwise indicated he had read them. That statement of the inspector general is not true. In response to one of the drafts that Breuer received, he commented to Weinstein that it was ``great work.'' That may not be a proposed edit, but it is certainly a comment. Thus, Breuer's statement to Congress is simply not credible. E-mails show that Breuer was very engaged in the process, asking for and receiving updates from Weinstein at every stage of the drafting of that letter of February 4, 2011 that 8 or 9 months later they withdrew because it was false. Breuer and Weinstein sent multiple e-mails to each other on the matter each day, with Breuer asking after a quiet period, ``Jason, let me know what's happening with this.'' So, quite obviously, he was involved before the letter was ever sent to me. Rather than holding him accountable for this evidence, the inspector general's report gives him a pass. Worse, new e-mails produced Wednesday show that Breuer was in the weeds about his deputy Jason Weinstein coming to brief the Senate Judiciary Committee staff a week after the Justice Department's false letter was sent to me. On February 13, 2011, Breuer sent an e-mail about such details as what specific questions my staff asked of Weinstein at this briefing. Breuer wrote: The goal--and by all accounts it seems to have worked--was to communicate that ATF's work in the AZ case and others like it reflected sound judgment and investigative work. It is clear that Breuer was in the weeds enough to know what the Justice Department was communicating to me was undermined by the gunwalking he knew about in Wide Receiver. He should have come forward in February 2011 and told Congress that he knew ATF had in fact walked guns. His failure to do so, coupled with his attempt to mislead Congress, is why I have called for him to resign or be fired. I made that request last fall on the floor of this Senate. The Attorney General has been saying for months that he would hold off on any personnel action until the inspector general's report was released. We have been hearing that for almost a year, ``Let the inspector general finish his work, and then we will decide what to do.'' So, Mr. Attorney General, it is time to hold people accountable. I wish to close with language from a statement that the family of Border Patrol Agent Brian Terry issued. Agent Terry is the person where two guns that were walked were found at his murder scene. From the family of Brian Terry: The Department's failure chronicled in the report had deadly and tragic consequences for hundreds of innocent American and Mexican victims of violent crimes. And our son, friend, relative and hero, Brian Terry, is dead. Questions and concerns should have been raised before the weapons purchased in this failed government sting wound up in the hands of drug dealers and killers, including those who killed Brian. The focus today should not be on political spin control nor on praise for the Department of Justice supervisors who chose to resign in light of the report's findings, but rather on the gross negligence of the Department documented in the report and the tragic consequences of that negligence. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, as a matter of senatorial courtesy, since I am referring to some things that the majority leader has said previously, not recently but previously, I have informed him of what I was going to say. On August 2, the majority leader decided that the valuable time of this body would be best employed by speculating on the contents of the tax returns of Presidential candidate Governor Mitt Romney. These remarks also touched on the vetting process of the Senate Finance Committee. It is that aspect of this to which I want to refer. As a senior member of the Finance Committee as well as former chairman and ranking member, I have come to familiarize my colleagues with the committee's vetting process. On Thursday, August 2, the majority leader exclaimed: As we know, he has refused to release his tax returns. If a person coming before this body wanted to be a Cabinet officer, he couldn't be if he had the same refusal Mitt Romney does about tax returns. This statement demonstrates a misunderstanding of the confirmation process for Cabinet officials and the Finance Committee vetting process in particular. The fact is, most prospective Cabinet officers do not need to disclose their tax returns. Actually, no prospective Cabinet officer is required to make their returns public in ordinary circumstances. To my knowledge, the Finance Committee is the only committee that asks nominees to provide copies of tax returns. Specifically, the Finance Committee asks that nominees provide copies of their last three Federal tax returns. The committee may request further returns if it is warranted by the circumstances of that particular time. The committee asks for this information for a few reasons. To begin with, many nominees referred to the Finance Committee, such as the Secretary of Treasury and the Commissioner of the IRS, will be able to exercise significant influence over tax policy and administration. Additionally, the examination of a nominee's tax return sheds light on the nominee's character. Over the last few years, several high flyers in the Obama administration have come up short when measured by their tax returns. Therefore, the vetting process utilized by the Finance Committee has received a lot of attention. Only two Cabinet officers and one position with the status of Cabinet rank are referred to the Finance Committee. These are the Secretaries of Treasury and the Department of Health and Human Services, as well as the U.S. Trade Representative. As I said before, to my knowledge, the Finance Committee is the only committee of the Senate to request copies of actual tax returns. This means that not counting the Vice President, there are 19 members of the Cabinet who do not release their tax returns during the Senate confirmation process. As I said, no Cabinet official is required to make his or her tax returns public. This goes to the details of the Finance Committee's vetting process. All nominees referred to the committee are required to submit copies of their last three filed tax returns. These copies, along with other financial data, are shared with a very limited number of staff, specifically designated by the chairman and ranking member of the Senate Finance Committee. While being reviewed, the returns themselves are kept under a very tight control. Most staff for the committee and ranking member do not have access to the tax returns. Neither the chairman nor the ranking member may unilaterally release the tax returns or information obtained from those tax returns. This means that even when I was chairman of the committee, rules prohibited me from unilaterally releasing a nominee's tax return or even making public that nominee's specific tax information. When an issue is identified pertaining to a nominee's tax information, the chairman and the ranking member jointly determine how to proceed. Information is only released under bipartisan agreement and after consultation with the nominee. For example, Secretary Geithner was given the opportunity to withdraw his nomination before the world learned of his failure to pay all his taxes. He was also provided an opportunity to review the bipartisan memo the committee eventually released. In sum then, no nominee vetted by the Finance Committee needs to make their tax returns public, and in the majority of the cases no information is released. Additionally, the purpose of the vetting is not to damage the credibility of the nominee. I bet those seeking Governor Romney's tax returns are operating under a completely different standard. I especially find it interesting that the majority leader compared Governor Romney to Cabinet officials when speculating as to the contents of Governor Romney's returns. There seems to be an implication that a discovery of unsatisfied tax obligations would be problematic to the leader. While the majority leader may want to speculate as to whether Governor Romney has paid his taxes, there are nominees and officials of the current administration we know did not completely satisfy their tax obligations. I will start this trip down memory lane with our current Treasury Secretary. Due in large part to his failure to pay self-employment taxes, irregularities in Mr. Geithner's returns added up to his owing a total of $48,268 in taxes and interest to the IRS. Those seeking a full accounting of the episode may read the bipartisan memorandum prepared by the Finance Committee, which is part of the record of his January 2009 nomination hearing. As I said, we don't need to speculate whether Secretary Geithner completely paid his taxes. We know as a fact he did not, to the tune of over $48,000. Secretary Kathleen Sebelius disclosed that in preparation of her confirmation she filed amended tax returns for 2005, 2006, and 2007. She voluntarily made this information public in the form of a letter to Chairman Baucus and me. This letter was printed in the record of her nomination hearing. The result of those amended returns was that she paid a total of $7,040 in additional taxes and $878 in interest to the Internal Revenue Service. Finally, I wish to mention former Senator Tom Daschle, who was the administration's nominee to be Secretary of HHS for a brief period of time in 2009. Although Mr. Daschle withdrew his nomination before the committee held a hearing on his nomination, it was widely reported, including in the New York Times and the Los Angeles Times, that he failed to pay more than $128,000 in taxes in the 3 years prior to his nomination. In mentioning Secretaries Geithner and Sebelius and Mr. Daschle, I am not suggesting anything beyond the reported facts of their circumstances or that their tax errors were intentional. I just want to remind the majority leader of these situations where it is not necessary to speculate on whether taxes were owed. While I appreciate the leader's newfound attention to the Finance Committee's vetting process, I wish to assure everyone has clear understanding of how this vetting process in the Senate Finance Committee works. I will be happy to discuss the committee's procedure with any interested colleague. I am sure Ranking Member Hatch and his staff would also be happy to discuss the process with anyone who was interested. I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. I come to the floor to discuss the State of our economy and to give suggestions on how to improve it. But before I go to the main purpose of why I came here, I wish to say to the Senator from Maryland that I agree with him. The House of Representatives ought to take up a farm bill. I hope they will, and that is my urging. I also wish to take advantage of the opportunity to explain a little bit about ethanol and how that works in with the situation he brought up about increasing feed for chickens or any other animals. This year, farmers planted 96 million acres of corn. There were more acres of corn planted than in any other year since 1938. Most of that is because of the ethanol industry. If we didn't have the ethanol industry, we would normally plant somewhere between 80 and 85 million acres of corn. Let's assume we never heard of the word ``ethanol'' or the product ethanol, that it didn't even exist, and farmers planted the usual 80 to 85 million acres of corn. Let's also assume we had the same drought we had this year--over about two-thirds of the United States--and the corn crop is going to be reduced because of it. If we planted 80 to 85 million acres of corn and we had the same drought, we would still have the high price of grain we have right now, but we wouldn't have ethanol to blame for it. So the marketplace is bringing about the increased production of corn because of feed, fuel, and fiber. We should not be scapegoating ethanol, because if we didn't have ethanol to blame, we wouldn't be planting 95 or 96 million acres of corn. We would be planting about 80 to 85 million acres of corn and we would still have the same high price and the same problem for the poultry producers. Economic Leadership Now to the point that I came to the Senate floor. We all recognize our Nation faces challenging times. We have had years with unemployment at unacceptable levels and anemic economic growth that shows no sign of lifting us out of the situation. Meanwhile, rampant government spending, which we were promised would jump-start the economy and create jobs, has instead displaced private sector investment and choked off job creation. More and more Americans are starting to doubt that their children and grandchildren will have better opportunities than they had, not to mention the fact that they will be forced to pay for all that spending. We keep being told by President Obama and members of his party that change is just around the corner. If we just keep doing what we are doing, things will get better. After almost 4 years of failed policy and dashed hopes, that line is wearing thin. Fortunately, our problems are not insurmountable and the solutions are common sense. All that is needed is sufficient leadership to make the tough decisions. In fact, this is the same situation Great Britain faced in the 1970s. Britain was mired in debt and even had to go to the IMF for a bailout. Successive British Prime Ministers had recognized the looming financial problem for years but failed to get the budget under control. At that time, in the 1970s, Britain was known as the ``sick man of Europe.'' Still, as in this country, interest groups that benefited from public spending threatened to bring down any British Government that even considered measures to control spending. We see those same forces in the Congress of the United States telling us we can't cut anyplace. In fact, Britain did face massive strikes in the winter of 1978 to 1979, better known as the winter of discontent. As a result of the inability of several different Prime Ministers to take the difficult steps necessary to turn things around, many pundits started to speculate Britain had become ungovernable. There were even many British politicians who had decided the best they could accomplish was to manage the economic and political decline of Britain. We hear the term in the United States of a ``new norm.'' I hope we aren't getting into that same attitude the British had in the 1970s. But they had a leader who came along by the name of Margaret Thatcher. She utterly rejected the notion that decline was an option. In fact, she was famous for repeating the phrase: ``There is no alternative.'' So I would like to take those words, ``there is no alternative,'' as a guiding point for us in the Congress, Republican or Democrat, that we have to do something. ``There is no alternative.'' Prime Minister Thatcher meant that control of the policy based on uncontrolled spending had failed. If economic recovery was the goal, the only alternative was the free market. This meant cutting spending, reducing growth-inhibiting income taxes, and reining in government micromanagement of business--things we hear from the private sector in the United States today. Despite the hard lessons of experience, the prevailing economic theory of the day still held: that government spending was good for the economy and that government central planners could operate more efficiently than private business left alone. That is the situation she was describing in Britain. However, for us in the United States, whether it is government or the private sector, it is like asking: Are 535 Members of Congress smarter to determine the direction of the economy or are the 308 million people outside of the Congress in the United States better prepared to do it, and which will do the most good? Now, Thatcher faced intense opposition both from true believers in the stimulus ideology and from those with a vested interest in the status quo, but having rejected national decline, as she did, as an option, there really was no alternative. She explained to the British public why her course of action was necessary and stood up to the special interests that stood in the way of prosperity. We hear from our constituents we ought to do something about those special interests, but we don't seem to do much about it. When the media began speculating she would fail to follow through and that she would lose her spine and make a U-turn as so many of her predecessors had done, Mrs. Thatcher's response was: ``You turn if you want to . . . The lady's not for turning.'' What Prime Minister Thatcher provided for Britain is very simple: Leadership. That is what the United States needs today. Most Americans I talk to believe in our opportunity society and refuse to accept that the American dream of a better life for our children is dead or that there is a new norm or that America is in decline. For those of us who feel that way, restoring the dynamic American free market economy is essential. In the words of Margaret Thatcher, there is no alternative. We must reduce spending. There is no alternative. We must have low, simple, and stable taxes. There is no alternative. And there is no alternative to reducing and reforming the growing regulatory burden. During the last 3\1/2\ years, the national debt has grown by more than $5 trillion--an increase of 50 percent. This year will be the fourth consecutive year with trillion-dollar annual deficits. These deficits and a Federal debt that now totals $16 trillion are, in fact, dampers on private sector job creation. When Washington takes and spends the wealth created in the private sector, it crowds out new investments that would have been made by businesses and entrepreneurs, investments that would have resulted in the creation of new wealth and job opportunities for more Americans. The out-of-control spending has created a stagnant economy with unemployment stuck above 8 percent now for 42 consecutive months. Economic freedom must replace bigger government. Economic growth must be our top priority, and fiscal discipline in Washington is a prerequisite to sustainable economic growth. In the words of Prime Minister Thatcher, there is no alternative. The 4-year experiment attempting to increase economic prosperity by growing government and managing the economy through government intervention has failed. To address the anemic economic recovery and get America back to work, we must reduce the size and scope of the Federal Government. In the words of Prime Minister Thatcher, there is no alternative. Again, our Nation is $16 trillion in debt. How much is $16 trillion? Well, if we started counting to 16 trillion one second at a time, it would take a person over 500,000 years to reach that level. The Federal Government will spend more than $11 trillion just on Medicare and Medicaid over the next 10 years. Medicare and Medicaid serve a vital role in providing health care services to individuals who are poor, elderly, or disabled. But just because those programs have operated a certain way for 47 years doesn't mean they operate efficiently, even though we all agree they are part of the social fabric of America and must be maintained. If we want to save those programs for future generations, the current path of just saying no to every proposal and every special interest is not an option. In the words of Prime Minister Thatcher, there is no alternative. There is no alternative but to look at their very structure and ask the question: Can we do better? As we begin to take the steps to pull ourselves out of this fiscal mess, we also need to reform how Washington does business so we don't find ourselves in this situation again. One major step that could produce long-term fiscal discipline is a balanced budget amendment, but if we passed that today it would not get us out of the hole we are in. However, once we get out of the hole, it is going to keep us from getting into it again. The national debt now is reaching a point where if we do not intervene with a constitutional amendment for a balanced budget, it is going to become unsustainable. Mere laws have not controlled deficit spending because Congress can always change a law when it becomes politically expedient. I went through this one time because I was an author with a former Senator in this body by the name of Harry Byrd from the State of Virginia, not West Virginia. He and I worked together when I was a Member of the House. We got legislation passed requiring a balanced budget. For 15 years that law was on the books and never in those 15 years was there ever a balanced budget. So it makes it very clear that statutes will not control deficit spending. I concluded a long time ago that a constitutional amendment is a ``must'' to provide Congress with necessary discipline. The example right now of Europe's debt situation is sobering. Nations that allow debt to grow out of control risk default. Think of Greece as an example. If we do not take effective, corrective action, the European future could be ours, and maybe sooner than we think. The time for tinkering around the edges of the budget is over. We must take bold action to address the debt crisis before it is too late. In the words of Prime Minister Thatcher, there is no alternative. Another area crying out for decisive action is our voluminous Tax Code. Uncertainty in our Tax Code and the threat of higher taxes is like an anchor preventing our economy from setting sail. At the end of the year, the across-the-board tax relief first enacted in 2001 and 2003 will expire. Its expiration will lead to a higher tax bill for virtually every taxpayer, representing one of the largest tax increases in the history of the country, and, as my colleagues know, that can happen without even a vote of Congress. Federal Reserve Chairman Ben Bernanke has testified about the negative impact of higher taxes on a fragile economy. More importantly, I hear from employers that uncertainty about the future makes it difficult to plan, take risks, and make decisions to expand and hire. Tax certainty must be a priority in creating a progrowth environment. In the words of Prime Minister Thatcher, there is no alternative. Even President Obama has acknowledged the negative impact of tax increases on economic growth saying we shouldn't raise taxes in a recession. We remember because he campaigned on tax increases in 2008, but before he was even sworn in he warned people we can't have that tax increase now because we are in a recession. Nevertheless, nearly every day our President is on the campaign trail in 2012 talking about tax increases on the so-called rich claiming them to pay their fair share. But I have never had a definition from the President of the United States of what a fair share is. However, the so-called rich already pay the overwhelming majority of Federal taxes. Do my colleagues know that the top 20 percent of households currently account for 95 percent of Federal income taxes? Moreover, the top 1 percent we hear so much about bears nearly 40 percent of the Federal income tax burden. It is no wonder our job sector, especially the nearly 1 million small businesses targeted by the President's tax increase, are reluctant to make business decisions and invest in this climate when taxes are going to go so high at the end of this year. There are businesses ready to expand and create jobs. There are millions of dollars in private sector investment waiting to be invested and to create jobs. But businesses are holding back, waiting for the heavy boot of higher taxes to drop. It is time we replaced divisiveness and demagoguery with a progrowth tax policy. This country does not need more taxes; we need more taxpayers. The way to get more taxpayers is to get more people working. The way to get more people working is to encourage that investment. We need to take the uncertainty out of the present political environment here that has an impact on the economy. When businesses and entrepreneurs are willing to put everything on the line by opening a new business or expanding an existing business, we must assure them that they will be able to enjoy the fruits of their success, not punish them with a higher tax bill which takes money out of their cashflow. When a business operates on cashflow, they cannot hire people if they don't have the cash. So we must act decisively to stop job-killing taxes from going up. In the words of Prime Minister Thatcher, there is no alternative. It isn't just the threat, though, of taxes that has caused uncertainty and held back private sector investment. The threat of costly new regulations has paralyzed many industries. In fact, I hear more complaints from small businesses about regulation than I do this biggest tax increase in the history of the country coming before us this December. During the past few years, thousands of new Federal rules were finalized. Those who view government intervention into private enterprise as positive might say: So what. All of these rules come with real costs. This administration has issued about 200 major rules that each have an impact of $100 million or more. A Gallup poll taken at the end of last year found that compliance with government regulations is the single biggest issue facing small business owners today. When 70 percent of the new jobs in America are created by small business, we ought to be concerned about what these small businesspeople are saying is their No. 1 problem. On top of the outright cost of new regulation and the compliance burden, the uncertainty about when a new regulation might come down makes businesses reluctant to expand. In recent years we have seen regulation on top of regulation. No one knows when the next one will appear or how much it will cost. During the Great Depression, the avalanche of new agencies with newfound regulatory powers led to businesses sitting on large amounts of cash, even in industries that were not yet affected by the new regulations because the uncertainty about who would be targeted next froze private sector investment. Now we are seeing pretty much the same thing today. It would be one thing if these were essential protections for the environment or public health as proponents often claim, but for many of these new regulations the cost of compliance outweighs the public benefit. It doesn't make any sense to try to regulate dust on farms when there is no practical way to stop the wind blowing. Still, I don't know how many years the EPA has been working on what they call a ``fugitive dust rule.'' Does it make any sense to make a dairy farmer fill out pages of documents to prove they have a plan in place in the case of an accidental milk spill? Well, they considered that regulation, but it was too outlandish that they made a public announcement they were not going to do that. Then why was EPA wasting time considering these regulations in the first place? There are legitimate forms of pollution that need attention, but even then the EPA seems intent on overkill. Did the Utility MACT rule, which was intended to limit mercury emissions from powerplants, really need to be the single most expensive regulation in EPA history? In addition to this rule, powerplants that rely on coal, like most of those in my State of Iowa, are facing a whole new string of overlapping rules with their own compliance deadlines and paperwork. These include the Cross-State Air Pollution Rule, the National Ambient Air Quality Standards, regulation of greenhouse gas emissions, cooling water intake regulations, clean water effluent guidelines, and coal ash regulations. Taken separately, each of these may have some justification, but when you put them all together, the cost and compliance burden is enormous, especially on small utilities. Yesterday there was a delegation of Iowa rural electric cooperatives in my office explaining exactly how costly this was to them and their consumers. That leads many people to suspect that the real motivation for this burst of regulation is an ideological drive to artificially raise the cost of electricity generation using coal, which would hurt the economy in places such as Iowa that rely on coal for cost-effective energy. A regulatory approach that imposes excessive costs for little or no benefit does not do anyone any good. Regulatory agencies should be held accountable for meeting the cost- benefit test and also--a little more difficult to measure--the commonsense test. The deluge of regulations in recent years and the uncertainty--there is that word again: ``uncertainty''--about what is coming next is acting like a wet blanket on our economy. We must put an immediate stop to unnecessary, costly new regulations. In the words of Prime Minister Thatcher, there is no alternative. In the long run, we need comprehensive regulatory reform. The Constitution vests all legislative powers in the Congress, which is directly accountable to the American people. However, over the years, Congress has delegated more and more authority to unelected and unaccountable bureaucrats. And once delegated, it is difficult to take back. As a result, then, we have a massive administrative state full of well-meaning but unelected government officials who have great power to write regulations with the force of law, with little or no democratic accountability. This has led to the implementation of major policy decisions that impact the economy and the lives of the American people that likely would never have been approved if they would have had to have been voted on by the Congress. That is why I am an original cosponsor of the Regulations From the Executive in Need of Scrutiny Act. REINS is the acronym. The REINS Act would require every major Federal regulation to come before both Houses of Congress for a vote and be signed by the President before it can be implemented. This will allow voters to hold their Members of Congress accountable for ill-conceived regulations. It would be a check on the mistake that Congress makes by delegating so much power in the first place. It would also provide more transparency and predictability to the regulatory process, thus reducing job-killing uncertainty. Reforms such as the REINS Act would be a major change in how Washington does business, and that upsets a lot of apple carts. In the words of Prime Minister Thatcher, there is no alternative. If we want economic growth and jobs, if we want a brighter future for America, we cannot afford to dither any longer. We need leadership like Britain had under Margaret Thatcher that is willing to tell all the special interests and all the political power players, there is no alternative. We must take steps I have outlined to reinvigorate the free market economy. Just like Britain in 1979, there is no alternative. We have tried President Obama's theory on economic stimulus. It was supposed to keep unemployment under 8 percent, and it has never been under 8 percent since the day he signed it. We saw a massive expansion of government and deficit spending as a result. More than $800 billion was spent on a failed economic stimulus bill that was supposed to keep unemployment down. We all know how that turned out. Government spending in the process has reached unprecedented levels. Today, the size of government--if you combine local, State, and Federal--is 40 percent of our gross domestic product. One hundred years ago, it was 8 percent. If it were true that government spending creates economic growth, then we should be living high off the hog today, but it is not. The private sector creates jobs. It is the responsibility of the government to merely create an environment that leads to job growth. Remember a very basic premise: Government consumes well. It does not create well. Through economic freedom, entrepreneurs are free to innovate and prosper. This economic success leads to higher standards of living and a better quality of life. Importantly, these gains do not then come at the expense of others. Because, contrary to what some around here would have you believe, when someone produces a product or a service that others want, they are creating new wealth and everyone is better off. But too often around here, we think matters of the economy are a zero-sum game. One person's prosperity, then, does not come at the expense of another's. In fact, business success and economic growth lift all boats through employment gains, higher wages, and greater value to the consumer. We sometimes hear it implied that individual success cannot be achieved without government involvement or intervention. Some people seem to believe that an individual's success must come at somebody else being deprived or that the success was only achieved collectively and with the help of government. This line of thinking concludes that government and society is, therefore, entitled to some of the fruits of that individual's labor. This line of thinking is in stark contradiction to our country's founding principles that government exists to protect the individual's right to life, liberty, and the pursuit of happiness. Happiness is not found in a government paycheck redistributing what somebody else earned. In fact, government dependence leads to resentment. By contrast, this great American dream of ours is based on individual Americans working hard and earning their own success. A country with an increasing number of citizens dependent on a government that lives beyond its means and redistributes what remains of a once great economy would, then, cease to be the great America that we have had for 225 years. Such a future is unacceptable to most Americans, just as it was unacceptable to Prime Minister Thatcher, who said, there is no alternative. The American dream is our birthright and our obligation to posterity. We must return to progrowth policies and an opportunity society. There is no alternative. I yield the floor. I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce, along with Senator Franken, the Family Farmer Bankruptcy Tax Clarification Act of 2012. This bill addresses the recent United States Supreme Court case Hall v. United States. In a 5-4 decision, the Supreme Court ruled the provision I inserted into the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act did not accomplish what we intended. The Family Farmer Bankruptcy Tax Clarification Act of 2012 corrects this and clarifies that bankrupt family farmers reorganizing their debts are able to treat capital gains taxes owed to a governmental unit, arising from the sale of farm assets during a bankruptcy, as general unsecured claims. This bill will remove the Internal Revenue Service's veto power over a bankruptcy reorganization plan's confirmation, giving the family farmer a chance to reorganize successfully. In 1986 Congress enacted Chapter 12 of the Bankruptcy Code to provide a specialized bankruptcy process for family farmers. In 2005 Chapter 12 was made permanent. Between 1986 and 2005 we learned what aspects worked and did not work for family farmers reorganizing in bankruptcy. One problematic area was where a family farmer needed to sell assets in order to generate cash for the reorganization. Specifically, a family farmer would have to sell portions of the farm to generate cash to fund a reorganization plan so that the creditors could receive payment. Unfortunately, in situations like this, the family farmer is selling land that has been owned for a very long time, with a very low cost basis. Thus, when the land is sold, the family farmer is hit with a substantial capital gains tax, which is owed to the Internal Revenue Service. Under the Bankruptcy Code, taxes owed to the Internal Revenue Service receive priority treatment. Holders of priority claims must receive payment in full, unless the claim holder agrees to be treated differently. This creates problems for the family farmer who needs the cash to pay creditors to reorganize. However, since the Internal Revenue Service has the ability to require full payment, they hold veto power over a plan's confirmation, which means in many instances the plan will not be confirmed. This does not make sense if the goal is to give the family farmer a fresh start. Thus, in 2005 Congress said that in these limited situations, the taxes owed to the Internal Revenue Service could be treated as general, unsecured debt. This removed the government's veto power over plan confirmation and paved the way for family farmers to reorganize successfully. However, in Hall v. United States, the Supreme Court ruled that despite Congress's express goal of helping family farmers, the language inserted into the Bankruptcy Code in 2005 conflicted with the Tax Code. The Hall case was one of statutory interpretation. There is no question what Congress was trying to do; rather, did Congress use the correct language? My goal, along with others at the time, was to relieve family farmers from having their reorganization plans fail because of huge tax liabilities to the federal government. Justice Breyer noted this in the dissent: ``Congress was concerned about the effect on the farmer of collecting capital gains tax debts that arose during (and were connected with) the Chapter 12 proceedings themselves. . . . The majority does not deny the importance of Congress' objective. Rather, it feels compelled to hold that Congress put the Amendment in the wrong place.'' Hall v. United States, 132 S.Ct. 1882, 1897, 2012, Breyer, J., dissenting, internal citations and quotations omitted. As a result of the Hall case, family farmers facing bankruptcy now find themselves caught in an unfortunate situation. The rules have changed and must be corrected in order to provide certainty and clarity in the law. The Family Farmer Bankruptcy Tax Clarification Act of 2012 will provide the clarity needed to help family farmers reorganize in bankruptcy. This bill strikes the current language in the Bankruptcy Code, which the Supreme Court said does not work, 11 U.S.C. Sec. 1222(a)(2)(A) and inserts a new 11 U.S.C. Sec. 1222(a)(5). The new provision transforms all government claims arising as a result of the sale or transfer of post-petition farm assets into unsecured, non-priority claims, notwithstanding any language in the Internal Revenue Code to the contrary. The bill also provides new sections for treatment of these claims during the bankruptcy process. The bill recognizes that some asset sales may occur post-confirmation. As a result, we also provide a mechanism for plan modification as a result of these sales, if used for the specified purpose of reorganization, to assist in reorganization. Finally, we make a technical change to 11 U.S.C. Sec. 1228(a), which practitioners and commentators have long argued is needed. This technical change is within the limited scope of this clarification bill, as it provides greater certainty and clarity that has troubled courts and practitioners alike. I recognize the end of this session of Congress is near and the time to do something is short. However, we have been fine tuning this legislation to ensure it properly corrects the Hall case. We will seek to do what we can during the remaining Congressional calendar to fix the problem this year. Should we run out of time, then we will maintain our focus on this problem into the next year. The Family Farmer Bankruptcy Tax Clarification Act of 2012 ensures that what Congress sought to do in 2005 actually occurs. In the wake of the Hall decision, clarification is needed to help ensure family farmers facing bankruptcy will have a chance to reorganize successfully. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.