Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I yield my time to myself, 15 minutes out of what we control. First of all, I remember before the President was sworn in he announced that--even though he ran on a platform of increasing taxes on higher income people--you do not raise taxes during a recession. So during the year 2009, there were no proposals to increase taxes from the administration, and, obviously, the Congress went along with that. Then, in August 2009, the President was in Elkhart, IN, and there was an exchange there along the same line, and the President said this: You don't raise taxes in a recession. We haven't raised taxes in a recession. Well, with 9.8 percent unemployment yesterday, it is quite obvious we are still in a recession. This debate is not about cutting taxes. This debate is whether we ought to increase taxes on anybody during a recession. We believe we should not raise taxes on anybody during a recession. Also, I heard the other side in their early speeches talk about efforts on this side to prevent unemployment insurance from being extended. Well, that is the same song we heard from the majority party during June and July. I would remind people on the other side of the aisle, the results of the election were that the people of this country said they were concerned about jobs, about the economy, and about the legacy of debt. During that period of time last summer when we were being accused, as we were just accused this time, of not wanting to do anything about unemployment compensation, on June 14, June 17, June 24, and June 30, we tried to not only extend unemployment compensation but we tried to do it in a way that was paid for so we did not increase the deficit. But we were denied that opportunity. Finally, soon after the July Fourth break, we were given an opportunity to at least vote on an opportunity to extend unemployment compensation and pay for it. But we did not get the votes because for the other side, a deficit does not bother them except when it comes to increasing taxes on somebody else. Then they say the deficit is of concern to them. But the fact is, as I said yesterday right here as I spoke to my colleagues, if we look at the history of tax increases in this Congress--in Congress generally--over a long period of time, it is one thing to raise taxes if it will go to the bottom line, but we have seen time after time raise a dollar's worth of taxes and it is a license to spend about $1.15, $1.17. So raising taxes does not reduce deficits. The reason is, it is not because people in this country are undertaxed, it is because Congress overspends. For the tax increases of the past and the expenditures that followed, $1 of taxes gives a license to spend $1.15. It is just like the dog chasing its tail; he never catches it. So here we are, just 1 month after the people of this country very definitely spoke about their concern about jobs, the deficit, and the economy, and we are right back where the President said we should not be both before he was sworn in and then in August of 2009; that we should not increase taxes during a recession. So I would like to quickly discuss the proposal to increase taxes on some Americans starting in less than a month from now. The first one would be unemployment. Just yesterday--as I just stated but to be more specific--the Bureau of Labor Statistics said the unemployment rate ticked back up to 9.8 percent from 9.6 percent. In July, the unemployment rate was 9.5 percent. For the 3 months of August, September, and October, it was pretty steady, 9.6 percent; now for November, 9.8 percent. The unemployment rates for minorities are significantly worse than what it is for the average. The trend is in the wrong direction. In other words, the economy is in a very fragile situation. The economy is clearly telling Congress: Handle with extreme care. The second point is what the economists say. I have a chart that says what various economists say we ought to do. This was a survey by CNN Money. A majority of the economists say preventing the 2011 tax hikes is the No. 1 thing Congress can do right now to help the economy. That would be the 60 percent of the economists who say don't raise taxes for any taxpayers; the 60 percent of the economists who say preventing tax hikes on all Americans is the best course of action. But only 10 percent of the economists say preventing tax hikes on only the middle class is the best way to help the economy. Sixty percent say don't increase taxes on anybody versus 10 percent who say it is OK to increase them on some. Of course, the survey is by CNN, hardly known as being a Republican network. Four, some on the other side may say that preventing tax hikes on higher income folks is not important. The theory goes that high-income people would just save the money. There are a couple problems with that point. The first is, we all know the lack of savings and investment is harmful to the economy. But the other more direct response is, they probably would increase their spending on consumption. Mark Zandi, a respected economist with Moody's, had this to say: Normally, I would firmly agree that raising taxes on people who make over $250,000 a year would not make a meaningful difference in the way they spend money. But I worry that these aren't normal times and that even this income group may be sensitive. Now, obviously, these are not normal times when we still have almost 10 percent of the people unemployed and a fragile economy. What this Congress does has consequences, and we ought to be very cautious how we approach it. Fifth, we have CBO saying the gross domestic product would be as much as 1.4 percent higher in 2011 if all the tax relief of 2001 and 2003 is made permanent. If the tax relief is only for lower income Americans-- as is proposed by the amendment before this body and by people on the other side of the aisle--then, according to CBO, the GDP would only be 1.1 percent higher in 2011. Now maybe some people think the difference between 1.4 percent an 1.1 percent of more growth is insignificant. But let me tell you, when it comes to 10 percent unemployment that sort of economic growth is going to put a significant number of people back to work if we allow the higher 1.4 percent to happen. In other words, the difference between preventing tax increases on all Americans and on only preventing the tax increases on some Americans--that three-tenths of 1 percent in 2011 is a very significant difference of economic growth. I would like to go to a sixth point. Given the recession, given the unemployment rate, given business reluctance to invest and grow, is this the time to reduce the gross domestic product at all? If it were just a matter of either the government got the money or the private sector, that would be one thing, as the government does have a deficit problem. But in this case, it is a matter of money simply not being there because of the hit to the gross domestic product. So we are talking about dead-weight loss. Then, seventh, fiscal history proves higher rates do not yield higher revenue. As shown on this chart, this is a 50-year history of revenue coming into the Federal Government as a percentage of gross national product. The red line is pretty steady. It does not matter whether we have 93 percent rates back in the Eisenhower and early Kennedy years, and then they were reduced down and down and down and down and down, to eventually, in 1987, when they got down to 26 percent, and, in 1990, they went back up to 39.6 percent. Now they are down to 35 percent. Are they going to go back up to 39 percent, 40 percent? This chart proves the taxpayers of this country are smarter than we are in Congress because we think we can raise high marginal tax rates and bring in more revenue, and it doesn't have anything to do with what the American people are willing to send to Washington. I wish to quote not this Senator but the Joint Committee on Taxation in regard to high marginal tax rates not making much difference to what money comes into the Federal Government because the taxpayers are smarter than we are. They are smart enough to know that if you have 93 percent marginal tax rates, why work? So you didn't get any more revenue. There is still about 18.2 percent of the gross national product coming in for us to spend. But we don't give the taxpayers of this country any credit for having any smarts because we think we are smarter than they are, and this chart proves the taxpayers are smarter than we are because we have high marginal tax rates, and it doesn't bring in any more revenue. When are we going to learn? So the Joint Committee on Taxation says about this: We anticipate that taxpayers would respond to the increased marginal rates by utilizing tax planning and tax avoidance strategies that will decrease the amount of income subject to taxation. The ninth point out of 11--and I am about done--I often quote the National Federation of Independent Business, the voice of small business here. Because the President says 70 percent of the new jobs in America are created by small business so we ought to listen to what their voice in Washington has to say for small business and what we do and the effect, good or bad, on the economy. Members of Congress fled with no action on important issues like expiring tax rates, leaving the cloud of uncertainty larger and darker. In response, consumer sentiment fell and owner optimism remained anchored solidly in recession territory. Thus, spending stayed in ``maintenance mode'', deterioration of jobs continued, and capital spending remains at historically low rates. Owners won't make spending commitments when sales prospects remain weak, and important decisions-- I wish to highlight this-- such as tax rates and labor costs remain so uncertain. This debate adds to that uncertainty, if you are going to have tax increases. So here we are on a Saturday. I have a chart up that I think says what today's debate is all about. We don't need a dog and pony show going on, on a Saturday, when we ought to be giving certainty to the economy, because the word ``uncertainty'' is exactly what CEOs of major corporations told the President back in June, when he called them in and said: You have $2 trillion in cash sitting in corporate treasury. Why aren't you spending it and creating jobs? They said: Because of so much uncertainty. So the bottom line is this. Stop the tax hikes. Mr. President, may I make a unanimous consent request, please, that Senator Hatch have 15 minutes; Senator Thune, 10 minutes; Senator Kyl, 10 minutes; and Senator Graham, 10 minutes.

Mr. GRASSLEY. Yes, because you New Yorkers think you can make us Midwesterners look bad, but I am glad to yield.

Mr. GRASSLEY. Yes; I thought I made that point very clear. Because the taxpayers are smarter than we in Congress are. They know if they give another $1 to us to spend, it is a license to spend $1.15. So it just increases the national debt. When it comes to paying for unemployment compensation, we can pay for unemployment compensation because the stimulus bill was supposed to stimulate the economy and it is not being spent. If you put money from stimulus into unemployment, you don't increase the deficit, and you also have the money spent right away.

Mr. GRASSLEY. I don't think they are here.

Mr. GRASSLEY. Are you saying you don't want to use any time on your side to speak?

Mr. GRASSLEY. I don't want to eat into my colleagues' time.

Mr. GRASSLEY. Madam President, I would like to know how much time I have.

Mr. GRASSLEY. Madam President, there are a lot of issues that have been brought up in the last hour that need to be responded to. I probably will not get to all of them, but I would like to start with a recent one that was just stated. It is not a case that tax cuts are more important than any other issue for those of us on this side of the aisle, not at all; growth of the economy, because growing this economy is the only way we are going to get people employed, bringing in more revenue, and getting the deficit down. We are not going to get the deficit down by increasing taxes, and I will explain that in just a minute. It is going to take economic growth. You have to get the economic engine started again. We have to get the unemployment down. It is the economy we are talking about. I heard several of my colleagues this morning say if we do not go along with big tax increases, we are giving a bonus to a lot of people in this country who maybe do not need any more money. Well, if you accept the idea that if Congress acts or does not act, we are giving people a bonus, you are starting with a proposition that for all the income people make in this country, Congress is going to decide where that income ought to go and that somehow we are going to give people a bonus if we do not take some sort of action in the Congress. Well, that is ludicrous. That is the ultimate of the lack of economic freedom in this country. Because every penny anybody makes, whether it is through the work of their hands or their brain, is money that belongs to the people of this country; otherwise, they have no economic freedom. The Constitution gives the power to tax for the legitimate purposes of government. But it does not give us the opportunity to tax to give bonuses to people because the money is theirs in the first place. It is only a question of how much we are going to take away from people for the legitimate constitutional purposes of government. Then, where do you get the idea that we are going to give a tax break if we do not do something in Congress? The issue is not tax breaks to anybody. The issue is the tax policy of the last 10 years passed in 2001 that will sunset December 31 of this year. Should we continue that tax policy or should we increase taxes on some or all people? That is the issue. We are not talking about a tax break for anybody. In other words, there is not going to be any tax policy different than what we have right now. That is what we feel is the best for the economy. We should not increase taxes on anybody. You get the impression from the other side that if we start taxing certain people in this country more that somehow the deficit is going to go down. Well, I heard the President recently on some news program discussing this issue, and I do not have an exact quote, but, in effect, he said that as for as he is concerned, rather than not raising taxes on people and bringing that money in to reduce the deficit, he said: I have better ways to spend the money. I spoke earlier this morning about the fact that people do have a better way of spending the money, not only the increase in taxes that might come in but even beyond that. I have quoted some individuals so many times, but I brought the exact quotes with me now because I was paraphrasing them before. But Peter Ferrara wrote an article in the Wall Street Journal entitled: ``Beware the Balanced Budget Deal.'' He said: Washington's traditional approach to balancing the budget is to negotiate an agreement on a package of benefit cuts and tax increases. Then he went on to say: What happens [if you do this] is the tax increases get permanently adopted into law. But the spending cuts are almost never fully adopted and, even if they are, they are soon swept away in the next spendthrift budget. Then--because taxes weaken incentives to produce--the tax increases don't raise the revenue that Congress initially projected and budgeted to spend. So the deficit reappears. Then he talked about Reagan making such a deal with Democrats in the Congress to have $3 in spending cuts for every $1 in tax increases. Then he has this sentence: Reagan went to his grave waiting for those spending cuts. Then, recently, there was an article by Stephen Moore and Richard Vedder that talks about raising taxes to reduce the deficit. There are a few sentences I am going to read: Instead, Congress will simply spend the money. He uses the figures they have studied: . . . we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. They refer to some other studies; that it is somewhere between $1.05 and $1.81. But no matter how we configured the data and no matter what variables we examined, higher tax collections never resulted in less spending. Madam President, do I have time left?

Mr. GRASSLEY. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, since yesterday, we have witnessed in this Chamber the resumption of a set of tired and worn out taking points that the Democratic side drags out whenever they are forced to finally get around to discussing tax policy. Well, once again beating the same dead horse, the other side has attempted to go back in time again and talk about fiscal history. Earlier this week, there has been a lot of revision or perhaps editing of recent budget history. I expect more of it in the future days. The revisionist history basically boils down to two conclusions. First, that all of the ``good'' fiscal history of the 1990s was derived from a partisan tax increase bill in 1993, and, two, that all the bad fiscal history of this decade to date is attributable to bipartisan tax relief plans. Not surprisingly, nearly all of the revisionists who spoke generally oppose tax relief and support spending increases. The same crew generally supports spending increases and opposes spending cuts. For this debate, it is important to be aware of some key facts. The stimulus bill passed by the Senate, with interest included, increased the deficit by over $1 trillion. The stimulus bill was a heavy stew of spending increases and refundable tax credits seasoned with small pieces of tax relief. The bill passed by the Senate had new temporary spending that, if made permanent, will burden future budget deficits by over $2.5 trillion. Now, that is not this Senate Republican speaking; it is the official congressional scorekeeper, the Congressional Budget Office. In fact, the deficit effects of the stimulus bill passed within a short time after the Democrats assumed full control of the Federal Government roughly exceeded the deficit impact of 8 years of bipartisan tax relief. You can see that very clearly right here. The tax relief over here, and the stimulus bill here--all of this occurred in an environment where the automatic economic stabilizers, thankfully, kicked in to help the most unfortunate in America with unemployment insurance, increased amounts of food stamps, and other benefits. That antirecessionary spending, together with lower tax receipts and the bailout activities, set a fiscal table of a deficit of $1.4 trillion. That was the highest deficit as a percentage of the economy in post-World War II history. You can see that right here. From the perspective of those on the Republican side, this debate seems to be a strategy to divert, through a twisted blame game, from the facts before us. How is the history a history of revision? I would like to take each conclusion one by one. The first conclusion is that all of the good fiscal history was derived from the 1993 tax increases. To test that assertion, all you have to do is take a look at data from the Clinton administration. The much ballyhooed 1993 partisan tax increase accounts for 13 percent of the deficit reduction in the 1990s, 13 percent. That 13-percent figure was calculated by the Clinton administration Office of Management and Budget. The biggest source of deficit reduction, 35 percent, came from a reduction in defense spending. Of course, that fiscal benefit originated from President Reagan's stare-down of the Communist regime in Russia. The same folks on that side who opposed President Reagan's defense build-up somehow seem to take credit for the fiscal benefit of the peace dividend. The next biggest source of the deficit reduction, 32 percent, came from other revenue. Basically this was the fiscal benefit from the pro- growth policies such as the bipartisan capital gains tax cuts of 1997 and the free trade agreements that President Clinton, with Republican votes, got passed. The savings from the policies I pointed out translated to interest savings. Interest savings account for 15 percent of the deficit reduction. Now, for all of the chest thumping about the 1990s, the chest thumpers who pushed for big social spending, did not bring much to the deficit reduction tables in the 1990s. Their contribution was this, 5 percent. What is more, the fiscal revision historians in this body tend to forget who the players were. They are correct that there was a Democratic President in the White House, but they conveniently forget that Republicans controlled the Congress for the period where the deficit came down and eventually turned into a surplus. They tend to forget they fought the principle of a balanced budget that was the centerpiece of Republican fiscal policy. Remember, the government shutdowns of late 1995? Remember what that was all about? It was about a plan to balance the budget. We are consistently reminded of the political price paid by the other side for the record tax increases they put into law in 1993. Republicans played a political price for forcing the balanced budget issue in 1996. But as we found out in 1997, President Clinton agreed. Recall as well all through the 1990s what the year-end battles were about. On one side, congressional Democrats and the Clinton administration pushed for more spending. On the other side, congressional Republicans were pushing for tax relief. In the end, both sides compromised. That is the real fiscal history of the 1990s. Now, let's turn to the other conclusion of the revision by fiscal historians. That conclusion is that in this decade all fiscal problems are attributable to the widespread tax relief enacted in the years 2001, 2003, 2004, and 2006. In 2001, President Bush came into office. He inherited an economy that was careening downhill. Investments started to go flat in 2000. The tech-fueled stock market bubble was bursting. After that came the economic shocks of the 9/11 terrorist attacks. Add in the corporate scandals to that economic environment, and it is true that in the fiscal year 2001, as it came to a close, the projected surpluses turned to a deficit. But it is wrong to attribute the entire deficit occurring during this period to the bipartisan tax relief. Because, according to the CBO, the bipartisan tax relief is responsible for only 25 percent of the deficit change, while 44 percent is attributable to higher spending and 31 percent to economic and technical changes. In just the right time, the 2001 tax relief plan kicked in. As the tax relief hits its full force in 2003, the deficits grew smaller. This pattern continued for 4 more years through 2007. If my comments were meant to be partisan shots, I could say this favorable fiscal path from 2003 to 2007 was the only period, aside from 6 months in 2001, where Republicans controlled the White House and the Congress. But unlike the fiscal history revisionists, I am not trying to make a partisan point; I am just trying to point out a few fiscal facts. There is also data that compares the tax receipts for 4 years after the much ballyhooed 1993 tax increase and the 4-year period after the 2003 tax cuts. I have a chart here that will track those trends. In 1993, the Clinton tax increases, the blue line, brought in more revenue as compared to the 2003 tax cuts. That trend reversed as both policies moved along in years. Over the first few years, the extra revenue went up over time relative to the flat line of the 1993 tax increases. So let's get the fiscal history right. The pro-growth tax and trade policies of the 1990s, along with the peace dividend, had a lot more to do with the deficit reduction in the 1990s than the 1993 tax increases. In this decade, deficits went down after the tax relief plans were put in full effect. No economist I am aware of would link the technical bursting of the housing bubble with the bipartisan tax relief plans of 2001 and 2003. Likewise, I know of no economic research that concludes that the bipartisan tax relief of 2001 and 2003 caused the financial meltdown of September and October 2008. I have another chart that shows what the President inherited from the Democratic Congress and a Republican President. As I said, from the period 2003 through 2007, after the bipartisan tax relief program was in full effect, the general pattern was this: revenues went up, deficits went down. One major point that needs to be said right here is to state where the government gets the money it spends. Basically I am asking, from where do taxes come? I would have thought this would have been perfectly obvious to most people, but I may have been wrong. Taxes come from taxpayers. I say this because we have heard tax relief for certain individuals referred to as the word ``bonus.'' A search of the Congressional Record for the Senate on December 1, 2010, shows that the word ``bonus'' was said nearly 50 times, the implication being that by extending tax relief for all Americans we are giving some people a bonus that other people are paying for. Let me try to simplify this for my colleagues who are having trouble understanding. There is no proposal to cut taxes for anyone before this body. The question is, Instead, are we going to allow taxes to go up or are we going to prevent a tax increase? If we prevent taxes for everyone from going up, we are letting taxpayers keep more of their own money that they have earned and worked hard for. No one is proposing a bonus or a gift to anyone. The question is, Do we want taxpayers to have more or less of their own money? My colleagues on the other side have been especially incensed by what they consistently refer to as ``tax cuts for the rich'' and seem to believe tax relief for everyone is responsible for our disastrous budget situation. However, I think nearly everyone serving in the Chamber and certainly the President and House and Senate leadership support extending around 80 percent of that tax relief. If those on the other side are serious in their pleas that taxes must be increased in the name of fiscal responsibility, how can they claim 80 percent of the tax relief is absolutely necessary and that 20 percent of the tax relief is absolutely wrong? This chart, drawn up from Congressional Budget Office data, should give more insight into the two groups the other side is talking about. The orange line measures the effective tax rate paid by the top 5 percent of taxpayers. By the way, this is where the small business owners' tax hit occurs. This group represents those tax-paying families with incomes over $250,000. Under the Democratic leadership's preferred tax policy, this line will go back up to where it was in the year 2000. Republicans would prefer to prevent this tax increase, and we have shown it falls primarily on the backs of small business. The main point this chart shows, though, is that tax relief undertaken during the last administration benefited all taxpayers, and characterizing it as tax cuts for the rich is simply not accurate. Of course, I wish to put our country on a path to fiscal responsibility, but I do not believe higher taxes will lead us to that path. Rather, we need to carefully examine how we spend the money we already collect. This debate is about one fundamental question. Who does the money you, the taxpayer, have worked hard to get belong to? Does it belong to the citizens who earn it or does it belong to the government? Is whatever the taxpayer is left with an allowance, with the balance to be spent by a government that knows best? I think most people would answer my last two questions with a strong resounding no. As we continue to discuss pressing tax matters in Congress, we need to keep these fundamental and simple truths in mind. We need to stop taxes from increasing for all Americans. It is fundamental, after all the years I have served in the Senate, that increasing taxes $1 does not go to the bottom line and bring the deficit down. Through three or four different occasions during the years I have served in the Senate, we have had propositions, some of them even bipartisan, that we increase taxes by $1 and somehow we will decrease expenditures by $3 and, in the process, we are all going to win and the deficit is going to go down. But what we forget is how the mechanics of legislative bodies work. You increase taxes for a long period of time, but each year expenditures are reviewed, and somehow that 3-for-1 rule does not seem to hold on the expenditure side. They don't go down. They creep up, creep up, and creep up. So in the final analysis, it is kind of averaged out that for every $1 we bring in in increased taxes, it is a license to spend $1.15. Some studies would say it is even much higher than that and not just one proposition like that but several propositions like that. That is how it has ended up. I don't like to increase taxes, but if there was ever a time I could increase taxes and knew that went to the bottom line and brought the deficit down $1, it might be a proposition I could buy into. But the practice of legislative bodies, particularly the Congress of the United States, increasing taxes $1 is a license to spend more. It is a ratchet effect. I am very suspicious of those propositions. I think my colleagues see that raising taxes has not done anything to bring the budget deficit down. I ask our colleagues, in these last few weeks of this Congress, to keep those historical facts in mind so we don't get hoodwinked into doing things that don't end up reducing the deficit. Even at a time when it sounds like it will reduce the deficit and makes sense, the common sense we ought to remind each other of is it doesn't work. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, it seems as though every few weeks or so there are a lot of misleading and misinformed accusations launched at our Nation's renewable fuel producers. It is impossible to come to the Senate floor to respond to all of them. But sometimes the claims are so outrageous that they require an informed response. So I am here to give that response with emphasis on the word ``informed.'' Earlier this week, a number of my colleagues in the Senate, including a few of my fellow Republicans, sent a letter to the majority and minority leaders expressing their opposition to extending the tax incentives for homegrown ethanol. Homegrown means we are less dependent upon people such as Dictator Chavez and our oil sheiks. My colleagues argued that the tax incentive for the production of clean, homegrown ethanol is fiscally irresponsible. They expressed their support for allowing the 45-cent-per-gallon credit for ethanol use to expire. It is important to remember that the incentive exists to help the producers of ethanol compete with the big oil industry. Remember, the big oil industry has been well supported by the Federal Treasury for more than a whole century. Many of the Republican Senators who signed onto that letter have also been leading the effort to ensure that no American sees their taxes go up on January 1, 2011, which will happen automatically if we do not do something this very month. The largest tax increase in the history of the country can happen without even a vote of Congress because of the sunsetting law. Of course, in that regard, I support the position of my Republican colleagues. But a repeal of the ethanol tax incentive is a tax increase that will surely be passed on to the American consumer. I would like to remind my colleagues of a debate that we had earlier this year on an amendment offered by Senator Sanders. The amendment he offered would have, among other things, repealed the $35 billion in tax subsidies enjoyed by oil and gas. Opponents of the Sanders amendment argued that repealing the oil and gas subsidies would reduce domestic energy production and drive up our dependance on foreign oil. Opponents of the Sanders amendment argued that it would cost U.S. jobs and increase prices at the pump for consumers. I agreed with the arguments of the opponents. All of my Republican colleagues and more than one-third of the Democrats did as well. Thus, the Sanders amendment was defeated. That majority against the Sanders amendment knew that if we tax something we get less of it. Repealing incentives on ethanol would have the very same result. Well, guess what. I know removing incentives for oil and gas will have the same impact as removing incentives for ethanol. We will get less domestically produced ethanol and be more dependent upon those oil sheiks. But it will also cost U.S. jobs. It will increase our dependence on foreign oil. It will increase prices at the pump for American consumers. So whether it is jobs or increased dependence or increasing the price of gas, no American would like that to be the result. We are already dependent on foreign sources for more than 60 percent of our oil needs. We spend $730 million a day on imported oil. That money is leaving America to the Middle East or nutty dictators like Chavez. Why do my colleagues want to increase our foreign energy dependence when we can produce that energy right here at home? So I would like to ask my colleagues who voted against repealing the oil and gas subsidies but are supporting repealing incentives for renewable fuels, how do you reconcile such inconsistencies? The fact is, it is intellectually inconsistent to say increasing taxes on ethanol is justified, but it is irresponsible to do so on oil and gas production. If tax incentives lead to more domestic energy production and result in good-paying jobs, why are only incentives for oil and gas important but not for domestically produced renewable fuels? It is even more ridiculous to claim that the 30-year-old ethanol industry is mature and thus no longer needs the support they get, while the century-old big oil industry still receives $35 billion in taxpayer support. Regardless, I do not believe we should be raising taxes on any type of energy production or on any individual, particularly during a recession. Allowing the ethanol tax incentive to expire will raise taxes on producers, blenders, and ultimately consumers of renewable fuel. A lapse in the ethanol tax incentive is a gas tax increase of over 5 cents a gallon at the pump. I do not see the logic in arguing for a gas tax increase when we have so many Americans unemployed or underemployed and struggling just to get by. On Tuesday of this week all of my Republican colleagues and I signed a letter to Majority Leader Reid stating that preventing a tax increase, meaning mostly income-tax increases, and providing economic certainty should be our top priority in the remaining days of this Congress. I know we all agree we cannot and should not allow job- killing tax hikes during a recession. Unfortunately, those Members who have called for ending the ethanol incentive have directly contradicted this pledge because a lapse in the credit will raise taxes costing over 100,000 U.S. jobs at a time of near 10 percent unemployment. The taxpayer watchdog group, Americans for Tax Reform, considers the lapse of an existing tax credit for ethanol to be a tax hike. Now is not the time to impose a gas tax hike on the American people. Now is not the time to send pink slips to more than 100,000 ethanol- related jobs. A year ago at this time I came to the Senate floor to implore the Democratic leadership to take action on extending expiring tax incentives for the biodiesel industry. They failed in their responsibility to extend that incentive and provide support for an important renewable industry. So while 23,000 American jobs were supported on December 31 last year, nearly all of those jobs have disappeared. An industry with a capacity to produce more than 2 billion gallons of renewable fuel a year is on track to produce less than 20 percent of that capacity this year. Ethanol currently accounts for 10 percent of our transportation fuel. A study concluded that the ethanol industry contributed $8.4 billion to the Federal Treasury in 2009, $3.4 billion more than the ethanol incentive. Today, the industry supports 400,000 U.S. jobs. That is why I support a homegrown, renewable fuels industry, as I know the Obama administration does as well. I would encourage anyone who is unclear on the administration's position to contact Agriculture Secretary Vilsack. I would like to conclude by asking my colleagues, if we allow the tax incentive to lapse, from where should we import an additional 10 percent of our oil? Should we rely on Middle East oil sheiks or Hugo Chavez? I would prefer we support our renewable fuel producers based right here at home rather than send them a pink slip. I would prefer to decrease our dependence on Hugo Chavez not increase it. I certainly do not support raising the tax on gasoline during a recession. I would respectfully ask my colleagues to reconsider their support for this job-killing gas tax increase. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I, Senator Chuck Grassley, intend to object to proceeding to H.R. 5717, the Smithsonian Conservation Biology Institute Enhancement Act, for the following reasons. The Smithsonian has had well documented problems keeping up with the maintenance needs of current structures and facilities. Additionally, I have investigated Smithsonian officials in the past few years regarding inappropriate use of taxpayer funds. I would like to examine whether the Smithsonian is able to meet its current operational requirements before legislation allowing for the construction of a new facility moves through the Senate without debate or even committee consideration.

Mr. GRASSLEY

Mr. GRASSLEY. I ask for the yeas and nays.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I want to first start off by thanking my Senate colleagues and in particular the Senate Agriculture Committee for addressing a new cause of action in Federal court for those African-American farmers who may have been discriminated against and who were denied entry in the Pigford v. Glickman Consent Decree. The Food, Conservation, and Energy Act of 2008 included a provision titled Determination on Merits of Pigford Claims. It gave these farmers a chance to have their claims heard. For those that don't know, in 1997 a lawsuit was filed in the United States District Court for the District of Columbia against the United States Department of Agriculture, USDA, Pigford v. Glickman, alleging that the USDA had violated the Equal Credit Opportunity Act and the Administrative Procedure Act by maintaining a pattern and practice of discrimination against African-American farmers. Such pattern and practice delayed, denied, or otherwise frustrated the efforts of African-American farmers to obtain loan assistance and to engage in the vocation of farming. Because of the persistent practice of discrimination, Congress, in October 1998, passed a law tolling the statute of limitations under the Equal Credit Opportunity Act for an additional 2 years for African- American farmers who had been discriminated against between 1981 and 1996 and had filed complaints with USDA prior to July 1, 1997, so that they could file a civil action against USDA. On April 14, 1999, the U.S. District Court for the District of Columbia approved a settlement and assigned four entities to facilitate implementation of the claims resolution process set out in the Consent Decree. To participate in this process, eligible farmers initially were required to submit completed claims packages to the Consent Decree Facilitator by October 12, 1999. This deadline was subsequently extended by the Court to September 15, 2000, upon a showing of ``extraordinary circumstances beyond [the claimant's] control.'' Approximately 61,000 petitions were filed after the original October 12, 1999, deadline, but on or before the September 15, 2000, ``late- filing'' deadline. Of these, only around 2,500 were permitted to proceed to a determination on the merits. Over 25,000 additional petitions were filed after the September 15, 2000 late-filing deadline and before the May 22, 2008, enactment of the 2008 farm bill. On November 18, 2004, the Subcommittee on the Constitution of the Committee on the Judiciary of the House of Representatives received sworn testimony highlighting the inadequate notice provided to those who had viable claims of discrimination against the USDA of the claims resolution process set out in the Consent Decree. Because of this inadequate notice, many potential claimants were denied participation in the Pigford claims resolution process as ``late-filers.'' Secretary Vilsack has reached a settlement agreement with the claimants who filed claims after the deadline set by the court who were denied a determination of the merits of their Pigford claims. The government has an obligation to fund this settlement which is subject to court approval and Congress must act to provide relief for these claimants quickly. Today we have the opportunity to make right these past wrongs by the Department and give each individual claimant the right to tell their side of the story. This second Pigford round is not the same as the claims adjudicated in Pigford 1. We've made changes to the settlement agreement that will enhance the Department's ability to fight fraud. We require the adjudicators to be a truly neutral party. We allow that neutral adjudicator to ask the claimant for additional documentation if he or she suspects any fraud. We require the claimants' attorneys to certify that there is evidentiary support for the claims. And we require the Office of Inspector General and the Government Accountability Office to evaluate the Department's internal controls and audit the process in adjudicating the claims. I also thank John Boyd, president of the National Black Farmers Association, NBFA, for his help in getting us where we are today. Without his dedication to this issue, I don't think we would be passing this legislation today. My hope is that the Department will work with groups like NBFA to conduct outreach to the black community and claimants. No one wants to see fraud in the administration of these claims and stakeholder groups such as John's can be a valuable resource to getting that message out. All these steps will help deter fraud and better protect taxpayer dollars. Other provisions are included in this package including the Cobell settlement and four Native American tribal water agreements. In a fiscally responsible manner, we have fully offset the entire package. The farm bill we passed 2 years ago does one thing right. It focuses a considerable amount of resources on new and beginning farmers and ranchers. Well, many of the Pigford claimants were in that same boat 20 years ago. It's time to rectify that. We know USDA has admitted that the discrimination occurred, and now we are obligated to do our best in getting those that deserve it, some relief. It is time to make these claimants right and move forward into a new era of civil rights at the Department of Agriculture.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, Senator Hatch has long been a leader on a lot of these tax provisions, particularly in research and development. I thank him for his leadership. I think Senator Hatch has clearly outlined the gravity of the economic consequences of a continuing failure to finish time-sensitive legislative tax business. There is a chart I will put up that shows where we are on these categories of expiring tax provisions. Said another way, here are the categories of tax hikes that congressional inaction will put in place. I have used this chart before, so I think Members will be familiar. In fact, several months ago, I used it. The congressional Democratic leadership paid no attention to the seriousness of these issues then. Unfortunately, the to-do list is exactly the same today as it was several months ago. If we go down through the chart, Members can see that we have had partisan votes on extender packages negotiated between the bicameral Democratic leadership but no effort to reach out to the Republican side to find bipartisan common ground. On this year's alternative minimum tax patch, as Senator Hatch noted, inaction on the AMT will force a ``gotcha'' tax hike on millions of middle-income families when they start to file their tax returns 6 weeks from now. On death tax reform, the House passed a permanent reform almost 1 year ago, but it has languished in the Senate during that period. On our side, we would like to improve that bill to protect more small businesses and farm families from the death tax. On the 2001-2003 tax relief packages, there is no bill from the other side that would serve as a starting point on preventing this massive tax hike. On our side, if the Democratic leadership permitted us, we would like to start with Senator McConnell's bill. Senator Hatch and I are cosponsors of that legislation.

Mr. GRASSLEY. First of all, my colleagues probably know that my friend from Utah is going to advance as the incoming ranking member of the Senate Finance Committee, and I congratulate him on that. I know he is going to do a very good job. One needs only to look to the nonpartisan Congressional Budget Office to assess the harm that could be done to the economy if we don't get this tax legislation passed. According to the Congressional Budget Office, not addressing these very time-sensitive tax issues will reduce economic growth by as much as 1.7 percent on average for the years 2011 and 2012. If Members didn't hear that, it is not some political leader saying that economic growth will be harmed by 1.7 percent; it is the nonpartisan experts in the Congressional Budget Office saying that if we don't pass these tax bills, economic growth is going to get hit 1.7 percent. Some private forecasters put that hit even higher--at 2 percent. When we consider that the last report has the economy growing at an annualized rate of 2 percent, then it is quite obvious. We can see that this single failure to prevent these great big tax increases could wipe out what little economic growth is currently occurring. I don't know how policymakers can sleep at night, let alone be so casual when we haven't dealt with these time-sensitive tax issues at a time when coming back here we heard nothing from our constituents other than concern about the economy, about jobs, and about the legacy of debt we are leaving.

Mr. GRASSLEY. Absolutely. We have a track record on that. Just a few years ago, it didn't get done on time, and people had to wait for their tax refunds. That is the biggest thing. But it also created a terrible bureaucratic problem for IRS to get the forms out. My friend from Utah is correct. Fortunately, the chairs and ranking members of the tax writing committees wrote to the Commissioner of IRS last week indicating our intention to pass an AMT patch. The letter specified what the AMT patch would look like. But as helpful as the letter was, we still need to change the law. As a matter of fact, the filing season could become very complicated if we don't act. During our years in the majority, we never let the AMT patch legislation slip past May of any tax year that it applied to. That only happened once. The death tax is another overdue tax legislative item that has been referred to. Maybe the Senator from Utah could bring up the issue of the estate tax.

Mr. GRASSLEY. Well, I say to Senator Hatch, the only thing I would add to the good work you put out there is maybe to say a little bit more about the estate tax; that is, if we do not do anything--as you see from this chart, you can see the House passed death tax reform but not the Senate. Obviously, we do not have a final bill. If we do not get a final bill by the end of this year, instead of having no estate tax like this year or a $3.5 million exemption like last year, we are going to have only a million-dollar exemption and a 55-percent tax rate. That is going to be catastrophic on small business. It is going to be catastrophic in the rural areas. So I hope that emphasizes the importance of getting something done on the estate tax ahead of time. The only other thing I would add, because the Senator did such a good job of saying what the economic consequences are, if we let the biggest tax increase in the history of the country happen by sunset December 31, and then that means you go back to the tax rates and tax policy of the year 2000, it is going to be very destructive on job creation for small businesses and very destructive as far as bringing the certainty that businesses, particularly small businesses, need if they are going to hire people. I had a news conference last month in my State, and I brought in some small businesspeople. One of the small businesspeople testifying for me said to the media of Iowa that they would like to hire five or six people, but as long as there is all this uncertainty about what the tax policy is, they are not going to move forward. So what we have to do--and I say to Senator Hatch, I think you have said it several times--and particularly for small business, we have to bring certainty to the Tax Code. You cannot have this uncertainty of what is going to happen after December 31, particularly when you are certain you are going to have the biggest tax increase in the history of the country without even a vote of Congress. So I compliment Senator Hatch. I will not have anything more to say on this subject until we get one of these pieces of legislation before the Senate. But I thank the Senator very much for his leadership.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to recognize a truly exceptional Iowan. After more than 31 years of honorable military service, in November of this year, COL Michael J. Jensen is set to retire. His dedication and tireless devotion to the service of our great country is without question. I extend my heartfelt congratulations to COL Mike Jensen. Colonel Jensen was born in Estherville, IA. He attended and graduated from Estherville Community High School in 1975, received an associate of science degree in computer science from Iowa Lakes Community College, a bachelor of arts degree in business management from Buena Vista University, and a master's degree in public administration from Drake University. Colonel Jensen also attended General Staff College, where he was the distinguished honor graduate. Mike Jensen enlisted in C Battery 1st Battalion 194th Field Artillery on June 14th, 1979. He was commissioned a second lieutenant, Field Artillery, in June 1982 and graduated from the Iowa Military Academy Officer Candidate School at Camp Dodge in Johnston, IA. Duty assignments over his career include a number of positions in the 1- 194th Field Artillery, 34th Infantry Division; Recruiting and Retention; the Secretary of General Staff; and Director of Military Support. In 2006, Colonel Jensen assumed his current position as the Commander of the Counterdrug Task Force, Iowa National Guard. Over his admirable military career, Mike Jensen received a number of awards and decorations, including seven awards of the Meritorious Service Medal, the Army Commendation Medal with two oak leaf clusters, the Army Achievement Medal, and the Army Reserve Components Achievement Medal. Colonel Jensen is also an accomplished outdoorsman and avid fisherman. Congratulations again to COL Michael Jensen. The Iowa National Guard will no doubt miss his daily contributions; however he continues as a model of honorable and distinguished service to his country. I thank him for his unwavering commitment to Iowa and to the United States of America.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, Congress meets in the District of Columbia. The District of Columbia is an island surrounded by reality. Only in the District of Columbia could you get away with telling the people if you like what you have you can keep it, and then pass regulations 6 months later that do just the opposite and figure that people are going to ignore it. But common sense is eventually going to prevail in this town and common sense is going to have to prevail on this piece of legislation as well. I support the resolution of Senator Enzi, disapproving the regulation on grandfathered health plans. The partisan health care overhaul enacted last March and subsequent implementation represents so many broken promises that I hardly know where to begin. But the resolution of Senator Enzi certainly sheds some light on one of the most glaring broken promises we have seen so far, and is as good a place as any for us to start. Time and again throughout the health care debate, supporters of the health care overhaul assured voters that even after their proposal became law, ``If you like what your current health plan is, you will be able to keep it.'' The administration's own regulations prove this is not the case. Under the grandfathering regulation, according to the White House's own economic impact analysis, as many as 69 percent of businesses will lose their grandfathered status by 2013 and be forced to buy government- approved plans. The estimates are even more troubling if you are a small business. Again, according to the administration's own estimates in the regulation, as many as 80 percent of small employers will be forced out of their current plan and into a more expensive government-approved plan. It is no wonder that the grandfathering regulation is opposed by pretty much every employer organization in the country. The National Federation of Independent Businesses, the Chamber of Commerce, the National Association of Manufacturers, and the National Retail Federation have all weighed in against this burdensome and disruptive policy. In every one of those cases, businesses that are members of those organizations want to provide health insurance and have been providing health insurance for their employees, and they want to keep it. They were believing Congress when they said if you have what you like you can keep it, and now they are finding out otherwise. It is true our economy is in a fragile place right now. Yet the implementation of the new health care law is creating more uncertainty and higher costs for American businesses. How can we ask them to go out and create jobs and hire new people when each new health care regulation adds another layer of bureaucracy and uncertainty? The White House should be making it easier to do business in this country, not harder. This is not just about confusion, it is also about costs. When employers and individuals make even modest changes to their benefits and lose grandfathered status, they are forced to buy a new government- approved health care plan that in most cases will cost more than their current plan. That means the government will tell employers what benefits they have to cover, to whom they have to offer coverage, and how much they are going to have to contribute. We have already seen data from health plans saying that the requirement in the new law could drive up premiums by about 9 percent. This is in line with the Congressional Budget Office's estimate that the overall increase in premiums could be as much as 10 percent to 13 percent. When you factor in medical inflation, some people are still seeing premium increases of 20 percent or more after the passage of the health care law. What happened, then, to President Obama's promise about lowering premiums by $2,500? Are we supposed to add that to the list as another broken promise? Each day it seems as if another news story comes out that shows why the partisan health care overhaul was the wrong approach. Health plans are being forced out of the child-only market. Some have stopped selling in individual markets entirely. Premiums continue to go up at twice the rate of inflation. The White House's own actuary is telling us that health care inflation will be worse now than it was before the health care reform bill became law. Over 1 million seniors are being forced out of their current national Medicare Advantage or Medicare prescription drug plans, and this is only going to get worse. Businesses are considering dropping retiree health care benefits and possibly dropping health care coverage altogether. With these kinds of stories coming out on a daily basis, it is no wonder that polls are showing close to 60 percent of the American people opposed to this new law. I support the efforts of Senator Enzi and appreciate that he is willing to shed some light on this issue. There is a lot of misinformation out there and people need to understand what this health care overhaul means for them. The grandfathering regulation is a clear violation of the promises made by supporters of the health care law that, if you like what you have, you are able to keep it. We owe it to our constituents to fix that misrepresentation. I urge my colleagues to support the resolution. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, on January 8 of this year, I requested the Government Accountability Office to conduct followup tests of our Nation's airport security screening procedures. Investigators attempted to smuggle bomb-making materials past security checkpoints in a number of airports around the country. This is something the GAO has done for Congress on several occasions since the 9/11 terrorist attacks. It is an important reality check for Congress to find out exactly how effective or ineffective the Transportation Security Administration's screening procedures are. TSA has spent a lot of time and money trying to prevent future terrorist attacks, and we are, no doubt, safer in many ways than we were before 9/11. However, it is important to cut through the talking points and the press releases. We need to test the system in real time with real people carrying potentially destructive materials once in a while to find out how vulnerable we still are. Unfortunately, the Obama administration, which is now responsible for keeping airline passengers safe, does not want you to know the results of these tests. In fact, the administration classified almost every word of the GAO report as ``secret.'' These sorts of classification decisions ought to be made only when the information is actually sensitive for national security reasons. The power to classify information should not be used merely to hide information that might be embarrassing to the administration. I understand that certain details of how GAO investigators did what they did should not be made public. No one wants to give the terrorists a roadmap of how to attack us again. I do not want to do that, and the GAO investigators do not want that to happen. That is why I asked them to draft a report that did not include those sorts of details so that a declassified version could be released to the public. The problem, however, is that the Obama administration classified the report anyway. The key data that should be public are the results. Did the GAO investigators succeed in penetrating our airport security checkpoints? If so, how many times? How many times did they fail? The public has a right to know those bottom-line results. Those results are not going to help terrorists figure out how to better attack us, and they certainly are not going to give them any more motivation to try than they already have. Keeping the results secret will accomplish one thing, however. It will ensure that the public has no idea how effective our airport screening strategy actually is, and it seems that is the way the Obama administration likes it. Therefore, I am asking the TSA Administrator to personally come to our secure facilities here in the Senate and explain his decision. Several of my colleagues joined me in asking the GAO to do this work, including the chairs and the ranking members of the Homeland Security Committee in both the House and the Senate. I invite them to join us and help resolve this situation. We need to work together to make sure that the entire Congress and the public are aware of the results of this important work while maintaining the security of information that truly needs to remain secure. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, so far during the 111th Congress, the Finance Committee, of which I serve as the ranking Republican member, has held over 50 hearings. At those hearings, around 200 witnesses offered their testimony and answered members' questions. The witnesses who testify at our hearings are considered to be some of the most qualified experts in their field and their participation is critical to the legislative process. Because of their influence on legislation, it is important that Congress knows to what extent the witness' testimony is objective and if the witness has any significant interest in the outcome of potential legislation. Three of the hearings held by the Finance Committee this Congress were roundtable discussions on health care reform. These discussions brought 41 witnesses, including industry stakeholders and academic leaders, before the committee to share their expert knowledge on policy options for health reform. At one of these roundtables, Dr. Jonathan Gruber, a health care economist and professor at the Massachusetts Institute of Technology, testified before the committee on health care reform. I thought he was an unbiased expert, but was later disappointed to hear that he had been paid over $400,000 by the administration to help advance the president's health care proposals. At the very least, he should have been straightforward with the committee and disclosed this financial interest. In addition to his testimony before the Finance Committee, Dr. Gruber testified in front of the HELP Committee and was also a high-profile supporter of the administration's health care reform effort in the media. In only a handful of his many articles on health care reform did he disclose his financial conflict of interest. While the propriety of Dr. Gruber advocating for administration positions in the media and other venues while failing to disclose his financial ties to the administration has been called into question, I am especially concerned about his advocacy before the U.S. Congress. When an academic leader comes before Congress to advocate a position, Congress should have confidence that the witness is both independent and objective and not being paid to assist the administration, or any other organization, in its efforts. Equally troubling is the Department of Health and Human Services, which has been unresponsive to efforts by Senator Enzi and myself to learn more about their practice of hiring consultants to advance the President's agenda. The fact that this expert was paid by the administration--and hid that fact from Congress--really taints everything this particular advocate told the committees. If Congress had been aware of his arrangement with HHS prior to his testimony, we would have had the opportunity to clarify that relationship with Dr. Gruber before considering his opinions and ideas. Unfortunately, when we learn about it after the fact, it completely discredits the information he presented. To follow up on this alarming news, Senator Enzi and I sent a letter to Dr. Gruber on January 26, 2010, asking him for details of any other government contracts he might have or might have had over the last 5 years and for details on whether he disclosed his government ties during media interviews, speaking engagements and written works on health care reform. Dr. Gruber's response failed to answer any of the questions posed in the letter. Instead, the response barely exceeded one page in length, was dismissive of any concern about the lack of disclosure and attempted to excuse his failure to disclose and to explain away the need for any detailed response. Furthermore, Dr. Gruber did not even commit to providing any such disclosure of the financial relationship with the Administration in the future. Unfortunately, Dr. Gruber's failure to answer our questions came as no surprise. In my 30 years serving in the United States Congress, I have found that chasing answers on the back end is much more difficult than requiring clarity and transparency from the start. And many of my colleagues might be surprised to find out that although many witnesses voluntarily disclose their affiliations or relationships so that they can explain them, no Senate committee currently requires witnesses to disclose potential conflicts of interest. Dr. Gruber even highlighted this point when he said in his February 23 letter that, ``to the best of my recollection, during the course of my health care reform work with Congress, no Member or staffer ever asked me whether I held any government contracts.'' In retrospect, if we were to have asked Dr. Gruber to disclose his agreements with the administration up front, we would have had the ability to ask him questions in-person, and he would have been given a chance to explain the relationship before testifying, so that his testimony could be given its proper weight. Our failure as an institution to ask for transparency in testimony is a problem that has a simple solution, a solution that most other institutions that rely on the work of academic experts have already implemented. The solution is to simply ask witnesses who come before the Senate to disclose any potential conflicts of interest up front. Our colleagues in the House of Representatives are already requiring witnesses to do this and there is no reason why we shouldn't require the same level of transparency from witnesses who come before the Senate. That is why today I am submitting the Witness Sunshine resolution. This resolution will make the Senate committee hearings more transparent and thus more credible and valuable to the legislative process. It achieves this goal by requiring each witness that appears before any Senate committee to submit a form disclosing outside affiliations and financial interests in any organizations, including government entities, that are directly related to the topic of the committee hearing. In August, I was happy to learn that the administration is supportive of this idea. In an August 4 letter, Secretary Sebelius wrote me saying, ``Should the Senate Finance Committee or any other Congressional Committee choose to [require witnesses to submit financial disclosure forms in advance of an appearance before the Committee], I would certainly encourage HHS contractors to fully comply with [that requirement].'' So adopting this rule should be an easy decision for the Senate. Our colleagues in the House of Representatives have been requiring this level of transparency for over a decade and now we know that the administration supports the idea as well. The House tells me that their witnesses are not overburdened or discouraged to offer testimony because of this requirement. I have carefully drafted this resolution so that the requirement for transparency similarly does not burden Senate witnesses. It is time for this body to meet the standards for transparency set by the House and followed in so many other institutions across the country. Supporting my resolution will help ensure that future testimony can be given its proper weight, and end the uncertainty of unknown interests influencing testimony. I urge my colleagues to support my resolution.

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, in a few minutes, the Senate will be voting on the motion to invoke cloture on the motion to proceed to a bill that has been mislabeled the ``Creating American Jobs and Ending Offshoring Act.'' The part of the bill that is attracting the most attention is the repeal of deferral for the income of foreign subsidiaries for importing into the United States. Deferral is the policy that allows U.S. corporations to defer paying U.S. tax on the earnings of its foreign subsidiaries until those earnings are sent back to the United States when, at that point, they are going to be taxed just like every other corporate income. In general, deferral is not allowed if the income is earned offshore and the reason for it being offshore is solely to avoid tax. What is bad about the bill is it would deny deferral for income that a foreign subsidiary legitimately earns from the sale of goods into the U.S. market. The problem is that there has been no finding that such income is earned outside the United States by a motivation to simply avoid U.S. taxes. So this bill is completely contrary to a whole half century of bipartisan thinking as to when it is appropriate to deny deferral and when it is not. That bipartisanship goes back to President John F. Kennedy's administration, when there was a bipartisan agreement within the Congress and between the President and the Congress that this is the tax policy we should have to make American manufacturing competitive with foreign competition. To the contrary, there are obviously many reasons for a foreign subsidiary of a U.S. corporation selling goods into the United States. There could be a need to be near to a certain overseas market or the good in question may not be found in appreciable quantities within the United States. Yesterday, I referred to chromium not being available in the United States, as one example. There could be many reasons having nothing to do with tax policy. But the sponsors of this bill don't seem to understand that fact, that American manufacturing ought to be competitive with overseas competition or, obviously, we are going to lose business and lose jobs in the process or perhaps the bill's sponsors would admit that curbing tax avoidance is not the point. Perhaps they would instead claim it is all about an effort to create American jobs. That would be a very good goal, but it is unlikely to create jobs. I fear it would have the opposite effect. The bill may lead to fewer headquarters jobs in the United States, if a corporation, for uncompetitive reasons, decided to move totally offshore and take those headquarters jobs with them. The bill could lead to a loss of American jobs assembling finished products from parts assembled outside the United States. In the words of the late Senator Moynihan, who was, for a long time, chairman of the Senate Finance Committee, in speaking in opposition to this very same proposal 14 years ago: Investment abroad that is not tax driven is good for the United States. In other words, what he is saying there is, if there is investment abroad but it is not solely to avoid U.S. taxation but has economic substance behind it, that is good for the United States. He did not say this. Contrariwise, if there is money offshore simply to avoid U.S. taxation, then obviously that is wrong. As an example, Senator Baucus and I have been involved in the Stanley Corporation doing that 6, 7 years ago, and we plugged those loopholes. I agree with Senator Baucus when he was recently quoted as to this bill saying: I think it puts the United States at a competitive disadvantage. That's why I'm concerned. If there is any doubt about whether I agree with that statement of Senator Baucus, the Democratic leader of our committee, I agree with Senator Baucus. In addition, there are procedural defects concerning this bill. I wish to start this part of my remarks by relying on a statement Senator Reid said to me privately--he might deny he made this statement, but soon after the 2006 election, when the Senate became a Democratic majority rather than a Republican majority, he said something like this to me: You and Senator Baucus work so well together. I want you to know I am going to let the committees continue to function as they always have, particularly in your case because you have such a close working relationship. With that as background, things have changed very recently so that every bill seems to be written in Senator Reid's office, not in committee. This bill before us has not been vetted by the Finance Committee. Does anyone believe that if my friend the chairman were to put this bill before the Finance Committee, it would be approved in the form it is right now? If the idea in this bill had the kinds of merits claimed by their proponents, then they should welcome the Finance Committee reviewing it. Let members ask questions as they review the language. Test the strength of ideas through the committee process. The Democratic leadership has short-circuited the opportunity to methodically test the bill as good tax policy. Unfortunately, this process defect has been more the rule than the exception. Since the stimulus bill in January of 2009, the Finance Committee has only marked up one tax policy bill, and that was the health care reform bill. My sense is the Democratic leadership simply does not want this bill to undergo scrutiny of a regular-order process--in other words, the way the Senate normally does business. This bill is presented as a ``take it or leave it'' proposition. Republicans are not supporting cloture because they are not being offered the opportunity to amend this bill with amendments that go to the supposed purposes of the bill. No amendments are allowed on any tax incentives for job creation. No amendments are allowed on measures to prevent offshoring of jobs. In other words, the Senate being a deliberative body of a bicameral Congress--and, obviously, the House is not a deliberative body--the purpose of this body is being neutered by the procedure this bill is going through. For instance, I have amendments dealing directly with the offshoring of jobs. They are bipartisan amendments. But if I vote for cloture, I have no assurance from the Democratic leadership that these amendments will be in order. I will describe these amendments. The first amendment mirrors a bill the junior Senator from Vermont and I have coauthored. It is the Employ America Act. It would prevent any companies engaged in the mass layoff of American labor from importing cheaper labor from abroad through temporary guest worker programs if they lay somebody off. The second amendment I filed today mirrors a bill the senior Senator from Illinois, a Democrat, and I have worked on for several years. It is the H-1B and L-1 Visa Reform Act of 2009. It would improve two key visa provisions while rooting out abuse while making sure Americans have the first chance of obtaining high-skilled jobs in this country. Many Americans are unemployed. Yet we still allow companies to import thousands of foreign workers. These businesses should be asked to look first at Americans to fill those jobs, and they should be held accountable for displacing Americans to hire cheaper foreign labor. These two amendments go directly to the concerns about job creation and the prevention of offshoring of U.S. jobs. Both amendments are bipartisan. Yet if cloture is invoked, these amendments would fall on the Senate cutting room floor. Furthermore, I have no confidence, even if the Democratic leadership were to follow regular order for floor purposes, that we could expect anything like a conference committee to work out the issues between the House and the Senate. In sum, the bill's substance would more likely lead to an increase in offshoring of American jobs and would make American companies less globally competitive. The bill's procedure is very irregular and not in the thoughtful traditions that so dignify the Senate. For purposes of the contents of the amendments, as well as this procedure, I ask that we vote against this bill. I yield the floor.

Mr. GRASSLEY. Mr. President, very soon, the Senate will be asked to vote on the motion to invoke cloture on the majority leader's motion to proceed to a bill that is mislabeled the ``Creating American Jobs and Ending Offshoring Act.'' The process for this bill illustrates how the Democratic leadership has dumbed down any efforts to seriously legislate any tax policy issues. To show how far, as a body, we have run off the rails in legislating, let's compare the legislative track record of this bill with the last major piece of tax legislation designed to deal with domestic job creation. I am referring to the bill that responded to a World Trade Organization ruling against a domestic manufacturing benefit known, at that time, as the foreign sales corporation or FSC program. Dangerous tariffs were pending with respect to many American products. How was that legislation handled? First of all, the Finance Committee members and staff engaged in a lot of due diligence in crafting the replacement regime, the domestic manufacturing deduction. On a bipartisan basis, Finance Committee staff, principally the tax and trade staffs, met with the interested parties, including officials from the litigating group, the European Union. Finance Committee staff, Republican and Democrat, negotiated a bill that took the revenue generated from repealing the FSC benefit, added revenue from shutting down tax shelters like the so-called SILO/LILO schemes, and channeled that revenue back into a new broader based domestic manufacturing incentive. That incentive is a 9 percent deduction for domestic manufacturing activity. It is a substantial tax incentive. The Joint Committee on Taxation estimates it is worth $10 billion annually in terms of reduced taxes to domestic manufacturers, large and small. The chairman's mark was a joint mark between my friend, then-ranking Democratic member, Max Baucus, and me. Ranking Member Baucus and I came up with a bill title. It was the Jump Start Our Business Strength or JOBS bill. The bill went through the usual transparent Finance Committee markup process. Over several days, Finance Committee members reviewed the language, asked questions, and prepared and filed amendments. When I gaveled the committee to order, several amendments were debated. Some were defeated. Some were modified and accepted. Others were discussed and withdrawn. Every Finance Committee member played a role in shaping the bill the committee approved. And it should be noted the only dissents were two members on the then majority side. When the bipartisan JOBS bill was scheduled for floor debate, then majority leader Bill Frist brought up the Finance Committee bill. Both my friend, Senator Baucus, and I were consulted on the floor bill's contents. At that time the Democratic leadership filibustered efforts to effectively process the bill. Keep in mind there was no dissent in the Finance Committee on the substance of the bill on the Democratic side. As I said before, two members of my leadership, on very principled grounds, voted against this popular bill. Despite opposing the bill in committee, those two members supported the majority leader's efforts to bring the time-sensitive legislation to the floor and process it in a timely fashion. It took three cloture votes to process the JOBS bill. That is right. Three cloture votes. The basis for the multiple filibusters of the JOBS bill was not opposition to material in the bill. The Democratic leadership filibustered over items not in the bill that they wanted to offer as amendments. The Republican leadership did something we seldom, if ever, see from the Democratic leadership. Majority Leader Frist yielded by allowing votes on those issues, which were not in the bill, but controversial with many in the Republican Conference. Many votes were held on the JOBS bill. Some were designed by those close to the Democratic campaign operation solely to score political points. The Republican Conference, as the majority party at the time, recognized multiple votes were the price to pay to push part of the majority's agenda. Even if that agenda consisted of doing the people's business by processing a bill with more support on the other side. The conference committee that considered the JOBS bill was fully open. There was a chairman's mark and several days of amendments between the House and Senate. In the end, a conference report was produced that garnered a majority of Senate conferee signatures from each side. The conference report passed with overwhelming bipartisan support. Compare that JOBS bill process with the one for this bill which, as I said at the start of my remarks, is a jobs bill in name only. In the Senate, I have found over the years, that legislative substance and legislative process are symbiotic. That is, the quality of the process often affects the quality of the substance and vice versa. Here we are debating a bill whose proponents claim will make a material difference with job creation incentives. We are also told that this bill will materially curtail the offshoring of U.S. jobs. If it were only that simple, I am sure the bill would pass with the overwhelming bipartisan margin the JOBS bill did some 6 years ago. I have previously discussed the defects in the bill before the Senate. I will not do it again here. But I will say this: Does anybody on the other side really believe if my friend, the chairman, were to put this bill before the Finance Committee that it would be approved in the form that is before the body today? I can tell you this Senator has several amendments that he thinks would improve this bill dramatically. I would expect those amendments might pass with bipartisan support. This bill, like so many others, was crafted in the majority leader's office and is largely the singular work of two senior members of his leadership. That is not to say anything negative about those members or their interest or work in the area of tax legislation. My point is that, if the ideas in this bill had the kind of merit claimed by their proponents, why avoid the Finance Committee? Why not let the public see it in committee. Let members ask questions as they review the language. Test the strength of the ideas through the amendment process. If the proponents answer by blaming Republican Leader McConnell, I would point out that Senator McConnell isn't on the Finance Committee. If the proponents answer by blaming partisanship, I would ask them to take a look at the Finance Committee ratio. It has been the most favorable to the majority since the early part of the 1990s. By intentionally skipping the committee of jurisdiction, the Democratic leadership has deliberately short-circuited the opportunity to methodically test the bill as tax policy. Unfortunately, this process defect has been more the rule than the exception. Since the stimulus bill in January of 2009, the Finance Committee has only marked up one tax policy bill, the health care reform bill. As a former chairman, I know the current chairman would not want to proceed this way. Nope. My sense is the Democratic leadership simply doesn't want this bill to undergo the extra scrutiny of a regular order process. Unlike the 2004 JOBS bill, this bill is being presented as a take-it- or-leave-it proposition. Republicans are not supporting cloture because they are not being offered the opportunity to amend this bill with amendments that go to the supposed purposes of the bill. No amendments allowed on other tax incentives for job creation. No amendments allowed on measures to prevent offshoring of jobs. I have amendments dealing directly with the offshoring of jobs question. They are bipartisan amendments. If I vote for cloture, I have no assurances from the Democratic leadership that these amendments will be in order. Any look back on the way in which tax bills have been processed this year tells me I have good reasons for doubting that a full debate would occur. I would like to briefly describe the two amendments I filed earlier. The first amendment mirrors a bill that the junior Senator from Vermont and I have coauthored. Known as the Employ America Act, this amendment would prevent any company engaged in a mass layoff of American workers from importing cheaper labor from abroad through temporary guest worker programs. Companies that are truly facing labor shortages would not be impacted by this legislation and could continue to obtain employer-sponsored visas. Only companies that are laying off a large number of Americans would be barred from importing foreign workers through guest worker programs. Since the recession started in December of 2007, nearly 8 million Americans have lost their jobs and the unemployment rate has nearly doubled. In total, 15 million Americans are officially unemployed, another 8.8 million Americans are working part-time only because they cannot find a full-time job, and more than 1 million workers have given up looking for work altogether. At the same time, some of the very companies that have hired tens of thousands of guest workers from overseas have announced large scale layoffs of American workers. The high-tech industry, a major employer of H-1B guest workers, has announced over 330,000 job cuts since 2008. The construction industry, a major employer of H-2B guest workers, has laid off 1.9 million workers since December of 2007. The second amendment I filed yesterday mirrors a bill that the senior Senator from Illinois and I have worked on for several years. Known as the H-1B and L-1 Visa Reform Act of 2009, this amendment would improve two key visa programs by rooting out fraud and abuse while making sure Americans have the first chance of obtaining high-skilled jobs in this country. The amendment does several things, including: one, requiring employers to try and recruit U.S. workers before hiring H-1B visa holders; two, requiring employers to pay a better wage to visa holders who take these jobs; three, expanding the powers of the federal government to go after abusers; four, creating new rules regarding the outsourcing and outplacement of H-1B and L-1 workers by their employers to secondary employers in the United States; and five, establishing a new database that employers can use to advertise positions for which they intend to hire an H-1B worker. Too many American workers are unemployed today. Yet we still allow companies to import hundreds, even thousands, of foreign workers with very little strings attached. These businesses should be first asked to look at Americans to fill vacant positions, and they should be held accountable for displacing Americans to hire cheaper foreign labor. These two amendments go directly to the concerns about job creation and prevention of offshoring of U.S. jobs. Both amendments are bipartisan. Yet if cloture is invoked, these amendments would fall on the Senate cutting room floor. Unlike the 2004 JOBS bill, I have no confidence that, even if the Democratic leadership were to follow regular order for floor purposes, that we could expect anything like a conference committee to work out the issues between the House and the Senate. We find ourselves in a very disappointing situation today. Two serious issues are supposed to be addressed in the legislation before the Senate: The first is tax incentives for job creation; the second is measures to prevent offshoring of jobs. No doubt the people who send us here expect us to take these weighty matters seriously. With all the economic pain Americans are enduring, we shouldn't be playing political games. But here we are. We have a bill whose proponents claim is a serious effort. The Democratic leadership skipped the Finance Committee, and we are presented with a take-it-or-leave-it bill that is really nothing more than a political label. We can do better. Cloture Motion