Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I cannot support this pay-go amendment because it would continue the double-standard that exists between taxes and spending. Under current law, more than a dozen mandatory programs will expire over the next 10 years. Extending these programs will cost nearly $1 trillion according to CBO. But, unlike tax cuts that expire during these same years, pay-go does not apply to the cost of extending these mandatory programs. This double standard is unacceptable.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I want to express my concern about the nomination of Ben Bernanke as Chairman of the Federal Reserve Board and explain why I will vote against him when the Senate has the opportunity this week. I know many of my colleagues will support Mr. Bernanke because he was a cocaptain of the U.S. economic recovery efforts in the last year and a half. Appointed by President Bush, Mr. Bernanke undoubtedly has a difficult job. Our Nation has been jolted by greed, corruption, fraud, and excessive risk-taking that led to the largest taxpayer bailout in history. Mr. Bernanke was holding the reigns, along with officials in the Department of the Treasury, but steered us into an out-of-control spending frenzy with very little oversight by the American people. Ben Bernanke has been wrong about the economy. He was wrong about the subprime lending meltdown. He was apparently blind to the pitfalls of credit default swaps. He misled the American public about the purpose and intent of the Troubled Asset Relief Program. He recklessly spent billions of dollars on a few renegade financial firms, picking winners and losers on Wall Street and justified these actions by saying Main Street would be saved. Then, he stonewalled Congress from learning about how the billions of dollars were spent. Ben Bernanke also opposed transparency almost every step of the way. Let me address these issues more in depth. Whenever the Chairman of the Federal Reserve opines about the economy, he understands that his words can be misunderstood or taken out of context and thus have an unintended impact on the market and day-to-day trading. However, Ben Bernanke has been saying that our economy has been strong since the beginning of the decline. His analysis of the situation and predictions for our future economic growth were far off. Let's take the housing problems, for example. In 2006, Fed Chairman Bernanke believed that the housing market had been strong but could cool slightly. He said, ``Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise, but not at the pace that they had been rising. So we expect the housing market to cool, but not to change very sharply.'' He didn't think the housing market would blow up, nor did he believe that the weakness in the market would spill over to other sectors of the economy. He was dead wrong. He was wrong about unemployment. Most recently, in May of 2009 and in front of the Joint Economic Committee, Fed Chairman Bernanke said: ``Currently, we don't think [the unemployment rate] will get to 10 percent.'' In November the unemployment rate hit 10.2 percent. We can go back to February 2006. As President Bush's Chairman of the Council of Economic Advisers, Mr. Bernanke was responsible for drafting the Economic Report of the President which claimed the following: ``The economy has shifted from recovery to sustained expansion. . . . The U.S. economy continues to be well positioned for long-term growth.'' In this report, Bernanke projected the unemployment rate to be 5 percent from 2008 through 2011. Even in 2007, the Fed Chairman believed that the labor market would stay healthy and incomes would continue to rise. In February of that year, he said that ``the business sector remains in excellent financial condition.'' Later in July of 2007, Mr. Bernanke said, ``Employment should continue to expand. . . . The global economy continues to be strong. . . . financial markets have remained supportive of economic growth.'' Then came the Bear Stearns debacle. Bear Stearns led the charge in the securitization market. Because they had placed significant resources in mortgage-backed securities, the company was on the verge of collapse. In March of 2008, the Federal Reserve Bank of New York attempted to save the company through an emergency loan, but failed and moved to force a sale to JPMorgan Chase. Three months later, Fed Chairman Bernanke still did not acknowledge the pending economic crisis. In fact, in June, he said, ``The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.'' He couldn't have been more wrong. The economy melted down, and the Fed and Department of the Treasury had to come to the rescue of several failing firms. The Federal Reserve Chairman only warned Congress about the financial crisis when it was too late. Under his leadership, the Federal Reserve took very little action to control the root causes that led us to economic storm we have all had to endure. Instead, they urged Congress and the American people to swallow a plan that was ill conceived and risked making the situation worse. So another reason I cannot support his renomination as Chairman of the Board is because of the disastrous implementation of the Troubled Asset Relief Program, also known as TARP. Chairman Bernanke came to Congress with former Treasury Secretary Paulson, selling a proposal that would direct taxpayer money to purchase ``toxic assets.'' The proposal would have allowed the Federal Government to take bad assets off the books of troubled firms to keep credit flowing. We were told that the situation was dire. We were told that the Fed and the Treasury Department had a plan in place. We were told that taxpayers may even come out ahead. We were told to trust them. It wasn't long after the Emergency Economic Stability Act was passed in October 2008 that the Fed and the Treasury reversed course. Without input from Congress, they took the authority they were given and went their own way. Chairman Bernanke was doling out funds for Bear Stearns and AIG while the Treasury was doling out funds to firms that were destined for failure. Today, the Troubled Assets Relief Program has been used as a slush fund to bail out firms on Wall Street and troubled automakers. Taxpayer money has been enabling these companies to continue in their misguided ways. Corporate jets were being used to lobby Congress for billions of dollars, and CEOs resisted proposals to slim down the fat pockets of their cronies. The American people were misled, and Ben Bernanke should share responsibility for that. But, it wasn't just the Troubled Asset Relief Program that was used to funnel taxpayer money to failing firms. Chairman Bernanke led the Fed on a spending spree, using a blank check to unilaterally direct money to AIG, Fannie Mae, and Freddie Mac. Chairman Bernanke was AWOL as the Federal Reserve funneled billions of taxpayer dollars to AIG knowing that the money would go directly out the back door to AIG counterparties like Goldman Sachs and foreign banks. AIG's payment of 100 cents on the dollar for the counterparty securities meant Goldman actually received more than some other counterparties, because Goldman's securities had a market value of 40 cents on the dollar while UBS Bank's securities, for example, were worth 71 cents on the dollar. Chairman Bernanke was absent from the critical ``haircut'' negotiations with the AIG counterparties, in stark contrast to the TARP Capital Purchase Program negotiations weeks earlier. As a consequence, no reductions in counterparty payments were obtained for the American taxpayer. These negotiations failed despite the fact that some of the foreign counterparties offered to reopen negotiations. The Federal Reserve failed to capitalize on this opportunity and investment bankers were paid in full. The AIG bailout was designed by the Fed in a manner that funneled billions of dollars directly to the counterparties. No other outcome was possible. The effect was a ``backdoor bailout'' regardless of the Fed's now- stated intent merely to improve AIG's liquidity in order to avoid a collapse. Reasonable people can disagree about whether Chairman Bernanke made the right decisions. Aside from the problems I have already outlined, I have serious reservations about voting for him again given his resistance to transparency. For example, we have seen very little cooperation from the Federal Reserve to ensure that the Government Accountability Office, GAO, has independent audit authority. Last March, the GAO testified before the Finance Committee that the Federal Reserve was resisting its efforts to conduct oversight of the response to the financial crisis by citing provisions of law that were intended to maintain the independence of monetary policy. Such restrictions could be defended when the Federal Reserve focused only on monetary policy. However, since the financial crisis, the Federal Reserve has routinely exercised extraordinary emergency powers to subsidize financial firms far above the levels Congress is willing to authorize through legislation. The Federal Reserve took on enormous amounts of risk in complicated and unprecedented ways. That risk is ultimately borne by the American taxpayer. Congress authorized $700 billion in funds under TARP. However, the total projected assistance in various initiatives by the Federal Reserve could be up to $3.4 trillion by GAO estimates. Therefore, I introduced an amendment in May of last year that would have guaranteed GAO the authority to audit all of the extraordinary emergency assistance from the Federal Reserve. Regrettably, due to objections from the Federal Reserve, my amendment had to be watered- down to ensure that GAO received at least some of the additional authorities it needed. Although I would have preferred to make all of the Fed's emergency actions under section 13(3) subject to GAO audit, I agreed to limit my amendment to Fed actions aimed at specific companies like Bear Stearns and AIG. However, broader, more comprehensive oversight authority over the Federal Reserve is needed to ensure the kind of transparency and accountability the American people expect. Unfortunately, when the opportunity to embrace that sort of oversight was presented, the Federal Reserve hid behind concerns about the independence of monetary policy to maintain the secrecy of its operations. Another example of the Federal Reserve resisting attempts to shine light on their actions surrounds the ``back-door bailout'' of Goldman Sachs and major foreign banks through the aid to AIG. The Federal Reserve initially refused to disclose the identity of the banks to whom AIG paid out the vast majority of its Federal assistance. Federal Reserve lawyers even opposed AIG disclosing details of its transactions in public filings required by the Securities and Exchange Commission. The Federal Reserve argued that disclosing the identity of these counterparties who engaged in exotic, risky transactions with AIG would destabilize AIG, would harm the private business interests of the counterparties, and could affect the stability of the markets as a whole. However, following significant public and Congressional pressure, the identities of the counterparties were released, and we learned that French bank Society General and Goldman Sachs were among the largest beneficiaries of the Federal bailout of AIG. None of the horrible consequences the Federal Reserve used to oppose basic transparency came to pass. The sky did not fall. The Special Inspector General for TARP has launched an investigation into whether there was misconduct at the Federal Reserve in regard to the Fed's role in the failure of AIG to disclose billions of dollars in counterparty payments to the SEC last year. And just this week, the Special Inspector General announced that it is investigating the Federal Reserve for withholding documents from the Special Inspector General in connection with his audit in November 2009 of the AIG counterparty payments. The Special Inspector General learned that they did not receive all of the documents they requested from the Federal Reserve when they saw the documents produced last week under subpoena to the House Committee on Oversight and Government Reform for the Committee's January 27, 2010, hearing. This sort of stonewalling by the Federal Reserve is outrageous and cannot be tolerated. So, I have had to ask myself, Is Ben Bernanke the man to lead us forward? Chairman Bernanke didn't see the financial crisis coming. He never expected our unemployment to reach 10 percent. He didn't foresee the subprime housing market affecting the broader economy. He didn't expect complicated financial instruments like credit default swaps to pose a risk to the economy, even though they were considered by some to be ``financial weapons of mass destruction.'' In fact, Chairman Bernanke insisted only well-informed and intelligent minds were using such instruments and that government supervision wasn't necessary. This lack of foresight makes me wonder if he is ready to lead our economy down the path to a sustainable recovery. I am afraid Ben Bernanke thinks everything is under control. He steered our economy out of danger. But we still have a long road ahead of us. The Fed has to unwind its massive balance sheet. It has to remove the excess funds that were created to paper-over the financial sectors' unacknowledged losses without stoking the flames of inflation. We need a Fed Chairman that is committed to a strong dollar and low inflation. We need a Fed Chairman that is committed to transparency. I am afraid Ben Bernanke had a seat at the table during the development of our current economic and financial crisis. He has failed to learn its lessons. He has promoted a policy of easy money, inflating our way from a stock market bubble to a housing bubble. He neither predicted nor prepared for the inevitable results. Moreover, he seems determined to repeat the mistakes of the past. For these reasons, I cannot support his nomination by President Obama to serve a second term as Chairman of the Fed.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in 2009 the Medicare, Medicaid and CHIP programs accounted for over $800 billion of the $2.3 trillion spent on health care in the U.S. Together, these programs constitute around 35 percent of national health spending. With so much taxpayer money at stake, it is no surprise that all this spending brings crooks, scam artists and even organized crime out of the woodwork. Low estimates are that fraudsters steal $60 billion from the Medicare and Medicaid programs every year. As Federal health care spending continues to skyrocket, so will the dollars lost to fraud, waste and abuse. This is a crime against not only the taxpayer, but against each and every beneficiary who depends on these programs for their health care. The examples of fraud are all around us. In a 60 Minutes segment late last year, we saw a medical supply company that billed Medicare $2 million last July--despite being empty and having apparently no staff. One man interviewed said he was waking up every day making $20,000- $40,000. Every single day. He said it was like winning the lottery, and you and me and every taxpayer were footing the bill. He was running a fake medical supply company that didn't actually sell any medical equipment to anyone. He says he stole at least $20 million from Medicare. He said it was, ``real easy.'' This must change. I don't think Members on either side of the aisle dispute this. Back when health care reform was a bipartisan endeavor, I developed a set of legislative proposals with Senator Baucus to combat fraud, waste and abuse. These proposals are in the bill that the Finance Committee reported as well as the health care reform bill that the Senate passed late last year. And these provisions did not draw opposition from either side of the aisle. Tackling fraud, waste and abuse in health care is one of the areas where there is widespread agreement. That is why I am here today to introduce the Strengthening Program Integrity and Accountability in Health Care Act. This legislation includes the critical measures that I developed on a bipartisan basis. This bill also includes legislation and amendments I have subsequently introduced to strengthen these proposals to address fraud, waste and abuse. They are designed to deter, detect and prevent those that would steal from Federal health care programs, to assist those tasked with catching these criminals, and to protect taxpayer dollars. These commonsense changes will go a long way in helping to make sure Medicare, Medicaid and CHIP dollars are going to bona fide providers, instead of fraudsters set on scamming the system. This legislation would make it harder for fraudsters to enroll in Federal health programs as providers and bilk the system. This includes requiring meaningful screening of health care providers and suppliers. Additional tools would also be provided to prevent fraud, waste and abuse including enhanced oversight measures, disclosure requirements, authority to impose enrollment moratoriums and requirements for developing compliance programs. This bill would impose additional requirements on providers and suppliers to ensure that bona fide providers are billing Federal health programs for bona fide items and services. This includes providing documentation or performing a face-to-face evaluation before certifying a beneficiary's eligibility for an item or service. It would also improve Federal monitoring for fraud, waste and abuse by requiring better data sharing and data access across the Federal government. Government agencies would be able to share information with each other in an effort to identify crooks in the system promptly. It would also create a national clearinghouse of information so we can better detect and prevent and thereby deter medical identity theft. Again, this is about the Federal Government sharing information it already has in ways that protect the Taxpayer and work against those defrauding the system and hopefully deter those who are thinking about stealing from you. The legislation takes several steps to end the current ``pay and chase'' model of Federal health care spending. It takes the commonsense approach of allowing the government to withhold taxpayer dollars from those under investigation for health care fraud. It would change Federal laws that require Medicare to pay providers quickly, regardless of the risk of fraud, waste, or abuse. Under current law, the government is required to make payment for a ``clean'' claim within 14 to 30 days before interest accrues on the claim. That is not enough time for the limited number of Medicare auditors to determine if the claim is legitimate before the payment has to be made. The result is that this ``prompt payment rule'' requires that Medicare pay fraudsters first, and ask questions later. This requirement doesn't make any sense. This bill would give the Secretary of Health and Human Services the authority to ask questions first and then and only then to make the payment if the health care provider and the payment for services check out. The Secretary would also be required to suspend payments pending the investigation of credible allegations of fraud against the provider or supplier. This legislation would also increase funding for those fighting health care fraud. Study after study has shown that every dollar spent fighting health care fraud is repaid multiple times over in funds recovered and fraud prevented. This is a good investment for the taxpayer and bad news for health care fraudsters. This bill would provide powerful disincentives for those that would rob the taxpayer through health care fraud. It would better arm those fighting fraud with tools to catch and prosecute fraudsters. It also would make the consequences for committing health care fraud more meaningful by increasing civil monetary penalties and expanding the types of acts and omissions that would be subject to civil monetary penalties and exclusion from Federal health programs. This legislation would also strengthen the government's most powerful tool for preventing and recovering taxpayer dollars lost to fraud, the False Claims Act. It also ensures that courageous whistleblowers that come forward to speak up against fraud and file False Claims Act cases are protected from retaliation by their employers. These changes would go a long way to deter those who would defraud our health care programs. It also would provide greater protections to the taxpayer. In these difficult economic times, we have got to do everything we can to protect taxpayer dollars and the resources of health care programs on which so many Americans depend.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in 2009 the Medicare, Medicaid and CHIP programs accounted for over $800 billion of the $2.3 trillion spent on health care in the U.S. Together, these programs constitute around 35 percent of national health spending. With so much taxpayer money at stake, it is no surprise that all this spending brings crooks, scam artists and even organized crime out of the woodwork. Low estimates are that fraudsters steal $60 billion from the Medicare and Medicaid programs every year. As Federal health care spending continues to skyrocket, so will the dollars lost to fraud, waste and abuse. This is a crime against not only the taxpayer, but against each and every beneficiary who depends on these programs for their health care. The examples of fraud are all around us. In a 60 Minutes segment late last year, we saw a medical supply company that billed Medicare $2 million last July--despite being empty and having apparently no staff. One man interviewed said he was waking up every day making $20,000- $40,000. Every single day. He said it was like winning the lottery, and you and me and every taxpayer were footing the bill. He was running a fake medical supply company that didn't actually sell any medical equipment to anyone. He says he stole at least $20 million from Medicare. He said it was, ``real easy.'' This must change. I don't think Members on either side of the aisle dispute this. Back when health care reform was a bipartisan endeavor, I developed a set of legislative proposals with Senator Baucus to combat fraud, waste and abuse. These proposals are in the bill that the Finance Committee reported as well as the health care reform bill that the Senate passed late last year. And these provisions did not draw opposition from either side of the aisle. Tackling fraud, waste and abuse in health care is one of the areas where there is widespread agreement. That is why I am here today to introduce the Strengthening Program Integrity and Accountability in Health Care Act. This legislation includes the critical measures that I developed on a bipartisan basis. This bill also includes legislation and amendments I have subsequently introduced to strengthen these proposals to address fraud, waste and abuse. They are designed to deter, detect and prevent those that would steal from Federal health care programs, to assist those tasked with catching these criminals, and to protect taxpayer dollars. These commonsense changes will go a long way in helping to make sure Medicare, Medicaid and CHIP dollars are going to bona fide providers, instead of fraudsters set on scamming the system. This legislation would make it harder for fraudsters to enroll in Federal health programs as providers and bilk the system. This includes requiring meaningful screening of health care providers and suppliers. Additional tools would also be provided to prevent fraud, waste and abuse including enhanced oversight measures, disclosure requirements, authority to impose enrollment moratoriums and requirements for developing compliance programs. This bill would impose additional requirements on providers and suppliers to ensure that bona fide providers are billing Federal health programs for bona fide items and services. This includes providing documentation or performing a face-to-face evaluation before certifying a beneficiary's eligibility for an item or service. It would also improve Federal monitoring for fraud, waste and abuse by requiring better data sharing and data access across the Federal government. Government agencies would be able to share information with each other in an effort to identify crooks in the system promptly. It would also create a national clearinghouse of information so we can better detect and prevent and thereby deter medical identity theft. Again, this is about the Federal Government sharing information it already has in ways that protect the Taxpayer and work against those defrauding the system and hopefully deter those who are thinking about stealing from you. The legislation takes several steps to end the current ``pay and chase'' model of Federal health care spending. It takes the commonsense approach of allowing the government to withhold taxpayer dollars from those under investigation for health care fraud. It would change Federal laws that require Medicare to pay providers quickly, regardless of the risk of fraud, waste, or abuse. Under current law, the government is required to make payment for a ``clean'' claim within 14 to 30 days before interest accrues on the claim. That is not enough time for the limited number of Medicare auditors to determine if the claim is legitimate before the payment has to be made. The result is that this ``prompt payment rule'' requires that Medicare pay fraudsters first, and ask questions later. This requirement doesn't make any sense. This bill would give the Secretary of Health and Human Services the authority to ask questions first and then and only then to make the payment if the health care provider and the payment for services check out. The Secretary would also be required to suspend payments pending the investigation of credible allegations of fraud against the provider or supplier. This legislation would also increase funding for those fighting health care fraud. Study after study has shown that every dollar spent fighting health care fraud is repaid multiple times over in funds recovered and fraud prevented. This is a good investment for the taxpayer and bad news for health care fraudsters. This bill would provide powerful disincentives for those that would rob the taxpayer through health care fraud. It would better arm those fighting fraud with tools to catch and prosecute fraudsters. It also would make the consequences for committing health care fraud more meaningful by increasing civil monetary penalties and expanding the types of acts and omissions that would be subject to civil monetary penalties and exclusion from Federal health programs. This legislation would also strengthen the government's most powerful tool for preventing and recovering taxpayer dollars lost to fraud, the False Claims Act. It also ensures that courageous whistleblowers that come forward to speak up against fraud and file False Claims Act cases are protected from retaliation by their employers. These changes would go a long way to deter those who would defraud our health care programs. It also would provide greater protections to the taxpayer. In these difficult economic times, we have got to do everything we can to protect taxpayer dollars and the resources of health care programs on which so many Americans depend.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I think most of the people watching this debate, studying how Congress works and how the Federal Government works, know there is a statutory limit on the amount of debt that can be issued by the Federal Government. If the public does not know this, they are constantly reminded of it because, from time to time, we pass legislation that does what this legislation does, increase the borrowing capacity of the Federal Government. Right now this legal limit stands at $12.394 trillion, and it applies to money borrowed from Federal investors such as banks and pension funds, as well as money borrowed from government programs such as Social Security and Medicare. Yes, we ought to admit that a lot of the Federal debt is owned by various foreign governments as well. I think the latest I saw, in the case of China maybe investing and holding about 8 percent of all the Federal debt and then you have other countries as well. This determination is made when the Secretary of Treasury goes to the market and says: We want to borrow X number of dollars, and people bid on it. Obviously, we take it for the lowest interest rate we can get, whatever individuals or pension fund or foreign entity might want to take our debt for that interest. That happens throughout the year. The decision to increase the debt limit is never an easy one. In recent years, I have reluctantly supported increases in the debt limit on the grounds that Congress must pay its bills. That is quite obvious. Some countries--such as Argentina--decided, from time to time, they did not want to pay their debt, and they are paying the piper for making those unwarranted public decisions in those countries. We do not want to be in that shape. But Congress sometimes, and too often, has been very irresponsible. I am going to get into some of this current irresponsibility but, at the same time, I do not wish to say some other political party is entirely responsible, over a period of decades, for irresponsible spending. But I think it has reached a new height recently. Because of that, I will be voting no. Sometimes deficits are unavoidable. People know about wars. The No. 1 responsibility of the Federal Government is to provide for the national defense, the protection of Americans or a threat to our security. We meet that threat. If that requires borrowing to do it, to protect the United States, we consider that justified. But you cannot plan for wars. You can plan for peace by having a strong national defense. So war is one reason, recession is another. Natural disasters are another example. All of these can result in lower taxes and higher spending, which produces bigger deficits that add to our Federal debt. But sometimes deficits can be avoided. Since the beginning of 2009, the majority in Congress has approved a $787 billion stimulus bill, a $408 billion supplemental appropriations bill, an additional $350 billion for the financial bailout, and, most recently, an Omnibus appropriations bill that increased Federal spending by 12 percent over the previous year's levels. In my recent 21-county tour of southeast Iowa, I discussed the most recent example as an example of how spending recently has gotten entirely beyond the commonsense view that Midwesterners look at spending by government. I pointed out how 1 year ago today, the new President was sworn in. The previous President was under a budget that was established for a 5-month period of time. That last budget under Bush had spending at a 3-percent increase. But just as soon as the new majority came into power with a new President, that 3-percent increase was not enough for the remaining 7 months, it was jacked up to 9 percent and then, for the year we are in, the 12 percent I just spoke about. I think you have to adopt a principle of spending that has increases in expenditures related to the economic growth of the tax policies that provide revenue to the Federal Government. That doesn't have to be on a year-to-year basis, but over a long period we ought to have that balance. In other words, without increasing tax rates, with economic growth of the tax base, more money will come in to the Federal Treasury under the same tax rates. Well, that growth in Federal income coming in makes it possible to appropriate more money, but there ought to be some relationship between the amount of money coming in and the expenditures made by the Congress. The bills I just referred to--the stimulus bill, the Omnibus appropriations bill, and others--I voted against every one of those on the grounds that we could not afford them. The fact that we are here this week facing yet another vote to increase the debt limit proves that is true. Many of my colleagues, particularly on the other side of the aisle, insist that it is not their fault. They continue to blame previous administrations for all fiscal problems. I want to make it clear that we in the Republican Party got kicked out of the majority in 2006 because we lost fiscal integrity. I hope we are reestablishing that, and I hope that in the process of reestablishing that we can convince the people who had doubts about Republicans that we can regain their trust. More recently, as I indicated, it seems a great deal of the current debt problem is related to irresponsible spending that has taken place near term. What do they target us with when they want to blame us for the deficit? They criticize the 2001 and 2003 tax cuts which they insist were excessive and unfair. Such criticism overlooks several facts. First, these were not Republican tax cuts. They passed both the House and Senate with bipartisan support. Second, Federal revenue quickly returned to the historical average following these tax cuts, so they were not excessive relative to the government's historic claim on revenue. I suppose you can take any period of time you want, but in the post- President Kennedy period of time, it seems to me the average take of the economy that has come through the Federal Government in the way of taxes has been about 18 to 19 percent. Even including the tax cuts of 2001 and 2003, those cannot be considered excessive relative to the government's historic claim on revenue; in other words, what the government takes as opposed to what they leave in the pockets of taxpayers in the United States. It is very important to remember that our Tax Code is not fully indexed to inflation and economic growth. Thus, every year without a tax cut results in a small but not insignificant tax increase or more revenue coming into the Federal Treasury without our actually changing rates. Indeed, without the 2001 and 2003 tax cuts, Federal revenue would have risen well above that historic average of 18 to 19 percent. In fact, when we passed those tax cuts, it was very near 21 percent. Third, critics insist that the 2001 and 2003 tax cuts unfairly benefitted the wealthy. Again, critics are wrong. I quote the Congressional Budget Office. Around here, we don't question the Congressional Budget Office. Maybe you want to. But if you want to question them, it takes 60 votes to override their determination of something, if there is a budget point of order. According to the Congressional Budget Office, the bottom 90 percent of households pays the smallest share of Federal taxes in nearly 30 years while the top 10 percent pays the largest share. When taxes are measured as a share of income, the bottom 90 percent of households pays the lowest effective rates in nearly 30 years while the top 10 percent pays their historic average. You can say it many times, but it never sinks in because people have their own ideas of how to show populism, and it is to always hit the wealthy of America. From that standpoint, you have to understand that percentage of top income earners, if you compare what they are paying into the Federal Treasury now with what they were paying in even during the Reagan years, you will find it is a much higher percentage right at this point. In regard to what I just said about historical averages, President Obama's budget and the budget resolution adopted by the Democratic majority in Congress last year both called for the continuation of 70 to 80 percent of the 2001 and 2003 tax cuts. So you can bad-mouth those tax bills all you want, but the new President, the new majority wants to maintain about 70 to 80 percent of them. So some of it isn't so bad, but you never hear that. It is all about the 2001 tax cuts being everything for the wealthy. If these tax cuts were so excessive and so unfair then, why does the majority party support so many of those tax cuts right this very day? The desire to blame our current predicament on the previous administration also overlooks two other facts. First, the Democrats controlled the majority of the Senate during half of the previous administration, including its final 2 years. I think it is disingenuous for them to deny any responsibility for where we are today. Second, when the new administration took office in 2009, it sent up a budget that proposed to increase the debt three times faster than the previous administration. You know where that takes us to from the 40- year average? I talked about the 40-year average of the proportion of the GNP that is coming into the Federal Treasury as far as taxes are concerned at 18 to 19 percent. Take a 40-year average on what the percentage of the national debt is to gross national product. It is about 40 percent. This is going to be reaching 80 to 90 percent under this budget that was sent here in the previous year. The majority party essentially approved most of that very same budget. So they have now signaled the intention to continue to increase the national debt at a record pace. Finally, let me say a word about the health care bill adopted by the Senate. Rather than taking an incremental approach and waiting for the results to see what works and what doesn't work, the majority wants to raise taxes and cut Medicare to pay for a brand new health care entitlement program. If they use all of the tax hikes, and all of the Medicare cuts they can support to pay for more spending, how will they ever reduce the deficit? At what point will those who want to blame our current predicament on previous administrations take responsibility for actions that are taking place now? This week we have an opportunity to do that. I am glad we have a long period of time to discuss the debt limit but connect it with a lot of policies that seem to be out of proportion to problems that we previously had. If they want to continue to vote for more deficit spending, it seems to me they should vote to raise the debt limit or take actions that would reduce the need for such a dramatic increase in the debt limit. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to take a moment to honor a remarkable Iowan, Raymond Paul Pritchard, a native of Bondurant, IA. He is a distinguished World War II Air Force veteran and a civil servant of 29 years. Following graduation from Bondurant High School in 1937, Mr. Pritchard went to work for Standard Oil Company. In 1941, Mr. Pritchard joined the Army Air Corp and served his country valiantly for the entirety of World War II. As an engineer and top turret gunner in the 384th Bomber Group, Mr. Pritchard was involved in numerous missions in the hostile skies of Europe, including several bombing runs over Germany and Czechoslovakia that were critical to the war effort. Upon returning from World War II, Mr. Pritchard became a U.S. Postal Service worker. Mr. Pritchard retired in 1974, following 29 years of public service. Mr. Pritchard and his wife Helen have three children, along with seven grandchildren, and five great-grandchildren. He is a member of Christ United Methodist Church, American Legion Post 374, and a 50-year member of Pioneer Lodge No. 22. Mr. Raymond Paul Pritchard is a truly remarkable Iowan and American, who exemplifies great military and civilian service to his country.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, we had a very early vote, and it brings the health care reform bill obviously one step closer to final passage--at least it looks obvious that is going to happen. Regardless of whether the other side has 60 votes, my friends on the other side still have a problem they want to not have the public concentrate on; that is, that the pending bill still raises taxes on middle-income Americans. The Reid modification did nothing to reverse this fact. I will take a few moments to illustrate the winners and losers under the bill. We start with a question: If a person is not receiving a subsidy for health insurance under the bill, then how can the person receive a tax cut? This is a relevant question because the White House and the majority leadership continue to proclaim that the bill is a ``net tax cut'' for middle-class Americans. For example, on Wednesday, December 16, a senior White House aide wrote: The bill being considered represents a substantial net tax cut for middle income families. So I think that statement begs more questions. Who do you believe? The White House, on the one hand, or on the other hand, the nonpartisan independent experts upon whom we on Capitol Hill rely for judgment--the people who are not political, the Joint Committee on Taxation? This committee tells us that in 2019, a little more than 13 million individual families and single parents would receive the government subsidy for helping people under 400 percent of poverty buy health insurance. The Joint Committee also tells us that the number of tax filers in 2019 will be 176 million people. If people are wondering why we talk about 2019, it is the budget window from now until the end of the 10-year period of time that we call a ``budget window.'' That means out of--comparing this 13 million to the 176 million taxpayers, 13 million people receiving the subsidy and 176 million tax filers--that means out of that 176 million individuals, families, and single parents, only 13 million of them would receive a government subsidy for health insurance. That is only 7 percent of the tax filers. It is pretty important to understand that only 7 percent of Americans will benefit from the subsidy for health insurance. We have a pie chart so people can see exactly what I am talking about. This says 176 million taxpayers, with 13 million receiving the subsidy. This means 163 million families, individuals, and single parents--or 93 percent of all taxpayers--will receive no government benefit under the Reid bill. What does that mean? It means there is a small beneficiary class under the Reid bill--7 percent. Thirteen million people will receive benefits under the Reid bill. A very large nonbeneficiary class--93 percent--will not benefit. This nonbeneficiary class is affected in other ways. Yes, while one group of Americans in this class would be unaffected, another group of Americans will see their taxes go up. This group would not have a tax benefit to offset the new tax liability. That means these Americans will be worse off under the Reid bill. It is legitimate to ask, for these 93 percent of the people, what happened to their net tax cut? What they will see instead is a net tax increase. Based on the Joint Committee's data, in 2019 42 million individuals, families, and single parents with incomes under $200,000 will see their taxes go up. This is even after taking into account the subsidy for health insurance. Again, this is on a net basis. If we were to identify those Americans who are not eligible to receive the tax credit and those whose taxes go up before they see some type of tax reduction from the subsidy, this number will climb to 73 million Americans. The first bar on the chart illustrates what we have already established but looks at Americans earning less than $200,000. Right here, 13 million families and single parents and individuals would receive the subsidy. The middle bar on the chart shows the net tax increase number of 42 million Americans under $200,000-a-year income. Finally, when we identify those Americans who get no benefit under this bill, and those Americans who see a tax increase, we find that there are 73 million individuals, families, and single parents under the $200,000 category. That is this group. I want to close by referring to a final chart that illustrates the winners and losers under the Reid bill. What we see is that there is a group of Americans who clearly benefit under the bill from the government subsidy for health insurance. This group, however, is relatively small--8 percent of Americans, if you look at those earning less than $200,000. There is another much larger group of Americans who are seeing their taxes go up. This group is not benefiting from the government subsidy, this group on the chart. There is another group of taxpayers who are generally unaffected, this 82 million here. The Joint Committee on Taxation tells us this group may be affected by tax increases that are not included in this study, like the cap on flexible savings accounts and the individual mandate tax that people are going to pay if they don't buy health insurance. The bottom line is this: My friends on the other side of the aisle, first, cannot say that all taxpayers receive a tax cut; two, they cannot say the Reid bill does not raise taxes on middle-income Americans because we have the professionals who are nonpolitical at the Joint Committee telling us differently. No one can dispute that data. I yield the floor and suggest the absence of a quorum.

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

Mr. GRASSLEY. Madam President, my friends on the other side of the aisle continue to argue that the Reid bill eliminates the so-called hidden tax. They argue that this would reduce the cost of health care. For example, on Wednesday, December 16, a senior White House aide wrote: Even if you believe that some of the tax on insurance companies is passed along, it would be more than outweighed by the benefits middle-class families would get from reducing the hidden tax they currently pay for the uninsured. I don't believe the fees on health insurance companies will be passed through to the policyholders. I think it is just idiotic not to think they would not be passed through. I want to flatout state I know they are going to be passed through. My authority for this is the Congressional Budget Office and the Joint Committee on Taxation telling us that fact. The CBO and the Joint Committee on Taxation told us that these fees will actually increase health insurance premiums. Premiums will go up because the companies are paying increased taxes under this bill. For insurance premiums to go up, under a title of a bill that encompasses health care reform, that is going in the wrong direction. Also, for argument's sake, let's assume my Democratic colleagues are correct and this so-called hidden tax that results from uncompensated care equals $1,000. The pending health care reform bill still leaves a large number of Americans uninsured. Specifically, the Reid bill leaves 23 million out of 54 million without health insurance at the end of this budget window, 2019. So, at best, the Democrats' reform cuts the hidden tax in half-- in this case, to about $500 a family. To add insult to injury, however, the bill adds new hidden taxes. These taxes are the fees imposed on health insurance. CBO and the Joint Committee on Taxation--two respected organizations--say this will increase costs. If you check the report, no one can dispute that. These fees go into effect in 2011--still 3 years before any of the major reforms under the pending bill kick in. That means this hidden tax will increase premiums in 2011, 2012, and 2013. That is before there is any government assistance for health insurance being provided to families that need it. The new hidden tax is also created as a result of the Medicaid expansion on the one hand, and Medicare cuts on the other hand, a major cost shift in health care derived from government programs--Medicare and Medicaid--which reimburse providers at rates roughly 20 percent to 40 percent lower than private providers. President Obama understands that paying doctors below market rates leads to cost shift. This is what he said at a townhall meeting on health care reform: If they are only collecting 80 cents on the dollar, they have to make that up someplace else, and they end up getting it from people who have private insurance. The Medicare and Medicaid cost shift will be increased significantly under the pending health care reform bill. According to the CBO estimate, Medicaid will be increased by more than 40 percent, from 35 million to 50 million people. Additionally, the bill includes almost $\1/2\ trillion in Medicare cuts that will result in lower payments to providers. Increasing the current Medicare and Medicaid cost shift as a result of the Democrats' health reforms would add even more costs to a family's health insurance policy. The easier cost shift to address would be the $1,700 cost shift from defensive medicine. The Democrats do not address the cost shift from defensive medicine which former CMS Director Mark McClellan has estimated adds $1,700 in additional cost per average family. Addressing this reform alone could save more than covering all of the uninsured in America. So, you see, my friends on the other side say their bill will eliminate the so-called hidden tax. My friends seem to come up short on that one. Also, they add new hidden taxes that will burden middle-class Americans. I think in the present situation, the legislation before us and the language used by debaters on the other side, they should be transparent when they are talking about getting rid of the hidden tax. The pending health care reform bill makes things from these three perspectives work. Madam President, I will be happy to yield the floor for a minute for the purpose of a colloquy with Senator Baucus on another subject.

Mr. GRASSLEY. Madam President, I would like to add to what Senator Baucus said by speaking positively on this issue and to remind my colleagues who maybe have been watching in the last 3 weeks and have seen Senator Baucus and I on opposite sides of the issue of health care reform--it is uncharacteristic for us to have different points of view on legislation. In the 10 years he and I have been leaders of the Finance Committee, most of the issues coming out of our committee have been very bipartisan. What he just talked about and what I am going to respond to is one of those issues. I agree with Chairman Baucus that we should retroactively extend the expiring tax provisions as soon as possible after Congress reconvenes in 2010. As chairman of the Finance Committee in 2005, I worked with then- Ranking Member Baucus, and we authored the biodiesel tax credit. The biodiesel tax credit is a tax credit that is needed to be extended before the end of the year to prevent the U.S. biodiesel market from grinding to a halt on January 1, 2010. This tax credit differs from other tax provisions in that the price of biodiesel will be $1 higher on January 1, 2010, as a result of the tax credit not being extended before that date. That means people will simply buy petroleum diesel rather than biodiesel come January 1, 2010. I point out that support in Congress for extending the biodiesel tax credit, I think, has been and still is robust, bipartisan, and bicameral, and that it has not been extended prior to January 1, 2010, due solely to issues unrelated to the merits of the biodiesel tax credit. I want everybody to know that I agree with Chairman Baucus that the expiration of these tax provisions creates uncertainty and complexity in the tax law. I also agree that the taxpayers need notice that these tax provisions will be in place so they can plan their personal and business affairs to fully and efficiently use the intended tax incentives. In addition, extending the tax provisions as early as possible in 2010, as we intend to do, will minimize the administrative problems created for the Internal Revenue Service. I look forward to working with Chairman Baucus to retroactively extend these provisions as soon as possible when the Senate reconvenes in 2010.

Mr. GRASSLEY. Madam President, I suggest the absence of a quorum.

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

Mr. GRASSLEY. Madam President, there was a report released recently by the Chief Actuary, Rick Foster. I hope this report will once and for all put an end to any serious consideration of the CLASS Act. The CLASS Act is going to be in the bill, if this bill passes Congress. But it should not be in it, and we should have had a long discussion on this provision because it is simply fiscally unsustainable. The information the Chief Actuary's letter provides is ample evidence of why the CLASS part of this bill cannot work. Quoting from page 13 of the Chief Actuary's letter: We estimate that an initial average premium level of about $240 per month would be required to adequately fund CLASS program costs for this level of enrollment, antiselection, and premium inadequacy for students and low income participants. So who would enroll in the CLASS program? An American making 300 percent of poverty has a gross income of $32,490. If the CLASS premium is, as the Chief Actuary predicts, $240 per month--that is $2,880 per year--and an individual at 300 percent of poverty would have to commit 8.9 percent of their income to join the program. That is simply not possible, nor is it plausible to argue that young, healthy persons will commit almost 9 percent of their income to long-term care insurance policy. The people who will enroll then are those who have real expectations of using the long-term care benefit. People who join the CLASS program with the expectation of needing the benefit become the Bernie Madoffs of the CLASS Act Ponzi scheme. An individual becomes eligible for the CLASS program after paying premiums for just 5 years. If a person pays premiums of $2,880 per year for 5 years, they would have paid a total of $14,400 in premiums for that program. That person can then begin collecting a benefit of $1,500 per month. In 10 months, the person will have recouped their 5 years' worth of premiums. This simple explanation should make it crystal clear why the CLASS Act is a fiscal disaster waiting to happen, not based on our determination but based on the determination of the Chief Actuary. The premium will be too expensive to entice young, healthy people to participate. The benefit payout is very enticing for people who know they will need the benefit. Healthy people do not participate; sicker people will. This adverse selection problem will send the program into the classic insurance death spiral. The Chief Actuary concluded on page 14 of his report with this one sentence: There is a very serious risk that the problem of adverse selection would make the CLASS program unsustainable. If the CLASS Act becomes law, the Federal taxpayers are at very serious risk of paying a price to clean up the fiscal disaster when the CLASS Act fails. I yield the floor and suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, My Friend, Senator Casey, just a few moments ago repeated the frequent claim made by members on the other side of the aisle that the health care bill provides a $40 billion net tax cut. As I demonstrated in a speech earlier today, this claim is inaccurate and does nothing to address the fact that millions of middle-class Americans will see a tax increase. I have consistently given my Democratic friends credit for providing a significant benefit to help people buy insurance. This beneficiary class, however, is small. At the same time there are 78 million individuals, families, and single parents who will see a tax increase. Seventy-three million of them are below $200,000. It is only because the subsidy for this small group is so large--and refundable--that there is a net tax benefit. For example, the average subsidy is close to $8,000. Around 13.2 million individuals and families receive this subsidy. But the data also shows that there is a group of 73 million middle- class Americans who will pay on average $710 more in taxes. My Democratic colleagues want to say that since the cost of providing an average tax benefit of $8,000 to 13.2 million individuals and families is greater than the revenue raised by raising the taxes on 73 million individuals and families by $710 there is a net tax decrease. The truth is individuals who are seeing a tax increase are not actually benefiting from the very large subsidy. This is because, in general, this group isn't even eligible for the subsidy. It comes back to this: a small group of Americans benefit under this bill. Another group of Americans pay higher taxes. These Americans include middle-income individuals and families.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the biodiesel tax credit will expire on December 31, 2009. I am speaking today to set the record straight about why the biodiesel tax credit will not be extended before the end of the year. Some have suggested that Republicans are to blame for not getting the biodiesel tax credit extended before the end of the year. This is simply inaccurate. The bottom line is that the Senate Democratic leadership decided they were going to attach the tax extender package to a controversial estate tax bill in an attempt to get moderate Democrats and Republicans to vote for an estate tax bill that does not provide sufficient estate tax relief. If the Senate Democratic leadership had not chosen to hold the tax extender package hostage in an attempt to force moderate Democrats and Republicans to vote for an estate tax bill that lacks support, the tax extender package would have easily passed separately. The tax extenders bill could have passed as a stand-alone bill easily at any time during this whole year. In fact, the Senate Democratic leadership could simply bring up a noncontroversial version of the tax extenders bill and pass it by unanimous consent like we have done in the past. We wouldn't even need to be talking about the tax extenders package in relation to the Department of Defense funding bill. However, because the Senate Democratic leadership failed to act on the tax extenders package this entire year, one of the only legislative vehicles left to pass the tax extenders package was the Department of Defense funding bill. Instead of just adding to the Defense bill a noncontroversial tax extenders package that both Republicans and Democrats could agree on, the Senate Democratic leadership instead decided that they would also try to attach the controversial estate tax bill and a controversial increase in the debt limit. They could have instead just included a noncontroversial tax extenders package with the Defense bill, and it would have easily passed. Again, they did not do this because they wanted to use the tax extenders package as leverage to get moderate Democrats and Republicans to vote for an estate tax bill that lacks support. It is also worth noting that there are 60 Senators that caucus with the Democrats, so they can pass anything if they vote together. It rings hollow to place the blame on Republicans for failing to enact the tax extenders package before the end of the year when the Democrats hold a supermajority of 60 Senators, an overwhelming majority in the House, and the Presidency. The House, waiting until the last month of the year, finally passed a tax extenders bill. However, the House usually passes an extenders bill prior to the last month of the year. For example, in 2008 the House passed a tax extenders bill on September 26, 2008, and in 2007 the House passed a tax extenders bill on November 9, 2007. This year, the House passed an extenders bill that they knew the Senate would not accept. And then they left town for the year. This is called a dump and run. The House dumped a tax extenders bill that they knew the Senate would not agree to, and left town before the Senate could have any chance to negotiate a tax extenders bill that both the House and Senate could agree to. The House also had a choice to make regarding whether they wanted to pass a tax extenders bill this year by simply attaching a noncontroversial version of the tax extenders bill, which both the House and Senate could agree on, to the House Department of Defense bill, without attaching either the controversial estate tax bill or the increase of the debt limit on the Defense bill. However, the House chose not to do so. Therefore, this should set the record straight. The Democratic leadership in the House and the Senate, and not Republicans, are responsible for the failure to pass a tax extenders bill before the end of this year. This failure has very serious consequences to the U.S. biodiesel industry, which will grind to a halt as of January 1, 2010. I remind my colleagues of the economic challenges faced by this industry. In 2008, the biodiesel industry supported more than 52,000 green jobs. Because of the downturn in the economy, the biodiesel industry has already lost 29,000 green jobs in 2009. The industry is poised to lose another 23,000 jobs if nothing is done on the tax incentive or regulatory delays at the Environmental Protection Agency. So where are these jobs? Some might think they are all in the Midwest, but they are not. These green jobs are in 44 of the 50 States. I would like to list the 13 largest biodiesel-producing States in the country. There are 24 facilities in Texas. There are 15 facilities in Iowa. There are 6 facilities in Illinois and 6 in Missouri. There are 4 facilities in Washington. Ohio has 11 facilities. There are 5 facilities in Indiana. There are 3 facilities each in Mississippi and South Carolina. There are 7 facilities in Pennsylvania and 4 in Arkansas. New Jersey has 2 facilities. There is 1 facility in North Dakota. Only 6 of the 50 States do not have some biodiesel production. They are Alaska, Delaware, Maine, New Hampshire, Vermont, and Wyoming. The other 44 States have some biodiesel presence. So workers in 44 States will be negatively affected by the inaction of this Congress to extend the tax credit. You don't have to take my word for it. On November 25, I received a letter from the Iowa Renewable Fuels Association. The letter outlined the economic and job ramifications of allowing the tax credit to expire, even if it is a short-term expiration. I would like to read directly from that letter. It states in part: Simply put, if the biodiesel tax incentive is allowed to expire--even for a brief period of time--the Iowa biodiesel industry will cease production and many plants will likely not reopen under current ownership. If the biodiesel tax incentive expires, biodiesel blends will be priced out of the marketplace and our customers--the oil companies--will stop purchasing biodiesel. In reality, we already cannot book any first quarter sales for next year. No retroactive action on the tax credit sometime next year will undo the harm caused by the lost sales and shuttered plants over the holidays. Quite frankly, the biodiesel industry is facing shutdowns that would certainly lead to a much longer--and unpaid-- Christmas break than anticipated for the hundreds of workers at Iowa biodiesel plants. But there are long-term impacts potentially even more far- reaching. After more than a year of mainly breakeven or negative margins, most of Iowa's biodiesel plants simply do not have the cash reserves to withstand even a two or three month shutdown. So, even if the biodiesel blenders' tax credit is retroactively enacted, several of Iowa's biodiesel plants are unlikely to reopen under the current local-ownership. Please do not let the Iowa-owned biodiesel industry disappear on your watch. I would ask unanimous consent that the entire letter from the Iowa Renewable Fuels Association to which I referred be printed in the Record. The dire situation reflected in this letter applies to all 173 biodiesel plants around the country. The expiration of this tax credit on December 31, 2009, will affect all 23,000 workers in this green energy sector. It is unfortunate that we have to be faced with the loss of 23,000 green jobs because of inaction on the extension of the biodiesel tax credit. I hope this explanation makes clear who is responsible for this terrible situation.

Mr. GRASSLEY

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

Mr. GRASSLEY. Mr. President, I would call to the attention of the leadership of the majority party that I have a unanimous consent request I wish to make. I am going to be visiting with my colleagues about the issue of taxes on medical devices, so my unanimous consent is in regard to that. I hope people would observe that if there is an effort to block this motion I am going to make, I think it is an endorsement of the tax on medical devices such as the Berlin heart and hundreds of others that children across this country rely on. With that in mind, I ask unanimous consent to set aside the pending amendment in order to offer my motion to commit.

Mr. GRASSLEY. Mr. President, it is disappointing for those of us on this side of the aisle to not be permitted to offer an amendment or motion that is as important as this, so I will go ahead with my remarks. This is another major problem in the Reid bill. Of the many taxes in this bill, I am especially worried about the excise tax on medical devices. Medical device technology is responsible for saving many lives and extending the overall life expectancy of people in the United States. In the United States, over 6,000 companies are in the business of developing lifesaving medical products. The majority of these companies are very small businesses. Small business we tend to measure around here as being those with less than 500 employees. So what will happen when the Reid amendment imposes a tax hike of $20 billion on these innovative medical devices? I think that is something we ought to consider if we are considering the quality of life in America and quality health care to preserve that life and extend life expectancy. During the markup of the Finance Committee bill, I asked the question to the nonpartisan Congressional Budget Office and the nonpartisan Joint Committee on Taxation--and let me emphasize the word ``nonpartisan'' because these folks are professionals. So both of these organizations, the Congressional Budget Office and the Joint Committee on Taxation, said these excise taxes will be passed on to consumers in the form of higher prices and higher insurance premiums. Also, I wish to emphasize on this chart a statement of the Chief Actuary of the HHS. The Congressional Budget Office, the Joint Committee on Taxation, and the Chief Actuary all say the tax gets passed on to consumers. Who are the consumers of these devices? Who is going to bear the cost of the new medical device excise tax? Well, it is quite a burden, so I am going to share some real-life stories here. I will start by telling the story of the Tillman family, a family who would bear the burden of this new medical device tax. At only 5 months old, Tiana Tillman had her life saved by a medical device. This story has received a lot of attention because Tiana's father is a professional football player for the Chicago Bears. However, lifesaving stories such as this happen all across the country regularly. When Charles Tillman reported to training camp in 2008, it wasn't long before his coach told him that his 5-month-old daughter Tiana had been rushed to the hospital. When Charles got to the hospital, Tiana's heart rate was over 200 beats per minute. That doctor told Charles and his wife Jackie that Tiana may not make it through the night. Tiana survived that night, and after a series of tests, she was diagnosed with cardio myopathy, an enlarged heart that is unable to function properly. Her condition was critical, and without a heart transplant she would not survive. But finding pediatric donors is very difficult and many children do not survive the long wait time, so Tiana was immediately put on an ECMO, a device that would help the function of the heart while Tiana waited for a transplant. However, ECMO is an old device that has many shortcomings. Infants can only survive on ECMO for about 3 weeks, much shorter than the average wait for a donor heart. ECMO also requires that the patient take a paralytic medication which prevents a patient from moving and at the same time that obviously weakens the body. The Tillmans waited for one of two outcomes: Either Tiana would receive a transplant or she would die waiting on ECMO. But then the doctors told them about a new pediatric medical device called the Berlin heart. The Berlin heart is an external device that performs the function of the heart and lungs. It is designed for a long-term support to keep infants and young children alive for up to 421 days while they wait for the donor heart--obviously a lot longer than the 3 weeks on ECMO. So the Tillmans decided to move forward with the Berlin heart. After 13 days of being on ECMO without any movement, Tiana underwent surgery to connect the Berlin heart. So we have pictures here that show what this is like. These two photos are of Tiana with the Berlin heart. You can see that this device is run by a laptop at the foot of the hospital bed. It pumps the blood through her body, a job that her heart could not perform on its own. Unlike ECMO, the Berlin heart and its long-term support capabilities allowed the Tillmans some peace of mind while they waited for that donor. The doctor said that the Berlin heart helped Tiana regain her strength because she was off the paralytic medication and was finally able to move. Not long after Tiana was connected to the Berlin heart, a donor was found and Tiana underwent an 8-hour transplant surgery. The risky surgery was a success. Usually it takes some time for the new heart to start working, but doctors said that due to Tiana's strength, her new heart started working immediately. I wish to talk about the tax on devices such as this. This picture shows Tiana today holding a football. That is Tiana today, and we shouldn't be surprised about her love for football, considering her father is a professional football player. She enjoys playing on her swing set and watching her dad play football. There are many people responsible for the successful effort to save Tiana's life, but without the Berlin heart to keep her alive and help her to gain strength, they may not have had that opportunity. What does this legislation have to do with this story about Tiana? Well, the Reid bill would increase costs for families such as the Tillmans. In fact, the Reid bill would tax every pediatric medical device. Pediatric devices aren't the only devices affected by the tax on medical devices in the Reid bill. The Reid bill also taxes one of the most important modern technologies: automatic external defibrillators. The defibrillator is used to save people from sudden cardiac arrest, and that is the leading cause of death in this country. Each year, nearly 325,000 people die from sudden cardiac arrest. That is nearly 1,000 deaths a day. Sudden cardiac arrest occurs when the heart's electrical system malfunctions and the heart stops beating abruptly and without warning. When this happens, the heart is no longer able to pump blood to the rest of the body, and for about 95 percent of the victims, death occurs. Once cardiac arrest occurs, the clock starts ticking and the victim's proximity to a defibrillator could mean the difference between living and dying. As many as 30 to 50 percent of the victims could survive if such a device is used within 5 minutes of sudden cardiac arrest. Here we have the story then of Mari Ann Wearda. Mari Ann is a constituent of the county I have lived my entire 76 years in, Butler County, IA. She is also a survivor of a sudden cardiac arrest, thanks to the prompt response of the Hampton Police Department and the availability of a defibrillator. On July 26, 2002, Mari Ann pulled up to a stoplight in Hampton, IA. Without any warning, Mari Ann experienced sudden cardiac arrest. As she slumped over the steering wheel, her car drifted across the road, climbed the curb, knocked over a sign, and came to rest against a tree. She was only minutes away from brain damage and death. At 11:38 a.m. the police station dispatched Officer Chad Elness, who arrived at the scene 2 minutes later, at 11:40. When Officer Elness arrived, Mari Ann was as blue as his uniform, according to his own report. Officer Elness attached the defibrillator to Mari Ann and pushed the button, sending 200 joules of electricity through her heart. That was one of the two shocks that Mari Ann required. Between the shocks, the defibrillator prompted officer Elness to perform CPR. Twice he almost lost Mari Ann. But by 11:50 a.m., Mari Ann had a pulse and her color was improving. At 11:52, just 11 minutes after the defibrillator was turned on, it had saved her life and was turned off. Mari Ann then was taken by helicopter to Mercy Hospital, Mason City, IA, where she received care. One week later--just one week later--she was back home with no permanent damage. Defibrillators are only effective if they are used within minutes of cardiac arrest, which means that in order to save more lives, there needs to be more of these devices. But do you know what this bill would do about all that? It would increase the cost, meaning there would then be fewer defibrillators. We understand the laws of economics. If we increase a price, we get less of it. If we lower a price, we get more of it. So we are going to increase the price of these devices. That would make it more difficult for police departments, schools, libraries, churches, and other public places to purchase defibrillators, or for an individual to have one. If you have to be within 5 minutes of their use, you can understand why they have to be in every police department, school, library, church, and a lot of other places. Right now, only one-third of police departments are equipped with defibrillators. However, Mari Ann was lucky that the Hampton Police Department had already purchased the device. Increasing the cost of defibrillators will make it more difficult for communities to make this lifesaving investment. We already have 62-- 62--defibrillator stations throughout the Capitol and the three Senate office buildings. So you and I are protected, but we are going to put a tax on them for the people in the rest of the country. It seems as though around here we have one set of morals and ethics for Capitol Hill and another set of morals and ethics for the rest of the country. Congress clearly understands why having so many of these devices, the importance of them and having them on hand to protect us and to protect our staffs and the million visitors who come to the Capitol. I made a motion that was objected to, so I cannot go through with that motion. My motion would have stopped this new Federal tax from increasing the cost of defibrillators and hurting the chances of placing the devices where they need to be--hopefully, within 5 minutes of people who need them. It is a disappointment my colleagues on the other side of the aisle would not allow that motion to go through. It is a sad state of affairs when the majority is not only blocking the offering of the motions and amendments that will improve the bill but also trying to ram through a bill before the American people even know what is in it. Yesterday, we heard things about Republicans having not offered amendments. There are 214 Republican amendments at the desk. One would think we would have a chance to offer more than a dozen or so--I doubt it is even a dozen at this point--on a bill that is going to restructure one-sixth of the economy. I yield the floor.

Mr. GRASSLEY. Mr. President, how much time remains?

Mr. GRASSLEY. I would think one of the things we would have seen from the majority at this point is a list of what the last two Senators were talking about, all the earmarks that are in this bill, because I asked for a parliamentary inquiry yesterday--I am not going to ask that again--but, as we said yesterday, rule XLIV was adopted as part of a major ethics and reform legislation, adopted in 2007. It was part of the Honest Leadership and Open Government Act. The Democratic leadership made it the first bill to be introduced when they took the majority in 2007, taking control of Congress for the first time for a long period of time. This bill passed by unanimous consent. When rule XLIV was passed, the theory behind it was that we ought to have total transparency on earmarks. It applies to floor amendments such as the pending Reid bill. It requires the sponsor of the amendment to provide a list of earmarks in that amendment. Earmarks are provisions that provide limited tax benefits. Those words, ``limited tax benefits,'' are words out of the rule. Another substitute language for limited tax benefits is ``congressionally- directed spending items'' or ``earmarks,'' as they are generally referred to by the public at large. Given what a priority the new rule passed in 2007 was given and the importance of it, one would expect that the majority leader would be making every effort to comply with it. One would think he would be wanting to set a good example in complying with the rule and disclosing these earmarks. In order to assure transparency of these very narrow provisions, such as what Senator Johanns just referred to, to get the votes of specific Members of the majority party who probably would not have voted for this bill, you would think that ought to be made public. That is what rule XLIV is about. Of course, that burden under that rule is on the sponsor to provide the list. Once again, I am going to ask the Democratic leadership to comply with the Honest Leadership and Open Government Act.

Mr. GRASSLEY

Mr. GRASSLEY. I object. I don't know what this is all about. Has this been cleared with our side?

Mr. GRASSLEY. I withdraw my objection.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, one longstanding priority of mine has been to improve Medicare payments for hospitals known as tweeners. They tend to have too many beds, so they can't qualify as critical access hospitals, but they do not have sufficient volume to operate viably under Medicare's prospective payment systems. There are a number of these tweener hospitals in Iowa. Working closely with the Iowa Hospital Association and individual Iowa hospitals over the years, I introduced, last Congress, the Rural Hospital Assistance Act of 2008, S. 3300, which would improve the low- volume adjustment for hospitals under Medicare's hospital inpatient prospective payment system. This improvement would enable tweener hospitals to benefit from this adjustment. In fact, the low volume adjustment provision in the Finance Committee's health reform bill, S. 1796, and the Reid substitute to H.R. 3590 is the language that I crafted. This language was crafted with the intention of benefiting all Iowa tweener hospitals. I was assured by the Iowa Hospital Association that this language would do so, and they supported it. Unfortunately, after the Finance Committee markup of S. 1796, I learned from the Iowa Hospital Association that the language they originally supported would not benefit all Iowa tweener hospitals. I was informed that several Iowa tweener hospitals had Medicare discharges in excess of the maximum in the provision, which was 1,500. In an attempt to make sure that all Iowa tweener hospitals benefit from this provision, I filed an amendment that would increase the maximum number of Medicare discharges from 1,500 to 1,600. This amendment was also offset. My staff was successful in working with the majority staff to include my amendment in the manager's amendment to the Reid substitute.