Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I rise in support of the Vitter amendment. Just so colleagues of mine don't think I am a latecomer to this battle on pay raises, I want to refer to a debate that went on in the House of Representatives, July 30, 1975, my first term in the House. There was a noncontroversial bill that came up, referred to on page 25824, -825 and -826 of the Congressional Record for that day, a little noncontroversial postal safety bill came up for postal employees. Attached to that bill were the provisions of the law that have been a little bit changed in 1989 but go back to this postal bill in 1975, when included in it was a provision that is referred to here as section (c)(2): Effective at the beginning of the first applicable pay period commencing on or after the first day of the month in which an adjustment takes effect under section 5305 . . . And I will not read the whole legislative language from the debate, but it essentially said that Members of Congress were going to get an automatic pay increase just as civil servants were already getting. The stage on that day was set so that everybody was going to be on the floor of the House of Representatives. The idea of the Republican leadership and the Democratic leadership--and the Democrats were controlling the House at that time, with only 140 or 141 Republicans, as I recall--the idea was to get everybody on the floor so when unanimous consent was asked to bring up this bill, there would be unanimous consent and there wouldn't be a vote because everybody, even 34 years ago, didn't want to take a vote on raising pay; particularly, you didn't want to take a vote on the automatic increase in pay. So they had the stage all set. There are two words I want to refer you to after my name, ``Mr. Grassley.'' This is after unanimous consent was asked for. I said: I object. My point in objecting wasn't knowing whether I could kill that piece of legislation at that particular time. It was that I thought, as Senator Vitter thinks and as I think yet today, 34 years later, that if we are going to have a vote on a pay raise for a Member of Congress, we ought to have guts enough to stand up and cast a vote, yes or no. Eventually, the bill passed that very day by just a 1-vote margin, 214 to 213. I remember after that vote there was a Mr. Hays, a Representative from Ohio, who was chairman of the Democratic Congressional Campaign Committee. It is still called the same thing today. He was chairman of it. He came up and he pointed to me and he said: We are going to get you. In other words, he was going to do everything he could as chairman of the Democratic Campaign Committee to defeat me in the next election. Well, he didn't defeat me in that next election, and I haven't been defeated since. That has nothing to do with it except I think I was reflecting what the attitude of the people at the grassroots of America was then, and I think Senator Vitter is expressing that same thing today. My colleagues at that time were not happy with me, and they probably aren't happy with what Senator Vitter is doing today. I thank him for going out in front. Then, in the 1980s, I sponsored legislation to reform the system where the President could recommend a congressional pay increase and have it go into effect without a vote of Congress because that system needed to be reformed further. I worked with several of my colleagues who felt letting pay raises take effect without a vote was wrong. The system did get reformed as part of the 1989 ethics reform bill but not in the way we had proposed at that particular time. That act just put congressional pay raises on autopilot. The congressional pay raise now takes effect every year unless Congress specifically rejects it. I have consistently voted for measures to deny all the congressional pay raises. However, in recent years Congress has not considered the annual spending bills on time or under regular order. This has denied us the typical opportunity to consider amendments as Senator Vitter is offering now. This massive omnibus bill we are now considering is a result of the failure to consider any of the fiscal year 2009 appropriations bills separately and on time. As a result, Congress gets a 2.8-percent pay raise without a vote. At a time when many Americans are being forced to tighten their belts, this sends a very bad message. It makes Americans cynical about government. Congress seems totally out of touch, taking a pay raise when the people who pay our salaries are struggling to make ends meet. I completely understand the frustration because I hear it from my own constituents. That is why I support this amendment. I am not saying Congress should never consider increases to keep pace with inflation. We don't want only people who are independently wealthy to be able to afford to serve in Congress. What we are saying with this amendment is that if Congress decides it needs a pay raise, we had better be prepared to justify it to our constituents. When it can't be justified, like now, when Americans are facing a dismal economy and Congress just voted to double the deficit, then the least we can do is not boost our own salary. Article I, section 6, of the Constitution establishes that: Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law. However, to prevent the conflict of interest inherent in Congress raising its own salary, the 27th amendment stipulates that: No law, varying the compensation for services of Senators and Representative, shall take effect, until an election of Representatives shall have intervened. This amendment was submitted to the States in 1789 as part of what became known as the Bill of Rights but was not fully ratified by the necessary three-fourths of the States until 1992. The clear intent of the wise and forward-thinking men of 1789 was that the sitting Congress not be able to raise its own salary before the people could have their say. Congress should be held accountable. The courts have ruled that the annual automatic congressional pay increase does not technically violate the 27th amendment, but it sure seems to violate the intentions of its authors. It is time to go back to the system originally envisioned by the Constitution without pay raises for Congress when the American people are not looking. In fact, I can't think of a better time to send that message to a public that is becoming increasingly cynical about the actions of the Congress. I urge adoption of the Vitter amendment to take us back to pre-July 30, 1975, when Congress, by a 1-vote margin on an otherwise noncontroversial bill that was selected by the leadership of both the Republicans and Democrats at that time to let Congressmen get a pay raise without having a vote on it--that 1-vote margin was a controversy at that time, and I hope at this particular time we have a massive vote in support of this amendment. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise for the purpose of discussing an amendment that was filed yesterday that I hope I get an opportunity to offer. I am going to touch on these points, but I thought I would highlight a couple points about this amendment. First of all, there is bipartisan agreement in this body there is a $290 billion tax gap--``tax gap'' meaning taxes that are owed but not collected. There is also an understanding that is not written that the IRS is not going to go after taxes unpaid, through their own employees, of under $25,000 a year. There is a feeling by some people in the IRS there ought to be more employees hired to go after the tax gap, but even if those additional employees are hired, they still will not go after those under $25,000. Now, we have a program in place I wish to defend in my remarks. That program in place is the IRS contracting with private collection agencies to go after the money that is owed for those under $25,000; and to make the point, that program is working. But the bill before us, the Omnibus appropriations bill, contains a provision that would essentially kill the IRS private debt collection program, which the Senate, working through the Senate Finance Committee I serve on, only authorized a short period of 4 years ago. The IRS implemented that program only 2 years ago. This program, which has never been fully operational in its brief 2- year period, allows the Internal Revenue Service to use private collection agencies to collect money owed to the Government. The program has many critics, and once again they are seeking to destroy the program before we have a chance to gauge how effective the program is. Before I discuss the merits of the program, I wish to note that an appropriations bill is not the proper vehicle to nullify tax policy. The private debt collection program was created in a tax bill within the jurisdiction of our Finance Committee, and further legislation affecting the program should be done through the committee where the expertise is, the Finance Committee. Whether you would agree with the program, I think everyone could agree on the importance of the committee structure that we use in the Senate. In other words, a committee of jurisdiction where the expertise is ought to work to change a program if it needs to be changed or if it needs to be done away with, as basically the appropriations bill would do. I would assume members of the Appropriations Committee would not want--would not want--those of us on the Finance Committee making decisions against the expertise of the Appropriations Committee. The IRS private debt collection program facilitates the collection of tax debts the IRS would not otherwise pursue. These liabilities amount to billions of dollars a year. A Government Accountability Office report issued in June of 2008 reported the unpaid tax debt as of fiscal year 2007 to be about $290 billion, of which almost $185 billion was classified as nonpotentially collectible inventory and $25.5 billion was deemed potentially collectible but not in active collection status. The private debt collection agencies are only permitted to pursue debts taxpayers have conceded they owe. Opposition to this program is surprising, since the Internal Revenue Service program is intended to run like similar programs at other agencies. In other words, the Department of Education uses private collection agencies to pursue delinquent student loans. The Treasury Department, which houses the Internal Revenue Service, also houses the Financial Management Service, and, ironically, the Treasury Department uses private debt collection agencies to collect small business loans. So if it is OK for one branch of the Treasury Department to do that, why isn't it OK for the Internal Revenue Service to go after taxes owed but not paid? The only reason I can think of that private debt collection is so controversial at the Internal Revenue Service is simply the opposition to the program from the National Treasury Employees Union. The National Treasury Employees Union is comprised primarily of Internal Revenue Service employees, and according to that union's Web site, is the largest Federal sector union in the entire country. The other Government agencies that use private debt collectors do not have as powerful a union fighting for more Government jobs. Yet this program does not threaten the jobs of revenue agents already working at the IRS. The tax debts the private collection agencies are targeting are debts the Internal Revenue Service is not even pursuing, and likely would not pursue even if additional revenue agents were hired. In May 2007, Acting Commissioner Kevin Brown--now this is a Commissioner of the Internal Revenue Service--when testifying before a subcommittee of the House Ways and Means Committee, confirmed that the Internal Revenue Service would not otherwise pursue these debts, even if the IRS were given additional resources. So the bottom line is this: There are no IRS jobs on the line. Rather, the National Treasury Employees Union believes the IRS should be hiring more union employees to do collections work. In contrast, I believe if the IRS is going to hire more workers, it should be agents to do more exams--work that private contractors cannot do. Former IRS Commissioner Mark Everson stated in a letter to me on April 11, 2007, that a full-time revenue agent auditing individual tax returns historically brings in nearly $700,000 annually. Mr. President, I ask unanimous consent that Commissioner Everson's letter be printed in the Record, as well as a followup letter I wrote to Treasury Secretary Paulson on this issue.

Mr. GRASSLEY. For me, this proves the IRS would be better off hiring more examination agencies than debt collectors. In addition to the National Treasury Employees Union's failure to discuss the success of private debt collection programs at other Federal agencies--I mentioned them, Education and one other branch of the Treasury Department--the National Treasury Employees Union also conveniently fails to mention that the private collection agencies hired by the IRS have consistently scored customer satisfaction ratings above 95 percent, while the IRS collection employees appear to be scoring at less than 65 percent. The National Treasury Employees Union also fails to mention the amount of employee time devoted to union activities is proportionately higher at the Internal Revenue Service than it is in comparison to other Federal Departments and agencies. Commissioner Everson testified to this at the Senate Finance Committee tax gap hearing held on April 18, 2007. Just think, then, of the additional revenue IRS could be collecting if union employees were actually doing the job they were paid to do instead of spending taxpayers' dollars to lobby Congress to do away with a program that is collecting money owed under $25,000 a year that would not otherwise be collected. Of course, they do not like that program. Since the omnibus provision prohibiting the IRS from using 2009 appropriations to fund the program office may actually kill the program, I have this amendment before the Senate. I mean, at least it is filed. It is not before us yet. I would not support a government program that is unsuccessful, and this private debt collection program is no different. However, we do not have enough information to know whether this program is effective, and, given the success of such programs at other agencies, I believe it can be successful at the Internal Revenue Service. It surely is successful at the Education Department. Last week, I, along with Senator Harkin, my colleague from Iowa, and Mr. Schumer, the senior Senator from New York--the three of us--sent a letter to Treasury Secretary Geithner and IRS Commissioner Shulman asking for more information so we can actually make an informed decision on the effectiveness of the private debt collection program. The letter asks for, among other things, additional information to measure the cost-effectiveness of the program, information to gauge the results of the collection agencies, and more information on the use of collection agencies by other Government agencies. So all my colleagues are able to read the letter, I ask unanimous consent that letter be printed in the Record.

Mr. GRASSLEY. It boils down to the fact that we should have a chance to obtain and review this information before killing a program that is going after money owed--$25,000 or less--from people who have said they acknowledge they owe it, that IRS employees would not go after. This affects jobs in a couple States, and I wish to say that when we are having a program--as the stimulus bill did--to keep people from being laid off and to have people being hired, you would at least think we would not think about eliminating jobs in a couple States. I was a supporter of this program before any contracts were awarded. As I said, I will not support the program if it does not prove effective. Given the propensity to spend the Government seems to be afflicted with, there is going to be a hunger for new sources of revenue which is going to be controversial. What should not be controversial is that we need to collect taxes currently owed in the most effective and most efficient way possible and particularly not ignore a policy of not going after money under $25,000. Since the private debt collection program will accomplish that, I urge support for this amendment when it comes up. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. I am not going to take long to respond because I think the main point I make is this. My remarks were not addressed by the Senator from Illinois. The issue we are talking about is an IRS policy that they will not go after any amount of money under $25,000, even though those are amounts that individuals agreed they owe. So any comparisons of what the IRS can do versus what private debt collection agencies can do is not legitimate because you can hire more IRS employees. But I told you the policy of the IRS if they hire more employees, they will not go after amounts of $25,000 or less and I think it is fair to taxpayers that are honest, that every dollar owed is collected. Not one dollar more. And that we shouldn't have a government policy that is not going to go after it, and this program does go after it. He mentioned start-up costs and this is very important because you cannot judge the cost effectiveness of a program based on how much was spent on start-up costs. There are start-up costs in any Federal agency, for any new agency or program that starts out. You can't weigh the costs incurred for what was supposed to be a permanent program against the benefits of a program that hasn't been fully operational for most of the 2 years of its existence. And the reason it hasn't been fully operational, is that the union, the taxpayer advocate, and even the chief counsel, continued to throw up roadblocks by weighing in on what type of cases the contractors could work. This means that even though the program was supposed to start in September 2006, it was months later before the contractors received the full allocation of cases they were supposed to get. The Senator from Illinois asked what happened in regards to why the actual amounts collected to date by contractors was lower than expected. Well, that is what happened. And to his point about paying $13 million for $60 million of revenues. Let's be honest--the contractors are paid on a commission basis so the IRS isn't paying anything out of its pockets. The contractors are getting a percentage of the taxes they collect and they don't get paid for all the work they do that generates no collection. Because of the IRS policy to not collect taxes due under $25,000, the $60 million IRS did get is revenue that IRS would never have received. He also mentioned this, there is a difference between what is paid to education debt collection contractors and what is paid to tax debt collection contractors. He is right. But there is a factor with collecting taxes that is not true in the case of the Education Department and that is the privacy issues that have been brought up. The contractors with the IRS incur higher expenses than education contractors because they don't have access to all the information IRS has because the law does protect the privacy of taxpayers. And because they have to provide all of the safeguards and protections that IRS provides, the contractors have to incur more security expenses than education contractors. The Senator from Illinois mentioned the success of IRS's use of automated collection systems. You have to remember that there is nothing automated about the IRS's so-called automatic collection system. The contractors use automated systems to determine which taxpayer to call next. The IRS doesn't even make outbound phone calls-- the only phone calls are returning phone calls when taxpayers call the IRS with questions about a letter they received. Finally, the Senator from Illinois described my efforts to continue to fund the IRS program as my own personal stimulus plan because it will save jobs in Iowa. I want to make clear that it was expected that the IRS would contract with 10 or 15 contractors--not just 2. But because of all the roadblocks put up by the union and others, the IRS apparently claims that there aren't enough cases to provide to even these two contractors. This doesn't make sense to me since there is apparently $25 billion of potentially collectible debt that the IRS is not pursuing. The program, if run properly, would have and should have been expanded to include other contractors. And I would also like to point out that these two contractors are national organizations and between them are likely to have offices and employees in almost all of the 50 States. So the bottom line of our approach in this program is to make sure that the honest taxpayer is protected. And that we do not support an IRS policy that we aren't going to collect the money from everyone--a policy which is not clear to me that IRS is going to change. And we're showing that we do not accept this policy through this program. We are going after that money that no IRS employee is going to go after. And if you're going to be fair to the taxpayer that pays every dollar that they owe, it seems to me we should make every effort we can to go after all taxpayers who do not pay their taxes. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today our President sent his budget to the Hill. On Tuesday night, in a joint address, our new President, with his usual eloquence, sketched out his fiscal policy goals. First off, as ranking Republican on the Finance Committee--and I am a senior Budget Committee member--I wish to point out that Republicans were happy to hear the President make deficit reduction a very high priority. If I heard correctly, the loudest bipartisan applause, in terms of responses to the President's policy proposals, greeted that policy point. We Republicans want deficit reduction on our future fiscal path. As we come out of the recession--hopefully sooner rather than later--we need to get the deficit down. While we Republicans agree with the President on that goal, we disagree on the degree to which the Democratic leadership has dramatically expanded the deficit and added to the debt. A couple of weeks ago, Republicans and Democrats disagreed on what is referred to as a stimulus bill. In both bodies, only three Republican Members supported that conference report. We parted ways on the stimulus bill for many reasons. Most on our side disagreed that we should put $1 trillion of taxpayers' money into an effort to grow the economy by priming the Government pump. We also would have shut off that spending spree once the recovery occurred, as opposed to half of the spending money in that bill being spent in years beyond 2010--supposedly the end of the stimulus effort to the economy. But what disturbed most of us on this side was the hidden fiscal burden built into the bill--in other words, that period of time of spending beyond 2010. Although advocated as a $787 billion bill, the real cost--the real cost--is much higher. Unfortunately, many in the media accepted the $787 billion score on its face. By contrast, most in the media looked much deeper when the bipartisan tax relief bill of 2001 to 2006 was scored. Of course, I remember that because during that period of time, or most of it, I was chairman of the Finance Committee and involved in that tax relief. So they looked very deeply into what we did in tax relief, and in a bipartisan way, but they seem not to be as concerned about the impact on the deficit of that $787 billion score that is in the stimulus bill. So I would encourage the punditry and other opinion makers to apply the same tough fiscal standards to the hidden spending in the stimulus bill as they applied to the tax relief packages in an earlier part of this decade. Soon, I am going to have some charts that will demonstrate this difference between tax issues versus the spending issues of the stimulus bill. According to the nonpartisan Congressional Budget Office, if popular new programs in the stimulus bill are made permanent, the cost will be $3.3 trillion. I have a chart here that lays out what the Congressional Budget Office says the total cost of the bill is--this column right here. Let's move from the left to the right of the chart. First, we have the basic cost of the bill--$820 billion. If the making work pay refundable tax credit is extended, there is $571 billion--the second column here. If the new entitlement spending is made permanent, then the cost of the bill more than doubles; that is, there is almost $1 trillion in new hidden entitlement spending right here--the third column. Over here in the fourth column, if the appropriations increases are baked in the cake, then there is $276 billion in new nondefense discretionary appropriations in the bill. That is the fourth column. And finally, CBO tells us that the interest cost on the overt new spending and the hidden new spending totals $744 billion. Total it all up, and you come out right here at $3.3 trillion. You don't come out at $787 billion; it is $3.3 trillion. And these are Congressional Budget Office figures. They are not from some conservative think tank. They are not from Senate Republican sources. CBO estimated this hidden spending. There is one way, and only one way, for stimulus bill supporters to dispute what I have said. The Democratic leadership in the House and Senate could pledge to keep temporary spending temporary--basically, the money spent in 2009 and 2010 is the end of it. If the Democratic leaders pledge to support leaving the bill as written and would not push to extend the new entitlements and new appropriations spending, then we could go back to the figure many in the press are reporting on the cost of the bill. If the Democratic leadership makes a pledge to keep temporary spending really temporary--in other words, for the 2 years of jump-starting the economy--we on this side would agree that the bill does not cost this $3.3 trillion. Otherwise, as Members of the loyal opposition--with emphasis on ``loyal''--it is our duty to let the taxpayers know the true cost of the stimulus bill. Unfortunately, stuffing all of that understated new spending into the stimulus bill will make it harder for Democrats as well as Republicans to reach the bipartisan goal of fiscal discipline, and I have another chart which shows how hard it will be. This chart shows the trendline from President Clinton's era through George W. Bush's era and for the current fiscal year of the deficit as a percentage of gross national product. As this chart shows, President Clinton's era saw deficits decline in the early years. Once Republicans won control of the Congress and entered the scene, making fiscal discipline a priority, the deficits turned into surpluses during those years. In the George W. Bush era, deficits occurred during the economic downturn of 2000, with the tech bubble burst, the corporate scandals of 2001, and, of course, the economic shock of the terrorist attacks of 9/ 11. So we have a downturn, or we have an increase in the deficit is the easiest way to say it. Now, fortunately, during 2001 to 2003, we had bipartisan tax relief that kicked in, the economy recovered, and deficits started to come down during this period of time right here. Now we find ourselves dealing with the housing and financial sector problems. Those problems matured during the period of divided government--the last Congress--for the years 2007 to 2008. During that 2-year period, Democrats controlled Congress and, obviously, we had a Republican President. The response of the Republican White House and Democratic Congress was the Troubled Asset Relief Program, TARP, and other stimulus legislation. Those bipartisan actions led to the large deficit here in 2009, and that was the deficit that awaited President Obama. That is over $1 trillion. Two nights ago--Tuesday night--President Obama pointed this fact out, and Democrats lustily cheered. I found the partisan cheering just a bit odd. I saw people leading that cheer vigorously clapping their hands. This enthusiastic applause from the other side would make you think President Obama was somehow predicting we would have a Mets-Yankees Subway Series in 2009. But, no, the President wasn't making a sports prediction; President Obama was noting that he had inherited a record deficit. Not many on our side find much to cheer about a record deficit, and I doubt that many taxpayers find much to cheer in it either. That is why you didn't see much applause from the Republican side of the aisle Tuesday night as the President was speaking to us. Big deficits aren't anything to applaud about. I was scratching my head on that one. Maybe the Democratic leadership forgot they were running the show here the last Congress. Maybe they looked at some polling data and inferred from that polling data that voters didn't realize Democrats ran the Congress in the last couple of years and were authors of the budgets for that period and last year's stimulus and the TARP deal. Maybe they figured that the President was taking a sharp and effective political shot, but you must be careful because history says otherwise. The TARP legislation was cut by Democratic congressional leaders, ably led by Chairman Barney Frank in the House and our able chairman from Connecticut, Chris Dodd in the Senate. In the key negotiations on one fateful fall Saturday night, there was only one Republican Senator in the room. There were at least four Democratic Senators in the room. I find it curious that Democrats lustily cheered when President Obama, Tuesday night, rightly pointed out that he inherited a $1.2 trillion deficit. There is no doubt he did inherit such a deficit. We on our side do not dispute that. But for the congressional Democratic leadership to pretend that they did not play a key role in creating the deficit, at least from the standpoint of 2 years of their budgets as well as the TARP legislation and other stimulus things, is beyond being absurd. To be giddy about the record deficits is almost Kafkaesque. Yet that incorrect partisan assertion is, like this $787 billion figure I am referring to, somehow accepted as fact by opinion makers and pundits. If we go to the last column of this chart, the one with the red line, we see the real fiscal damage of the stimulus bill. In the first few weeks of this Congress the inherited deficit, which was bad enough at 8.3 percent of GDP, was made much worse. It is now 13.5 percent of GDP. We have not had deficits that high since the World War II era. If you go back over the debate in committee, on the floor and on the conference agreement, you will find that Republicans opposed the bill because, in general, we believed the bill failed National Economic Council Director Summers'--Dr. Summers of Harvard University--three ``t'' tests: that it needed to be timely, it needed to be targeted, and it needed to be temporary. Those are words directly from, I think, a December 28 Post article that Dr. Summers wrote. It was failure in that third ``t,'' the ``temporary'' test, that was most troubling to those of us who voted against it. I have laid out the degree of that failure in the comments today. The response from many on the other side is that Republicans are in no position to criticize of because the deficits of the years 2001 through 2006. I put this chart back up here again. As I have shown, while briefly rising in 2004, the deficits consistently came down for budgets produced and implemented in the period 2004, 2005, and 2006. Most often the critics from the other side make the widespread bipartisan tax relief of this era the culprit for our deficit. Let's take a minute to put that characterization in context. I have a chart that compares the revenue loss of the bipartisan tax relief with the full effect of spending in the stimulus bill. On the left side of this chart, over here, you will see all the tax relief enacted in various bills in the period 2001 through 2006. There were quite a few major tax relief bills in this period of time. They yielded tax relief for virtually every American taxpayer. We cut marginal tax rates, we doubled the child tax credit, we greatly expanded education tax incentives, we created the largest retirement savings incentives in a generation and provided significant relief from the confiscatory reach of the death tax, and we protected tens of millions of families from the alternative minimum tax. In this major tax relief program we made the Tax Code--now everybody is saying this is counterintuitive--but we made the Tax Code more progressive in those pieces of legislation. But, as would be expected, the Joint Committee on Taxation assigned significant revenue loss to these packages. That is up here on this side of the chart where you see what the Joint Tax Committee says. It scores at $2.2 trillion. As I understand it, for some folks that figure raises their blood pressure. It would raise mine too if I liked to hike taxes and keep taxes high. You can understand it from the perspective of those critics--those taxes represent $2.1 trillion that folks in this body and the other body would rather spend. But we all know that tax relief did a lot of good. I have another chart about tax relief doing a lot of good. For a family of four at $50,000 a year of income, we have $2,300 more for that family budget to operate under. For a single mom with two kids it means she keeps $1,100 for her to spend instead of 535 Members of Congress spending. From what we heard on the campaign trail a few months ago, and we heard a couple of days ago here in the Capitol building, President Obama agrees with most of this tax relief program. He said his first budget will retain most of that tax relief that is in those various bills. For purposes of this discussion, let's assume the merits--I want to assume the merits of the arguments of the critics of the bipartisan tax relief program; that is, let's assume all of the $2.2 trillion was policy that, despite what President Obama will propose, is policy these critics disagree with. For a fiscal damage assessment, let's compare the revenue loss of this widespread tax relief, leaving money of $1,100 in the pockets of a single mom or $2,200 in the pockets of a family of four--let's assume the real cost. So, for fiscal damage assessments let's compare the revenue loss of this widespread tax relief with the real cost of the stimulus bill signed last week by the President. I am going to go back to the chart that makes the comparison. So here it is. On the right side you will see that CBO estimates the 10-year cost of the bill if the temporary proposals are made permanent. Guess what, it is higher than it is over here. The total is $2.5 trillion. This one stimulus bill costs about 10 percent more than the full effect of the tax relief bills passed between 2001 and 2006. For a lot of those bipartisan tax relief bills, again, virtually every American taxpayer benefits from these tax relief bills. On average, the American taxpayer's tax bills would be 10 percent higher today if this bipartisan tax relief plan were not in effect. We heard a lot from the critics of tax relief about fiscal discipline. Where are those same people today? Why are they not applying the same standard to the one partisan spending bill that they applied to the widespread bipartisan tax relief bill? It was good to hear my President, President Obama, raise the important goal of deficit reduction Tuesday night. He got applause from our side of the aisle. He was right that he inherited a serious budget deficit. The Democratic leadership applauded that line because they falsely claim that only Republicans bequeathed the deficit to President Obama. The reality is that a Democratic Congress as well as a Republican President bequeathed the deficit from bipartisan policies they jointly developed. To those who claim Republicans have no right to discuss deficits, they need look no further than their own actions. They need to take a look at the fiscal effects of the stimulus that was crafted early in this new Congress and compare the costs in that bill with all of the bipartisan tax relief that they criticize. In other words, compare this here, what happened in 2 weeks, with what happened over a period of 5 or 6 years of deficit reduction. The partisan stimulus bill's costs exceed that of the bipartisan tax relief. As we examine President Obama's first budget, let's take a cue from his speech Tuesday night. Let's make deficit reduction a priority and let's do it in an intellectually honest fashion. A lot of fiscal damage was done in the stimulus bill enacted a few days ago. That is not so of what was assigned to the years 2009 and 2010, but what was assigned way out into the future years, as if somehow the stimulus bill were a platform for the subterfuge of getting things done in 2 weeks that ought to have the very crafty look-see that goes on in the very sophisticated appropriation process between April and September, weighing one priority against another priority. As we proceed, then, to write a budget in a couple of weeks, let's do it in an intellectually honest manner. Let's take off the political blinders and deal with the cold, hard fiscal facts. Let's be realistic about expiring tax relief, its merits, its economic growth effect. That is shown by that one chart where the deficit went down an extreme amount, even though we had cut taxes, which I know to most people sounds as though it can't happen. If you reduce tax rates, you have to reduce revenue. If you raise tax rates, you are going to bring more in. But I think our history over the last 6 years shows that you can reduce taxes and still reduce deficits. Let's take off the political blinders and deal with cold, hard fiscal facts. Let's be realistic about expiring tax relief, its merits, its economic growth effect and its political popularity. Let's sharpen our pencils, get out our yellow notepads and rev up our calculators as we consider new nominally temporary spending or tax cuts. We owe it to the American people who send us here.

Mr. GRASSLEY

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

Mr. GRASSLEY. Madam President, I ask unanimous consent to speak as in morning business for 6 minutes. (The remarks of Mr. Grassley pertaining to the introduction of S. 474 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I come to introduce another bill as part of my Accountability in Government Week. Yesterday I introduced the False Claims Act Clarification Act to help restore the original intent of the most successful law the Government utilizes to protect taxpayers' dollars from fraud, waste, and abuse. One key component I added to the False Claims Act when it was amended in 1986 was allowing whistleblowers to file cases on behalf of the Government when they are aware of fraud or abuse of taxpayers' funds. Whistleblowers are the key to unlocking the secrets of wrongdoing because they have access to information about how the frauds were perpetrated and can help lead authorities in the right direction to uncover the fraud. However, for their brave efforts whistleblowers are often the victims of retaliation and are removed from their jobs by supervisors who do not want the wrongdoing uncovered. I have often said whistleblowers were as welcome as skunks at a picnic, despite the fact that all they do is bring forward the truth. This is wrong. That is why I have supported strong whistleblower protection laws during my time in the Congress. The landmark whistleblower law is the Whistleblower Protection Act of 1989--I believe is the year it was passed--providing rights and remedies to executive branch whistleblowers who are the victims of retaliation. I proudly cosponsored that bill. But like many laws that are 20 years old, it needs to be updated. So I have cosponsored legislation introduced by Democratic Senator Akaka to do just that. However, that law also needs to be extended to employees of the legislative and judicial branches of Government. So I come today to start the discussion and to introduce legislation that will provide the same whistleblower protection rights currently extended to executive branch employees to the legislative branch. I am pleased to be joined by Senator McCaskill in introducing the Congressional Whistleblower Protection Act of 2009. This important legislation simply adds whistleblower protections to the legislative branch by incorporating the Whistleblower Protection Act into the Congressional Accountability Act of 1995, a law that I authored to bring Congress in line with many labor and workplace practices that affected businesses around the country because I have long believed Congress should practice what it preaches. This legislation will do just that. You might remember the Congressional Accountability Act was passed because, going back to the 1930s, Congress had exempted itself from a lot of employment laws because we individual Senators are employers, the Congress is an employer, but we exempted ourselves from, I think, 18, 19 different laws at that particular time. So in 1995 I wanted to end the proposition of why we had two sets of laws in this country--one for Capitol Hill and one for the rest of the country. Now, since 1995, we have one set of laws, but we do not have the whistleblower protections that ought to be in it. A theme that has dominated this new Congress, as well as dominated the campaign of last fall, is accountability and responsibility in Washington. In most instances, the only reason we discovered waste or fraud is because employees were brave enough to stand up to the wrongdoers and to expose the offenses. Without these whistleblowers, the American taxpayer would continue to foot a bill that might be a violation of law, might be fraudulent use of taxpayers' money, might just be a waste of taxpayer money. Either way, taxpayers are hurt. This bill is long overdue. I have previously introduced similar legislation, but, unfortunately, those bills were never brought out of committee. I hope the Homeland Security and Government Affairs Committee, of which the chairman is on the Senate floor--I did not know the Senator would be so available for me to preach to him. I hope the Homeland Security and Governmental Affairs Committee will examine this legislation and will closely and expeditiously report it to the full Senate so we can ensure employees of the legislative branch that they are protected from any reprisals relating to protected whistleblowing the same way as executive branch employees. Now, it has been a number of years since the Congressional Accountability Act was signed into law. So I would like to remind my colleagues why we passed that law. It was a time very similar to today. The American people were demanding more from their elected officials in Washington and wanted accountability and transparency in all branches of Government. I believed then, as I do now, that Congress needs to put its money where its mouth is and apply the various labor and employment laws that were enforced on other branches of Government and businesses all across the country. That is what the Congressional Accountability Act did. It applied a number of important laws to Congress, including the Fair Labor Standards Act, title VII, the Civil Rights Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, Family Medical Leave Act, the Occupational Safety and Health Act, Employee Polygraph Protection Act, Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, as well as some provisions of title V relating to Federal service labor-management relations. It also created the Office of Compliance of the legislative branch that oversees the application of these important laws to this branch of Government and ensures that employees' rights under these laws are protected. While the Congressional Accountability Act was a good start, the Office of Compliance has recommended additional laws be applied to the legislative branch, including the purpose of my bill, the Whistleblower Protection Act. We have already taken the steps to protect whistleblowers in the executive branch, so it does not make sense not to extend those same protections to whistleblowers working right here in our own backyard on Capitol Hill. My bill will, very simply, give congressional employees the same protections that workers of other branches of Government have. It does this by simply adding the Whistleblower Protection Act to the preexisting list of statutes that are applied to the legislative branch by the Congressional Accountability Act. This is a straightforward and simple solution to ensuring that employees of the legislative branch are not without vital whistleblower protections. So I ask, in closing, that my colleagues join me and Senator McCaskill in supporting this bill to ensure that those who help us in the fight to hold Government accountable are not punished for those efforts.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I come to introduce another bill as part of my Accountability in Government Week. Yesterday I introduced the False Claims Act Clarification Act to help restore the original intent of the most successful law the Government utilizes to protect taxpayers' dollars from fraud, waste, and abuse. One key component I added to the False Claims Act when it was amended in 1986 was allowing whistleblowers to file cases on behalf of the Government when they are aware of fraud or abuse of taxpayers' funds. Whistleblowers are the key to unlocking the secrets of wrongdoing because they have access to information about how the frauds were perpetrated and can help lead authorities in the right direction to uncover the fraud. However, for their brave efforts whistleblowers are often the victims of retaliation and are removed from their jobs by supervisors who do not want the wrongdoing uncovered. I have often said whistleblowers were as welcome as skunks at a picnic, despite the fact that all they do is bring forward the truth. This is wrong. That is why I have supported strong whistleblower protection laws during my time in the Congress. The landmark whistleblower law is the Whistleblower Protection Act of 1989--I believe is the year it was passed--providing rights and remedies to executive branch whistleblowers who are the victims of retaliation. I proudly cosponsored that bill. But like many laws that are 20 years old, it needs to be updated. So I have cosponsored legislation introduced by Democratic Senator Akaka to do just that. However, that law also needs to be extended to employees of the legislative and judicial branches of Government. So I come today to start the discussion and to introduce legislation that will provide the same whistleblower protection rights currently extended to executive branch employees to the legislative branch. I am pleased to be joined by Senator McCaskill in introducing the Congressional Whistleblower Protection Act of 2009. This important legislation simply adds whistleblower protections to the legislative branch by incorporating the Whistleblower Protection Act into the Congressional Accountability Act of 1995, a law that I authored to bring Congress in line with many labor and workplace practices that affected businesses around the country because I have long believed Congress should practice what it preaches. This legislation will do just that. You might remember the Congressional Accountability Act was passed because, going back to the 1930s, Congress had exempted itself from a lot of employment laws because we individual Senators are employers, the Congress is an employer, but we exempted ourselves from, I think, 18, 19 different laws at that particular time. So in 1995 I wanted to end the proposition of why we had two sets of laws in this country--one for Capitol Hill and one for the rest of the country. Now, since 1995, we have one set of laws, but we do not have the whistleblower protections that ought to be in it. A theme that has dominated this new Congress, as well as dominated the campaign of last fall, is accountability and responsibility in Washington. In most instances, the only reason we discovered waste or fraud is because employees were brave enough to stand up to the wrongdoers and to expose the offenses. Without these whistleblowers, the American taxpayer would continue to foot a bill that might be a violation of law, might be fraudulent use of taxpayers' money, might just be a waste of taxpayer money. Either way, taxpayers are hurt. This bill is long overdue. I have previously introduced similar legislation, but, unfortunately, those bills were never brought out of committee. I hope the Homeland Security and Government Affairs Committee, of which the chairman is on the Senate floor--I did not know the Senator would be so available for me to preach to him. I hope the Homeland Security and Governmental Affairs Committee will examine this legislation and will closely and expeditiously report it to the full Senate so we can ensure employees of the legislative branch that they are protected from any reprisals relating to protected whistleblowing the same way as executive branch employees. Now, it has been a number of years since the Congressional Accountability Act was signed into law. So I would like to remind my colleagues why we passed that law. It was a time very similar to today. The American people were demanding more from their elected officials in Washington and wanted accountability and transparency in all branches of Government. I believed then, as I do now, that Congress needs to put its money where its mouth is and apply the various labor and employment laws that were enforced on other branches of Government and businesses all across the country. That is what the Congressional Accountability Act did. It applied a number of important laws to Congress, including the Fair Labor Standards Act, title VII, the Civil Rights Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, Family Medical Leave Act, the Occupational Safety and Health Act, Employee Polygraph Protection Act, Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, as well as some provisions of title V relating to Federal service labor-management relations. It also created the Office of Compliance of the legislative branch that oversees the application of these important laws to this branch of Government and ensures that employees' rights under these laws are protected. While the Congressional Accountability Act was a good start, the Office of Compliance has recommended additional laws be applied to the legislative branch, including the purpose of my bill, the Whistleblower Protection Act. We have already taken the steps to protect whistleblowers in the executive branch, so it does not make sense not to extend those same protections to whistleblowers working right here in our own backyard on Capitol Hill. My bill will, very simply, give congressional employees the same protections that workers of other branches of Government have. It does this by simply adding the Whistleblower Protection Act to the preexisting list of statutes that are applied to the legislative branch by the Congressional Accountability Act. This is a straightforward and simple solution to ensuring that employees of the legislative branch are not without vital whistleblower protections. So I ask, in closing, that my colleagues join me and Senator McCaskill in supporting this bill to ensure that those who help us in the fight to hold Government accountable are not punished for those efforts.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent the Senate stand in recess under the previous order.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I wish to visit with you about voluntarism. I wish to use the example of a deceased Boy Scout as the perfect example. Today is the day we Iowans honor the life and legacy of a young Boy Scout--a compassionate teenager who lived his life in passionate service to others. Mr. President, 14-year-old Aaron Eilerts from Eagle Grove, IA, tragically lost his own life last summer when a deadly tornado swept through Camp Little Sioux on January 11, 2008. One Iowan, Aaron, and three Nebraska boys lost their lives that evening. Fifteen years ago today, Bob and Carol Eilerts experienced the overwhelming joy and elation that parents treasure the day their child is born. The Eilerts undoubtedly took pride in shouldering the responsibilities and sacrifices that parenthood brings. It was not long before his parents would realize their beloved son spread joy in service to others, in ways big and small, with family, friends, neighbors, the elderly, and even total strangers. As a Boy Scout, Aaron took to heart the tenets of his organization. Through words and deeds, he upheld the Boy Scout Law, which prescribed a Scout as ``trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent.'' Every Boy Scout knows those words. By all accounts, Aaron Eilerts lived and breathed the objectives of an honorable Boy Scout, which included character development, citizenship, and personal fitness. As a parent and grandparent, I can appreciate the demands placed on our youth to excel in academics, navigate social pressures, participate in extracurricular activities, and to just ``be.'' Similar to many young people growing up in small town Iowa, Aaron's extensive list of activities was impressive. Besides the Humboldt Boy Scout Troop 108, Aaron participated in football, cross country, track, band, choir, theater, and art. Aaron also was an agent of the CIA; that is, ``Character in Action,'' a youth leadership character-building organization at Robert Blue Middle School. With so many irons in the fire, it is even more remarkable to consider the time and energy Aaron devoted in service to others. Consider a few of the community service projects this industrious 14- year-old organized: hand-sewing pillowcases for pediatric patients, teachers, and others in need; making blankets for animals at the Humane Society; volunteering at the local senior center and nursing home; performing the National Anthem at local high school events; and making it a habit to do great deeds and simple acts of kindness just to make his community a better place to live. We can honor his legacy of service by following in the footsteps of this local teenage legend. The Governor of Iowa, Chet Culver, has proclaimed today, February 24, as the first annual Aaron Eilerts Day of Service and Giving. Scores of schools and service organizations across the State of Iowa have made plans to participate. Inspired by this young man's spirit of service, thousands of school students across Iowa will seize this opportunity to make their community a better place. Just a few of the service projects underway today include shoveling snow; sewing pillowcases to donate to hospitals, veterans facilities, and nursing homes; creating fleece tie blankets for shelters; packaging meals in a box for local food pantries; conducting food and diaper services and drives that are connected with that; and pumping gas and cleaning windshields at local service stations. The Bible tells us in Acts 20:35: It is more blessed to give than receive. Many of us who contribute time, talents, and treasure in service to others often find we are the ones who are blessed by giving. If I may suggest, I believe Aaron Eilerts, if he were alive today, would agree. Although he did not share the world stage of Mother Teresa, who devoted her life to poverty in service to others, Aaron showed his compassion for others on the stages of his hometown, from the senior centers, to hospitals, school and community events. Mother Teresa is attributed with an observation that applies so well to this young man from Eagle Grove. Mother Teresa said: Do not wait for leaders. Do it alone, person to person. Aaron Eilerts was a product of small-town Iowa--a small town that took pride in its community, and he took pride in his community. Eagle Grove takes pride in this young man, Aaron Eilerts, who was killed last June. I would like to extend, again, my sincerest condolences to the family and loved ones Aaron Eilerts has preceded into God's Kingdom. I also would like to take this opportunity to extend an invitation to my fellow citizens from the other 49 States. I welcome you to join the State of Iowa, and Iowans generally, next year on February 24 to participate in the annual Aaron Eilerts Day of Service and Giving, as declared by Governor Culver of my State of Iowa. Tragic circumstances abbreviated the life of this young Iowan with no warning and with no opportunity for second chances. Let Aaron's life and legacy of service inspire each of us to respond in our own neighborhoods and communities to the call of service of giving.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to speak 6 or 7 minutes as in morning business, but I also would like to ask--if there is nobody on the other side of the aisle who would intervene--if I could have another 15 minutes after this time. I do not wish to take advantage of anything, but if they do not know of any other people from the Democratic Party who wish to speak, I would like to speak longer. But right now I ask unanimous consent for 6 or 7 minutes.

Mr. GRASSLEY. I forget. This is for my first 5 or 6 minutes?

Mr. GRASSLEY. I thank the Chair. (The remarks of Mr. Grassley are printed in today's Record under ``Morning Business.'')

Mr. GRASSLEY. Now, Mr. President, if I could proceed to that other speech. If there are people from the other party, from the majority party, who come to the Chamber, I will be glad to yield the floor at the time of their appearance. (The remarks of Mr. Grassley pertaining to the introduction of S. 458 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am here as part of what I am calling ``Accountability in Government Week.'' I plan to introduce various bills this week that will strengthen oversight of Government programs, integrity of taxpayer-funded initiatives, and bring sunshine to the executive, legislative, and judicial branches of our Government. These bills are important and will help all Americans better understand their Government in addition to making sure taxpayers' dollars are not lost to fraud, waste, and abuse. The first bill I am introducing this week, and am introducing today, is the False Claims Clarification Act of 2009. I am glad to be joined by my original cosponsor, Mr. Durbin, the majority whip, the Senator from Illinois, who has worked closely with me in crafting this legislation that will update the 1986 amendments to the False Claims Act I authored. This legislation is similar to a version that was introduced in the last Congress that cleared the Judiciary Committee by unanimous voice vote. We have made some updates to the bill that was the result of sitting down with various interested parties and hearing their concerns. We made a commitment last Congress to move that bill through regular order to ensure that all interested stakeholders had a say. I believe this version of the bill not only clarifies the original intent of the 1986 amendments but also makes a number of modifications that strengthen the False Claims Act and will help the Government recover taxpayers' dollars lost to fraud and abuse for years to come. Senator Durbin and I are also joined by other original cosponsors, including Senator Leahy, whom you recognize is the chairman of the Judiciary Committee, and Senator Specter, its ranking member, and Senator Whitehouse, a member of the committee. It is a bipartisan bill that is about protecting taxpayers' dollars and strengthening the Government's hand in combating fraud. A little history: Back in 1986, the Government was in a situation that had some parallel to today's economic situation. Government military expenditures were a significant portion of the budget, and there was ample evidence of fraud and abuse in Government contracts. Today, we are facing an economic situation where the Government is now on the hook for trillions of dollars in new Government spending in an attempt to jump-start our ailing economy. That is compounded by the fact that the Treasury Department has taken unprecedented steps to bail out financial institutions with hundreds of billions of taxpayers' dollars. I am concerned this new Government spending has occurred too quickly and could be ripe with opportunities for fraud and abuse. I would say there are 99 other Senators who can say the same thing. But that is the reason this legislation is timely and urgently needed. The False Claims Act, which is also known as Lincoln's Law, was originally passed by Congress in 1865 to combat war profiteering by Government contractors during the Civil War. The False Claims Act allowed individual citizen whistleblowers to go to court to collect Government money that was lost to unscrupulous contractors that were selling false or fraudulent goods to Union troops. This legal mechanism, known as qui tam--Q-U-I T-A-M, for you Latin lovers--is the key component to the False Claims Act, allowing individual citizens to act as private ``attorneys general'' to help unearth fraud and recover lost money. However, following World War II, the False Claims Act was weakened by an act of Congress which lowered the penalties, limiting the money the Government could recover from this fraud. This remained the case from the end of World War II until 1986 with the False Claims Act. That is when I authored amendments to that act which restored the teeth and breathed new life into a law that was designed to do nothing but to protect all American taxpayers. Now, since 1986 the Federal Government has recovered $22 billion from those who defraud the Government. By working with qui tam whistleblowers, the Justice Department has turned Lincoln's law into the single most effective tool in the Federal Government's tool box to help protect taxpayers' dollars. However, it has been a hard fought battle to get the False Claims Act to where it is today as deep-pocket Government contractors have spent hundreds of millions of dollars to litigate the False Claims Act. As a result, various court interpretations have limited the applicability and the reach of the False Claims Act, cutting off many worthy cases from ever going forward. Some of these cases have been around for quite a while, others more recent. Yet the one thing these cases have in common is they threaten to undermine both the spirit and the intent of the 1986 amendments to Lincoln's law called the False Claims Act. The first case that created problems for the False Claims Act was the Totten case where the DC Circuit Court of Appeals held that false claims must be presented directly to the Government--in this case, employees at Amtrak, which is a Government grantee--and were not actually presented to the Federal Government. As a result, the Government was precluded from recovering money lost to fraud and abuse perpetrated against Amtrak. More recently, the Supreme Court held in Allison Engine Co. v. U.S. that for liability to attach a defendant must not only make a false statement but must intend to get the claim paid and approved directly by the Government based upon that false statement. While this sounds straightforward, it creates a huge loophole in the False Claims Act because subcontractors who receive Federal money never actually submit a claim directly to the Government because they do it through the contractors. Instead, they pass the claim to the prime contractor who then gives it to the Government. So under the Allison Engine decision, it could be virtually impossible to prove a False Claims Act case where the subcontractor knowingly ripped off the taxpayers. In fact, a judge in my home State of Iowa dismissed a case based solely upon the Allison Engine decision, even without a motion from the defendant. This has created a significant problem for recovering taxpayers' dollars that trickle down to subcontractors, particularly in Medicare and Medicaid Programs where subcontractors are frequently utilized. Further, this could become a bigger problem if the second tranche of TARP money--some people might refer to that as the bailout money--is used to purchase distressed assets through a third party broker as originally envisioned. Another case that is detrimental to the False Claims Act is Rockwell International Corporation v. U.S. In that case, the Supreme Court interpreted an area of the False Claims Act known as the ``public disclosure bar,'' which prohibits a false claims case from moving forward if the case was based upon publicly disclosed information such as a Government report, unless the whistleblower filing the case was the ``original source'' of the information. Here, the Supreme Court held that a qui tam whistleblower was barred from receiving a share of any money recovered unless they were the original source of all claims ultimately settled. This may not sound like a troublesome decision. However, the impact is that oftentimes a case is brought by a whistleblower on a certain set of facts and then expanded by the Department of Justice that ultimately settles on other grounds. As a result, this case creates a disincentive for a whistleblower to bring forth information about fraud as they may not get to share in any part of that recovery. That is the incentive under false claims: a whistleblower, not a lawyer, not in the Justice Department, to get a percentage of what is recovered as an incentive to get this information out there and get it prosecuted, particularly if the Justice Department is overloaded or maybe doesn't want to take the case. Now, one last case I will mention is the Custer Battles case decided in 2006. In this case, a jury found that a defense contractor in Iraq had defrauded the Government of $10 million. However, the judge overturned the jury's verdict, finding that the money lost was not U.S. taxpayer money but was instead Iraqi money under the control of the U.S. Government. As a result of this case, the U.S. Government may not recover for any fraud committed against the U.S. Government if the funds are not American funds, even if the U.S. Government has been entrusted with the management of those funds, just as if money is somehow not fungible. These decisions, which are by no means an exhaustive list, are contrary to the spirit and the intent of the 1986 amendments. And who should know that? I should know it because I authored this legislation. This bill we are introducing today--a bipartisan bill by Senator Durbin and myself--seeks to clarify the False Claims Act so these judicial interpretations that have limited the False Claims Act are overruled. It is narrowly tailored--I wish to emphasize ``narrowly tailored''--to ensure that the intent of Congress in the 1986 amendments is upheld, if nothing else. The False Claims Clarification Act would correct these negative interpretations in addition to making technical and clarifying amendments. First, the bill would address the Totten decision by removing the requirement that false claims be directly presented to the Government officials instead of tying the liability directly to Government money and property. It would also correct the Allison Engine decision, ensuring that subcontractors who rip off the taxpayers will be held accountable. The bill would also address the Rockwell decision by requiring the Attorney General to file a timely motion to dismiss claims that violate the public disclosure bar. By allowing the Attorney General to present to the court information about public disclosures up front in a case, the bill would eliminate procedural uncertainties that exist now by allowing public disclosures to be addressed at any time during the proceeding. The bill also clarifies that nontaxpayer funds under the control of the U.S. Government subject to fraud are actionable under the False Claims Act. Thus, monies directly under the control of the U.S. Government subject to fraud that are currently outside the scope of the False Claims Act would now be covered. This would correct the problems that have arisen following the decision of Custer Battles. Additionally, the bill clarifies a split between the Federal Circuit Courts of Appeal that currently exists regarding whether a Government employee may file a False Claims Act case. It takes a dissenting opinion from the Tenth Circuit and codifies that by allowing Government employees to bring a False Claims Act case based upon information learned in the course of their employment only when the employee: One, discloses the fraud to a supervisor; two, discloses the fraud to the Inspector General of the agency; three, discloses the fraud to the Attorney General and then waits 18 months without Government action. Further, it restricts a Government employee from bringing a False Claims Act case if they derive information for their case in an indictment or information, any ongoing criminal, civil, or administrative investigation, or if they are an auditor, investigator, or attorney who has a duty--a duty--to investigate fraud. This ensures that a Government employee can act as a relator, but only if he or she is truly bringing a claim that the Government has refused to investigate. The bill makes some additional technical corrections that I am not going to go into. Finally, the bill includes a new section that will require the Attorney General to report to Congress on an annual basis regarding the use of the False Claims Act and any settlements made upon these sorts of lawsuits. This has two purposes. It allows Congress, first, to see if the Justice Department is utilizing the act consistent with the spirit and intent; and, secondly, ensures that the seal provisions allowing the case to be privately sealed with the court are not being abused to the detriment of qui tam relators. So the False Claims Act clarification bill is narrowly tailored to ensure that the legislative intent of 1986 is truly understood. It will bring a level of reason and sanity instead of the current hodgepodge of laws across various circuit courts of appeals. This bill is designed to protect the American taxpayer from fraud and is timely, given the recent actions to shore up the balance sheets of banks and private businesses across the country. I am glad we have a bipartisan coalition ready to pick up where we left off in the last Congress. I believe we made great strides last year in working through the concerns of various stakeholders, and I encourage my colleagues to join me and Senator Durbin in strengthening Lincoln's law so that it can stand up and work for the American taxpayers for years to come as it has for the last 22 years, bringing about $22 billion back to the Federal Treasury. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am here as part of what I am calling ``Accountability in Government Week.'' I plan to introduce various bills this week that will strengthen oversight of Government programs, integrity of taxpayer-funded initiatives, and bring sunshine to the executive, legislative, and judicial branches of our Government. These bills are important and will help all Americans better understand their Government in addition to making sure taxpayers' dollars are not lost to fraud, waste, and abuse. The first bill I am introducing this week, and am introducing today, is the False Claims Clarification Act of 2009. I am glad to be joined by my original cosponsor, Mr. Durbin, the majority whip, the Senator from Illinois, who has worked closely with me in crafting this legislation that will update the 1986 amendments to the False Claims Act I authored. This legislation is similar to a version that was introduced in the last Congress that cleared the Judiciary Committee by unanimous voice vote. We have made some updates to the bill that was the result of sitting down with various interested parties and hearing their concerns. We made a commitment last Congress to move that bill through regular order to ensure that all interested stakeholders had a say. I believe this version of the bill not only clarifies the original intent of the 1986 amendments but also makes a number of modifications that strengthen the False Claims Act and will help the Government recover taxpayers' dollars lost to fraud and abuse for years to come. Senator Durbin and I are also joined by other original cosponsors, including Senator Leahy, whom you recognize is the chairman of the Judiciary Committee, and Senator Specter, its ranking member, and Senator Whitehouse, a member of the committee. It is a bipartisan bill that is about protecting taxpayers' dollars and strengthening the Government's hand in combating fraud. A little history: Back in 1986, the Government was in a situation that had some parallel to today's economic situation. Government military expenditures were a significant portion of the budget, and there was ample evidence of fraud and abuse in Government contracts. Today, we are facing an economic situation where the Government is now on the hook for trillions of dollars in new Government spending in an attempt to jump-start our ailing economy. That is compounded by the fact that the Treasury Department has taken unprecedented steps to bail out financial institutions with hundreds of billions of taxpayers' dollars. I am concerned this new Government spending has occurred too quickly and could be ripe with opportunities for fraud and abuse. I would say there are 99 other Senators who can say the same thing. But that is the reason this legislation is timely and urgently needed. The False Claims Act, which is also known as Lincoln's Law, was originally passed by Congress in 1865 to combat war profiteering by Government contractors during the Civil War. The False Claims Act allowed individual citizen whistleblowers to go to court to collect Government money that was lost to unscrupulous contractors that were selling false or fraudulent goods to Union troops. This legal mechanism, known as qui tam--Q-U-I T-A-M, for you Latin lovers--is the key component to the False Claims Act, allowing individual citizens to act as private ``attorneys general'' to help unearth fraud and recover lost money. However, following World War II, the False Claims Act was weakened by an act of Congress which lowered the penalties, limiting the money the Government could recover from this fraud. This remained the case from the end of World War II until 1986 with the False Claims Act. That is when I authored amendments to that act which restored the teeth and breathed new life into a law that was designed to do nothing but to protect all American taxpayers. Now, since 1986 the Federal Government has recovered $22 billion from those who defraud the Government. By working with qui tam whistleblowers, the Justice Department has turned Lincoln's law into the single most effective tool in the Federal Government's tool box to help protect taxpayers' dollars. However, it has been a hard fought battle to get the False Claims Act to where it is today as deep-pocket Government contractors have spent hundreds of millions of dollars to litigate the False Claims Act. As a result, various court interpretations have limited the applicability and the reach of the False Claims Act, cutting off many worthy cases from ever going forward. Some of these cases have been around for quite a while, others more recent. Yet the one thing these cases have in common is they threaten to undermine both the spirit and the intent of the 1986 amendments to Lincoln's law called the False Claims Act. The first case that created problems for the False Claims Act was the Totten case where the DC Circuit Court of Appeals held that false claims must be presented directly to the Government--in this case, employees at Amtrak, which is a Government grantee--and were not actually presented to the Federal Government. As a result, the Government was precluded from recovering money lost to fraud and abuse perpetrated against Amtrak. More recently, the Supreme Court held in Allison Engine Co. v. U.S. that for liability to attach a defendant must not only make a false statement but must intend to get the claim paid and approved directly by the Government based upon that false statement. While this sounds straightforward, it creates a huge loophole in the False Claims Act because subcontractors who receive Federal money never actually submit a claim directly to the Government because they do it through the contractors. Instead, they pass the claim to the prime contractor who then gives it to the Government. So under the Allison Engine decision, it could be virtually impossible to prove a False Claims Act case where the subcontractor knowingly ripped off the taxpayers. In fact, a judge in my home State of Iowa dismissed a case based solely upon the Allison Engine decision, even without a motion from the defendant. This has created a significant problem for recovering taxpayers' dollars that trickle down to subcontractors, particularly in Medicare and Medicaid Programs where subcontractors are frequently utilized. Further, this could become a bigger problem if the second tranche of TARP money--some people might refer to that as the bailout money--is used to purchase distressed assets through a third party broker as originally envisioned. Another case that is detrimental to the False Claims Act is Rockwell International Corporation v. U.S. In that case, the Supreme Court interpreted an area of the False Claims Act known as the ``public disclosure bar,'' which prohibits a false claims case from moving forward if the case was based upon publicly disclosed information such as a Government report, unless the whistleblower filing the case was the ``original source'' of the information. Here, the Supreme Court held that a qui tam whistleblower was barred from receiving a share of any money recovered unless they were the original source of all claims ultimately settled. This may not sound like a troublesome decision. However, the impact is that oftentimes a case is brought by a whistleblower on a certain set of facts and then expanded by the Department of Justice that ultimately settles on other grounds. As a result, this case creates a disincentive for a whistleblower to bring forth information about fraud as they may not get to share in any part of that recovery. That is the incentive under false claims: a whistleblower, not a lawyer, not in the Justice Department, to get a percentage of what is recovered as an incentive to get this information out there and get it prosecuted, particularly if the Justice Department is overloaded or maybe doesn't want to take the case. Now, one last case I will mention is the Custer Battles case decided in 2006. In this case, a jury found that a defense contractor in Iraq had defrauded the Government of $10 million. However, the judge overturned the jury's verdict, finding that the money lost was not U.S. taxpayer money but was instead Iraqi money under the control of the U.S. Government. As a result of this case, the U.S. Government may not recover for any fraud committed against the U.S. Government if the funds are not American funds, even if the U.S. Government has been entrusted with the management of those funds, just as if money is somehow not fungible. These decisions, which are by no means an exhaustive list, are contrary to the spirit and the intent of the 1986 amendments. And who should know that? I should know it because I authored this legislation. This bill we are introducing today--a bipartisan bill by Senator Durbin and myself--seeks to clarify the False Claims Act so these judicial interpretations that have limited the False Claims Act are overruled. It is narrowly tailored--I wish to emphasize ``narrowly tailored''--to ensure that the intent of Congress in the 1986 amendments is upheld, if nothing else. The False Claims Clarification Act would correct these negative interpretations in addition to making technical and clarifying amendments. First, the bill would address the Totten decision by removing the requirement that false claims be directly presented to the Government officials instead of tying the liability directly to Government money and property. It would also correct the Allison Engine decision, ensuring that subcontractors who rip off the taxpayers will be held accountable. The bill would also address the Rockwell decision by requiring the Attorney General to file a timely motion to dismiss claims that violate the public disclosure bar. By allowing the Attorney General to present to the court information about public disclosures up front in a case, the bill would eliminate procedural uncertainties that exist now by allowing public disclosures to be addressed at any time during the proceeding. The bill also clarifies that nontaxpayer funds under the control of the U.S. Government subject to fraud are actionable under the False Claims Act. Thus, monies directly under the control of the U.S. Government subject to fraud that are currently outside the scope of the False Claims Act would now be covered. This would correct the problems that have arisen following the decision of Custer Battles. Additionally, the bill clarifies a split between the Federal Circuit Courts of Appeal that currently exists regarding whether a Government employee may file a False Claims Act case. It takes a dissenting opinion from the Tenth Circuit and codifies that by allowing Government employees to bring a False Claims Act case based upon information learned in the course of their employment only when the employee: One, discloses the fraud to a supervisor; two, discloses the fraud to the Inspector General of the agency; three, discloses the fraud to the Attorney General and then waits 18 months without Government action. Further, it restricts a Government employee from bringing a False Claims Act case if they derive information for their case in an indictment or information, any ongoing criminal, civil, or administrative investigation, or if they are an auditor, investigator, or attorney who has a duty--a duty--to investigate fraud. This ensures that a Government employee can act as a relator, but only if he or she is truly bringing a claim that the Government has refused to investigate. The bill makes some additional technical corrections that I am not going to go into. Finally, the bill includes a new section that will require the Attorney General to report to Congress on an annual basis regarding the use of the False Claims Act and any settlements made upon these sorts of lawsuits. This has two purposes. It allows Congress, first, to see if the Justice Department is utilizing the act consistent with the spirit and intent; and, secondly, ensures that the seal provisions allowing the case to be privately sealed with the court are not being abused to the detriment of qui tam relators. So the False Claims Act clarification bill is narrowly tailored to ensure that the legislative intent of 1986 is truly understood. It will bring a level of reason and sanity instead of the current hodgepodge of laws across various circuit courts of appeals. This bill is designed to protect the American taxpayer from fraud and is timely, given the recent actions to shore up the balance sheets of banks and private businesses across the country. I am glad we have a bipartisan coalition ready to pick up where we left off in the last Congress. I believe we made great strides last year in working through the concerns of various stakeholders, and I encourage my colleagues to join me and Senator Durbin in strengthening Lincoln's law so that it can stand up and work for the American taxpayers for years to come as it has for the last 22 years, bringing about $22 billion back to the Federal Treasury. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I suggest the absence of a quorum, and if it is necessary, to be fair to the other side, I will take it out of the time I have over here, or equally divided.

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

Mr. GRASSLEY. Mr. President, on Friday the 13th, there is superstition that says we shouldn't be walking under ladders, we should avoid black cats crossing our paths, and certainly you wouldn't purposely break mirrors, would you. But since this is the first significant piece of legislation in this Congress, and under our new President, we ought to take a look in the legislative mirror at what we are doing when we vote here today. If you look at the developments of this legislation, you will see some patterns. No. 1, House Democrats put together their priorities and drove their priorities through the House of Representatives. They didn't pretend to take any Republican input and they left out 11 of their own Members in the House of Representatives, as we saw from the 11 Democrats who voted against it. In the Senate, Republicans were consulted, and that is a very positive thing, but we were never invited to the negotiating table. We saw this pattern repeat itself at committee levels and on the floor here and, of course, the most obvious one, at the conference stage. When Republicans offered ideas, generally they were rejected. There were a few exceptions, and the chart behind me will show what those few exceptions were. The chart deals with one of the improvements--the alternative minimum tax. This is 2006 return data, so it might understate its impact, but you can see that every State would add up to about 20 million for the year 2006. If the 2008 patch were not passed, it would probably add up to 23 million, 24 million middle-class Americans who would be hit if we didn't do something on the alternative minimum tax. Each one of us can look at our own individual State. But you can see that there are high percentages of middle-class people who would be hit by the alternative minimum tax. That needs to be done. I heard detracting remarks on whether we ought to do that in a stimulus package. It is not as stimulative as some parts of it. I think I heard some figures from the other side that it might be 2 cents on the dollar--or $1.02 of stimulus as opposed to other places where, as with food stamps, you might get a $3 or $4 return on the investment from a stimulus. But it needs to be there for the simple reason that in each of the last 2 years, we have waited a long period of time to do it, and it has created problems for the IRS to do their form work when you do the alternative minimum tax in November. I pushed this amendment, an extension of the alternative minimum tax patch. I thank the conferees for retaining it in conference. Many in the Democratic leadership--most particularly the senior Senator from Illinois--argued that I should support the package based upon that amendment alone. I agree with my friend from Illinois that the package was improved with that amendment. I also point out that all these families in his State--and you can look at Illinois, where there is a fabulous number of middle-income taxpayers, 909,000 right now, before this bill is signed by the President--would be obligated to pay that alternative minimum tax. In my State of Iowa, it is a large number; not quite that big. We need to point out that all the families from his State and families from my State will get a tax cut averaging $2,300 due to the amendment. We on this side pushed for that. I do not get what the senior Senator from Illinois was saying. I only heard him say it last night because I was on the floor at that particular time. I don't get why he doesn't accept the improvements based on merits alone and not whether it has anything to do with who supports this bill or who does not. Why he feels the need to continue to criticize me by name for improving the bill is beyond my comprehension. Now, instead of repeatedly criticizing me by name, I hope the senior Senator from Illinois would listen to what I have to say and reflect on it. We do not need to be partisan, cutout cartoon characters. We can actually engage in some real debate. In that vein, many on my side could probably support the conference agreement before us, with more improvements such as the one the senior Senator from Illinois has criticized me for offering, the alternative minimum tax. President Obama could get the 80 votes he wanted and still have a stimulus bill. But on this side we will supply those additional votes, maybe pushing the total to 80, only if we believe the bill as a whole would improve the economy. To that end, House and Senate Republicans offered amendments in committee and on the floor to improve this bill the following ways. I have about four examples. No. 1: to tie the spending of this bill to the period in which the economy is sagging. That was Senator McCain's trigger amendment. If Senator McCain had prevailed, taxpayers would know their tax dollars would be protected once the economy recovered. It was a good, fiscally responsible idea. It was rejected largely along party-line votes. No. 2 example: to ensure that the huge amount of State aid money, almost $87 billion for Medicaid alone, was used by the States to prevent tax increases or cuts in important services. We had amendments to do that. The amendments required States to maintain their efforts on keeping taxes low and not cutting services. That was rejected largely along party lines. Another example was to build on the individual tax relief in the package. On this side, we offered amendments to expand the relief in amount and by the number of taxpayers. Those amendments also were largely rejected along party lines. The last example: we tried to divert some of the over $1 trillion in this bill--that is $1 trillion when interest on this debt is included-- to home mortgages and housing problems. We offered amendments to do that. Senator Isakson prevailed with his amendment to provide a robust tax credit for home purchases. How was that amendment received in the conference committee? The answer is it was dumped and new social spending, the priority of a lot of House Democrats, was added back. These are just a few examples. I would like to remind my colleagues that we would cut back the cost of the bill. Ask Senator McCain. I am sure he will explain, in detail, the large amounts of money that could be saved. The true test is in the press reports. They note the conference report is not too far off from the basic plans laid out by the Democratic leadership. The bottom line is the basic outlines of the plan did not move all that much between what was originally passed in the House, originally passed in the Senate, and what comes out of conference. It goes back to my basic point--to be bipartisan you have to have a real offer to negotiate and a sincere objective to entertain each other's point of view. There is no better evidence of that kind of pattern than the record Senator Baucus and I have established in the committee, the Finance Committee, during the years I chaired the committee and during the years he has chaired the committee. I yield the floor. I suggest the absence of a quorum and ask the time be divided.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to speak on concerns I have with the Medicaid and welfare provisions in the conference agreement we will be voting on shortly. This bill would provide an $87 billion slush fund for the States. As I have said on the Senate floor numerous times during this debate, States don't need $87 billion for their Medicaid Programs. The Congressional Budget Office analyzed an amendment I wrote to target funds just for enrollment-driven increases in Medicaid spending. The nonpartisan Congressional Budget Office gave us the answer for how much it would cost to provide federal funding for the additional Medicaid enrollment caused by the economic downturn. And that cost is not $87 billion; it is 1.8 billion. The remaining $75 billion in this bill goes to helping States fill in their deficits. Giving States almost eight times what they need for enrollment-driven Medicaid does not meet the definition of targeted in my book. Now, we will hear that this $87 billion Medicaid slush fund for States is necessary to avoid tax increases at the State and local level. We will also hear that vital State services will be cut unless the Federal Government cuts this big blank check to the States. But when asked to tie the taxpayer dollars to guarantees that the States will not raise taxes or cut services, we have been turned back by Members on the other side. I heard some folks on the other side of the aisle claim the formula for distributing the funds better targets relief to the States that need it most by using unemployment rates in the formula. Using unemployment makes sense to target--there is nothing wrong with that. But it doesn't work if you then funnel the money for the States through Medicaid. Let me explain. Every State has a different sized Medicaid program-- some States have bigger Medicaid Programs and some have smaller ones. By using Medicaid to distribute the 87 billion, the formula in the bill necessarily biases the funds towards States with large Medicaid Programs, like California, Illinois, Massachusetts and New York. Now we'll hear that those States need more because they have larger Medicaid Programs. But remember it only takes $10.8 billion to pay for enrollment-driven Medicaid spending increases. So States like California, Illinois, Massachusetts and New York get favored treatment and everyone else gets short-changed. Simply put, this way of targeting misses the target. The formula in this bill clearly fails the targeting test of the three Ts. This bill also undermines key principles of welfare reform. While it makes sense to provide a safety net for families that have lost their jobs, this bill moves welfare policy in the wrong direction. The historic Welfare Reform law signed by President Clinton already has a built-in mechanism to help states during an economic downturn. That law provides welfare contingency funds for States in economic need. But rather than make the existing contingency fund more accessible to States, this bill creates a new fund that includes policies that are not consistent with the principles of meaningful welfare reform. For the first times since the abolishment of the aid to families with dependent children program, this new fund gives States financial incentives for expanding their welfare caseloads. Rather than encourage States to reduce their welfare rolls, this provision rewards States for enrolling families on welfare. This bill also relieves States of the responsibility to engage able- bodied adults on welfare in work training, work experience programs or education. It makes no sense to promote policies that encourage States to expand their welfare rolls while loosening requirements on States to provide work training, work experience programs or education. At this critical time, these job training activities are even more important than ever. These changes will not stimulate the economy nor will they lead to productive jobs. In fact, these policies could trap families in deep and persistent poverty. Mr. President, that is clearly not what we should be doing in this bill and it is another reason why I am unable to support the legislation. Mr. President, I am back again to speak about some provisions that are buried deep within this stimulus bill that was put together behind closed doors without input from the minority. I know this was done behind closed doors because I was a conferee to the negotiations and I wasn't even in the room. Now, I have always been a strong advocate of opening up Government, making it more transparent, making it more accountable, and shedding some sunlight on how the Government works for the people. So, in that vain, I am here today to shed some light on provisions hidden away in the conference report that will actually hurt transparency and accountability of taxpayer dollars. Inspectors general are the front line against fraud, waste, and abuse of taxpayer dollars at Federal agencies. They are independent from the Federal agencies they oversee and are independent from Congress. They are the watchdogs that are responsible for sifting through all the budgets and expenditures by conducting audits, performing program evaluations, investigating allegations of wrongdoing, and working closely with whistleblowers to uncover the truth. Inspectors general point out problems that need to be fixed and save taxpayers billions of dollars a year. They are integral to any effort to stamp out waste and deter fraud and abuse. So, I was pleased to see that they weren't forgotten in the bill and were given some more resources to oversee the billions in new spending. However, tucked away in this bill is a provision that threatens to micromanage these independent watchdogs in a manner that is contrary to not only the spirit and intent of the Inspectors General Act of 1978, but the 31 years of results these dedicated fraud fighters have worked to achieve. I will point my colleagues to division A, page 465 of the conference report. There, section 1527 is, ironically titled, ``Independence of Inspectors General.'' Great title, something you would think you would like to support. If you keep reading, it states that ``nothing in this subtitle shall affect the independent authority of an inspector general to determine whether to conduct an audit or investigation of covered funds.'' Again, a nice statement that reinforces the fact that we want inspectors general to be independent, but, unfortunately, the provision doesn't stop there. If you read a little further you will find that the bill gives a new entity, the ``Recovery Accountability and Transparency Board'' the authority to, request ``that an inspector general conduct or refrain from conducting an audit or investigation.'' It goes on further to say that if an IG objects to being told what to do and acts independently-- as we expect them to--he or she must submit a report to that board, the agency they oversee, and to Congress within 30 days. Now, I don't know about everyone else around here, but that sounds to me like a lot of redtape for an independent watchdog to go about doing their job. In fact, it is fitting that the acronym for this board is RAT, because that is what I smell here. But, most importantly, this provision strikes right at the heart of any inspectors' general independence. It appears to me that the majority that crafted this bill, isn't all that interested in transparency and accountability. Let me say it loud and clear: I don't like this one bit and from the chatter I hear, the IGs don't like it either--especially if it involves a criminal investigation. Now, some of my colleagues will say this isn't too burdensome and that it will help coordinate the work of inspectors general. Others say that the new board will contain IGs who will have input so it won't stifle investigations. Both of these arguments lack merit when you peel the onion back. Any new limitation on the independence of inspectors general is dangerous. Here, even though an inspector general is allowed to buck the new board and continue an investigation they are told not to do, he or she must then put together a report for that board, the agency that is being investigated, and Congress, all within 30 days. This will take resources away from investigating and auditing fraud, and turn a truly independent IG into a report writer. As to the argument about the make-up of the new board, it is true that inspectors general will make up the bulk of the board. However, it will be chaired by either: the Deputy Director of the Office of Management and Budget, a Presidential appointee confirmed by the Senate, or any other individual subject to Senate confirmation. So, based upon this model, you could have a situation where the President appoints a sitting Cabinet Secretary to oversee the board that oversees the inspectors general that oversee the agency run by the Secretary in charge of the board. I don't want to even try to imagine the scenario where the head of the board is a private sector corporate figurehead of a company that has a financial conflict stemming from the fact that the company receives stimulus money. The system this bill creates is not only unworkable; it is loaded with potential for conflicts of interest that are simply mind blowing. I also question the need for yet another board full of Government officials. Why do we need yet another Government entity? The inspectors general have worked cooperatively for years via the President's Council for Integrity and Efficiency, PCIE, and the Executive Councils for Integrity and Efficiency, ECIE, which are made up of inspectors general. These entities were recently rolled into the Council of the Inspectors General on Integrity and Efficiency, CIGIE, by the Inspector General Reform Act of 2008. This new board created by the stimulus bill will simply duplicate already existing efforts in addition to hindering the independence of inspectors general. We have repeatedly recognized the need for independent IGs and we unanimously passed the Inspector General Reform Act of 2008 that was signed into law by President Bush last October. That law was passed because Congress and the IGs recognized that changes were needed to strengthen the independence of inspectors general. It included simple, straightforward reforms such as ensuring each inspector general had access to independent legal advice free and clear of agency influence. It seems to me we all agreed independence was needed for IGs so long as it occurred when there was a Republican President. I hate to think that there is some conspiracy here, but when we have all backed the independence of IGs in the past, you have to question the change of direction buried deep within this bill. This is a dangerous provision that will hamper oversight, restrict transparency, and damage the independence of inspectors general. It works against the pledge of transparency and accountability that President Obama has advocated for and puts another layer of bureaucracy between taxpayers and the truth about how the hundreds of billions of dollars are spent. Mr. President, I would like to talk about an immigration provision that was included in the final conference report, as well as a couple that were not. First, the good news. I was pleased to hear that the conference report retained the Sanders-Grassley amendment to ensure businesses that receive TARP funds go through a very rigorous hiring process before employing new H-1B visa holders. Hiring American workers for limited available jobs should be a top priority for businesses taking taxpayer money through the TARP program. With the unemployment rate at 7.2 percent, there is no need for companies to hire foreign workers through the H-1B program--particularly in the banking industry. According to an AP article, the banking industry requested more than 21,800 visas for foreign guest workers over the last 6 years. At least 100,000 workers were laid off in the banking industry in the past few months. Now that many qualified American bank employees are unemployed, banks who want to hire workers shouldn't have a hard time finding what they need from an American workforce. The Sanders-Grassley language requires that a company receiving TARP funds and applying for workers under the H-1B process must operate as an ``H-1B dependent company.'' This means they will still be able to hire H-1B visa holders, but must comply with the H-1B dependent employer rules which include attesting to actively recruiting American workers; not displacing American workers with H-1B visa holders; and not replacing laid off American workers with foreign workers. This restriction would last for 2 years. So this amendment would ensure that TARP recipients comply with strict hiring standards in order not to displace qualified American workers. The bottom line is that if banks are going to be getting TARP money--American taxpayer money then they need to be hiring American workers. While I support the H-1B program, it needs to be used in the way it was intended and not to replace qualified American workers. This amendment helps to ensure that taxpayer money going to assist companies get back on their feet also helps American workers keep and/or get jobs. Now, the bad news. I am extremely disappointed that the final bill doesn't include some very important E-verify provisions. The House passed stimulus bill included language to extend the E-verify program, a program that allows employers to verify the social security numbers and legal status of newly hired employees. The E-verify process has been an extremely successful program for employers. In addition, the House passed stimulus bill included language that would have made it mandatory for companies receiving TARP funds to use the E-verify system when hiring new employees. These two provisions passed the House with broad bipartisan support. Here on the Senate side, my friend Senator Sessions filed several amendments to extend E-verify and require TARP recipients to use E- verify. I fully supported those amendments. Unfortunately, the good Senator from Alabama was blocked from offering his amendments to the Senate bill--even though, if given the chance, I am sure that his amendments would have passed with the same overwhelming vote as the House amendments. I was ready to support the House E-verify provisions in conference. As we all know, Republican conferees were shut out from any negotiation of this conference report. But we were extremely hopeful that the provisions were going to be retained, because of strong bipartisan support on both sides of Capitol Hill. So I was really surprised to hear that House leadership stripped E- verify completely from the conference report. Many people supported these provisions and understood their importance. These E-verify provisions would have helped stimulate the economy by preserving jobs for a legal workforce, so it is outrageous that they were not included in the final conference agreement. The American taxpayer is spending nearly a trillion dollars to spur the economy. It's not much to ask that the companies receiving hard earned taxpayer dollars actually make sure they are employing legal workers. The exclusion of both the E- verify reauthorization and the requirement that companies getting TARP money have to use the E-verify program is truly a colossal failure on the part of our congressional leadership to stimulate the economy and ensure that jobs go to legal workers. The fight is not over. I am a strong believer in the E-verify program. I will continue to work with my colleagues to make sure that this important program is reauthorized and utilized by as many employers as possible.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I wish to recognize a fellow Iowan, C. Edward ``Ed'' Brown, FACHE, on his election as the chair of the board of directors of the American Medical Group Association. Mr. Brown has had a distinguished career in health care in Iowa where he has served for the last 15 years as chief executive officer of the Iowa Clinic, a multispecialty group practice in Des Moines. Ed has a long list of achievements in delivering cutting edge, quality focused health care to the benefit of Iowans, and his achievements include the Iowa Clinic's adoption of electronic medical records and information technology systems. He holds a master's degree in health administration from Washington University in St. Louis, and he is a fellow of the American College of Healthcare Executives with over 25 years of experience in executive and senior levels of health care management. As the head of the American Medical Group Association, Ed's vision and management skills will be put to good use in leading an organization that represents some of the Nation's highest quality and most prestigious health care delivery systems. It is wonderful to see someone with such a distinguished health care record in Iowa recognized at the national level as a dedicated leader who is committed to improving health care at such an important time for our Nation's health care system. Ed's voice will be a valuable contribution to the health care debate in 2009 in Washington, and I congratulate him on this new chairmanship.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to join my colleague Senator Kerry today to re-introduce the Empowered at Home Act for the 111th Congress. This bill is a continuation of efforts that I undertook in 2005 and again in 2008 to improve access to home and community based services for those needing long-term care. This is an important piece of legislation that continues our efforts to make cost-effective home and community based care options more available to those who need it. In 2005, I introduced the Improving Long-term Care Choices Act with Senator Bayh. That legislation set forth a series of proposals aimed at improving the accessibility of long-term care insurance and promoting awareness about the protection that long-term care insurance can offer. It also sought to broaden the availability of the types of long-term care services such as home and community-based care, which many people prefer to institutional care. The year 2005 ended up being a very important year for health policy as it relates to Americans who need extensive care. In the Deficit Reduction Act of 2005, Congress passed into law the Family Opportunity Act, the Money Follows the Person initiative, and many critical pieces of the Improving Long-term Care Choices Act. With the bill I am re- introducing today with Senator Kerry, I hope to set us on the path to completing the work we started in 2005 and continued in 2008. Making our long-term care system more efficient is a critical goal as we consider the future of health care. There are more than 35 million Americans, roughly 12 percent of the U.S. population, over the age of 65. This number is expected to increase dramatically over the next few decades as the baby boomers age and life expectancy increases. According to the U.S. Administration on Aging, by the year 2030, there will be more than 70 million elderly persons in the United States. As the U.S. population ages, more and more Americans will require long- term care services. The need for long-term care will also be affected by the number of individuals under the age of 65 who may require a lifetime of care. Currently, almost half of all Americans who need long-term care services are individuals with disabilities under the age of 65. This number includes over 5 million working-age adults and approximately 400,000 children. Long-term care for elderly and disabled individuals, including care at home and in nursing homes, represents almost 40 percent of Medicaid expenditures. Contrary to general assumptions, it is Medicaid, not Medicare that pays for the largest portion of long-term care for the elderly. Over 65 percent of Medicaid long-term care expenditures support elderly and disabled individuals in nursing facilities and institutions. Although most people who need long-term care prefer to remain at home, Medicaid spending for long-term care remains heavily weighted toward institutional care. Section 6086 of the Deficit Reduction Act of 2005, DRA, P.L. 109-171, was based on the Improving Long-term Care Choices Act. The DRA provision authorized a new optional benefit under Medicaid that allows states to extend home and community-based services to Medicaid beneficiaries under the section 1915(i) Home and Community-Based Services State Option. Under this authority, states can offer Medicaid- covered home and community-based services under a state's Medicaid plan without obtaining a section 1915(c) home and community-based waiver. Eligibility for these section 1915(i) services may be extended only to Medicaid beneficiaries already enrolled in the program whose income does not exceed 150 percent of the Federal poverty level. To date, only one State, my own state of Iowa, has sought to take advantage of the provision authorized through the DRA. While we had hoped far more states would participate, we know that the relatively low income cap, 150 percent, in the DRA provision creates an administrative complexity that has not made the option appealing for states. The bill we are re-introducing today mirrors the one we introduced in 2008 during the 110th Congress. In this bill, the income eligibility standard would be raised for access to covered services under section 1915(i) to persons who qualify for Medicaid because their income does not exceed a specified level established by the state up to 300 percent of the maximum Supplemental Security Income, SSI, payment applicable to a person living at home. This will significantly increase the number of people eligible for these services. States will be able to align their institutional and home and community-based care income eligibility levels. The bill would also establish two new optional eligibility pathways into Medicaid. These groups would be eligible for section 1915(i) home and community-based services as well as services offered under a state's broader Medicaid program. Under this bill, states with an approved 1915(k) state plan amendment would have the option to extend Medicaid eligibility to individuals: who are not otherwise eligible for medical assistance; whose income does not exceed 300 percent of the supplemental security income benefit rate; and who would satisfy state- established needs-based criteria based upon a state's determination that the provision of home and community-based services would reasonably be expected to prevent, delay, or decrease the need for institutionalized care. Under this new eligibility pathway, states could choose to either limit Medicaid benefits to those home and community-based services offered under section 1915(k) or allow eligibles to access services available under a state's broader Medicaid program in addition to the 1915(k) benefits. These changes will give the states the option of exploring the use of an interventional use of home and community-based services. If states have the flexibility to provide the benefit as contemplated in the bill, they can try to delay the need for institutional care and keep people in their homes longer. As the number of Americans reaching retirement age grows proportionally larger, ultimately the number of Americans needing more extensive care will grow. Many of these Americans will look to Medicaid for assistance. States need more tools to provide numerous options to people in need so that they can stay in their own homes as long as possible. The cost of providing long-term care in an institutional setting is far more expensive care than providing care in the home. States will benefit from having options before them that allow them to keep people appropriately in home settings longer. The more States learn how to use those tools, the more States and ultimately the Federal taxpayer will benefit from reduced costs for institutional care. I am also pleased that this bill will include key provisions from S. 2337, the Long-Term Care Affordability and Security Act of 2007. The bill includes important tax provisions that I introduced in previous Congresses as well, the Improving Long-term Care Choices Act of 2005, introduced in the 109th Congress. Research shows that the elderly population will nearly double by 2030. By 2050, the population of those aged 85 and older will have grown by more than 300 percent. Research also shows that the average age at which individuals need long-term care services, such as home health care or a private room at a nursing home, is 75. Currently, the average annual cost for a private room at a nursing home is more than $75,000. This cost is expected to be in excess of $140,000 by 2030. Based on these facts, we can see that our nation needs to prepare its citizens for the challenges they may face in old-age. One way to prepare for these challenges is by encouraging more Americans to obtain long-term care insurance coverage. To date, only 10 percent of seniors have long-term care insurance policies, and only 7 percent of all private-sector employees are offered long-term care insurance as a voluntary benefit. Under current law, employees may pay for certain health-related benefits, which may include health insurance premiums, co-pays, and disability or life insurance, on a pre-tax basis under cafeteria plans and flexible spending arrangements, FSAs. Essentially, an employee may elect to reduce his or her annual salary to pay for these benefits, and the employee doesn't pay taxes on the amounts used to pay these costs. Employees, however, are explicitly prohibited from paying for the cost of long-term care insurance coverage tax-free. Our bill would allow employers, for the first time, to offer qualified long-term care insurance to employees under FSAs and cafeteria plans. This means employees would be permitted to pay for qualified long-term care insurance premiums on a tax-free basis. This would make it easier for employees to purchase long-term care insurance, which many find unaffordable. This should also encourage younger individuals to purchase long-term care insurance. The younger the person is at the time the long-care insurance contract is purchased, the lower the insurance premium. Our bill also allows an individual taxpayer to deduct the cost of their long-term care insurance policy. In other words, the individual can reduce their gross income by the premiums that they pay for a long- term care policy, and therefore, pay less in taxes. This tax benefit for long-term care insurance should encourage more individuals to purchase these policies. It certainly makes a policy more affordable, especially for younger individuals. This would allow a middle-aged taxpayer to start planning for the future now. Finally a provision that is included in our bill that I am really pleased with is one that provides a tax credit to long-term caregivers. Long-term caregivers could include the taxpayer him- or herself. Senator Kerry and I recognize that these taxpayers--who have long-term care needs, yet are taking care of themselves--should be provided extra assistance. Also, taxpayers taking care of a family member with long- term care needs would also be eligible for the tax credit. These taxpayers should be given a helping hand. As our population continues to age, the least that we can do is provide a tax benefit for these struggling individuals.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to join my colleague Senator Kerry today to re-introduce the Empowered at Home Act for the 111th Congress. This bill is a continuation of efforts that I undertook in 2005 and again in 2008 to improve access to home and community based services for those needing long-term care. This is an important piece of legislation that continues our efforts to make cost-effective home and community based care options more available to those who need it. In 2005, I introduced the Improving Long-term Care Choices Act with Senator Bayh. That legislation set forth a series of proposals aimed at improving the accessibility of long-term care insurance and promoting awareness about the protection that long-term care insurance can offer. It also sought to broaden the availability of the types of long-term care services such as home and community-based care, which many people prefer to institutional care. The year 2005 ended up being a very important year for health policy as it relates to Americans who need extensive care. In the Deficit Reduction Act of 2005, Congress passed into law the Family Opportunity Act, the Money Follows the Person initiative, and many critical pieces of the Improving Long-term Care Choices Act. With the bill I am re- introducing today with Senator Kerry, I hope to set us on the path to completing the work we started in 2005 and continued in 2008. Making our long-term care system more efficient is a critical goal as we consider the future of health care. There are more than 35 million Americans, roughly 12 percent of the U.S. population, over the age of 65. This number is expected to increase dramatically over the next few decades as the baby boomers age and life expectancy increases. According to the U.S. Administration on Aging, by the year 2030, there will be more than 70 million elderly persons in the United States. As the U.S. population ages, more and more Americans will require long- term care services. The need for long-term care will also be affected by the number of individuals under the age of 65 who may require a lifetime of care. Currently, almost half of all Americans who need long-term care services are individuals with disabilities under the age of 65. This number includes over 5 million working-age adults and approximately 400,000 children. Long-term care for elderly and disabled individuals, including care at home and in nursing homes, represents almost 40 percent of Medicaid expenditures. Contrary to general assumptions, it is Medicaid, not Medicare that pays for the largest portion of long-term care for the elderly. Over 65 percent of Medicaid long-term care expenditures support elderly and disabled individuals in nursing facilities and institutions. Although most people who need long-term care prefer to remain at home, Medicaid spending for long-term care remains heavily weighted toward institutional care. Section 6086 of the Deficit Reduction Act of 2005, DRA, P.L. 109-171, was based on the Improving Long-term Care Choices Act. The DRA provision authorized a new optional benefit under Medicaid that allows states to extend home and community-based services to Medicaid beneficiaries under the section 1915(i) Home and Community-Based Services State Option. Under this authority, states can offer Medicaid- covered home and community-based services under a state's Medicaid plan without obtaining a section 1915(c) home and community-based waiver. Eligibility for these section 1915(i) services may be extended only to Medicaid beneficiaries already enrolled in the program whose income does not exceed 150 percent of the Federal poverty level. To date, only one State, my own state of Iowa, has sought to take advantage of the provision authorized through the DRA. While we had hoped far more states would participate, we know that the relatively low income cap, 150 percent, in the DRA provision creates an administrative complexity that has not made the option appealing for states. The bill we are re-introducing today mirrors the one we introduced in 2008 during the 110th Congress. In this bill, the income eligibility standard would be raised for access to covered services under section 1915(i) to persons who qualify for Medicaid because their income does not exceed a specified level established by the state up to 300 percent of the maximum Supplemental Security Income, SSI, payment applicable to a person living at home. This will significantly increase the number of people eligible for these services. States will be able to align their institutional and home and community-based care income eligibility levels. The bill would also establish two new optional eligibility pathways into Medicaid. These groups would be eligible for section 1915(i) home and community-based services as well as services offered under a state's broader Medicaid program. Under this bill, states with an approved 1915(k) state plan amendment would have the option to extend Medicaid eligibility to individuals: who are not otherwise eligible for medical assistance; whose income does not exceed 300 percent of the supplemental security income benefit rate; and who would satisfy state- established needs-based criteria based upon a state's determination that the provision of home and community-based services would reasonably be expected to prevent, delay, or decrease the need for institutionalized care. Under this new eligibility pathway, states could choose to either limit Medicaid benefits to those home and community-based services offered under section 1915(k) or allow eligibles to access services available under a state's broader Medicaid program in addition to the 1915(k) benefits. These changes will give the states the option of exploring the use of an interventional use of home and community-based services. If states have the flexibility to provide the benefit as contemplated in the bill, they can try to delay the need for institutional care and keep people in their homes longer. As the number of Americans reaching retirement age grows proportionally larger, ultimately the number of Americans needing more extensive care will grow. Many of these Americans will look to Medicaid for assistance. States need more tools to provide numerous options to people in need so that they can stay in their own homes as long as possible. The cost of providing long-term care in an institutional setting is far more expensive care than providing care in the home. States will benefit from having options before them that allow them to keep people appropriately in home settings longer. The more States learn how to use those tools, the more States and ultimately the Federal taxpayer will benefit from reduced costs for institutional care. I am also pleased that this bill will include key provisions from S. 2337, the Long-Term Care Affordability and Security Act of 2007. The bill includes important tax provisions that I introduced in previous Congresses as well, the Improving Long-term Care Choices Act of 2005, introduced in the 109th Congress. Research shows that the elderly population will nearly double by 2030. By 2050, the population of those aged 85 and older will have grown by more than 300 percent. Research also shows that the average age at which individuals need long-term care services, such as home health care or a private room at a nursing home, is 75. Currently, the average annual cost for a private room at a nursing home is more than $75,000. This cost is expected to be in excess of $140,000 by 2030. Based on these facts, we can see that our nation needs to prepare its citizens for the challenges they may face in old-age. One way to prepare for these challenges is by encouraging more Americans to obtain long-term care insurance coverage. To date, only 10 percent of seniors have long-term care insurance policies, and only 7 percent of all private-sector employees are offered long-term care insurance as a voluntary benefit. Under current law, employees may pay for certain health-related benefits, which may include health insurance premiums, co-pays, and disability or life insurance, on a pre-tax basis under cafeteria plans and flexible spending arrangements, FSAs. Essentially, an employee may elect to reduce his or her annual salary to pay for these benefits, and the employee doesn't pay taxes on the amounts used to pay these costs. Employees, however, are explicitly prohibited from paying for the cost of long-term care insurance coverage tax-free. Our bill would allow employers, for the first time, to offer qualified long-term care insurance to employees under FSAs and cafeteria plans. This means employees would be permitted to pay for qualified long-term care insurance premiums on a tax-free basis. This would make it easier for employees to purchase long-term care insurance, which many find unaffordable. This should also encourage younger individuals to purchase long-term care insurance. The younger the person is at the time the long-care insurance contract is purchased, the lower the insurance premium. Our bill also allows an individual taxpayer to deduct the cost of their long-term care insurance policy. In other words, the individual can reduce their gross income by the premiums that they pay for a long- term care policy, and therefore, pay less in taxes. This tax benefit for long-term care insurance should encourage more individuals to purchase these policies. It certainly makes a policy more affordable, especially for younger individuals. This would allow a middle-aged taxpayer to start planning for the future now. Finally a provision that is included in our bill that I am really pleased with is one that provides a tax credit to long-term caregivers. Long-term caregivers could include the taxpayer him- or herself. Senator Kerry and I recognize that these taxpayers--who have long-term care needs, yet are taking care of themselves--should be provided extra assistance. Also, taxpayers taking care of a family member with long- term care needs would also be eligible for the tax credit. These taxpayers should be given a helping hand. As our population continues to age, the least that we can do is provide a tax benefit for these struggling individuals.