Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, one of the arguments we have heard in support of the proposed $1 trillion stimulus bill is that our economy is performing below its potential. It is argued we have a gap between what we could produce and what we are producing. There is no question our economy is producing less than it could. It is quite obvious we are in a recession. But that does not mean a massive, temporary increase in Government spending can fill the gap and thus restore our economy to its full potential. In fact, the opposite is true. The proposed $1 trillion increase in Government spending will impede recovery and reduce future growth. The Congressional Budget Office--which I want to remind people listening, as well as my colleagues who tend to forget it--is a nonpartisan group of people who are professionals in making judgments about Government programs and what they cost. The Congressional Budget Office reported last week that the stimulus bill will create temporary jobs that cost as much as $300,000 apiece, and then it will reduce jobs permanently compared to no stimulus bill at all. Economists often talk about the economy in terms of a circular flow. The circle assumes a continuous flow between production and consumption. Businesses hire workers who produce goods and earn a salary in order to buy the goods they produce. According to this world view, whenever production declines, the solution is to increase demand and thereby boost production. In reality, the economy is not a circle. Production involves a series of steps in which raw materials are transformed into intermediate goods which are transformed into finished products. This process takes time as value is added at every step. That is what production is all about: adding steps to the process until you get to a finished product. For example, to make bread, we need to grow wheat. To grow wheat, we need to work the land. To work the land, we need tractors. To build tractors, we need plastic, steel, rubber--and you know all the other components. Nearly every step of this process relies on trained individuals with unique skills and unique knowledge, people who utilize tools and material designed to meet their very specialized needs. Given the complex structure of production, an increase in the demand for bread cannot instantaneously bring about an increase in the supply of all the things needed to produce more bread. Likewise, a reduction in the demand for bread cannot instantaneously convert all of the people's places and things previously used to produce bread into some other productive alternative. At a given point in time, our economy is comprised of a specific set of goods and services, each with its unique factors of supply and demand. When market conditions change--either because of fickle consumers or maybe foreign competition or maybe rising oil prices or maybe a stock market bubble or a housing bubble, which we all know about now--some of the goods and services that existed before the change are no longer suitable to meet the market conditions that exist after that change. Those are some conditions we are in right now. The unemployed workers and idle resources that exist today are largely the result of the decline in home prices and the associated turmoil in the financial markets. Most everyone in this body knows that. I think most people at the grassroots know there were problems with housing that brought about our credit crunch and the unemployment and recession we have now because our housing market was overleveraged, overpriced, and unsustainable, bringing about a great deal of unemployment caused by changes in the economy and adjustments to that economy going on and not going on in a very likeable way. The bursting of the housing bubble has not only affected homebuilders, realtors, and mortgage brokers, it has also spilled over into other areas of our economy. For example, falling housing prices have reduced the ability of many homeowners to finance nonhousing- related spending through the use of home equity loans. As workers become unemployed and resources idle, it is said that our economy has fallen below its potential, and we all know that. However, that does not mean a massive temporary increase in Government spending can fill that gap that we all realize exists and, hence, cannot necessarily restore our economy to its full potential because massive temporary increases in Government spending does not have that effect. Spending for the sake of spending, then, is not a solution. Every dollar the Government spends does, in fact, have a cost, regardless of whether the dollar comes from taxes, from borrowing or through the printing press. When the Government spends money, what does it do? It diverts workers and resources from alternative uses. We may not think about that, but that is the impact of the Government on the free market economy we have. During a recession, when workers are unemployed and resources are idle, it is argued that this diversion is a good thing. However, the stimulus bill is not restricted just to unemployed workers and just to idle resources. Moreover, the stimulus bill is supposedly temporary. Consider the implications of unrestricted, temporary Government spending. I wish to have my colleagues consider those. In one case, unemployed workers obtained temporary make-work jobs and, therefore, delay their search for meaningful, long-term employment. In the other case, employed workers are diverted from their current employment into temporary make-work jobs and thereby reduce the output of other goods and services. Thus, if you think about temporary make-work jobs, they add little or no value to the economy, while diverting employment from other jobs, probably other jobs that are very long term and productive. As a result, the money paid to these workers increases the demand for goods and services while reducing the supply. We know what results then: more inflation and less growth. The only way the Government can increase economic growth is by spending other people's money more efficiently than those individuals would. But instead of arguing the Government can spend money better than everyone else, the supporters of the stimulus bill are relying on the argument that Government can spend money faster than everyone else can. As President Obama said last week in Williamsburg, VA: So then you get the argument, ``Well, this is not a stimulus bill, this is a spending bill.'' What do you think stimulus is? That is the whole point. However, that is not the whole point. What matters is whether we are producing goods and services that people want to buy or whether the Government is paying people to engage in activities that have less value than the private sector alternatives. Let me be clear. Not all Government spending is wasteful and unnecessary. Government spending designed to meet a critical need can be beneficial, and we can list a lot of things the Government does that are beneficial but not necessarily the things that are in this stimulus bill or at least not all of them. We could go to building the interstate highway system, for example. It increased our ability to travel and transport goods across the Nation. However, the economic benefit is derived from the transportation services that result from the interstate highway system and not from the jobs that created the interstate highway system. If the goal of infrastructure spending is jobs, then why not give everyone a shovel or a spoon or even build roads by our hands. We could create millions of jobs. Now, no one has proposed that--at least not yet--but the point ought to be very clear. When Government spends money in order to create as many jobs as possible, as fast as possible, we end up with Government boondoggles instead of sound economic policy. As an aside, I would point out that repairing our existing infrastructure is a necessary expense; however, such activity causes increased traffic congestion and delays. The loss in productivity and output due to increased travel time and fuel consumption is an unavoidable cost of maintaining an existing benefit, which the interstate highway is or which all our highways and streets and roads are. There may be a cost-benefit analysis that shows we would benefit from spending more to build and maintain our infrastructure; however, this analysis would also show that cost is ongoing over a long period of time. I ask unanimous consent for 1 more minute.

Mr. GRASSLEY. We should not waste valuable resources on needless, temporary projects, nor should we fool ourselves into believing that truly useful projects can be funded on a temporary basis. Any worthwhile investment will involve an ongoing expense. Those who claim all the spending in the stimulus bill will be temporary are essentially admitting it will have no lasting value. Alternatively, those who claim it will have a long-term benefit are essentially admitting the spending will not be temporary. Clearly, both these claims cannot be true. Contrary to what some people might have us believe, a massive increase in Government spending for the purposes of creating temporary make-work jobs is not a sound economic recovery plan. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I have two or three items of this legislation I want to discuss with my colleagues, some items I hope can still be worked into the final package. The first deals with the idea that President Obama put forth in his campaign about the zero capital gains. If you look at what is possibly going to be passing this Senate, you find that this bill contains only about $21 billion in net tax relief for businesses, and that is for the purpose of encouraging investment because investment creates jobs and these are long-term jobs. I don't find any fault with the business incentives that are in here, but $21 billion, for the most part--it is tax relief going to just big business. That has to be a result of the $19 billion dollar net operating loss carryback provisions which are in this bill, mostly benefitting large corporations. Well, how much tax relief for small business is in this $827 billion bill? Not much. I think it is a pretty puny amount. So I stand to encourage support of a proposal by President Obama to eliminate capital gains on sale of stock in small business and startup corporations. Under present law, under section 1202 of the Internal Revenue Code, 50 percent of the gains realized on the sale or exchange of certain small business stocks held for more than 5 years is excludable from gross income. That 5 years is very important because we want to look at long-term investment, not the just the get in quick and get out quick that has created a lot of economic problems. Now, beyond that, the remaining gain is taxed at the rate of 28 percent. So excluding half the gain from tax, and taking the other half at 28 percent, you end up at 14 percent. However, regular capital gains are currently taxed at 15 percent, so you can see section 1202, which was intended to encourage investment in small business corporations is not very effective. A tax rate of 14 percent, pretty simply, is not much better than 15 percent and, consequently, does not do much good. It is actually even a worse situation in that that portion of excluded gain is subject to the alternative minimum income tax. Therefore, this bill should go further than it does. Now, obviously, the underlying piece of legislation tries to address the small business investment but not the way President Obama suggested. So I am back to where President Obama was. This bill should be amended, and I have an amendment that would do three different things: First, it would increase the section 1202 exclusion to 100 percent of the gain realized upon the sale of qualifying small business stock, instead of the 75-percent exclusion included in the underlying bill; second, it would make the section 1202 gain not subject to the alternative minimum tax; and, third, it would increase from $50 million to $75 million the amount of aggregate gross asset the corporation could have and still qualify as a qualified small business corporation. Again, this amendment would implement President Obama's campaign proposal to eliminate capital gains tax on sale of stocks in small businesses and startups. Would you please note the President's campaign proposal was not merely to bring down the capital gains rate on small business to 7 percent, as the stimulus bill now written would provide but, very importantly, eliminate capital gains for the sale of stock of small businesses and startup corporations. If you wonder why the President's as well as my emphasis upon small business investment is--you know it better than I do, or as well as I do--70 to 80 percent of the new jobs are created in new business and you realize, in 2007, I believe it was, maybe it was 2006, whenever we had the latest figures, the only net gain in employment in the United States was in small business, while there was probably a downturn in big business at that time. So we ought to move forward. What I would like to have you note is the main policy justification for preferential tax treatment for capital gains is because of the risk inherent in many investments in capital assets that are taxed at ordinary rates would discourage risk- taking, because ordinary tax treatment would take a large share of the upside but would not help the taxpayer in the case of the investment not working out, on the downside. To correct this imbalance in our law, capital gains are given preferential treatment. I explained to you the importance of giving to it small business because they are the employment machine of our free market economy. This argument concerning risk-taking is especially strong regarding investment in originally issued stock from small corporations such as we are discussing in this legislation, in a little smaller way. With small corporations especially, it is still in startup mode and still raising new capital. The risk of failure is especially high. That is even more so, given the fragile nature of today's economy, which leads me then to my next two points: I have spoken about the importance of the stimulus bill being targeted and temporary; that is, if the word ``stimulus'' is to have any real meaning, the bill should be targeted and temporary. The question is, Is this provision--I suppose you could raise it about the provision in the bill, which is a smaller version of what President Obama recommended. Is this provision concerning elimination of capital gains tax on the sale of small business corporation stock targeted and temporary? Well, you know the answer is obviously yes on targeted. The provision is targeted with where relief is needed. One thing all of us heard over and over again is capital markets are one, frozen; two, people are not loaning money; and, three, they are not investing money in anything very risky, but rather than simply putting their money in Treasury bills or cash, very safe, risk-free places. So small businesses are starved for the capital needed to invest, and they need to invest in new capital, new equipment, and new employees. What will it take to encourage people to invest new equity in small corporations? Well, I believe this provision will help by giving favorable tax treatment for such investment. Note that the favorable tax treatment described in this amendment will not be extended to the purchase of small business corporate stock on the secondary market. If an individual buys already-issued small business corporate stock from another individual, this does not get the new capital to the small business itself; rather, the favorable tax treatment described in this bill would only be for originally issued stock of corporations issued after the date of enactment of this legislation. Why only for originally issued stock? Because that is the stock issued for direct capital injections from the investor into the corporation. By targeting this amendment in such originally issued stock, this will result in new capital investment in small business corporations where jobs are created in America. Now, targeted, yes; temporary, yes. So the provision must be temporary under this legislation. This provision would only apply to the purchase of originally issued stock after the date of enactment, 2009 through January 1 of 2011. Of course, all of us hope our current economic problems will have eased by that date, 2011. Thus, to make sure this provision is targeted during the time it is needed most, it is targeted for the remainder of this year and next year. According to the staff of the Joint Committee on Taxation, this provision has a 10-year cost of $1.5 billion. You can surely see that with the job creation machine small business brings about, this is a good investment. Please do not count on me to say this again, but I have the audacity to hope that this proposal will attract large bipartisan support, this proposal of the President is actually change we can believe in. I encourage support for that provision. Going to another issue, a large portion of this bill is devoted to health care, so also I will bring up that. In the Senate, we are giving States more money for Medicaid; giving subsidies so people who lost their jobs can pay for health insurance and throw billions of dollars at pet projects related to health care. Over in the House, they are going even further. They are expanding who is eligible for Medicaid, letting people stay on their employer's health plan for up to 35 years after they are fired and ultimately have the taxpayers foot that part of the bill. Last week the Wall Street Journal summed up these reforms with an op- ed entitled, ``Democratic Stealth Care.'' Under the title, the article quotes: With the Nation preoccupied by financial crisis, Democrats have been quietly working to nationalize health care. Now, some may think this is just a conspiracy theory, but between the Children's Health Insurance Program last week and now the stimulus this week, I begin to wonder. The Government-run Children's Health Insurance Program alone is going to cause 2.4 million people to drop out of the private market, the private market where people already have health insurance and where they are already paying for it, and join the taxpayer-funded program and that probably the additional kids who need to be in that program will not be in it. Now this is a big victory for the people who want the Government to change over our health care system. But they are not going to stop there. Some say Medicaid spending in this stimulus bill is meant to help States get people already enrolled. Well, who is going to argue with that? But I think you have to look at it beyond that. If you just wanted to shore up existing Medicaid programs, why does this bill provide billions more than what the Congressional Budget Office says States will actually need to meet that responsibility? When we marked up this bill in the Finance Committee, I said: Anything in this stimulus package should meet the three Ts test that we hear: timely, targeted, and temporary. But that also applies to these health provisions. Well, I do not see how giving States billions more for Medicaid dollars than they need so they can add more people to the program we already cannot afford meets any of these tests. I am not saying that about people who are unemployed and would otherwise qualify, I am talking about beyond that. It also is not very targeted to give the same CEOs who got $18 billion in bonuses last week a Government handout to buy health insurance. But under this bill, you can get a subsidy to pay for health insurance regardless of how much you make. The budget deficit for this year is already targeted and projected to be over $1 trillion. After the stimulus bill and other legislation, the deficit is going to grow to over $2 trillion. It is critical that we must be fiscally responsible with these taxpayers' dollars. I do not see how giving a millionaire, who maybe got fired from a corporation, money to buy insurance is fiscally responsible. But this legislation allows that because there is not an income cap for getting on Medicaid. The Wall Street Journal article I mentioned goes on to say: ``In this new health care nirvana, even the rich are welcome.'' It also says that: If you add it all up, ``the Democrats may move ten million more people under the Federal health umbrella in just 4 weeks.'' This certainly sounds, of course, like a big step toward too much Government-run health care for this Senator. I thought Republicans and Democrats were going to work together on our reform of our health care system. Well, I must have missed some memo along that line because it looks like this bill is taking steps a lot further with things that are normally in a health care reform package. Quite frankly, we do have a bipartisan process going on that I am a part of. I am glad to be a part of it. But some of those moves make me somewhat cynical. On another point, something in this stimulus package appropriates money for the National Science Foundation. I wish to speak about an issue there. Not that they should not have the money, but we have to change things at the National Science Foundation if that money is going to be spent wisely. Last week, I sent a letter to the National Science Foundation asking about the inspector general's semiannual report. The IG found extensive use of National Science Foundation computers to view sexually explicit material. A particularly severe incident described in the semiannual report involved a manager at the National Science Foundation spending, would you believe it, up to 20 percent of his official worktime viewing pornography, over a 2-year period of time, at a cost to taxpayers, us, just for his salary of $58,000. Now, he is no longer there. But there is a culture hit there that encourages this sort of thing. The IG estimated that, obviously, that is a waste of taxpayer money and spoke about that. As my investigators began digging around the National Science Foundation, they found that pornography is not necessarily the main problem. It is only a sign that the National Science Foundation has not been subjected to too much scrutiny over the years. We are going to put a damper on that misuse of taxpayer money, because I have some very powerful cosponsors of my amendments in Senator Mikulski and Senator Shelby, who are the chair and ranking member of the Appropriations subcommittee that oversees the National Science Foundation budget. They are also involved with the extra money for the National Science Foundation in this stimulus bill. To make sure the National Science Foundation gets a very clear message that Congress is serious about ensuring accountability of taxpayers' money, this amendment freezes $3 million of the additional billions of dollars going to NSF for a short period in the money that is going as operating funds directly to the Office of Director of the National Science Foundation. This money will become available when the National Science Foundation Director does what he is supposed to be doing. If he had been doing that, we wouldn't have these problems we are trying to fix. The tasks are, No. 1, the National Science Foundation Director needs to submit a report to Congress detailing the steps the National Science Foundation has taken to remove pornography from the foundation computers. By the way, this report is only based upon one server. I don't know how many servers they have, but they have, obviously, more than one that needs to be gone through. The inspector general found problems after searching that one and believes there is a more extensive problem. No. 2, the National Science Foundation Director submits a report to Congress detailing an appropriate response of the National Science Foundation IG semiannual report where all this information came from. This will include actions taken to stop people watching pornography while on the job at the National Science Foundation. No. 3, the National Science Board needs to hire an independent general counsel. The board is supposed to provide oversight over the National Science Foundation, but they have been relying on the National Science Foundation's own attorney for legal advice. This is pretty silly and raises concerns about the independence of the National Science Foundation's own attorney. So we are going to want them to have somebody more independent. I am certain this will not fix all of the problems at NSF, but with the help of Senators Mikulski and Shelby, we are on a road to making this organization more accountable to the taxpayers. We will have a lot more work to do at the agency, but I am happy that Senator Mikulski is in position there. In the $800 billion bill we have before us, it calls for more congressional oversight. I know most everybody knows that. But I want to point out some problems we have to take care of to make sure all Members of Congress are able to do congressional oversight with an amendment simply ensuring that we in Congress can keep a watchful eye on the extraordinary amounts of money being spent in the stimulus bill over the next 2 years. We need this oversight. Over the years, under both Republican and Democratic administrations, I have taken on the responsibility of asking a lot of the tough questions of the executive branch, regardless of whether the President was of my party or the other. Day in and day out, many Members of Congress--this one included--write letters asking questions about how laws we pass are being carried out. We ask about allegations of waste, fraud, and abuse that come to our offices on a regular basis. In order to get to the bottom of these allegations and truly understand how executive branches under both Republicans and Democrats are conducting the people's business, it is not enough to rely upon assurances from bureaucrats that there is nothing to worry about. We need access to documents, records generated by the agencies that we are trying to oversee. We need to access those records in order to act as a constitutional check on the executive branch to verify that what they are telling us is more than just spin. Documents and records created at taxpayer expense ought to be available to their elected representatives in Congress. It is that simple. It is fundamental to our constitutional system of checks and balances. Too often, however, unelected bureaucrats, sometimes political appointees, misinterpret the law and deny congressional requests for information without any legitimate legal reason for doing so. My amendment would take away those bogus legal arguments by making the will of this body crystal clear. If an agency gets money under this bill and if the agency gets a request for records from the chair or ranking member of congressional committees, the agency must provide those records. A vote for this amendment is a vote to make sure that Congress has the information it needs to do its duty under the Constitution. We cannot act as a check and a balance if we allow ourselves to be kept in the dark about what is going on in the executive branch, particularly when we are appropriating almost $800 billion over the next 2 years as a stimulus. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, many folks on the other side of the aisle claim that spending is better stimulus than tax relief for working men and women. This is certainly not a unanimous opinion among economists, so I would share some recent economic research that analyzes data--not building models--to answer the question of whether spending or tax relief is more effective for economic stimulus. Christina Romer, who is the Obama administration's Chair of the Council of Economic Advisers, and David Romer, from the University of California at Berkeley, find that $1 of tax relief raises the gross domestic product by about $3. Robert Hall, from Stanford, and Susan Woodward, who is chair of Sand Hill Econometrics, find that $1 of Government spending raises gross domestic product by about $1. Andrew Mountford, from the University of London, and Harold Uhlig, from the University of Chicago, conclude that deficit-financed tax relief works better than either deficit-financed or balanced-budget Government spending increases to improve the gross domestic product. These experts calculate that each $1 of tax relief amounts to $5 of additional gross domestic product 5 years after the shock of recession. Olivier Blanchard, who is the chief economist at the IMF, and Roberto Perotti, from IGIER University, assert that a combination of both tax increases and Government spending increases has a strong negative impact on private investment spending. In addition to the opinions of these economic experts, a look back at the picture that developed following the 2003 tax relief is also very instructive. After the 2001 recession ended, both the economy and labor markets continued to sputter. But a significant turnaround occurred soon after the passage of the 2003 tax relief bill. Following nine straight quarters of decline, business investment grew at an annual rate of 6.6 percent between the enactment of the 2003 tax bill and the start of the current recession. Similarly, a period of job growth following the 2003 tax relief was the longest streak of monthly job growth on record. We have spent a lot of time in this body discussing the balance sheets of financial institutions. The balance sheets of families and individuals throughout the country have been suffering significantly as well. From the third quarter of 2007 to the third quarter of 2008, the net worth of households and nonprofit organizations has dropped by $7.1 trillion, or 8.9 percent. Families and individuals who receive tax reductions will likely save some of their tax cut to pay down household debt. Some erroneously suggest that this is bad for the economy. Quite to the contrary. When people pay down their debt, their credit improves. Improved credit leads to freeing up bank lending. Reduced debt for families and individuals also increases the amount of long-term income available for spending. So we should not look at households improving their balance sheets as a bad thing economically. Finally, evidence suggests that permanent tax reductions are more likely to be spent by consumers than one-time stimulus checks or credits. Our focus should be on permanent tax relief to get the engine of our economy running. Our economy is like the Titanic, and while it continues to go down, the only proposal on the other side is to spend over $700 billion to buy new deck chairs. Mr. President, I yield the floor, and I reserve the remainder of the time.

Mr. GRASSLEY. Mr. President, I am going to tell the Senator from New Jersey that I agree with him totally on part of the money that is in this $87 billion. He is absolutely right on his argument for $10.8 billion of the money that is in there. That is the money we have had the CBO say is going to be spent for Medicaid for the unemployed. But what about the other $75 billion or $76 billion? We don't apologize for it somehow. It is a slush fund to States. There is no rationale for that part of the money to go out under the same circumstances as the result of the recession--the fact that people are going to need more medical care. I ask him to consider that the Senator is right for a small part of this $87 billion--$10.8 billion of it--but wrong about the remaining amount of it. So that is why I have my amendment as a matter of fairness for money being distributed to the States, unrelated to unemployment, or medical care that is needed because of unemployment. I want to spend my few minutes telling you what States benefit: Alabama, $41 million; Alaska, $45 million; Arizona, $58 million; Arkansas, $99 million; District of Columbia, $43 million; Georgia, $31 million; Idaho, $16 million; Indiana, $29 million; Iowa, $128 million; Kansas, $61 million; Kentucky, $92 million; Louisiana, $158 million; Maine, $23 million; Maryland, $1 million; Mississippi, $102 million; Missouri, $51 million; Montana, $25 million; Nebraska, $52 million; New Hampshire, $22 million; New Mexico, $86 million; North Carolina, $54 million; North Dakota, $25 million; Ohio, $78 million; Oklahoma, $86 million; Oregon, $4 million; South Carolina, $47 million; South Dakota, $24 million; Tennessee, $32 million; Texas, $547 million; Utah, $59 million; Vermont, $2 million; West Virginia, $86 million; Wisconsin, $55 million; Wyoming, $13 million. I think what we are talking about here is a matter of fairness for those States--for the portion of the FMAP that doesn't need to be needed except for medical care for the unemployed. The part going to States under the FMAP formula needs a more fair distribution. I will yield back my time.

Mr. GRASSLEY. Mr. President, I do not want to take more than 5 minutes, so let me know when 4 minutes is up. I want to talk about an amendment I am going to put in. But, first, I think I ought to remind the public at large that here we are on a Friday, there are lots of amendments being adopted. We have been told cordially by the majority that they will not fill the tree. But if you are in the situation where you have to have unanimous consent to get an amendment up, it is tantamount to filling the tree. So I hope this deliberative body is going to do what it should be doing. I hope we do not see a bunch of quorum calls all day where the public back at home is looking at a blank screen that says ``quorum call'' when the Senate could be working on dozens of amendments we have been waiting to bring up for a long period of time, because that is a waste of the taxpayers' money. If it is extremely important to get on with this legislation, and it is extremely important to get on with this legislation, we should not be having anybody talk about stonewalling on any political party's part, when we are ready to do business, waiting to do business, have been waiting to do business, for a long time. We ought to be able to offer amendments. I want to speak shortly then about an amendment No. 372. It is not the most important amendment I have been waiting to bring up, but I have spoken about that other amendment before. I want to bring up my amendment No. 297. This one is 372. It merely says that any agency that receives funds under this bill must comply with congressional requests for records. That means our ability as individual Senators to get records for money that is going to be spent by Departments under this bill. It is an effort to ensure that the vision of transparency that President Obama expressed in his Inaugural Address to the Nation is fulfilled. This is what the President said: Those of us who manage the public's dollars will be held to account to spend wisely, reform bad habits, and do our business in the light of the day, because only then can we restore the vital trust between people and their government. I agree. Of course, unfortunately, when my colleagues and I in Congress ask for documents from the executive branch, we are usually stonewalled with bureaucratic excuses and legalese regarding statutes that were never intended to prevent Congress from gathering information. This is not a criticism of the Obama administration, this is criticism of previous administrations, Republican and Democratic. I want to make sure it does not happen under this new administration. I do not think it will, but this legislation will make that certain. Sometimes even statutes with explicit exceptions allowing information to be given to Congress are used as excuses to keep the people's business secret. So to ensure that Members of Congress can gather information, this amendment would simply impose an obligation on any agency that receives funds to comply with a request from a chairman or ranking member of a committee or subcommittee of Congress. If you support open Government, vigorous congressional oversight, as President Obama says he does, then you should support this amendment. I yield the floor.

Mr. GRASSLEY. Then I will not yield back my time.

Mr. GRASSLEY. Mr. President, 5 minutes for me.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY. Mr. President, I would just as soon leave it at 5 minutes because we have all of these other colleagues. We just spent an hour on one amendment, and we have plenty of people on both sides of the aisle. I think we ought to be tolerant toward our colleagues and make this debate very short. If you want me to do it in 4 minutes, I will do it in 4 minutes.

Mr. GRASSLEY. Mr. President, amendment No. 297 is an FMAP amendment. This amendment is about $2.3 billion of the $87 billion that is in this bill for Medicare. There will be no less money spent in Medicare overall. It will still be $87 billion. We are talking about the $87 billion and the formula as to how it is divided. Let me ask my colleagues a question: If Congress is going to give States $87 billion in Medicaid funds, shouldn't the formula be fair? The exceedingly complex formula in this bill is simply not fair to certain States. It is not fair to States with low unemployment rates or States that have not seen the recession hit full force yet, and for those States where the recession hasn't hit, it is just around the corner. For instance, in the Midwest agricultural areas, we tend to be countercyclical. We tend to be lagging when we hit recession. Yet we will be coming along into recession when the other parts of the country are recovering. Now, those States I just mentioned that have low unemployment, as an example, will see less of the $87 billion than other States. My amendment gives each State a flat 9.5-percent increase in their FMAP payments, and the States can choose which 9 consecutive quarters in any 11-quarter period best fits the economic needs of their State. That is a better, more fair way to spend the $87 billion. This amendment is budget neutral. According to data provided by the Government Accountability Office, my amendment redistributes about $2.3 billion of FMAP spending in the bill. Almost 75 percent of that redistribution comes from four States: California, Illinois, Massachusetts, and New York. With a redistribution, nearly 75 percent of which comes from four States, 34 States will receive more Medicaid FMAP funds under this amendment. If Congress is going to spend $87 billion on States through Medicaid FMAP, I believe we have to do it more fairly. I wish to quickly run through the States that will do better so you can decide if you want your State to have more money or less money. More money will go to Alabama, Alaska, Arizona, Arkansas, the District of Columbia, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, West Virginia, Wisconsin, and Wyoming. Before I yield the floor and reserve my time, under the unanimous consent agreement that has been entered into, I call up my amendment No. 297 and make it pending.

Mr. GRASSLEY. I yield, Mr. President.

Mr. GRASSLEY. Yes, from the figures I have, the Senator is absolutely right. That number is that amount.

Mr. GRASSLEY. Mr. President, GAO's argument about targeting applies to decreases in Medicaid due to the recession. This isn't about targeting. This is seven times more than is needed for Medicaid. I will agree to targeting for that $10.8 billion. The rest should be more fairly targeted. This amendment should be a simple vote. The complex funding formula for spending the $87 billion in Medicare in this bill is not fair. It should be a flat increase to all States. That is what my amendment does. Thirty-four States do better with the formula under my amendment. So you can vote to give your State its fair share or, if you vote against it, you are voting not to give them that fair share. I yield the floor. As long as the other side's time is used up, I yield back the remainder of my time.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, this amendment is a very simple vote. The complex funding formula for spending the $87 billion in Medicare in this bill is not fair. It should be a flat increase to all States. That is the way we have done it in the past, and that is what my amendment does now. Thirty-four States do better with the formula under my amendment. So this is a vote to give your State its fair share or not, as you choose. I believe there are 65 Members in the Senate here today whose States do better under my amendment, and if you do not know how your State does--although I put it in the Record this afternoon--come to me before you cast your vote and I will show you.

Mr. GRASSLEY. Madam President, I ask for the yeas and nays.

Mr. GRASSLEY. Madam President, the amendment No. 274 would reduce the efficiency credit by $1.8 billion--that is almost half the tax benefit for these energy efficient home improvements. The principal defect of this change will be felt in the emerging high-energy efficiency market. As anyone with conventional windows in this cold winter knows, inefficient windows suck a lot of heat out of a home. Moreover, the tax benefit shifts, in part, to electric plug-in motorcycles, three wheelers, and golf carts. Does this make sense? However, there are a couple provisions I am glad to see are included. For instance, I am glad to see that the depreciation schedule for smart meters was cut from 10 to 5 years. Also, I am glad to see that businesses that make real plug-in electric cars--I don't support it for those that make golf carts, three wheelers, or motorcycles--can expense manufacturing facilities that make these cars.

Mr. GRASSLEY. Mr. President, I voted for Bunning amendment No. 531 because the $3,000 of capital losses that people can use to offset their ordinary income hasn't been indexed for inflation, and has been at that $3,000 level since 1976. The $15,000 level is only $4,500 higher than the level it would be--$10,500--if it had been indexed for inflation.

Mr. GRASSLEY

Mr. GRASSLEY. I am here to speak in favor of the Sanders amendment. I would like to speak right after him for a couple minutes.

Mr. GRASSLEY. Mr. President, I support the amendment that has just been described by the Senator from Vermont prohibiting banks which get TARP funds from hiring H-1B guest workers for this year. I support the amendment because these companies should be hiring American workers during these tough economic times, particularly when there are so many qualified Americans on the streets looking for jobs. The American taxpayers who will be footing the bill on the stimulus money would agree with me. Banks that are getting taxpayer funds need to hire qualified Americans first before hiring foreign guest workers. Many banks participate in the H-1B visa program. Over 6 years, the banking industry has requested visas for over 21,000 foreign guest workers. The purpose of the H-1B visa program is to assist companies in their employment needs where there is not a sufficient American workforce to meet their technology and expertise requirements. I am very OK with an H-1B program if American companies cannot find enough qualified Americans to do certain jobs that need that particular expertise. Then we need to help those companies with those resources. However, H-1B and other worker visa programs were never intended to replace qualified American workers. We do not want to put Americans at a disadvantage. And now that many qualified, hard-working American bank workers are unemployed, banks that want to hire workers will not have a hard time finding what they need from the American workforce. I am concerned companies going through layoffs that currently employ H-1B workers will be retaining those guest workers rather than similarly qualified American employees. We hear announcements every day about companies cutting large numbers of jobs. Yet many of these companies continue to advocate for H-1B visas and apply for them. I am pretty sure these work visa programs were never intended to allow companies going through layoffs to retain foreign guest workers rather than similarly qualified American workers. I think in implementing layoff plans, companies should ensure that American workers have priority in keeping their jobs over foreign guest workers on visa programs. I recently sent a letter to Microsoft asking a series of questions about the makeup of their layoff plan and encouraging the company to ensure that Americans are given priority in job retention. Our immigration policy is not intended to harm the American workforce. I firmly believe companies going through layoffs that employ H-1B visas have a moral obligation to protect American workers by putting them first during these difficult economic times. So I plan on looking into this issue further and exploring whether legislation is necessary there. Again, I support the amendment Senator Sanders and I have put in. The bottom line is, employers should recruit qualified American workers first before hiring foreign guest workers. If banks are going to be getting TARP money from the American taxpayers, then they should be hiring American workers. I want to emphasize, once again, I am not against the H-1B program. I think when we do not have workers in this country, we need to keep it going, but it is how it operates. That is also why Senator----

Mr. GRASSLEY. After one sentence. That is why I also support Senator Durbin and I working together on a reform of the H-1B program. Mr. President, I will yield the floor for a question or whatever the Senator might want.

Mr. GRASSLEY. Mr. President, while we are debating this trillion dollar bill, we need to keep our eye on the ball. We have a preliminary study that I have referred to a couple times in previous debates by the Congressional Budget Office, which shows that jobs created by the economic stimulus legislation being debated in the Senate would cost the taxpayers between $100,000 and $300,000 apiece. These numbers should be contrasted to those under the January baseline of the Congressional Budget Office, in which there is no stimulus, that shows that the gross domestic product per worker is about $100,000. In other words, without the bill, the new analysis indicates that the cost of each stimulus job to be as much as three times more than jobs created without the stimulus bill. There has been a lot of talk about getting the most ``bang for the buck,'' but there is no talk about actually making sure it happens so that Americans get the help they need. Before Congress spends another trillion dollars, we ought to make sure we are getting our money's worth. I will reiterate a caution that I gave the other day. Before this bill passes the Senate, we ought to have the full analysis of the Congressional Budget Office that they said would take a few days to get done. We need to know what these jobs are going to cost so we get our money's worth. We are the caretakers of the taxpayers' dollars--tossing money at a program, when you figure that our gross domestic product would produce about $100,000 per worker--and we have in this bill these jobs costing up to $300,000 apiece. I yield the floor.

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

Mr. GRASSLEY. Mr. President, if Senator Ensign prevails on his amendment, I will seek to further amend his amendment. I would offer the Grassley amendment patch amendment. The amendment would be in identical form to my amendment adopted in the Finance Committee markup.

Mr. GRASSLEY. I want to be right after the end of the list you just gave.