Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. The American people rightly wonder why these popular expiring tax relief provisions can't be passed by the Senate on their merits alone. Why can't we get there and ``get 'er done''? Part of the problem is that the committee and floor process have been disregarded by the Senate Democratic leadership. The debate and exchange of ideas, which is the essence of the Senate, has been bottled up. The Senate process is being truncated. For the first time in this decade, since 2001, the Finance Committee members have not been allowed to exercise their right in committee markup with respect to these issues. With one exception--the 2002 stimulus bill--for the first time in this decade, Senate Members have not had the opportunity to debate and amend the extenders in a real Senate floor process. For the first time in this decade, Senators in the minority are being presented with a top-down deal, crafted in the dark corners of Democratic leaders' offices of the House and Senate. The irony of all of this is compelling. Almost 2 years ago today, we faced an attempt to end run the natural order of the committee and floor process by the bicameral Republican leadership of the House and Senate. I referred to it at that time as a wrongheaded effort that was doomed to fail--even when it came from my own party. It envisioned a unicameral tax writing committee that ignored the rights and privileges of Members of both parties. I used sharp words and directed them at my side's leadership in the House and Senate. I am sure some on my side thought I had gone a bit overboard in criticizing the Republican leadership at that time. Then the Health, Education, Labor and Pensions chairman, Senator Enzi, stood with me. Some of my friends on the Democratic side spoke up about the harm the leadership was doing to the rights of the Members of the Senate.

Mr. GRASSLEY. May I have 1 more minute?

Mr. GRASSLEY. Ironically, today we find the Democratic leadership attempting to do much the same thing. Like the failed trifecta jam to which I referred, today's jam will not work. It is part of a larger problem with the Senate because we are not going through the regular order at the committee and the floor level. Issues are building up, tempers are flaring, and, most importantly, nothing is getting done. The Senate is constipated. This legislative body needs a function, a laxative. Legislation needs to circulate through this body in the usual form like food through your body. We need real debate, real amendments, and we need an informal bipartisan process that leads to an agreement that can pass the House and the Senate. I have my pencil sharpened, my notepad out. I am ready to engage in our usual bipartisan process with my Democratic friend, Chairman Baucus. I am hopeful that the Democratic leadership will relieve the constipation on the tax extenders legislation. The Finance Committee and the Senate need to function just like our intestinal system functions. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, we finished a fourth vote on the tax extenders bill. As the great baseball philosopher, Yogi Berra, said: ``It's deja vu all over again.'' Here we are getting ready to vote and just finishing a vote for the fourth time on the motion to proceed to the House tax extenders bill. As I said, it is deja vu all over again and yet again. The vote, I believe, was 51 to 43, so very short of what it takes to get business done in the Senate, which is to work a bipartisan agreement so we have more than 60 votes to get business done. This is a no-brainer, in this particular instance, to get an extenders bill and the AMT. The futility of this exercise, which is motivated purely by partisan politics, makes this vote as silly as a ``Three Stooges'' episode. Instead of wasting time on such a silly exercise, the Senate Democratic leadership should be working on negotiating a bipartisan deal with Senate Republicans that can be signed into law by the President. The American people do not want another futile vote on tax extenders. They want a bill that will be signed into law. That would provide the American people with the tax relief that is needed. The extenders vote we had has already failed before. Albert Einstein famously stated the definition of ``insanity'' is doing the same thing over and over and expecting different results. The Senate Democratic leadership has already done the same thing too many times and, of course, today sought to do it again. This is a waste of everyone's time. Everyone can see through the Democratic leadership's strategy for what it is: a partisan political exercise, designed solely to get 30- second sound bites for political ads. Let's stop this nonsense. Let's work out a bipartisan compromise on the tax extenders bill. Let's reach agreement in a form that can be signed into law by the President. The President made it very clear today that he is not willing to sign what we had before us a few minutes ago into law. Of course, what I am asking is that the Senate Republican leadership has been trying to urge the Senate majority to move in this direction. The Senate Republican leadership has made numerous offers to the Senate Democratic leadership to try to find a way to break the logjam on tax extenders. So far, our colleagues on the other side of the aisle have been unwilling to enter into a bipartisan agreement on a tax extenders bill that even attempts to address legitimate concerns of the minority party in this body. As the Senate Democratic leadership engages in pure partisan politics by bringing up the tax extenders bill for yet another vote, the chairman of the Democratic Senatorial Campaign Committee is probably grinning like a Cheshire cat, thinking of all the 30-second campaign ads they will be able to make. However, the people of New York are not grinning because they are not getting the benefit of any of these tax relief provisions. All the tax relief provisions that are very important to the American people, including even to the people of New York, are being held hostage as part of the political game of the Democratic Senate leadership having vote after vote on cloture to stop debate for whatever reason. Some of these important tax relief provisions are the alternative minimum tax patch, the deduction for the State and local sales tax, the deduction of tuition expenses, and the deduction for expenses of school teachers. How is anybody going to find fault with the fact that these provisions should have been done a long time ago? In fact, the AMT patch should have been done because, since the first of the year, taxpayers who have had to file quarterly tax payments have been violating the law if they haven't taken into consideration that there are 24 million American families right now hit by the alternative minimum tax. That figure would include 3.1 million New York families. The provision for the State and local sales tax would help almost 11 million families. Also, the deduction for expenses for tuition and fees would help over 4.6 million families. In addition, the deduction for expenses of school teachers would help 3.4 million Americans. These hard-working taxpayers are more important than a 30-second sound bite to be used in the next campaign because of political games that are being played. The bottom line is, when we have 24 million people being hit by AMT, 4.6 million people on the deduction of college expenses, and 3.4 million people hit by increased taxes because school teachers will not be able to deduct supplies from their income taxes, real Americans are being hurt while political games are being played, when everybody in this body knows the only way we get things done is in a bipartisan way. The biggest divide between Republicans and Democrats regarding tax extenders relates to the issue of offsets, also known as revenue raisers, or I think we ought to be more intellectually honest and call these tax increases. In other words, tax increases on Americans generally to provide the extension of some policy that has been on the books for decades. My party's position has been clear on this issue. We are perfectly willing to use offsets that make sense from a tax policy perspective to pay for new tax policy. However, tax relief provided by extending existing tax policy or expiring provisions, or somebody may call these sunset provisions, we do not feel they should have to be offset. We should not be raising taxes in order to pay for the extension of existing tax policy. One reason I care about this issue is that there is currently a bias in favor of using this as an excuse to bring in more money to increase the size of Government. The pay-as-you-go rules apply to expiring tax provisions which are not built into the revenue base. On the other hand, if you have sunset of appropriations, these are built into the spending baseline. Therefore, in order to extend expiring tax provisions, the pay-go rules require an offset, and that happens to be a big tax increase. Whereas, if you have extensions of expiring appropriations provisions--in other words, spending provisions--they do not need to be paid for by decreased spending in other areas because they are assumed in the spending baseline. Therefore, pay-as-you-go rules apply to the extension of expiring tax provisions, but in an intellectually, inconsistent way do not apply to the extension of expiring spending provisions. This inconsistent treatment makes no sense-- intellectually inconsistent; I say to the taxpayers of America, intellectually dishonest. It is biased to create ever larger Government. The money the American people earn, after all, is their money. We should only take the money from them that it truly takes to run the Government. We should not be using sunset tax provisions as an excuse to increase taxes, and that is all it is. In addition, the Democrats' desire to use permanent offsets to pay for an extension of temporary tax provisions is extremely problematic. It creates a situation where the permanent offsets that can be agreed to on a bipartisan basis--in other words, the low-hanging fruit all gets used to pay for the extension of temporary tax provisions. Under the Democrats' tax side only, pay-go obsession, once all the low-hanging fruit is used--and we are rapidly approaching that point-- then the choice becomes much uglier for them and much uglier for the American taxpayers. The choice becomes whether to extend existing tax policy that has broad support by increasing taxes in areas that will hurt Americans. Nobody advocates the inconsistency of the pay-as-you-go rules more than the famed House of Representatives Blue Dogs, and they are all Democrats. The Blue Dogs portray themselves as fiscal conservatives. We agree with the Blue Dogs' goals of fiscal responsibility. They will have allies all over my side of the aisle if they want to control spending. The problem is the Blue Dogs are pursuing the same old tax- and-spend game under the cloak of fiscal responsibility. The Blue Dogs will fight tooth and paw over any tax relief that is not offset with a corresponding tax increase. However, the same self-described fiscally conservative Blue Dogs are not willing to fight tooth and paw to seek the same equality for the taxpayers on the spending side of the ledger. They have a big appetite for spending. The Blue Dogs generally do not seek to offset spending increases with spending cuts in other areas. But in taxes, it is a whole different story. In fact, the Blue Dogs do not even seek to curb the amount of spending increases for which they hunger. By portraying themselves as fiscal conservatives, while in reality playing the same old tax-and-spend game, the Blue Dogs remind me of the land shark character played by Chevy Chase on ``Saturday Night Live.'' This was many years ago, so maybe some of you will not remember. But we have a picture of the land shark skit with the theme from ``Jaws'' playing in the background. The land shark knocks on a person's door. With the door still closed, the person would ask: Who is at the door? The land shark would reply: Flower delivery. The person answering the door then said: You are that clever shark, aren't you? And in response, the land shark said: Candygram. If you don't know how the skit ended, the person eventually let the land shark in the door because that person believed the land shark when the land shark said he was a dolphin. And, yes, the land shark ate that person. The moral of the land shark story is, don't let yourself be fooled that the Blue Dogs are fiscal conservatives because they are pursuing the same old tax-and-spend Washington game. Don't let the House of Representatives Blue Dogs' insatiable appetite for spending swallow the much-needed tax relief contained in the tax extenders. I recommend that folks take a look at the cover story of the June 14, 2008, edition of the National Journal magazine about the Blue Dogs. It is very enlightening. In trying to reach a bipartisan agreement on tax extenders, my party's leadership has made several offers to the other side's leadership. One of these offers is to pay for some new tax policy using offsets that make good tax policy sense. This is not simply a vague promise to look for such offsets. For instance, I have suggested we use the offset that closes the loophole that allows hedge fund managers to defer compensation for tax haven jurisdictions. My time is up. Mr. President, I ask unanimous consent for 4 more minutes.

Mr. GRASSLEY. I thank the Chair. So we have offered something like closing a loophole that allows hedge fund managers to defer compensation in tax haven jurisdictions. However, we need to remove the huge charitable loophole that is contained in both the Democratic House and Senate extenders bill. Let me try to explain something that is not explainable. I would be embarrassed if I had this in one of my bills. This charitable loophole allows hedge fund managers to deduct 100 percent of their deferred compensation that is donated to charity. In contrast, the ordinary American is only permitted to deduct charitable contributions of up to 50 percent of his or her income for that year. Everyone is obviously in favor of charity, but treating wealthy hedge fund managers better than the average American taxpayer makes no sense from a tax policy standpoint. Also, the Senate Republican leadership suggested that some of the other new tax policy could be paid for by decreasing the scheduled increase in new spending, but that was not taken into consideration, even considering the fact that the present budget authorizes an increase greater than $350 billion over the next 10 years, and none of that is offset. This extra $350 billion is like an extra checkbook that Congress is carrying around in addition to its already fat checkbook. This checkbook covers nondiscretionary spending and current levels of discretionary spending. We simply asked that they take a few checks out of this extra checkbook--not all of it, just a small part of it--to pay for some of these needed tax relief provisions. However, this suggestion was summarily dismissed. My colleagues on the other side of the aisle are unwilling to even consider decreasing their increased nondefense discretionary spending that is above the President's budget. If the Blue Dogs of the other body are fiscal conservatives, they should come out and say they are willing to decrease this increase in the new extra nondefense discretionary spending. Instead, the Blue Dogs' position has been that all of the tax relief provided in the tax extenders package, even the extension of the existing tax policy, must be offset by an equal amount of tax increases on every other American. Why not look at curbing this new excess spending to pay for part of the much needed tax relief? So let us get back to square one. I invite my Blue Dog friends who claim to be fiscal conservatives to answer that question. Back to where we started today--back to Yogi Berra. He also said: ``It ain't over 'til it's over.'' This extenders vote failed because our colleagues on the other side of the aisle have refused to negotiate toward a bipartisan bill that can be signed into law. Because of the Senate Democratic leadership's doomed plan, this extenders discussion ``ain't over 'til it's over.'' Let's get this over with. Let's negotiate toward a bipartisan agreement that can become law so the American people will benefit. So far, the Senate Democratic leadership has not done that. For that reason alone, people did vote ``no'' on cloture, as they previously had. Mr. President, I yield the floor, and I thank the Senator from Ohio for allowing me the additional 4 minutes.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, at 2:42 today on the Senate floor, the Senate majority leader made an incorrect statement. In discussing the negotiations last night between the chairman of the Senate Finance Committee and this Senator, the Senate majority leader, who was not present at the meeting, stated: ``The only thing that Senator Grassley wanted to discuss is having all these extenders not paid for.'' I will make a statement of why this statement is wrong. Specifically, I made three proposals to Chairman Baucus. In all three of the proposals, we agreed to use three tax offsets suggested by Chairman Baucus and his staff. The first offset I agreed to accept is the offset that closes the loophole that allows hedge fund managers to defer compensation in tax haven jurisdictions. However, I mentioned we needed to remove the huge charitable loophole that is contained in both the Democratic House and Senate extenders bill. Closing this charitable loophole will raise about $1 billion in extra revenue from hedge fund managers, according to the nonpartisan Joint Committee on Taxation. Let me make clear why that is a very important adjustment. If you, the average taxpayer, want to give the maximum the law allows for a charitable deduction, you can only allow 50 percent of your income to be used for that purpose. But if you are under this provision, if you are a hedge fund manager making contributions to a charity, you can have 100 percent deduction. We think that is unfair to the middle- income taxpayer. The second offset I reluctantly agreed to accept was a version of the worldwide interest allocation offset. We are still waiting on the revenue estimate for this proposal. This was a compromise on my part. That is what it will take from the other side, as well, to get an extenders bill done--some sort of compromise. The third offset I agreed to accept is a permanent offset regarding basis reporting of securities brokers. These three offsets that I agreed to accept could--depending on the revised worldwide interest allocation proposal--raise over $50 billion in revenues as offsets. As I mentioned above, I made three proposals to chairman Baucus. I also offered to use all three offsets mentioned above for each of the three separate proposals that I made; therefore, paying for much of the revenue loss generated by the tax extender provisions. In two out of my last three proposals, I proposed using those three offsets to offset much of the revenue loss that results from extending these tax extender provisions. So for the majority leader to say that ``the only thing that Senator Grassley wanted to discuss is having all these extenders not paid for'' is simply not accurate. And it is plain wrong. The majority leader was not in the room, and he must have received a false report from someone who actually was in the room. Chairman Baucus was in the room. So he knows the majority leader's statement that the only thing Senator Grassley wanted to discuss was having all of these extenders not paid for is untrue. I ask everybody to ask Chairman Baucus. To demonstrate in detail that the majority leader's statement is incorrect, Chairman Baucus and I discussed a number of issues other than offsets in the media. One of these issues was my disaster tax relief package that is needed for the people of Iowa and the Midwest because of the gigantic 500-year floods. Three other issues we discussed were the three tax offsets I described above. Some other issues that were discussed were provisions in the Democratic leadership's extenders bill that we objected to, such as the provision regarding the train from Manhattan to JFK Airport that accounts for more than 20 percent of the revenue loss in the Democratic leader's disaster tax package. In addition, I offered to make all three of my proposals revenue neutral by suggesting that we use the three offsets mentioned above and also decrease the amount of new increases in spending that were approved in the budget only 2 months ago. Let me be clear, we did not suggest any spending cuts. We suggested our colleagues on the other side of the aisle consider decreasing the amount of new unspecified nondefense discretionary spending. The nondefense discretionary spending that has been authorized in the budget is $350 billion greater than the President's fiscal year 2009 budget. This extra $350 billion is like an extra checkbook that Congress is carrying around in addition to the already fat checkbook. This checkbook covers nondiscretionary spending and current levels of discretionary spending. We simply ask they take a few checks out of the extra checkbook over the next 10 years to help pay for part of the needed tax relief provisions in the tax extenders package. However, this suggestion was summarily dismissed by Chairman Baucus. My colleagues on the other side of the aisle are unwilling to even consider decreasing their increased--and I emphasize ``their increased''--nondefense discretionary spending that is above the President's budget. In summary, the majority leader's statement at 2:42 this afternoon about my position on our negotiations is flat out wrong, and I cannot be any clearer than that. Folks across the country must wonder why the Senate cannot pass the popular expiring tax relief provisions. There is no disagreement between the parties on the merits alone. Nearly all Members of this body and the other body support the alternative minimum tax fix and also the other parts we refer to as extenders; in other words, tax provisions that have sunsetted. And, of course, because of the good of these provisions, anybody who opposes it would be crazy. The problem is the committee and floor process have been disregarded by the Senate Democratic leadership. Debate, exchanges of ideas, up-or- down votes are the essence of how the Senate works. All of that Senate process is now bottled up. The Senate process is quite truncated. For the first time in this decade--that is, since 2001--the Finance Committee members have not been allowed to exercise their rights in the committee markup with respect to these issues, with one exception--the 2002 stimulus bill. For the first time in this decade, Senate Members have not had the opportunity to debate and amend extenders in a real Senate floor process. For the first time in this decade, Senators in the minority are being presented with a top-down deal crafted between the Democratic leadership of the House and Senate. For me, the irony of all of this is very compelling because I found myself within the last 2 years, when Republicans were in the majority, condemning Republicans for trying to get around letting the Senate work its will. Almost 2 years ago today, we faced an attempt to end run the natural order of the committee and floor process by the bicameral Republican leadership of the House and Senate; meaning when we were in the majority. I referred to it at that time as wrongheaded. If it was wrongheaded when we had a Republican majority and the Democratic majority is doing it, it is just as wrongheaded, as far as I am concerned, because 2 years ago it was doomed to fail. I don't know how many times I told the Republican leadership: It ain't going to work. And right now we are faced with it when we have a new majority and that new majority is Democratic. Two years ago, it was envisioned as some sort of unicameral, not a bipartisan, bicameral tax- writing committee process. The unicameral tax-writing committee process 2 years ago ignored the rights and the privileges of both political parties. I used sharp words and directed them at my side's leadership of the House and Senate. I am sure some on my side thought my comments were over the top. I don't care. I didn't care then, at least. Then-Health, Education, Labor and Pensions Chairman Enzi stood shoulder to shoulder with me in this process. My friends on the Democratic side criticized my leadership for the harm it was doing to the rights of the Members of this body that is supposed to be the greatest deliberative body in the entire world of any parliamentary bodies. That is why I find today's actions bitterly ironic. I am sorry to say today we find the Democratic leadership attempting to do much the same thing. Like the failed trifecta jam then, today's jam will not work. Let me make clear, when I refer to the ``trifecta jam then,'' I mean 2 years ago when Republican leaders thought they could stuff something down the throats of Democrats in this body. It failed then, and that sort of jam is not working when Democrats are in the leadership position. It is part of a larger problem with the Senate because we are not going through the regular order at the committee and floor levels. Issues are building up, tempers are flaring, and most importantly, nothing is getting done and the people are mad about it. The people back home are mad about it. I reiterate what I said this morning. The fourth vote failed. That failed cloture vote had the effect of Kaopectate. It further constipated the Senate. This legislative body needs to function. Legislation needs to circulate through this body in the usual form. We need real debate and real amendments. We need a legislative laxative. Another alternative to resolution is an informal bipartisan process. Either way, repeated cloture partisan jams do not lead to an agreement that can pass the House, the Senate, and be signed by the President. And don't forget about that because that is an important part of the process. I think the White House spoke out on some of the AMT and extender legislation we have been considering. I have my pencil sharpened, a note pad out. I am ready to engage in our bipartisan process with my friend Chairman Baucus. I am hopeful the Democratic leadership will relieve the constipation on the tax extenders legislation. The Finance Committee and Senate need to function. On behalf of Leader McConnell, I am going to propound a unanimous consent request about which I already informed the other side. The agreement, if accepted by the majority, would set in motion a process that would lead to resolution of these expired provisions. If accepted by the majority, we would have real debate, real votes, and a resolution that matters. Madam President, I ask unanimous consent that upon the conclusion of the energy speculation bill, the Senate proceed en bloc to the consideration of the Baucus extender bill, S. 3335, and a bill introduced by Senator Grassley on the same subject of extenders; provided further, that there be 2 hours of debate equally divided in the usual form to run concurrently on both measures; and that following that time, the bills be read a third time, en bloc, and the Senate proceed to vote on passage of S. 3335, followed by a vote on passage of the Grassley bill. I further ask unanimous consent that if either bill does not receive 60 votes in the affirmative, the bill be returned to the calendar.

Mr. GRASSLEY. Madam President, I wish to correct the Senator on a couple of respects, and he has exercised the right I expected. First, we accept the provisions that were in the Baucus bill for offsets. We did suggest a modification on the provision that the Senator said we don't want. He is wrong on that point. We will accept it. There is a slight modification in it that would give an election. We go along with that provision, and I think I made that clear in the remarks I proposed. The second place the Senator from Illinois is wrong is we are not proposing the cutting of spending. We are proposing the $350 billion increase that their budget has suggested for additional spending be reduced by a very small percentage.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, 2 days ago, I came to the floor to talk about tax policy and the history of tax policy. I have come to follow up on that speech of 2 days ago to talk about the recent history of speeches that were made in past Presidential elections and the tax policy that was associated with those speeches and in another day or two, come to the floor to speak about the different tax policies between Senator Obama on the one hand and Senator McCain on the other hand. History is very important. Elections have consequences. Policy coming out of an election has consequences and eventually affects real people. The impact upon the voter of past elections, what people said in those elections, what happened after the election in policy, ought to be things people are taking into consideration for the upcoming Presidential election. As to that speech I gave 2 days ago, I want to go back and remind my colleagues of a couple of comments I made at that particular time. At various times during the past 25 years, we have had times when Democrats have controlled both the Presidency and the Congress. There have been times when the Democrats have controlled Congress and we had a Republican President. And there have been times when we have had both a Republican President and a Republican Congress. Tax cuts or tax increases have resulted from that. And you find a pretty good pattern of when you have both a Democratic Congress and a Democratic President that you have big tax increases, as is the case in 1993--if you remember the big tax increase of 1993. Then there are periods of time when we have had a Republican President and a Republican Congress and you can see tax decreases--very deep decreases in taxes. Then you have a period of time in here where there was a little flurry--some tax cuts, some tax increases--when we had a Republican President and a Democratic Congress. So elections do have consequences. Another chart that would show it a little better and more specifically would be this thermometer chart, where we have it very clear that when you have times when you have a Democratic President and a Democratic Congress, you have some of the biggest tax increases in history. And that would be this figure. There are times we have had a Republican President and a Democratic Congress with some tax increases but a little bit less. There are times we have had a Democratic President and a Republican Congress with slight tax decreases. When you have a Republican President, a Republican Senate, and a Democratic House, you have some tax decreases but not very much. Then you have times when you have a Republican President, a Democratic Senate, and a Republican House, and you have tax decreases but not by very much. Then you have times when you have a Republican President and a Republican Congress and you have deep tax cuts. So what this chart shows--this thermometer--over the last 25 years, is that if you have Republican Presidents and Republican Congresses you have deep tax cuts. When you have Democrats controlling both the Presidency and the Congress, you have very rapid tax increases. So elections do have consequences. I want to go now to a period of time of a specific election and the tax consequences that came as a result of that election. But I think you have to realize that the relationship is clear from the past 25 years: the more relative power Democrats have, the higher the probability of a tax increase. So Americans will need to think long and hard about campaign promises of tax relief as they consider their choices in this Presidential election. The reason is that history shows very clearly, if Democrats obtain the White House and control of Congress, taxes are certain to go up. And not just go up on the wealthy but across the board. Today, I would like to follow up last week's discussion. This week, I want to focus on a campaign season most like this one and take a look at how the victors in that campaign used their taxing power once sworn in. The period I am thinking about is 16 years ago. Well, in 16 years you can learn a lot from history, and I think people ought to be reminded of it. But before I get into details, I would like to say that I hope this election doesn't go the same way that it did 16 years ago because President Bill Clinton was elected. I want people to be clear that I am pulling for a Republican colleague, Senator McCain, to defeat another one of our Senate colleagues, Senator Obama. So let's turn the clock back to this time 16 years ago, and I have another chart. This chart considers the story of Rip Van Winkle, which I think is very appropriate during this period of time. You know the story about Rip Van Winkle. He was a person who slept for 20 years. Here is the chart showing Rip Van Winkle. If you round up just a little bit, it is almost 20 years since that 1992 campaign, and you will see from this chart those events from a while ago might have led to a form of tax hike amnesia. If we go back to the 1992 campaign--and I will show you eventually how this is pretty appropriate to the campaign coming up--in 1992, you find a very charismatic, a very likable, a very articulate young Governor from Arkansas barnstorming across the country. Bill Clinton was 46 years old, facing a 47th birthday in mid-August. He was widely acknowledged as the most talented public speaker on the Presidential scene since Ronald Reagan. America had been in a recession at that time. Although it was not reported until after the election, which is something you might expect from our liberal media, the American economy had recovered in the latter half of 1992, but it was not officially announced until the day after the 1992 election, when all of a sudden the recession was over, just because of the election. But all during that election, reading the media, you would always be reminded about the recession we were in. But magically, election day 1992, 1 day later, and the recession was over. The charismatic Democratic Presidential candidate promised to focus, in his words, ``like a laser beam'' on the economic ills that Americans worried about. In a key speech on June 21, 1992, this ``different kind of a Democrat'' laid out his economic plan. He called the plan ``Putting People First.'' I am going to focus in a laser-like way on then-Governor Clinton's tax agenda that he announced for that 1992 campaign. In that speech, candidate Clinton was very critical of the marginal tax rate relief that President Reagan had put into effect. To quote candidate Clinton: For more than a decade, this country has been rigged in favor of the rich and the special interests. And we still hear that today. While the very wealthiest Americans get richer, middle- class Americans pay more to their government and get less in return. For 12 years, the driving idea behind American economic policy has been cutting taxes on the richest individuals and corporations and hoping their new wealth would ``trickle down'' to the rest of us. That is a quote from his speech of June 21, 1992. As a relief from this version of the middle-class squeeze, candidate Clinton proposed middle-income tax relief, and here is what he said: Middle class tax fairness. Virtually every industrialized nation recognizes the importance of strong families in its Tax Code. We should too. We will lower the tax burden on middle class Americans by forcing the rich to pay their fair share. Middle class taxpayers will have a choice between a children's tax credit and a significant reduction in income tax rate. Now, doesn't all of this sound very familiar to speeches that are going on this year? I have quoted from a June 21, 1992, speech given by candidate Clinton, but you would think that you are hearing exactly the same thing this year. Now, let's get down to basic facts. The definitions of rich and middle class are always open. They probably vary from candidate to candidate and everything with intellectual honesty and where you might set rich and where you might set middle class. A person who is rich in Mason City, IA, might be middle class in New York City. An irony I continue to notice around here relates to this point. It seems as if the politicians from the highest income, highest cost of living, highest taxed States seem to be the most obsessed with raising taxes on their Presidential candidate's definition of the rich. In this case, I am referring to a single person who makes $125,000, or double it for a married couple to $250,000. That seems to be the dividing line between the rich and other people, according to the 2008 Democratic Presidential candidate. Now, is $250,000 a rich family in Manhattan? Is $250,000 a rich family in San Francisco? Is $250,000 a rich family in Chicago? Is $250,000 a rich family in Boston? By the definition of Senators from those areas, I guess I would have to say it is. Do those families in those cities know they are rich and that their Senators think they pay too little tax? But I digress. In candidate Clinton's economic plan that was announced on June 21, 1992, the rich were--put another way--the top 2 percent income earners in the United States. On September 8, 1992, candidate Bill Clinton said: The only people who will pay more income taxes are the wealthiest 2 percent, those living in households making more than $200,000 per year. By definition, you would think under candidate Clinton's plan that everybody below that level of 2 percent, or $200,000, is either middle class or low income. Now, remember what I said that he said--the only people who will pay more income taxes are the wealthiest 2 percent-- because I am going to show you, after being sworn in, how that turned out to be a heck of a lot more people than the wealthiest 2 percent. On January 20, 1993, President Clinton was inaugurated. Democrats retained their solid majority, 56 to 44, in this body. Although losing 9 seats in the U.S. House, the Democrats retained a heavy majority of 258 to 176. Once elected, the Democratic White House and the Democratic Congress converted the campaign economic plan, as you would expect them to, into a legislative blueprint. A key feature of the program, the middle-class tax cut, was thrown to the side. On January 14, 2003, at a press conference, President-elect Clinton stated: From New Hampshire forward, for reasons that absolutely mystify me, the press thought the most important issue in the race was a middle-class tax cut. I never did meet any voter who thought that. Now, how do you reconcile the contents of the economic plan and the shift in position after the election? Pulitzer Prize winning author Bob Woodward--who I think has a great deal of respect among most people of the Senate--wrote a comprehensive book about the first part of the Clinton administration. It was titled ``The Agenda.'' Mr. Woodward, of the Washington Post, described it this way: While Clinton continued to defend his middle-class tax cut publicly, he privately expressed the view to his advisers that it was intellectually dishonest. That is Woodward saying that, not Chuck Grassley. The late journalist, Michael Kelly, in an article in the New York Times, explained how the newly elected President planned to ``escape'' from his middle-class tax cut campaign promise. Here is what Mr. Kelly wrote, in part: [T]he President built himself an escape hatch a little less than a month before Election Day. Every time Clinton said ``I'm not going to raise taxes on the middle class,'' he always added the phrase ``to pay for my programs,'' said a chief political adviser to the President, who spoke on condition of anonymity. He never, never, said just, ``I will not raise taxes on the middle class.'' He always said ``I will not raise middle-class taxes to pay for my programs.'' Madam President, I want to have Mr. Kelly's article printed in the Record. I ask unanimous consent to do that.

Mr. GRASSLEY. I have another chart to back up what I say, that the tax increase was not responsible for the deficit going down. The chart shows the source of deficit reduction from 1990 through the year 2000. The tax increase represented only 13 percent, just 13 percent of the deficit reduction during that period. Other revenue, mainly from economic growth and defense spending cuts, made the deficit decline. Even with the 1993 bill in effect, 2 years later the Congressional Budget Office projected President Clinton's budget as producing significant deficits as far as the eye could see. But several events not related at all to the 1993 tax increase pushed the budget toward surplus until 1999. First, Republicans attained control of Congress in 1994 and made a deficit reduction a priority. Year after year, Republican Congresses resisted Democratic efforts to spend over tight budget caps placed in the Republican budget. Most often, President Clinton would extract additional spending in the end deal. Republican resistance, however, to popular Democratic spending proposals often had political consequences for Republican Members. Second, revenues, especially capital gains revenues, grew after the bipartisan Tax Relief Act of 1997. The centerpiece of that bill was, ironically, a middle-class tax cut in the form of a $500-per-child tax credit. The child tax credit was a fundamental part of the Republican Contract With America. Another key component of that bill was a reduction in the top capital gains rate from 28 percent down to 20 percent. It is down to 15 percent now, as a result of the 2003 tax bill, but then it went from 28 down to 20 in 1997. As I said, there was a widely documented significant growth in capital gains revenue after that rate reduction in 1997, as there was with the rate reduction in 2003. Indeed, even the Clinton Treasury scored the reduction as a revenue raiser and was more than vindicated. Finally, external factors aside from tax policy led to revenue growth. Free trade opened more markets to American goods and services. The Internet bubble started to form. It was burst in 2000 with the collapse of the NASDAQ and the business cycle yielded an economic expansion after the 1991 recession ended. Economist J.D. Foster has documented this data. I commend to my colleagues WebMemo dated March 5, 2008, available on the Internet at www.heritage.org/Research/Taxes/wm1835.cfm. At the end of the day, the justification for the tax flip-flop in 1993 mattered not one whit. Supporters of the 1993 tax hike can offer whatever reason they want for the record tax increase. A flip-flop of that size is, in fact, a flip-flop. What they cannot dispute is their Presidential candidate promised a middle-class tax cut. Once they had the White House and congressional control, the other side abandoned the tax cut promise, raised taxes on Americans--not just above $200,000 a year but from $20,000 up. That is not a tax cut. That is a middle-class tax increase. So, once again, like Rip Van Winkle, taxpayers do not want to wake up to that tax increase. As a minimum, as the Presidential campaign unfolds, Americans need to keep this very clear history in mind. We need to probe the candidates in 2008 on where they want to go on tax policy so what they say in 2008 is done in 2009, not a repeat of what was said in 1992 and what was done in 1993. We need to be careful not to leave escape hatches on favorable sounding tax cut campaign promises. In that vein, I will follow up on this discussion and the prior discussion with a later speech that concentrates on where each Presidential candidate stands this year on tax issues. I will examine these positions in the light of this history I have discussed--of the likelihood of each side, whether they will deliver on campaign tax policy positions. To sum up, we are hearing from a very articulate and attractive Democratic Presidential candidate. On tax issues, as we heard 16 years ago from the soon-to-be President at that time, Bill Clinton, we are hearing a proposal to tax the rich this year to provide tax cuts for the middle class. We are hearing that this year. The Presidential candidate on the Republican side has a different message. We need to explore that as well. His message, consistent with a Republican position for almost 30 years, has been to continue progrowth, low levels of taxation. In light of history I look forward to discussing the two competing visions of tax policy in the future. I yield the floor.

Mr. GRASSLEY. While the middle-class tax cut was discarded, the definition of the group subject to a tax increase, ``the rich,'' expanded. According to a distribution analysis by the nonpartisan Joint Committee on Taxation, the taxpayers above $20,000 in income received a tax increase. So no longer was it just taxing the top 2 percent richest people in America. That was when you were campaigning for President. When you get to be President, it is $20,000. It was true that taxpayers above $200,000 go up far more than other groups. But generally taxpayers above $20,000 saw their taxes rise. Madam President, I ask unanimous consent to have printed in the Record a copy of the joint tax distribution analysis of the 1993 tax bill.

Mr. GRASSLEY. That comprehensive tax increase went into effect on the strength of Democratic votes only. I was here and I remember that. You could look at it as the consequences of the confidence in the large Democratic majorities in Congress, and a newly elected Democratic President. Basically, however, there was no check on one political party's agenda. If that agenda is to raise taxes and increase spending, then it is not a surprise. Mr. Kelly's article notes the adverse reaction of a prominent player of the leftwing in this town. This is a Mr. Robert S. McIntyre, who was very active in causes that you consider liberal. Quoting from Mr. Kelly's article, this is what Robert S. McIntyre, director of Citizens for Tax Justice, a liberal research group, had to say. They campaigned on a middle-class tax cut and then four days into a new Administration the chief economic spokesman is talking about a middle-class tax increase. That's a flip- flop. That is the end of the quote of Mr. McIntyre, quoting from Mr. Kelly's article. Most folks are unhappy about flip-flopping politicians. Fishermen may like a flip-flopping fish that they brought into the boat. This photo is the best fish I could find to demonstrate that. That is about the only kind of flip-flopper that would be received positively. If a politician flips from a tax cut promise to a tax hike, you can bet most folks will consider that move a flop in more ways than one. All of this happened almost 16 years ago, but it is relevant for this year as we go into a debate on taxes for this campaign. During almost 14 years since Republicans have held either the White House or the Congress or both--and this chart shows, as I pointed out once before, Congress and the President have generally reduced the tax burden. That is during this period of time, when Republicans controlled both the House and the Senate. It has been a long time, almost 15 years since the American people have seen a large tax increase, going back to the period of time when the Democrats controlled both the Presidency and the Congress. Then I remember right here on the floor, because I was here when he said it, the then-Finance Committee chairman Pat Moynihan termed the 1993 tax bill: . . . the largest tax increase in the history of public finance in the United States or anywhere else in the world. Philosopher George Santayana said words to the effect that history repeats itself, and if you do not learn from history, you are bound to repeat the mistakes of the past. A risk Americans face, if we hand over all the reins of power to the Democratic Party, is to repeat the history of 15 years ago. I am a Republican. I know what polls show. They show right now that the electorate trusts Democrats more than Republicans on tax policy. But the 1992 campaign shows that if you listen too much to what is said in the campaign, it doesn't necessarily come out that way in the election. So I raise the question, during the debate of 2008, in the Presidential campaign, are we headed in the same direction? Are we going to hear all the talk about taxing nobody but the rich but end up doing as we did in 1993, taxing the middle class? Our tax increase amnesia may lead us in that direction. We could find ourselves then being like Rip van Winkle. We will hear dreamy rhetoric about hope and about change. It will be clothed in a slumber of middle- class tax relief and tax increases on only the rich, as it was in the campaign of 1992. We could awaken from that slumber, our tax increase amnesia would probably fade, we could wake up to another world record tax increase. I know what the folks who put in place that world record tax increase will say. They will defend it by arguing that it cut the deficit. They will argue that by cutting the deficit and moving to a surplus, that interest rates dropped. While it is true the fiscal situation went from deficit in 1992 to surplus in 1999, there were many other factors involved and a tax increase was not the biggest reason for it. First, supporters of the 1993 bill touted it as a dollar of spending cuts matched by a dollar of tax increase. If you were a taxpayer, wouldn't you buy that? Pay one more dollar and get a dollar decrease in expenditures? But, you know, it doesn't work out that way. A close look at the numbers shows the bill contained $4 of tax increase to every $1 of spending cuts. I ask unanimous consent to have a summary of the Senate Finance Committee Republican staff analysis dated June 28, 1993, printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the FBI turned 100 years old on June 26, 2008, and so I want to offer some remarks to mark the occasion. This anniversary is the perfect opportunity to look at the FBI's accomplishments and failures over the past 100 years and its challenges for the future. During the presidency of Theodore Roosevelt, seven U.S. Secret Service operatives moved to the new Department of Justice Bureau of Investigation to start a new mission. Thus, the FBI was born. The FBI has had countless successes in its first centennial. In particular, the Bureau developed a talented corps of professional agents and staff who pioneered new investigative tools that set most of the standards of modern law enforcement. The FBI had early successes with the arrests of Al Capone and Gangster ``Machine Gun'' Kelly in the 1930s. Bonnie and Clyde were also permanently put out of business thanks to some local cops and the FBI. The Bureau later went after the Ku Klux Klan in the 1940s and 1950s. It targeted the New York mafia in the 1980s and 1990s, which led to the decline of the Gambino crime family and its infamous leader, John Gotti. However, the FBI also has had its share of failures. From its own civil rights abuses in unauthorized wiretapping of civil rights leaders, to the tragedies at Ruby Ridge and Waco, to the internal betrayal by special agent Robert Hansen, there have been many dark days in the history of the Bureau. Still, I am confident that if the FBI is willing to honestly examine its own shortcomings, it can learn the lessons necessary to improve and become more effective at keeping Americans safe and free. I celebrate with all FBI employees, active and retired, whose difficult and courageous work keeps the rest of us secure. I also recognize and honor agents who have paid the ultimate price to protect our country from all enemies, foreign and domestic. These heroes deserve praise for their hard work and sacrifice. The protection of the United States is the FBI's main mission. The FBI is tasked to keep us safe from terrorist attacks, foreign spies, public corruption, infringements on civil rights, organized crime, and major white-collar and violent crime. To serve its mission, the Bureau maintains a worldwide presence in over 400 cities in the United States and 60 countries worldwide. Since the terrorist attacks on September 11, 2001, the FBI has focused its efforts on antiterrorism. Its intelligence and diligence have protected our Nation from countless threats to our safety. FBI employees have stepped up in these treacherous times, and we count on them every day. They put their lives on the line for our freedom. We know they are fulfilling their mission when nothing happens to harm us, when we have another day, week, and year free from a terrorist attack and violent crime. Like any anniversary, this is a good opportunity for us to look at the FBI's failures so it can learn and grow from its mistakes. For years, I have been a watchdog of the FBI's propensity to retaliate against whistleblowers, the Bureau's unwillingness to cooperate with other agencies, and its inability to update its technology system. I hope on its 100-year anniversary, the FBI will turn a new leaf and correct these problems to create a better, safer century ahead. Parts of the FBI's internal culture hamper its ability to effectively identify and neutralize threats to national safety. For instance, the Bureau has what I have called a ``Pac-Man'' mentality, because it tries to gobble up whatever it can of other agencies' jurisdiction, evidence, and cases. At times, it has acted like a lunch-stealing bully on the playground. Our safety would be much better preserved if the FBI would play nice and share jurisdiction and resources with the other agencies. The FBI should concentrate on its primary mission--fighting terrorism--and let other agencies take the lead on investigations in which they have specialized expertise. For example, often, drug and bombing cases should be handled by the Drug Enforcement Administration, DEA, and the Bureau of Alcohol, Tobacco, and Firearms, ATF, respectively. This Pac-Man mentality is evident by the way the FBI demands access to other law enforcement groups' intelligence, informants, evidence, and resources, and yet it rarely shares its own information and resources-- even after 9/11. For instance, in 2006, Houston Immigration and Customs Enforcement, ICE, agent Joe Webber testified before a House Committee that the FBI purposely delayed a wiretap request in an ICE-headed terrorism financing case, simply because it was an ICE-originated case, rather than an FBI case. The result of this Pac-Man attitude by the FBI was a missed opportunity to hunt down the perpetrators of terrorist financing in that case. The FBI has also engaged in jurisdiction grabbing with the ATF over bombing cases and with the DEA over drug cases. Turf wars don't help keep our streets safe, because our limited resources are wasted when programs and investigations are duplicated. Instead of concentrating its resources on antiterrorism, the FBI has tried to take over investigations in which other agencies have jurisdiction and expertise. Similarly, the FBI has not always cooperated with other agencies in information-sharing efforts. This reluctance to cooperate is epitomized in FBI agents' turf wars with ATF agents. The Washington Post reported that FBI agents sold counterfeit cigarettes to ATF agents because the two agencies were running twin tobacco smuggling stings. At crime scenes, the Washington Post reported, agents from each agency threatened to arrest each other over jurisdiction and evidence squabbles. The agencies acted like two dogs fighting over one bone. The problem is that there are plenty of bones out there, and the agencies can each get more if they work together. Another problem area exists in deciding which agency should investigate domestic bombing incidents. Until recently, the FBI and ATF have been operating under a 1973 memorandum of understanding, which predated and did not anticipate the ATF's 2002 move to the Justice Department from the Treasury. This old agreement failed to take into account the post-9/11 emphasis on searching for terrorism links in bombing cases. With a 35-year-old agreement, it doesn't surprise me that there was so much confusion and squabbling between the two agencies. I have recently learned that the Attorney General issued a new MOU that will now be the controlling authority between the ATF and FBI in bombing cases. I am curious to see this new MOU and sincerely hope the FBI and ATF have come up with a better way to resolve disputes regarding which agency takes the lead on domestic bombing cases. Unfortunately, there is reason to be skeptical that this new MOU will have an impact. A 2004 memo from former Attorney General Ashcroft directed the FBI and ATF to combine their bomb databases under the ATF's direction, because of the ATF's expertise in bombing cases. However, 4 years after the Attorney General issued that directive, the FBI still has not transferred its bomb database to ATF's management. Without the ATF's and FBI's cooperation in this area, agents are more likely to be missing key information. I don't blame the agents on the street for this problem. The problem is the direct result of jurisdictional greed and indecision by top bureaucrats at FBI Headquarters. It is imperative that the two agencies work together so that they can keep the country safe. Notwithstanding these issues, there have been instances of effective cooperation. In 2007, the ATF and FBI cooperated with other law enforcement agencies, and their efforts resulted in the largest prosecution of environmental extremists in U.S. history. Ten ecoterrorists were convicted for politically motivated arson that caused $40 million in damage. We need to see more of these types of successes, and if the FBI and other agencies can replicate this kind of cooperation in the next 100 years, Federal law enforcement will end up better fighting criminals and terrorists together, rather than fighting against each other. I have also done oversight of the culture within the FBI which encourages retaliation against whistleblowers. There have been too many cases of continued retaliation against FBI whistleblowers. Any FBI employee who has the courage to come forward to expose corruption or wasted resources in the FBI should be applauded, rather than punished. Not only are these courageous individuals safeguarding our tax dollars, they are also diverting resources from waste to use in the fight against terrorism and crime. Whistleblowers can spur the FBI to correct its problems. For instance, FBI agent Coleen Rowley went public with insights about the FBI's conduct in the weeks leading up to the 9/11 terrorist attacks. Rowley wrote a letter to FBI Director Robert Mueller in May 2002, outlining how her Minneapolis field office pushed to search Zacharias Moussaoui's home and laptop following French intelligence reports on his connections and activities. But FBI headquarters downplayed the need to get a FISA wiretap and search his home and computer and ultimately denied the Minneapolis field office's request. This was after the FBI got reports that Moussaoui tried to take flight lessons and a Phoenix field agent reported suspicions about Middle Eastern men enrolled in flight school. After the attacks, Rowley wrote her concerns in a letter to Director Mueller about how FBI headquarters ``downplayed, glossed over, and/or mischaracterized'' their investigation of Moussaoui. We don't know what could have been prevented if the Minneapolis office had been able to pursue Moussaoui when it had the chance. What we know is that whistleblowers play an important role in improving our agencies. On its 100-year anniversary, the FBI should recognize that it needs to listen to those courageous agents who alert them to a problem, rather than retaliate against the messenger. There continue to be high-profile cases involving discrimination against FBI whistleblowers. For instance, just over a month ago, FBI agent Bassem Yousseff came forward and testified before Congress about staffing deficiencies in the counterterrorism program of the FBI. Without his testimony, Congress would not have known that the FBI is having trouble filling those critical positions. Yet, just 2 days after testifying, agent Youseff was accused of violating FBI regulations. The FBI dropped its allegations, but I am not willing to drop the subject. I sent a letter, along with House Judiciary Committee and subcommittee chairmen, demanding the FBI turn over its records to determine what happened. The FBI has not responded. The FBI should have a system that encourages concerned agents to come forward and identify problems that can then be solved, rather than swept under the rug. It should not use whistleblowers as ``canaries in coal mines,'' to be sacrificed as soon as they alert us to a problem. Another problem the FBI must correct is the different standard of punishments it sets for agents versus their supervisors. While a supervisor may get a slap on the wrist for misconduct, an agent may be heavily reprimanded. For example, agent Cecilia Woods reported that her supervisor engaged in illicit sexual activities with a paid informant. Her courage and honesty in reporting this improper activity were rewarded with two investigations into her own conduct, suspensions, and a transfer. Meanwhile, senior level FBI agents are treated differently for their misconduct. For instance, acting special agent in charge in Baltimore, Jennifer Smith-Love, was investigated, along with two agents acting under her direction, for conducting an unauthorized search of another agent's computer. However, Smith-Love's investigation was classified as a performance issue, rather than a misconduct issue. While the investigation was still ongoing, she got a promotion. The disparate treatment of agent Cecelia Woods and special agent in charge Jennifer Smith-Love illustrates how the FBI reprimands its agents much more harshly than it reprimands supervisors. This unequal treatment of agents and senior management is unfair and creates an appearance of double standards at the agency. Double standards in discipline devastate morale among the dedicated, hardworking FBI agents who are just trying to do their job. The FBI should set more uniform guidelines for punishments for both agents and supervisors. Another area the FBI needs to improve is its implementation of information technology upgrades. For years, the FBI has been charged with the task of bringing its computer systems up to date. However, despite spurts of progress, this effort has been hobbled by embarrassment and setback. The FBI had to scrap a $170 million case management system called Virtual Case File in 2005. The Virtual Case File system was scrapped because it failed before it ever got rolling. VCF was poorly designed and poorly managed, and to make matters worse, the FBI placed little internal controls on the oversight of the project. To date, the FBI still has not completed a new version of the system, now known as Sentinel. Information technology needs to be a top priority for the FBI if it wants to effectively hunt down and disrupt terrorist cells around the globe. The situation could not be more urgent, and the FBI needs to step up and get the job done, on time and on budget. It is also important to note that the FBI's budget has tripled since 1999. Last year, Congress appropriated almost $7 billion dollars to the Bureau. We should not tolerate the FBI's continued mismanagement of public funds on programs that don't work. The American taxpayers can not afford another Virtual Case File. Technological advances are important tools to keep up with dangerous terrorists and criminals. As terrorists and criminals use more advanced technology to evade detection, the FBI needs to stay ahead of them with new technologies to fight them without delays or setbacks. Americans are counting on a system that works to help prevent the next terrorist attack. Congress plays an important oversight role over the FBI and other agencies. I take this role very seriously, as it is crucial to our system of checks and balances. At this 100-year juncture, I encourage the FBI to step up to the plate to make positive changes in its agency. Congress also has a role to play in the future of the FBI. In the 107th and 108th Congresses, legislation was introduced to reform the FBI to protect whistleblowers and provide true accountability. Unfortunately, these reforms were never fully enacted into law. We should revisit these efforts to help the Bureau be the best it can be. I also believe that Congress needs to continue to examine the FBI's counterterrorism mission and look at the calls some have made to split the FBI's law enforcement and domestic intelligence functions along the lines of the British MI-5. Now some may see my statement as a call to dismantle the FBI, that is not what I am saying. What I do believe is that our constitutional duty to conduct oversight includes a soup-to- nuts review of our law enforcement policies, including whether or not those at the FBI are achieving their primary mission. I think there is merit to arguments on both sides and believe we should spend some of our time looking into this. To summarize, I thank FBI employees, past and present, for their collective past 100 years of service. I also challenge the FBI's management to grab ahold of the reins to build a stronger, more accountable, transparent, and effective FBI. I challenge the FBI's leadership to recognize and correct the problems it currently has so the Bureau can be the top notch law enforcement agency it can be. Now is an ideal time for the agency to look back on what it has done right and wrong and work to do a lot better in the future.

Mr. GRASSLEY

Mr. GRASSLEY. I ask unanimous consent that Paraskevi Maddox, Lyndsey Arnold, and Cale Kassel be granted the privilege of the floor during the duration of the 110th Congress.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to take a few minutes to highlight the tax piece of the housing bill that is before the Senate today. From the beginning, Chairman Baucus and I had a goal. We wanted to develop a bipartisan tax package that responded to the needs of Americans facing difficulty in the housing market. Up until the last stage of this journey, in terms of the process, we met that goal. Unfortunately, at the last stage of the process, when the last House amendment was developed, a bipartisan process became a Democrats-only process. That is unfortunate. It is not the way we have done business in the past. Hopefully, it won't become a pattern. Mr. President, this bill, with one exception, complies with the Senate Republican conference principles on use of revenue raising offsets. This bill contains new tax policy. The new tax policy is offset with revenue raisers that a bipartisan majority in the Senate consider improved tax policy. The main one would put in place a reporting regime on credit card payments to merchants. It is a Treasury tax gap proposal. The other significant revenue raiser would clarify the home sale exclusion rules where second homes, usually vacation residences, are involved. The one exception deals with a reversal of a sound international tax policy reform. Back in 2004, Congress passed and President Bush signed a major bipartisan business tax reform bill. The centerpiece proposal in the international tax reform area was a restoration of the Finance Committee position from the 1986 Tax Reform Act on the treatment of interest for the purposes of the foreign tax credit. It took us 18 years to get back to the proper treatment of interest. This reform was due to take effect a few months from now. The proposal in the bill before us delays this important reform by 2 years. It also cleverly haircuts the reform by 70 percent in the year the reform would become effective. The House has offered this offset for several bills. It is currently in play on the House extenders bill. It is also in play on the House trade adjustment assistance, TAA, proposal. In the prior stages of this legislation, it is the only offset on which I have expressed opposition. I offered up other offsets which, in my view, represented good tax policy. They were rejected by either the House or the Senate. I respected the reservations of the House and Senate Democrats on revenue raisers they could not accept. My reservations with this policy were discarded at the final stage in the Democrats-only negotiation. The revenue grab trumps policy in this instance. The tax increase/ spending increase pay-go imperative is more important than getting the tax policy right. The revenue raised is used mostly for new spending on community block grants. So here we go again. Propose suspect tax policy to feed the insatiable appetite for new social spending. Now, why am I so opposed to the worldwide interest revenue raiser? My opposition rests in the bad tax policy this proposal represents. Starting in 2009, the interest allocation reform will lower the chance of double tax that arises under current law from the artificial allocation of interest expense to foreign income, even when the debt is incurred to fund domestic investment. The current rules actually penalize domestic manufacturers that compete in global markets by making it more likely they will be double-taxed on their foreign income. Several companies have spoken to my staff about the negative ramifications this delay will have on them. These companies are just starting to grow their businesses beyond the U.S. borders. The delay of this important international reform will make it more costly for these companies to expand into these markets. If these companies cannot grow beyond the domestic economy, they will be unable to compete in the global marketplace. It is long been said that the American dream is to own your home. Unfortunately, the subprime crisis has turned that dream into a nightmare for many Americans. The tax relief in this bill aims to restore the American dream. This package goes some distance to restore that dream, but in the journey this legislation took a wrong turn. The bill goes backward on a bipartisan international tax reform. That is a sorry development. It does not bode well for future efforts at international tax reform. How reliable are proposals from the other side if they are reversed a couple of years later when the pay-go beast growls for more revenue for more spending? Mr President, there are a lot of good proposals in the tax policy portion of the bill. Unfortunately, in the late stages of its development, it took on a more partisan character.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased today to introduce the Medicare Imaging Disclosure Sunshine Act of 2008. I agreed to a short-term Medicare extension bill last December with the understanding that this would give us the opportunity to include other priorities in a bipartisan Medicare package this year. One of the significant issues I had hoped to address was the lack of transparency in physician self-referrals for imaging services in the Medicare program. The recently-enacted Medicare bill requires accreditation for providers of the technical component of advanced diagnostic imaging services such as magnetic resonance imaging, MRI, computed tomography, CT, scans, and positron emission tomography, PET, and it establishes a demonstration project to assess appropriate physician use of these services. However, Mr. President, the legislation regrettably fails to address an issue that has contributed significantly to the rapid growth in Medicare spending for imaging services: physician self-referrals for imaging services in their offices and in facilities where they own or lease advanced imaging equipment. According to a June 2008 report of the Government Accountability Office, Medicare Part B spending for imaging services more than doubled in 6 years, growing from $6.89 billion in 2000 to $14.11 billion in 2006. During this time, the percentage of Medicare spending on imaging services provided in physician offices grew from 58 percent, about $4 billion, in 2000 to 64 percent, about $9 billion, in 2006. Spending on advanced imaging services, such as MRIs, CT scans, and nuclear medicine, also grew substantially faster than other imaging services. Beneficiaries need more transparency and disclosure of potential conflicts of interest when physicians write referrals for imaging services. An imaging disclosure provision was included in the Medicare bill that I introduced in June, and it was included in the agreement that Senator Baucus and I reached for this year's Medicare bill. The provision was not onerous nor was it overly proscriptive: it merely required referring physicians to disclose any conflict of interest related to their ownership of advanced imaging facilities or equipment. Patients still would be free to choose their physicians' imaging facility or equipment or to go elsewhere. Unfortunately, the imaging disclosure provision was dropped from the Medicare bill that Congress enacted once the process became partisan. It is for this reason that I am introducing this bill. The Medicare Imaging Disclosure Sunshine Act does just what the name implies: it requires referring physicians to shed some light on their relationship to imaging facilities and equipment they own by disclosing that ownership interest and providing beneficiaries with a list of alternative providers. The referring physician is required to inform the individual in writing at the time of referral that he or she can obtain imaging services elsewhere if they choose to do so and to provide a list of imaging suppliers located where the individual resides. The imaging services covered by the requirement include MRIs, CT scans, PET, and other radiology services specified as designated health services that the Secretary of Health and Human Services determines appropriate. The requirement would be effective in January 2010. Technology has made great advances in imaging services in recent years, and improvements in imaging hold much promise for earlier and more accurate diagnoses of life-threatening diseases which often may lead to improved outcomes for patients. But we must do more to help control the potential for overutilization of imaging services. The Medicare Payment Advisory Commission, or MedPAC, and others have expressed serious concerns that the sizeable growth in the volume of imaging services needs to be addressed. In March 2005, MedPAC recommended that the Secretary of HHS establish standards for providers of diagnostic imaging services and measure physicians' use of imaging services with their peers. Those recommendations were addressed to some degree in the Medicare bill that Congress enacted. However, another key MedPAC recommendation--that the Secretary of HHS strengthen the rules limiting physicians' financial incentives to order imaging services-- unfortunately was ignored. The June 2008 GAO Report noted that physicians in specialties other than radiology generated an increasing share of revenue from in-office imaging services from 2000 to 2006. They also found that in-office imaging spending per beneficiary, like other Medicare spending, varied widely across geographic regions of the country. By 2006, in-office imaging spending per beneficiary varied from $62 in Vermont to $472 in Florida, nearly eight times as much. This raises additional concerns about overuse since research on geographic variations on health care spending shows that, generally, providing more services does not lead to improved health care outcomes. In GAO's view, the shift in imaging services from hospital settings to physician offices has the potential to encourage overuse in light of the financial incentives that exist for physicians to supplement lower professional fees for interpreting imaging tests with relatively higher fees for performing the tests. They concluded that physician ownership of imaging equipment is a way to generate additional revenue for a practice. The Medicare Imaging Disclosure Sunshine Act will provide another necessary tool to address the significant increase in Medicare spending for in-office imaging services by providing more transparency and shedding some light on physician referrals to facilities and medical imaging equipment they own. I urge my colleagues to support this legislation.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased today to introduce the Medicare Imaging Disclosure Sunshine Act of 2008. I agreed to a short-term Medicare extension bill last December with the understanding that this would give us the opportunity to include other priorities in a bipartisan Medicare package this year. One of the significant issues I had hoped to address was the lack of transparency in physician self-referrals for imaging services in the Medicare program. The recently-enacted Medicare bill requires accreditation for providers of the technical component of advanced diagnostic imaging services such as magnetic resonance imaging, MRI, computed tomography, CT, scans, and positron emission tomography, PET, and it establishes a demonstration project to assess appropriate physician use of these services. However, Mr. President, the legislation regrettably fails to address an issue that has contributed significantly to the rapid growth in Medicare spending for imaging services: physician self-referrals for imaging services in their offices and in facilities where they own or lease advanced imaging equipment. According to a June 2008 report of the Government Accountability Office, Medicare Part B spending for imaging services more than doubled in 6 years, growing from $6.89 billion in 2000 to $14.11 billion in 2006. During this time, the percentage of Medicare spending on imaging services provided in physician offices grew from 58 percent, about $4 billion, in 2000 to 64 percent, about $9 billion, in 2006. Spending on advanced imaging services, such as MRIs, CT scans, and nuclear medicine, also grew substantially faster than other imaging services. Beneficiaries need more transparency and disclosure of potential conflicts of interest when physicians write referrals for imaging services. An imaging disclosure provision was included in the Medicare bill that I introduced in June, and it was included in the agreement that Senator Baucus and I reached for this year's Medicare bill. The provision was not onerous nor was it overly proscriptive: it merely required referring physicians to disclose any conflict of interest related to their ownership of advanced imaging facilities or equipment. Patients still would be free to choose their physicians' imaging facility or equipment or to go elsewhere. Unfortunately, the imaging disclosure provision was dropped from the Medicare bill that Congress enacted once the process became partisan. It is for this reason that I am introducing this bill. The Medicare Imaging Disclosure Sunshine Act does just what the name implies: it requires referring physicians to shed some light on their relationship to imaging facilities and equipment they own by disclosing that ownership interest and providing beneficiaries with a list of alternative providers. The referring physician is required to inform the individual in writing at the time of referral that he or she can obtain imaging services elsewhere if they choose to do so and to provide a list of imaging suppliers located where the individual resides. The imaging services covered by the requirement include MRIs, CT scans, PET, and other radiology services specified as designated health services that the Secretary of Health and Human Services determines appropriate. The requirement would be effective in January 2010. Technology has made great advances in imaging services in recent years, and improvements in imaging hold much promise for earlier and more accurate diagnoses of life-threatening diseases which often may lead to improved outcomes for patients. But we must do more to help control the potential for overutilization of imaging services. The Medicare Payment Advisory Commission, or MedPAC, and others have expressed serious concerns that the sizeable growth in the volume of imaging services needs to be addressed. In March 2005, MedPAC recommended that the Secretary of HHS establish standards for providers of diagnostic imaging services and measure physicians' use of imaging services with their peers. Those recommendations were addressed to some degree in the Medicare bill that Congress enacted. However, another key MedPAC recommendation--that the Secretary of HHS strengthen the rules limiting physicians' financial incentives to order imaging services-- unfortunately was ignored. The June 2008 GAO Report noted that physicians in specialties other than radiology generated an increasing share of revenue from in-office imaging services from 2000 to 2006. They also found that in-office imaging spending per beneficiary, like other Medicare spending, varied widely across geographic regions of the country. By 2006, in-office imaging spending per beneficiary varied from $62 in Vermont to $472 in Florida, nearly eight times as much. This raises additional concerns about overuse since research on geographic variations on health care spending shows that, generally, providing more services does not lead to improved health care outcomes. In GAO's view, the shift in imaging services from hospital settings to physician offices has the potential to encourage overuse in light of the financial incentives that exist for physicians to supplement lower professional fees for interpreting imaging tests with relatively higher fees for performing the tests. They concluded that physician ownership of imaging equipment is a way to generate additional revenue for a practice. The Medicare Imaging Disclosure Sunshine Act will provide another necessary tool to address the significant increase in Medicare spending for in-office imaging services by providing more transparency and shedding some light on physician referrals to facilities and medical imaging equipment they own. I urge my colleagues to support this legislation.

Mr. GRASSLEY

Mr. GRASSLEY. I ask unanimous consent to speak for 15 minutes as in morning business.

Mr. GRASSLEY. Mr. President, I come to the floor today to remind my colleagues and the American people, once again, about the deadly tornadoes, storms, and floods that affected the Midwest earlier this year. Iowa, my State, was especially hard hit by this severe weather event. The people in Iowa have great pride and resiliency. They don't like to complain, and it is even harder for them to ask for help. However, I wish my colleagues to know that Iowans are hurting, similar to people in other natural disasters. I see it in their eyes as they sort through the rubble and try to rebuild their lives. As their Senator, their friend, their neighbor, I am asking my colleagues to help and to help now. I thank my colleagues who have come to me and the rest of the Iowa congressional delegation and other Members whose States were affected. We have all had colleagues come to us to share their condolences and ask how they can help. However, I have heard some comments that this disaster was not severe enough to warrant special legislative attention. Washington doesn't seem to understand the devastation. That is the way I see it. In other words, it is not on television for 2 months in a row such as it was in New Orleans, so we don't seem to be getting the attention of colleagues such as we did from Hurricane Katrina. But we do have an emergency, and Congress needs to respond such as we did after 9/11 for New York City or after Katrina for New Orleans. Ten States were affected by this severe weather system. In Iowa alone, 340 communities were affected by these tornadoes, storms, and flooding. Iowa suffered well over $10 billion in damages. Of this amount, approximately $4 billion was agricultural loss, $4 billion was business loss, and $1 billion was housing damage and loss. Right now, those are very rough figures. I think they are only going to climb every day after these initial estimates. The floods in Iowa were well over a 500-year flood event level in many parts of my State. For example, the Cedar River in the Cedar Rapids area was 11 feet over record flood stage. Since we began keeping records in the 1850s, the highest flood level had been 20 feet. The levees protecting the city are at 22 feet. In June, Cedar Rapids had 31 feet of water, well over the 22 feet of the levee protection and the the previous record of 20 feet. Even my small hometown of New Hartford, IA, was first hit by an F5 tornado, which caused several deaths and severe damages and, just 2 weeks later, hit by severe flooding. Mr. President, 240 out of 270 homes had moderate to complete damage. Many of the businesses also suffered severe loss. They are trying to figure out how to stay in business. Unfortunately, for my small town, several have decided not to reopen. On Monday, I visited the home you see in this photo. This is one of my constituents in Cedar Rapids, IA. As you can see, they have already taken out the moldy drywall. Here, this lady, Shirley, is showing how high the water was on the first floor, and that is after the basement had been completely filled with water. We also couldn't go to the second floor in this home because half of the steps were washed away. So we are not just talking about standing water. At one point this was rushing water, turning over appliances and leaving boats in people's living rooms. It is people such as Shirley, who are in limbo because Congress is not acting, needing to know what assistance can be provided. They do not know whether the Government will help. Should they stay or should they leave? Then we have business owners who are worried about their employees not having homes. Will they leave town because they do not have a place to live? Then will the small businesses be closed because customers who use the local diner won't be there or the local flower shop won't be there? It is a vicious circle when you don't have housing for your workers. My colleagues in the Midwest and I have been working with appropriators on additional emergency assistance to help us with the recovery and with the rebuilding process. I happen to be concerned that this additional emergency assistance is being held up by nonemergency, nonrelated, and, in fact, quite controversial provisions. I believe we should do what we did for New York and what we did for New Orleans: consider the emergency portion separately from other appropriations that people think need to be done, and do it before the August congressional recess. Aid to the Midwest should not be held hostage to politics. Iowans are beginning to notice the inaction in Congress. I get asked why--why hasn't something been done? I would like to read to you parts of an editorial running in the Waterloo Courier. Waterloo is close to my hometown. I am not going to read it all, but, I want to include the entire editorial in the Record. I will read from just portions of it because it tells what Iowans are thinking about the inaction in Congress and that maybe there is a double standard. The headline is: ``Congress Needs To Make Time To Help Iowa.'' Iowans who don't agree with the recent minuscule approval ratings of Congress may want to take a second look. Congress has delayed consideration of a bill that includes further disaster aid for Iowa until after Congress' August recess. The editorial goes on: That's quite a slap in the face to those people and businesses already confused by which direction to take concerning housing and rebuilding issues. The Senate Appropriations Committee was scheduled to take up the supplemental package on Thursday, but Senator Robert Byrd, Democrat of West Virginia, the committee chairman, announced late Tuesday it was putting off consideration until after the recess. Then they quote Senator Byrd: There is no opportunity to begin consideration of a supplemental appropriations bill during the next 10 days. Then the editorial goes on to say that Byrd said the Senate was busy debating legislation on housing, energy, defense policy, and taxes before the recess. Continuing to quote the editorial: Our response to Senator Byrd and the rest of the Congress is: Make the time. Delay the recess if you have to. We'd also like to remind the Senator of his comments just last month after areas in West Virginia were ravaged by storms. The editorial refers to that statement, with Senator Byrd saying this: Once again, West Virginia has suffered at the hands of Mother Nature. Every moment counts in the recovery efforts, and every little bit of help is crucial. Then the editorial repeats again the last words of Senator Byrd's statement--``every moment counts.'' That was his plea then. It goes on to say: Sounds very similar to situations faced today by many Iowa communities, businesses, families, and individuals. It appears that Byrd's view on timely assistance doesn't extend to the Midwest. Mr. President, I ask unanimous consent to have printed in the Record the entire editorial so people can read it in its entirety.

Mr. GRASSLEY. Mr. President, I have also, as an individual Senator, been working on a comprehensive plan to provide tax relief to flood, tornado, and severe storm victims in the Midwest. My Midwestern colleagues have been helping me with this effort. We urge Congress to act quickly on enacting a tax relief law because we acted very quickly--within 3 weeks--after Katrina for New Orleans. On Wednesday, I introduced this tax bill with Senators Harkin, Bond, McCaskill, Coleman, Klobuchar, Durbin, Obama, Roberts, Brownback, Lugar, and Bayh and called it the Midwestern Disaster Tax Relief Act of 2008. The same bill was introduced in the House by the Iowa congressional delegation in a bipartisan fashion. Federal tax relief has proven to be very helpful to disaster recovery efforts in recent years. We modeled this legislation after the tax legislation that Congress passed to help victims of Hurricanes Katrina, Rita, and Wilma in 2005, and the tornadoes of Kiowa County, KS, in 2007. We took into account the lessons learned from the other disaster packages, so we have been able to slim down this package and tailor it to meet the needs of this major natural disaster and not repeat the mistakes we made for Katrina, where some people who weren't hurt by the disaster were able to take advantage of it. So we are curtailing the cost considerably. But there is another inconsistency. I have been told by the chairman of the House Ways and Means Committee, Mr. Rangel, that our disaster tax relief package needs to be offset. Well, he didn't hear Chuck Grassley say the tax package we passed for New York City after 9/11 had to be offset. It was an emergency. New York City needed help and New York City got help from this Senator, chairman of the committee at that time. I guess at that time I was ranking member, but still helping. And when Katrina came along, I was chairman of the committee once again, and we did not ask for offsets for Katrina. People in New Orleans were hurting and we passed the legislation and the President signed it 3 weeks after Katrina. We appropriated $60 billion within 5 days after reconvening after Labor Day in 2005. So I don't want anybody telling me that we have to offset a disaster relief package for the Midwest where people are hurting, when we didn't do it for New Orleans. Why the double standard? Is it because people aren't on rooftops complaining for helicopters to rescue them, and you see it on television too much? We aren't doing that in Iowa. We are trying to help ourselves in Iowa. We have a can-do attitude. It doesn't show up on television like it did in New Orleans for 2 months. So we are going to move ahead. We have targeted this assistance in this tax bill to those who have suffered damage and lost specifically from this severe weather event--individuals and businesses located in presidentially declared disaster areas due to floods, tornadoes, or severe storms, in just these States--Iowa, Arkansas, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, and Wisconsin--just where the harm has happened this spring. Among other provisions, this legislation would let disaster victims with damages to their primary residence tap their assets and access cash by withdrawing money from retirement plans without penalties and suspend limits on tax incentives for charitable contributions, thus strengthening local and other fund-raising drives collecting money to help small businesses and families recover. We also create tax-credit bond authority to help local governments rebuild infrastructure with interest-free loans; increase the amount of tax-exempt bond authority to help businesses receive below-market interest rate financing; remove limitations on deducting casualty losses due to natural disasters; and reduce the 2008 tax burden for businesses by substantially increasing the 2008 deductions from depreciation and expensing the business property. We tried to add a disaster tax relief package as an amendment to the housing bill--and I have to say Senators Shelby, Dodd, and Baucus were very helpful in that process--but we didn't get all these details ironed out in time to get it in the housing package. Mr. President, I ask unanimous consent for 4 more minutes.

Mr. GRASSLEY. We have agreed to pursue Midwestern tax relief either as a separate bill, which would have to start in the House of Representatives, or on another tax bill that is over here under consideration in the Senate. I want to thank Senators Shelby, Dodd, and Baucus, though, for their consideration of putting that in the housing bill. We have had further discussions since then with Chairman Rangel and Baucus. It is our hope that we can swiftly reach a bicameral agreement with Ways and Means and the Senate Finance Committee on our proposals. I think we basically have it ironed out, except for this offset issue. And we should pass this tax bill in both the House and Senate by unanimous consent before we leave for the August recess. That would get it done in still a longer period of time than it took me to get tax relief for New Orleans. Once again, assistance to Iowa and the Midwest should not be held hostage to politics and gamesmanship. We treated the victims of the gulf coast with quick and fair action, as I have indicated twice during my remarks. We passed $60 billion in appropriations bills within a week of returning to Washington after the August recess--Katrina happening just days before Labor Day, during our recess--and we passed that tax relief bill that I have mentioned that was signed by the President within 3 weeks. Those were clean bills. They weren't loaded down with controversial extraneous positions and didn't need offsets. Efforts underway by Democratic leadership are letting down the people of the Midwest. They are trying to use this disaster assistance as a vehicle to promote an agenda and pet projects, and I will give you some examples. The majority would like to include a provision to give $1.2 billion in tax credits to New York City, even though New York City does not pay Federal taxes. This proposal is widely reported to fund the building of a train from Manhattan to John F. Kennedy Airport through the use of New York Liberty Zone tax credits. According to the Joint Committee on Taxation, Congress has never before provided a limited tax benefit such as this to a government unit. This provision is very controversial, is nonemergency, and it would slow down getting assistance to the Midwest, and Iowans, where people are hurting and hurting right now. I reiterate that politics should not get in the way of helping the victims of the storms and tornadoes in the Midwest. To cut through this hogwash, we ought to pass the Midwestern disaster tax relief bill by unanimous consent even this week. As Iowans and others in the central United States start recovering and rebuilding their lives and communities after these record deadly storms and floods, they need and deserve swift Federal action. The assistance should not be held up over politics. I am often asked by constituents not to forget them. Therefore, I am asking my colleagues in Congress this very minute not to forget my constituents or other constituents of Midwestern States. We only ask that Congress give Iowans and those in the Midwest the same consideration we gave victims of other disasters--and most often I mention New York City and New Orleans--nothing more, nothing less. If any of my colleagues doubt that this is an emergency and that Federal aid is needed, I am in Iowa every weekend--except this weekend, I am sorry to say, because we are in session on Saturday. But whenever they come, I will be happy to show them around. I have all kinds of pictures, which I think my staff has been putting up from time to time, to demonstrate this disaster that we have had in the Midwest. Mr. President, I yield the floor, and I suggest the absence of a quorum.

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

Mr. GRASSLEY. Mr. President, I ask the Senate stand in recess subject to the call of the Chair.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I rise to express my opposition to the nomination of Mr. James A. Williams to be the Administrator of the General Services Administration, GSA. My concerns are based on my investigation of a dubious GSA contract with Sun Microsystems. In 2006 and 2007, my oversight staff conducted a thorough inquiry into the GSA Multiple Award Schedule contract with Sun Microsystems for computer products and services. GSA inspector general, IG, auditors had alerted GSA's top management of alleged fraud on this contract as early as 2005. In 2006, Mr. Williams became the Commissioner of the GSA Federal Acquisition Service, FAS. His office was directly responsible for this questionable contract with Sun Microsystems. He and Administrator Doan were alterted to the alleged fraud and the referral of the matter to the Department of Justice, DOJ. I previously made the findings of my inquiry known in a floor statement on October 17, 2007. In a nutshell, all the evidence developed in my oversight investigation appears to indicate that top-level GSA management, including Administrator Doan and FAS Commissioner Williams, may have improperly interfered in the ongoing contract negotiations with Sun Microsystems in May-September 2006; and Administrator Doan and Mr. Williams pressured the GSA contracting officer to approve the new Sun contract even though they both knew that the IG had detected alleged fraud on the existing Sun contract and had referred the matter to the DOJ for possible prosecution/litigation. This case is now pending in Federal court. The facts appear to show Mr. Williams, as FAS Commissioner, failed to act in the best interest of the American taxpayer. He had the opportunity to put an end to or bring into compliance a contract that was allegedly fraudulent, but in the end he could not do it. Instead, he sided with former Administrator Doan by taking steps to remove the GSA contracting officer. When the final contract was signed with Sun Microsystems by a newly appointed contracting officer, he chose to look the other way. He didn't even try to have the IG audit or examine the terms of the proposed contract. At the very least, this was a very poor management decision by Mr. Williams. It was a deplorable error in judgment that he probably regrets today. We need a strong leader at GSA. The responsibilities of GSA Administrator require an individual who will stand up to anyone to protect the financial interests of hard-working American taxpayers. Although I agree he is well qualified and a devoted civil servant, I don't believe Mr. Williams has the bureaucratic and intestinal fortitude to make the tough decisions at GSA when it matters. Reports of alleged fraud on the Sun contract surfaced on his watch. He knew about the alleged fraud. The taxpayers may have been cheated out of tens of millions of dollars. As FAS Commissioner, he was the top GSA official responsible for making the tough calls, and he chose not to protect the taxpayers. He made the wrong choice. He is now accountable for that decision. Because he failed to protect the taxpayers at a crucial moment, we should not elevate Mr. Williams to high office. For all these reasons, I oppose his nomination to be GSA Administrator. Mr. Williams's nomination is now before the Homeland Security and Governmental Affairs Committee. On July 22, I wrote to the chairman, Senator Lieberman, laying out the reasons behind my opposition to this nomination. I ask unanimous consent to have that letter printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in a little over 3 months, Americans will make a very important choice on the future direction of the country. We will go to the polls, we will select a new President. Americans will also vote on roughly one-third of the Senate and all the Members of the House of Representatives. According to public opinion polls, economic issues will be among the most important matters voters will consider when they go to the voting booth in November. Everybody knows that the Federal Government affects economic issues, and we do it through Federal fiscal policy. How we deal with Federal fiscal policy can be viewed as two sides of a ledger: On one side is tax policy, and on the other side is spending policy. The choices about how we as a nation want to balance each side of the ledger will have very important consequences and implications on our economic future. Most economists agree that high taxes dampen economic growth. Too much spending, just like too much taxation, can also dampen economic growth. As elected representatives of the American people, we have an obligation, as the Constitution directs us, to spend those tax dollars for the common defense and also for the general welfare of the Nation. We all have a stake in a growing economy, and we will all suffer from a shrinking economy. As ranking Republican on the tax-writing Senate Finance Committee, I believe it is my obligation to explain the choices and the consequences of those fiscal policy choices; therefore, I wish to focus on tax policy as it relates to the choices Americans will face this fall. In all of the discussion about vague notions of change and vague notions of hope, there are some substantive issues Americans will be facing in the fall. The big question will be how much is the Federal Government going to take out of the American taxpayers' pocketbooks. We will need to evaluate before the election what we are being told on the campaign trail--not just what we are told, compare it with what is likely to occur starting at high noon, January 20, 2009. I think from history we have some pretty good indicators that tell us what will happen based upon the choices of the American people in the next election. To do that, we must look at our current tax burden. Then we need to take a look at what Senators McCain and Obama are telling us about how they will change the tax burden. Finally, we have to consider the ability of each candidate to deliver on promises. Each taxpayer is going to have to make choices, choices about what these candidates will do on tax issues once they get into that position of power. Every American taxpayer and every American family budget will be impacted by the new President and the agenda of the Congress. Elections have consequences. Today, I wish to consider future tax policy and do it in the context of the Congressional Record over the last 3 decades. First, I want to compare the actions of Congress on tax hikes and tax cuts in relation to each party's hold on the White House and do it from the congressional as well as the White House basis. As a baseline, I will show a scorecard of tax hikes and tax cuts for each 4-year Presidential term since 1981. I have a chart here. The chart shows three things. They start, as I said, with the year 1981. As you will note, the years are divided into Presidential terms, so we start with President Reagan's first term and work our way through to the present, which is the last year of President George W. Bush's second term. You see the bottom lines across there, the ones that have red and blue, and the years there for the Presidential terms. Right above the line for the Presidential terms, we have a thick line. It is a three-part line. The line shows relative power of Democrats and Republicans. The top third of the line, if red, shows Republicans holding the White House. The middle third of the line shows who held the Senate majority for a certain period. If red, then Republicans held the Senate; if blue, the Democrats held the Senate. Then the bottom line, that is in regard to the House majority. Like the other two lines, if red, it means the Republicans held the majority; if blue, it means Democrats were in charge of the other body. If you move up the chart, there is a running total of how much on a yearly average that particular Congress and President agreed to raise or reduce taxes. The lines going up or down are in regard to the tax raises or tax decreases. This data is not mine; it was drawn from the Treasury Office of Tax Analysis report that was released--the most recent one in 2006. The amounts are derived from the nonpartisan Joint Committee on Taxation revenue estimates of each of the enacted bills Congress passed during that 26-year period of time. Let's take a further look at the chart so you get some specifics. President Reagan made tax relief a cornerstone of his successful 1980 campaign. His election helped Republicans attain a narrow majority for the first time in over a generation. The House, of course, remained in Democratic hands. In 1981, President Reagan proposed and Congress agreed to a large tax cut. So you have it. The first green line goes there. On average, if fully implemented, it meant that you would have a tax cut of almost $111 billion per year. Over time, the Democratic House pushed for and President Reagan reluctantly agreed to some smaller tax increases, and they are the second line where the tax increases come down toward the zero line there. For the 1984 campaign, President Reagan made revenue-neutral tax reform a central part of his campaign for reelection. Republicans held a majority in the Senate for that election, and President Reagan had built a case for reform. Republicans in the Senate and Democrats in the House agreed, and the chart reveals tax reform for 1986 of a small amount, as you can see there, but still tax reform. It is significant, I would say. But in 1986, Republicans lost control of the Senate. I happen to remember that because I was on the Finance Committee for my first 6 years in the Senate. We didn't have enough Republican seats after that, I didn't have enough seniority, and so I lost my seat on the Finance Committee. Congressional Democrats insisted on and obtained, after their success in that election, a tax increase in 1987. You can see that tax increase there for 1987. In 1988, as you recall, President Bush's father, George H.W. Bush campaigned, in 1988, and included a pledge not to raise taxes. President George H.W. Bush won that election, but congressional Democrats solidified their majorities, and, as a part of a deficit- reduction package, President George H.W. Bush forgot about his campaign promise and agreed to a tax increase. And here it is. You can see the big tax increase--in 1989-1990, it was. Shortly after that tax increase went into effect--there are consequences of policy made here in Congress--the American economy went into recession that year. Then you get to the 1992 campaign. Bill Clinton, in response to the recession, campaigned on a middle-income tax cut and tax increases on higher income taxpayers. President Clinton was elected, and Congress Democrats retained a very comfortable majority in the House and Senate, as you can see by the blue lines there, during those years. In 1993, less than a year later, on the force of the Democratic votes alone, the largest tax increase of modern era was enacted. There you can see it very definitely, a big tax increase at that period of time. You will note it is at the highest point on the tax increase part of the chart. Republicans claimed majorities in the House and Senate in the 1994 election. President Clinton agreed to a revenue-neutral small business tax relief package in 1996. During that campaign, President Clinton campaigned once again on middle-income tax relief. President Clinton was reelected, Republicans increased their majority in the Senate, and we retained a majority in the House. In 1997, congressional Republicans and President Clinton agreed to a significant tax relief package. It was the first tax relief law since the President Reagan administration, and it averaged about $13 billion a year. There you can see it in the year of 1997. George W. Bush campaigned on a broad-based tax relief plan for 2000, or in the 2000 campaign. He was elected then, obviously. The parties split the Senate 50-50, with Republicans in control because of Vice President Cheney's tie-breaking vote for organization. Republicans held their House majority. In 2001, President Bush and Congress agreed on the largest comprehensive tax relief package since President Reagan. Here it is, as you can see, the big tax reduction of 2001, averaging about $82 billion per year. As things happen around here, I was chairman of that committee for only about 5 months because Senator Jeffords switched from being a Republican to a Democrat, and in the wake of 9/11, corporate scandals, and other events, President Bush, a Republican House, and a Democratic Senate agreed on an economic stimulus package that averaged about $12 billion a year. Republicans regained the Senate majority in 2002. So in 2003, President Bush and the Republican Congress continued to significantly reduce the overall tax burden. So here you can see in the 2003 and 2004 tax bills a combined about another $82 billion a year reduction in taxes. If you look at President George W. Bush's first term, enacted legislation totaled roughly $174 billion per year, on average. Republicans held the House for all of that term. Republicans held the Senate for most but not all of that term. In 2004, President Bush campaigned for reelection by emphasizing the permanence of the lower tax burdens secured during his first term. Republicans increased their House and Senate majorities. So in 2006, President Bush and the Republican Congress extended the tax relief in the first term through the year 2010. It is shown here. It averages about $22 billion per year. In 2006, the situation now, as a result of that election, Democrats gained majorities in both the House and Senate. Despite the opposition of the Democratic leadership in the House and Senate, Congress passed and President Bush signed an ``unoffset'' alternative minimum tax. That legislation averaged $13 billion in tax relief. This year Congress and the President agreed to $34 billion in temporary economic stimulus. At present, the Democratic Congress and President Bush are in a stalemate on an AMT patch extension and other expiring tax relief matters. The reason for the stalemate is the House and Senate Democratic leadership's opposition to passing these bills ``unoffset.'' I want to use one chart to sum up today's discussion. This chart shows a tax thermometer. We have got it up there. The heat side is the tax increase side. This chart shows the relationship between party control of Congress, Presidency, and tax hikes or tax relief. If Republicans control the Presidency and Congress, then lowering the tax burden, which is a tentative Republican philosophy, is virtually certain to be put in place. So you can point to that point in the chart there that demonstrates having both a Republican President and a Republican Congress is a certainty to have a lower tax burden for the American people. If Democrats control both the Presidency and the Congress, then an increase in the tax burden is certain to occur. That is what history of the last 25 years shows. So it is a virtual certainty, regardless of campaign rhetoric to the contrary. If the parties split control of the Presidency and the Congress, the record is, as you might expect, mixed, though generally against tax relief. So if you look at the median picture there, you see that we have about three decades of history backing this up. I would encourage everyone to take a look at this thermometer chart. When folks go to the voting booth on November 4, they will need to consider the probability of a change in fiscal policy. They will need to consider the potential change to their family budget, from higher or lower taxes, because elections have consequences. They will have to also think about the broader economic effects of higher or lower tax burdens on business or investment, because tax policies by the Congress of the United States do have consequences, some ways good, some ways bad. My view is, higher taxes are bad for the economy. That change could be dramatic if the vote is for one party to control the House, the Senate, and the Presidency. There would be consequences then, lower taxes if that is House and Senate Republicans, Republican President; House and Senate Democratic, Democratic President, higher taxes. In my next discussion, which will not be today, I will follow up this one with a detailed examination of what happens in the last bit of history most like the present. I am referring to the 1992 campaign and the legislative record that followed in 1993. The reason I do that is I think I see the same thing evolving in this campaign. We ought to learn from history, and the voters need to take that into consideration before November 4. I yield the floor.