Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I congratulate the Senator from South Dakota. He is expressing a very simple law that everybody learns in economics 101: If you increase supply, it reduces price; if you restrict supply, price goes up. What we want to do is increase the supply of energy. For myself, I want to explain earlier today my vote to invoke cloture on the motion to proceed to S. 3044, the so-called Consumer-First Energy Act or, another title, the antiprice-gouging bill. I want to explain it because people might think that I am in support of everything in the legislation. I will explain why I wasn't, but why I thought we ought to move forward. The legislation includes provisions that I have long supported, including the no oil producing and exporting cartels legislation. I am an original cosponsor of the NOPEC bill. This bill would authorize the Department of Justice and the Federal Trade Commission to bring lawsuits against oil cartel members for antitrust violation because it is a fact of American law, if oil companies were doing the price fixing that OPEC countries do, these executives would be in jail. Yet we are faced with the same anticompetitive environment from other countries. As our gas prices continue to rise, it is time to say enough is enough to OPEC anticompetitive activities. It is past time to let OPEC know that we are committed to stopping illegal pricing, the same illegal pricing that would put CEOs of major oil companies in jail. This legislation also includes provisions aimed at reducing speculation in oil markets. I support that. I can't say for certain whether the provisions included in the bill will have the desired effect. I can say, however, that something needs to be done to address what seems to be out-of-control speculation in crude oil markets, and speculation of crude oil tends to show up on the business pages of the newspaper as a major cause of the increase in oil and, in turn, gasoline. I am pleased that recently the Commodity Futures Trading Commission has taken steps in recent days and weeks to increase their access to data and information that will hopefully allow them the proper oversight and transparency of energy markets. Take a little bit of speculation, take a little bit of unknown out of the market, more transparency ought to help our markets work better. In conjunction with what the Commodity Futures Trading Commission is up to and my wanting to build on what they are doing, I asked Acting Chairman Lukken and Commissioner Chilten very pointed questions during a recent confirmation hearing in the Agriculture Committee on the CFTC's oversight responsibilities. In addition, I sent a letter to the CFTC today seeking more information about the CFTC's action to rein in speculation by investment banks and traders on foreign exchanges. I voted today as I did in a manner uncustomary of Republicans to proceed to the bill because I think we need to have a debate on the critical issue of energy prices. However, that doesn't mean I support everything in S. 3044. The bill, for instance, included a windfall profits tax on oil companies. I saw firsthand a couple decades ago the result of a windfall profits tax the last time it was enacted. It didn't do anything to produce more energy. Simple economics: You tax something, you get less of it. Why would those on the other side believe if you tax energy production, you would get more energy produced? Of course, it is counterintuitive. Yet this bill doesn't include a single provision to increase the production or supply of traditional energy resources. Why aren't we considering policies to develop the resources that God gave us at home? We have a huge supply of oil and gas in Alaska. We could be opening areas of the Outer Continental Shelf to exploration. We could be looking at Federal lands onshore for energy production. These are things we could do this very day that would increase supply and drive down prices. Yet they have been blocked time after time by people on the other side. If you think this is a partisan shot by a senior Republican, let me suggest to you that I can show you rollcall after rollcall after rollcall, not just recently but over a long period, of opposition from the other side to increasing the supply of fossil fuels and the use of fossil fuels we know. My constituents need to know why they are paying $4 at the gas pump. Yet we in Washington have done little to increase our own supplies. Speaking from the grassroots of the State of Iowa, I want to remind my colleagues of what I said last week on the floor of the Senate. Of at least 14 out of the 17 town meetings I have had, the question came up very simply: Why aren't we producing more oil? Why aren't we going where the oil exists, with $4 gas? I can give a simple answer, and I tell the people ahead of time in my town meetings. I try not to make partisan comments, but occasionally I think I can when it is intellectually honest to do it. I suggest to them that there is opposition in the other party to more exploration, where we know there is oil. We just don't have the votes to get the job done. That could be considered a partisan shot, but I think I can back it up with rollcalls. It is a justification to my constituents when I am asked why we don't drill more where we know there is oil. Most of my constituents expect you to do this in an environmentally sound way as well. That doesn't, to me or my constituents, appear to be incompatible because the United States is dependent upon oil cartels and foreign countries such as Iran and Venezuela, very unstable, yet we have done nothing to help ourselves. That is the way my constituents see it, as evidenced by 14 out of 17 town meetings I held during the week of Memorial Day. In the other three town meetings, it just did not happen to come up. I believe oil is trading today at around $135 a barrel. Yet there is an overwhelming aversion to environmentally sound resources developed at home. We ought to be developing our domestic resources. There is no rational reason not to, and at $4-a-gallon gas, consumers ought to be outraged they are not exploring for more domestic resources, and Congress making decisions to do that, and to do it so quickly that it is telling people why it is not being done. At the grassroots of America, we ought to be having the same march on the Capitol as when people are outraged about other things, which we do not seem to be having this time. Maybe we will have this outraged expressed. It is a little bit of a quandary to me why, at the grassroots of America, when gas goes from $3.50 to $4, or from $3 to $4, it does not seem we are having as much outrage as we had when gasoline was going from $1.50 to $1.75 about 4 years ago. Maybe it is because people have lost confidence in Congress. I do not know. I can understand why you can lose confidence in Congress when you have $4 gasoline and we know where there is 13 billion barrels of oil in this part of the country and 7 billion barrels of oil in other areas of the country and we are importing 10 to 15 million barrels of oil a day and paying out to some foreign country money that if we drilled in the United States we would keep in the United States. The bill I am explaining to you takes billions of dollars of permanent tax provisions and dumps them into a special piggy bank designed to let appropriators dole out special interests checks for their favorite spending projects. I know the rhetoric you have heard today is to make big oil pay to lower the price of gasoline. But I can promise you, there is absolutely nothing in this bill that accomplishes that charge. This bill, flawed as it is, would have to be amended. Any permanent tax provisions on the backs of the energy industry should immediately go back into tax benefits that expand conservation and clean energy tax provisions currently in the Internal Revenue Code. We cannot put the cart before the horse. It is irresponsible to change taxes for future undisclosed spending. It is even more irresponsible to do this before we make certain the current tax benefits available for wind, solar, alternative fuels, and much needed conservation in buildings and homes. It was wrong for the Democratic leadership to dump permanent tax provisions into a slush fund for future appropriations. But those types of wrongs cannot be fixed if we never proceed to the bill, hence why this Senator voted as I did today, contrary to what a lot of the members of my party did. House Extenders Bill I turn now to the tax extenders bill. I voted today on the second rollcall along with 43 other Senators against invoking cloture on the motion to proceed to H.R. 6049, the House extenders bill. Earlier today, the Democrat leadership released a description of a substitute extenders bill that included many provisions that were not extenders. As you know, I joined Senator McConnell in filing an extenders bill last Friday that is not offset by increases in taxes elsewhere because it is our policy that if you extend existing tax policy, you should not have to raise taxes on somebody else for an extension of tax policies that in some instances have been in place for 20 years. Here are some of the reasons, then, why I opposed the Democratic leadership bill and support the Republican leadership bill. The Senate Democratic leadership bill contains numerous provisions that do not either extend or make permanent expiring tax provisions. On the other hand, the Republican bill really is an extenders bill, with all the provisions in the Senate bill extending or making permanent expiring tax provisions. Included in the Senate Democratic leadership bill is a proposal to give $1.2 billion in tax credits to New York City, even though New York City does not pay Federal tax. 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, the Congress has never--and I want to emphasize ``never''--before provided a limited tax benefit such as this to a governmental unit. In addition, the bill provides a new $1.6 billion tax benefit just for trial lawyers. Now, think about that. We are trying to extend tax policy to bring economic development and create jobs, and it has something in it for trial lawyers. It allows trial lawyers to deduct their upfront expenses in contingency fee cases, even though they expect to recover them when they win or settle the case. And these trial lawyers do expect to win or settle their case; otherwise, they would not take the case on a contingency fee basis. So why should trial lawyers get a deduction for something they expect to get back? We do not give lenders a current deduction when they make a loan. Some would argue that this is a large chunk of pork that the Democratic leadership bill is trying to feed to trial lawyers. The Democratic leadership bill, for the first time in history, makes tax benefits directly conditioned on the Davis-Bacon Act. That is the prevailing wage requirement. It is added to a new provision called the New Clean Renewable Energy Bonds. The Senate Democratic leadership bill only extends provisions that expire at the end of 2007 until the end of 2008, setting up another extenders fire drill early next year. In contrast, our bill on the Republican side generally extends provisions that expired at the end of 2007 until the end of 2009. The Democratic leadership bill contains permanent tax provisions to offset temporary extensions of current law. Anonymous Democratic lobbyists are misstating the Republican position on offsetting expiring tax relief provisions. The lobbyists have been quoted in the Roll Call newspaper and other publications stating that part of the Republican theology is opposition to offsets. Republicans will support offsets if they make sense on the policy merits. If the revenue-raising proposals make policy sense and offset the revenue loss for new tax policy--I want to emphasize ``new tax policy'' as opposed to extending existing tax policy--then it will likely garner majority support among Senate Republicans. However, one of the revenue raisers in the Democratic leadership bill is a proposal to delay the effective date of the worldwide interest allocation rules. This provision was enacted in the American Jobs Creation Act of 2004, with a delayed effective date for revenue purposes. The decision to reform the interest allocation rules was bipartisan back then in 2004. The reform came out of the Finance Committee working group set up by Chairman Baucus in 2002 and passed the full Senate by a vote of 92 to 5. So after a vote of 92 to 5--bipartisan--why would they try to undo a very important provision in it? The current rules actually penalize domestic manufacturers who compete in global markets by making it more likely they will be double taxed on their foreign income. The Senate Democratic leadership bill would delay the effective date even further--can you believe it--by 9 years, giving it an effective date of 2018. This provision raises almost $29 billion over 10 years. The President of the United States, aware of how important this provision is that is going to take effect in 2009--that was actually passed in 2004 to make our manufacturing competitive with international competition--issued a statement of administration policy noting that ``the Administration strongly opposes the provision in the bill that would subject U.S. companies to continued double taxation by delaying the effect of new rules for allocating worldwide interest for foreign tax credit purposes.'' Let's look at the Senate Republican alternative. I hope people listening know that a minority in the Senate has a responsibility to have alternatives, not just jab at the majority position. So we have this responsible alternative. It contains alternative minimum tax relief and extensions of individual and business tax provisions, but with no offsets, following the philosophy we have that if you have had tax policy in place for decades that tends to sunset from time to time--it has been on the books--you should not have to raise taxes on new people to extend it for a few more years. So there are no offsets for the continuation of existing tax policy. It also includes the Ensign-Cantwell energy tax incentives, an unoffset provision which was approved by the Senate by a vote of 88 to 8. This means an overwhelming majority of this body were willing to pass energy extenders without requiring offsets. So why, if we have a vote of 88 to 8 to extend energy tax credits for a few years, and we do not have to offset it--how does the other side get the idea that if you had other tax policies that maybe have been on the books for decades and sunset, you have to have offsets for that? I do not understand the inconsistency. The bottom line is, we need a package that can garner 60 votes in the Senate and get a signature by the President of the United States. So Senate Republicans will seek to proceed to the Senate Republican leadership bill which contains a package of proposals that have bipartisan agreement. Mr. President, I yield the floor, and since I do not see other Members ready to speak, I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to inform my colleagues that I have requested to be notified of any unanimous consent agreement before the Senate proceeds to the consideration of any legislation that amends the Immigration and Nationality Act. I intend to reserve my right to object to any such request unless legislation to reauthorize the E-verify program run by the Department of Homeland Security is included. Last week, I introduced legislation to permanently extend the employment verification program, which was created in 1996. This program has been a valuable asset for more than 69,000 employers across the country that want to comply with our immigration laws. This program needs to be reauthorized this year. For that reason, I have asked the minority leader to consult me before any unanimous consent agreement on immigration legislation is considered.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to recognize the service that Arthur (Art) J. Schut has provided to so many in my home State of Iowa. Art is an Iowan that has dedicated over 30 years of himself to the disenfranchised of our communities. He has worked tirelessly on a local, State, and national level to provide care, counseling, and education for families, the public, and lawmakers to minimize the negative stigma and to secure funding and resources for those with addiction and mental health issues. Art began his distinguished career nearly 40 years ago as a program director for the Des Moines Metropolitan YMCA working with youth gangs. Since that time, Art has served in a variety of roles working on behalf of those who suffer from the scourge of addiction and other mental illness. Art has served as a member of the University of Iowa faculty and as a clinical and treatment director. During this period in Art's life, he supervised several drug treatment and education programs throughout southeast Iowa, and he provided vital education for future substance abuse professionals through his position with the University of Iowa. Art will soon be leaving the position that he has dutifully served in for 25 years as President and CEO of the Mid-Eastern Council on Chemical Abuse, MECCA. Throughout his service as the President of MECCA, Art has overseen the administration of operations and programs in three regions throughout Iowa. These operations include outpatient offices in 16 counties, a prevention unit, employee assistance program for regional businesses and industries, a residential treatment program, and a detoxification unit. Sadly, Art will soon be leaving the great State of Iowa, but he will be continuing the good fight against addiction and abuse. Barbara and I want to extend our gratitude for all the years of service and for the positive impact on all the lives Art has had throughout his remarkable career. We wish Art all the best in his future endeavors.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I probably will not be more than 10 minutes, but I appreciate the will of the Senate if I need a few more minutes. Today, I pay tribute to the victims of the devastating tornado that ripped through northeast Iowa a week ago Sunday. This would have been Memorial Day weekend. That is a weekend that traditionally offers a thank-you to veterans who have given their lives. It is a time of backyard barbecues, and in the Midwest it is when swimming pools open for business. But late afternoon on May 25, 2008, Mother Nature unleashed a tragic beginning to a summer vacation. It was a kind of natural disaster that makes people realize the perils of pettiness and appreciate what really matters the most. A history-making twister produced winds in excess of 200 miles per hour. It tore across Butler County--that is my home county--Black Hawk County, Delaware County, and Buchanan County. It paved a 43-mile path of destruction. The severe storm system virtually ripped the town of Parkersburg in half. It destroyed 22 businesses, leveled 222 homes, and damaged 408 others in a community of only 2,000. The storm system injured 70 individuals. The fatalities attributed to the tornado have now risen to eight Iowans. But the statistics don't do justice to the heartbreak and to the hurt. Natural disasters have wrought havoc on humanity since the beginning of time. In recent years, the 2004 tsunami in Southeast Asia claimed more than 100,000 lives and displaced millions of victims from their homes. In September 2005, a category 5 hurricane ravaged the American gulf coast, causing $11.3 billion in damages. Last year, in Greensburg, KS, a tornado leveled the entire community of 1,400, causing an estimated $267 million in damage. The financial estimate of damage from the May 25 tornado in my home area from storms and flooding hasn't been calculated yet, but the pricetag will not do justice to the heartbreak and to the hurt. Whether it is an earthquake, a hurricane, or a tornado, a natural disaster leaves behind massive debris and destruction. The physical and financial tolls shouldered by the victims arguably pale compared to the emotional scars and personal losses left in the aftermath of a killer natural disaster. This tornado was what they call an F-5 tornado, the worst they get. It struck terror into the hearts and minds of northeast Iowans over Memorial Day weekend, and it also hit close to home as well. From the lawn on my farm near New Hartford, I watched what I thought was nothing but a dark storm cloud blackening the sky as the tornado made its way across Butler County from Parkersburg--population, as I said, about 2,000--to my hometown of New Hartford, population 600. It was the first F-5 tornado to strike Iowa since 1976, so tornadoes like this don't happen every day in our State. Maybe they do in Oklahoma, but they do not every day in my State. And it happened to be the deadliest tornado in the State since the 1968 tornado in Charles City, IA. I believe that tornado claimed about 13 lives compared to the 8 so far here. In some ways, the storm may serve as a wake-up call to those of us who have become somewhat complacent about severe weather warnings. The day after the storm, I visited with residents of Parkersburg and New Hartford and toured the damage, along with Senator Harkin and Governor Culver, and Congressman Braley was there. It was an unimaginable scene. In Parkersburg, the tornado ripped apart the Aplington-Parkersburg High School. This is a picture of that devastating damage. It will cost $14 million to rebuild. Thank God they were well insured, I have been told. I haven't heard that directly but indirectly. It destroyed the Parkersburg City Hall, crushed the town's only gas station, and crumbled the grocery store. If you watched CNN yesterday, you were able to find some pictures from the cameras that guard the bank during the night and over the weekend, and you saw, before they went blank, sucking everything up. And you know where a lot of those bank papers landed, and a lot of pictures from various homes? In Prairie Du Chien, WI, 100 miles away. And those people in Prairie Du Chien, we are told by television, are collecting all those valuables and are someday going to bring them back to Parkersburg, IA. In the afternoon of this tragedy, seven people sought refuge and survived by going to a produce cooler in one of the restaurants there. That is just one example of what people do. So more life could have been taken. I have been told by some people that as the Weather Bureau or the government agencies that measure this stuff and tracked the storm, that this damage to 220 homes in Parkersburg, IA, could have been done in just a few seconds, like 20, 30 seconds. Some people on the scene said it had to be less than 45 seconds. But in just a few minutes or a few seconds, whatever you want to say, a mile-wide tornado wiped away a lifetime of treasured belongings, furniture, and family memorabilia. There are no parts of homes sitting around. There is only sticks sitting around, and a lot of that landed in farm fields miles away. There are uprooted trees. There is not a tree with a leaf, maybe a limb or two. The trunk maybe still stands, or maybe the trunk is down. We have mangled vehicles. Some people didn't know where their vehicle ended up. Maybe today they do, but they didn't a week after the storm, they told me. It killed a lot of livestock in the rural areas, ripped away roofs and walls, mowed down neighborhoods, shredded solidly built homes like toothpicks, and knocked out the city's infrastructure. I saw this debris. I am told that there were 60,000 tons in Parkersburg alone left behind in the wake of the tornado. I suppose that is a rough guesstimate, but the people who know about the tragedy know how to estimate some of this stuff. This picture of the high school, once again, probably isn't the best picture I could produce about how much of a wilderness the southern half of this small town is, and I don't think this captures the wreckage, but it is a small glimpse. It is nearly inconceivable to understand the awesome force of Mother Nature. Thankfully, the resiliency and the compassion of human nature also has proven that it can withstand floods and droughts and famines, and so it shall be in my home State. After seeing the devastation firsthand, it still made me wonder that the fatalities have thus far been kept in single digits considering that 70 people were hospitalized. And I commend the emergency preparedness plans put into action by city and county authorities and during the storm. The civil defense people came from the adjoining counties without hardly even being called to come. They knew we needed help. And thanks to the warning systems, countless lives were saved. In fact, rising above the call of duty, volunteer firefighters in my hometown of New Hartford raced up and down the streets after the power had gone out alerting people with their vehicle sirens, just to show their commitment to letting everybody know that just a few minutes away was a terrible weapon of destruction. Exactly 1 week after the storm blazed its trail through the region, I returned to Parkersburg. I am pleased to report relief and recovery efforts underway. I saw fire departments coming up to serve the community and the surrounding communities from 100 miles away--the suburbs of Des Moines, IA, is an example. I hope you know there is a great deal of resilience in the people of Parkersburg and New Hartford. Like a beacon of hope, I want to show you where people were, what they were doing 6 days after this tornado hit through. This doesn't give justice to all the debris that still has not been picked up, but there were people constructing new buildings right away. Except for a generation of trees being gone--because 25 years from now you will be able to go down this 43 miles and you are going to know where this tornado went--except for that, Parkersburg and these other communities will be back in a few months. I give this as evidence of the resilience of the people, only 6 days after this damage took place. The cleanup operation, of course, will take a long time. Bulky machinery will do the heaviest lifting. That is after people have an opportunity to paw through all of the strewn things that are there, so they can take out some of their valuables in the sense of remembrances--pictures, photographs, maybe some important documents they might find. There may be some of those important documents up in Prairie Duchene. The scoreboard for this high school ended up 70 miles in Decorah, IA, as an example. Maybe it was part of the scoreboard, but this tells you how it is. It is going to take countless hours of manpower to orchestrate this massive undertaking to get the job done. The seemingly impossible task is being made possible, thanks to the tireless commitments of Butler County's first responders, administrators, emergency crews, and legions of volunteers, but in addition to my county, counties around it. You can't believe the number of trucks that came in Sunday to haul away debris, as an example. We have had the donation of food, water, clothing, and other supplies poured into the tornado-ravaged region. I wish to mention a few notable examples of neighbors and strangers lending a hand during the recovery week. There is no count of construction crews and heavy equipment volunteers coming in from as far as Tennessee. I have thanked Senator Corker I have not thanked Senator Alexander yet, for people coming all way from Tennessee with very heavy equipment. People who were cleaning up from tornadoes in Oklahoma the night before spent the night on the road to come up and help people in Parkersburg, IA. Separately, we had a group of traveling volunteers known as the Massage Emergency Response Team from California--people who are physical therapists who came in to rub the backs of people working day and night. They offer assistance to those who need stress and tension relief from their recovery work. We had a group of 90 high school students, mostly football players from the Catholic high school, Dowling, in Des Moines, traveling 100 miles to help with the recovery work at the Aplington-Parkersburg High School athletic fields. If you want to know how this little town of 200 is proud of its football team, this little town has four NFL players, right now--I mean not right now today playing football, but still signed up. These Dowling High School people pitched in to rake up glass and debris. The Salvation Army has set up mobile canteens serving 1,000 hot meals each day to the Parkersburg residents and relief residents, and in New Hartford as well. And the Red Cross, as you would expect because of their good reputation, was immediately on the job and is still present. The tornado, storm, and flood damage over Memorial Day weekend in Iowa has received Federal declaration of disaster assistance, and people have come in from FEMA, from Sacramento, CA; from Pennsylvania and from New Jersey; maybe from a lot of other places that I had a chance to meet on that Sunday afternoon. So the Federal people are working well, as they should. Residents in these communities will need help rebuilding and I know Iowans appreciate that help. So I am here to say thank you to everybody. I listed only a few people. If I knew everybody who was helping out, there wouldn't be any help there. You can't keep on top of everybody who is stressing out. When I was in church in Cedar Falls, IA, one Sunday we had people there from North Carolina--Franklin Graham. We had people there from the Billy Graham organization in Minneapolis. Looking out across the countryside near my home, our corner of the world looks turned upside down. Utility polls, shingles, siding, insulation, uprooted trees are strewn across the farm fields. The cleanup will take time, but I know Iowans are in this for the long haul. I and other Grassleys were fortunate in this damage, because I live 1\1/2\ miles south of where the tornado went through on a farm. My son and grandson farm with me. They live a mile and a half north of where the tornado went through. I thank God for that. We lost friends. A person named Norman who worked at the New Hartford grain elevator will not be there because he was killed in this tornado. So Norman, who always greeted us when we would go to the elevator to unload our grain in the fall--his friendly face will be missed. The outpouring of support from neighbors, friends, and strangers from near and far has given a jump-start to the necessary healing process. It underscores the decency of human nature rising above catastrophic forces of Mother Nature. The selfless sacrifice by literally scores of heroes will help mend the immeasurable heartbreak and hurts that I saw during my visits to these communities. I say with gladness in my own heart, the F5 tornado did not extinguish the hope and pride of residents of the midwestern communities who call Parkersburg, New Hartford, Hazleton, and Dunkerton home. I suppose maybe it is a little bit ambitious on my part to take the floor of the Senate to acknowledge this and to praise the Lord for what can be done now, and the people who have not been hurt. I suppose every one of my colleagues, particularly in the tornado channel that I most often hear about, of Kansas, Oklahoma, Arkansas, Kentucky, Tennessee, and I guess yesterday damage around here as well--maybe every Senator could tell the story I tell. But, frankly, tornadoes are not as common in my State as they are in these other States and there is a lesson to be learned from this. There is an appreciation to be learned from it. We all ought to remember how lucky--and then we need to remember how unlucky--some people and families are, in our daily life.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today, I am introducing legislation to reauthorize and expand the E-verify program, a web based tool run by the Department of Homeland Security for employers across the country. Known as the Basic Pilot Program since its inception in 1996, E-verify provides employers with a process to verify the work eligibility of new hires. This program is set to expire in November of this year. The Immigration Reform and Control Act of 1986 made it unlawful for employers to knowingly hire or employ aliens not eligible to work in the United States and required employers to examine the identity and work eligibility documents of all new employees. Employers are required to participate in a paper-based employment eligibility verification system, commonly referred to as the I-9 system, in which they examine documents presented by new hires to verify identity and work eligibility, and complete and retain I-9 verification forms. Under current law, if the documents provided by an employee reasonably appear on their face to be genuine, the employer has met its document review obligation. However, the easy availability of counterfeit documents and fake identifications has made a mockery of the law. In 1996, Congress authorized the Basic Pilot Program to help employers verify the eligibility of their workers. Participants in this program electronically verify new hires' employment authorization through the Social Security Administration and, if necessary, the Department of Homeland Security databases. The Basic Pilot was authorized in 5 States until an expansion of the program was agreed to by Congress in 2003. Now, all States and all employers can take advantage of this voluntary and free program. The bill I am introducing today isn't broad expansion of the current program, which I would like to see done. I attempted to revamp E-verify in 2006 and 2007 when the Senate debated a comprehensive immigration bill. During those debates, I offered amendments to require all businesses to use E-verify rather than maintaining it as a voluntary system. Over time, I would like to see this tool as a staple in the workforce. My legislation today doesn't go that far. My amendment in 2006 and 2007 also would have changed the verification and appeal procedures, and would have improved the ability of the Federal Government to go after employers who knowingly hire illegal aliens. While I hope that the Congress can one day address these issues, my priority this year is the reauthorization of the E-verify program. We must not let it expire. Employers rely on it, and we must not pull the rug from under them in their attempt to abide by the law. My legislation would extend the program indefinitely. There's no reason that we should allow this to expire in 1, 5 or 10 years. It should only expire when Congress feels the need to terminate it. Right now, over 61,000 employers use the program. That number is likely to grow, and they need to be able to know that Congress isn't going to let this program die. Another provision in my bill would require all contractors of the U.S. Government to use E-verify, even though they have the authority to do so today. Under the original statute in 1996, the Federal Government--including the Executive and Legislative Branches--must comply with the terms and conditions of E-verify. I added this provision because I don't like the progress I am seeing from the administration to require contractors to use the program. In August of this year, Secretary Chertoff announced a series of reforms to address border security and immigration challenges that our country faces. One of the 26 proposed reforms was to require Federal contractors to use the basic pilot program. Specifically, Secretary Chertoff said that ``the Administration will commence a rulemaking process to require all federal contractors and vendors to use E-Verify, the federal electronic employment verification system, to ensure that their employees are authorized to work in the United States.'' I firmly believe that the Federal Government ought to lead by example, and they shouldn't wait for my bill to become law. My bill would also allow employers to check the status of all employees, not just new hires. Since the system is voluntary, businesses should be able to use E-verify to check the work eligibility of all their employees. They would alert the Department of Homeland Security of their desire to check all employees and be required to do the checks not later than 10 days after. If an employer wants to make sure his or her labor force is lawful, or legally allowed to work in the United States, he or she should be afforded that right. Also, the Department of Homeland Security should be able to require repeat offenders of immigration law to check the status of all employees, not just new hires. My legislation would require certain employers to use E- verify if the Security has reasonable cause to believe that the employer has engaged in the hiring of undocumented workers. This provision will help us hold employers accountable. My bill would require more information sharing between the agencies at the Department of Homeland Security. Citizenship and Immigration Service, the agency in charge of service and benefits for immigrants, runs the program. However, Immigration and Customs Enforcement has the duty to enforce immigration laws and conduct worksite enforcement. I fear that the two agencies don't communicate enough, especially when it comes to this program. While CIS will provide ICE information about employers who use E-verify upon request, this should be an automatic process. The enforcement agency is better equipped to go after those who hire illegal aliens, and they should have access to such information, including those businesses that receive final non- confirmations through the system. My bill would require CIS to report monthly to ICE. Finally, as a Senator from a State with many rural communities, I have heard small businesses say they want a system that works and is easy to use. Many towns in Iowa and across the country want to be able to use E-verify but may not have access to computers or the Internet. The Citizenship and Immigration Service has made strides to help businesses learn the system and accommodate their lack of access. As we continue to ramp up the program and potentially make it a requirement for all employers, I would like to see the Federal Government reach out to rural areas and figure out a way to make this work. My bill would authorize the Director of U.S. CIS to establish a demonstration program that assists small businesses in verifying the employment eligibility of their newly hired employees. In conclusion, I cannot stress enough the importance of making sure E-verify remains intact and operating for employers across the country. We need to reauthorize the program this year so that businesses can continue to abide by our immigration laws. I urge my colleagues to join me in this effort.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today, I am introducing legislation to reauthorize and expand the E-verify program, a web based tool run by the Department of Homeland Security for employers across the country. Known as the Basic Pilot Program since its inception in 1996, E-verify provides employers with a process to verify the work eligibility of new hires. This program is set to expire in November of this year. The Immigration Reform and Control Act of 1986 made it unlawful for employers to knowingly hire or employ aliens not eligible to work in the United States and required employers to examine the identity and work eligibility documents of all new employees. Employers are required to participate in a paper-based employment eligibility verification system, commonly referred to as the I-9 system, in which they examine documents presented by new hires to verify identity and work eligibility, and complete and retain I-9 verification forms. Under current law, if the documents provided by an employee reasonably appear on their face to be genuine, the employer has met its document review obligation. However, the easy availability of counterfeit documents and fake identifications has made a mockery of the law. In 1996, Congress authorized the Basic Pilot Program to help employers verify the eligibility of their workers. Participants in this program electronically verify new hires' employment authorization through the Social Security Administration and, if necessary, the Department of Homeland Security databases. The Basic Pilot was authorized in 5 States until an expansion of the program was agreed to by Congress in 2003. Now, all States and all employers can take advantage of this voluntary and free program. The bill I am introducing today isn't broad expansion of the current program, which I would like to see done. I attempted to revamp E-verify in 2006 and 2007 when the Senate debated a comprehensive immigration bill. During those debates, I offered amendments to require all businesses to use E-verify rather than maintaining it as a voluntary system. Over time, I would like to see this tool as a staple in the workforce. My legislation today doesn't go that far. My amendment in 2006 and 2007 also would have changed the verification and appeal procedures, and would have improved the ability of the Federal Government to go after employers who knowingly hire illegal aliens. While I hope that the Congress can one day address these issues, my priority this year is the reauthorization of the E-verify program. We must not let it expire. Employers rely on it, and we must not pull the rug from under them in their attempt to abide by the law. My legislation would extend the program indefinitely. There's no reason that we should allow this to expire in 1, 5 or 10 years. It should only expire when Congress feels the need to terminate it. Right now, over 61,000 employers use the program. That number is likely to grow, and they need to be able to know that Congress isn't going to let this program die. Another provision in my bill would require all contractors of the U.S. Government to use E-verify, even though they have the authority to do so today. Under the original statute in 1996, the Federal Government--including the Executive and Legislative Branches--must comply with the terms and conditions of E-verify. I added this provision because I don't like the progress I am seeing from the administration to require contractors to use the program. In August of this year, Secretary Chertoff announced a series of reforms to address border security and immigration challenges that our country faces. One of the 26 proposed reforms was to require Federal contractors to use the basic pilot program. Specifically, Secretary Chertoff said that ``the Administration will commence a rulemaking process to require all federal contractors and vendors to use E-Verify, the federal electronic employment verification system, to ensure that their employees are authorized to work in the United States.'' I firmly believe that the Federal Government ought to lead by example, and they shouldn't wait for my bill to become law. My bill would also allow employers to check the status of all employees, not just new hires. Since the system is voluntary, businesses should be able to use E-verify to check the work eligibility of all their employees. They would alert the Department of Homeland Security of their desire to check all employees and be required to do the checks not later than 10 days after. If an employer wants to make sure his or her labor force is lawful, or legally allowed to work in the United States, he or she should be afforded that right. Also, the Department of Homeland Security should be able to require repeat offenders of immigration law to check the status of all employees, not just new hires. My legislation would require certain employers to use E- verify if the Security has reasonable cause to believe that the employer has engaged in the hiring of undocumented workers. This provision will help us hold employers accountable. My bill would require more information sharing between the agencies at the Department of Homeland Security. Citizenship and Immigration Service, the agency in charge of service and benefits for immigrants, runs the program. However, Immigration and Customs Enforcement has the duty to enforce immigration laws and conduct worksite enforcement. I fear that the two agencies don't communicate enough, especially when it comes to this program. While CIS will provide ICE information about employers who use E-verify upon request, this should be an automatic process. The enforcement agency is better equipped to go after those who hire illegal aliens, and they should have access to such information, including those businesses that receive final non- confirmations through the system. My bill would require CIS to report monthly to ICE. Finally, as a Senator from a State with many rural communities, I have heard small businesses say they want a system that works and is easy to use. Many towns in Iowa and across the country want to be able to use E-verify but may not have access to computers or the Internet. The Citizenship and Immigration Service has made strides to help businesses learn the system and accommodate their lack of access. As we continue to ramp up the program and potentially make it a requirement for all employers, I would like to see the Federal Government reach out to rural areas and figure out a way to make this work. My bill would authorize the Director of U.S. CIS to establish a demonstration program that assists small businesses in verifying the employment eligibility of their newly hired employees. In conclusion, I cannot stress enough the importance of making sure E-verify remains intact and operating for employers across the country. We need to reauthorize the program this year so that businesses can continue to abide by our immigration laws. I urge my colleagues to join me in this effort.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, starting last year, I started looking at the financial relationships between physicians and drug companies. I first began this inquiry by examining payments from Astra Zeneca to Dr. Melissa DelBello, a professor of psychiatry at the University of Cincinnati. In 2002, Dr. DelBello published a study that found that Seroquel worked for kids with bipolar disorder. The study was paid for by Astra Zeneca, and the following year that company paid Dr. DelBello around $100,000 for speaking fees and honoraria. In 2004, Astra Zeneca paid Dr. DelBello over $80,000. Today, I would like to talk about three physicians at Harvard Medical School--Drs. Joseph Biederman, Thomas Spencer, and Timothy Wilens. They are some of the top psychiatrists in the country, and their research is some of the most important in the field. They have also taken millions of dollars from the drug companies. Out of concern about the relationship between this money and their research, I asked Harvard and Mass General Hospital last October to send me the conflict of interest forms that these doctors had submitted to their institutions. Universities often require faculty to fill these forms out so that we can know if the doctors have a conflict of interest. The forms I received were from the year 2000 to the present. Basically, these forms were a mess. My staff had a hard time figuring out which companies the doctors were consulting for and how much money they were making. But by looking at them, anyone would be led to believe that these doctors were not taking much money. Over the last 7 years, it looked like they had taken a couple hundred thousand dollars. But last March, Harvard and Mass General asked these doctors to take a second look at the money they had received from the drug companies. And this is when things got interesting. Dr. Biederman suddenly admitted to over $1.6 million dollars from the drug companies. And Dr. Spencer also admitted to over $1 million. Meanwhile, Dr. Wilens also reported over $1.6 million in payments from the drug companies. The question you might ask is: Why weren't Harvard and Mass General watching over these doctors? The answer is simple: They trusted these physicians to honestly report this money. Based on reports from just a handful of drug companies, we know that even these millions do not account for all of the money. In a few cases, the doctors disclosed more money than the drug companies reported. But in most cases, the doctors reported less money. For instance, Eli Lilly has reported to me that they paid tens of thousands of dollars to Dr. Biederman that he still has not accounted for. And the same goes for Drs. Spencer and Wilens. What makes all of this even more interesting is that Drs. Biederman and Wilens were awarded grants from the National Institutes of Health to study the drug Strattera. Obviously, if a researcher is taking money from a drug company while also receiving Federal dollars to research that company's product, then there is a conflict of interest. That is why I am asking the National Institutes of Health to take a closer look at the grants they give to researchers. Every year, the NIH hands out almost $24 billion in grants. But nobody is watching to ensure that the conflicts of interest are being monitored. That is why Senator Kohl and I introduced the Physician Payments Sunshine Act. This bill will require companies to report payments that they make to doctors. As it stands right now, universities have to trust their faculty to report this money. And we can see that this trust is causing the universities to run afoul of NIH regulations. This is one reason why industry groups such as PhRMA and Advamed, as well as the American Association of Medical Colleges, have all endorsed my bill. Creating one national reporting system, rather than relying on a hodge-podge of state systems and some voluntary reporting systems, is the right thing to do. Before closing, I would like to say that Harvard and Mass General have been extremely cooperative in this investigation, as have Eli Lilly, Astra Zeneca and other companies. I ask unanimous consent that my letters to Harvard, Mass General, and the NIH be printed the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, on April 24 of this year the Senate Finance Committee held a hearing on the tax aspects of what we call the cap-and-trade program, which is an essential part of this bill before the Senate. At that hearing, the Director of the Congressional Budget Office, Peter Orszag, testified about the economic impact of a cap-and- trade system. Then we also had Robert Greenstein of the Center on Budget and Policy Priorities testifying on the impact of a cap-and-trade system on low- income families. I would like to share with my colleagues some very relevant information, in the case of my colleagues not having an opportunity to review the testimony that was before the Senate Finance Committee. Mr. Greenstein, who is often pointed to by Members of the other side of the aisle on economic issues, expressed support for policies to address climate change, but pointed out: Significant increases in the price of energy and energy- related products will necessarily occur as a result of the enactment of effective policies to reduce greenhouse gas emissions. I think sometimes this issue is presented as though there will be no cost or that big corporate polluters will pay all the costs. On the contrary, we have then the CBO Director Orszag testify: Under a cap-and-trade program, firms would not ultimately bear most of the cost of the allowances but, instead, would pass them along to their customers in the form of higher prices. So we are in this situation where everybody wants you to believe that corporations pay taxes or corporations absorb costs. But corporations are tax collectors or, if they have costs, they are passed on to the consumers and individuals end up paying. Mr. Orszag explained that price increases stem from the restrictions on emissions itself, and price increases are, in fact, an integral part of a cap-and-trade system. This is because price increases would be a key mechanism through which businesses and households would be encouraged to change behavior, leading to reductions of CO2. Regarding the impact of higher energy prices, I would like to refer to Mr. Greenstein again, whom I know many on the other side of the aisle very closely listen to about issues that affect the poor. He observed in his testimony: Households with limited incomes will be affected the most by these higher prices because they spend a larger fraction of their budgets on energy and energy related products and because they-- Meaning people who are in lower income levels-- are less able to afford investments that could reduce their energy consumption, such as a new or more fuel efficient heating system or car. That is the end of the quote from Mr. Greenstein. It is important to emphasize we are not just talking about heating bills. Mr. Greenstein further testified: The impact of climate change policies on low-income consumers goes well beyond the direct effect of higher energy prices on their utility bills. More than half of the increased costs that low-income households would face would be for goods and services other than utilities. Any item that requires energy to produce will become more expensive-- common sense. Items he mentioned that would be more costly for low- income families are quite obvious--gasoline, food, and rent. We have heard a lot of rhetoric from the majority party expressing concerns about the current high gas prices. Now they have brought before us a bill that would yet further raise gas prices. It seems like making points that are in conflict, very definitely in conflict. You cannot complain about high gas prices and then introduce legislation to raise gas prices yet higher. The new substitute amendment does contain a token provision for tax relief for consumers, but it only allocates the revenue from 3.5 percent of the allowances in the first year for this relief. Robert Greenstein, whom I have quoted many times--many of the supporters of this bill usually quote him, maybe on other issues-- testified that 14 percent of the allowance revenue would be needed to shield low-income households from further poverty and hardship instead of 3.5 percent. The current bill still falls short even in the year 2030, when 12 percent of allowances will be available to fund tax relief for consumers and emissions will be 45 percent below 2012 levels. Mr. Greenstein estimates that the average increase in energy-related costs for the poorest fifth of our population would be somewhere between $750 and $950 per year for a modest 15-percent reduction in emissions. Can you imagine the outcry if Congress passed a bill to raise taxes on the poorest fifth of our population by $750 to $950 per year? Some of the very proponents of this legislation would be those crying foul the quickest. But that is exactly what this bill will do. I guess the Democratic leadership is hoping no one will notice. Be forewarned, just look at a recent election in Britain. The Labor Party recently enacted a new tax policy that was perceived as a tax increase on low-income people, and its approval ratings hit historic lows, leading to sweeping losses in local elections. If Congress is going to impose significant new costs on working families, we must take sufficient action to maintain their standard of living. However, that means more than providing benefits to offset direct costs imposed by the bill before Congress. All Americans rely on healthy economic growth to provide jobs and opportunity. CBO Director Orszag testified regarding a CO2 cap that ``the higher prices caused by the cap would lower real wages and real returns on capital, which would be equivalent to raising marginal tax rates on those sources of income.'' In other words, a cap-and-trade system has the same economic effect as the most antigrowth type of tax increases one could think about. We are talking about a loss of jobs. We are talking about a loss of economic opportunity for too many Americans. The Environmental Protection Agency estimates that this bill could reduce U.S. manufacturing output by almost 10 percent in 2030 and could cut gross domestic product by as much as 7 percent--by $2.8 trillion-- in the year 2050. So we have people proposing this legislation from whom I have sometimes heard outcries on the floor of the Senate because there is outsourcing of manufacturing jobs, losing manufacturing in the United States. We have a bill before the Senate that is going to make that situation worse, according to the EPA. To help mitigate the adverse effect of a CO2 cap, Director Orszag suggested that one option would be to use revenue from auctioning allowances to reduce existing taxes that tend to dampen economic activity. Instead, what does the bill do? The bill before us creates a raft of new Government spending programs. In fact, this bill is 491 pages long, and I have had my staff count how many pages of new spending programs. They counted 212 pages. Much of the rest of the bill, then, is devoted to creating new bureaucracy to manage new programs and to bring about new mandates. We are talking about $6.7 trillion in spending over the life of the bill. That is an astounding amount of money, even by Washington standards. Of course, the authors of the bill will say these new spending programs would invest in new technology. I heard that sort of discussion on the floor of the Senate a week or two before we took our Memorial Day recess. I also heard speeches a couple weeks ago that it would help the environment in some way. One problem with that argument is that almost all of this spending would occur after the caps have taken effect because that is when the revenue from the allowance auctions will start coming in. So common sense tells me that is way too late. It is too late to start investing in alternative energy technology after we already have a cap in place that effectively limits the amount of energy that can be produced from fossil fuels. We need to develop those alternatives right now. If we wait, the pinch we feel from the cap will be much harder. We must have alternatives in place before caps. I should add that even though this bill showers money on many industries and special interests in an attempt to attract political support, it does little or nothing to promote further use of wind energy. My interest in wind energy is that I happen to be the father of legislation that passed in 1992, and Iowa is one of the leading producers of wind energy of the 50 States. As a promoter of the wind energy tax credit, I can tell you that this is zero-carbon, zero- pollution technology, and it has tremendous potential to help meet any future carbon emissions goals. Congress should take a very positive, concrete step toward reducing greenhouse gases right now. You don't do that by leaving wind energy out of the legislation. That step we ought to be taking right now would be to send to President Bush a package of extensions of expiring renewable energy production tax incentives. In order to become law, that package would need to be in a form obviously acceptable to the President. The Senate acted on this issue when the Cantwell-Ensign amendment passed the Senate in the housing bill debate. The full Congress needs to follow through and get it to the President. With those production incentives and investments in effect and way ahead of time of what this bill would do, the projects will be built and more green energy will be supplied to American homes, motor vehicles, and businesses. I look forward to seeing these vital incentives extended, but we need to do more--much more--if we are going to have in place the alternatives to meet any future emissions targets. Instead, what does this bill do? This bill for the most part waits until the cap has already taken effect and we will need to start switching to alternative sources of energy. Only then does it begin spending money to develop the alternatives we will already desperately need by that point. In addition, this legislation creates a whole new Federal bureaucracy, called the Climate Change Technology Board, to spend money. So we tax the American people. We are going to have an independent agency spend the money, independent of any other Government agency. It will consist of five Directors appointed by the President. This new unelected bureaucracy will have broad discretion to spend funds that are allocated directly to it without going through Congress and with minimal congressional oversight. Congress will only be allowed to block funding after the fact and only if it passes legislation within 30 days. Anyone who is familiar with the legislative process around here, particularly in the Senate, knows this is essentially a carte blanche to spend money. I am sure we will hear justifications of how each of these new spending programs will do a lot of good. When we hear that, I urge my colleagues to keep one thing in mind: According to the EPA, a typical American household will lose $1,400 in purchase power, and $4,400 in 2050, due to this legislation. What we need to ask is whether these new spending programs justify a tax of $1,400, increasing to $4,400, on a typical American family. The authors of this bill will say this is not a tax. I have already quoted the CBO Director saying that this bill will have the same economic effect as tax increases. We know this bill will raise trillions of dollars in Federal revenue, and CBO says it will consider auction proceeds to be Federal revenues. Spending in the bill, quite obviously, will be Federal outlays. In the process, American families are going to feel a tight pinch on their pocketbooks. So you get back to something that is kind of Midwestern common sense about this legislation and about whether it is a tax increase or not a tax increase, whether it is a Federal expenditure or not a Federal expenditure, because where I come from, as the saying goes, if it walks like a duck, talks like a duck, it is a duck. Well, this looks like a tax and it talks like a tax. The question is, What to do with the revenues? We are faced with a tough decision. With this much new spending, there is something in there for everyone. But does it justify a tax of $1,400--eventually $4,400--on hard-working American families? Rather than spend this money on new Government programs, the right thing to do is to return it to the American people to offset increased costs they will bear, prevent increased poverty, and preserve economic opportunity for all. I yield the floor.

Mr. GRASSLEY. I probably will not take all that time.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I come to the floor today to object to the inclusion of provisions that are clearly in the jurisdiction of the Finance Committee in an emergency supplemental appropriations bill to fund the war. The supplemental appropriations bill seeks to place a moratorium on seven Medicaid regulations until the next administration. It also prevents implementation of a CMS policy to ensure States cover poor kids before expanding their SCHIP programs. I know some people have concerns with the CMS policies. Let me be clear: I am not here to argue the regulations are perfect. I have issues with some of them I would like to see addressed. However, the regulations do address areas where there are real problems in Medicaid. Medicaid is a Federal-State partnership that provides a crucial health care safety net for some very vulnerable populations . . . low- income seniors, the disabled, pregnant women, and children. They depend on Medicaid, and it does generally serve them well. Medicaid is also a program with a checkered history of financial challenges. Medicaid has a history of States abusively pushing the limits of what should be allowed to maximize Federal dollars sent to them. And while sometimes States have clearly pushed the envelope, at other times, States have struggled to understand what is and is not allowable in Medicaid. So after years of work by CMS, numerous reports by GAO and the Inspector General at HHS, and frequent Congressional hearings, CMS issued regulations to try to clarify the rules in some very problematic payments areas of Medicaid. I will start with the public provider regulation. We know that in the past, many States used to recycle Federal health care dollars they paid to their hospitals to use for any number of purposes beyond health care. It was an embarrassing scam that several administrations tried to limit. For years, the Medicaid Program was plagued by financial gamesmanship. States used so-called intergovernmental transfers or IGTs, to create scams that milk taxpayers out of millions--even billions--of dollars. Here is an example: a State bills the Federal Government for a $100 hospital charge. The hospital gets the $100 payment and then the State would require the hospital to give $25 of it back to the State. In my view, that is a scam. What happens to the $25? In the days before Congress and CMS cracked down on the behavior, the money could go to roads or stadium construction. That is right. Medicaid IGT scams paid for roads and stadiums instead of health care for the poor. In 1991, 1997 and again in 2000, Congress took specific action to limit the States' ability to use payment schemes to avoid paying the State share of Medicaid. CMS has continued their work since then. Over the past 4 years, CMS has been working with States to try to limit these scams. I will note these efforts have not been without their controversy. States have been very concerned about exactly what the new standards are. Senator Baucus and I wrote the GAO and asked them to look into what CMS has been up to in trying to limit the way States make these payments. We were concerned that there was not enough transparency in what CMS was doing. And CMS did publish a rule for all to see. It is out there in the open. The core goal of the rule is to limit provider reimbursement to actual cost. I know some people consider this a radical idea, but I just don't understand why anyone thinks it is a good idea to have hospitals paid more than cost so they can be a part of these scams that rob the taxpayer to fund State pork. Restricting payments to cost is not exactly a new idea. In 1994, GAO recommended that payments to government providers be limited to cost. This is a fundamental issue for program integrity. What did GAO find in their 1994 report that led them to this conclusion? The State of Michigan used these questionable transfers to reduce their share of the Medicaid Program from 68 percent, which is what it should have been, to 56 percent. The GAO found evidence that in October 1993, the State of Michigan made a $489 million payment to the University of Michigan. Within hours, the entire $489 million was returned to the State. The report found that in fiscal year 1993, Michigan, Tennessee, and Texas were able to obtain $800 billion in Federal matching funds without putting up the State Share. Congress and CMS have spent the last 17 years combating that behavior. Last year, the emergency supplemental included a provision to delay implementation of the public provider rule for 2 years. Fortunately, cooler heads prevailed and the delay was reduced to 1 year. But I wish to read what I said at the time. This is from remarks I made on March 28, 2007: If some people think CMS has gone too far, then we should review their actions in the Finance Committee. We should call CMS in, make them testify, and ask the tough questions to which we need answers. If we think there are things we should have done differently, then we should legislate. That is the way it ought to be done. That is the right way to operate. We should have dealt with it in the Finance Committee. We should have tackled the issues here that are extremely complex. They deserve thorough consideration so we can insure we are taking appropriate action. But a year has passed with no action and instead we are here with this amendment to the supplemental appropriations bill. No hearings have been held. No testimony submitted. Nothing. Making the CMS regulation go away opens the door for a return to the wasteful, inappropriate spending of the past. Intergovernmental transfers can have a legitimate role, but it is critical that States have a clear, correct understanding of what is a legitimate transfer and what is not. If the regulation goes away, those lines will still not be adequately defined. Why should we care if the lines are not adequately defined? Let me read from the National Conference of State Legislatures Web site: ``IGTs can enhance a State's Federal match and thus bring additional funds to the State in two main ways. First, States can use county funds instead of State funds to generate a Federal match to support services provided by counties. Second, States can use IGTs to help it claim additional Federal funds based on upper payment limits. Under this model, a State can make payments to eligible public facilities using the rate Medicare pays for the same service, a rate that may exceed the State's standard Medicaid reimbursement rate. If it chooses to do so, a State then could use a portion of the new revenues generated--a share of the portion that remains after the standard Medicaid rate is paid for other goods or services.'' States speak openly about these payment schemes to maximize Federal dollars flowing to the States. It is absolutely the worst thing we could do for the Medicaid Program to leave States without clear guidance on these types of payments. We cannot simply walk away from this subject. Now I would like to turn to the CMS regulation on graduate medical education. I personally think Medicaid should pay an appropriate share of graduate medical education or GME. But I would like to see us put that in statute rather than return to the current customary practice because I do not think the taxpayers are well served by the way Medicaid GME operates today. If we simply make the regulation go away, what are the rules for States to follow? There are five different methods States use in billing CMS, 11 States don't separate IME from GME, and CMS cannot say how much they are paying States for GME. Let me quote from a CRS memo I submitted for the Record during the budget debate a few months ago: ``States are not required to report GME payments separately from other payments made for inpatient and outpatient hospital services when claiming Federal matching payments under Medicaid. For the Medicaid GME proposed rule published in the May 23, 2007 Federal Register, CMS used an earlier version of the AAMC survey data as a base for its savings estimate and made adjustments for inflation and expected State behavioral changes, for example.'' To make their cost estimate for the regulation, CMS relied on a report from the American Association of Medical Colleges to determine how much they are paying for GME in Medicaid. That is because the States do not provide CMS with data on how much they pay in GME. That is simply unacceptable. You can disagree with the decision to cut off GME, but simply leaving the current disorderly and undefined structure in place is not good public policy. Now let me turn to the regulations governing school-based transportation and school-based administration. Is it legitimate for Medicaid to pay for transportation in certain cases I think the answer to that is yes. I do think it is legitimate for Medicaid to pay for transportation to a school if a child is receiving Medicaid services at school. That said, we should have rules in place that make it clear that Medicaid does not pay for buses generally. We should have rules in place that make it clear that schools can only bill Medicaid if a child actually goes to school and receives a service on the day they bill Medicaid for the service. You can also argue that the school-based transportation and administrative claiming regulation went too far by completely prohibiting transportation, but if making this regulation go away allows States to bill Medicaid for school buses and for transportation on days when a child is not in school, we still have a problem. It is also critical that Medicaid pay only for Medicaid services. We all openly acknowledge the Federal government does not pay its fair share of IDEA. Quoting from the CRS memo: ``States, school districts, interest groups, and parents of children with disabilities often argue that the Federal government is not living up to its obligation to `fully fund' Part B of the Individuals with Disabilities Education Act--IDEA, P.L. 108-446--the grants-to-States program.'' We can also acknowledge that just because IDEA funding is inadequate, States will try to take advantage of Medicaid to make ends meet. Again quoting from the CRS memo: ``It is generally assumed that such transportation is predominantly provided to Medicaid/IDEA children.'' If a child is required to be in school under IDEA and receives a Medicaid service while in school, is the transportation of that child 100 percent Medicaid's responsibility? We should define clear lines so that States know what is and is not Medicaid's responsibility. Now I would like to turn to the rehabilitation services regulation. I certainly would argue that Medicaid paying for rehabilitation services is good for beneficiaries. We want Medicaid to help beneficiaries get better. But States must have a common understanding of what the word ``rehabilitation'' means in the Medicaid Program. Again quoting from the CRS memo: ``Rehabilitation services can be difficult to describe because the rehabilitation benefit is so broad that it has been described as a catchall.'' Also, States need clear guidance on when they should bill Medicaid or another program. Again quoting from the CRS memo: ``There is limited formal guidance for states in Medicaid statutes and regulations on how to determine when medically necessary services should be billed as rehabilitation services.'' You can say the CMS regulation went too far, but that doesn't mean there isn't a problem out there. As CRS notes, billing for rehabilitation services between 1999 and 2005 grew by 77.7 percent. I am far from convinced that all of that growth in spending was absolutely legitimate. Finally turning to the case management regulation, I first want to point out the issues relating to case management are a little different than issues associated with some of the other Medicaid regulations I have discussed so far. The provision in the Deficit Reduction Act of 2005--DRA--relating to case management received a full review in the Finance Committee, along with Senate floor consideration and conference debate prior to enactment of the DRA. This regulation relates to a recently enacted statutory provision. There is reason to believe that States have been using case management to supplement State spending. Some believe that States are shifting some of their child welfare costs to the Medicaid Program through creative uses of case management. Concern about the inappropriate billing to Medicaid for child welfare services extends back to the Clinton administration. There are some who would disallow most child welfare case management claims from reimbursement from Medicaid. This goes further than I would support. Getting these children the proper services requires thoughtful review, planning and management, and I believe that Medicaid has an appropriate role in supporting these activities. On the other hand, driving a child in foster care to a court appearance and billing the caseworker's time to Medicaid is not an activity that should be billed to Medicaid. Certainly, the regulations are not perfect. The degree that CMS has gone to in specifying how case management should operate conflicts with the efficient operation of the benefit in certain respects. But again let me quote from the CRS memo: Although there may be a number of issues related to claiming FFP for Medicaid addressed in these sources, at least two issues have been sources of confusion, misunderstanding, and dispute. One issue where there has been misunderstanding is non-duplication of payments. Another area where there has been some disagreement is over the direct delivery of services by other programs where Medicaid is then charged for the direct services provided by the other program. When CMS tried to come up with rules to increase accountability in case management, they had good reason to be trying to provide clarity and specificity for States. Surely the answer is not to tell States they are on their own to interpret the case management provision in the DRA. As CRS notes, billing for case management services between 1999 and 2005 grew by 105.7 percent. With spending growing that fast, we must make absolutely certain States understand how they should be billing CMS. During the Appropriations Committee markup, a provision was added to delay implementation of an August 17, 2007, State Health Officials letter regarding the SCHIP program. Simply put, the idea behind the policy is that States should have to show they are covering their poorest kids before they can expand to cover kids with higher incomes. No matter how many technical issues people might have with the ability of CMS to implement the policy, I find it mind boggling that anyone would argue with the idea of covering poor kids first. Poorer kids are generally sicker and in need of care. It is reasonable public policy to require States that want to cover higher income children to first demonstrate that they are doing a good job covering poor kids. It is just common sense. Earlier this month the administration issued further clarification on the August 17 directive. The purpose of this additional State Health Official letter is to respond to some of the concerns that have been raised by States looking to accommodate the August 17 directive. Rather than work with the administration to find solutions--even after the administration made an effort to clarify the policy--this bill simply makes the policy go away. This bill provides for $1.3 billion in savings to address the various policy provisions in the Finance Committee's jurisdiction. I actually support the provisions that save money in this bill. I have been working on the provision related to physician-owned hospitals for years. But it is wrong to move it in this bill, and as much as I do support that provision, I must object to its inclusion here as well. The provisions in this bill are scored by CBO as spending $1.7 billion. It is $1.7 billion because the regulations are delayed only until the end of March of next year. I know supporters hope that the next administration will pull back and undo the regulations completely. What would it cost if we tried to completely prevent these regulations from ever taking effect? Not $1.7 billion that is for sure. It would actually cost the taxpayers $17.8 billion over 5 years and $42.2 billion over 10 years. It is an absolute farce for anyone to argue that all of those dollars are being appropriately spent and that Congress ought to just walk away from these issues. Instead of just making the regulations go away, the Finance Committee and the Energy and Commerce Committee should sit down with the administration and fix the problems with the regulations and address real problems in Medicaid. That is what we should be doing for the taxpayers. Secretary Leavitt states that the most pressing of regulations will not go into effect on May 25 as many have feared. He has offered to sit down with us and work on these issues. There is no cause for us to act today to block the implementation of these regulations while an offer to talk is on the table. After the President vetoes this bill, I encourage my colleagues to drop these provisions and sit down with the administration to find real solutions. Separately, I want to voice my concern over the inclusion of an authorization relating to imports of uranium from the Russian Federation. The Finance Committee has not had an opportunity to examine this complex legislation and evaluate how it relates to our bilateral agreement with Russia concerning the disposition of highly enriched uranium extracted from nuclear weapons, and its potential impact on our bilateral agreement to suspend the antidumping investigation on uranium from the Russian Federation. The Finance Committee is the committee of jurisdiction over international trade in the Senate, and circumvention of that jurisdiction has in the past led to significant trade disputes. I am disappointed that the Finance Committee was not fully engaged on this matter. We were deprived of an opportunity to contribute expertise and provide input so that any potential consequences under our trade laws could be mitigated. Perhaps my concern will prove unfounded in this case. But nevertheless, this manner of legislating does not serve our best interests and should be avoided in the future. In conclusion, I oppose provisions that are the jurisdiction of the Finance Committee being considered in this bill.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the Heroes Earnings Assistance and Relief Tax Act of 2008, the HEART Act, which passed the Senate by unanimous consent today, was a bipartisan effort that incorporates most of the provisions in the Defenders of Freedom Tax Relief Act of 2007, which passed the Senate last December. The HEART Act also makes permanent and expands upon some of the tax relief measures that I coauthored with Senator Baucus in 2003, while chairman of the Senate Finance Committee. Our men and women who serve in the military make tremendous sacrifices to keep this great Nation safe and strong. Oftentimes, this very service makes taxes complicated and sometimes unfair. It is only right that these honorable men and women get treated fairly under the Federal Tax Code. The Federal Tax Code shouldn't penalize people for serving their country. It has been a few years since Congress enacted a tax relief measure for the military. As such, we have updated the relief package to include some additional relief. Amongst some of these new measures is a clarification that members of the military who file a joint tax return would be eligible for the stimulus rebate payment even if one spouse does not have a Social Security number. The bill also ensures that U.S. employers of Americans working abroad pursuant to a Government contract pay Social Security and Medicare taxes, regardless of whether they operate through a foreign subsidiary. Amongst the offsets in the HEART Act is a provision that ensures individuals who relinquish their U.S. citizenship or long-term residency pay the same Federal taxes for the appreciation of assets as they would have paid if they sold them prior to relinquishing their U.S. citizenship or terminating their long-term residency. It is unfortunate that the Senate was not able to strike an agreement with the House to include a provision that Senator Roberts championed. This provision would make more service members eligible for low-income housing. However, Senator Roberts has been reassured by House, Ways and Means Democrats that this provision will be processed with the House's low- income housing credit reform measures, which was part of their housing bill.

Mr. GRASSLEY

Mr. GRASSLEY. I thank the Senator for providing time for me. For 6 years, and those would be the years 2001 and 2003 through 2006, the budget resolutions provided the necessary resources that allowed the Finance Committee, the tax-writing committee, usually in a bipartisan manner, to realistically address the demands of tax policy. I am disappointed to say that this year, like last year, is different. The people spoke in November of 2006, and for this year--and last year--the Democrats are in the majority and in control of the congressional budget process. As ranking Republican on the Finance Committee, a committee I used to chair, like last year, I was not consulted at any point by our distinguished chairman on this budget resolution. Unfortunately, after reviewing the resolution conference agreement, it is clear it does not realistically address the tax policy needs the Finance Committee is very concerned about and has the responsibility to do something about. I am going to take a look at what the budget means to the American taxpayers in two timeframes, from now until January 20, 2009, and then for the period of time long term. Short term first; long term, the period of time after the new President is sworn in starting January 20, 2009. Let's take a look, then, at what this budget says to the American taxpayer near term. For the hard-working American taxpayer, the news is not all bad. I complimented the distinguished chairman for preserving the ``unoffset'' AMT patch for this year in the budget. He had to concede a new point of order to the House, but my guess is there will be 60 votes to waive it when the AMT patch is brought up. The problem that 26 million families face is uncertainty of the action on the AMT patch this very year. In other words, right now. I have a chart here I wish to put up. It is the estimated tax voucher, a form that people fill out for making quarterly payments. Many of the 26 million families facing the AMT technically should be adjusting their withholding upward and filing the 1040-ES form with a check for a portion of the AMT they already owe because Congress hasn't acted yet to prevent the AMT from expanding to almost 25 million more Americans, which I don't think will happen, because I think we will take care of it in time, but who knows. But right now, those filing quarterly should have made this payment, filled this form out, on April 15. That is when the first quarter's estimated tax is due, and that is what the tax law says right now. This is all a problem because the House Democratic leadership won't send us an ``unoffset'' AMT patch. Now, let's make it clear what the Constitution says, so people don't think I am only blaming the House of Representatives. The Constitution says tax laws must start in the House of Representatives. So why then won't the House Democratic leadership send us an ``unoffset'' AMT patch bill so we can get it to the President? Here is the problem. The House Blue Dog Democrats will not support an ``unoffset'' AMT patch bill. Now, why wouldn't the Blue Dogs do that? And I am not accusing them, I am stating what their position is. The answer is the Blue Dogs are a growing presence in the House of Representatives. Most of the seats that shifted from the Republican column to the Democratic column in the 2006 election are occupied by Blue Dogs. The Democratic-leaning Washington punditry and the Democratic leadership have gloated recently about the trifecta that has happened because of the House special congressional elections this year. By trifecta, I am referring to the three House races that were switched from Republicans to Democrats this year, not something this Republican is proud about. All three of those Members have joined or intend to join the Blue Dog coalition in the other body. Lord knows we have heard a lot of gloating from the other side about these three new so-called conservative Democrats. We have also heard from a lot of Republicans crying in their favorite beverage about this outcome. The Blue Dogs have had a heavy hand in this budget and are the leading obstacle to getting the ``unoffset'' AMT patch bill done and to the Senate so we can send it to the House. So if the Blue Dogs are representing themselves as strict agents of fiscal responsibility, it is a fair question for every one of us to ask about their definition of fiscal responsibility. Let's take a look at it. I have another chart here. This chart contains a depiction of the most famous Blue Dog. Here he is, the most famous Blue Dog, Huckleberry Hound, showing us the definition of fiscal responsibility from his Blue Dog perspective. Now, here we have Huckleberry Hound barking ``fiscal responsibility.'' American taxpayers should beware. Huckleberry Hound's bite happens to be higher taxes. With respect to spending cuts, all we get is a whimper. No spending cuts. Maybe I am being too tough on Huckleberry Hound and his Blue Dog friends, but I have yet to see the empowered Blue Dogs propose spending cuts for deficit reduction. All I have seen is higher and higher taxes. Like their liberal brethren, Blue Dog Democrats only look to the American taxpayers to fund new spending. We are seeing it once again on the war supplemental bill. Why couldn't they find a spending cut here or there to pay for the popular veterans' benefit package? Why always go to tax increases? The reason I point this out is this group of House Members is holding up our ability to pass an AMT patch bill in a form that can pass the Senate and in a form that can be signed by the President. The Blue Dogs' bark of fiscal responsibility is stalling relief for 26 million AMT families. The Blue Dogs insist on getting their bite of $62 billion in new taxes as a condition to sparing these 26 million families from the AMT. I agree with the Blue Dogs on the importance of fiscal responsibility. And as I have stepped up to the plate over the years with plenty of revenue raisers, well, if you have any questions, ask the people downtown in what we call the K Street crowd who think of defending all these tax loopholes we are trying to close. But the Blue Dogs whimper when it comes to spending cuts. They only look at the taxpayers for fiscal responsibility. This obsession with raising taxes, most pointedly advanced by Blue Dogs, is a theme that runs through this budget. I am going to turn now to the short-term tax legislative agenda and examine how the budget squares with what we need to do. As a farmer, I would like to think we country folks can teach city folks a lesson or two. The first chart I am going to put up here involves the method a lot of us farmers use to get our water. You will see a well in this chart. You can see it as a long well. There is a little bit of water way down there at the bottom of the well, but most of the well is dry. Now, what we are told by those who drew up the budget is that the tax-writing committees will somehow plain find the money. Well, find the money. You have to have some sort of consensus to do that, because in the Senate, to get anything done, you have to have some bipartisanship. We will find the money, they say, to pay for this time- sensitive tax business we have to deal with. Now, these are not just abstract things; these are pending matters. They are pieces of legislation on both sides that we say we want to get done before this session ends. The offset well here shows about $58 billion that is known, that is identified, and that is scored revenue raisers that the Senate Democratic caucus supports. I used this chart several months ago trying to make similar points. I have updated it to assume that the farm bill will become law, and I think that is going to happen within 48 hours. As a rule of thumb, the Finance Committee tax staff, in a bipartisan way, has developed about $1 billion per month in new offsets. That figure of $1 billion per month is in line with our historical average, the success we have had of gleaning money by closing loopholes. How reliable is that average, and can we count on it? As a farmer, I know something about the predictability of rainwater. You hope you will get rain and that will give you a decent level of well water. As a former chairman and now ranking member of the Finance Committee, I know something about revenue raisers. I have been there and done that. When I was chairman, I aggressively led efforts to identify and enacted sensible revenue raisers aimed at closing the tax gap and shutting down tax shelters. And as ranking member, I continue to look for ways to shut off unintended tax benefits. So I consider myself to be a credible authority on what is realistic when it comes to revenue raisers. From 2001 through 2006, Congress enacted over 100 offsets, with combined revenue scores of $1.7 billion over 1 year, $51\1/2\ billion over 5 years, and $157.9 billion over 10 years. So if you look at recent history, we can realistically figure the tax staff will find about $1 billion a month. Let taxpayers who are trying to avoid honestly paying taxes beware of that. Right now, however, all we can find that is specified, that is drafted and is scored, is that $58 billion. The revenue-raising well shows about $58 billion in available, defined, and scored offsets. Defenders of the resolution before the Senate will say a virtual cornucopia of revenue raisers is there from the tax gap and from shutting down offshore tax scams. I take a backseat to no one on reducing the tax gap or shutting down offshore tax shelters. I have scars to show from my efforts over the years. But the defined as well as the scored tax gap proposals are included. We have that here already. Likewise, we have a proposal targeted at tax haven countries and other off-shore activities on this chart. The well has, then, about $58 billion of offset water. This budget anticipates Congress will be thirsty for this limited group of offsets. On the thirst or demand side, you will see the bucket will be busy bringing up that water. On the demand side, I have talked about next year's AMT patch--there is $74 billion for the patch for next year. There is $16 billion for tax provisions that ran out at the start of this year. That estimate, by the way, is probably low. Then there is $29 billion for next year's extenders, and there is $15 billion for the energy tax package we want to pass. If you add up those things--and we have to add the $5 billion we have there for the Federal Aviation Administration reauthorization bill, if we get to it--and I hope we get to it. So the pending, the time-sensitive tax business totals what? It is $139 billion that we have to bring up in that bucket. You see $59 billion of real money is available. That is quite a difference. We are short about $80 billion. I have not even included the demands from the myriad of reserve funds that are mentioned in this resolution. Since we know from almost a decade of fiscal history that the Democratic leadership cannot propose spending cuts, we know the new reserve funding spending will be paid for with tax increases. It has been shown to be the case since the Democrats took power in January 2007. As I said earlier, the Blue Dogs in the House of Representatives are leading proponents of this tax and this spending practice. You can see it doesn't add up. The budget plan for tax legislative business is very much out of balance. It is out of balance by at least $80 billion. Even if the Senate were to adopt some of the new tax hikes that the House has come up with, we would be substantially still out of balance. I might add I have included in the Senate offset accounting proposals the House has rejected. So I think on this chart is a fairly conservative estimate. What is going to happen? How do we then bridge that $80 billion gap? Either the tax relief is not going to happen or we will add that to the deficit. That is a frightening proposition. I had hoped that the shortfall would be confined to the short term, but that is not the case. Over the long term--and I said I had a short-term view and a long-term view of this budget resolution. So what does it look like after January 20, 2009? It gets much worse. Let's take a look at the budget's assumptions about revenues over that long term. Over the 5-year budget window going out to the year 2012, keeping existing policy in place will have a revenue effect of over $1.2 trillion. This includes AMT relief, extension of bipartisan 2001 and 2003 tax relief, and extending other broadly supported expiring provisions. In the aggregate, this budget appears to provide $340 billion in new resources for extending these policies over the 5-year window. Let's look further, and you will find a complicated obstacle course to making any of this tax relief happen. To me, the conditional tax relief language is almost bait and switch. Senator Gregg has described in great detail how this mechanism would work. To me, it is as convoluted as a Rube Goldberg type of invention. So I have another chart. The chart shows a Rube Goldberg potato peeler invention. If you want to peel potatoes, I would tell Rube Goldberg to use a simple potato peeler. If you really mean to deliver tax relief, I would tell the majority, the Democratic majority, write it into the resolution. Make it very clear. Don't use a Rube Goldberg mechanism. Suffice it to say, the supposed $340 billion in tax relief targeted to 2011 and beyond assumes it will not be used for future spending. Does anybody really believe this new majority will not spend future tax relief if given the chance? If your answer is yes, then I have a few bridges in Iowa that I will sell you. Under this budget, $1.3 trillion in expiring entitlement spending is assumed to continue. It is right in the CBO outlook. So, Mr. and Mrs. Taxpayers, that is right, your taxes will go up by almost $1.2 trillion unless Congress raises taxes to offset the revenue loss. When it comes to expiring entitlement spending, it is quite a different story. There is no requirement in this resolution for Congress to do any heavy lifting. This emphasis upon higher taxes and higher spending is reinforced by the pay-as-you-go rules, or we say pay-go around here. That is this budget's notion of fiscal responsibility--unrestrained spending is good, higher taxes are good. Over the 5 years of this budget resolution, it assumes a dramatic tax increase--at least $1.2 trillion. In 2011 the bipartisan tax relief plan will expire. Some folks will call these provisions the Bush tax cuts. I suppose that term, ``Bush tax cuts,'' arises from polling by campaign outfits on the other side. It is true President Bush signed both bills, but the bipartisan compromises occurred in the Senate Finance Committee. In 2011 President Bush will have been gone from office for a couple of years. You can call this package of tax relief for virtually every American the Bush tax cuts, but for the taxpayers, if Congress does not intervene, it will be a tax increase and it will be the biggest tax increase in the history of the country and it is all going to happen without a vote of the Congress. So I would like to run through a couple of examples. The first would be a family of four. There is the husband, his wife, and their two children. This family makes $50,000 in income. That is right about the national median household income today. For example, the Census Bureau stated that for 2006 the national median household income was $48,200. Under the Democratic leadership's budget this family will face a tax increase of $2,300 per year. That is a loss in their paycheck of about $200 per month. It is a hit on their yearly budget of $2,300. Where I come from, that is real money. I will give another example, this one a single mom, two children. She earns $30,000 a year. In 2011, under this budget, she and her family run straight into a brick wall--that is a brick wall of $1,100-per-year taxes. That is $100 a month out of the family's budget. Some on the other side will say they only excluded top-rate taxpayers or other high-income folks from tax relief. I am going to tell you don't believe it. We have tax bills of the previous several decades to prove it, that you don't tax just the wealthy when you raise taxes. The facts are otherwise. Low-income folks, including millions of seniors, pay no tax on their dividends or their capital gains income. If this budget stands, even with the Baucus amendment, millions of these low- income taxpayers, especially seniors, will pay a 10-percent rate on capital gains and could pay as high as a 15-percent rate on dividends. Nationally, over 24 million families and individuals reported dividend income. Let's say that again--24 million Americans reported dividend income--because you think it is just a few hundred thousand of very wealthy people--24 million families. In Iowa, for instance, we have 299,000 families and individuals claiming dividend income on their income tax returns. There are not 299,000 millionaire families and individuals in Iowa. Nationally, we are talking about over 9 million families and individuals reporting capital gains income. In Iowa we are talking about 127,000 families and individuals. There are many marginal rates other than the top rate that would rise if this budget stands, even with the amendment of Senator Baucus. The 25-percent rate--which for 2007 starts at $31,850 for singles and $63,700 for married couples--would rise by 3 percent, to 28 percent. The 28-percent rate would go up 3 percentage points to 31 percent. The 33-percent rate would go up 3 percentage points to 36 percent. The top rate would go up from its current 35 percent level to 39.6 percent. To sum up, even with the Baucus amendment added to this budget, there would be marginal rate increases on millions of taxpayers, and not just millionaires. Those marginal rate increases would reach taxpayers with taxable incomes as low as $31,850 for singles and as low as $63,700 for married couples. What I just described is accurate only if the Democratic leadership intends to follow the letter and the spirit of the Baucus amendment. If you look at last year's track record, the House neutered the effect of the amendment in the conference committee. They created a Rube Goldberg type of mechanism to impede the amendment. As I pointed out a few minutes ago, that mechanism is right back again. Of course, after the budget conference report was agreed to, all talk and action around the amendment then somehow ceased. I wouldn't put much stock on the followthrough on the Baucus amendment. The distinguished chairman and friend of mine points out that since last year's budget, we passed tax relief of $50 billion for last year's AMT patch. He will also point to the stimulus package passed earlier this year. The senior Senator from North Dakota is correct that those tax relief packages did pass. He used the assertion to counter the assertion on our side that there is a $1.2 trillion tax increase in the budget. The distinguished chairman omits a critical fact in his assertion, and that is the ``unoffset'' AMT patch passed only because Senate Republicans and the administration insisted that they would not use the AMT problem as a money machine for current and future spending. If the Democratic caucus had prevailed, the AMT patch would have been offset. Likewise, on the stimulus bill, there was bipartisan consensus that economic stimulus should not be a tax increase. When you step back from the differences across the aisle on this budget, you probably will not be surprised to find some differences among Presidential candidates. Generally, the candidates on the other side have proposed to take heavily from the taxpayers under the guise of fiscal responsibility. This is true when they are talking about ending the bipartisan tax relief plans of 2001 and 2003. It is true when they are talking about the same loophole closers for a myriad number of expansions of existing entitlements and creating new ones. Nowhere is there discussion of reining in spending. So the tax side of the Federal ledger is the only route to fiscal responsibility from the perspective of Presidential candidates on the other side of the aisle. I wanted to give you one telling example. One Democratic candidate has proposed to repeal the bipartisan tax relief plans for taxpayers earning above $250,000. This proposal raises $226 billion over 5 years and 10 years. A key fact is that the source of that revenue peters out over the next few years because under current tax law, the tax relief sunsets at the end of 2010. Madam President, I ask unanimous consent for an additional 4 minutes.

Mr. GRASSLEY. Besides the work of Senator Harkin, we have an outstanding farm bill because of the hard work of the Senator from North Dakota.

Mr. GRASSLEY. I think that is it.

Mr. GRASSLEY. Sure.

Mr. GRASSLEY. Well, I was talking about Presidential candidates and what their budget plans might do. Like the Democratic leadership's budget, the candidates on the other side oversubscribe the revenue sources from proposals that are popular with the Democratic base. The deficiency can only be made up in three ways: One, other undefined sources of revenue would need to be tapped. The taxpayers should rightly be worried about that avenue. Two, the proposed spending plan would need to be abandoned or curtailed. There is not much history on the Democratic side of this avenue being taken. Three, add to the deficit for the cost of the new programs. Unfortunately, this avenue has been taken too many times. We will hear a lot of criticism of the Republican candidate, Senator McCain, from those on the other side. They will argue, like the President's budget, a continuation of current-law levels of taxation somehow costs the Federal Government too much revenue, just like all the money every worker makes belongs to the Government and we let the taxpayers keep a little bit of it. They will argue that the spending increases they propose are more important than the restrained levels of the President's budget, and they will argue that despite the record tax hikes in their budget, entitlement reform is a matter for another day. In fact, Senator McCain's plan intends to keep the revenue take where it is as a share of the economy. You see revenue averages of about 18.3 percent of the economy. That is 18.3 of the GDP. The state of the economy affects revenues more than anything else. There are dips when we have been in recession and peaks when growth is high. Our side cares about keeping the revenue line at a reasonable level, about 18 to 19 percent. We do not see the merits of an imperative behind a growing role for Government in the economy. The other side disagrees. That is their philosophy, they are entitled to it. I think they are wrong. They impliedly or explicitly reject our premise that the size of Government needs to be kept in check. That view has been best expressed in an editorial of October 22, 2007, in the New York Times. The lead paragraph says it best: President Bush considers himself a champion tax cutter, but all the leading Republican presidential candidates are eager to outdo him. Their zeal is misguided. This country's meager tax take puts its economic prospects at risk and leaves the Government ill equipped to face the challenges from globalization. But the bottom line is the New York Times directly states the view behind this budget and the position of the Democratic candidates. From this perspective, the historical level of taxation is not somehow appropriate as a measure for the next decade. The New York Times implies that the Federal Government must grow as a percentage of our economy by at least 5 to 8 points. That is more than ever in the history of the country. If we were to follow the path suggested by the Times, the Government's share of our economy would grow by one-third. One-third. One-third is a great big increase in Government. The Democratic leadership budget takes some big steps on that path. So do the campaign proposals of the Democratic candidates. They go in the same direction. Our Republican conference takes a different view. America is a leading market economy. American prosperity and economic strength, in our view, is derived from a vigorous private sector that affords all Americans the opportunity to work hard, to save, and to invest more of their money. A growing economy is the best policy objective. It makes fiscal sense as well. Fiscal history shows that despite criticism to the contrary, the bipartisan tax relief plan drove revenues back up after the economic shocks we suffered earlier this decade. I am referring to the stock market bubble, corporate scandals, and the 9/11 terror attacks. Revenues bounced back when the economy bounced back. The revenue outperformed CBO's projections by a significant extent. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I ask to take 10 minutes off the Kyl time.

Mr. GRASSLEY. Madam President, I believe we should adopt Senator Kyl's motion to instruct the budget conferees. First of all, I wish to comment on the status of the alternative minimum tax. There is some good news regarding the need to do a patch to protect over 20 million families. The Democratic leadership in this body recognized the importance of halting the effect of this tax on these families and provided room in the budget for a patch for this year. I commend my friend, the chairman of the Budget Committee, for that improvement of the budget resolution over previous years. I do so again and note that the Kyl instruction is consistent with the chairman's position in that regard. The bad news is, we are halfway through the year and the patch has not been done. The reason is that Blue Dog Democrats in the other body will not supply the votes for an un-offset patch in the House of Representatives. By the way, the only Blue Dog answer to deficit reduction is to raise taxes. We have seen it on the AMT, and we have seen it on spending legislation. We are seeing now the GI benefit provisions in the war supplemental bill. Why they think of only raising taxes and not of where to cut spending levels to offset the need to spend someplace else I don't understand. They never seem to propose spending cuts as a remedy. I think it is fair for me to say they never do. They only ask for higher taxes. I hope people in this body will start to pay attention to this issue. The Blue Dogs' bark is deficit reduction, but their bite is always more taxes. In addition to the AMT patch, both bodies need to deal with several expired provisions of tax law. We need to focus on this problem and get legislation ready. Earlier today, the House began work on an extenders bill. It is offset with tax increases. I urge them to send the bill to the Senate so Chairman Baucus and I will have a vehicle to deal with this pressing problem. We need to act ahead of time. We need to act before the IRS forms are finalized. We cannot go through another filing season fiasco, such as waiting until December last year when it finally got passed, and the IRS had a lot of extra work after the forms had already gone out. Let's not create big problems for our taxpayers and the Internal Revenue Service. Senator Kyl's motion then is very important to assure us of the quickest route to complete action on AMT and extenders. The quickest route is the same route as last year: Drop the offset demand. Folks on the other side happen to be complaining all the time that offsets are essential. I would like to make it clear that the policy issues behind offsets are one thing. We ought to ask ourselves the same question on any tax policy proposal, whether it raises revenue or loses revenue. The question should be: Does a tax legislative proposal make tax policy sense? It ought to be decided on the basis of policy. That is the bottom line. On the matters of tax policy, Senator Kyl's motion to instruct, the answer is very evident. On the AMT patch and extenders, the answer is overwhelmingly clear. The answer is ``yes'' on the motion to instruct. The policy call is a slam dunk. It is backed up by the politics; that is, supermajority votes for an AMT patch and extenders in the House and Senate that are very difficult to get. We have to divorce the merits of the current law provisions from the offset question. Offsets should be judged on their merits. An AMT patch and extenders should be judged on their merits. Why should we seek divorce of the two, some might ask. Here is the reason. Right now, we have a budget process, including pay-go, that is biased toward higher taxes and, of course, higher spending. As evidence, take a look at expiring spending provisions. According to the CBO, they total $1.3 trillion--a whole $1.3 trillion. That is double a permanent AMT patch score. That spending is not subject to pay-go. It, unlike expiring tax provisions, is included in the baseline; hence, it is home free. Just like the record tax increases built into this budget, so too is a record spending increase. I have not even talked about appropriations increases. That additional above-baseline spending is included as permanent, once passed.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, we have 30 minutes on the Republican side. I would like to proceed to use probably most of that. I may not use all of it.

Mr. GRASSLEY. I ask unanimous consent to proceed for a longer period of time.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I come to the floor to rebut the scapegoating of ethanol, which is part of the food versus fuel debate. I do not do it for a one-way conversation. I hope I can encourage conversation on this subject among my colleagues so we can look at this from a scientific and economic point of view and avoid scapegoating. For almost 30 years, I have been leading an effort with many of my colleagues to promote policies to grow a domestic renewable fuels industry. We have promoted homegrown renewable fuels as a way to lessen our dependance on foreign oil and to improve our air quality. For all these years, we have hardly heard anything negative about these policies. Now, ethanol and other biofuels are being made a scapegoat for a whole variety of problems. Never before in 30 years has the virtuous benefits of ethanol and renewable fuels been so questioned and so criticized. The problem is, none of these criticisms are based on sound science, sound economics, or for that matter even common sense. I had the opportunity to hear an intelligent discussion of this, maybe it only lasted a couple of minutes, on a program on Fox News Saturday night called, ``The Beltway Boys.'' And these people are very intelligent people. I heard Mort Kondracke, a veteran journalist, falling prey to some of the same erroneous talking points that I have heard over and over for the past couple of weeks. Mr. Kondracke is one-half of that intelligent duo on Fox News that I referred to as ``The Beltway Boys.'' Maybe Mr. Kondracke has spent too much time inside the beltway and could use a little real world explanation from a family farmer like me from the Midwest. Some of my colleagues in the Senate have also gotten involved in this misinformation campaign, and that is why I did not come to the floor to speak; I come to the floor to encourage dialogue with my colleagues on this subject because it seems there is a ``group-think'' mentality when it comes to scapegoating ethanol for everything from high gas prices, global food shortages, global warming, and even deforestation. But, as was recently reported, this anti-ethanol campaign is not a coincidence. It has been well thought out, well programmed, and that program is going on. It turns out that a $300,000, 6-month retainer of a beltway public relations firm is behind the smear campaign against ethanol. And they have been hired by a trade association referred to as the Grocery Manufacturers Association. They have outlined their strategy of using environmental, hunger, and food aid groups to demonstrate their contrived crisis. And it is right here in a 26-page document put out by the Glover Park Group, called ``The Food and Fuel Campaign.'' They enlist the support of these other nonprofit groups that are involved with environment and hunger. I think it is important for policymakers and the American people to know who is behind this effort. According to reports, downtown DC lobbyists, the Glover Park Group, and the Dutko Worldwide are leading the effort to undermine and denigrate the patriotic achievements of American farmers to reduce our dependence on foreign oil, while also providing a safe and affordable food environment. The principal leaders behind the Glover Park Group's proposal reads like a who's who of Democratic operatives. The effort is led by former President Clinton's Press Secretary, Joe Lockhart. Another is 8-year veteran of the Clinton-Gore White House, Michael Feldman. Other leaders in this misinformation campaign include Carter Eskew, Mike Donilon, Joel Johnson, and Susan Brophy, all of which proudly display their ties to the Clinton-Gore White House and their credentials of helping elect Democratic candidates. This campaign against ethanol is more sophisticated than anything I have seen put on by big oil over the last 30 years, as big oil has been a constant fighter. I will show you how this is a well-sophisticated political operation and public relations effort. For instance, the media relations public affairs responsibility comes under the partners in charge, Joe Lockhart and Michael Feldman. The advocacy and image advertising comes under the leadership of partners in charge, Carter Eskew and Mike Donilon. The legislative affairs part of it is directed by partners in charge, Joel Johnson and Susan Brophy. Now, these people are outstanding people. They are going to be able to deliver what they have said they could do. That is why we have to take it very seriously. I suggest that Democrats in the Senate who claim to support our Nation's drive toward energy independence should be alarmed by this group's planned campaign and the tactics being used. I happen to be one who fought President Clinton during his 8 years in office at every turn when he tried to undermine our renewable fuels industry. The outstanding example I remember is when California made application to the EPA for a waiver under the Clean Air Act at the very time that MTBE was being outlawed because it was poisoning the groundwater. The only oxygenate that you could use in gasoline then was ethanol. California sought an exemption. We were able to win that by the Clinton administration not allowing it. Now, of course, we find ourselves fighting President Clinton's former staff and staff who worked for the Gore and Kerry Presidential campaigns, leading an effort for the grocery manufacturers to smear ethanol, after 30 years of developing an industry because people called for more renewable energy. They wanted renewable, clean-burning energy. They didn't want to be reliant upon dirty-burning petroleum. They didn't want to be relying upon importing so much. I imagine that they are leading this effort partly because they are being paid well for doing so, but they maybe can't stand the fact that President Bush has proved to be the best friend the renewable fuels industry has had. Because their old boss failed miserably at crafting policies to promote ethanol, they are doing everything they can to tear down the success President George W. Bush has helped foster. There are a lot of intelligent people who have been misled by this campaign and are simply wrong. They are using in their speeches a lot of the rhetoric that comes out of this effort. The facts don't back up the argument. I invite my colleagues to look at the facts, challenge me, have a dialog on this subject so we can use science as a basis for what we are doing, and economics as well. It is time to dispel the myths perpetuated by Mr. Kondracke, one of the Beltway boys--he was probably reporting this misinformation because he is a smart person--the Glover Park Group, and others. The Grocery Manufacturers Association, I have come to the conclusion, needs an excuse to gouge consumers of America with higher food prices, and an easy scapegoat for increasing food prices is, of course, ethanol. One myth that pops up again and again is that ethanol takes more energy to produce than it provides. I heard Mr. Kondracke say that. Let's look at the facts. In 2005, the Argonne National Laboratory study concluded that it takes only seven-tenths of one unit of fossil energy to make one unit of ethanol. That is a positive net energy balance. In comparison, it takes 1.23 units of fossil energy to make one unit of petroleum gasoline. So why aren't the grocery manufacturers of America bringing up the point that petroleum processing into gasoline is not energy positive? Because gasoline requires more than 1 Btu of energy to deliver 1 Btu to your car. That is a negative net energy balance. A 2004 U.S. Department of Agriculture study concluded that ethanol yields 67 percent more energy than is used to grow and harvest the grain and to process that grain into ethanol. These figures take into account the energy required to not just process grain into ethanol, it takes into consideration the energy the farmer takes to plant, to grow, to harvest the corn, as well as the energy required to manufacture and distribute the ethanol. Of 15 different peer-review studies we have looked at and that have been conducted on this issue, 12 of the 15 found that ethanol has a positive net energy balance. Only a single individual from Cornell University, who authored the other three studies, disagrees with this analysis. The Cornell studies have consistently used old data, some from 1979. Remember, in 1979, farmers weren't producing as much corn per acre as they do today. Corn yields then were 91 bushels per acre. It was at 137 bushels per acre in the year 2000. The average is now up to 150 to 160 bushels per acre. The flawed studies also rely on 1979 figures for energy use to manufacture ethanol. This energy consumption was cut in half between the years 1979 and 2000 and continues efficiency gains every year. I could quantify that better than just using a broad sweep. In the early 1980s, we were producing about 2.3 gallons of ethanol from a bushel of corn. Today, we are producing 2.8 gallons of ethanol per bushel. And pretty soon, the industry believes they might be able to produce 3 gallons per bushel. So these erroneous Cornell conclusions have been refuted by experts from entities as diverse as the U.S. Department of Agriculture, the Department of Energy, the Argonne National Laboratory, Michigan State University, and the Colorado School of Mines. The fact is, studies using old data overestimate energy use by not taking into account efficiencies gained in agriculture, the greater use of fertilizer, and ethanol production. I don't understand how intelligent people, then, can continue to argue that ethanol has a negative net energy balance. But that is what I heard on television Saturday night from very intelligent people. That is what I hear in this smear campaign. The net energy balance of ethanol production continues to improve because ethanol production is becoming more efficient. A March 2008 study by Argonne National Laboratory found significant gains just since 2001. Ethanol production since 2001 has reduced water use by 27 percent, reduced electricity use by 16 percent, and reduced total energy use by 22 percent. Another myth being perpetuated by opponents of a renewable fuels effort and by Mr. Kondracke is that ethanol harms the environment and contributes more in greenhouse gases than petroleum. This claim is likewise hogwash. Science magazine and Time magazine made wildly erroneous claims about corn ethanol that are now being used by these detractors. They claim that ethanol production is the driving force behind rain forest deforestation and grassland conversion to agricultural production. This is an oversimplification to say the least. How could intelligent people ignore the effects of a growing global population? How can one simply ignore the surging global demands for food from growing populations in China and India? Wouldn't urban development and sprawl also be a contributor to the increased demand for arable land? Secretary of Agriculture Ed Schafer and Energy Secretary Sam Bodman stated in a letter to Time magazine, when they ran this outrageous story that was based on a Science magazine article, that it was ``one- sided and scientifically uninformed.'' They further stated that the Science magazine article had been ``thoroughly rebutted by leading scientists at the Department of Energy's Argonne National Laboratory.'' In fact, Dr. Wang at the Argonne Laboratory stated: There has been no indication that the U.S. corn ethanol production has so far caused indirect land use changes in other countries. No claim can be made that U.S. ethanol production leads to the clearing of rain forests. In fact, since 2002, U.S. corn exports increased by 60 percent. Even with the growth in the ethanol industry, our corn exports have steadily increased, meeting growing global demands. So when it comes to the United States and food, we allow exports to other areas where they need our overproduction. But one of the things that is driving up the price of rice now is a lot of prohibition in countries that produce rice to exports. So the global trading system is not efficiently distributing rice to where it is needed to feed hungry people. Think of that as a detraction, but also think that in the whole world, 95 percent of all grain produced is consumed and not made into something else. While some claim that corn ethanol increases greenhouse gas emissions because of land use changes around the globe, they need to think again. According to the U.S. Department of Energy, today's corn ethanol produces about 20 percent fewer greenhouse gas emissions on a life- cycle basis. Ethanol blended fuel emits cleaner tailpipe emissions and, unlike petroleum, ethanol doesn't harm the environment or groundwater the way the petroleum-based product MTBE did for the 20 years it was used in gasoline as an oxygenate, where ethanol can be used as an oxygenate and it doesn't do that. In recent weeks, a new argument has come forward about the effect of corn ethanol on domestic and global food prices. Food prices are going up. Of course, we all have to be sympathetic to that, whether it is in America or abroad. People are struggling with higher prices for food is not something we like to hear. But to put all the blame at the feet of the U.S. ethanol industry is outrageous and misplaced, and that is what this smear campaign is all about, just so the grocery manufacturers of America can have an excuse to increase the price of food here. Watching the news and listening to some of my colleagues, there was even a hearing on this a couple weeks ago in the Senate. I have even heard expressed in this hearing that the price of oranges was going up because of ethanol. We have heard that the domestic ethanol industry was blamed for shortages not only in oranges but apples, broccoli, rice, wheat, lentils, peppers, even bananas. Let's stop to think about the people who are saying: You are growing more corn, so we are growing less wheat or rice. We don't make ethanol out of wheat or rice. But for people to say that fruits are going up or bananas are going up because we are growing more corn, well, let me assure everybody I do not know of anybody who is plowing up and tearing out an apple orchard, an orange orchard or a banana plantation to plant corn for ethanol. But that is the ignorance about the people who are making those mistakes, trying to make the argument that more land is going into corn and less going into wheat, so the price of bread is going up. With regard to wheat, rice, and lentils, the global demand for food from a growing middle class in China and India have the most impact is what economists are telling us. Weather trends, including a 100-year historic--how to say it--the worst drought in 100 years in Australia and poor growing conditions in Southeast Asia and Eastern Europe have had a much greater impact on the supply of rice and wheat. Many of these countries also have government production policies that manipulate production, supply, and trading of these commodities. Think of some of the dictators in Africa who want a cheap food policy. Farmers cannot make enough producing food, so the farmers move to town and live in the slums, when they could be producing something back home, if the governments had policies that would encourage the production. There is so much resource in Africa that there is no reason to have anybody starving in Africa. The fact is, the global demand and price for all commodities has increased. Some of this could even be due to speculation. You read that in the business papers in the United States quite regularly. One of the biggest culprits behind rising food prices is the cost of oil at $125 a barrel. We had a recent Texas A&M study concluding that the biggest driving force behind the higher food costs is higher energy costs. So if Texas A&M is saying that, let's look at what the Iowa State University Center for Agriculture and Rural Development is saying about ethanol's impact upon the price of gasoline and energy to move food around. They say, without the ethanol we have, you would be paying 30 or 40 cents more for a gallon of gasoline. In turn, then, since Texas A&M says energy is the biggest reason for the increased costs of food, you would have yet higher food prices without having ethanol. Joseph Glauber, chief economist at the U.S. Department of Agriculture, recently testified that rising prices for corn and soybeans have had little or no effect on the high price for wheat, rice, and other food commodities. Dr. Glauber cited the worldwide economic growth--that would be China and India, as examples of a couple countries--global weather problems-- that would be the drought in Australia--rising marketing costs, and a weak U.S. dollar as having a greater role than biofuels in the cost of food being higher and even being scarce. A U.N. official has recently referred to biofuels as ``a crime against humanity.'' Mr. Ziegler, from the country of Switzerland, might benefit from a review of European policies that ban or restrict the growth and import of genetically modified crops. Let me explain that genetically modified crops have had a great deal to do with the increased production of corn per acre, from 91 bushels per acre in 1979, to 107 bushels per acre in 2000, to 150 to 160 bushels per acre in 2007. While U.S. farmers are taking great strides, through the use of genetically modified grains, to feed the world, Europe is taking a step backward--the same Europe that Mr. Ziegler lives in, who is saying that biofuels is ``a crime against humanity.'' As a result, you have a ripple effect of the policies in Europe because African countries are reluctant to grow genetically modified grains, even though their production gains are great, because European countries might restrict their imports from those African countries. I might suggest Mr. Ziegler focus more of his efforts on opportunities lost as to growing more grains in Europe and focus on GMOs and their use in Europe than our biofuels policy. U.S. farmers responded to these increased demands for grain and produced a record corn crop in 2007. Now, we grew more acres of corn in 2007 than any year since 1944. We produced 2.6 billion more bushels of corn in 2007 than 2006. Now, out of that 2.7 billion bushels, ethanol only used 600 million of them. So for all the people complaining about not having enough corn, are they going to use 2.1 billion bushels more that we raised in the greatest acreage since 1944 that was not used for ethanol? Are they going to take that into consideration or are they going to still complain that there is not enough corn around? Exports have grown as well. Our U.S. Department of Agriculture estimates that this year's corn exports will be a record 2.5 billion bushels--up 18 percent over last year. We are getting that surplus production in the United States around the world, where it is needed. One of the places it is needed is in China. They do not export corn anymore. In the 1980s, the Chinese were eating 44 pounds of meat a year; this year--while I guess the figures are for a couple years ago-- 111 pounds of meat. They are going from rice to value-added food products. They have to have some of our corn to do that, and we are glad to sell it to them. With these facts, it is hard for critics to argue that the domestic ethanol industry is diverting corn from feed or food markets. Yet that is what this smear campaign is saying. It is also important to keep in mind that a tiny fraction of the cost of retail food is the result of farm inputs. Would you think farmers are getting rich because the price of food is going up? First of all, let's look at all the income from farmers. They only get back 19 cents

Mr. GRASSLEY. Madam President, since I do not see any other colleagues asking for time, I ask unanimous consent for an additional 10 minutes.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, with today's passage of the Food, Conservation, and Energy Act of 2008, we have taken a step in the right direction for rural America after well over a year of work on this bill. This legislation will result in new opportunities for U.S. farmers, rural business owners, and those who require food assistance during a time of rising food prices. I am pleased that the Senate has finally voted in favor of its implementation. None of this would have been possible without the leadership of our chairman and ranking member on the Senate Agriculture Committee, Senator Harkin and Senator Chambliss. I want to thank both of their staffs and in particular Mark Halverson, majority staff director, and Martha Scott Poindexter, minority staff director, for their hard work and dedication to bring this 5-month conference to a conclusion. For the first time in the process of writing a farm bill, the tax writing committees were asked to help fund a portion of the spending. I have strong concerns about this, which I have expressed previously. Still, we would not be here today without the hard work and leadership of the chairman of the Finance Committee, Senator Max Baucus. And he is supported by a strong staff. That starts with the Democratic staff director on the Finance Committee, Russ Sullivan, and the deputy staff director, Bill Dauster, as well as his legislative director, Jon Selib, who were each critical to the process. I also want to thank Brandon Willis on his personal staff, Pat Bousilmann on the Senate Finance Committee, and Cathy Koch and Rebecca Baxter on his tax staff. And I want to thank his chief international trade counsel, Demetrios Marantis, as well as the other members of the Democratic trade staff, Darci Vetter, Amber Cottle, Janis Lazda, Chelsea Thomas, and Hun Quach, and three individuals serving on detail to Senator Baucus, Russ Ugone, Ayesha Khanna, and Chuck Kovatch. Of course, I am grateful for the outstanding effort of my staff as well. First I want to thank Amanda Taylor, my agriculture counsel on my personal staff for her many months and countless hours of dedication and hard work on this bill. I also want to thank my chief tax counsel and deputy staff director, Mark Prater, as well as Elizabeth Paris, my energy and agricultural tax counsel. I am pleased that with their hard work we were able to provide long overdue agricultural tax relief to our nation's farmers. In addition, from my trade staff, Stephen Schaefer, David Johanson, Claudia Poteet, and David Ross, each deserve my thanks for their contributions. I also want to thank John Kalitka, who is on detail to my staff from the U.S. Department of Commerce. Today's vote is long overdue. The September 2007 deadline of the farm bill has long come and gone. The farm bill hasn't happened as quickly as I would have liked, and we've had multiple extensions. Still, today's vote is critical to giving our agricultural policy a face lift. The U.S. Department of Agriculture should begin to implement these new laws as soon as possible, and I will work hard to oversee the Department in its administration of this important legislation.