Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, it is with great sorrow I honor a fallen soldier. American hero Marine LCpl Cody Wanken was seriously injured near Fallujah, Iraq, last fall. He subsequently died from these injuries on April 2, 2008. My deepest sympathy and prayers go out to Cody's parents, Rick and Susan Wanken. Cody was a machine gunner in the 3rd Battalion, 5th Marine Regiment, 1st Marine Division. He was a 2006 graduate of Hampton-Dumont High School and served as the 2005-06 president of the Iowa Jobs for America's Graduates, Hampton-Dumont chapter. Throughout his youth, Cody was a standout athlete. He played on a Hampton youth baseball team that took first place at the Iowa games, and he was named to the Class 3A, District 2 defensive team after his senior year of high school. Cody returned to speak at Hampton-Dumont while recuperating from his injuries obtained in Iraq. Cody will be forever remembered by his family, friends, and community members. One of Cody's former coaches said, ``He was very, very proud to serve in the Marines. You could just tell.'' For this, we are all indebted for his service to our country. I express gratitude on behalf of all Americans to the family of a true American patriot, fallen hero Marine LCpl Cody Wanken.

Mr. GRASSLEY

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 I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak as in morning business for such time as I might consume but probably in the neighborhood of 8 or 9 minutes for anybody else who might be wanting to speak.

Mr. GRASSLEY. Today, President Bush submitted the Colombia Trade Promotion Trade Agreement Implementing Act to Congress. This bill, as the title implies, would implement our pending trade agreement with Colombia, which the administration and Colombia signed in November 2006. This is an important agreement that deserves our support. Some of the economic reasons for supporting this trade agreement are that the economic rationale is obvious. In my view, the economic rationale is undeniable. That is because Colombia is a beneficiary of two of our unilateral trade preference programs: The Andean Trade Preference Act, and the Generalized System of Preferences. Now, all this means is Colombia already gets duty-free access to U.S. markets for the vast majority of its goods. Now, meanwhile, less than 3 percent of our exports to Colombia, and not a single U.S. agricultural export, receives duty-free treatment from Colombia. Our exporters face Colombian tariffs as high as 35 percent for nonagricultural goods and even much higher tariffs for agricultural goods. The Colombian trade agreement would thus eliminate this disparity or, as we like to say so often, level the playing field for American exporters, thus giving American workers the same access to Colombian markets that their workers get to the U.S. markets; in other words, being fair, leveling the playing field. Now, the U.S. International Trade Commission has found that leveling the playing field will increase our exports to Colombia by $1.1 billion per year. That is as a result of eliminating the duty on goods. That means real benefits for American farmers, for American manufacturers, for American service suppliers. One of the chief benefits is it will help keep good-paying jobs in the United States. So I would ask my colleagues and the American people to think about this whole proposition about the Colombian Free Trade Agreement this way: Either we maintain the status quo or we create new opportunities for American exporters. At its heart, that is what this debate is all about. Last year, exports accounted for more than 40 percent of our total economic growth. We should be doing everything we can do to grow our exports even further. That is what we did last December when the Senate voted by this wide margin of 77 to 18 in favor of a free-trade agreement with Peru. The Colombian trade agreement is very much like this Peru agreement, and the Colombian market is bigger than the Peru agreement. If it makes sense to approve the Peru agreement, it makes even more sense to approve the agreement with the country of Colombia. Economic considerations are not the only reason to support the Colombian agreement. I say this because too often we measure trade entirely in economic terms. But there are a lot of ways to measure trade other than in dollars and cents. Because in this instance and in so many instances, trade agreements are about an important national security priority. There is one very specific reason for doing this with Colombia. Because as my Senate colleagues know, Colombia is a strong Democratic ally in a very dangerous neighborhood. For many years, it has been under assault from the FARC, a group of narcoterrorists fighting to overthrow the democratically elected Government in Colombia. It is increasingly under pressure, as Colombia is, from Venezuela's President Hugo Chavez. You have seen a lot of this in the news in the last month. President Chavez of Venezuela is using oil wealth to divide Latin America. He is trying to lure allies to his Socialist vision and, most importantly, to promote his anti-U.S. agenda. He is fiercely opposed in this process to anything that Colombia's President Uribe does in cooperating with the United States or even having a friendship with the United States. There have been troubling reports that President Chavez may be working with the FARC. Last month, he tried to create a diplomatic crisis over a border incident that did not even involve Venezuela. He took the side of the FARC against the Colombian Government. At a challenging time such as this, the United States has a responsibility to provide strong, principled leadership. Our agreeing to the Colombian Free Trade Agreement is one way of showing strong, principled leadership in support of a friend in South America. We must stand by our allies. We must help to promote economic stability, security and, most importantly, the rule of law, whether it is in trade or nontrade areas. President Uribe has made it clear that one of the most important steps we can take in this regard is then to help him, through our implementation of the Colombian Trade Agreement that levels the playing field for America, for America's manufacturers, service providers, so we can get our products into Colombia on the same basis as Colombian farmers or manufacturers or whatever have been able to get their products into this country without duty. Our leaders in Latin America are watching us in this process. They see our approach to Colombia as a proxy for the overall attitude toward Latin America. If Congress rejects this trade agreement, or if we were to refuse to vote on it, our allies in Latin America might well conclude that the word of the United States is no good. That will not help Latin America, and it surely is not good for our country. I know some of my colleagues have concerns about this agreement. One of those concerns is the issue of violence by Colombia or within Colombia against labor leaders. Anti-union violence has been a serious problem in Colombia for years. If the Colombian Government were ignoring this issue, that might be reason to oppose this agreement. But Colombia and President Uribe are not ignoring the issue. To the contrary, Colombia has made massive strides in its fight against anti-union violence. Moreover, I have yet to hear a convincing reason why voting down the Colombian agreement or refusing to vote on it will help to reduce violence against labor leaders. If we want to help Colombia reduce violence, and if we want to assist in the demobilization process, we should be doing what we can to enhance economic growth and create new opportunities for a legitimate economy. One way we can advance that objective is to vote to implement the Colombian trade agreement. Now, the one other concern I have heard is the administration should have waited to submit the agreement until it reached a procedural agreement with the congressional leadership. The fact is, we have been waiting for Congress to take up this issue for over 10 months. On May 10 of last year, there was a great, grand deal made about our bipartisan compromise on trade that would pave the way for the continuation of pending trade agreements, including the Colombian agreement, including Peru, which has been passed, and including Panama, which still is on the agenda. Now, since May 10 of last year, there has been no action on Colombia. This inaction violates the compact between the legislative and executive branches of our Federal Government on trade. The administration negotiated the Colombian trade agreement under the Bipartisan Trade Promotion Authorization of 2002. Under the trade promotion authority procedures, the administration has an obligation to consult with Congress during the course of the negotiation and to conclude an agreement that meets the negotiation objectives specified in that statute, the Bipartisan Trade Promotion Authority Act of 2002. Now, the administration has done all those things required by that act. The administration even went further by reopening the agreement to implement the enhanced labor and environmental provisions that were demanded by the new Democratic majority after the elections of 2006, which was their right to do. These agreements then on labor and the environment were part of the May 10 bipartisan trade deal. Colombia has agreed to accept those provisions. But the trade promotion authority places a firm responsibility on Congress as well, the responsibility to process a trade agreement for an up-or-down vote once it has been concluded. Congress has had over 10 months to engage the administration and commence that process. In that time, we have not even had a hearing on the Colombian trade agreement. So the time for that process ran out. Now, this is the position the administration is in. In order to preserve sufficient time under the trade promotion authority to assure a final vote this year, the President has now submitted the agreement and implementing legislation to this Congress. But that does not mean Congress must vote tomorrow. Today's action by the President starts the 90-day legislative clock in the House and Senate under that Bipartisan Trade Promotion Authority Agreement of 2002. So there remains plenty of time to work together on a bipartisan basis to reach consensus. For example, I am engaging in intense discussion with the chairman of the Finance Committee, Senator Baucus of Montana, on a consensus bill to reauthorize our trade adjustment assistance programs. We will certainly continue that effort. Trade adjustment assistance is the top priority of Senator Baucus on the trade agenda this year. I have agreed to work with him to advance his priority that I also have an interest in advancing. But my priority is implementation of the Colombian trade agreement. I expect to see a vote on that as well. I think Congress can address both priorities. I think Congress can meet both responsibilities. I think Congress can accomplish them in a bipartisan way. It is time to stop playing politics with our Nation's vital economic and foreign policy interests. It is time to level the playing field between the United States and Colombia on free trade. That level playing field is going to benefit the United States. It is not going to benefit Colombia much more, although it will benefit them some. American workers deserve a fair opportunity to sell our products and services abroad. Colombia deserves recognition for the tremendous progress it has made over the past few years. It is time for Congress to demonstrate leadership and to meet our responsibility in the economic and foreign policy areas. The United States-Colombia trade promotion agreement deserves an up- or-down vote this year. This debate will continue. I hope that before the end it becomes more of a dialog than a debate because I think dialog is what foreign trade is all about. This issue is too important. The stakes are too high. We must find a way forward, and we need to find it together. I think we will. I yield the floor and suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am here today to honor the University of Iowa wrestling team. The Hawkeye wrestlers won their 21st NCAA championship on March 22, 2008 in St. Louis. It was the first national championship for the Hawkeyes since 2000, and it shows that Iowa's great wrestling tradition continues. Under the tutelage of former Hawkeye great Tom Brands, the Iowa squad won its 32nd Big Ten conference title with a perfect 8-0 record. They had an overall dual record of 21-1. Iowa crowned two individual national champions in St. Louis, Brent Metcalf and Mark Perry. Metcalf had an incredible season for the black and gold and was named Outstanding Wrestler at the Big Ten and NCAA Championships, and at the Division I NWCA/Cliff Keen National Duals. Metcalf was named Big Ten Wrestler of the Year, and most recently was awarded the Dan Hodge Trophy which recognizes the top college wrestler each year. Perry won the second national championship of his college career. He was also named an All-American for the fourth time. A senior, Perry compiled an overall record of 96-16, and a 20-3 record this season. They also had seven athletes named All-Americans, Metcalf, Perry, Jay Borschel, Matt Fields, Charlie Falck, Phillip Keddy and Joe Slaton. Coach Brands was named National Wrestling Coaches Association Coach of the Year and Big Ten Coach of the Year. Iowans also celebrated the Hawkeyes' success on April 3, which Governor Culver proclaimed ``University of Iowa Wrestling Day'' in our State. I am proud to recognize the Iowa Hawkeye wrestling team, along with Coach Tom Brands and his outstanding staff, for winning the Division I Wrestling National Team Championship.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I rise for two purposes. One, to state some views on the Durbin amendment and, No. 2, to give very short remarks on tax provisions that are part of the underlying housing bill. I would like to speak on the Durbin amendment for the reason that I am the author of the bankruptcy reform provisions that passed here, maybe 3 or 4 years ago, and are now law. I would like to speak on the tax provisions as ranking Republican on the Senate Finance Committee. Senator Durbin and I have had opportunities to work together on many issues, and in fact we are working together on other things this very day, unrelated to this bill. I appreciate the opportunities to cooperate in a bipartisan way with Senator Durbin. Senator Durbin, many months ago, was very polite, coming to me and asking me to take a look at his bankruptcy language. It is probably similar to the one that is before us right now. I know the language has been changed some since then, but it is basically the same concept. He asked me to consider it. I and my staff did consider it, and I am standing here now to speak against it. But Senator Durbin was very courteous in giving me a heads up, not just a few weeks ago but a long time ago. I want my colleagues to know Senator Durbin is an easy Senator to work with, even if you disagree with him. So I am here to voice opposition to Senator Durbin's bankruptcy amendment. While I appreciate Senator Durbin's sincerity in trying to alleviate the home mortgage crisis, I believe his amendment is misguided and will have serious unintended consequences. So I am going to point out some of my concerns. First, the proposal would make filing bankruptcy a deceptively attractive option for people trying to keep their homes. But we do not want to encourage people to go into bankruptcy for the sole reason of keeping their homes. Rather, we should be working on solutions outside of bankruptcy to address this issue, and that is what a great part of the other provisions of this housing legislation before us is all about. That is what a lot of the things the Federal Reserve and the Secretary of the Treasury are trying to do, both through public policy as well as through encouraging private sector policy. Other solutions need to be sought before bankruptcy. In order to get the relief Senator Durbin wants, homeowners will have to go into bankruptcy to get it. That is no news. He has made that very clear. I believe otherwise; that voluntary efforts and programs outside of bankruptcy will be quicker and more efficient, in terms of helping people keep their homes and shoring up the housing market. We need to let these efforts work. Also, people will not risk ruining their credit history by filing for bankruptcy just because they think that this is the only way maybe they are going to be able to keep their home. The mortgage banking industry needs to be doing all it can to make sure that all homeowners in distress, not just the ones in bankruptcy, are getting help in making their payments. I think more importantly, we have been told the cramdown provision in Senator Durbin's amendment will increase the cost of mortgages for all borrowers in the form of higher interest rates or higher downpayments, or both. Independent experts, as well as the Congressional Budget Office--and I like quoting the Congressional Budget Office because they are not partisan--have concluded that there will be an interest rate increase for all home mortgages, between 1 and 2 percent. Higher interest rates will deny many Americans the ability to buy a home and will make it more expensive for other Americans to get a home loan. So, in effect, this will put up barriers--maybe unintended barriers, but real barriers, the experts tell us--to the American dream of owning a home. The fact is, in 1978, a Democratic-controlled Congress and a Democratic President specifically--and I wish to emphasize ``specifically''--exempted primary residences from cramdown to keep interest rates low for primary homes and to ensure credit was available for low-income borrowers. In fact, U.S. Supreme Court Justice Stevens explained, in the Nobleman case, that the legislative history of the 1978 bankruptcy law indicated very clearly that: . . . favorable treatment of residential mortgages was intended to encourage the flow of capital into the home lending market. Debate surrounding the Senate version of the 1978 act indicates that exceptions for real estate liens were allowed with the explicit goal of making home mortgages more available and more affordable than other kinds of credit. So I think, from the history of the 1978 act, there is a sound policy basis for this decision to not allow cramdown for primary homes in bankruptcy.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY. Now you are getting personal.

Mr. GRASSLEY. Madam President, I am glad to answer that. First, let me explain why I said he is getting personal. I am the author of that Chapter 12 bankruptcy provision. I am going to address it very soon. So if you would listen, I think I will answer your questions. I appreciate what you are saying and, in fact, I anticipated that, and I hope I am ready for it. I am sure it is going to be difficult to satisfy the Senator from Illinois, though. The amendment of Senator Durbin will not only increase interest rates on mortgages and make home ownership more expensive for everyone, many experts tell us this proposal will also have an adverse impact on financial markets because of difficulties and uncertainty in valuing the mortgages that back up securities. In addition, innocent investors would be hurt. So the Durbin amendment would cause other adverse impacts beyond higher costs of home loans. Proponents of this amendment, particularly the cramdown provisions, argue that primary residences should be crammed down in bankruptcy just as second homes, family farms, and boats are. But there are good reasons why primary homes are treated differently from these other things. First, interest rates and downpayments for vacation homes are significantly higher than for primary homes. If we are to start treating primary homes the same as vacation homes, I am told that then interest rates are certain to rise to the same level of second homes where cramdown is permitted. Second, Chapter 12, referred to by the Senator from Illinois, only applies to very small commercial farming and ranching operations, not all farms and not all ranches. There are very specific requirements that need to be met in order to be able to file under Chapter 12. So we are not talking about the same number of loans that could be eligible under the Durbin amendment. I would be glad to give some statistics on that, but I am going to wait and see if the Senator from Illinois is satisfied. Actually, I will give these numbers now because I think they are significant at this point. According to the USCOURTS.GOV Web site, the Federal courts Government Web site, for fiscal year 2006 there were only 348 Chapter 12 filings; in fiscal year 2007, there were only 361 Chapter 12 filings. This would compare to what, at least I believe, you are saying are possibly at least 600,000 filings under your amendment. Moreover, it took Congress over two decades to make Chapter 12 a permanent part of the Bankruptcy Code because people were concerned about the possible negative consequences to allowing cramdown for family farms. Chapter 12 was initially only enacted as a temporary provision. In addition, I would like to say that the definition of family farm which can file under Chapter 12 is very limited. In fact, Chapter 12 only applies to a limited number of farms--those that have less than $3.2 million in debt; debt has to arise out of the farming operation; 50 percent of income within the last 3 years has to come from farming income; and 80 percent of the assets in the estate have to be related to farming operations. Those are some of the requirements. So probably Chapter 12 ended up, quite frankly, being a lot more narrow than maybe I originally intended. But I think it is working. Finally, I want to go to the cramdown that is allowed for boats, because boats are like cars: their values diminish rather than increase, which is very different from real estate, where values are expected to rise over the long term. Proponents of Senator Durbin's amendment argue that the way the amendment is now drafted, only a very limited number of loans will qualify for cramdown in bankruptcy. Now, while the amendment does attempt to limit the scope of the legislation from how it was originally drafted when Senator Durbin introduced his bankruptcy proposal as a stand-alone bill--that was probably soon after he had talked to me about it several months ago--the reality is that the language still is extremely broad. Cramdown and other loan modifications are available for many loans, both nontraditional and subprime as defined by Senator Durbin's amendment, made before the amendment's effective date. That is, of course, a lot of loans. Since there is no sunset date in the amendment, borrowers could file for bankruptcy and still get this cramdown relief years and years from now.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY. So then you are saying my statement was wrong?

Mr. GRASSLEY. I am looking at my staff because I am not a lawyer. My staff would disagree with you that my statement is inaccurate. But I will not go into that now. Furthermore, according to the Durbin amendment, subprime loans are defined to be any loan with an interest rate of 3 to 5 percent over the Treasury yield rates for comparable loans. It is my understanding that this definition could include prime loans and home equity lines of credit, which would encompass a large number of loans. The cramdown provision is just one of several problematic provisions in Senator Durbin's amendment. The amendment will increase bankruptcy filings, something I really do not think we should encourage. We should be doing everything we can to keep people out of bankruptcy. It ought to be very much a last resort, particularly because filing bankruptcy in and of itself hurts a consumer's credit rating. I think we can all agree that bankruptcy should be a last resort and one should not file for bankruptcy unless it is absolutely necessary. The amendment will increase mortgage interest rates and downpayments for other homeowners and potential home buyers. The Durbin bankruptcy amendment will inject greater risk into and negatively impact our financial markets. I would like to be clear: I want to help homeowners weather the storm just as much as the next Senator. I want to support constructive solutions to help homeowners meet their obligations so they do not lose their homes. In fact, I have worked very hard with other Senators to craft tax provisions that I am soon going to address that are currently contained in the underlying housing proposal before us. But I am concerned that the Durbin bankruptcy amendment we are considering right now--if we adopt that, we are going to pass legislation that would do a great deal of harm. I am concerned about the possibility of the amendment helping some, but hurting many others. I am not alone in my concerns. Many experts agree that the Durbin bankruptcy cramdown proposal is problematic and could have serious adverse consequences. So I am asking my colleagues to vote against the Durbin bankruptcy amendment. I said that I am the ranking Republican on the Senate Finance Committee. I now wish to give a short statement about some of the tax provisions. I may have to be more specific when we get into debate on this, so this is kind of a preliminary notice of where the committee is coming from. First of all, as usual, I find it very necessary to thank Chairman Baucus for his courtesy and hard work in the legislative effort. Our goal was to develop a bipartisan tax package that responds to the needs of Americans and, in particular, the housing market. Americans are struggling to keep their homes and their jobs. As economic conditions continue to worsen, it is appropriate that Congress act to enact tax laws that address the housing problem. After all, the housing problem is at the root of the current economic turmoil and anxiety that people have. Last year, we responded to the call for help. Congress enacted the Mortgage Debt Relief Act of 2007 which was signed into law by the President. This law excludes from income discharges of indebtedness incurred by taxpayers to acquire homes. It also extends the tax deduction for mortgage insurance premiums. Earlier this year, Congress acted at lightning speed to enact a stimulus package that delivers additional relief to American taxpayers. As a result of that legislation, Treasury will be sending out rebate checks in a few weeks that will give the economy a much needed boost. We have carefully balanced this tax relief package being considered today on the floor. It addresses the housing downturn but is limited so as to ensure that it helps the problem and does not simply create new problems. We are mindful that any relief that benefits one sector of the public does not do so at the expense of another sector. The other sector is the taxpaying population that carefully managed their family budget, especially as it is related to housing costs. Taxpayers bear the burden of a bailout of these risky mortgages that went south. So it is important that we have a compassionate view that recognizes taxpayers possibly picking up some of the tab. Once again, the Senate is stepping in to help Americans in distress. The tax relief package helps encourage home ownership and encourages the basic businesses that are tied to the housing industry to recover some losses. Keep in mind that those businesses create jobs. More jobs means a stronger economy. In 2002, Congress passed a stimulus bill that provided some of the very same relief that is contained in this bill. In 2002, Congress passed, with overwhelming support, a provision to extend the net operating loss carryback. This provision passed without controversy. Hopefully, there will be no controversy this time. Then, again, earlier this year the Senate Finance Committee passed a similar provision to extend the net operating loss carryback once again, with overwhelming support by the committee. Relying on our successes in the past, we have included similar provisions in this bill. However, the net operating loss provision in this bill is even more conservative than the relief offered in the past. Instead of a 5-year carryback, this proposal offers a 4-year carryback. This provision, of course, is a no-brainer. It helps the very industries suffering from this housing downturn and will help Americans continue to be employed. This bill also offers a tax credit to help people buy homes that are in foreclosure. These homes are depressing home values in the marketplace. It is important that this inventory is moved so as to help retain home values. This bill also increases the cap on mortgage revenue bonds to give people in distressed loans additional options for refinancing. This is not a bailout for homeowners; this is a provision that helps enable people to keep their homes and to pay mortgages. As we proceed on this bill, I am asking everybody to keep in mind what I said at the beginning: We need to address the housing downturn, but we need to show restraint. We need to limit the relief so that it eases the problem, but does not create new ones. We need to be considerate of the many Americans who worked hard to save and buy homes and who will ultimately pay the price for this relief, if the relief is used, and we expect it will be. They should benefit, too, in that any targeted relief will, in fact, give the economy a boost and not be a drag on the economy, drag it down even further. We want to keep people employed, and particularly the taxpayers who were conservative in their financial plans should not be harmed as a result of this. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I have had the opportunity in the last several years that I have been in the Senate to look into how drug companies may be improperly influencing medical care. It is no secret that drug and device companies have substantial financial relationships with the health industry and specifically with physicians. In addition to multimillion dollar royalty payments and lucrative consulting contracts, I found that drug and device companies often provide perks to doctors. These would include things such as expensive trips, lavish speaking fees, and other benefits that are too numerous to mention at this point. These relationships, as you might expect, can motivate doctors to modify their treatment practices. It can motivate doctors to do practices that may not be in the best interests of the patient. Because these financial relationships are so common, I have had the help of Senator Kohl of Wisconsin in the introduction of a bipartisan bill called the Physicians Payment Sunshine Act. We introduced that in the latter half of last year. Now, this bill is not aimed at stopping money flowing to the doctors, the results of which I have spoken about. But it ought to throw a little sunshine on this issue. And that sunshine on this issue will go a long way toward curbing bad behavior. I am proud to report the bill is gaining support from industry and from many physicians. In fact, medical device maker Zimmer recently announced their support. I expect even more companies to come onboard very soon. You might say that these companies coming on board must like this, that it is not going to do any good. Well, it will do a lot of good. I think companies coming on board at this point are recognizing that if they are in a public debate on this issue where there is evidence that their payments to doctors may influence practice, that is not going to stand up in the theater of public debate, and so they ought to help their public relations and get behind this legislation. They know it is the right thing to do. I hope my colleagues in the Senate will look at this bill and see it as the right thing to do as well. Since last summer, I have been investigating dozens of physicians to see if they are reporting their outside income to universities they are affiliated with. These physicians are at public as well as private universities and are working at institutions of higher learning across the United States today. I am going to report on the action of one physician. I do this to explain how industry payments to medical experts can affect medical practice. Last summer, the New York Times ran an article about several drugs called atypical antipsychotics. These drugs are very powerful. The New York Times reported they are widely prescribed for children. In the case of Seroquel, this drug became widely prescribed to treat children for bipolar disorder in the year 2005. It is important to examine this drug because we have paid billions of taxpayers dollars for Seroquel in the last years under various programs that the Federal Government has that provide help for people who cannot otherwise afford it. Now, this happened after a group of experts decided that drugs such as Seroquel worked in kids and then published new guidelines in the Journal of the American Academy of Child and Adolescent Psychiatry. But this panel based its guidelines on a single inconclusive study that was done in the year 2002, paid for by AstraZeneca. The study concluded kids did well on Seroquel, even though half of them dropped out of the study because of bad side effects. The lead author of this study was Dr. Melissa DelBello, a professor at the University of Cincinnati. After reading about this story, I sent a letter to the University of Cincinnati and asked to see Dr. DelBello's reports on outside income. I found out Dr. DelBello received over $100,000 from AstraZeneca in 2003, the year after she did this study. The following year, the company paid her over $80,000. These payments were for things such as lectures, consulting fees, services on advisory boards, and reimbursement for travel-related costs. After the university sent me these records, I then asked AstraZeneca to account for money the company had sent to Dr. DelBello. The numbers after they all came in simply did not add up. Between 2005 and 2007, Dr. DelBello reported about $100,000 in outside income to her university. But I found out AstraZeneca had paid her over $238,000, and obviously $138,000 of reported income is a big difference. Of course, I am finding out the money keeps trickling in. Last week, AstraZeneca reported to me they had discovered an additional $1,800 in payment to Dr. DelBello, and who knows if we will ever know the full accounting of this money paid between AstraZeneca and the professor. So her own university, her very own university which is supposed to be monitoring her conflicts of interest, did not even know about these additional payments. It seems to me they did what many universities around the country do: They trusted their faculty to provide accurate information. Even worse, I found out Dr. DelBello received grant money from the National Institutes of Health. According to Federal regulations, universities are supposed to monitor conflicts of interest when their researchers receive National Institutes of Health grants. Obviously, the university has engaged in the practice of trust but did not verify, where the rule is: Trust but verify. Another interesting thing happened while I was looking into Dr. DelBello. According to the letter I received from the University of Cincinnati, Dr. DelBello failed to report other money she also received from big drug companies. So it turns out Dr. DelBello has a company which she established for ``personal financial purposes.'' AstraZeneca was involved here. Let me remind you that AstraZeneca is the maker of Seroquel. They paid MSZ Associates, Inc., an Ohio corporation, over $60,000. Where do you think the address of MSZ Associates is? Well, you probably have figured it out, the Department of Psychiatry, University of Cincinnati. This situation is unfortunate on so many levels. It is unfortunate for the University of Cincinnati relying on the representations of its faculty, it is unfortunate for patients who once believed their doctors were not for sale, and it is unfortunate we are in a day and an age where a bill promoting transparency for millions and millions of dollars going from big drug companies to American doctors is necessary. In other words, I am saying to my colleagues in the Senate: The bill Senator Kohl and I put in last year that is picking up steam, even from companies in the medical business, should not have had to be introduced. The checks and balances that are out there between universities, between the NIH and universities that get their grants ought to be enough to make sure the ethics are properly followed. This information is available, and, most importantly, the information is public, because this is the public's business. The public has a right to know whether people who doctor them might have a financial interest in the treatment that is prescribed for them. Now, I have given you one example of a doctor who has been receiving large amounts of money from drug companies. In this area, as in many others, I hope a little bit of sunshine will go a long way. That is what the Kohl-Grassley legislation is all about. The fact that a physician can promote a drug to other doctors and receive NIH funding, while hiding a very clear conflict of interest, ought to be very disturbing to all of us. That is why this bill is very needed. Because nobody is watching this money, and it is having a bad effect on medical practice as evidenced by this drug made by AstraZeneca. Before closing, I wish to give this compliment to the University of Cincinnati. This university has and continues to be very cooperative in this investigation. I very much appreciate this. Thank you to the University of Cincinnati. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to introduce the Medicare Rural Health Access Improvement Act of 2008. The purpose of this legislation is to continue ongoing efforts to ensure that Americans in rural areas have access to health care services. Much has been done in the past to improve access to rural providers such as hospitals and doctors. Much more still needs to be done. I hold town meetings in each of the 99 counties in the great State of Iowa every year. As many know, Iowa is largely a rural State, and a significant concern that I consistently hear during these meetings is the difficulty my constituents experience in accessing health care services. As the former chairman and currently the ranking member of the Finance Committee, it has, therefore, been a priority for me to improve the availability of health care in rural areas. In Iowa, as in many rural areas across the country, hospitals are often not only the sole provider of health care in rural areas, but also employers and purchasers in the community. Moreover, the presence of a hospital is essential for purposes of economic development because businesses check to see if a hospital is in the community in which they might set up shop. As you can see, it is vital that these institutions are able to keep their doors open. In previous legislation, Congress has been able to improve the financial viability of rural hospitals. For instance, the creation and subsequent improvements to the Critical Access Hospital designation has greatly improved the financial health of certain small rural hospitals and ensured that community residents have access to health care. However, there are still a group of rural hospitals that need help. I am referring to what are known as ``tweener'' hospitals, which are too large to be Critical Access Hospitals, but too small to be financially viable under the Medicare hospital prospective payment systems. These facilities are struggling to stay afloat despite their tireless efforts. Like in many communities across the country, the staff of tweener hospitals and their community residents take great pride in the quality of care at these facilities. I have heard countless stories of the exemplary work tweener hospitals in Iowa perform not only as providers of essential health care, but also as responsible members of their communities. It is for this reason that many provisions in this bill are intended to improve the financial health of tweener hospitals and ensure that people have access to health care. Most tweener hospital are currently designated as Medicare Dependent Hospitals and Sole Community Hospitals under the Medicare program. There are provisions, both temporary and permanent, included in this bill that would improve Medicare payments for both types of hospitals. This includes improvements to the payment methodologies so that inpatient payments to these facilities would better reflect the costs they incur in providing care. Improvements are also proposed in this bill to Medicare hospital outpatient payments for both Medicare Dependent Hospitals and Sole Community Hospitals so they would both share the benefit of hold harmless payments and add-on payments. Also, a major driver of the financial difficulties that tweener hospitals face is the fact that many have relatively low volumes of inpatient admissions. This bill would improve the existing low-volume add-on payment for hospitals so that more rural facilities with low volumes would receive the assistance they desperately need. Over the years, many have commented that it is simply unfair for many rural hospitals to receive only a limited amount of Medicare Disproportionate Share Hospital, or DSH, payments while many urban hospitals are not subject to such a cap. This bill would eliminate the cap for DSH payments for those rural hospitals for a 2-year period. There are also other provisions that would continue to help rural hospitals. The rural flexibility program would be extended for an additional year. Certain rural hospitals that are paid on a cost basis for the outpatient laboratory services they provide would continue to do so on a permanent basis. And Critical Access Hospitals that provide outpatient laboratory services would be paid 101 percent of their costs regardless of whether the specimen was collected from a patient of the CAH or whether the specimen was collected in a skilled nursing facility or clinic associated with the CAH. This legislation also seeks to improve incentives for physicians located in rural areas and increase beneficiaries' access to rural health care providers. It includes provisions designed to reduce inequitable disparities in physician payment resulting from the Geographic Practice Cost Indices, or adjusters, known as GPCIs. Medicare payment for physician services varies from one area to another based on the geographic adjustments for a particular area. Geographic adjustments are intended to reflect cost differences in a given area compared to a national average of 1.0 so that an area with costs above the national average would have an index greater than 1.0, and an area below the national average would have an index less than 1.0. There are currently three geographic adjustments: for physician work, practice expense, and malpractice expense. Unfortunately, the existing geographic adjusters result in significant disparities in physician reimbursement which penalize, rather than equalize, physician payment in Iowa and other rural states. These geographic disparities in payment lead to rural states experiencing significant difficulties in recruiting and retaining physicians and other health care professionals due to their significantly lower reimbursement rates. These disparities have perverse effects when it comes to realigning Medicare payment to reward quality of care. Let me put that into context. Iowa is widely recognized as providing some of the highest quality health care in the country yet Iowa physicians receive some of the lowest Medicare reimbursement due to these inequitable geographic adjustments. Medicare reimbursement for some procedures is at least 30 percent lower in Iowa than payment for those very procedures in other parts of the country. That is a significant disincentive for Iowa physicians who are providing some of the best quality care in the country, and it is fundamentally unfair. Congress needs to reduce these disparities in payment and focus on rewarding physicians who provide high quality care. The inequitable geographic payment formulas have also exacerbated the problems that rural areas face in terms of access to health care. Rural America today has far fewer physicians per capita than urban areas. The GPCI formulas are a dismal failure in promoting an adequate supply of physicians in States such as Iowa, and more severe physician shortages in rural areas are predicted in the future. The legislation I am introducing today makes changes in the GPCI formulas for work and practice expense to reverse this trend. It establishes a 1.0 floor for the physician work and practice expense adjustments. It also revises the calculation of the work and practice expense formulas to reduce payment differences and more accurately compensate physicians in rural areas for their true practice costs. We must act now to help rural States recruit and retain more physicians so that beneficiaries will continue to have access to needed health care. Congress has previously enacted a number of other provisions to improve Medicare payment for health care professionals and providers in rural areas that will expire soon. This bill extends the five percent incentive payments for primary care and specialty physicians in scarcity areas through December 2009. It also extends the existing payment arrangements which allow independent laboratories to bill Medicare directly for certain physician pathology services. The bill includes several new provisions to improve beneficiary access to health care services. It increases rural ambulance payments by 5 percent for the next 18 months. It permanently increases the payment limits for rural health clinics. It allows hospital-based renal dialysis centers and skilled nursing facilities to provide telehealth services. It also allows physician assistants to order post-hospital extended care services and to serve hospice patients. Finally, the bill would protect rural areas from being adversely affected by the new Medicare competitive bidding program for durable medical equipment. It would ensure that home medical equipment suppliers who provide equipment and services in rural areas and small metropolitan statistical areas, MSAs, with a population of 600,000 or less can continue to serve the Medicare program by exempting these areas from competitive bidding. We must ensure that rural areas continue to have medical equipment suppliers available to serve beneficiaries in these areas. Mr. President, as you can see, we still have much to do when it comes to ensuring access to health care in rural America. I look forward to working with my colleagues on this important matter. Mr. President, I ask unanimous consent to have printed in the Record a summary of the bill.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I send to the desk a modification of amendment No. 4276.

Mr. GRASSLEY. Mr. President, remember, before Christmas the Senate voted to make sure that middle-class America didn't pay the alternative minimum tax, and we did it without an offset by a vote of 95 to something. So here we are again with an opportunity to say to middle- class America that we are not going to tax the people who were not supposed to be hit by the AMT, and we are going to do it without an offset. This amendment gives us an opportunity to get over that hurdle that is in this budget resolution that, under pay-go, you would have to have an offset for the AMT. So even though the resolution sets aside money to deal with this year's patch, unless my amendment is adopted, there is no guarantee the patch will be done. The 25 million families who will be hit by the AMT increase will get a tax increase of over $2,000 apiece. So they deserve a guarantee of relief. My amendment puts the budget money where its mouth is, and that is we are going to guarantee AMT relief. The principle is applicable to this year's patch and AMT's relief in future years.

Mr. GRASSLEY. Mr. Secretary, I want to talk for a moment about how important it is to encourage physicians to adopt e-prescribing. Some studies suggest that e-prescribing could save the Nation tens of billions of dollars. It can prevent doctors from prescribing a drug to a patient when he is allergic to it. It can prevent doctors from prescribing a drug that could cause dangerous interactions with a drug the patient is already taking. It can help doctors better use health plan formularies, saving themselves time and their patients money. Senator Sununu knew this years ago. Well ahead of others, he was pushing to give incentives to physicians to buy and implement e- prescribing systems. Senator Sununu introduced a bill 3 years ago, but Congress wasn't ready to take his lead. We should be ready now. Studies show that only 11 percent of physicians are using e-prescribing. Adopting e-prescribing isn't cost-free to doctors. Not only must they invest in the technology, but they also must reengineer their practices. This means lost time and money. And many doctors, especially rural doctors, cannot afford that. So providing some financial incentives to get them started makes a lot of sense. There is bipartisan support for e-prescribing. Many members of the Finance Committee, Democrats and Republicans alike, have said how important they think it is. The administration, too, supports e- prescribing as an integral part of electronic health records. With all this support, it is time to get the job done. I support Senator Sununu's amendment to provide financial incentives to encourage physicians to adopt e-prescribing. I urge my colleagues to support the amendment.

Mr. GRASSLEY. Mr. President, the budget resolution proposes that Congress delay several CMS Medicaid regulations that are unpopular with states and advocates. I know some people have concerns with the CMS Medicaid regulations. I am not going to argue they are perfect. I have issues with some of them as well. However, the regulations do address areas where there are real problems in Medicaid. States don't have clear guidance and could be inappropriately spending taxpayer dollars. This leads to improper payments and wasteful spending. We see this throughout the regulations in question. I have a CRS memo that shows some of the issues that exist under current law that I am going to be quoting from shortly, and ask unanimous consent at this time to have it printed in the Record.

Mr. GRASSLEY. Mr. President, 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. This administration has gone a long way towards cleaning that up and the oversight of payments to public providers is part of that effort. I have taken issue at times with the administration's methods. I don't believe they have their public provider definition right in the current regulation. That said, simply making the CMS regulation go away opens the door for a return to the wasteful, inappropriate spending of the past. Quoting from the CRS report, ``Under certain circumstances, a state can require providers to transfer funds to the state and because a provider's Medicaid receipts are indistinguishable from other receipts, effectively a portion of Medicaid payments may be included in those transfers.'' Intergovernmental transfers do 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. Now I would like to turn to the new 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 don't 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, eleven States don't separate IME from GME, and CMS can't say how much they are paying States for GME. Let me quote from the CRS memo: ``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's because the states don't 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 doesn't 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.'' 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 wouldn't argue that Medicaid paying for rehabilitation services is a bad thing. 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 catch-all.'' 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 does not mean there is not 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. Certainly there is reason to believe that states have been using case management to supplement state spending. An example is child welfare. The income eligibility standard for the Federal entitlement for foster care is linked to a pre-welfare reform standard. This means that every year fewer and fewer children are eligible for federally supported foster care. States must make up the difference for these children. This has caused some to 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 that would disallow most child welfare case management claims from reimbursement from Medicaid. This goes further than I would support. Children in the child welfare system are arguably some of our Nation's most vulnerable citizens, presenting with complex and multiple problems. Getting them the proper services requires thoughtful review, planning and management and I believe that Medicaid is the appropriate agency to support 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. I am not convinced that limiting individuals eligible for case management to one case manager will contribute to the quality of their care and provide for access to services. Requiring case manager's to document their time in 15 minute increments seems overly burdensome and inefficient. Eliminating the 180-day period to transition from an institution into the community is contrary to a number of provisions supporting home and community based services, including the ``Money Follows the Person'' program, also included in the DRA. 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. Mr. President, the budget resolution provides for 1.7 billion dollars to address the regulations. This is only to delay the regulations until the end of March of next year. I know supporters hope that the next administration will pull back and undo the regulations. What would it cost if we tried to completely prevent these regulations from ever taking effect? Not $1.7 billion that's for sure. It would actually cost the taxpayers 19.7 billion dollars over 5 years and 48 billion dollars 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. What we ought to do is insist the Finance Committee to REPLACE the regulations. That's what this amendment does. Instead of just making the regulations go away, the Finance Committee should replace them with policy that fixes the problems. Mr. President, that's what we should be doing for the taxpayers. Mr. President, on Monday, the chairman of the Budget Committee talked about the need for adequate funding to fight health care fraud and abuse and how they believe the budget accomplishes that. Let me quote: We have program integrity initiatives to crack down on waste, fraud, and abuse in Social Security and Medicare. In fact, I received a letter from the Secretary of Health, Secretary Leavitt, thanking us for the program integrity funds that we have included so that he can continue his important investigations to shut down these Medicare fraud operations that he found in Florida and other parts of the country last year and that he is continuing to crack down on. What the chairman failed to mention is that Democrat appropriators apparently do not think rooting out fraud and abuse in the health care system is a priority. In fact, here is what actually happened last year. Last year, the Omnibus appropriations bill gave CMS nearly $39 million less than the prior year to fight health care fraud and abuse in the Medicare and Medicaid programs. And they cut all the new funding for fighting fraud and abuse--that is almost 100 million dollars they took from CMS for fighting health care fraud and abuse. That is an actual cut in funding to fight fraud from the prior year. The funding we are talking about here is for the Health Care Fraud and Abuse Control Program known as HCFAC. The HCFAC Program was created in the Health Insurance Portability and Accountability Act of 1996 and is jointly administered by the Department of Health and Human Services and the Justice Department. It is intended to help combat fraud and abuse in health care programs including Medicare and Medicaid and establishes a national framework to coordinate Federal, State and local law enforcement efforts to detect, prevent, and prosecute health care fraud and abuse. These funds are used to pay for FBI agents, OIG investigators, as well as assistant U.S. attorneys who prosecute fraudfeasors. These funds represent the frontline defense we have for fraud against the Medicare and Medicaid programs and pay for themselves in savings. I absolutely agree that CMS must be properly funded. Of course the agency needs funding to detect and deter fraud and abuse in health care--there are billions at stake. CMS also needs funding for general program oversight. Congress actually cut funding last year, yet my colleagues on the other side of the aisle are given to criticizing the job CMS does. Just to expand on this, the Finance Committee has had three hearings in the last 6 weeks that focused on how well CMS was enforcing the rules in Medicare Advantage. During those hearings, some of my colleagues on the other side of the aisle were critical of the job CMS is doing. For example, in Medicare Advantage, some want to let the States take over enforcement of the marketing rules. They say that CMS lacks the resources and the experience to do the job. But it is hard to conduct oversight when Congress cuts the money you need to get the job done right--and that is exactly what the other side did. It is a self-fulfilling prophesy. Without the right resources CMS can't get the job done and CMS didn't get the resources. CMS would like to improve its enforcement and oversight of Medicare Advantage plans. For Fiscal Year 2009, CMS is requesting $198 million in new fraud and abuse discretionary funding. This would be 100 percent more than last year, when there was no funding. The administration plans to use $147 million of the $198 million--or about three-quarters--for the Medicare Integrity Program, which is used for Medicare Advantage oversight. Without these new funds, CMS cannot undertake some of the oversight activities Congress believes it should. I agree with my good friend Senator Conrad that Congress must fund CMS appropriately to crack down on fraud and abuse. After all billions of dollars are at stake. But it also needs to fund CMS appropriately to ensure that Medicare beneficiaries are well served by those selling and providing Medicare services. I urge my colleagues on the other side to avoid last year's mistake, which was to talk a good game in the budget process but zero out needed new funding in the actual funding bill. But to be blunt, the budget resolution is no better on the Medicaid side. Allocating $1.7 billion in the budget to stop CMS Medicaid regulations aimed at providing States clarity, stopping inappropriate spending and protecting the integrity of the Medicaid Program without requiring any action to replace the regulations is irresponsible. Money spent on fighting fraud and abuse is money saved in the long run. We have seen time and time again that when we invest money in fighting fraud, we get lots of dollars back. And rest assured that the deterrent value associated with those actions is significant too-- crooks read the papers, and they will think twice when they see someone turning in their pinstripe suit for an orange jumpsuit. While Democrats like to talk about how inexpensive Medicare administration is, that is no excuse to fund CMS at such a low level that it cannot actually oversee its own programs so that it can protect taxpayer money. If you want to combat fraud and abuse in Medicare and Medicaid, you really do need to put your money where your mouth is. On this subject, the majority is toothless.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am here today to commend the Drake University Men's Basketball team on its outstanding and unexpected success this past season. Drake is a school of less than 5,000 students in Des Moines, IA. Today the Drake community is experiencing basketball success the likes of which it hasn't seen in over 35 years. Coached by Keno Davis, the Bulldogs won the regular season Missouri Valley Conference, the Missouri Valley Conference tournament and earned a berth to the NCAA tournament. They were picked to finish ninth in the conference and instead roared to a 28-4 overall record. It was only the second winning season the Bulldogs have enjoyed in the past 20 years. And it's the first time since 1971 that they will play in the NCAA tournament. Drake also finished the regular season ranked 20th in the Nation and beating a tough Illinois State team by 30 points in the MVC tournament final. It's been a long drought, but the Bulldog nation, from Iowa to Washington, DC, to California, could not be prouder. This upstart team has quite a story. Two starters, Adam Emmenecker and Jonathon Cox are former 3-year walk-ons who recently earned basketball scholarships. They are also incredibly successful academically. Drake started off the season well and won the mythical State championship by beating the University of Iowa, Iowa State University and the University of Northern Iowa. They snapped a 20 game losing streak at the University of Iowa. Drake also had great success in Missouri Valley Conference play. The Bulldogs cracked the Top 25, too, and traveled to Butler University and beat the eighth ranked team on their home court. This Drake team exemplifies what it means to be a student-athlete. Five Drake players, Adam Emmenecker, Josh Young, Klayton Korver, Brent Heemskerk, and Jonathon Cox were named to the MVC's scholar-athlete team. Four of the five Bulldog starters have a GPA above 3.0. In addition, Emmenecker was named the ESPN Scholar Athlete of the year for NCAA Men's Division I basketball, with a 3.97 GPA and four majors. It goes without saying that behind a great college team are great coaches and administrators. Keno Davis is in his first year as a head coach. He's been named the Missouri Valley Conference Coach of the Year, and Sporting News Coach of the Year. Just 36 years old, Keno learned from his father, Dr. Tom Davis, who retired as Drake's head coach in 2007, and was a longtime head coach at the University of Iowa. I have great respect for the Davis family, and I'm so glad that they have rebuilt the Drake program. Keno and his wife Krista became parents during the season, too. Assistant coaches Chris Davis, Rodell Davis and Justin Ohl have obviously spent hours fine-tuning their talented and intelligent team. I also need to congratulate Drake's president Dr. David Maxwell and Athletic Director Sandy Hatfield Clubb for their support of the men's basketball program. They have helped rebuild Drake's basketball program while maintaining high academic standards. We all know how hard that is in college sports today. Drake is a shining example of how a team can win on the court and in the classroom. Dolph Pulliam, a member of Drake's one and only Final Four team, has served as an inspiration to the current Bulldogs. Dolph and his team played Lew Alcinder, known as Kareem Abdul-Jabbar today, and UCLA back in 1969 and only lost by 3 points. Since his playing days, Dolph has remained in the Des Moines area, working for the university and broadcasting their games on the radio. And he is quite a presence with his huge smile and blue leather suit. I know he has influenced the current Drake players, thanks to encouragement from Dr. Tom Davis to help them all rekindle the fires of great basketball. So I want to again extend my congratulations to the Drake University men's basketball program, and to their students and fans who've never lost faith in them. It has been a joy to watch their success, and I hope that they continue winning during March Madness. I also hope that these young men will serve as an example to the young people in Iowa, to show that it is entirely possible to maintain high academic standards and winning ways on the court.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to introduce the Medicare Rural Health Access Improvement Act of 2008. The purpose of this legislation is to continue ongoing efforts to ensure that Americans in rural areas have access to health care services. Much has been done in the past to improve access to rural providers such as hospitals and doctors. Much more still needs to be done. I hold town meetings in each of the 99 counties in the great State of Iowa every year. As many know, Iowa is largely a rural State, and a significant concern that I consistently hear during these meetings is the difficulty my constituents experience in accessing health care services. As the former chairman and currently the ranking member of the Finance Committee, it has, therefore, been a priority for me to improve the availability of health care in rural areas. In Iowa, as in many rural areas across the country, hospitals are often not only the sole provider of health care in rural areas, but also employers and purchasers in the community. Moreover, the presence of a hospital is essential for purposes of economic development because businesses check to see if a hospital is in the community in which they might set up shop. As you can see, it is vital that these institutions are able to keep their doors open. In previous legislation, Congress has been able to improve the financial viability of rural hospitals. For instance, the creation and subsequent improvements to the Critical Access Hospital designation has greatly improved the financial health of certain small rural hospitals and ensured that community residents have access to health care. However, there are still a group of rural hospitals that need help. I am referring to what are known as ``tweener'' hospitals, which are too large to be Critical Access Hospitals, but too small to be financially viable under the Medicare hospital prospective payment systems. These facilities are struggling to stay afloat despite their tireless efforts. Like in many communities across the country, the staff of tweener hospitals and their community residents take great pride in the quality of care at these facilities. I have heard countless stories of the exemplary work tweener hospitals in Iowa perform not only as providers of essential health care, but also as responsible members of their communities. It is for this reason that many provisions in this bill are intended to improve the financial health of tweener hospitals and ensure that people have access to health care. Most tweener hospital are currently designated as Medicare Dependent Hospitals and Sole Community Hospitals under the Medicare program. There are provisions, both temporary and permanent, included in this bill that would improve Medicare payments for both types of hospitals. This includes improvements to the payment methodologies so that inpatient payments to these facilities would better reflect the costs they incur in providing care. Improvements are also proposed in this bill to Medicare hospital outpatient payments for both Medicare Dependent Hospitals and Sole Community Hospitals so they would both share the benefit of hold harmless payments and add-on payments. Also, a major driver of the financial difficulties that tweener hospitals face is the fact that many have relatively low volumes of inpatient admissions. This bill would improve the existing low-volume add-on payment for hospitals so that more rural facilities with low volumes would receive the assistance they desperately need. Over the years, many have commented that it is simply unfair for many rural hospitals to receive only a limited amount of Medicare Disproportionate Share Hospital, or DSH, payments while many urban hospitals are not subject to such a cap. This bill would eliminate the cap for DSH payments for those rural hospitals for a 2-year period. There are also other provisions that would continue to help rural hospitals. The rural flexibility program would be extended for an additional year. Certain rural hospitals that are paid on a cost basis for the outpatient laboratory services they provide would continue to do so on a permanent basis. And Critical Access Hospitals that provide outpatient laboratory services would be paid 101 percent of their costs regardless of whether the specimen was collected from a patient of the CAH or whether the specimen was collected in a skilled nursing facility or clinic associated with the CAH. This legislation also seeks to improve incentives for physicians located in rural areas and increase beneficiaries' access to rural health care providers. It includes provisions designed to reduce inequitable disparities in physician payment resulting from the Geographic Practice Cost Indices, or adjusters, known as GPCIs. Medicare payment for physician services varies from one area to another based on the geographic adjustments for a particular area. Geographic adjustments are intended to reflect cost differences in a given area compared to a national average of 1.0 so that an area with costs above the national average would have an index greater than 1.0, and an area below the national average would have an index less than 1.0. There are currently three geographic adjustments: for physician work, practice expense, and malpractice expense. Unfortunately, the existing geographic adjusters result in significant disparities in physician reimbursement which penalize, rather than equalize, physician payment in Iowa and other rural states. These geographic disparities in payment lead to rural states experiencing significant difficulties in recruiting and retaining physicians and other health care professionals due to their significantly lower reimbursement rates. These disparities have perverse effects when it comes to realigning Medicare payment to reward quality of care. Let me put that into context. Iowa is widely recognized as providing some of the highest quality health care in the country yet Iowa physicians receive some of the lowest Medicare reimbursement due to these inequitable geographic adjustments. Medicare reimbursement for some procedures is at least 30 percent lower in Iowa than payment for those very procedures in other parts of the country. That is a significant disincentive for Iowa physicians who are providing some of the best quality care in the country, and it is fundamentally unfair. Congress needs to reduce these disparities in payment and focus on rewarding physicians who provide high quality care. The inequitable geographic payment formulas have also exacerbated the problems that rural areas face in terms of access to health care. Rural America today has far fewer physicians per capita than urban areas. The GPCI formulas are a dismal failure in promoting an adequate supply of physicians in States such as Iowa, and more severe physician shortages in rural areas are predicted in the future. The legislation I am introducing today makes changes in the GPCI formulas for work and practice expense to reverse this trend. It establishes a 1.0 floor for the physician work and practice expense adjustments. It also revises the calculation of the work and practice expense formulas to reduce payment differences and more accurately compensate physicians in rural areas for their true practice costs. We must act now to help rural States recruit and retain more physicians so that beneficiaries will continue to have access to needed health care. Congress has previously enacted a number of other provisions to improve Medicare payment for health care professionals and providers in rural areas that will expire soon. This bill extends the five percent incentive payments for primary care and specialty physicians in scarcity areas through December 2009. It also extends the existing payment arrangements which allow independent laboratories to bill Medicare directly for certain physician pathology services. The bill includes several new provisions to improve beneficiary access to health care services. It increases rural ambulance payments by 5 percent for the next 18 months. It permanently increases the payment limits for rural health clinics. It allows hospital-based renal dialysis centers and skilled nursing facilities to provide telehealth services. It also allows physician assistants to order post-hospital extended care services and to serve hospice patients. Finally, the bill would protect rural areas from being adversely affected by the new Medicare competitive bidding program for durable medical equipment. It would ensure that home medical equipment suppliers who provide equipment and services in rural areas and small metropolitan statistical areas, MSAs, with a population of 600,000 or less can continue to serve the Medicare program by exempting these areas from competitive bidding. We must ensure that rural areas continue to have medical equipment suppliers available to serve beneficiaries in these areas. Mr. President, as you can see, we still have much to do when it comes to ensuring access to health care in rural America. I look forward to working with my colleagues on this important matter. Mr. President, I ask unanimous consent to have printed in the Record a summary of the bill.

Mr. GRASSLEY

Mr. GRASSLEY. May I speak at 8:05?

Mr. GRASSLEY. Six minutes.

Mr. GRASSLEY. I know you will not believe it, but I will not have anything negative to say.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise for two purposes: one, to speak about an amendment that will come up tomorrow dealing with the alternative minimum tax and, on a second point, to speak against an amendment that will be offered tomorrow on the H-1B program. First, I will discuss the amendments I intend to pursue on the budget resolution. The first is similar to the amendment I offered in committee markup. Unfortunately, the committee did not adopt the amendment. The amendment is very straightforward. The amendment would exempt from the pay-go requirements an extension of relief from the alternative minimum tax. I want to explain the term pay-go. It means if you are going to offer something that has less income coming in from taxes, you have to offset it someplace else. Pay-go is a rule that applies to both taxes as well as expenditures. It is pay as you go. I want to make sure this doesn't apply to the AMT because, quite frankly, it is silly to talk about offsetting revenue from middle-class Americans from whom it was never intended to be collected in the first place. And the alternative minimum tax, if we don't do something about it, has that negative impact. As everyone knows, if we do not act this year, about 25 million families, most of them middle- income families, will be faced with an alternative minimum tax increase of over $2,000 per family. The alternative minimum tax, which was meant to hit high-income people, filthy rich people, it now could happen that middle-income people would pay an increase in taxes of more than $2,000 per family. We cannot let that happen. It is a result no one in Congress can defend. The alternative minimum tax was meant to apply, as I have said so many times, to a small group of high-income taxpayers who use tax preferences, legal ways of not paying taxes. There is nothing illegal about it. The chairman of the Budget Committee has wisely recognized the reality and the importance of shielding these 25 million families from the unintended reach of the alternative minimum tax. To that end, then, his budget resolution has revenue room, about $62 billion worth, for an AMT hold harmless for the current year. Unfortunately, though the budget revenue baseline is adjusted for the AMT for this year, action on an AMT patch faces pay-go points of order unless offset. So my amendment would clear away the hurdle for this year as well as for future years. My amendment would ensure that delivering relief from the AMT would trump an obsession with a tax increase notion of pay as you go. It is as simple as that. My second amendment deals with fundamental tax reform. Everyone knows our tax system could be improved. The alternative minimum tax monster I just referred to is only one of the major reasons we need to undertake tax reform. Senator Wyden, a Democrat from Oregon, has been very articulate on that point. So this is a bipartisan statement as well as a partisan statement. If we undertake fundamental tax reform on a revenue-neutral basis under the current revenue baseline, we could be backing into a major tax increase on virtually every taxpayer. In 2011, the bipartisan tax relief bills of 2001 and 2003 expire or to use the terminology in Congress, they sunset. If we allow current law to continue--in other words, current law so that you have tax increases automatically without a vote of Congress--the tax burden on the American people as a group could be up to 10 percent higher than it is today. That would be well into the future after 2010, until Congress would reduce taxes. We should not have a tax increase without a vote of Congress, No. 1. But also we should keep taxes where they are now because it has been so good to the economy. You should not have a tax increase on the American people. That is what is going to happen if we don't make changes between now and the end of 2010. Tax reform should not be a stealthy method, then, to raise taxes on the American people. When I say ``raise taxes on the American people,'' let me repeat, the biggest tax increase in the history of the country is going to happen without even a vote of Congress. The amendment from my friend from Montana, the chairman of the Finance Committee, with whom I have the privilege of working closely, makes the point that current law levels of taxation set to spring into effect in 2011 are intolerable on both sides of the aisle. My amendment seeks the same assurances, though in a complete manner, if we hopefully enter into a real legislative effort on fundamental tax reform. Those are my remarks in regard to two amendments that are going to be voted upon tomorrow. Tomorrow my friend, the ranking Republican on the Senate Budget Committee, Senator Gregg, is going to offer an amendment or maybe has offered the amendment already to expand the H-1B visa program. I have nothing against the H-1B visa program. In fact, I value it as a legal channel for U.S. companies to bring in workers they need. That is under the assumption that we don't have workers in the United States to fill those slots. But I have to say, increasing the H-1B visa cap, which is the proposal, if we do that without reform, will only hurt U.S. taxpayers and American workers. The solution to increasing our global position in science and technology is, obviously, from the ground up, investing in American workers. We must strengthen educational opportunities for our American students, particularly in the areas of math and science. Such an investment will help reduce the trend in which 60 percent of the students in our U.S. STEM doctoral programs are foreign born. According to recent statistics released by the Department of Homeland Security, foreign outsourcers top the list of companies bringing foreign workers to the United States under the H-1B program. In fact, it is this overwhelming--6 of the top 10 visa recipients in 2007 are based in the country of India. Senator Durbin and I made the same point about the visa approvals during debate in the year 2006. We found that the top 9 foreign-based companies in 2006 used nearly 20,000 of the total availability of H-1B visas, and there is a cap on the number of H-1B visas. It seems to me that that 20,000 is close to a third of all. They are used by nine foreign-based companies. You would think, of the thousands and thousands of companies we have in America, that you would not have H-1Bs clustered to such a great extent around nine companies and nine foreign-based companies. We heard today that Microsoft, in testimony before the House of Representatives, wants an unlimited supply of H-1B visas. However, that company's visa approvals declined in 2007 from 2006. In 2006, Microsoft was approved for 3,117 H-1B visas. In 2007, it dropped from third to fifth place and only approved 959 visas compared to over 3,000 visas the year before. This very day, as I have indicated, Bill Gates said that Microsoft was ``unable to obtain H-1B visas for one-third of the highly qualified foreign-born job candidates that it wanted to hire.'' It makes me question, then, why visa approvals decreased very dramatically for Microsoft, from 3,000 in 2006, down to 900 plus in 2007. I think the statistics are very clear. Thousands of visas are going to foreign-based companies, leaving U.S. companies such as Microsoft scrambling for qualified workers. How can one explain the fact that most H-1B visas are going to companies based outside the United States? Do you think that increasing the cap, then, increasing the cap we have in current law, would actually benefit Microsoft and other companies? Answering these questions should lead one to the conclusion that the H-1B visa program is not working as originally intended. We need reform, even in conjunction with increasing the numbers. I am not opposed to increasing the numbers if they need to be increased. But it won't do any good if we don't have reform, and not just the so-called reform, then, of increasing the visa supply, as proposed by the high-tech industry. Reforms are needed so that U.S. businesses, both large and small, can find, recruit, and hire the workers they need. One of the major reforms needed to protect American workers is to require employers to make good-faith efforts to recruit U.S. citizens before hiring an H-1B visa holder. Only a small group of employers have to make this good-faith effort. We need to require all users of the visa program to first recruit Americans for these highly skilled, high- paying jobs, or at least attempt to find if American workers are available, because Americans should come first. Another reform needed is to increase the investigative power of the Department of Labor over this program. The program is full of bad actors. Companies are using ruthless tactics to undermine the system and to pay lower salaries and benefits to foreign workers. Current law is handicapping Federal officials from rooting out more fraud. We need to give them the power to audit and the power to investigate abuse. In addition to those two major reforms, we need to increase transparency for U.S. taxpayers to view job openings that are filled by H-1B visa workers. We should require employers to better advertise job openings so American workers have a chance at the jobs before they are taken by foreign workers. If we do not make changes in the H-1B program, foreign outsourcers will continue to import thousands of foreign workers to the detriment of U.S. businesses and opportunities for American workers to be hired first. So I want my colleagues to know I cannot support an increase in the visa supply without reform--and I mean real reform or drastic reform--to the program. I have suggested some of those reforms. Like I said, raising the H-1B cap without reforms will only hurt American companies and American workers. American workers should come first. I yield the floor. Mr. President, I suggest the absence of a quorum.