Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. I understand the concerns of our colleagues. Certainly, there are those who think we should have gone further in this proposal. There are Senators who support going from a 3-year allotment structure to a 2-year allotment structure immediately. And there are Senators who want to put greater limits on how CHIP dollars can be spent, to ensure program spending prioritizes children first. Senator Baucus and I developed a CHIP proposal that is somewhere in between but is a proposal that meets our ultimate objective of keeping children covered. We can have a policy debate about the merits of various proposals when we reauthorize the program next year. Nothing in this package precludes us from doing that.

Mr. GRASSLEY

Mr. GRASSLEY. I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, at this time I would like to recognize Brian Pomper, chief trade counsel for the Democratic staff on the Finance Committee. Today is Brian's last day with the committee. Brian has been a real asset to the Senate, and he will be greatly missed. He has worked both with my staff and sometimes against my staff, but let me tell you this: He is the sort of person who, whether he is with you entirely or against you, is a wonderful person to work with. So at all times the lines of communication with him between our staffs always remained open, and it has always been a friendly relationship. Brian is a very warm and decent person, and I wish him the best of luck in his future endeavors. It is my understanding that he is going to go into the private sector, the cold cruel world of the private sector. I hope he enjoys it, but I want to thank him for his cooperation with us.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, pretty soon we will be taking up the tax bill that includes trade provisions and health provisions. I will start debate on that so we can use our time very efficiently. We are at the end of a very long road on what should be routine business: The two tax-writing committees have many provisions that have either expired or will expire shortly. The provisions cover three major areas of our jurisdiction: tax, trade, and health. The foundation of this bill is a tax-writing committee's agreement that goes back to last summer on the core package of expiring provisions and other items that were dropped from a reconciliation tax bill we passed early last spring. These provisions that were dropped were put together in what is called a trailer bill. That is an odd name for a bill. The bill has been held up for so long that some people have probably forgotten the reason for the nickname. I will remind everyone it is a trailer bill because it covers tax provisions that were dropped out of the tax reconciliation conference agreement of last spring. That conference agreement includes the cornerstones of both House and Senate bills which now have been signed by the President more than half a year ago. The cornerstone of the House bill was a 2-year extension of the lower rates on capital gains and dividends. The cornerstone of the Senate bill last spring was an extension of the hold harmless on alternative minimum tax. I was pleased we covered the cornerstone of both bills. We only had revenue room to cover those two provisions. The other provisions, principally what we call tax extenders, and what now will soon be before the Senate, were decided to travel in a bill that would follow, or trail. Hence, the name trailer bill. The two cornerstones, alternative minimum tax and capital gains and dividends, were very important achievements by this Senate last summer and when they were originally passed in 2003. The 2-year extension of capital gains and dividends was a key priority for my conference though we were pleased to garner some Democratic votes, as well. It was a priority for Senators Frist, Kyl, Lott, Gregg, and others. I was pleased we were able to deliver on that priority in that conference last spring. The alternative minimum tax was the other cornerstone. The alternative minimum tax, everyone recognizes, is a widespread tax problem because at least 15 million families will be affected. It was necessary to help those families so they were not paying a tax that was never intended to be foisted upon them in the first place and would not have been if the original alternative minimum tax passed in 1969 had been indexed. We assured all of these 15 million families that their lives would not be unnecessarily complicated by the tax system. The trailer bill took several weeks of intense negotiations. The negotiators were Chairman Thomas of the House and Senator Baucus and me in the Senate. They were tough negotiations, but they produced a fair agreement. That agreement, with some additions by the leadership, was included in the trailer piece of the trifecta bill that came up in July where we tried to pass a reform of the estate tax with, sort of cute processes that were put together but did not deliver the number of votes to break a filibuster. That, of course, occurred 4 months ago. A bill that should have passed 4 months ago we are still dealing with. That is the way the Senate sometimes works. That is the way the Congress sometimes works. Chairman Thomas represented the House, Senator Baucus represented Democrats, and I represented Senate Republicans. It was a bicameral, bipartisan agreement. In our view, that agreement was closed. No items should be subtracted. No items should have been added. A deal made last summer is still a deal now. Changes would only occur if all the parties to the agreement consented. When we returned, we all knew we didn't have another 5 or 6 weeks to renegotiate the trailer bill so we kept mostly to that original agreement. In getting to that agreement, I pushed hard for several Senate issues to be resolved. I am referring to items other than the basic 2-year extension of the provisions that expired on December 31, 2005. I will go through a few of those items. First, there is a package of added incentives to enhance Hurricane Katrina rebuilding efforts. Senator Lott took the lead on that package along with support from Senators Vitter and Landrieu. We modified these provisions with the work of these Senators. Second, there were tax relief incentives for mine safety. Senators Byrd, Santorum, and Rockefeller argued for these important provisions. Third is an expansion of the veterans mortgage bond program. This is a program the States use to provide veterans who return from combat with low-interest loans so they can buy their families a home. Senators DeWine and Smith advanced these provisions. Fourth, there is a proposal to provide a deduction for private mortgage insurance for low-income home purchasers. Senators Lincoln and Smith deserve credit for those provisions. Fifth, there was a proposal to level the playing field between individual and corporate timber capital gains transactions. This provision would have ensured that timber-growing areas and related mill towns will not be disadvantaged if the timber company is a corporation. Most, if not all of the Senators from the timber-growing States of the Pacific Northwest, and the Southeast of the United States, had an interest in this provision. This proposal was dropped from the package, but I want my colleagues to know I argued for it. These are a few of the proposals that were negotiated and resolved in the trailer package. In my role as chairman of the Committee on Finance, I protected these Senate provisions. In the second round of negotiations, our Senate leadership backed me as we proceeded through the trailer issues. I appreciate Senator Frist's patience and support in our efforts to reach agreement. Why have I pushed so hard for this trailer package? There are two basic reasons. The first is for the 19 million tax filers who may face compliance problems because of uncertain tax law. The second reason is the hundreds of thousands of business taxpayers who have been in limbo waiting for final approval of measures such as the research and development tax credit. So let's look at some of those in detail. First, take a look at the Committee on Finance Web site. On September 13 and 26 of this year there are press releases that explain Committee on Finance tax staff research. At my request, the tax staff looked into the effects of delaying action on the three widely applicable expiring middle-income tax relief provisions: deduction of college tuition, teacher out-of- pocket classroom expenses, and State sales tax deduction. We are talking about a group of up to 19 million tax filers being affected. Tax filers mean families filing jointly and individually as singles. In other words, we are talking about a lot more than 19 million taxpayers. The professional staff, all experienced tax practitioners who discussed this problem with the IRS, came to the conclusion that delaying action on extenders into the lameduck would have adverse consequences for that group of 19 million taxpayers. I won't go into the details. They are found on the Web site. So everyone knows, I have a few charts to show the impact of these provisions on these 19 million people. First, we have the college tuition deduction on the chart behind me. Between 4 and 6 million families, students, took advantage of this deduction in 2004. The next chart shows teachers benefiting from the educator expense deduction, where teachers pay out of their own pocket for materials for the classroom. For the last several years we have allowed a deduction. I suppose those supplies ought to be paid for by the school district but sometimes the school districts don't do it, the teachers need it, they want to help their kids, they pay for it out of pocket. We have allowed a tax deduction. That should not be allowed to expire. Nationwide, there are 3.3 million teachers who benefit from this deduction. Finally, in the next chart I have the sales tax deduction chart. In 2004, almost 11 million families and individuals were helped by this deduction. If we do not get this bill passed, they lose that deduction. Serving as chairman of this committee is a privilege and a responsibility. I might say to my friend, Senator Baucus, who will be incoming chairman because the Democrats won a majority in the last election, I look forward to returning to the chair in a couple of years. I thank the people of Iowa and my friends and colleagues in the Senate Republican conference for that privilege. I have enjoyed every day I have served as chairman. It brings responsibilities as well. One of those responsibilities is tax policy. Now, whether an individual Senator agrees or disagrees with a particular expiring tax relief matter is always debatable. We all have opinions on a multitude of things, and particularly on tax policy. Probably no two Finance Committee members, let alone two U.S. Senators not on the committee, agree on all expiring tax relief measures. What we ought to agree on is that we should not deliberately--and I underline that word, ``deliberately''--take actions to unnecessarily complicate taxpayers' efforts to comply with our admittedly complex tax system. That is what delaying action on these provisions means. There are no ifs, ands, or buts--we need to act quickly. We are already about a year overdue. But if we get it done yet before we adjourn, we will take care of most of the problems taxpayers would otherwise have. The 2006 IRS forms were finalized, but the IRS hopefully can act to mitigate problems for these more than 19 million taxpayers with supplemental forms. As chairman, I would not be doing my job if I stayed silent. I spoke out. It is my responsibility to these 19 million taxpayers. Some could call it complaining. Some might call it annoying. Others could call it persistence. It is just simply doing my job. When you are talking about up to 19 million middle-income taxpayers who are trying their best to comply with the tax system, I will complain until I run out of breath. So that is the first reason I have been pushing for resolution of these matters, going back to the strong statements I made on the floor of this Senate at the time the trifecta bill was defeated last July and going back further since the reconciliation bill was passed in early spring. The second reason I pressed for quick resolution was the expiring business-related tax incentives. These matter. Just think about what you have heard from your constituents about the need for the research and development tax credit to continue and not lapse. These are all overwhelmingly popular in the House and Senate, but they are also good for our economy. Businesses are in limbo on these provisions. We are talking about almost a year of being in limbo and at least another month yet to come by the time we work this through and the President gets this signed. A lot of businesses in good faith relied on my assurances. They relied on assurances made by the congressional leadership in May of 2006. These business folks were assured these extenders would be done. In my own State of Iowa, for example, a major business, Rockwell- Collins of Cedar Rapids, IA, took a financial hit because we dilly- dallied around with the reauthorization of the R&D tax credit. It is not just that management cares. Iowa is a manufacturing State, and we are proud of our research and development. Thousands of Iowa employees in these companies have a right to ask why this popular provision that does so much economic good has been delayed now at least 6 months--some people could argue 8 months--beyond the time it should have been signed by the President. Aside from the new proposals I have talked about, the core tax extender package prevents tax increases on more than 19 million taxpayers and thousands of businesses. There is a revenue loss of $44 billion. Some have called this a budget buster. But a close examination of the facts will tell you that you ought to reach a different conclusion. I would remind the Senate that revenues have shown record levels of increase over the last 2 years. These increases were not accounted for in budget resolutions because, quite frankly, the money came in faster than anybody could have anticipated when the resolutions were adopted. And that is good because the economy is good, or else you would not be getting all this tax revenue coming in. The tax relief here and in the reconciliation relief bill of last May are very small in comparison to the unexpected taxes that have come into the Treasury. So how can anyone call a bill that prevents tax increases a budget buster when the taxpayers are sending record levels of taxes into the Federal Treasury? So why would anybody penalize taxpayers with tax increases when revenues are not the source of the deficit? I don't get it. Because if this bill does not pass, it is going to be an automatic increase on the taxpayers and the businesses of this country because of the sunsetting of those tax laws. That is why these bills are before us, to get them reauthorized, not to decrease taxes but to keep the same level of taxation, the same policy. It just expired. Renew it. Our budget problems are not because of legislation that soon will be before this body. They are derived from out-of-control spending. That is where the budget busting is occurring. Present tax policy is bringing in more money than anybody anticipated it would bring in. Although the Democratic leadership has blamed Republicans for the deficit, we all know that spending problem is not a Democrat or Republican problem, it is a bipartisan problem. It is a disease in the Congress of the United States. I agree with the Budget Committee chairman that when Democrats gain control of Congress in a few weeks, we are going to see bigger spending problems. I am sure they would deny that tonight, but we have had evidence of it over the last decade. My evidence is, take a look at the last 10 years. Try looking for a Democratic spending cut for deficit reduction. Guess what. You are not going to find one. You will find lots of proposed tax increases. You will find lots of opposition to tax cuts. You will not find spending cuts in their deficit-reduction proposals. I hope I am wrong. Maybe we will see folks on the other side offering spending cuts when they have the budget resolution up next March and when they have appropriations bills up in the summer of 2007. I might be wrong. I hope I am. But we will see. So if you hear critics, Democrat or Republican, calling this bill a budget buster, keep the fiscal history in mind. Look at the numbers over the last 2 years. And take a look back for about a decade. The numbers do not lie. The bill is not a budget buster. It prevents tax increases. Preventing tax increases is not a budget problem. Millions of hard- working, tax-paying families do not need tax increases, neither does the American business community. When I am holding my town meetings in Iowa, I have people coming in complaining about overspending. I do not have people coming into my town meetings saying: Tax me more; I am undertaxed. So I would then go on now, after talking about tax provisions here, to talk about the trade provisions. And we will start with the Generalized System of Preferences. This program offers developing countries duty-free access to U.S. markets. I have traditionally been a supporter of GSP. In recent years, however, I have come to question the merits of the Generalized System of Preferences. Too often, GSP benefits have gone to those who simply have not deserved them; in other words, meaning countries that have not deserved them. Perhaps due in part to the GSP Program, some industries in some developing countries have reached world-class status. These successful industries clearly are not the struggling businesses in poor countries for which the Generalized System of Preferences benefits were originally intended. In addition, I am concerned that the GSP has threatened U.S. interests in trade negotiations. Given that beneficiary countries already have duty-free access to the U.S. market for many of their products through the GSP Program, they have little incentive, then, to negotiate lower tariffs on U.S. exports. If they can get their product into our country under this program duty-free, they would consider themselves suckers to give our businesses and farmers the same advantage in their country. But that is what negotiations are all about. Like the Colombia Free Trade Agreement, the Peru Free Trade Agreement--both things before Congress that we ought to be passing. Those products from those countries are coming in here duty-free. We can have the advantage now of sending our products back to those countries duty-free for the first time ever. And do you know what. There are people in Congress here, right now, questioning whether we ought to approve the Peru Free Trade Agreement. It is stupid to not level the playing field for the American worker, the American farmer, and our service industry. But GSP has encouraged these countries to come along. Now they have developed. We need the same rights, the same consideration from them that we have been giving them over the last 20 years through the GSP Program. I am convinced that the lack of progress in the Doha Round of the WTO negotiations can be attributed, at least in part, to this GSP Program. GSP is set to expire in 23 more days. Due to my concern over GSP, I considered dropping my support for this program altogether, not even renewing it, for the unfair reasons I have told you. But in negotiations this week over a trade package in this bill, I agreed to compromise with Senator Baucus and my counterparts on the Ways and Means Committee for a short-term extension of this program for 2 years. Discussions I have had with Senator Baucus figured in my decision to support this short-term extension. Senator Baucus has agreed to work with me during the next Congress to reexamine the GSP Program. I anticipate that a reexamination of the GSP will result in needed reforms to this program. Today's legislation does take a very first step in making changes to GSP. It does so by allowing the President to limit the availability of GSP benefits for ``supercompetitive'' products. The word ``supercompetitive'' is a technical term. Imports of products from numerous countries, including Brazil, India, and Venezuela, will be impacted by this provision of the bill, which will become operative in July of next year. This new supercompetitive standard reflects the results of a review of the Generalized System of Preferences Program, the GSP Program, conducted by the U.S. Trade Representative. Today's bill, in addition to extending the GSP under the proviso that we are going to review it next year, also extends the Andean Trade Preference Act, also expiring in 23 days. The Andean Trade Preference Act offers four Andean countries--Colombia, Peru, Ecuador, and Bolivia--duty-free access to the U.S. market for a variety of products. It was my strong inclination to extend benefits under this program to just two of the Andean countries, Peru and Colombia, for the reason they have been cooperating with us on this free-trade agreement. We have not adopted it yet. If we had adopted it, they would not need this program, and we would not be talking about it. But I would not be inclined to extend the benefits to Ecuador and Bolivia. Peru and Colombia have worked actively to strengthen their economic ties with our country by concluding free-trade agreements. It is only fitting for us to extend benefits to them until the point that these free-trade agreements are implemented. But Bolivia and Ecuador is another circumstance. Those countries, in contrast, have gone out of their way to demonstrate they do not value increased economic ties with the United States--unless, of course, those ties involve one-way trade benefits through the Andean Trade Preference Act where they can get their products into our country very easily and it is very difficult and very expensive for us to get our products into their countries. In order, however, to see that the Andean Trade Preference Act is extended to Peru and Colombia, where I said it ought to be for a short period of time, I had the opportunity to compromise with Senator Baucus and our House counterparts on an extension. This bill provides a straight 6-month extension of the program. Another 6-month extension will be provided if steps are taken to implement trade agreements with any of those countries, meaning if Ecuador or Bolivia want to get onboard and get into the act of cooperating in a bilateral way, they will get greater consideration in the future. But with their new Presidents nationalizing their industries, not having respect for personal property, not having respect for the growth that comes from the market economy, you wonder whether they are smart enough to think in terms of a free-trade agreement. But we hope they are. We have another trade preference program that is very popular; it almost passes unanimously most times in the Congress--the African Growth and Opportunity Act. That is modified by this legislation as well. This African Growth and Opportunity Act offers sub-Saharan countries duty-free access to the U.S. market. This program is instrumental in promoting economic growth in one of the poorest regions of the world. The third country fabric provision of the African Growth and Opportunity Act is going to expire October 2007. It allows beneficiary countries to keep preferential benefits on certain apparels made with fabric from countries other than the United States or Africa. This bill extends that third country fabric provision that will expire October 2007 until 2012. Also, in order to remove disincentives to investment in fabric production in Africa, we included what we call an ``abundant supply'' exception to eligibility under the third country fabric provision with respect to fabrics and yarns that are available in commercial quantities from African suppliers. The bill also provides tax benefits to Haiti, the poorest country in the Western Hemisphere, through the Haitian Hemispheric Opportunity Through Partnership Encouragement Act, also known by its acronym HOPE. This legislation provides new rules for origin for duty-free imports from Haiti. Haiti may only receive benefits under the bill if it meets certain political, economic, and labor criteria, as well as textile and apparel transshipment enforcement requirements. At this time, it is very important to recognize one of our colleagues who worked very hard on this, and that is Senator DeWine. He has contributed to advancing the economic development of Haiti during his tenure in the Senate. The bill also extends unconditional normal trade relations to Vietnam--something that should have been passed in November before the President went to Vietnam. This provision will enable us to enjoy the benefits of Vietnam's imminent accession into the World Trade Organization. That translates into significant benefit for our farmers, including those in my State of Iowa, by reducing duties on U.S. exports of beef, pork, soybeans, and other products. Our manufacturers and service providers also stand to benefit significantly from the Vietnam normal trade relation bill. And by engaging Vietnam through enhanced trade, we can best press the Vietnamese Government for continued progress with respect to where we don't think there is enough progress yet--religious freedom and human rights. In addition, this legislation modifies U.S. law with regard to changes in the U.S. harmonized tariff schedule. The U.S. Trade Representative periodically makes changes to tariff lines in the U.S. harmonized tariff schedule. This year, due to the thousands of changes to be made and to administrative delays, the business community requested that Congress extend the usual 15-day window for implementation, so we have extended the deadline to 30 days. This will allow time for the private sector to incorporate all of the changes in their computer system and avoid costly, time-consuming errors to entry. Finally, the bill includes numerous duty suspensions and reductions that have resulted from the Finance Committee's efforts to prepare a miscellaneous tariff bill. These provisions are noncontroversial in nature. They reduce tariffs on imported goods not produced in the United States. As a result, they will provide cheaper inputs for businesses operating in the United States and, thereby, increase the competitiveness of our firms and workers. I will talk about health care now, the third major area of jurisdiction of our committee, and the third major area in this piece of legislation. Despite what some might characterize as a ``do-nothing Congress,'' the 109th Congress actually accomplished a great deal relative to health care. We enacted the Deficit Reduction Act of 2005, which greatly strengthened and improved the Medicaid Program. Most would acknowledge that this bill made the most significant changes to the Medicaid Program in three decades. Those changes should make it possible for the States to serve more low-income beneficiaries, families who cannot afford to provide health insurance and pay for it. Significant challenges await us in the new Congress. We will need to take a serious look at the solvency of the Medicare Program. We have to develop a solution for the Medicare physician reimbursement system. The State Children's Health Insurance Program needs to be reauthorized. And there remain serious problems of the uninsured. I look forward to working with my partner and incoming chairman of the Finance Committee, Senator Baucus, on those issues and doing that in a bipartisan way. However, before we can adjourn this Congress and before we go home to enjoy the holidays, there is still urgent work needed to be done, and that is the purpose of this piece of legislation. In the legislation we consider today, there are several provisions that rise to the level of ``must do.'' These include ensuring that physicians do not receive a drastic cut in the Medicare reimbursement that a formula in place for the last 15 years dictates they take and we generally don't let happen. There are a number of other expiring provisions that must be extended. I am very disappointed that this package doesn't include anything to address the coming shortfalls of the State Children's Health Insurance Program. The Senate package that I introduced with Senator Baucus included a proposal to address the shortfalls, but that proposal was rejected in the negotiations that Senator Baucus and I had with the House. We apologize for not winning on that. Our legislation will, however, increase payments for providers while providing additional payments for physicians and other health practitioners who report quality measures in order to ensure both continued beneficiary access and improved quality of care. We must ensure that health care providers can afford to continue to practice medicine. We must preserve Medicare beneficiaries' access to physicians, and we must provide incentives for quality improvement. The physician payment formula is deeply flawed. We need to reform the SGR formula's flawed payment system and develop a new way of paying physicians appropriately for their services. Last year, we included a provision in the Deficit Reduction Act to require the Medicare Payment Advisory Commission, known as MedPAC, to submit a report to Congress early next year on alternative mechanisms that could be used to replace the existing formula. It is a flawed formula. We must find a long-term solution that will stabilize physician payments in the future. Working to develop a better physician payment system will be one of my top priorities, and I am sure that under Senator Baucus's leadership, it will be a top priority as well. The legislation before us today will eliminate the 5-percent cut in physician fees scheduled to take effect in January 2007 and, instead, keep physician fees at the same level as this year. In effect, this would provide a 5-percent increase in payment fees over what the formula would otherwise allow. Next year, we must face the challenge of producing a long-term solution to the physician payment formula. The one-year-at-a-time approach we have used over the last several years makes the problem worse and does nothing to address the longer term challenges. We need to put better incentives into the health care system so providers are motivated to provide better quality care. So this bill before us establishes a quality reporting bonus for physicians and other eligible professionals--meaning nurse practitioners, physician assistants, podiatrists, and other health care professionals who submit data on quality measures from July through December in 2007. Our legislation also creates a fund, effective in 2008, to help stabilize physician payments and promote physician quality initiatives. This new fund of $1.35 billion will be available in 2008 to help minimize fluctuations in physician payments and promote physician quality initiatives. The physician payment changes will be offset by two adjustments to the Medicare Advantage stabilization fund. Our legislation does not repeal the fund but, rather, preserves the funds for future years. We adjust the funds in two ways. First, the fund will be reduced by $10 billion to $3.5 billion. Second, the Secretary will be able to use the proceeds in the funds only in the years 2012 and 2013. There is strong participation in the program right now, and if more funds are needed to be added back to the Medicare Advantage stabilization funds, Congress can add these funds in future years. I have been working very closely with my colleague Senator Baucus on realigning incentives in Medicare to reward for quality of care, rather than paying physicians as we do now, on volumes of service, without any care about quality. We have been doing that under these formulas for a long time. We began the process of moving toward quality care reimbursement in the Medicare Modernization Act of 2003. This Medicare Modernization Act required hospitals to report 10 quality inpatient measures in order to receive full payment update. Now almost 99 percent of hospitals are reporting this data. Without this incentive, they would not have done so. Our legislation includes provisions to extend quality reporting for hospitals to hospital outpatient departments and ambulatory surgical centers as well, beginning no sooner than 2009. Now that hospitals are reporting this data, it is time for other providers, such as physicians, to do that as well. The quality reporting measures in our bill today are a small step toward creating better incentives for quality care in Medicare. The transitional bonus payment policy included in this bill for reporting quality measures is a good first step for physicians and practitioners. The physician quality measures in this legislation before us today have been developed primarily by physician organizations, including the American Medical Association and physician specialty societies. All of the measures adopted for 2007 have the support of the physician community and will be easily reported electronically with the submission of their claims. Those professionals who participate in the quality reporting program and voluntarily submit up to three quality measures that apply to their specialty will receive an additional 1.5 percent bonus incentive payment for services provided during the 6- month reporting period. I emphasize that that 1.5 percent bonus is on top of our filling it in so that there is not the 5-percent cut that the formula now applies for. Ultimately, we should move toward rewarding quality through higher Medicare reimbursement for better health care outcomes. Once that principle begins to govern medical care, we will be able to better align payment incentives throughout our health care system to reward for quality of care. We are interested in quality because when doctors and hospitals and other health care professionals do it right the first time, it is the least expensive way to have it done. If it is done wrong the first time, it is very expensive to send people back to the doctor and the hospital a second time. We want to do in the Government, through the Medicare Program, what a lot of major corporations are doing--being concerned about quality. With that quality, we can get better health care, but you are going to save a lot of money, whether it is for Ford Motor Company or for the taxpayers of the United States, under a Federal Medicare Program. In addition to reforming the manner in which Medicare pays for physician services, this legislation will extend several expiring provisions enacted in the Medicare Modernization Act of 2003 to help ensure that beneficiaries will continue to have access to needed medical care. This includes provisions applicable to rural payments to physicians, continued direct payments to independent laboratories for physician pathology services, and continuing Medicare reasonable cost payments for lab tests in small rural hospitals. Our legislation also provides a 1-year extension of the therapy cap exceptions process that we included in the Deficit Reduction Act last year to ensure that beneficiaries receive physical, occupational, and speech language therapy services that they need. We also give a 1.6 percent update for dialysis services effective April 1, 2007, thus helping to ensure continued access for beneficiaries who suffer from what is called end stage renal disease. Our legislation also includes some new provisions to improve beneficiary access and provide additional protections. We have included additional reimbursement for important preventive medicine by reimbursing health professionals for administering vaccines covered under the new Medicare Part D prescription drug benefit. We also include a requirement for reporting anemia indicators in cancer patients receiving anti-anemia drugs to better manage these patients' care. We have established a new postpayment review process to ensure the timely payment for drugs and biologicals that are delivered for patient use under the Competitive Acquisition Program. This legislation includes several provisions to improve accountability in Medicare. There has long been a concern that the program is vulnerable to fraud and abuse, and certainly experience has borne that out, with billions of dollars being wasted. Even more significant, the program has not been able to effectively detect when it makes payment errors. This legislation contains several provisions to address these concerns of ferreting out abuse and fraud. The Health Care Fraud and Abuse Control Program addresses fraud and abuse in the Medicare Program but has been funded at the same levels since 2003 despite significant increases in its responsibilities. In order to ensure that the Federal Government has sufficient resources to effectively combat health care fraud and abuse, this essential program will receive annual funding updates for the next 4 years. And that investment has a good return. In other words, for a $1 investment, many dollars come back to the Federal Treasury from either recouping fraud or preventing fraud. This legislation also includes a provision that addresses payment errors by adopting the Recovery Audit Contractor Demonstration as part of the Medicare Program and implements that program nationwide. Despite being implemented for a limited time in a limited number of States, this demonstration has already shown enormous potential for the identification of overpayments and underpayments and the recoupment of overpayments. In fiscal year 2006, this demonstration has identified around $300 million in improper payments in just three States. By taking the recovery audit program nationwide, up to $10 billion in Medicare overpayments will be recovered in the next 5 years. By passing this legislation, we will also take a big step toward making sure that the Medicare Program does not pay for substandard care provided to beneficiaries. The National Quality Forum has identified a number of serious and preventable adverse health care events called ``never events.'' The HHS inspector general will be required to conduct a study on Medicare payments for services related to never events and will provide guidance for CMS in setting policy regarding payments for services when never events are involved. Let me explain never events. We are not going to pay when somebody is operated on and covered by Medicare if they cut off the wrong leg--and this has happened--or the wrong arm or other things that were never intended to be done to a patient. We are sick and tired of paying for things such as that. This legislation will also promote more accurate hospital payments. One aspect of Medicare hospital payments that has been subjected to much criticism is the area wage index. Many say that the current method of calculating the wage index does not reflect the hospital's actual labor costs and is instead arbitrary in nature so that similarly situated hospitals can receive significantly different wage index values. Since the enactment of the Medicare Prescription Drug Improvement Modernization Act of 2003, hospitals have been able to obtain relief from this unfair situation temporarily. But we shouldn't have to do this every year in a temporary way. So this legislation will provide limited extension of this relief. More significantly, major steps will be taken toward comprehensively reforming the wage index classification system by requiring a report on alternatives to the current methodology for calculating the Medicare wage index, as well as proposals for reforming this classification system so we don't have to mess with these inequities. This legislation also includes several provisions relating to the Medicaid Program. These include codifying the provider tax rate paid by Medicaid providers at 5.5 percent and extending the transitional medical assistance and abstinence education programs. Throughout the year, we have heard from nursing homes, hospitals, and managed care plans that lowering the maximum provider tax rate would make it harder for them to treat Medicaid recipients as States had to make up for lost revenue. This provision protects health care access for some of the most vulnerable in society. While this legislation does not go as far as some would like, it accomplishes the goal of helping ensure the continuation of critical health care policies and programs. I was disturbed when I heard one of my colleagues refer to this bill as an example of bad legislative practice. The critics imply that political defeat was somehow connected with this kind of legislative practice. With all due respect, these criticisms could not be more off the mark. This legislation was based on popular expiring provisions within the jurisdiction of the tax writing committees, provisions that were meant to expire so they are reviewed occasionally so we know the best possible tax policy is being pursued by the Congress of the United States. The legislative business in this bill then is the people's business. Throughout the year, I pressed repeatedly to finish these matters. I was thwarted by others who sought to leverage these items for other purposes. I firmly believe that if we had dealt with these issues in a timely fashion, as was planned last May to do it in the pensions bill, we would have been rewarded politically. We are where we are, but we are here because of politics on both sides of the aisle getting in the way of processing these items in a timely fashion. I agree with the critics that this kind of omnibus bill is not the best way to finish this legislative business. The critics should know that the tax-writing committees had no choice. In conclusion, I hope my colleagues will support this bill--a bill that should have been law last summer--to finally get it done to save the taxpayers and 19 million people from being adversely affected. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. The letter lays out the major problems at the FDA. I encourage my colleagues to read it and, maybe more important, emphasize again reading the Institute of Medicine's criticism of the Food and Drug Administration. The FDA needs a permanent commissioner to tackle these problems. Unfortunately, I believe the nominee is not the person for the job. Over the past year, the nominee has failed to step to the plate and failed to keep his assurances to me. He has said the agency needs to be a facilitator, but think what the word ``facilitate'' means or what ``being a facilitator'' means. It could mean a cozy relationship between the FDA and industry. What is called for is someone who recognizes that the FDA is supposed to be a regulator, not a facilitator. I am also afraid he will allow FDA management to continue pressuring FDA scientists to change their findings or conclusions and to approve the products despite concerns about the safety and efficacy of the product. Dr. Von Eschenbach is not prepared to provide the leadership necessary to restore confidence in the FDA. Given these concerns, I hope my colleagues will take them in consideration before they vote. I intend to vote no. I hope my colleagues will so that we can have a person in this position who will change the culture but also cooperate with the constitutional responsibilities of the Congress of the United States to oversee the executive branch. I yield the floor.

Mr. GRASSLEY. Mr. President, for one final time, I wish to address the nominee before us, Dr. Von Eschenbach, who is up for Commissioner of the Food and Drug Administration and who I think should not be approved for the position by the Senate. I have considered Dr. Von Eschenbach's performance on the job for more than a year now because he was appointed Acting Commissioner in September of 2005. In fact, over the last year I have closely monitored his actions, reactions, and his public and private comments to the FDA staff and to the public. This nominee inherited a Food and Drug Administration plagued by cultural and structural and personnel problems, and I surely do not blame him for the problems, but I have to look at whether he is the person to correct those problems. Because this agency is plagued by these cultural and structural and personnel problems, FDA is in desperate need of a leader, a leader who can not only restore the public's confidence in the agency but also restore the agency's confidence in itself. I met with Dr. Von Eschenbach more than once. We talked, and he seemed to be very nice. He has, of course, without dispute, excellent credentials. He promised me full cooperation in my oversight work I was doing and the investigations I was doing, but, in fact, it did not happen. Instead, I had to issue two subpoenas. So far, he has not complied with those subpoenas which were issued 7 months ago. This reflects a lack of respect for the authority of Congress conducting its constitutional responsibility of oversight of the executive branch of Government. In addition, under Dr. Von Eschenbach's leadership, the FDA remains in a state of denial about all these cultural problems to which I have referred. A coherent action plan to address the problems is nowhere to be found. Dr. Von Eschenbach has told me that there is room for improvement in the area of technology, but it does not appear that he understands the depth and breadth of problems affecting the Food and Drug Administration. The FDA is in serious trouble, and I am not the only one saying so. Over the last year, we have heard from the Government Accountability Office, the Union of Concerned Scientists, and just a few months ago we had a scathing report from the Institute of Medicine. The Institute of Medicine completed a $3 million, 15-month study and set forth 25 recommendations. This report by the Institute of Medicine conveys a sense of urgency to fix the problems. Just last month at the Health, Education, Labor, and Pensions Committee hearing, the chairman of the Institute of Medicine committee that produced the report said: If there ever was a time that it was critical to address these issues, it is now. The next Food and Drug Administration Commissioner must be a person who not only has excellent credentials, as I have said he has, but who also will accept the criticism of the agency and develop coherent solutions. Here is what the Institute of Medicine reported: The committee believes that cultural changes are urgently needed to support a stronger, more systematic and more credible approach to drug safety in the Center of Drug Evaluation and Review and it recommends solutions to the problems created or exacerbated by the elements of the Center's management, structure and environment. Now a short quote: Many have observed signs of an organizational culture in crisis. Another quote: The Center's leaders have to be prepared to address the underlying cultural problems that divide and impair the optimal functioning of the Center's staff and effectively use the existing and new authorities and resources to achieve the Center's public health and regulatory mission. These criticisms of the Food and Drug Administration have come from outside the agency, not from whistleblowers reporting to me. But I also continue to hear from these employees inside and also from managers inside the Food and Drug Administration who were concerned about the integrity of the Food and Drug Administration's work. What is also troubling is that some of these employees have experienced intimidation or reprisals for voicing legitimate concerns. I have fought long and hard over the last two decades to protect the rights of numerous whistleblowers who expose fraud, waste, and abuse. When I met with Dr. Von Eschenbach in March, he told me that he was ``committed to whistleblowers.'' Yet his actions seem to suggest otherwise. The worst example may be when Dr. Von Eschenbach ordered a meeting with the FDA staff after the press reported information that was critical of how the FDA handled safety issues with the drug Ketek. I keep referring to Ketek because it is a drug involved in the death of an 18-year-old boy in Cedar Rapids, IA. As I understand it, Dr. Von Eschenbach sent a clear message at this staff meeting. Some suggested that this attempt was simply to boost morale among FDA employees, but some longtime FDA employees saw it differently. They took his word that anybody who spoke ``outside the locker room'' might find themselves ``kicked off the team''--literally. And I don't blame them for taking offense at that. People are trying to do their job, and you talk about what is wrong and you might be fired for it? People like that ought to be upheld and honored. In the final analysis, they ought to have their concerns addressed within the agency and not have to come to those of us in Congress because they are not getting any ear in the agency. So they took his message to mean: Your career is in jeopardy if you happen to come to Senator Grassley or outside the agency or to any Member of Congress. To me, it shows his poor judgment and intolerance for dissenting opinions and also for what is basic to American government, that the public's business ought to be public. Dr. Von Eschenbach also told me that he was a man of ``discipline, rigor and precision.'' Those are his words. He used those same words in a speech: We will retain all the rigor, all the discipline and all the precision of regulation, but our efforts will be geared so that things can move faster rather than slower.'' We can all agree that new drugs and devices should be available to the public as soon as possible, but there is also the issue of safety and the protection of the public. The FDA must do its job and ensure that the drug's benefits outweigh its risks before approval. My other concern regarding Dr. Von Eschenbach is that he assured me of his commitment to respond promptly to requests from Congress. That is a promise which was never kept. So do I have a reason to be concerned about this person, regardless of the very good credentials he has? My oversight of the FDA has consequently been slowed by inaction on the part of his agency. In fact, he has not responded to a letter I sent to him 9 months ago, and my requests for interviews with some FDA officials were ignored for more than 3 months and some still have not been scheduled. As Acting Commissioner, he has ignored congressional requests, and I do not expect that will change if he is confirmed by the Senate. Before I close my remarks, I ask unanimous consent to have printed in the Record the full text of a letter I sent to the Acting Commissioner in September.

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Select Committee on Intellience be authorized to meet during the session of the Senate on December 7, 2006, at 2:30 p.m. to hold a closed briefing.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate Committee on the Judiciary be authorized to meet to conduct a hearing on ``Vertically Integrated Sports Programming: Are Cable Companies Excluding Competition?'' for Thursday, December 7, 2006 at 11 a.m. in Dirksen Senate Office Building Room 226. Witness list: Panel I: Mr. David L. Cohen, Executive Vice President, Comcast Corporation, Philadelphia, PA; Mr. John D. Goodman, President, Coalition for Competitive Access to Content, Washington, DC; Dr. Mark Cooper, Director of Research, Consumer Federation of America, Washington, DC; Mr. Michael Salinger, Director of Bureau of Economics, Federal Trade Commission, Washington, DC; and Mr. James Baller, The Baller Herbst Law Group, Washington, DC.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to hold an off-the-floor markup during the session on Thursday, December 7, 2006, to consider pending committee business. Agenda Nomination: 1. Paul A. Schneider, Under Secretary for Management, U.S. Department of Homeland Security.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, December 7, 2006, at 9:30 a.m., to receive testimony on the report of the Iraq Study Group.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session of the Senate on Thursday, December 7, 2006, immediately following the next vote on the Senate floor, in the Senate Reception Room, S-212 of the Capitol, to consider favorably reporting the nomination of Eric Solomon to be an Assistant Secretary of the Treasury, U.S. Department of the Treasury.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, my opposition to the cloture motion is as much about whether we are going to be able to fulfill our constitutional responsibilities of oversight of the administrative branch of Government as it is about the particular qualifications of the nominee. I intend to vote against cloture and I hope that Democrats who are listening--particularly those Democrats in the last election who were bellyaching because there wasn't any oversight on the part of Republicans toward the executive branch of Government--would pay attention to the fact that this nominee has something to do with and is an illustration of the lack of cooperation on the part of the executive branch, failure to cooperate with Congress on the issue of congressional oversight. I have serious concerns about what this cloture vote means, then, to congressional oversight of the executive branch now and in the future, and what it means for Members such as me, who placed a hold on this nominee. This was not a secret hold. I made this hold public. I am voting against cloture and ask my colleagues to join me because I believe we need to send a message to the executive branch that it is not OK to impede congressional investigations. It is not OK to limit the Senate's access to documents, information, and employees of the executive branch. In his book on congressional government, Woodrow Wilson, before he was President, when he was a professor at Princeton, wrote, in 1885: ``Quite as important as lawmaking is vigilant oversight of the administration.'' Our work as lawmakers does not end with the passage of a bill. This body has a responsibility to the American people to make sure that laws work and that they are being implemented effectively, efficiently, and economically. Congressional oversight serves very important goals, and we should not lose sight. They include reviewing actions taken and regulations adopted by executive agencies to make sure that the agencies are executing law according to the intent of Congress, and, second, ensuring that the Federal Government is not wasting taxpayers' dollars. Oversight work allows us to evaluate the ability of agencies and managers to carry out program objectives and improve the efficiency, effectiveness, and economy of Government programs; next, ensuring that executive policies reflect the public interest and that public interest is expressed in the laws of Congress; and, lastly, protecting the rights and liberties of the American people. Woodrow Wilson also said in his book that: It is the proper duty of a representative body to look diligently into every affair of Government and to talk much about what it sees. It is meant to be the eyes, the voice and embody the wisdom and the will of its constituents. In America, with our Government, the public's business ought to be public. But when you have coverups and the lack of information going to Congress, as demonstrated by this request for documents, and when we get a document back with practically 57 pages removed, what is in those 57 pages that we ought to have access to? That is just one example of lack of information and the lack of cooperation from this agency. Throughout history, Congress has engaged in oversight of the executive branch. The right to congressional oversight has been asserted from the earliest days of our Republic. In 1792, the House invoked its authority to conduct oversight when it appointed a committee to investigate the defeat of General St. Clair and his Army by Indians in the Northwest and empowered the ``call for such persons, papers, and records as may be necessary'' for that inquiry. In fact, the Constitution grants Congress extensive authority to oversee and investigate executive branch activities. Congressional oversight was also recognized explicitly in the passage of the Legislative Reorganization Act of 1946, which required the standing committees of Congress to exercise continuous watchfulness over programs of agencies in their jurisdiction. Numerous Supreme Court decisions will support all the precedents for Congress to see all aspects of the Federal Government. In 1927, in McGrain v. Daugherty, the Supreme Court upheld congressional authority to conduct oversight of the Teapot Dome scandal. Justice Van Devanter writing for the unanimous Court stated: We are of the opinion that the power of inquiry with the process to enforce it is an essential and appropriate auxiliary to the legislative function. To do oversight, Congress needs access to information and people in the executive branch. And that is what I did not, and still may not, be getting from the FDA under the leadership of Dr. Von Eschenbach--as an example, 47 pages removed; another example, 43 pages removed. How are you going to conduct oversight when you get answers such as that from the Food and Drug Administration? I take exception to the statement made in support of the cloture motion. People ought to be ashamed of saying Dr. Andrew von Eschenbach has done a superb job in the position he is currently occupying with an answer such as that to the Congress of the United States. That is an insult. Before you cast your vote in favor of cloture, consider what is at stake--and particularly Members on the other side of the aisle who, during the campaign, in campaign commercial after campaign commercial after campaign commercial, said Congress is not doing its job of oversight, implying that Republicans were covering up wrongdoing by the administration. If you want to preserve your access to information and do the oversight that you think you are going to do, when you are in the majority and you get answers such as that, do you think you are going to be able to do the job of oversight? In my interactions with the Department of Health and Human Services and the FDA these last 8 months, I have seen a complete and utter disrespect for congressional authority and hence the law. The department and the Food and Drug Administration have repeatedly failed to act in good faith in responding to congressional investigations--and the lack of 43 pages is just one example. Although the Director's leadership at the FDA has failed to fully comply with two congressional subpoenas that were issued 7 months ago, efforts to accommodate the agency's concerns fall on deaf ears, and I wonder if I am dealing with dysfunction by design. Not only has the NEDA withheld documents that do not appear to be privileged, but it also says what has been withheld and why. The subpoenas compel a privilege log, but the FDA has not provided us with that privilege log. For Democrats in the majority next year doing the oversight that they said they were going to do because Republicans weren't doing it--they didn't let me--let me ask you this: Are you going to be able to conduct oversight when you get answers such as that? Are you going to be able to conduct oversight when, for 7 months, you don't get your subpoenas responded to? What is the agency's explanation? The FDA has said that many documents have been withheld, that it is unduly burdensome to provide a privilege log. Even in the FDA, general counsel, as recently as Tuesday of this week, could not see why the agency needed to comply with the law and the terms of the subpoena which was issued by the committee. In denying the committee access to the documents responsive to the subpoena, which the department and the FDA administration have claimed ``prosecutorial deliberative process'' or ``confidential communications'' or ``agency prerogatives'' to determine who will be interviewed and testify before a jurisdictional committee, when those on the other side of the aisle get answers such as that when you are going to be in the majority, what are you going to do about it? Are you going to keep your commitment to the American people when you won the majority? And are you going to be able to do the oversight when you get rationales such as ``prosecutorial deliberative process'' or ``confidential communications'' or ``agency prerogatives?'' I could not talk to a line agent named West because you can't talk to line agents, when 3 months before I talked to line agents? There was someone from the Justice Department before the Judiciary Committee, when Senator Kennedy said, ``I want access to line agents,'' unrelated to what I am talking about: Line Agent West, whom I wanted to talk to and I was told I couldn't talk to because you can't talk to line agents, the official at the Justice Department said to Senator Kennedy: You can talk to line agents. We will get them for you. I do not know whether that ever happened. But that was the answer. When I went around doing my questioning of Justice Department officials, I said: What about my ability to talk to Line Agent West? It just seemed as if I was going to be able to talk to Line Agent West. But yet this very day the Justice Department is advising the Secretary of the Interior that we can't talk to Line Agent West, which is key to whether some of these investigations are allowing dangerous drugs on the market. In Cedar Rapids, IA, I have a family that lost an 18-year- old because of a drug that was on the market then and which is not on the market now. It seems to me that if you are concerned about the safety of drugs, this information is important, and if you are going to have it covered up in the FDA, you aren't protecting the public. If Congress knows about it, you are not doing your job of oversight. This past summer I asked the Congressional Research Service to look into the department's policies regarding this matter. And the Congressional Research Service told me that there is ``no legal basis'' for the department's executive branch assertion. The legal analysis provided by Congressional Research Service supports the committee's position that these executive agencies' claims have been consistently rejected and compliance with congressional requests in the past has been forthcoming. The CRS cites numerous court cases which establish and support Congress's power to engage in oversight and investigate activities and its access to executive branch personnel and documents in carrying out our powers of oversight. The Department of Health and Human Services, the FDA within Health and Human Services, says it has been responsive because the agency made available hundreds of thousands--even millions--of pages of documents to the Finance Committee in response to its subpoena. But the agency can give me all of the books and all the documents housed at the Library of Congress and it won't matter if it is not what I have asked for and the pages are removed. It is this type of cooperation that I am getting under this Director that you are now going to confirm. I am very concerned about the cooperation, if any, that we have once he becomes a permanent commissioner. Every Member of Congress should be equally concerned if they take their constitutional duty of conducting oversight of the executive branch seriously, and most importantly to the new majority when you are going to carry out your campaign promises to make sure that there is proper oversight, checks and balances against an executive branch of Government you think is exceeding authority. Every Member should be concerned. I cannot emphasis this enough. A vote for cloture today is a vote against oversight, and that is not what this Senate should be doing. It is not what the American people sent us here to do. We need to step up congressional oversight to protect our Nation's system of checks and balances and not reward those who seek to impede our constitutional authority. This body should not walk hand in hand with the executive branch and sit idly by as instances of abuse and fraud continue to endanger the health and safety of American people. This Senate needs to make it clear to the executive branch that Congress takes its oversight responsibilities seriously and to vote against cloture. If we do have cloture, I will have other remarks during postcloture debate.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I spoke earlier this morning against cloture. Cloture passed, which for the public listening means there are 60 percent or more in support of stopping debate, and there is under the rules the possibility of 30 hours of debate. I don't intend to probably speak for more than a half hour, so if anybody is interested in how long postcloture debate might go on, it won't go on very long from my point of view. But I do want to take some time to tell people, even though it is quite obvious this nominee will be approved, why I think he should not be approved. I placed a hold on this nominee for quite a few weeks. That hold obviously was ignored by the leader when he filed cloture, which is his right to do. I voted against cloture because I take my constitutional duty to conduct oversight of the executive branch of Government very seriously, and I think the nominee is standing in the way of Congress doing its oversight of the agency of which he is now Acting Director and will probably soon be the confirmed Director. That sort of lack of cooperation violates the separation of powers and the checks and balances within our constitutional system. I hope my colleagues know that I take a great deal of time to make sure that we do both jobs we have the responsibility to do here in the Congress. One is to pass laws. But the one we are never taught much about in political science classes is the constitutional job of oversight, which is the responsibility to make sure the laws are faithfully executed and money is being spent according to congressional intent, and the overseeing of the administrative branch of Government. So I take a great deal of my time in the Senate trying to make Government work not just by passing laws but by making sure they are faithfully executed. I don't do that all by myself as a single Senator. I have good staff. I charge my staff to conduct oversight rigorously and to investigate any areas where the Federal Government is failing to be transparent, accountable, and effective. Transparency is so important, because the public's business, which is everything about the Federal Government, ought to be public. If the work of the executive branch fails the sniff test and the law is not being faithfully executed or the public's business is not being made public, that is when it is my constitutional responsibility to blow the whistle. Quite frankly, I don't want to take credit for what I am able to blow the whistle on, because there are a lot of good, patriotic employees in the executive branch of Government who also know it is their constitutional responsibility to execute the laws and spend the money right. When they see it isn't happening, and particularly when they go up the chain of command and don't get results, or when taxpayers monies are being wasted and it seems nobody cares, then they exercise the right they have under laws to blow the whistle to Members of Congress. So we obviously count on whistleblowers--in other words, patriotic Federal employees--who report something wrong when people above them don't care. They care enough to come to us and give us a lot of good information. So today I am blowing the whistle on this nominee. In good conscience, I did put a hold on the nominee, and I will not vote in favor of him for the reasons I have given before and reasons that will be more spelled out now. A vote for this nominee would be an endorsement of the stonewalling, but, more importantly, the disrespect for Congress he has shown by not cooperating with congressional oversight. I can say this not only because of his actions but because of his words which are on the record. In response to a nomination question in which I asked this nominee if he would cooperate with congressional oversight, Dr. Von Eschenbach identified a number of ``executive branch interests'' as a basis for not complying with congressional requests, including ``matters pending before the agency.'' And ``predecisional deliberative process information,'' and ``open investigation information.'' You get this sort of gobbledegook as excuses for not giving information to Congress as they promised to do but, outside of that, that the Constitution requires they do; that is if you believe in the checks and balances of our Government and if you believe it is backed up by Supreme Court decisions. It seems to me it has a good basis. This nominee was not well-served by whoever counseled him on these matters. He should know that during my years in the Senate, my investigators have obtained access to every single one of these categories of so-called confidential information. I would say to the distinguished chairman of the HELP Committee who is watching over this nomination process--confirmation process--he said to me before the vote on cloture it would help if we got Dr. Von Eschenbach approved because now he is an acting and maybe he can't do all the things that he can do as Director, and that may be true. But not once in my discussions or my staffs' discussions with people at FDA was there ever a hint from the nominee himself that once approved, he would be able to give us all of these documents. I use this chart as an example: You get an answer to a request and you get 57 pages removed. Another chart I had up here showed 43 pages were removed. And what is in those pages? Who knows what is in them. We don't even know why they were removed, and we don't know who made the decision to remove them. That is cooperation with Congress? Not once, I say to Senator Enzi, did he ever tell me or my staff or people who are working for him that if we could get this confirmation over, we will be able to satisfy what you want done. So I don't see anything better, with a vote of approval by the Senate, of cooperation with us than before. But he wasn't well-served by those who counseled him. He should know that during my years in the Senate, my investigators have obtained access to every single one of these categories of so-called confidential information. His answer is at odds with my belief that congressional oversight is one of the best ways to shake things up at a government agency and expose the truth. The truth will make Government look better, or if the truth doesn't make Government look better, at least you are being candid with the American people. Besides, it is the public's business, and whether it is good news or bad news, it ought to be public. Dr. Von Eschenbach's answers happen to be at odds with my belief that congressional oversight is one of the best ways to get to the bottom of things. This is true not just of the FDA; it is true of any Government agency. If an agency is not doing the right thing, typically behind it there is an effort to keep information suppressed, an effort to keep people from doing what they think ought to be done, an effort to keep people from doing what their job requires them to do, or to not let them put out that information. The muzzling of dissent and information is too common throughout our Government. Things that should be transparent in Government simply are not. And under Dr. Von Eschenbach, the FDA has not only avoided transparency, it also has threatened those who are trying to desperately expose the truth. That is not just under Dr. Von Eschenbach. For years before him, there has been intense pressure brought to bear upon scientists who want to do the scientific process. I say ``do the scientific process'' because the scientific process answers itself or gives the answer. That is what we want: answers on safety and efficacy of drugs. There is a culture there--even prior to Dr. Von Eschenbach, for any serious Director who wants to change it--that is going to make it very difficult to change because you have an agency that is more interested in its public relations and how they look to the public-at-large than what their job is. That is when they end up getting egg on their face, when they are more concerned about their public relations than just doing the job. In most instances, if these agencies do what they are supposed to do, things get done and get done effectively, and then the public relations takes care of itself. Good policy, good administering of law, is good public relations. It will take care of itself. I met with this nominee after the White House sent his nomination to the Senate last March. I hoped he would provide the kind of strong, permanent leadership this agency needs to change its culture, where scientists are intimidated from doing their work. Over the next 9 months, this nominee showed me that he is unlikely to provide that kind of leadership. My belief is what you see is what you get. I fear what we will get from this nominee is what we got from him where he is now as the Acting Commissioner. Let me tell you why, with just a few examples. First, the doctor failed to live up to his word. In our meeting, he said he respected and understood the important role Congress plays as an equal branch of Government. But it didn't take long after that meeting before the first red flags appeared. In April, the committee began its investigation of the Food and Drug Administrations's approval and postmarket surveillance of the Ketek drug, an antibiotic that came under renewed scrutiny last January. It looks as though it is another drug where the FDA was caught flatfooted. The Finance Committee issued two subpoenas in May after the FDA refused to provide documents related to Ketek. I referred to a family in Cedar Rapids, IA, who lost an 18-year-old son. During this time, the Food and Drug Administration also refused access to Food and Drug Administration officials. The Finance Committee was forced to issue a subpoena to a special agent in the FDA's Office of Criminal Investigation. The FDA refused to allow my staff to speak to this Federal employee, citing a policy against providing access to line agents. Yet, only months before, just a few weeks before that, my staff interviewed two line agents from the Food and Drug Administration on another case. What rule was in place when I interviewed them, but a few weeks later you couldn't interview another? Apparently, the policy was abruptly changed. I have seen it change over the years with other investigations. This policy is not law, and it is typically enforced when the stakes are at their highest and there is something to hide. I took this matter seriously enough that I went to the Department of Health and Human Services to meet with this agent. I was told that if this agent wanted to speak to me, he would have to assert his status as a whistleblower under Federal law. I ask today what I asked that day: Why does this Government employee have to become a whistleblower to talk to me or anybody else in Congress if the public's business is really public? So I have to ask my colleagues, is that acceptable? When you are doing your constitutional responsibility of oversight, is it acceptable to the rest of you in the Senate that they thumb their noses? Also, this Government employee's supervisors put him in a no-win situation, and because of that he risked being in contempt of Congress. This is an agent who put a doctor in jail for fraud in the Ketek study. You understand, I said this started back in January with Ketek and our getting involved in the oversight. There was fraud in this Ketek study. Did the agent do the right thing? It is a closed case. We want to talk to him about the closed case, and the Food and Drug Administration says no. So I have to ask, what does the FDA have to hide or cover up? There are enough instances of political leaders and public servants being ruined by coverup. Can't lessons be learned, that when, in this town, two people know something about it, it is no longer a secret? Under this Acting Commissioner, the Food and Drug Administration has also attempted to hide and cover up documents. The Finance Committee has received hundreds of pages that say, as I indicate here, ``57 pages removed.'' There is another poster behind it that looks exactly the same: ``43 pages removed.'' Other documents have whole pages, paragraphs, or sentences redacted, with no explanation as to why. Sometimes documents are marked ``redacted.'' Other times they are not marked, even when it is evident that information is missing. There is no explanation for what documents have been withheld or redacted. It is incomprehensible, and it looks like the work of the Keystone Cops rather than an agency responsible to the American public for the safety of drugs and devices and the efficacy of drugs and devices. One of the Food and Drug Administration's most incompetent and absurd moments was when it sent one of my own request letters back to me with information redacted out of it. Let's get this clear. You folks are defending a person who is running an agency from which I asked for information and they redacted the letter I sent to them. The letter I wrote came back as part of the information. Does that meet the commonsense test? Does that meet the test of competency? Recently, I wrote Secretary Leavitt and Attorney General Gonzales to explain the basis for some of these redactions. I don't know whether you call a blank page a redaction because you don't know what has been there to redact, but obviously there is no information on a blank page unless it is about the competency of the people who work within the agency. Again, two copies of the same document were redacted differently. Think of this. They want to keep us from getting information. They send us two copies. One copy has one sentence redacted, and the other copy doesn't redact that sentence but redacts another sentence. So we got the whole document but presumably a basis for things we were not supposed to know but now we know. Do you think this guy with a medical degree, with this sort of background, is going to go in and change that culture even if there was nothing wrong with him? Even if he cooperated with me? So it calls into question the good-faith basis for redaction at all. I could go on and on with examples showing the stonewalling and the withholding of information from legitimate congressional requests, pursuing our constitutional responsibility of oversight. What it boils down to is that this nominee has demonstrated he does not understand that Government truly is the people's business. He doesn't seem to understand that the people who finance it, the taxpayers, have a right to know what their Government is doing and how their money is being spent. I will give one final example. I have been a longtime champion of whistleblowers. I was the lead Senate sponsor of the 1986 whistleblower amendments to the False Claims Act. Back then, we were interested in dismantling a too-cozy relationship between defense contractors and the Pentagon. Today, whistleblowers are once again the key to dismantling the cozy relationship between some drug companies and the Food and Drug Administration. In June, Dr. Von Eschenbach held a meeting of FDA staff involving this drug I have been investigating, questioning how it was handled-- Ketek. FDA employees who were present say that he used a lot of sports metaphors regarding being a ``team player'' and keeping opinions ``inside the locker room.'' Basically, he said to not criticize the FDA outside the locker room, ``outside the locker room'' being his words. Apparently he stated that anyone who spoke outside the locker room might find themselves ``off the team.'' How are you going to do your job of congressional oversight if you have somebody you are getting confirmed who says that if you want to talk to anybody, they better not talk to you, at least not talk off note, because they are no longer on the team? Just think of the intimidation that brings throughout the Federal bureaucracy. This nominee held this meeting in the midst of this ongoing congressional investigation of this drug Ketek. He called the meeting after a number of critical reports in the media about the FDA's handling of Ketek. A number of FDA employees interviewed by the committee were offended by his comments, found them highly questionable, inappropriate, and potentially threatening. I don't think there was any ``potential'' about it, they were meant to be threatening, and I agree with the employees. Leaders of an agency should not hold a meeting to suggest that dissenters will be kicked off the team, particularly when the lives of American people are at stake, when drugs are going to be put on the line and they might not be safe. I can refer to the death of an 18- year-old in Cedar Rapids, IA. His is the type of action that shows the true stripes of the nominee. He broke his word that he respected whistleblowers--that is what he told me; quite obviously he doesn't respect whistleblowers--and that he would never raise even the appearances of retaliation. If this meeting isn't an example of retaliation, I don't know what it is. When it comes to health care and public safety, we need to empower whistleblowers more than ever. They demonstrate extraordinary courage in the face of extraordinary adversity. It is extremely difficult to be a whistleblower. As I like to say, they are about as welcome as a skunk at a picnic. Yet it is whistleblowers in Government who put their job security on the line to come forward and expose fraud or wrongdoing for the public good. My Finance Committee staff has been investigating serious allegations raised by whistleblowers at the FDA on various issues over a period of 3 years. Many of these allegations are very serious and call into question whether the Food and Drug Administration is fulfilling its mission to protect the health and safety of Americans. The way the Food and Drug Administration under this nominee has handled the investigation of Ketek shows the agency would like to keep its business secret. It doesn't want these issues made public or subjected to scrutiny. The culture at the FDA has been we will let the public know what we think they need to know. The American people do not want the government making decisions about what is good for them behind closed doors. The goal of the Finance Committee's oversight has been straightforward. As chairman, I wanted to bring out in the open the decisions made by the FDA. For too long the agency has been making its decisions behind closed doors. This nominee is not likely to serve well because he just does not seem to get it. He has placed media relations over the mission of the FDA. First and foremost, he is supposed to do the right thing on behalf of Americans. Dr. Von Eschenbach has other interests to serve and they are not always the interests of John Q. Public. I hear from time to time from other agencies that particular documents are especially sensitive or that the release of certain documents could jeopardize a criminal investigation--I understand that. But in those circumstances, I have reached accommodations. Unfortunately, in this case, my efforts to work with Dr. Von Eschenbach and his subordinates have been all but summarily dismissed. As I am sure you know, I intend to keep pressing the FDA for greater transparency and openness. I think there is going to be new leadership in the Congress which is going to be even more aggressive and has a history of being more aggressive in this area. I have been welcoming and I continue to welcome that sort of help. As I continue with my constitutional duties to conduct oversight, I look forward to working with my colleagues to ensure transparency, accountability, and effective governance by the executive branch. The bottom line is Congress needs to stay committed to oversight of the executive branch. The public depends on Congress to fulfill its duty and hold executive agency leadership accountable. To sum up, that is what congressional oversight is all about. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to take this opportunity to offer my sincerest congratulations and gratitude to retiring U.S. Attorney Charles ``Chuck'' Larson, Sr. While I could easily just focus on all Chuck has done in his years as the dedicated U.S. attorney for the Northern District of Iowa, this man has given so much more in over 40 years of Government service. When his country has called, Chuck has been there. He served in the U.S. Army and Army Reserves for 40 years, retiring as a lieutenent colonel in 1989. Four U.S. Presidents have called on Chuck to serve in various capacities, and each time he has stepped forward and served with honor and distinction. Chuck was first appointed as the U.S. attorney for the Northern District of Iowa by President Ronald Reagan in 1986 and continued to serve in this position under President George H.W. Bush through 1993. During his service at this post, Chuck went well above and beyond. He devoted himself to fighting the scourge of drug crime and abuse by bringing local, State, and federal agencies together. Chuck also recognized the need for community outreach, and he pioneered a number of programs that brought together community leaders, clergy, and citizens to explore approaches to reduce drug abuse in Iowa. These ideas were recognized as very innovative at the time and led to President Clinton's call for Chuck to serve on the Commission on Drug- Free Communities, a post in which Chuck served with distinction and which his son, Chuck, Jr., fills today. Following the tragic events of September 11, 2001, Chuck was again called to duty as the U.S. Attorney in the Northern District of Iowa by President Bush. He continued his aggressive and innovative strategies in this new and complex era of the war on terror. His efforts led to programs for the training of law enforcement and other emergency responders in dealing with and preventing terrorist attacks. Chuck extended this training effort to private industry and trade associations. Yet Chuck never ceased his efforts in Iowa in fighting crime and drug abuse. His past successes in community outreach programs and law enforcement coordination led to the creation of programs such as the ``Weed and Seed'' initiative in Cedar Rapids and the statewide ``Meth and More'' program. These programs not only helped put criminals behind bars but also provided help and support to thousands trapped in the destructive cycle of methamphetamine abuse and educated Iowa communities about the disastrous effects of drug abuse. His devotion to this cause can be summed up in Chuck's own words, ``if we can save one life, then our efforts are a success.'' In the midst of this, his country called yet again. In 2004, Mr. Larson was ask to serve as the senior Department of Justice representative in Iraq. Chuck was given the enormous task of directing and administering efforts to train Iraqi judiciary, law enforcement, and civilian contractors. He was tasked with nothing less than restoring justice and equity to the Iraqi judicial system. Despite the inherent dangers and complexities of his mission, Chuck yet again served with distinction. Again, I offer my thanks and congratulations to U.S. Attorney Charles Larson, Sr. Chuck's dedication, devotion, and courage, again and again, provided invaluable service to our country and the great State of Iowa. Chuck, you are a true American and a model for all in Government service.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I ask that the Senate join me in paying tribute to SGT Kampha Sourivong, who made the ultimate sacrifice while protecting freedom. Sergeant Sourivong, of Iowa City, IA, was assigned to C Company, 1st Battalion, 133rd Infantry Regiment, 34th Infantry Division, Army National Guard, based out of Iowa Falls, IA. He was mobilized for Operation Iraqi Freedom with the unit in September 2005 and arrived in Iraq in early May 2006. He died at the age of 20, on September 30, 2006, in Al Asad, Iraq, when his military vehicle encountered small arms fire. Sergeant Sourivong will be posthumously awarded the following awards and decorations for his heroic service: the Bronze Star, the Purple Heart, the Armed Forces Reserve Medal with Mobilization device, the Army Good Conduct Medal, the Iraq Campaign Medal, the Global War on Terrorism Service Medal, the National Defense Service Medal, the Army Service Ribbon, and the Combat Infantryman Badge. My thoughts and prayers have been with Sergeant Sourivong's parents, Patty and Maliphone Sourivong, his brother and sister, and all those other family and friends who are grieving the loss of this young man. The Sourivong family described Kampha as ``a very caring person'' who ``had a lot of friends, loved his family, loved his brother and loved his sister'' and someone who ``would give the shirt off his back to someone in need.'' I am grateful for the sacrifice that both Sergeant Sourivong and his family have made. Our Nation will forever be in their debt. While the tragic loss of this young American is deeply saddening, he will be remembered proudly as the hero that he was.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I rise to pay tribute to SFC Scott E. Nisely, who made the ultimate sacrifice while serving his country. Sergeant Nisely, of Marshalltown, IA, was assigned to C Company, 1st Battalion, 133rd Infantry Regiment, 34th Infantry Division, Army National Guard, based out of Iowa Falls, IA. He was mobilized for Operation Iraqi Freedom with the unit in September 2005 and arrived in Iraq in early May 2006. He died at the age of 48, on September 30, 2006, in Al Asad, Iraq, when his military vehicle encountered small arms fire. Staff Sergeant Nisely will be posthumously awarded the Bronze Star for the second time, the Purple Heart, the Iraq Campaign Medal, the Army Good Conduct Medal, the Armed Forces Reserve Medal with Mobilization device for the second time, and the Combat Infantryman Badge. My thoughts and prayers have been with Scott's wife Geri and his children, Justin and Sarah, as well as all those other family and friends who are grieving his loss. Scott's family said, ``Scott was a dedicated and loving husband and father. He was actively involved in his children's lives. He was a loyal, compassionate, and caring friend that everyone liked. He loved and was committed to God, and was very involved with his church and community.'' Learning about the sacrifice of Scott Nisely, I am reminded of the words of John 15:13: ``Greater love has no man than this, that he lay down his life for his friends.'' His family also said of Scott that he ``loved his country and was a volunteer career service-member that was proud and honored to serve his country.'' Our Nation will be forever grateful for Scott Nisely's loyal service and sacrifice. His loss is tragic, but he will be remembered as an American hero.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to discuss the impact of Public Law 109-8, the bankruptcy reform legislation of which I was the lead sponsor here in the U.S. Senate. On October 17, 2006, we will see the one-year anniversary of the new law. This law was the result of many years of comprehensive study and intense debate in Congress. There was much give and take among all interested parties over several Congresses, and the final bill that was signed into law was the result of compromise, upon compromise, upon compromise. In fact, people tend to forget that this law passed both the House and Senate by wide bipartisan margins. It is a law that was sorely needed. It is a law whose central premise--if an individual wants to file for bankruptcy and can repay some of his debt, he should do just that, repay some of that debt--is supported by almost everyone. The law's central premise is about fairness. It is about good old common sense. The bankruptcy reform legislation was driven by a desire to restore balance to a system that had become too easy: a system where clever lawyers gamed the integrity of the bankruptcy system for the benefit of those who wanted to get out of their debts scott-free and to the detriment of those who played by the rules. In fact, bankruptcy rates in the 1990s and early 2000 timeframe exceeded bankruptcy rates during the Great Depression, despite the fact that the economy was going strong during much of this time. So with this law we closed some loopholes, made upper-income Americans repay more of their debts if they were going to seek bankruptcy, and enacted important consumer protection provisions so people could be more knowledgeable about their finances. The law retained bankruptcy for those who truly are in need of that relief, while injecting more integrity and fairness in the bankruptcy system. So how has the new bankruptcy law worked? So far, I think it is too soon to make firm judgments. But early reports indicate the new law has been working very well. We have seen bankruptcy rates fall dramatically from about 2 million bankruptcies in 2005 to the point where I doubt there will be over 1 million bankruptcies in 2006, if current trends continue. In my mind, this is bound to help the American economy. Fewer bankruptcy filings lead me to believe that only those individuals who truly are in need of a fresh start are filing for relief. Furthermore, a natural outgrowth of fewer bankruptcy filings is a much lower cost to the American consumer and the U.S. economy. As my colleagues may recall, the Clinton administration's Treasury Secretary, Larry Summers, told Congress that high levels of bankruptcies tend to push up interest rates. I have called that the ``bankruptcy drag'' on the economy. It is just common sense. When a business loses money because a customer files for bankruptcy instead of paying his bill, that business has a couple of options: Either the business can absorb the loss and spend less on growth and expansion or the business can increase what it charges other customers to offset the loss, imposing what many of us in Congress called a bankruptcy tax. It follows that businesses can weather the storm when the occasions where customers don't pay their bills are relatively rare, but when you have a scenario where filing bankruptcy is easy and customers are filing bankruptcy on a regular basis--whether they really need it or not, no questions asked--and they aren't paying their bills, well, then businesses get into trouble. Unfortunately, businesses that don't get paid aren't the only ones impacted by this. The reality is, either way, u1timately it is the consumers and the economy that suffer the most when bankruptcies spiral out of control. People who play by the rules and pay their way are the ones who end up picking up the tab. I would rather see the ``bankruptcy drag'' reduced, freeing up businesses to grow, add jobs, and contribute to the Nation's economy and the people's prosperity. I would rather see the $400 ``bankruptcy tax'' burdening American families each year reduced so they can spend their money in a more productive way. And based merely on the bankruptcy filing numbers available from the Federal courts, I think that it is fair to say that Public Law 109-8 has been a success for our economy. Public Law 109-8 has driven a stake through the heart of this bankruptcy drag. I have struggled with how to put a dollar figure on how much bankruptcy reform has saved the economy since it became the law of the land. During Congressional debate, we received testimony that the average amount discharged in bankruptcy is $41,000 per filing. If one does some simple math, taking the total number of consumer bankruptcies filed in the first half of this year and doubling that number, it seems we could see about 550,000 consumer bankruptcies in 2006--perhaps a little more, perhaps a little less. As I said, the Federal courts reported that we had just over 2 million consumer bankruptcies filed in 2005. So using the $41,000 figure, bankruptcy losses cost our economy $82 billion in 2005. On the other hand, it looks as if, because of the new law, bankruptcy losses for 2006 will only be about $22.5 billion. Let me repeat: $82 billion in 2005 and $22.5 billion in 2006 after the law was put in effect. We are not talking peanuts. That is a substantial savings for our economy. That is around $60 billion that would have been lost, that would have put a drag on our economy. And I am confidant that at least some of that money has been or will be redirected to economic growth. If this isn't success, I don't know what is. It is also important to remember the unprecedented new consumer protections included in the new bankruptcy law. Let me mention some of them. Retirement savings receive more protections from the reach of creditors. Likewise, education savings also receive enhanced protections under the new law. And lenders who won't compromise with financially-troubled borrowers can be penalized for not negotiating out-of-court settlements. People considering filing for bankruptcy now have access to no-cost or low-cost credit counseling and financial education. We want people who make bad financial choices to learn how to deal with their finances and quit the spending cycle. After all, better educated consumers are a benefit to everyone. The law even encourages education of young people on how to manage their money. And credit card companies are required by the new law to warn consumers about the dangers of making only minimum payments and to clearly identify payment amounts. Moreover, bankruptcy mills that deceived people into filing for bankruptcy when they had other options available are now subject to new regulation. People should be aware that bankruptcy is not the only way out in times of financial trouble. Even a Federal Trade Commission Alert warned against bankruptcy mills and advised the American consumer that filing for bankruptcy adversely affects an individual's credit rating. Bankruptcy should be a last resort, rather than the first stop in regaining one's financial bearings. So, all in all, Public Law 109-8 contains some of the most sweeping consumer protections enacted by Congress in a long time. Of course, as I said earlier, it is too early to gauge the full impact of Public Law 109-8. Bankruptcy attorneys so frightened consumers by exaggerating the impact of bankruptcy reform that many consumers rushed to file prior to enactment of the law. And after the law was enacted, many consumers who truly need bankruptcy were scared away. Some of the consumer protections contained in the law--such as minimum-payment warnings for credit cards and the like--have not yet been implemented by the Federal Reserve. Also, the debtor attorneys who want to operate bankruptcy mills are seeking to get out from under the new regulations by claiming in court to have a constitutional right to advise consumers to run up debt on the eve of bankruptcy and not comply with the new law. I am pleased that the Justice Department is aggressively resisting this effort. These lawyers just want a license to go back to their old ways of making a quick buck by shuffling unsuspecting consumers into bankruptcy without advising them of the downsides of bankruptcy or their alternatives. These lawyers also are dragging down our economy. Bankruptcy should be reserved for those persons who have no other options, not for people who use clever legal advice to make big purchases on the eve of bankruptcy with no intention of ever repaying the debt because they can wipe away their debts clean, no questions asked. So I will keep a watchful eye on developments in the future. But for now, almost one year later, bankruptcy reform seems to have been a success.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise in support of the conference report to accompany H.R. 4954, the SAFE Port Act. This legislation achieves some important objectives that I have been working on for some time. It will strengthen our port security operations and resources within the United States Customs and Border Protection. It authorizes and approves current programs for securing our Nation's trade, and it provides direction for further strengthening of these programs as technological advances permit. It requires our Federal agencies to cooperate and better coordinate their contingency planning in the event there is a security breach. In sum, this critical legislation will empower personnel in the Department of Homeland Security to stay one step ahead of the terrorists who seek to wreak economic havoc and physical destruction on our Nation. At the same time, this legislation strengthens our Nation's economic security by realigning resources to ensure better efficiency in the administration of customs laws within the United States Customs and Border Protection, as well as trade facilitation functions within the agency and elsewhere in the Department of Homeland Security. Unfortunately, this legislation falls short in one critical area. The Senate-passed bill included robust sections on rail and mass transit security. But objections from the House have prevented us from including those provisions in the conference report. I find this extremely shortsighted. It demonstrates a troubling lack of leadership. I want to make clear that I strongly supported the Senate-passed provisions on rail and mass transit security, and I strongly oppose their omission from this conference report. But because this legislation contains so many provisions critical to the security of our Nation, I will support the conference report. It is certainly better than the alternative. I hope my colleagues on the House side realize that we have lost an opportunity here. At a minimum, it would take another several months for us to be in a position to enact rail and mass transit security legislation into law. In the meantime, this important aspect of our Nation's security will not get the rightful attention that it needs. That being said, this legislation does significantly strengthen our Nation's security. I want to thank my colleagues, particularly the chairmen and ranking members of the Commerce and Homeland Security Committees in the Senate, as well as the chairman of the Permanent Subcommittee on Investigations of the Homeland Security Committee, Senator Coleman, for their constructive engagement with me and Senator Baucus these past few months. Together we produced a very good bill, much of which is retained in this conference report. I urge its support so that we can get this critical legislation to the President's desk as soon as possible.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, would you signal to me when I have used 15 minutes of my 20 minutes?

Mr. GRASSLEY. Reserving the right to object, the only objection is about what Senator Baucus set up; that we were going to come in line afterwards. I don't object to him having the time.

Mr. GRASSLEY. He wasn't going to come in between us anyway. He wants the 8\1/2\ minutes but not right now.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, we've hit the end of the road on trying to pass the trailer bill separately. It is pretty clear we won't get a bill to the President's desk before we recess for the upcoming mid-term elections. From my perspective the right thing to do is to pass legislation that resolves two important tax policy issues. The issues are a permanent death tax relief package and the trailer bill which contains a retroactive extension of several tax relief provisions. Those provisions expired on December 31, 2005. That is the right date-- December 31, 2005. Taxpayers have lived with uncertainty on these bipartisan, widely-supported provisions for almost 9 months or three- quarters of a year. How did we get here? How come we can't get a permanent death tax relief deal when it is clear that more than 60 Senators are on record in support of repeal or significant relief? How come we can't get a resolution of expired tax provisions that are overwhelmingly supported in both the House and Senate? This uncertainty is solely the responsibility of the leadership of both parties here in the United States Senate. We are stuck on death tax because the Democratic leadership won't let enough Democratic Senators vote their conscience. It's all because of political calculations. That's a shame. Family farmers and small business owners deserve an answer to the uncertainty posed by the death tax. My answer would be to repeal the death tax. Repeal isn't in the cards. We have had votes to prove it. Unfortunately, the political proof that repeal wasn't in the cards didn't materialize until the cloture vote we had back in June. The American people deserve a final and definitive answer on death tax relief. As we go home, they have only to look to the Senate Democratic leadership and ask why the Senate was not permitted to work its will on this issue. I want to tell the rightfully disappointed family farmers and small business folks that we will resolve the death tax problem. It should have been resolved by now. And, it will be resolved in a way that focuses on family farms and small businesses. I pledge to family farmers and small business folks, especially those in my home state of Iowa, that I will devote my energy and resources, as chairman of the Senate Finance Committee, to resolving this problem. Let's turn to the trailer bill. It's an odd name for a bill. The bill has been held up for so long some folks have probably forgotten the basis of the nickname. I will remind you. It's a trailer bill because it covers tax provisions that dropped out of the tax relief reconciliation conference agreement. That conference agreement included the cornerstones of both the House and Senate bills. The cornerstone of the House bill was a 2-year extension of the lower rates on capital gains and dividends. The cornerstone of the Senate bill was an extension of the hold-harmless on the alternative minimum tax--``AMT''. I was pleased we covered the cornerstones of both bills. We only had revenue room to cover the cornerstones. The other provisions, principally the tax extenders, were decided to travel in a bill to follow or ``trail.'' Hence the name trailer bill. The trailer bill took several weeks of intense negotiations. The negotiators were Chairman Thomas for the House and Senator Baucus and me for the Senate. They were tough negotiations, but they produced a fair agreement. That agreement was included in the trailer piece of the trifecta. The House ratified Chairman Thomas's agreement when it passed the trifecta. In my view, the agreement is closed. No items should be subtracted. No items should be added. A deal is a deal. Let me repeat that. A deal is a deal. Changes should only occur if all the parties to the agreement consent. We don't have another 5 to 6 weeks to re-negotiate the trailer bill. In getting to that agreement, I pushed hard for several Senate issues to be resolved. I'm referring to items other than the basic 2-year extension of provisions that expired on December 31, 2005. Let me go through a few of those items. First off, there is the abandoned mines reclamation--AML--fund proposal. Senators Santorum, Byrd, and Rockefeller took the lead in this plan. Chairman Enzi did the heavy lifting. Secondly, there is a package of added incentives to enhance Hurricane Katrina rebuilding efforts. Senator Lott took the lead on this package, along with the support of Senators Vitter, and Landrieu. Third, there are tax relief incentives for mine safety. Senators Byrd, Santorum, and Rockefeller argued for these important provisions. Fourth, there is an expansion of the veterans mortgage bonds program. This is a program that the states use to provide veterans who return from combat with low-interest loans so that they can buy their families a home. Senators DeWine and Smith advanced these provisions. Fifth, there is a proposal to provide a deduction for private mortgage insurance--PMI--for low-income home purchasers. Senators Lincoln and Smith worked hard to secure these provisions. Sixth, there is a proposal to level the playing field between individual and corporate timber capital gains transactions. This proposal will insure that timber-growing areas and related mill towns will not be disadvantaged if the timber company is a corporation. Most, not all, of the Senators from the timber growing states in the Pacific Northwest and southeast had an interest in this provision. These are a few of the proposals that were negotiated and resolved in the trailer package. In my role as Finance Committee chairman, I protected these Senate positions. I expect our Senate Leadership to back me as we proceed. I am protecting Senators and Senate positions, so you would think they would automatically back me. To reiterate, a deal is a deal. The House has affirmed the deal with its vote on the trifecta. There should be no backsliding on the deal. Now, we haven't been able to move a separate trailer bill because the Republican Leadership wants to use the trailer as a ``sweetener'' for votes for death tax relief at some future point. I have been pushing for a separate bill for a lot of reasons. Some Republican colleagues have complained about my efforts, using terms like ``whining'' to describe my persistence. Why push so hard for a separate bill, some have asked. There are three key reasons. The first is the 19 million taxpayers who may face compliance problems because of incomplete IRS forms. The second reason is the hundreds of thousands of business taxpayers who have been in limbo waiting for final approval of measures like the research and development tax credit. Third, I'm virtually certain that the leadership's strategy of trying to use unrelated ``sweeteners'' to turn Democratic votes for a death tax deal will continue to fail. Let's go through these reasons, one-by-one. First, take a look at the Finance Committee website. On September 13, and 26, 2006, you will find press releases that explain Finance Committee tax staff research. At my request, the tax staff looked into the effects of delaying action on the three widely-applicable expired middle-income tax relief provisions. I am talking about the deductions for college tuition, teacher's out-of-pocket classroom expenses, and State sales tax. You will see that we are talking about a group of up to 19 million tax filers being affected. Tax filers means families filing jointly and individuals filing as singles. In other words, we are talking about a lot more than 19 million taxpayers. Let me repeat that. More than 19 million taxpayers. The professional staff, all experienced tax practitioners who discussed this problem with the IRS, came to the conclusion that delaying action on extenders into the lame duck would have adverse consequences for that group of 19 million taxpayers. I won't go into details, you will find them on the website. Let me say that serving as chairman of the Senate Finance Committee is a privilege and a responsibility. I thank the people of Iowa and my friends and colleagues in the Senate Republican Caucus for that privilege. I enjoy every day I serve as chairman, but it brings responsibilities as well. One of those responsibilities is tax policy. Now, whether an individual Senator agrees or disagrees with a particular expiring tax relief matter is debatable. We all have opinions on these things. Probably no two Finance Committee members, let alone two U.S. Senators not on the committee, agree on all expiring tax relief measures. What we ought to agree on, is that we should not deliberately, and I underline the word deliberately, take actions to unnecessarily complicate taxpayers' efforts to comply with our admittedly complex tax system. That's what delaying action on these provisions means. There's no ifs, ands, or buts. If we do not act before the 2006 IRS forms are finalized we're causing problems for these 19 million taxpayers. It's just not right. As chairman, I would not be doing my job if I stayed silent. I had to speak out. It's my responsibility to those millions of taxpayers. Some have called it whining. Some might call it annoying. Others could call it persistence. I call it doing my job. When you are talking about up to 19 million middle-income taxpayers who are trying their best to comply with the tax system, I will whine until I run out of breath. I tried to remedy this problem by persuading my leadership to change its mind. I did it in a way that is respectful of the rights and responsibilities of the leadership. I'm disappointed and frustrated that leadership has failed to act. The second reason I pressed for a separate trailer bill is to deal with long-expired business-related tax incentives. These matters, like the research and development tax credit, are overwhelmingly popular in the House and Senate. Businesses have been in limbo on these provisions. We are talking about almost 9 months of limbo now and at least another month of limbo. A lot of businesses, in good faith, relied on my assurances. They relied on assurances of the Congressional leadership, made in May of this year. These business folks were assured that these extenders would be done. In my State, Rockwell-Collins, of Cedar Rapids, is taking a financial hit because of our dilly-dallying. And it is not just management that cares. Iowa is a manufacturing State and we are proud of our ``R & D.'' Thousands of Iowa employees of these companies have the right to ask why this popular provision is being delayed. Some of them could ask why something this popular is a ``hostage'' to be cavalierly shot? They could ask me if political ``credibility'' of threats is more important than a job-based incentive? When they ask me these questions, I could blame the Democratic leadership for thwarting Republican efforts to get death tax relief. Certainly, there's truth to that defense. But, the Iowa workers, as most Midwesterners, want to know the bottom-line. Blaming the other side is fair political discourse and everyone does it. But it is not a satisfactory answer if the matter is not taken care of. We owe these companies and workers a ticket out of limbo. I come to the third reason I pushed for a separate trailer bill. Almost 2 months ago, the proponents of the trifecta rejected my advice and decided to place the bet. I advised them publicly and privately that it would not work. I won't repeat all of that. It is in the Congressional Record of August 3. The bottom line is that the horses didn't come in on the trifecta. After the vote, being worried about the endless delay on extenders, I suggested a course of action that would ``keep the hope of death tax relief alive.'' Under the plan, the leadership would push for an early vote on the trifecta in either the form in which it failed or in a revised form. If it were to fail, I suggested we pass a separate trailer bill. This plan would have tested, for a fourth time, whether sweeteners for key Democrats would turn their votes to favor a death tax relief package. I was convinced months ago that sweeteners wouldn't turn Democrat votes. On this point about turning votes with sweeteners, let's step back for a second and look at the big picture. Death tax is a passionate issue. There is a moral dimension to it. Liberals tend to define any death tax relief as immoral because they argue the benefit of the relief will go to wealthy people. The political ads they produce use the actress Paris Hilton as an example. Conservatives also look at the death tax as a moral issue. They see the death tax as confiscation of the fruits of labor and saving. It's a penalty on the rewards of hard work. From our perspective, the death tax is about small business and family farms. It's about providing one generation with a chance to pass on the results of their thrift and work to the next generation. The political ads we produce use family farm and small business examples. So, this is an issue where folks have strong feelings. Ironically, from a process standpoint, Republicans and Democrats think alike. Here is what I mean by that comment. Republicans and Democrats want permanent relief. Most, not all, of my caucus wants permanent repeal. A few Democrats agree with that view. Because of the political calculations I referred to before, you can not find a definitive Democratic Caucus position plan on death tax relief. The Democratic Caucus is divided into three groups. Some want repeal. Some want significant relief short of repeal. Another group, probably a big majority, the liberal core, wants symbolic permanent relief and don't want to lose much revenue in doing it. There is a huge irony in all of this. The irony is the Republican leadership's sweeteners strategy ignores this basic mindset on the death tax. Republicans will not compromise their principles on the death tax with unrelated sweeteners. Neither will the middle group of Democrats. The ultimate evidence is record votes. As former Majority Leader Bob Dole once said, it's all about the votes. The evidence that sweeteners don't matter is on the record. Take a look at it. Timber capital gains was added as a sweetener on the first Thomas effort. It did not change any votes. There was an effort to add the pension bill to a death tax relief package. That didn't change votes and was aborted. Then, we had the third sweetener effort, the trifecta. A minimum wage hike, the ultimate sweetener, was added along with the trailer bill. It changed one vote in gross. We are not certain, that if all Democratic Senators were here that day, that, on net, the vote count would have changed. As the old saying goes about some places, there is no there, there. The sweeteners strategy is like the places the old saying refers to. If our goal is 60 votes and permanent death tax relief, there is no there there. Rest assured, another trifecta run will carry extra political baggage. Don't listen to me. Listen to the Democrats who have resisted the iron hand of their leadership on this issue. Senator Lincoln has taken more heat than any single Senator in trying to get permanent death tax relief. Ask her for her opinion on this ``sweetener'' strategy. She says forcing the political votes on the trifecta set us back on getting permanent death tax relief. Why, with the pressure of elections off, and a new session coming up, would any targeted Democrat Senator switch their vote on a bill that was designed to squeeze them? Would any of my Republican friends in the same position react any differently? Think about it. Add to this futility another factor. Taking another run at a revised trailer bill would start an endless negotiation. If we re-open the trailer bill with the idea of adding even more sweeteners, where do we stop? How would that endless negotiation help close a deal on permanent death tax relief? The truth is trying to play trailer bill issues for more votes on death tax relief only complicates resolution of the death tax. So, the third reason I continued to try to clear the trailer bill is that I want a clear path to a death tax deal. Combining death tax relief with other issues only complicates our ability to get a death tax relief package. There is little or no utility in continuing the failed strategy of trying to ``turn'' death tax deal votes. Now, where do go from here? As I said a few minutes ago, I want to resolve two important tax relief issues--permanent death tax relief and the trailer bill. One package is done--it's the trailer bill. The other package needs some work, but can get done. We might even have a shot at permanent death tax relief in lame duck. If we are going to move the ball forward, we are going to have to recognize that we have two separate tax relief products. I hope all of us have finally learned that lesson. If we have learned our lessons, the trailer bill is a slam dunk. If we have learned our lessons, and, key Democrats are finally freed to do what they want to do, they will vote their conscience and their constituents' interests. If those two critical steps occur, we will get a permanent death tax relief deal. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to express frustration and disappointment with a provision included in the fiscal year 2007 Homeland Security appropriations bill. The provision would extend the deadline for the Western Hemisphere Travel Initiative from 2008 to 2009. On August 2 Senate Finance Committee held a hearing to highlight the problems at our Nation's borders. We heard testimony from the Government Accountability Office, GAO, about their undercover border crossings over the last 3 years. The GAO agents used fake documents, phony driver's licenses, and claims of U.S. citizenship in order to enter the United States. According to the GAO, their undercover agents got past the U.S. Customs and Border Patrol 42 of 45 times. CBP failed to catch the intruders 93 percent of the time, proving that anyone with a fake identification and a tall tale can get waived right in the United States. The committee also heard some very strong evidence as to why the Western Hemisphere Travel Initiative, WHTI/Initiative, is important and why we should make sure this law is implemented by the deadline established by Congress. In 2004, Congress passed the Intelligence Reform and Terrorism Prevention Act to require the Departments of State and Homeland Security to implement a plan requiring a passport or other document for all travelers entering the United States. We passed this initiative in order to reduce the free travel across our borders by potential terrorists, as recommended unanimously after an extensive investigation by the bipartisan, independent 9/11 Commission. At the hearing in August, CBP agreed that the initiative is important and told us that they were working to be prepared for the January 1, 2008 deadline. They said the initiative and its passport requirement is the ``gold standard.'' In fact, they even stated that another similar hearing could be held again in a few years if our country did not have a mandatory, standardized document with security features such as biometric identifiers. It was made very clear--border security, in part, depends on secure documents. Congress, through authorization bills, sets deadlines for a reason. Without them, nothing would get done in Washington. Even with deadlines, agency bureaucrats procrastinate. The US VISIT Program of 1996 is a classic example. The deadline we set for the WHTI is not until January 1, 2008. Extending the deadline in this year's spending bill is premature and foolish. We should have allowed the agency to try to meet the deadline and implement a system that will close our borders to potential terrorists as quickly as possible. If the Western Hemisphere Travel Initiative is delayed, then it is even more critical that our Customs inspectors be equipped with the tools and technology demonstrated at the Finance Committee's August 2 hearing. Only then can they have a better chance at catching people crossing into the United States with fake versions of the currently accepted documents, which are so easy to obtain.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today Senator Baucus and I are pleased to introduce the Tax Technical Corrections Act of 2006. Technical Corrections measures are routine for major tax acts, and are necessary to ensure that the provisions of the acts are working consistently with Congressional intent, or to provide clerical corrections. Because these measures carry out Congressional intent, no revenue gain or loss is scored from them. Technical corrections are derived from a deliberative and consultative process among the Congressional and Administration tax staffs. That means the Republican and Democratic staffs of the House Ways and Means and Senate Finance Committees are involved, as is the staff of the Treasury Department. All of this work is performed with the participation and guidance of the non-partisan staff of the Joint Committee on Taxation. A technical enters the list only if all staffs agree it is appropriate. By filing this bill, we hope interested parties and practitioners will comment and provide direction on further edits, additions, or deletions. These comments should be submitted in a timely manner, by the end of October. It is our hope that we may move this package of technicals in November if possible. We ask unanimous consent that the text of the bill print in the Record.