Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. I support the amendments offered by my colleagues from North Dakota and Oklahoma. I want to assure them that I fully intend to make good on the promise made in the Committee mark up. In a separate statement I made today, I laid out for the Senate the history of the use of the corporate shift. It has been used in varying forms on a number of tax bills that have been enacted. In making this agreement, I do not concede that it is an improper provision for the tax writing committees to use. As the legistlative process moves forward, I pledge that I will continue working to address their concerns.

Mr. GRASSLEY. Mr. President, I will respond to some criticisms of the Finance Committee package. There is an allegation that the Finance Committee did not pay for this bill. Let me be clear. The Finance Committee adhered to the following principles in carrying out its responsibilities: The Finance Committee funded the trust fund by increasing the amount of excise tax receipts retained by the trust fund. The Finance Committee funded the bill at the outlay number--that is the cash flow impact on the trust fund. Some have pointed to obligations and contract authority numbers. Those numbers were not and are not relevant to the Finance Committee role. It is unfair to compare numbers for contract authority or obligation with receipts. That is apples and oranges. The Finance Committee matched receipts and outlays. In accordance with Finance Committee members' desires, the deficit impact of matching receipts and outlays was offset with general fund revenue raisers. Those numbers match up. That is the bottom line. The Finance Committee did its job. I ask unanimous consent to have printed in the Record a summary of the Finance Committees funding title for the highway bill.

Mr. GRASSLEY. Mr. President, I ask unanimous consent to have printed in the Record a copy of Finance Committee staff prepared analysis. This analysis reconciles trust receipts and outlays. It also reconciles the deficit impact of the proposal with general fund revenue raisers.

Mr. GRASSLEY. There has also been some mention of the use of a provision accelerating the payment of corporate estimated taxes. The provision has been attacked as a ``gimmick.'' It has been attacked as ``funny money.'' The provision is fairly straight forward. It increases the payment of the third quarter corporate estimated tax deposits by 119% for 2009. This measure has the effect of shifting $11.4 billion from fiscal year 2009 to fiscal year 2010. It makes sure the bill will be offset for the five- and six-year periods. Let the record reflect, Mr. President, that this technique and variations on it have been used frequently over the past decade. Most of the time these things were done without complaints from either side. Sometimes complaints were raised by those opposed to a particular bill on other substantive grounds. Let's look at the history of enacted tax laws that contained these shifts. In 1994, the Uruguay Round Agreements Act, that is, the landmark general agreement on tariffs and trade legislation contained several changes in payment dates for excise taxes. Check it out in section 712 of Public Law 103-415 of December 8, 1994. That legislation was overwhelmingly supported by both sides of the aisle. In 1997, the Tax Relief Act of 1997 contained a change in the percentage for the ``safe harbor'' for payment of individual estimated taxes for 1998, 1999, 2000, 2001, and 2002. Check it out in section 1091 of Public Law 105-34 of August 5, 1997. In 1998, the Trade and Tax Relief Extension Act of 1998 contained a change for the safe harbor for payment of individual estimated taxes. Check it out in section 2003 of Public Law 105-277 of October 21, 1998. In 2001, the Economic Growth and Tax Relief Reconciliation Act of 2001, contained the much-criticized shift in corporate estimated tax payments. Check it out in section 801 of Public Law 107-16 of June 7, 2001. In 2003, the Jobs and Growth Tax Relief Reconciliation Act of 2003 also contained the much-criticized shift in corporate estimated tax payments. Check it out in section 501 of Public Law 108-27 of May 28, 2003. All of the laws mentioned above are major pieces of legislation. They were all bipartisan measures. All of them contained shifts in dates of payment of excise taxes, corporate taxes, or individual income taxes. Members should also be aware that these devices or similar devices were used in partisan bills by each side that did not become law. For example, the patients bill of rights legislation considered in the summer of 2001, contained a one day shift in Medicare provider payments. Some of the harshest critics of the corporate estimated tax shift were lead sponsors of that legislation. Now, even though the corporate shift in this bill is a conventional practice, Senator Baucus and I agreed to delete it before this bill left the Senate floor. Our agreement is with Senators Nickles and Conrad. We will attempt to carry out our agreement but are subject to the cooperation of our colleagues. Part of the legislative process is compliance with our budget rules. The Finance Committee offset its title over the five, six, and ten year period of the bill. Contrary to the critics' assertions, the corporate shift moved real money, corporate tax receipts, from one period to the other. I ask unanimous consent that a revenue table, prepared by the Joint Committee on Taxation, on the Finance Committee financing title, be inserted in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Thursday, February 12, 2004, at 10 a.m., to conduct an oversight hearing on the semi-annual monetary policy report of the Federal Reserve.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Thursday, February 12 at 10 a.m. to consider the President's fiscal year 2005 budget for the Department of the Interior.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Thursday, February 12, 2004, at 9:30 a.m. in Dirksen Senate Building Room 226. Agenda I. Nominations William James Haynes II to be U.S. Circuit Judge for the Fourth Circuit, Raymond W. Gruender to be U.S. Circuit Judge for the Eighth Circuit, Henry W. Saad to be U.S. Circuit Judge for the Sixth Circuit, Judith C. Herrera to be United States District Judge for the District of New Mexico, F. Dennis Saylor to be United States District Judge for the District of Massachusetts, Sandra L. Townes to be United States District Judge for the Eastern District of New York, Louis Guirola, Jr. to be United States District Judge for the Southern District of Mississippi, Virginia E. Hopkins to be United States District Judge for the Northern District of Alabama, Kenneth M. Karas to be United States District Judge for the Southern District of New York, Michele M. Leonhart to be Deputy Administrator of Drug Enforcement, and Domingo S. Herraiz to be Director of the Bureau of Justice Assistance, United States Department of Justice.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Small Business and Entrepreneurship be authorized to meet during the session of the Senate for a hearing entitled, ``The President's FY2005 Budget Request for the SBA'' on Thursday, February 12, 2004, beginning at 9:30 a.m. in room 428A of the Russell Senate Office Building.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on February 12, 2004 at 2:30 p.m. to hold a closed Business Meeting.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on the Judiciary Subcommittee on Immigration, Border Security and Citizenship be authorized to meet to conduct a hearing on ``Evaluating a Temporary Guest Worker Proposal'' on Thursday, February 12, 2004 at 2:30 p.m. in Dirksen 226. Witness List Panel I: The Honorable Asa Hutchinson, Undersecretary for Border and Transportation Security Directorate, Department of Homeland Security, Washington, DC; The Honorable Eduardo Aguirre, Director, U.S. Citizenship and Immigration Services, Department of Homeland Security, Washington, DC; The Honorable Steven J. Law, Deputy Secretary, Department of Labor, Washington, DC. Panel II: Albert C. Zapanta, President, U.S.-Mexico Chamber of Commerce, Washington, DC; Richard R. Birkman, President, Texas Roofing Company, Austin, TX; Dr. Vernon Briggs, Professor of Industrial and Labor Relations, Cornell University, Ithaca, NY; Demetrios Papademetriou, Co-director, Migration Policy Institute, Washington, DC.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Subcommittee on Public Lands and Forests of the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Thursday, February 12 at 2:30 p.m. The purpose of the hearing is to receive testimony on S. 1421, to authorize the subdivision and dedication of restricted land owned by Alaska natives; S. 1466, to facilitate the transfer of land in the state of Alaska, and for other purposes; S. 1649, to designate the Ojito Wilderness Study Area as wilderness, to take certain land into trust for the Pueblo of Zia, and for other purposes; and S. 1910, to direct the Secretary of Agriculture to carry out an inventory and management program for forests derived from public domain land.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, February 12, 2004 at 2:30 p.m. to hold a hearing on Trade and Human Rights U.S./Vietnam.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, February 12, 2004 at 9:30 a.m. to hold a hearing on the State Department: Policy/Programs.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session on Thursday, February 12, 2004, at 2 p.m., in 215 Dirksen Senate Office Building, to hear testimony concerning the Revenue Proposals in the President's fiscal year 2005 Budget.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to take a moment to commend a remarkable Iowan. COL Robert C. King retired from his duties as Public Affairs Officer for the Iowa National Guard in December 2003 and will retire from the National Guard at the end of the year. Colonel King has been a member of the Iowa National Guard since 1968 and has worked tirelessly to break new ground in the area of communication between the Iowa National Guard and outside media outlets. It goes without saying, his service is appreciated beyond words. In his job as Public Affairs Officer, Colonel King cultivated a media relationship with the National Guard when none existed before. He served during some of the highest profile activities since World War II including the crash of United Flight 232, Operations Desert Shield and Desert Storm, the floods of 1993, as well as Operation Enduring Freedom and Operation Iraqi Freedom. Colonel King has represented the Iowa National Guard and its thousands of members at a variety of functions throughout the State. He has held several command-directed assignments and served as the commander of the State Area Readiness Command in addition to his role as Public Affairs Officer. He handled this dual assignment with remarkable ease and showed his dedication through his willingness to take on such a committed role. While under his command, the Iowa National Guard Headquarters received Superior Unit Awards every year. Colonel King served as the 34th Rear Area Operations Center training administrator and executive officer. Colonel King also served as the administrative-supply technician for the 186th Military Police Company. He has been a valuable connection for me personally, providing information for me to stay abreast of what is going on with the Iowa National Guard. I am proud of Colonel King and the contributions he has made to Iowa. He tapped previously underutilized or noticeably absent avenues within the media relations field for the Iowa National Guard. His devotion to the soldier, the National Guard, Iowa and this country is beyond reproach. Again, I would like to congratulate Colonel King on his retirement as Public Affairs Officer for the Iowa National Guard. He has proven to be a remarkable officer and I thank him for his inexhaustible dedication to Iowa and to America.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I have a unanimous consent request from Senator Baucus for people to be on the floor. I ask unanimous consent that the following interns for the Senate Finance Committee be granted floor privileges for the remainder of the debate on the highway bill: Jane Bergeson, Shannon Augure, Jeremy Sieglitz, Tyson Hill, Simon Chabel, and Trace Thaxton.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I want to address the consideration that the Senate Finance Committee gave to the portion of the highway bill that determines the size of the trust fund, source of the trust fund, and our committee's decisionmaking over that. And my speaking to the Senate is based on the proposition, thus far, that we are moving ahead with the total highway package the way that has been suggested by the Senate Environment and Public Works Committee, Senate Banking Committee, and the Senate Commerce Committee, with my committee working in cooperation with those three committees, at that level of expenditure. Somehow, if the President, in succeeding days, would say he is not going to sign a bill that is that big, I will moderate my remarks to conform with that. But right now, all I know is what this body has done in three of its committees to arrive at where we are now. I want to address, within that framework and that environment, the work of our committee. I will particularly speak about some other Members of this body who lack a consideration of the hard work that has been put into this product, as well as their philosophical objections to what we have done. I don't have any question that any Senator can have any philosophical objections to anything he wants, but I want everybody in the Senate to know that the 21 members of the Senate Finance Committee did not take this product lightly. There has been a lot of harsh criticism of the upcoming Finance Committee title of this highway bill. What I will do is lay out the context of the funding portions of this legislation and respond to this harsh criticism. The role of the Finance Committee on the highway bill is centered on the highway trust fund raising, not expending, funds. Finance Committee jurisdiction involves the Federal excise taxes, the highway trust fund, and the expenditure authority of the trust fund. The Finance Committee has acted in all of these areas as recently as just this Monday. The authorizing committee's actions will result in outlays from the trust funds of $231 billion for highways, and $36.6 billion for transit, spread out over the next 6 years. Essentially, those figures I just gave you represent the cash-flow out of the trust fund. The Finance Committee's action provided the resources in the trust fund to cover the cash outflows and provide a cushion in the trust fund balances. This is how we arrived at that action of the Senate Finance Committee. But some of the critics have said the Finance Committee should have funded the trust fund at the level of the motor fuel taxes and the compliant savings resulting therefrom. This is a very fair debate to have in the Senate, or in any committee, but I want the Members of this body who don't serve on the Finance Committee to understand that we had that fair debate in the Finance Committee on Monday, and in other sessions before that. This committee had to decide otherwise from those critics who have said that the Finance Committee should have funded the trust fund at just the levels of the motor fuel taxes and compliant savings. So I think everybody in this body has a responsibility to be realistic and wake up to the facts of life as we are considering this legislation and in their responding to it because there will be a time when the Senate will express its will on this floor, and we all have to face the reality of the legislative process. The will of the Senate, at the end of the day, will be to fund highways and transit programs at the outlay levels provided by the three authorizing committees of Banking, Commerce, and Environment and Public Works. So to my critics, some of whom chose to criticize me directly, let me remind them that last year I was 1 of 21 votes against the Bond-Reid amendment during the budget debate. That wasn't an easy vote. So I understand the sentiments for lower funding levels, but Members of this body need to understand that 21 is a sizable minority of this body, and the vast majority decided more money should be spent on highways and transit. That was last year, and this is now, today. A majority of the Finance Committee dealt with this fundamental reality. So I would like to ask the critics to come out of their ivory towers and deal with the reality of the Senate. The reality that faced us on the Finance Committee was how to bridge the gap between the baseline revenue collections and the outlay levels of the three authorizing committees, which was considerably higher. In consideration of this major problem facing us, the leader of the Democrats on my committee, Senator Baucus, and I--and we try to work together whenever we can, and that is most of the time--had the reality of the Senate to take into consideration. We had to keep in mind the institutional issues with which the Senate Finance Committee has to deal. We could not and we would not choose an option that would undermine the integrity of the trust fund, and we surely are not going to do anything to undermine the role of the Senate Finance Committee. What do I mean by the integrity of the trust fund? The answer is that the Finance Committee needs to ensure that there is a relationship between the receipts in the trust fund and the spending from that trust fund. To the extent that relationship is undermined, I say to my fellow colleagues, the Finance Committee's role is undermined as well. I also wish to point out the bottom line for those other 20 Senators who, like me, voted against the higher trust fund spending last year. Again, the political reality is that the Senate is going to approve outlays at the levels approved by these three authorizing committees. One option would be a direct general fund transfer. A direct general fund transfer erodes the integrity of trust funds, and it dilutes the role of the tax-writing committees. It directly delinks highway spending and highway receipts, and we believe those have traditionally been tied together and should be tied together. Because of that, the Senate did not go there. There is a danger for us fiscal conservatives of such an approach because direct general fund transfers would potentially be open ended and no fiscal discipline whatsoever. If the Finance Committee had done what the critics argue, what would have been the outcome on the floor of the Senate? Does anyone believe that we would have been left at the authorized funding amounts? No, we all know the funding levels would have gone way up. Where would we end up? The answer is that we would end up with a direct general fund transfer. Any Finance Committee member should be concerned about that bottom line result and what that does to the trust fund concept and the history of our committee's jurisdiction over that trust fund but, more importantly, our responsibility we have to the Senate. In the Finance Committee, we decided to maintain the relationship between the trust fund receipts and the trust fund spending. It is so important then to distinguish between trust fund receipts and revenues that is counted for budget purposes. Embedded in the trust funds are several policies that burden the trust fund. The clearest of these, and one we always hear, is the treatment of ethanol. The tax benefit for ethanol is the only--the only--energy production incentive that is not borne by the general fund. There are billions of dollars in tax benefits for oil and gas that are charged to the general fund, for instance. Do Senators from oil and gas States understand that the tax benefit for ethanol is the only energy production incentive that is not borne directly by the general fund? Under current law, the use of ethanol is prejudiced in terms of the highway trust fund resources. That is because the benefit is charged against the trust fund up to this point when we adopt this legislation because my VEETC proposal eliminated the inequity by making sure the trust fund is fully funded by those who use ethanol fuel. For my friends who are always criticizing, the tax benefit for ethanol, like that of any other energy source, will be borne then by the general fund. There are numerous other exemptions from the fuel taxes in addition to ethanol. These exemptions further important policy purposes but purposes which are not embedded in highway policy. No one takes issue with the exemption but whether they should be borne by the highway trust fund. We don't hear that argument. Contrary to what has been suggested, increasing highway funding in this manner is not unlimited like the direct general fund transfers but is limited by the universe of exemptions. For the 20 other Senators who, like me, last year voted for lower highway spending, they have an interest in what the Finance Committee did. By maintaining the relationship between highway receipts and spending, we maintain a ceiling on the spending. A direct general fund transfer does not have such a limit. I repeat and remind my colleagues, the bottom line is that the so- called illusory receipts that Finance came up with result in a ceiling on highway and transit spending. Don't these other 20 Senators want some sort of a ceiling? The ceiling is not available with a direct general fund transfer. The Finance Committee bill contains a self-imposed ceiling that relates the receipts to expenditures of the trust fund and everything connected with the trust fund. Do these receipts end up as refunds or exemptions? No, those are legitimate policy choices made by Congress in law. I cited the case of ethanol. There are others. Those receipts represent the burden users put on our roads. The trust fund then properly accounts for these users. Where we have shifted the burden of an exemption or refund from the highway trust fund to the general fund, the Finance Committee has provided offsets. In the end the Finance Committee has made sure this will not add to the deficit. To those who choose to ignore the political reality of the Senate, decisions made overwhelmingly by three other committees, decisions made last year on the budget we are still operating under with only 21 dissenters, the rest of the Senate decided there ought to be more massive amounts of money spent on roads. That is the political reality of the Senate. I say to these people, what would you do? What would you do to make the trust fund a relevant part of the highway program, where it has been since we have had Federal gas taxes? What would you do to maintain the relationship of the trust fund receipts and trust fund spending? What would you do to avoid an open-ended general fund transfer where there is lesser, or maybe absent any, fiscal responsibility? I get back to some old sayings that can say it better than I can, and I think I read in Lyndon Johnson's biography, ``The Master of the Senate,'' that Sam Rayburn said something about any jackass can push a barn down, but it takes a carpenter to build one. We have a few people who are trying to kick the barn down. These people are not really interested in building a barn like the three authorizing committees are, as they tried to put something together. Albeit there might be some sort of disagreement about exactly what the right and ideal level of expenditure is, but they have worked hard. The American people want us building the legislative barn. I turn to these people who do not want to build this barn--our Federal obligation under highways. It has been a pretty dominant Federal policy since Eisenhower and the interstate system, and of course a long time before that with other highways. They ought to quit kicking and focus on the reality of getting this highway bill done. The Finance Committee amendment took a step forward to getting this job done. The Finance Committee did the job. We provided the funding. More importantly, we linked the highway receipts to the spending, and we did this in a deficit-neutral way.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am introducing two education tax bills today. These bills will help us make permanent the $30 billion in education tax incentives that were contained in the 2001 tax bill. The first bill will extend and make permanent the tuition deduction that was enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16, or EGTRRA. A lot of people think we don't spend enough money on education, but they also don't think we should make the 2001 tax cuts permanent. I don't know how they can justify that position. The education tax incentives in the 2001 tax bill have done a whole lot of good. The tuition tax deduction is available only through December 31, 2005. The cost of the provision for those four years was about $10 billion. So you can see that it was very expensive. For parents struggling to send their children to college, the tuition tax deduction has been very important. Some of them probably wish it were set at a higher level, but at between $2,000 and $4,000 depending on your income, it is still a beneficial tax incentive for the middle class. The second bill that I am introducing today will make the rest of the EGTRRA education tax provisions permanent, as well as the deduction for teacher classroom materials that was passed in the stimulus package of March 2002. That provision expired at the end of last year so it is very important that we enact it on a permanent basis and do so as soon as practicable. I hope my colleagues will join me in sponsoring these bills and will agree to consider them and pass them in the Senate in the next month or two. Mr. President, I ask unanimous consent that the text of the bills be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am introducing two education tax bills today. These bills will help us make permanent the $30 billion in education tax incentives that were contained in the 2001 tax bill. The first bill will extend and make permanent the tuition deduction that was enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16, or EGTRRA. A lot of people think we don't spend enough money on education, but they also don't think we should make the 2001 tax cuts permanent. I don't know how they can justify that position. The education tax incentives in the 2001 tax bill have done a whole lot of good. The tuition tax deduction is available only through December 31, 2005. The cost of the provision for those four years was about $10 billion. So you can see that it was very expensive. For parents struggling to send their children to college, the tuition tax deduction has been very important. Some of them probably wish it were set at a higher level, but at between $2,000 and $4,000 depending on your income, it is still a beneficial tax incentive for the middle class. The second bill that I am introducing today will make the rest of the EGTRRA education tax provisions permanent, as well as the deduction for teacher classroom materials that was passed in the stimulus package of March 2002. That provision expired at the end of last year so it is very important that we enact it on a permanent basis and do so as soon as practicable. I hope my colleagues will join me in sponsoring these bills and will agree to consider them and pass them in the Senate in the next month or two. Mr. President, I ask unanimous consent that the text of the bills be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, as in executive session, I ask unanimous consent that following the vote on passage of the pension rate bill today, the Senate proceed to executive session to consider the following nomination on today's Executive Calendar: calendar No. 425, the nomination of Gary L. Sharpe to be a U.S. District Judge for the Northern District of New York. I further ask unanimous consent that the Senate proceed to a vote on the confirmation of the nomination; further, that following the vote, the President be immediately notified of the Senate's action, and the Senate then return to legislative session. I further ask consent that there be 4 minutes equally divided between the chairman and ranking member before the vote.

Mr. GRASSLEY. We have all agreed on the importance of this piece of the amendment, and we all understand that it is not intended to be window dressing. We expect that Treasury will adhere to the legislative intent in crafting this proposal, and implement the application process in a way that allows other employers to receive real relief, much like the steel and industry industries will receive.

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

Mr. GRASSLEY. As this discussion demonstrates, the focus of the relief is on the portion of the loss that would be recognized for any of the plan years for which the relief is available. That is what the language means when it refers to losses ``for the plan year.'' amendment no. 2233

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on the Judiciary Subcommittee on Terrorism, Technology and Homeland Security be authorized to meet to conduct a hearing on Tuesday, January 27, 2004, at 11:15 a.m., on ``Covering the Waterfront--A Review of Seaport Security since September 11, 2001,'' in the Dirksen Senate Office Building Room 226. Witness List: Larry Hereth, Rear Admiral, Director of Port Security, United States Coast Guard, Alexandria, VA; Mr. Robert M. Jacksta, Executive Director, United States Customs and Border Patrol, Fairfax, VA; and Mr. Gary M. Bald, Inspector--Deputy Assistant Director FBI, Washington, DC.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Special Committee on Aging be authorized to meet Tuesday, January 27, 2004 from 10 a.m.-12 p.m. in Dirksen 628 for the purpose of conducting a hearing.