Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the technical corrections in this modification obviously have been agreed to by Senator Baucus or I would not have offered it, and they are not controversial. The corrected items in this modification are technical in nature. It merely perfects policies in the Finance Committee's reported mark that were drafted incorrectly in S. 1. The corrected items also reflect drafting changes that, while small, were important from CBO's perspective in getting us a complete score. All of these technical changes are incorporated now into this modified version of S. 1. The new version also includes an official line-by-line score from the Congressional Budget Office. I am looking forward to getting on to amendments at this point. I repeat what I said yesterday: My hope is the spirit of comity and consensus building that existed in the Finance Committee last week will be and can be, and I am surely going to work for it to be, replicated here on the Senate floor. The Finance Committee members reached across party lines to arrive at that consensus. For some it was very difficult. But the final vote showed a lot of give and take because that vote out of committee was 16 to 5. I hope that same spirit will prevail here today and in the coming days this week and next week that we are on the bill. There was another part of the consent I did not ask. I now ask unanimous consent the amendment be agreed to--our professional staff has some disagreement whether or not I should be making that motion at this point, so I will not.

Mr. GRASSLEY

Mr. GRASSLEY. Well, the Senator from North Dakota is here.

Mr. GRASSLEY. I will put the rest of my statement in the Record.

Mr. GRASSLEY. Could I ask, since there are not other people here, maybe for 3 more minutes?

Mr. GRASSLEY. Mr. President, I thought I would read at least the last paragraph by President George Bush. I will support the increased Medicare funding for rural providers contained in your amendment-- Meaning the Grassley amendment-- as a part of a bill that implements our shared goal for Medicare reform. What the President is talking about in this letter is just exactly what we have before the Senate--the same amendment included in this prescription drug bill on rural equity that passed the Senate 86 to 12 a month ago. We have the prescription drug bill and the Medicare reform bill before us. These two are married up at a point that the President's letter refers to. I want people to know that including this is something I discussed with the President on at least two occasions before his May 22 letter to me. One time in early December when the President asked me to come to the White House to discuss early on the process for moving this legislation along, I had an opportunity to remind him at that particular point about the speech he gave in August 2002 in Davenport, IA, during a political event at which he appeared for Congressman Nussle of Iowa. The President rightly complimented Congressman Nussle for leading efforts in the other body to help rural equity. I reminded the President that the short reference he gave in his otherwise long speech was used by Congressman Nussle in his TV ads in eastern Iowa during last fall's election. I wanted the President to be reminded that all Iowa heard him--not just a few Republicans at the Nussle campaign event in August--but all Iowans heard him throughout the fall campaign with parts of his speech being reproduced on this campaign ad. I also had an opportunity early in April to talk to the President when the President once again visited with me about provisions of the prescription drug bill. He makes reference to that in the second paragraph of the letter. He said: When we met in the Oval Office in early April, we discussed our concerns that rural Medicare providers needed additional help, and we committed to addressing their problems. We agreed on the need to address issues faced by rural hospitals, skilled nursing facilities, home health agencies, and physicians. The President is well aware of his communicating this directly to the people of Iowa even before I had my discussions with the President on these issues. I am glad the President is committed to fulfilling his statement to the people of Iowa that he made last summer. This rural health care safety net is otherwise coming apart. That is why this rural equity issue is so important. The bill before the Senate begins to mend it. The hospitals and home health agencies in rural America lose money on every Medicare patient they see. Rural physicians are penalized by bureaucratic formulas that reduce payments below those of their urban counterparts for the very same service. Our bill takes historic steps toward correcting geographic disparities that penalize rural health care providers. I will summarize some of these. On hospitals, we eliminate the disparity between large urban hospitals and small urban hospitals, as well as rural hospitals, by equalizing the inpatient-based payment. The hospitals in my State and other rural areas are paid 1.06 percent less on every discharge. That is a $14 million loss every year just for my State. It is time to make this change permanent. We also revised the labor share of the wage index in the inpatient hospitals. The wage index calculation kills our hospitals in rural areas. They have to compete with larger hospitals in bigger cities for the same small pool of nurses and physicians. But because of the inequities in the wage index, they aren't able to offer the kinds of salaries and benefits that attract health care workers in cities. Our bill begins adjusting the labor-related share downward to correct these inequities. We strengthen and improve the Critical Access Hospital Program which has been so successful in keeping open the doors of some of our most remote hospitals. I think in my State of Iowa, almost a third of our hospitals have changed to what we call ``critical access hospitals.'' Also, in this bill, we create a low-volume adjustment for those critical access hospitals and for other rural hospitals that aren't able to qualify for the Critical Access Hospital Program. These hospital corrections are not partisan rhetoric. They are supported by the nonpartisan Medicare Payment Advisory Commission, by the Center for Medicare Systems Administrator--and he did that in a recent letter to the House Ways and Means Committee--and also by 31 bipartisan members of the Senate Rural Health Caucus. For doctors, our bill removes a penalty which Medicare imposes on those who choose to practice in rural States. Medicare adjusts payments to doctors downward based on just where they live. We believe the value of the physician service is the same regardless of where that doctor may live. Medicare doesn't recognize that. Our bill begins to change that. Our bill also provides assistance to other rural health care providers such as ambulance services, and home health agencies which millions of seniors in rural areas rely on every day. Providers in rural States such as Iowa practice some of the lowest cost, highest quality medicine in the country. This is widely understood by researchers, academics, and citizens of those States, but it surely isn't recognized by Medicare. Medicare, instead, rewards providers in high-cost, inefficient States with bigger payments that have the perverse effect of incentivizing overutilization of services and, in the end, giving poor quality. These policies are paid for, not by taking resources away from the prescription drug package or by taking money away from those high-cost States but by other modifications to the Medicare Program that makes just plain, good policy sense. These rural health care provisions are a fair and balanced approach to improving equity in rural America. My colleagues on the Finance Committee--a lot of them from these same rural States--recognize that. And I think on this vote we had a month ago I can say that the full Senate recognizes that. I would speak last about the Medicare Advantage or the preferred provider organization parts of our legislation. Because beyond prescription drugs, and beyond the issue of rural health care, our bill goes to great lengths to make better benefits and more choices available for our seniors. In fact, one of the things that has been a focal point of this legislation over the 2 or more years we have adopted it has been to give seniors the right to choose. Mr. President, I see that you are rapping the gavel. Can you tell me what that is all about?

Mr. GRASSLEY. Mr. President, I am happy we are here today on what I think is the first day of maybe 2 weeks of work in the Senate to pass a bill many Members thought would pass last summer but got tied up in some election year political maneuvering in the Senate and did not happen. We have an opportunity this year--because this bill has broad bipartisan support based on the vote of 15-6 out of our committee, such a vote gives an opportunity to bring this issue to fruition--to present a bill to the President of the United States yet this summer. Last Thursday, the Finance Committee did report out a breakthrough bill that would make prescription drug coverage a reality for 40 million Medicare beneficiaries. The committee approval was of a sweeping package of new comprehensive prescription drug benefits and other program improvements that makes very good sense but also keeps good our commitment to our seniors. Since 1965, seniors have had drug insurance without prescription drugs. We have had health insurance without prescription drugs. By passing our bill last Thursday, the Finance Committee made history and came one step closer to changing the fact that prescription drugs were never a part of the Medicare Program unless they were administered in a hospital situation. How did we get to the point we are today, where it looks as if we have broad bipartisan support for this legislation? This important breakthrough came because of the tireless work of our committee members, both Democrat and Republican, that has been going on over the last 5 years, going back to the time when Senator Breaux, who just spoke and deserves a lot of credit for bringing us this far--and also Senator Frist--led the way on prescription drugs before any of us were paying much attention or even listening. Then Senators Snowe, Hatch, and Jeffords carried the torch for 2 years, working with Senator Breaux and this Senator from Iowa on what we called then the tripartisan bill. It is tripartisan instead of bipartisan because Senator Jeffords officially, even though he sits with the Democrats, considers himself not a member of that party but an independent Member of the Senate. The tripartisan effort, of which I was a part, was something on which I was proud to work but, more importantly, not just as an end in itself but, in hindsight, now I can say it set the stage, the foundation work, for where we are today on a bill that is even better than the tripartisan bill. How do you get this far? The breakthrough came because of the President's unyielding commitment to getting something done for seniors once and for all. It takes more than just the Senate, it takes more than just the Senate and the House, it takes the President--all three-- to bring legislation to what we call law. This budget that the President put forth put real money on the table for prescription drugs--$400 billion over 10 years. So the Finance Committee wasted no time in taking advantage of that $400 billion that was in the budget for a specific proposal of prescription drugs and reporting out this good bill. I am glad about that; otherwise, we would not be here--without this budget leeway. The bill we passed out of committee last Thursday night is a balanced, bipartisan product that flowed from good faith, from fair dealing, and from a commitment to consensus across party lines. So it is my hope that this same spirit will prevail on the floor of the Senate during the debate on this bill. I have no reason to believe it will not. I believe the debate in our committee, by both Republicans and Democrats, was just the type of debate you ought to have but do not often see in committees, particularly on very sweeping legislation, which is what this bill happens to be. I intend to do everything I can to ensure a safe and successful passing of this legislation. To do that, I intend to work hard to keep the climate on the Senate floor as reasonable and most certainly bipartisan as it was in our Finance Committee through the course of last Thursday. Of course, legislation of this size and scope does not make everybody happy. You cannot expect that it would. This bill cannot and will not be all things to all people. I expect to hear from many Senators about provisions, whether they be large provisions or smaller, less significant provisions in the bill, with which Members might not be happy. Of course, in the process of legislating, I welcome those who want to tell me about those with which they are happy as well. Sometimes we tend more toward the negative than the positive. I think there is a lot about this legislation--most of this legislation--that is very positive. I pledge to work with all Senators in the days ahead to address concerns people have in the underlying bill. But I will keep my eyes on that larger prize, the promise we have expressed in so many elections, both Republican and Democrat, to modernize and strengthen Medicare, to move Medicare into the practice of medicine of the 21st century. One of the major steps in that move to improve Medicare is providing a prescription drug benefit. If we were writing a Medicare bill for the first time and we were doing that in the year 2003, it would not be like 1965 when prescription drugs were only 1 percent of the cost of medicine. Today it is a much larger part of the cost of medicine and is part of keeping people out of hospitals. Obviously, we would write prescription drugs in that 2003 brandnew Medicare bill if we were writing a brand-new bill. I am keeping my eye on that larger prize. That prize is passage of a comprehensive prescription drug benefit that will give immediate assistance, starting next January, 2004, and continuing as a permanent part of Medicare, to every citizen in America. If I were to generalize about a prescription drug benefit: First, it is voluntary. People don't have to buy into it if they don't want. It is very comprehensive and it is universal. The bill before us puts that prize in our path. The Prescription Drug and Medicare Improvement Act brings Medicare, then, into the 21st century. The bill provides affordable prescription drug coverage on a voluntary basis to every senior in America. The coverage is stable. It is predictable. It is secure. Most important, the value of the coverage does not vary based on where you live and whether you have decided to join a private health plan. For Iowans and others in rural America who have too often been left behind by most Medicare private health plans, this is an important accomplishment that I insisted be in our bill when delivered to the Senate floor. Overall, we rely on the best of the private sector to deliver drug coverage, supported by the best of the public sector to secure consumer protections and important patient rights. This combination of public and private resources is what stabilizes the benefit and helps keep the costs down. Keeping costs down is essential because what I hear from the seniors in Iowa is not about a specific program, it is: Why are prescription drug costs so high? To them, so unreasonable. Keeping drug costs down is essential, not just for seniors but for the program as a whole. Across this bill we have targeted our resources very carefully, giving additional help to our lowest income seniors. Consistent with a policy of targeted policymaking, we have worked hard to keep existing sources of prescription drug coverage viable. Our goal, ever since we started on the tripartisan proposal 2 years ago, was not to replace private dollars with public dollars. This bill accomplishes that by keeping Medicare State pharmacy assistance programs and retiree health benefits strong. Surely any change of this magnitude will have some ripple effect on other sources of coverage. Regarding company-based benefits, our bill gives employers more flexibility than ever to participate fully in the new drug benefit. We all know about the pressures employers face in maintaining health care coverage under mounting cost pressures. Decisions about scaling back coverage or even a company dropping it altogether are bound to be made regardless of whether we pass this bill. In the days ahead, we will work to encourage employer participation in the new drug benefit. But I am confident the balanced policy before us is a good place to start. I would like to speak about our fee-for-service improvements in this bill designated as S. 1. There is a very important aspect of this bill. It is called the Medicare Improvement Act for a reason. Beyond just prescription drugs, our bill is a milestone accomplishment for improving traditional Medicare, especially Medicare being delivered to rural America. Included in our bill is the best rural improvement and Medicare equity package that the Senate has ever seen. I insisted on including it in the committee mark because the most important Medicare reforms involved fixing outdated and bureaucratic formulas that penalize rural States. This package passed the Senate 86 to 12 last month on the jobs and growth package. But it was tabled in conference between the House and the Senate. I hope that vote is very strongly regarded today by the Senate so that we don't even have to deal with this discussion on the floor of the Senate as we did then on the tax bill. Because this rural health package, or Medicare equity package-- whatever you want to call it--was dropped in conference, the President wrote a letter shortly thereafter endorsing these same provisions. I am pleased to include them here today with his support. At this point, I ask unanimous consent to have printed in the Record the President's letter.

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

Mr. GRASSLEY. Two more minutes?

Mr. GRASSLEY. Mr. President, I thank the Senator from Maine for her very fine statement. More important, a thank-you to her is warranted because of the long hours of work she has put into this subject of Medicare and prescription drugs. The strengthening and improvement of Medicare and a prescription drug program has been something the Senator from Maine has worked on for a long time. So I not only compliment her on her statement today, but I thank her for the work she has done in putting together the product that is before us. Even more so than the product that is before us, I acknowledge the work she was part of during the years 2001 and 2002 as part of the tripartisan group of Senators, including Senators Breaux, Jeffords, Hatch, Senator Snowe, and this Senator from Iowa, because it was the months of work during the spring of 2001 through the summer of 2001, and then picking up again in the spring of 2002, until we brought a bill to the floor 1 year ago now to discuss. The success of that work then laid the foundation for what we can do right now. That involved hours and hours of work for individual Members of the Senate, and more work yet for the staffs of each of those Members. So I thank her for putting in the time in 2001 and 2002, which did not yield a successful product at that point but very much made it possible for us early in the year 2003 to be before the Senate. Again, I thank the Senator from Maine for that foundational work. I think the next speaker will be the Senator from Louisiana, Senator Breaux. While the Senator from Maine and I might be able to say we were part of the foundation of the bill that is before us, Senator Breaux was in the trenches digging the footing for that foundation years before we got involved, because he was a member of what was called the Commission on Medicare, later called the Breaux Commission. Because of his work--even before our work on the tripartisan bill--I acknowledge the extra effort the Senator from Louisiana has brought to this point. So I thank him and, for a second time, I thank the Senator from Maine.

Mr. GRASSLEY. Mr. President, we want to give seniors the right to choose in as many areas as we can. That is why I use the word ``voluntary.'' And that is why I use the phrase ``the right to choose what they might consider better Medicare programs than traditional.'' Our bill specifically authorizes provider organizations to participate in Medicare. The idea is these kinds of lightly managed care plans more closely resemble the kinds of plans that we choose for the Federal Government and which close to 50 percent of working Americans have today but only 13 percent of the people in Medicare have that today. Preferred provider organizations have the advantage of offering the same benefit of traditional Medicare, including prescription drugs, but on an integrated, coordinated basis. This bill creates new opportunities for chronic disease management and access to innovative new therapies. PPOs might not be right for everyone. We are going to let seniors make that choice. Our bill sets up a playing field for preferred provider organizations to compete for beneficiaries. We believe PPOs can be competitive and offer stronger, more enhanced benefits. In the days ahead, I will be working with colleagues on both sides of the aisle to ensure that we set up the right system, one that is truly competitive and viable for these preferred provider organizations. No senior has to choose this new program. Our prevailing policy has been, and always will be, one that lets seniors keep what they have if they like it with no changes. All the seniors, regardless of whether they choose a PPO or not, can still get prescription drugs. We have 2 long weeks ahead of us. My commitment is to stay here until the lights go out to ensure that we pass a balanced bipartisan bill. I thank my colleagues on the Senate Finance Committee for their fine work to get us this far. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I am reintroducing the Professional Employer Organization Workers Benefits Act of 2003-- legislation that I sponsored in the last Congress. This legislation clarifies certain tax rules for Professional Employer Organizations, PEOs, and will allow PEOs to provide retirement and health benefits for workers at small and medium- sized businesses. By eliminating uncertainty in the current rules, it will also improve the administration of our tax system. The PEO legislation makes it clear that a PEO that is certified by the IRS as meeting certain rigorous standards will be able to offer employee benefits and remit Federal employment taxes for workers performing services for the PEO's business customers. The bill has won the support of representatives of the small business community, including the National Federation of Independent Business (NFIB), and has been endorsed by an array of employee benefits experts, such as the American Benefits Council, ABC, the American Society of Pension Actuaries, ASPA, and the Employers Council on Flexible Compensation, ECFC. The legislation also has the support of the National Association of Professional Employer Organizations, NAPEO--the largest organization representing the interests of PEOs. Significantly, then-Internal Revenue Service Commissioner Rossotti stated last year that the IRS believes that the PEO bill could provide useful clarification of the federal employment tax and employee benefits obligations of PEOs and their clients. A well-run PEO provides the expertise and the economies of scale necessary to provide health, retirement and other services to small businesses in an affordable and efficient manner. For many of these workers, the PEO's pension or health plan represents benefits that the worker would not have received from the small business directly because they were too costly for the small business to afford on its own. We must take every opportunity to encourage businesses to provide retirement and health benefits to their employees through whatever means possible. PEOs offer one creative way to bridge the gap between what workers need and what small businesses can afford to provide them. For example, Merit Resources, based in Iowa, is a PEO that has provided important benefits to many workers in my state. The clarifications provided in the bill I am introducing today would provide PEOs like Merit with the certainty they need. Certainty that will ensure that they can continue to serve small businesses and provide benefits to the workers at those businesses. I look forward to working with the Administration and my colleagues, on both sides of the aisle, on these important issues. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I am reintroducing the Professional Employer Organization Workers Benefits Act of 2003-- legislation that I sponsored in the last Congress. This legislation clarifies certain tax rules for Professional Employer Organizations, PEOs, and will allow PEOs to provide retirement and health benefits for workers at small and medium- sized businesses. By eliminating uncertainty in the current rules, it will also improve the administration of our tax system. The PEO legislation makes it clear that a PEO that is certified by the IRS as meeting certain rigorous standards will be able to offer employee benefits and remit Federal employment taxes for workers performing services for the PEO's business customers. The bill has won the support of representatives of the small business community, including the National Federation of Independent Business (NFIB), and has been endorsed by an array of employee benefits experts, such as the American Benefits Council, ABC, the American Society of Pension Actuaries, ASPA, and the Employers Council on Flexible Compensation, ECFC. The legislation also has the support of the National Association of Professional Employer Organizations, NAPEO--the largest organization representing the interests of PEOs. Significantly, then-Internal Revenue Service Commissioner Rossotti stated last year that the IRS believes that the PEO bill could provide useful clarification of the federal employment tax and employee benefits obligations of PEOs and their clients. A well-run PEO provides the expertise and the economies of scale necessary to provide health, retirement and other services to small businesses in an affordable and efficient manner. For many of these workers, the PEO's pension or health plan represents benefits that the worker would not have received from the small business directly because they were too costly for the small business to afford on its own. We must take every opportunity to encourage businesses to provide retirement and health benefits to their employees through whatever means possible. PEOs offer one creative way to bridge the gap between what workers need and what small businesses can afford to provide them. For example, Merit Resources, based in Iowa, is a PEO that has provided important benefits to many workers in my state. The clarifications provided in the bill I am introducing today would provide PEOs like Merit with the certainty they need. Certainty that will ensure that they can continue to serve small businesses and provide benefits to the workers at those businesses. I look forward to working with the Administration and my colleagues, on both sides of the aisle, on these important issues. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I am pleased to express my strong support for the Burmese Freedom and Democracy Act of 2003. This bill sends a powerful message to the ruling military junta in Burma that their violent restrictions against freedom and democracy will not be tolerated and will have serious consequences. Their recent actions have yet again demonstrated to the world that this junta cannot be trusted. The international community cannot allow the crimes committed by the Burmese military against the rightfully elected leader of Burma, Aung San Suu Kyi, her followers, and the Burmese people to go unpunished. So, it is my great hope that the actions that the Senate is taking today will provide the international leadership needed to put the spotlight on the Burmese military junta and make them change their ways. I know that other countries, including the European Union, are also considering sanctions against Burma. A multilateral effort must be made so that we send the right message and so that our efforts are as effective as possible. I am proud to be an original cosponsor of the Burmese Freedom and Democracy Act of 2003. I look forward to continuing to work with my colleagues to help bring freedom and justice to the Burmese people.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to call attention to an issue whose time for reform and resolution has come. I am speaking of the so-called ``reachback'' and ``super-reachback'' issues enacted in the Coal Act in the 1992 Energy bill. This insidious tax has caused numerous businesses to fail over the past 10 years as a result of its inequitable taking from those that should not have been included in this effort in the first place. The Coal Act obligated companies to pay an annual tax to cover premiums of coal miner retirees' health care benefits. Not only did the Coal Act require companies then active in the coal mining business to pay but it also retroactively required companies--referred to as the reachback companies--that were no longer in the coal mining business to participate and assessed them liability to pay in to the Coal Act's combined benefit fund, CBF. This retroactive tax has been so crippling for a number of companies that many have been driven into bankruptcy. The very existence of many other companies that are subject to this tax is in danger due to the heavy obligation this tax imposes on them. Needless to say, the provisions of the Coal Act that created the CBF were hastily crafted and rushed into law without the benefit of hearings in the Senate Finance Committee or serious examination by the Senate. The combined benefit fund is not only financed by the taxes on these reachback and superreachback companies. At its inception, the coal miners' pension funds were used for part of the startup money for the fund. It is additionally funded through current transfers of the surplus interest income of the abandoned mine lands reclamation fund, or the AML. As of 2003, those transfers have been in the hundreds of millions of dollars. Since the beginning, the solvency of the CBF has been in question. Even now, the possibility exists that, without reform in the near future, this fund could fail putting in jeopardy the coal miner retirees' health care benefits. To temporarily stabilize the CBF, Congress appropriated $68 million for fiscal year 2000 and another $96 million for fiscal year 2001 and $35 million for fiscal year 2003. These ad hoc appropriations are not a permanent solution and do nothing to guarantee that retirees will continue to receive health benefits in future years. For some younger retirees, the benefits from the CBF is their only source of health care until they are eligible for Medicare. For older retirees, it serves as a kind of Medigap policy. In addition to reachback companies, the current law imposed crippling taxes on companies such as Plumb Supply in my home State of Iowa. Plumb Supply has been designated as a superreachback company. The superreachback companies were relieved of their prospective liability by the U.S. Supreme Court since 1998. They were not, however, afforded refunds of those improperly assessed taxes they had been required to pay into the CBF. This hurts Plumb Supply and all other similarly situated companies. The superreachback companies have been waiting patiently for the return of their money for nearly 7 years. Many of us in the Senate, along with our colleagues in the House of Representatives, pursued legislation aimed at solving the reachback issue in a comprehensive manner during the 106th and 107th Congresses. We took on these efforts in order to create stability and fairness in the combined benefit fund, and to thereby provide a solution that would address the needs of all interested parties. I sincerely hope that the Ways and Means Committee will take up legislation during this session of Congress to continue this program for coal mine retirees and their beneficiaries in a responsible fashion, while ending the unfair taxation imposed on businesses no longer active in the coal mining business. Such legislation should do four things. First, it should provide for permanent solvency for the combined benefit fund. Second, it should relieve all reachback companies of prospective liability. Third, the long-overdue refunds to the superreachback companies should be satisfied immediately. Finally companies with an ongoing reachback liability should be given an opportunity to prefund their obligations on an actuarially sound basis. If the Ways and Means Committee can send us this legislation, the Finance Committee will be most happy to receive and examine it so this issue can finally be resolved.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to pay tribute to a young man from Iowa who lost his life in service to his country. On Monday, May 26, 2003, Private Kenneth Nalley was killed in a tragic accident on a road in Iraq. Kenny was only 19 years old. As the town of Hamburg, Iowa mourns the loss of one of its sons, I know I join many of my fellow Iowans in extending my prayers and sympathy to Kenny's family. Private Nalley is the third soldier from Iowa to be killed since the start of Operation Iraqi Freedom. His death reminds us that a great many American men and women are still putting themselves in harm's way every day in answer to their country's call. Kenny joined the Army right out of high school in order to gain experience and further his prospects for a career in law enforcement. Like all who serve in our armed forces, he knew that meant he might be asked to risk his life to defend American interests. I salute Kenny Nalley's sense of public service, and I honor his sacrifice today. The announcement I received from the Army regarding his death said it best. It reads ``Pvt. Nalley epitomizes the best of our country--a brave soldier-- who exhibited courage, selfless service, and honor in abundance. His ultimate sacrifice has contributed immeasurably to the freedom and security of both Iraq and the world.'' I ask that all my colleagues in the Senate remember Kenny Nalley today, and all those who have given their lives in the service of our great Nation.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased today to be once again introducing with Senator DeWine the Mentally Ill Offender Treatment and Crime Reduction Act of 2003. This bipartisan bill authorizes the Attorney General to administer a grant program to assist communities in planning and implementing services for mentally ill offenders. These grants will increase public safety by fostering collaborative efforts by criminal justice, mental health, and substance abuse agencies. I have seen these types of collaborative programs work in Iowa and I know that they can work elsewhere. We have an obligation to ensure that the public is protected from these offenders who suffer from mental illness. The Bureau of Justice Statistics has reported that over 16 percent of adults incarcerated in U.S. jails and prison have a mental illness. In addition, the Office of Juvenile Justice and Delinquency Prevention has reported that over 20 percent of youth in the juvenile justice system have serious mental health problems. This grant program will help increase public safety, as well as reduce the number of mentally ill adults and juveniles incarcerated in correctional facilities. These grant dollars may be used by States and localities to establish mental health courts or other diversion programs, create or expand community-based treatment programs, provide in-jail treatment and transitional services, and for training of criminal justice and mental health system employees. The state of Iowa and a number of its counties are already leading the way in finding creative and collaborative programs to address the problems presented by these mentally ill criminals. Working together, the criminal justice, mental health, and substance abuse professionals can make a difference in the lives of this special class of offenders and also increase the safety of the public. I want to thank Senator DeWine for his leadership on this important issue. He has drafted a bill that reflects a common sense approach to a serious public safety issue. I also want to encourage my colleagues to support this important piece of legislation.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I yield the Senator from Maine 2 minutes.

Mr. GRASSLEY. Mr. President, I was a party to the conversation with the majority leader and the Senator from Texas. She has accurately stated what was discussed at that meeting. I will try my darnedest to fulfill it.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. GRASSLEY. Mr. President, I yield back the remaining amount of my time.

Mr. GRASSLEY. I send an amendment to the desk and ask for its immediate consideration.

Mr. GRASSLEY. I am pleased to join my distinguished ranking member, Senator Baucus, in the agreement we have reached on the child tax credit. I wish to take a minute to fill in my colleagues on how we are at this place at this time on another tax bill. In the Finance Committee in the year 2001, Senator Snowe and Senator Lincoln added a refundable formula to enhance the child tax credit. This provision lasted through conference. The formula was increased to 15 percent in 2005. President Bush proposed to accelerate the $1,000 tax credit amount but did not accelerate the refundability formula. In the Finance Committee, we accelerated the refundability formula. Unfortunately, that provision was dropped in conference. At that disappointing moment and at times since, I have indicated that I would like to revive that formula. I was joined by several Finance Committee members and both leaders in attempting to resolve this problem. I am pleased to say this agreement moves the ball on the marriage penalty and the child tax credit. The relief is small but a start in addressing yet another marriage penalty. I applaud Senator Kay Bailey Hutchison for her steadfast interest in resolving this other marriage penalty provision. Finally, our agreement is offset with an extension of customs fees, user fees. I urge the House to respond on our action today. I would like to get the bill to the President. This will ensure that low-income families get the checks we expect to get out in the next few months that are related to the tax bill that the President signed last week. Without this additional provision we are working on now, we would have families who get an increase in the child credit of $400 per child get a check this summer, but we would not get checks to people who are entitled to the usual refundability because it was not extended. I would like to do a lot more on the child tax credit. Families should be able to rely on permanent tax relief. That is what the bill I introduced did--not this compromise before the Senate. That is close to what the Senate growth bill did. That is what we should do in the upcoming process on this legislation. I hope we resolve the refundability formula. We address the marriage penalty and the child tax credit and we make progress on the longer term child tax credit. We simplify the definition of a child. This last measure is the principal recommended simplification of the Tax Code for individuals. This recommendation comes from the Joint Committee on Taxation and the Treasury Department and is something that should have been done a long time ago. Today we make some major progress on simplifying the Tax Code. Of course, we need to do a lot more. This is what we do as we try to move forward on various pieces of legislation from the Finance Committee. In this bill we are also going to help those serving in the Armed Forces overseas. Because some of their remuneration is not considered income, they would not benefit from the child tax refund the same way as other people who are not in a war zone. We ought to change that and do change it so everybody is treated fairly.

Mr. GRASSLEY. Mr. President, I yield the Senator from Oklahoma 5 minutes.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased today to be once again introducing with Senator DeWine the Mentally Ill Offender Treatment and Crime Reduction Act of 2003. This bipartisan bill authorizes the Attorney General to administer a grant program to assist communities in planning and implementing services for mentally ill offenders. These grants will increase public safety by fostering collaborative efforts by criminal justice, mental health, and substance abuse agencies. I have seen these types of collaborative programs work in Iowa and I know that they can work elsewhere. We have an obligation to ensure that the public is protected from these offenders who suffer from mental illness. The Bureau of Justice Statistics has reported that over 16 percent of adults incarcerated in U.S. jails and prison have a mental illness. In addition, the Office of Juvenile Justice and Delinquency Prevention has reported that over 20 percent of youth in the juvenile justice system have serious mental health problems. This grant program will help increase public safety, as well as reduce the number of mentally ill adults and juveniles incarcerated in correctional facilities. These grant dollars may be used by States and localities to establish mental health courts or other diversion programs, create or expand community-based treatment programs, provide in-jail treatment and transitional services, and for training of criminal justice and mental health system employees. The state of Iowa and a number of its counties are already leading the way in finding creative and collaborative programs to address the problems presented by these mentally ill criminals. Working together, the criminal justice, mental health, and substance abuse professionals can make a difference in the lives of this special class of offenders and also increase the safety of the public. I want to thank Senator DeWine for his leadership on this important issue. He has drafted a bill that reflects a common sense approach to a serious public safety issue. I also want to encourage my colleagues to support this important piece of legislation.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I move to reconsider the vote.