Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in case I do not get an opportunity tomorrow--or who knows, maybe even forget it--I am reminded by the Senator's statement that even though we have disagreed on the substance of this legislation, the Senator from Montana, the ranking member of the committee, has very cooperatively helped us move this legislation along. We have entered into several agreements to help us get amendments out of the way. A couple of times when there were some political differences, he helped smooth my path to move this bill along. That is all within the tradition of the Senate Finance Committee, and I say it not only to bring attention to the cooperative effort of Senator Baucus and also of the committee but also to demonstrate to the people of the country who might be watching this debate on the Senate Finance Committee bill and feel, well, it is just all the Republicans on one side and all the Democrats on the other side, that we are always that way and very seldom is a product from the Senate Finance Committee not a bipartisan product. I thank Senator Baucus for helping us move this bill along, even though he is not in agreement with the substance of the legislation. I yield the floor and I suggest the absence of a quorum.

Mr. GRASSLEY. Mr. President, I wish to take an opportunity just before we close down tonight to express some disappointment on my part that none of the specific small business and agricultural provisions survived the final conference agreement. I truly believe there are many provisions in the final agreement that will be generally good for small business, but there are several specialty areas that continue to need tax relief in a special way to address the particular concerns of some industries. Many of the items included in the original Senate bill are important to the bipartisan membership of the Senate. It previously passed the Finance Committee as well as the Senate. Again, I stress bipartisanship. I plan to continue to work on a bipartisan basis with Senator Baucus, the ranking member of the committee, to assure that we are able to address the tax needs of S corporations, cooperatives, particularly farm cooperatives, small business excise tax problems, livestock drought relief through the tax efforts, and historic rehabilitation, just to name a few areas of concern. As we finalize this growth package for the Senate's final vote and the President's signature, we will review the upcoming Finance Committee schedule and move forward with these important small business and agricultural provisions, all of which have bipartisan support.

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

Mr. GRASSLEY. Mr. President, I use morning business as a forum to discuss some of the issues that are going to be coming up tonight and tomorrow morning before we vote on the tax bill conference, the jobs bill, the growth package--whatever you want to call it. I take my opportunity to speak to the conference report that was agreed to this afternoon. There has been a great deal of hard work that has taken place in the last few days to bring the reconciliation conference agreement to completion. I thank all of my colleagues and the House for their hard work and their cooperation in meeting our goal of getting a jobs and growth bill to the President by this Memorial Day recess. We all agree the economy needs a shot in the arm. Although our economy is growing, it is not growing fast enough to create jobs. The difference is it has been growing for about a year and a half at 2 percent, roughly. We do not create jobs at 2 percent even though the economy is growing. It takes growth of about 3 to 3.5 percent to create jobs. We believe this bill will bring about the proper growth. Some estimates, some versions of the growth package, although not necessarily this compromise before the Senate, is that it will create 1.4 million new jobs. A major cause of the sluggish economy is the bursting of the stock market bubble created in the 1990s. This bill will address the ailing stock market. It will help create jobs. It will grow the economy. It will put money back into the hands of families, consumers, investors, and businesses that will help fuel our economic engines that create those jobs that we hope will be created from this legislation. It is often said that various bills before the Congress might be historic in nature, and I don't want to overplay this one, but I do want to use the term about this being an historic agreement in this sense: It will amount to the third largest tax cut in history. President Bush should be highly praised for initiating two out of the last three largest tax relief packages passed by the Congress in that period of time. The packages before the Senate abide by the budget agreement of the Senate side limiting the overall number to $350 billion. It includes the speeding up of all rate reductions, as well as the House's innovative version of the President's dividend proposal that will not only reduce dividend tax but also reduce the capital gains rate, as well. Capital gains and dividends will be taxed when this bill becomes law at 15 percent and 5 percent depending upon the level of income. The 5 percent eventually will be phased down to reach zero level of taxation in the year 2008. This happens to be the lowest level of capital gains tax since 1934. Dividends will also be taxed at historic lows, and those figures would be the same rates of taxation as apply to capital gains. We also included in this package an expenditure of $20 billion in aid to States that was in the Senate bill, which I know my fellow Senate colleagues, including Senator Rockefeller, who was a conferee, will appreciate. In addition, the bill includes further child tax credit and marriage penalty relief. Some may argue that we did not do enough regarding the two problems. This bill will greatly improve current law. If Senators vote for this measure, they are voting to put approximately an extra $1,000 in the pockets of a family of four if that family has two children. They are going to do this for the next couple of years compared to current law. That is going to be retroactive to January 1 of this year, and it would presume a rebate of $400 per child back to any family who reported children on their income tax. That check should be in the mail later this summer or very early in the fall. So a family with two children would get an $800 rebate check from the Federal Treasury later this year. As chairman of the Finance Committee, I certainly intend to continue and enhance improvements in marriage penalty and child tax credit in the coming years. In other words, we should get to that goal of continuing the $1,000 credit as permanent legislation, not as temporary legislation. We should resume our goal of eliminating the paper right now rather than down the road a few years when it is slated to be phased out. I happen to be very disappointed about an aspect of the conference report I and a lot of other people from rural States worked on, to bring some equity in Medicare reimbursement to our respective rural States. My amendment had 86 votes in the Senate. We addressed the Medicare rural equity. This is what was not included in the final agreement. Here is where the House comes from. They did not have a similar provision in their bill. They argued in the other body that this tax relief bill and the Medicare issues should be addressed in the Medicare legislation coming up for consideration in just 2 weeks. What I heard was this is a tax bill, not a Medicare bill, and why can't this wait an additional 2 weeks and take it up in an environment very closely related to the subject of Medicare reimbursement and not isolate it in a tax bill. My answer to that is, I know this bill before the Senate will be signed by the President. I hope later on this summer or early fall we have a Medicare prescription drug bill for the President to sign. But, obviously, I am not as sure of that as I am of this bill going to the President. There are obviously a lot of things about the reimbursement of Medicare for our health care providers in rural America that are very unequal to that of urban areas. On this very issue of Medicare rural equity, President Bush weighed in strongly supporting my efforts in the context of the Medicare bill, and this is a continuation of things that he spoke about at two or three different events over a period of months in Iowa just in the last year. It is a continuation of discussions I have had with the President on this very same subject during the month of December, last year, and the month of April, this year, when I had very private meetings with the President on the subject of Medicare. Given the President's strong endorsement of my proposal, and the strong support in the Congress evidenced by the 86 votes in the Senate, and the fact we will be considering Medicare very soon, and also Chairman Thomas's willingness to consider these issues, I am encouraged we will succeed before the end of summer. I ask unanimous consent to print a copy of the President's letter in the Record, wherein the President speaks about support for my efforts.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the order is what?

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I am resubmitting a Senate resolution to amend the Standing Rules of the United States Senate to eliminate the practice of secret holds. I'm pleased that I am once again joined by my colleague, Senator Wyden, in this effort. Senator Wyden and I have been working together on this issue for some time and we have made some progress in bringing this issue to light and having it addressed. Still, the problem continues to reoccur and a permanent solution is needed. I know many of my colleagues are well aware of the practice of placing an anonymous ``hold'' on a piece of legislation or a nomination. Some Senators have been victims of a secret hold placed on one of their bills and others may have used this practice. Holds are not explicitly mentioned anywhere in the Senate Rules, but they derive from the rules and traditions of the Senate where a single Senator possesses a great deal of power to derail any matter. In order for the Senate to run smoothly, objections to unanimous consent agreements must be avoided. Essentially, a hold is a notice by a Senator to his or her party leader of an intention to object to bringing a bill or nomination to the floor for consideration. If the Majority Leader were to attempt to bring a matter up for consideration despite an objection, the Senate would be forced to consider the motion to proceed, which would be subject to a filibuster. Because this kind of delay would paralyze the working of the Senate, holds are usually honored as both a practical necessity and a senatorial courtesy. A Senator might place a hold on a piece of legislation or a nomination because of legitimate concerns about an aspect of a bill or a nominee. However, there is no legitimate reason why a Senator placing a hold on a matter should remain anonymous. I believe in the principle of open government. Lack of transparency in the public policy process leads to cynicism and distrust of public officials. I would maintain that the use of secret holds damages public confidence in the institution of the Senate. It has been my policy to disclose in the Congressional Record any hold that I place on any matter in the Senate along with my reasons for doing so. I know Senator Wyden does the same. I have used holds in the past when I thought a matter was progressing too fast and more questions needed to be answered. However, I feel that my colleagues have a right to know that it was Grassley that placed the hold as well as why I did it. As a practical matter, other members of the Senate need to be made aware of an individual senator's concerns. How else can those concerns be addressed? As a matter of principle, the American people need to be made aware of any action that prevents a matter from being considered by their elected senators. Senator Wyden and I have worked twice to get a similar ban on secret holds included in legislation passed by the Senate. But, both times it was removed in conference. Then, at the beginning of the 106th Congress, Senate Leaders Lott and Daschle circulated a letter informing senators of a new policy regarding the use of holds. The Lott/Daschle letter stated, `` . . . all members wishing to place a hold on any legislation or executive calendar business shall notify the sponsor of the legislation and the committee of jurisdiction of their concerns.'' This agreement was billed as marking the end of secret holds in the Senate. Unfortunately, this policy has not been followed consistently. Secret holds have continued to appear in the Senate. Last year, Senator Wyden and I decided that we needed to continue to pursue a permanent change in the Senate Rules to end this practice and we introduced a Senate resolution to do just that. We were later joined by Senators Lugar and Landrieu and I was glad to have their support. We are now submitting that same measure and I am encouraged that Rules Committee Chairman Lott has expressed interest in examining our legislation and the problem of secret holds. The Grassley-Wyden resolution would add a section to the Senate Rules requiring that Senators make public any hold placed on a matter within two session days of notifying his or her party leadership. This change will lead to more open dialogue and more constructive debate in the Senate. Ending secret holds will make the workings of the Senate more transparent. It will reduce secrecy and public cynicism along with it. Moreover, this reform will improve the institutional reputation of the Senate. I look forward to working with Chairman Lott and all my colleagues to address the problem of secret holds and hopefully make progress toward ending this distasteful practice once and for all.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, on behalf of myself and Mr. Baucus, I ask unanimous consent the following statement be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. I appreciate the Senator from Oregon providing me with this information. This is a serious oversight in the original language and I will work closely with the Senator to ensure that this is corrected in conference with the House.

Mr. GRASSLEY. It is my intention to amend and clarify Section 333 in the conference report in order to reflect the Senators' comments and to carve-out certain fees and expenses paid by companies operating in highly-regulated industries.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order with respect to S. 1054 be modified to allow for the following conferees: Senators Grassley, Hatch, Nickles, Lott, Baucus, Rockefeller, and Breaux.

Mr. GRASSLEY. I would echo the comments of my colleague from Oklahoma. I, too, will do all that I can in conference to ensure that States revenues are not reduced by any dividends provisions that are included in the final product.

Mr. GRASSLEY. I move to reconsider the vote.

Mr. GRASSLEY. I am happy to confirm the understanding of the distinguished Senator from Louisiana. The provision was adopted to provide needed clarifications in order to eliminate the uncertainties that have arisen regarding the proper application of the income forecast method. I believe the disputes that have arisen regarding the mechanics of the income forecast formula are extremely unproductive and an inefficient use of both taxpayer and limited tax administration resources. By adopting these clarifications, I believe the committee intended to end any disputes and prevent any further waste of both taxpayer and Government resources in resolving these disputes. Any existing disputes should be resolved expeditiously in a manner consistent with the clarifications included in the bill.

Mr. GRASSLEY. If the Senator will yield, I would say to my distinguished colleague from Nevada that I share his concerns and that it may not properly reflect congressional intent for the IRS to separate an integrated hotel, restaurant, and casino business into different pieces subject to different depreciation treatment. Equipment, furniture, and similar personal property used in a such a business should be depreciable in accordance with the current law treatment of the hotel industry and the retail industry generally. I will be happy to work with the Senator to provide appropriate clarification for depreciation of assets used for gaming in the hospitality industry. amendment no. 545

Mr. GRASSLEY. Mr. President. I commend my colleagues for their work on this important amendment, which injects much needed flexibility and funding for safety net hospitals that treat especially vulnerable populations. This amendment alleviates pressure on those hospitals and allows ``extremely low-DSH States'' to increase Medicaid DSH allotments to 3 percent in Fiscal Year 2004. Currently, Federal law restricts Medicaid DSH allotments to ``extremely low-DSH States'' to only 1 percent of Medicaid Program costs. I thank Senators Bingaman and Domenici for their work and for their dogged commitment to the cause. I have supported low DSH improvement legislation in the past, and I am thankful for their leadership on this important issue this year.

Mr. GRASSLEY. Mr. President, it has come to my attention that certain provisions of S. 1054 have engendered concern in the equipment leasing industry. I recognize that assets used by vital American industries are often lease-financed. It is not the intention of the Senate or Committee on Finance to impede legitimate leasing transactions. I wish to assure the markets that in any final legislation, the tax incentives utilized in leases that are considered appropriate under current law will be maintained.

Mr. GRASSLEY. I can assure the Senator from Oregon that I support the effort to clarify this situation in conference and ensure that the 2002 bonus depreciation provision is available to purchasers of equipment pursuant to this method of financing multi-unit sales of heavy equipment. I thank the Senator for bringing this inadvertent error in the original 2002 Act to my attention.

Mr. GRASSLEY. Mr. President, I ask unanimous consent to add Senator Murkowski as a cosponsor to amendment No. 594 on rural equity, and amendment number 596, the Collins amendment.

Mr. GRASSLEY. Mr. President, I have a series of amendments that both sides have cleared. I send the amendments to the desk, ask that they be considered, as modified, ask that they be agreed to en bloc, and that the motion to reconsider be laid upon the table.

Mr. GRASSLEY. Mr. President, is it in order to continue now on the growth package?

Mr. GRASSLEY. That is correct. The Senator from Oregon refers to a common form of financing transportation and other equipment that involves the production of numerous units, all subject to a common lease. We refer to this form of financing as ``syndication''.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that Senator Stevens be added as a cosponsor to the amendment.

Mr. GRASSLEY

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

Mr. GRASSLEY. Mr. President, we support the amendment and urge its adoption.

Mr. GRASSLEY. Mr. President, let us set the record straight. This is not a tax increase. This is a loophole closure for people who live overseas. Taxpayer dollars should, in fact, not be subsidizing an employer's cost of sending an employee overseas. This subsidy equals $98,000 of taxes for each employee each year. Repeal will not cause people to be double taxed because of the fact that the foreign tax credit can be used against American taxes owed. A vote for the Breaux amendment will in fact gut the dividend exclusion we just passed. The bottom line is, let us weight the advantage of the dividend exclusion of the 234 million people who will benefit from that against only 358,000 people who benefit from section 911. I think it is pretty clear that this amendment should be defeated. It will destroy the well-balanced provisions we put together between investment and consumer spending, a well-balanced bill between helping investment and helping people of lower income with the refundables that are in the bill. I yield the floor.