Chuck Grassley

Mr. GRASSLEY

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

Mr. GRASSLEY. Mr. President, this amendment is designed to kill the growth package. It would eliminate the acceleration of all individual income tax rate reductions, and it would eliminate the entire dividend exclusion. What is also interesting about this amendment is that our colleagues on the other side of the aisle who are solely responsible----

Mr. GRASSLEY. Mr. President, the bottom line is that this tax on Social Security income is as high as it is because, in 1993, all except one Senator now serving on the other side of the aisle imposed a tax in the first place. I believe we should have an opportunity to repeal this tax. However, as my colleagues are aware, the revenue from this tax goes into the Medicare hospital fund without other changes in Medicare. Repealing this tax would bankrupt the Medicare trust fund. We should consider this in light of other Medicare legislation, and it ought to be done in the Finance Committee. This language is not germane to the measure now before the Senate. Therefore, I raise a point of order under section 305(b)(2) of the Congressional Budget Act of 1974.

Mr. GRASSLEY. Mr. President, I ask unanimous consent to set aside the Burns amendment No. 593 and proceed to the next amendment, which is my own amendment No. 594.

Mr. GRASSLEY. I move to reconsider the vote.

Mr. GRASSLEY. Mr. President, I compliment Senator Jeffords for doing a lot of work in this area. I was able to work with him on the 2001 tax bill to accomplish lots of what he wanted to accomplish in the area of refundability. But what we have here is an example of going just a little bit further than we should. There is $95 billion in this bill for children. In addition, we accelerate the refundable child credit for low-income families, the exact group Senator Jeffords seeks to help. I note also that there are some problems with the earned-income tax credit. It has 30-percent improper payments, according to the Treasury. That is $10 billion a year of improper payments. The GAO lists this program on its high-risk list. I think we are at a point where before we expand the earned-income tax credit we need to make sure it is reformed. I haven't made a point of order yet, but I would like to make a point of order. The pending amendment offered by the Senator from Vermont increases mandatory spending, if agreed to, and would cause the underlying bill to exceed the committee's section 302(a) allocations. Therefore, a point of order is raised against the amendment pursuant to section 302(f) of the Budget Act.

Mr. GRASSLEY. Mr. President, the leader asked me to remind everybody that starting right now the 10-minute rule for voting is going to be enforced because these votes are taking so long and we have so many more votes to go. I have made the announcement, and I yield the floor. Amendment No. 587

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

Mr. GRASSLEY. The R&D tax credit doesn't expire until June 30, 2004. That is more than 1 year away. The President has included permanent extension of R&D in his fiscal year 2004 budget. I want the people to know I am committed to extending the credit in subsequent legislation. However, we have before us the amendment by Senator Cantwell proposing striking the dividend exclusion in order to pay for the R&D extension. The exclusion for dividend income is a very significant piece of any jobs and growth plan--the President has it in his, obviously--even though in our bill it is scaled back some. Finally, extension of this R&D credit is not germane to the jobs and growth bill. I therefore raise a point of order under section 305(b)(2) of the Congressional Budget Act of 1974.

Mr. GRASSLEY. Mr. President, I rise in opposition to the amendment offered by the Senator from Washington. First, many priorities identified by Senator Murray have already been addressed in Senator Collins' amendment. Second, I consider $40 billion for this amendment to be fiscally irresponsible. I do appreciate the needs for State fiscal relief, and that is why I supported Senator Collins' amendment. Therefore, I urge my colleagues to vote against this very costly amendment. The amendment offered by the Senator from Washington increases mandatory spending and, if adopted, would cause the underlying bill to exceed the committee's section 302(a) allocation. Therefore, I raise a point of order under section 302(f) of the Budget Act.

Mr. GRASSLEY. I move to reconsider the vote.

Mr. GRASSLEY. Mr. President, the Senator from Arkansas has done well in the last tax bill and this tax bill to help in the area of refundability, and I compliment her for that, but this amendment goes too far because it provides a new entitlement with regard to the child credit. The bill already provides $95 billion for the child credit. That is the biggest part of this bill. It also includes acceleration of the child credit for low-income families, an issue of great importance to Senator Lincoln as well. The bill has a balance between spending and investment. The amendment cuts back significantly on the investment part, the partial dividend exclusion. I appreciate the Senator's efforts, but this amendment would gut our jobs bill. The pending amendment offered by the Senator from Arkansas increases mandatory spending and, if adopted, would cause the underlying bill to exceed the committee's section 302(a) allocations. Therefore, I make a point of order against the amendment pursuant to section 302(f) of the Congressional Budget Act of 1974.

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

Mr. GRASSLEY. Mr. President, as I said yesterday, we are willing to extend current unemployment benefits. We are willing to do it before the end of the week. In fact, yesterday I offered a unanimous consent request to accomplish this, and it was rejected on the other side. We have Senator Murkowski standing by ready to offer a unanimous consent request to extend unemployment benefits. This amendment is overreaching. This amendment would go way beyond anything we have done on unemployment at a level of 6 percent right now. In fact, this makes it as high as when unemployment was at 8 percent. We are asked to deal with an amendment that goes way too far to score political points. That is why it should be rejected. I raise the point on this amendment that the language is not germane to the measure before the Senate. Therefore, I raise a point of order under section 305(b)(2) of the Congressional Budget Act of 1974.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in opposition to this amendment, first, ask people at the IRS. This would be very difficult to handle mechanically. Regardless of that, repeating as I have often in opposition to other amendments along these same lines, we have $95 billion for children in the bill already. The amendment includes an acceleration for low-income families paid for by tax increases on small business owners. We need to balance incentives for spending and investments. We have a correct balance in this bill. This amendment breaks this balance. There also would be a budget point of order, and I make that, that the amendment increases spending and if adopted would cause the underlying bill to exceed the committee section 302(a) allocations. Therefore, a point of order ought to rise against it pursuant to section 302(f).

Mr. GRASSLEY. Mr. President, I hope the Senator from Pennsylvania will withdraw his amendment. I have had a lot of discussion with him tonight on it. He makes a very strong case about something which I have not studied, nor am I convinced he is wrong. But based upon how I approach bankruptcy--that is, I see bankruptcy as an impartial person, a judge making a decision on whether a business ought to continue or go out of business or how it ought to be restructured--we are talking about tax legislation that has been on the books for an awfully long time. But we are also aware, as the Senator has told me, of crafty people giving advice to corporations on how they can maybe restructure and become strong and avoid taxation such that other corporate entities that are competitors maybe would have a disadvantage. But I am not convinced of it. I would probably have to fight the amendment if it were offered tonight. I can promise the Senator, first of all, we will go into depth on this matter with Treasury, with my own Finance Committee staff, and with the Joint Committee on Taxation staff, and it probably will lead to a hearing. I hate to promise with the workload of the committee on taxes, on welfare, and on prescription drugs this summer that we are going be able to have a hearing tomorrow. But I will give very serious consideration to the very strong position that the Senator from Pennsylvania has made. The Senator is a member of my committee. He is a strong advocate for his position. I don't think it is going to get lost in the dust. I will do what I can to keep it paramount in my mind because I want to make sure we don't have crafty people advising people who are in bankruptcy any more than we have crafty people advising about corporate tax shelters who are not in bankruptcy. We will look into it with the same vigor that I pursued other corporate tax shelters and as I pursued other inversions and other attempts of corporations to avoid taxation. Amendment No. 648 Withdrawn

Mr. GRASSLEY. Mr. President, I appreciate very much what Senator Kerry has stated to us. I want everybody to know that I share their concerns. I think I expressed and shared that in legislation on which I joined with Senator Baucus last fall, not reintroduced this year. But Senator Baucus and I reflected on this and accommodated this as one of many factors in a Medicare bill that we put together. The disproportionate share program, of course, is a primary source of support for safety net hospitals which serve vulnerable patients. I agree that the safety net hospitals are also under considerable financial strain and that the disproportionate share hospital cuts now in effect make it even harder. That has been compounded by a weaker economy. The number of uninsured has gone up. Nationally, the 2003 disproportionate share hospital cliff represents an estimated reduction of $1.1 billion to total State allotments for fiscal year 2002 to 2003. I supported fixing this in the past, as I have stated. In June, we will in fact be considering Medicare prescription drug legislation. I think it is very appropriate to deal with that at that particular time. I am committed to working with my colleagues on this important issue in the context of our work on the Medicare prescription drug bill.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I thank my colleague from Pennsylvania for raising this issue. He is correct that my staff has been working with these organizations to obtain a fuller understanding of their transaction. We have learned that there is widespread abuse involving donations of patents and similar property. We made this provision effective May 7, 2003, so that abusive donations could not be rushed to completion if a later effective date was chosen. We will continue our discussion with these organizations, and will objectively consider their concerns and whether further clarifications are appropriate as the bill moves to conference.

Mr. GRASSLEY. I appreciate the concern of the Senator from Alabama with respect to Section 333. It was not the Committee's intent to prohibit deductions for amounts paid by companies as a condition to their operation in a regulated industry.

Mr. GRASSLEY. The Senator from Maryland is correct. The Committee addressed this issue in its publication entitled: ``Technical Explanation of Provisions Approved by the Committee on May 8, 2003.'' Footnote 164 of this publication states: The bill does not affect amounts paid or incurred in performing routine audits or reviews such as annual audits that are required of all organizations or individuals in a similar business sector, or profession, as a requirement for being allowed to conduct business. However, if the government or regulator raised an issue of compliance and a payment is required in settlement of such issue, the bill would affect that payment.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I oppose this amendment. I feel exactly about Medicare and prescription drug issues as the Senator from Michigan, but this is not the way to do it. This amendment reduces our jobs and growth package even before the Finance Committee takes up a comprehensive prescription drug benefit and Medicare improvement bill. I hope everybody knows that I am very committed to reporting a $400 billion bill out of the Finance Committee, and doing it this summer, hopefully within the month. This will add a comprehensive prescription drug benefit for seniors. The amendment before us jumps the gun. I am working in a bipartisan way on a prescription drug policy that fits within that $400 billion framework in our budget resolution. In fact, I have a 4 o'clock meeting today with Senators on that issue that, obviously, I am not going to be able to keep because of these rollcall votes. We need to keep the jobs and growth package complete.

Mr. GRASSLEY. Mr. President, I want to raise a point of order. This upsets the balance of our bill. This language is not germane to the measure before the Senate. Therefore, I raise a point of order under section 305(b)(2) of the Congressional Budget Act.

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

Mr. GRASSLEY. I ask unanimous consent that the Warner amendment be set aside to take up another amendment, and then we will take up the Warner amendment next.

Mr. GRASSLEY. I move to reconsider the vote.