Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Can't we go back and forth?

Mr. GRASSLEY. About 7 minutes.

Mr. GRASSLEY. Mr. President, I rise to oppose the amendment before us. For the third time in as many weeks, a mostly partisan Democrat prescription drug bill is about to fail on this floor. And beyond failing here, today's amendment, from what I've heard of it, fails seniors and taxpayers as well. I still haven't seen the bill language itself. But from what I've heard, it fails seniors because it fails to cover most of them. From what we know of the proposal--and we are only this afternoon getting the details--most middle income seniors will get next to nothing when it comes to prescription drug coverage. My friends on the other side of the aisle have accomplished quite a feat--they have managed to write a Medicare prescription drug proposal that does less with more money. Their proposal provides generous coverage to beneficiaries below 200 percent of poverty. There is nothing wrong with that. I agree that scarce resources should be used wisely by Congress to target money where it is needed the most. However, their proposal provides almost no assistance to Medicare beneficiaries whose incomes exceed $18,952 a year. A senior at 201 percent of poverty will receive no meaningful coverage under the Graham proposal until she has spent 17 percent of her income on drugs. A married couple at 201 percent of poverty will spend 25 percent of their annual income on drugs before both gain catastrophic coverage protection. To make matters worse. Three-quarters of seniors above 200 percent of poverty have other prescription drug coverage. Since these plans cover some drug expenses, and because the Graham plan does not have a basic benefit, these folks will receive no help even if they have total drug expenses over $3,300. A typical senior above 200 percent of poverty will receive approximately $6 of assistance every month toward their prescription drug expenses. The Congressional Budget Office has given Graham a preliminary cost estimate of $389.5 billion. Keep in mind, though, that CBO did not have legislative language to review at the time they completed their cost estimate. So, depending on what legislative language is included in the Graham proposal--it could cost more than $400 billion. The tripartisan bill with an official CBO cost estimate of $370 billion provides a solid benefit for all Medicare beneficiaries. Lower- income enrollees are provided with additional protections, which, as I said before, is appropriate. What the tripartisan bill has that Graham does not is a significant drug benefit for every single Medicare enrollee. Under our 21st Century Medicare Act, enrollees will save on average 50 percent off their drug bills. And, lower-income enrollees will see a 95 percent savings in their drug bills. The Graham bill fails these people. It fails them badly. Indeed, these failures amount to a massive failure for this body. Under Senator Daschle's leadership, Democrats and Democrats alone have tried to write partisan legislation on the Senate floor time and time again this summer. That has gotten us nowhere. It has led to chaos, to partisanship and, as I said just a minute ago, to failure. So, where are we now? It looks like we are ready for another mostly partisan vote on a pretty much partisan bill--another vote that will fail to get 60 votes, and will fail to give seniors the help they need. We could have been somewhere far different from this. The House passed a bill. We could have been in conference with the House at this point. The President wants a bill. We could have been in the Rose Garden. Senator Daschle says he wants a bill, but what has taken place here over the last 3 weeks means he really wants something else: an issue. Had regular order been followed, had the Finance Committee been given the right to work its bipartisan will, we could have had far more than just an issue. We could be far closer to providing real, affordable and universal prescription drug benefits than we are today. The sponsors of the Tripartisan bill, the only bipartisan bill in all of Washington to provide comprehensive, universal coverage on at a cost that is far lower than that in the amendment before us now, were ready and willing to talk to anyone about compromises. We still are. But we were denied the right to a markup in the Finance Committee. I believe that if it had been given the chance to work its will, the Finance Committee would have reported out a bipartisan proposal, based on the tripartisan 21st century Medicare Act we introduced earlier this month. I've said it before, everyone in this chamber knows that for anything of this magnitude to pass--and adding a prescription drug benefit to Medicare is the single greatest entitlement expansion in history--it needs to get 60 votes. And everyone in this chamber knows that the only way to get 60 votes is to have bipartisan support. The proper place to find bipartisan support is in the Finance Committee, not on the Senate floor. By bypassing the Finance Committee entirely and doing drafting on the floor--literally on the backs of envelopes--the Democrat leadership has led us to where we are today: In shambles. Mr. President, I urge my colleagues to sweep up the shambles on the Senate floor and start over. We can and should do better. I ask unanimous consent that a statement by several organizations be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, this chart illustrates the benefits of the income tax rate reductions State by State. As you can see, all taxpaying families in all States benefit. The examples are endless of the great benefits that we realize when we give tax relief to working families. While I am pleased about the first anniversary, I won't be satisfied until we make these bipartisan measures permanent. Let's tell every taxpayer they can count on the 10 percent bracket 10 years from now. Let's tell the small business owner that, after 10 years of hard work, they won't face a tax rate of 39.6 percent. Let's tell the single mother with two children that her taxes won't rise by $1,200. Let's tell the newlyweds that 10 years from now they don't have to face a marriage penalty. Let's tell family farmers they won't face the death tax 10 years from now. Let's tell workers saving for retirement that they can put away $5,000 in their IRA 10 years from now. Let's tell a young couple that 10 years from now they will continue to be able to save $2,000 each year per child for college savings. I would like to sum up. In historical context, the tax relief package provides a modest refund to all taxpayers at a level previously supported by the Democratic leadership. Over time, the Democratic leadership's notion of what the top rate of tax should be has moved up. Three assertions about the tax relief package, repeated almost daily by its critics, are incorrect. I will correct them once again. The tax relief package is bipartisan. The tax relief package did not cause our current or long-term budget problems. The tax relief package is progressive. Finally, and most importantly, the tax relief package provides important resources for families, small businesses, retirement security, and education. These resources are valuable and should be available to the American people on a permanent basis.

Mr. GRASSLEY. Madam President, some might ask how does Joint Tax conclude that the bipartisan tax relief made the tax code more progressive. The answer is that the bipartisan tax relief returns to taxpayers, on a progressive basis, a small portion of the record level of Federal taxes. Take a look at this chart. It shows that the largest tax cut went to taxpayers in the lower and middle income brackets. For instance, taxpayers with incomes between $10,000 and $20,000, will see their taxes reduced by almost 14 percent when the tax cut is fully in effect. Taxpayers with over $200,000 will see their taxes reduced by barely 6 percent. The Democratic Leadership and many in the media, will focus, not on the burden taxpayers bear, but on the benefits of the tax cut. In other words, they will try to ignore the progressive nature of our current system and use isolated examples. For instance, they will say that a taxpayer at $50,000 of income gets more of a tax cut than a taxpayer at $10,000 of income. In fact, a taxpayer at $50,000 of income, pays considerably more tax than a taxpayer at $10,000 of income. Comparing two different taxpayers' tax relief benefits without looking at the burden is comparing apples to oranges. Let us compare apples to apples. That is, the burden born by groups of taxpayers before and after the tax relief bill. What I showed you before was the change in the tax burden for different categories of taxpayers. This chart allows you to see how progressive the current system is and how the tax relief bill made the tax system even more progressive. Keep in mind that this table includes all taxes. That's income taxes, payroll taxes, excise taxes, and corporate income taxes. Let us compare the same two groups I talked about before. Taxpayers with incomes between $10,000 and $20,000 bore 1.2 percent of the Federal tax burden before the tax relief bill and 1.1 percent after the tax relief bill. Taxpayers with over $200,000 maintained their burden, 32.1 percent, before and after the tax relief bill. You can see the bipartisan tax relief bill lightened everyone's Federal tax burden but did it in a progressive way. What the tax relief bill aimed to do was send back to the American people a portion of the record-high levels of taxation. But the bipartisan tax relief bill sent the money back in a progressive manner. Let us take a look at where we were early last year. You'll see the Federal Government was taking in record-high levels of individual income taxes. For instance in 2000, Federal taxes were taking 20.5% of GDP and individual income taxes were taking 10.2 percent of GDP. According to CBO, those upward record-high level trends were going to continue throughout this decade. In fact, even when fully in effect, the bipartisan tax relief bill leaves both Federal and individual income taxes at near record levels. Chairman Greenspan gave us a green light to provide broad-based tax relief because he foresaw a long-term economic problem. The record level of taxation, if left on track, would have been a drag on economic growth. As a matter of fact, there is substantial agreement that the tax cut came at just the right time. The rebate checks and other relief arrived just as the recession started to hit home. According to the Department of Commerce, the tax relief boosted personal incomes by the highest amount in almost 10 years. You can now see that those three widespread incorrect assertions about the bipartisan tax relief package have been countered. One, the tax relief package was bipartisan; not partisan as its critics claim. Two, the tax relief package did not cause either the short-term or long-term budget problems we face. Three, the tax relief package provides broad-based relief in a progressive fashion. I would like to turn to the final part of my discussion. This is the most important part because it describes what the tax relief package means to typical taxpayers. We took as a starting point President Bush's efforts to provide income tax relief to all Americans. This legislation includes the four main elements of President Bush's goals of providing tax relief to working families. These goals are to: No. 1, provide tax relief for working families through reducing marginal rates; No. 2, reduce the marriage penalty; No. 3, expand the child tax credit; and No. 4, eliminate death taxes. Let's look at each one. First, this legislation reduced marginal rates at all levels and creates the new 10 percent level proposed by the President. We also began to address the hidden marginal rate increases such as PEPS and PEASE that complicate the Code. The 10 percent bracket means a tax cut for every American taxpayer. It was the source for the rebate checks that every taxpayer received last year. That's $600 for every family and $300 for every single person. America is a society of opportunity. Over 60 percent of all families will at one time or another be in the top fifth of income in this country. A man will make more at 55, after 30 years of hard work, than he did at 25. A family should not face a crushing marginal rate tax burden when they finally get a good paycheck for a few years as a reward for years of hard work. For those that have worked hard over the years, there is some marginal tax rate relief. Here, I am referring to small business. Small business generates 80 percent of the new jobs in this country. Small business owners receive 80 percent of the benefits of the marginal rate reductions. When fully phased in, the marginal rate paid by a successful small business will be the same as that paid by General Motors. I don't know how Senators can argue that 35 percent is an appropriate top rate for General Motors, but too low for Joe's Garage. While I am on the topic of marginal rate relief one political development continues to surprise me. Those on the other side most opposed to the marginal rate relief come from the higher income states, the so-called high-tax or ``blue states'' that tend to be on each coast and around the Western Great Lakes. Taypayers in those states, in particular, bear the brunt of higher marginal rates. It continues to surprise me that Senators from those high-tax paying states attempt to obstruct tax relief that is most meaningful to their constituents. Federal taxes squeeze harder in those states where incomes are higher and the cost of living is higher. To this day, I do not understand the virgourous opposition these members have to relieving the high tax burden their constituents face. Instead, members from these states tend to focus on those who don't pay income tax. Maybe members from the other side of the aisle and who are from these states seem oblivious to this disproportionately heavy tax burden. Or maybe they think Federal taxes should be higher. Maybe it's liberal guilt. I cannot figure it out. One has to wonder what the folks in those states who work hard and pay high taxes would think if they took a look at these charts. One has to wonder what they'd think about higher taxes those on the other side seem to yearn for. The first part of the package provides progressive income tax relief to every American that pays income tax. Let's move on to the second part. The second part provides income tax relief for married families--for families where both spouses work and where only one spouse works. In addition, thanks to the advocacy of Senator Jeffords, we expanded the Earned Income Credit for married families with children. Further, there was wide bipartisan agreement to simplify the Earned Income Credit which will mean that hundreds of thousands of more children will receive the EIC benefits. This package contains the first marriage penalty relief in 33 years. Let me repeat that. For the first time in 33 years, we're delivering marriage penalty relief. Third, the President's desire to expand the child credit to $1000 was met in the bipartisan tax relief package. And in response to the concerns of Senators Snowe, Lincoln, Breaux, and Jeffords the child credit was expanded to help millions of children whose working parents do not pay income tax. Let's take a look at an example. For a single mother with two children at $16,000 of income, this tax relief package means $600 more in her pocket for this year. That's an increase of almost 4 percent in this single mother's budget. I'm sure she can use the money. The fourth part of the package dealt with the death tax. The death tax is reduced and finally eliminated--as called for by President Bush. We were successful in this effort due to the work of many Senators but I would particularly note the efforts of Senators Kyl, Phil Gramm, and Lincoln. Thus, this legislation contained the four main elements of President Bush's efforts to provide tax relief for working families--marginal rate reduction, relief for married families, the expansion of the child credit and the reduction and ultimate elimination of the death tax. I would remind my colleagues again that the hallmark of this legislation is that relief for low income families comes first. The marginal rate drop to 10 percent was immediate, the child credit expansion to low income families was immediate, the expansion of EIC was immediate. The greater progressivity of the tax relief legislation is certainly due in no small part to the work of Senator Baucus. Everyone knows Senator Baucus and other Democrats who crafted this package took a lot of heat from the liberal core of the Democratic Caucus. His objective, like mine, was a bipartisan tax relief package. It seems that while many are happy to talk about bipartisanship they can't stand to see bipartisanship practiced. In addition to President Bush's proposals to provide tax relief to working families, the tax relief package included legislation that had been considered by the Finance Committee previously. I believe that not all good ideas come from just one end of Pennsylvania Avenue. Thus, we included the Grassley/Baucus pension reform legislation which probably would not have made it in the bill without the longtime support of Senators Hatch and Jeffords. That package means $50 billion in tax benefits for enhanced retirement security. That figure will be compounded many times over in retirement assets. A lot of folks like to play political football with retirement security issues. The bipartisan tax relief package actually moved the ball forward on retirement security. Let's take a look at an example. Under the tax relief legislation, workers will be able to raise their IRA contributions to $5,000 annually. Workers will also be able to put away up to $15,000 annually in their 401(k) accounts. In addition, the legislation contained over $30 billion in tax benefits targeted for education. Elements of this package included language to expand the prepaid tuition programs to help families pay for college--long advocated by Senators Collins, McConnell, and Sessions. In addition, the package provided a college tuition deduction thanks to Senators Torricelli, Snowe, and Jeffords, private activity bonds for school construction in response to Senator Graham's concerns, as well as an expansion of the education savings accounts--in honor of Senator Coverdell--thanks to the work of Senator Torricelli and Senator Lott. Let's take a look at an example. Under this legislation, a young couple can contribute $2,000 per year per child to an education IRA. The account enjoys inside buildup tax-free and is available to pay tuition and other college costs. None of us should forget the great winners of this legislation--the American taxpayer. We provided the American taxpayer the greatest amount of tax relief in a generation. And they deserve it. With the bipartisan tax relief legislation in place, all taypaying Americans have a little bit more of their money in their pockets. Struggling families will have more money to make ends meet; parents and students will be able to more easily afford the costs of a college education; a successful business woman will be able to expand her business and hire more people; a father finally getting a good paycheck after years of work will be able to better provide for his aging mother; and, a farmer can pass on the family farm without his children having to sell half the land to pay estate taxes. As an illustration of the breadth of this relief, I ask unanimous consent to have printed in the Record a State-by-State analysis of the per taxpayer benefits, prepared by the Tax Foundation.

Mr. GRASSLEY. Those checks represented the first broad-based tax relief in nearly a generation. Generally, single taxpayers got a $300 check and married couples got a $600 check. What I would like to do today is first put the tax cut in historical context. Second, I would like to set the record straight in terms of the progressivity of the tax relief and its budget effects. Finally, I would like to illustrate what the tax relief legislation means in terms of typical families across America. I am going to use a series of charts as I move through the discussion. Let's start with historical context. In the last 20 years, there have been several pieces of major tax legislation. When I use the term major, I am referring to net tax hikes or net tax cuts in the neighborhood of $100 billion or more. In the last generation, frankly, the American taxpayer has come out on the short end of the deal. By and large, the tax-and-spend Washington crowd prevailed. There have been four major tax increase bills. There have been three major tax cut bills, with one of those, the 1997 tax relief package, barely breaking into the major category. Let's take a look at the tax increase bills first. There were No. 1, ``TEFRA'' in 1982, No. 2, ``DEFRA'' in 1984, No. 3, ``OBRA'' in 1990, and, as then Finance Chairman Pat Moynihan said, No. 4, the ``world record tax increase'' of President Clinton's 1993 tax package. Senator Moynihan's description was verified by a Joint Committee on Taxation estimate. It showed the 1993 tax increase raised taxes by over $1 trillion. In the same generation, taxpayers have received net tax cuts three times. The three events occurred in 1981, in 1997, and last year. In 1981, the Reagan tax cuts brought down the top rate of 70 percent to 50 percent. In 1997, modest bipartisan tax relief, had, as its centerpiece, the $500 per child tax credit. Of course, last year, all taxpayers received a tax relief. When you look over the last generation, the bipartisan tax relief of last year, in effect, helped tip the balance back a little bit toward the American taxpayer. I say a little bit, because, by any reckoning, even when fully in effect, last year's bill still leaves the balance toward higher taxes and more government. More on that in a minute. For another point of historical context, take a look back at the fundamental tax reform of 1986. You will recall that effort was a grand compromise between liberals, led by Congressman Rostenkowski, and conservatives, led by President Reagan. We came up with a revenue neutral package by broadening the tax base by shutting down tax shelters. The revenue raised was used to create two rates--15 percent and 28 percent. In addition, millions of low income families ceased paying income tax. During the tax reform debate, today's House Democratic Leader, Congressman Gephardt, pursued a tax reform plan with former Senator Bradley. The Bradley-Gephardt plan contained three rates of tax. The three rates were 35 percent, 25 percent, and 15 percent. Former Senator Mitchell, who would become the Democratic Leader and a great champion of the liberal wing of the Democratic Caucus, supported a top rate of 35 percent as well. Indeed, the House, at that time controlled by Democrats, passed a tax reform bill with a top rate of 35 percent. So, at the watershed event of 1986, the leaders of the Democratic Caucuses, said individual income tax rates should not exceed 35 percent. As everyone knows, 35 percent is the top rate when the bipartisan tax relief package is in full effect in 2006. I guess I find it a bit ironic that today the Democratic Leadership says individual tax rates must be above 35 percent. It makes you wonder why today's Democratic Leadership, in historical context, is so fixated on higher taxes. Why is Congressman Gephardt, the House Democratic Leader, insisting on tax rates at higher levels than his 1986 era plan? Why is Senator Daschle, today's leader of the Democratic Caucus, insisting on tax rates at higher levels than his predecessor, Senator Mitchell? Isn't 35 percent of a person's income enough of a contribution for their share of the burden of the Federal Government? That is where the Democratic Leaders were during tax reform. That is where the bipartisan tax relief plan leaves us when fully in effect in 2006. Unfortunately, that's not where the Democratic Leaders are today. The question of why 35 percent isn't enough leads in the second part of my discussion. What I would like to do is set the record straight on the progressivity and budget effects of the bipartisan tax relief plan. It seems to me that the Democratic leadership has moved its tax reform target away from tax relief for a very simple reason. The reason is to provide resources to grow the Federal Government by increasing spending. It is part of a larger of agenda of moving a society, America the engine of capitalism, to look more like European socialism. It means more Government and less individual responsibility. It means less reward for work and more money from the pockets of working people for the Federal Government. It means opportunity defined less by a dynamic market and more by political criteria. Now, a lot of inaccurate information has been spread about the bipartisan tax relief package. At the head of this campaign, is the Democratic Leadership. Perhaps unwittingly, perhaps by design, much of the media has worked hand in glove with this partisan campaign. The misinformation comes forward in three bogus assertions. The first incorrect assertion is that the bipartisan tax relief was a partisan Republican product. The second is that the bipartisan tax relief package is the source of our current budget problems. The third incorrect assertion is that the tax relief favored the wealthy over low and middle income taxpayers. I would like to turn to the first incorrect assertion. Often we hear the phrase Republican tax cut or partisan tax cut. In fact, the tax cut was bipartisan. Twelve Democratic Senators voted for the conference report. Senator Jeffords also voted for the conference report. That is over one-fourth of the Democratic Caucus. The tax relief legislation was bipartisan by design. In a Senate divided down the middle, the tax relief had to be bipartisan to pass. There was no other way. Democratic members of the Finance Committee played a key role in crafting the bill. LEd by our current Chairman, Max Baucus, they insisted on a bill that reflected their priorities. Senators Breaux, Torricelli, Lincoln, all contributed to the formation of this bill. Republican moderates like Senator Snowe also played a key role. Without these Senator's input and support, we would not have the tax relief in place. Anyone who characterizes the tax relief as partisan is flat out wrong. I would like to move on the second incorrect assertion. How many times have we heard on this floor or seen written in the media the charge that the bipartisan tax relief caused the current and projected deficits. If I have a dollar for every time I've heard or read this point, I could put the budget in balance. Cold hard numbers tell a different story. Cold hard numbers from the Congressional Budget Office, the Office of Management and Budget, and private sector sources reveal the truth. Here is what the numbers say. You can check it out on the CBO website. According to CBO's January baseline, for the current fiscal year, the tax cut represents barely 14% of the total change in the budget since last year. For instance, for the same period, increased appropriations outranked the tax cut by $6 billion. So, spending above baseline, together with lower projected revenues, accounted for 89 percent of the change in the budget picture. Let me repeat that. Bipartisan tax relief was a minimal, 11 percent factor, in the change in the surplus. Over the long-term, the tax cut accounts for 45 percent of the change in the budget picture. Stated another way, the 10 year surplus declined from $5.6 trillion to $1.6 trillion. Of that $4.0 trillion change, the tax cut represented about $1.7 trillion of the decline. That is less than one-half of the change. Let me repeat that for our friends in the Democratic Leadership and their allies in the media. The tax relief package accounts for less than 45 percent of the decline in the surplus. The second incorrect assertion, that the tax cut ate the surplus, is incorrect, according to CBO. I would like to turn to the third incorrect assertion about the bipartisan tax relief package. That assertion is that the tax relief package was a tax cut only for the wealthiest Americans. How many times have we heard the statistic that 40 percent of the benefits of the tax cut went to the top 1 percent of taxpayers? Where did the statistic come from? Did it come from the non-partisan Joint committee on Taxation? The answer is no. The statistic cited by the media and the Democratic Leadership came from the liberal think tank known as the Center on Budget Policy and Priorities. How do they get their numbers? Here's an example. Let us talk about how they distribute the benefits of the death tax. The liberal think tank assumes that the person benefitting from death tax relief is the dead person. Imagine that. Only in Washington, D.C. do they assume you can take the benefit of tax relief with you to the grave. It takes these kinds of distortions in methodology to get the conclusion the liberal think tank wants. That's why our friends in the Democratic Leadership rely on the Center for Budget Policy and Priorities. Unfortunately, some in the media accept these statistics at face value. Once again, facts can be ugly things for harsh critics of the bipartisan tax relief package. According to the Joint Committee on Taxation, Congress' official non-partisan scorekeeper, the tax code is more progressive with the tax relief package. Let me repeat that fact. Joint Tax, not a liberal or conservative think tank, says the bipartisan tax relief package made the Tax Code more progressive. I ask unanimous consent to place in the Record a distribution analysis, prepared by Joint Tax.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, for the third time in as many weeks, Senator Graham and some of his Democrat colleagues have announced a mostly partisan Medicare prescription drug plan. When it comes to prescription drug plans, it seems like Senator Graham and his friends have tried everything. They tried sunsets. They tried fixed copayments. They even tried limiting coverage for many brand name drugs seniors rely on. They tried spending $800 billion. They tried spending $600 billion. Each time they tried, they failed. Today, to the tune of $400 billion, they're trying something else entirely. Despite their earlier calls for a universal, comprehensive benefit, Senator Graham and his Democrat colleagues are trying to cut out the bulk of seniors altogether by covering only those with low incomes and extremely high drug costs. This proposal is the same as the first two from Senator Graham, except that it eliminates the prescription drug benefit for the 75 percent of Medicare beneficiaries with average incomes who will have spending less than $4,000 in 2005. This means that the average senior, who will spend $3,059 on prescription drugs in 2005, according to CBO, gets nothing, no coverage at all. That's quite a coverage gap. Or, to use a phrase that's become commonplace around here, that's quite a ``donut.'' In fact, that lack of coverage--from $0 to $4,000 for most beneficiaries--is the biggest ``donut'' of them all. I find this last fact especially ironic since it was these very same Democrats who last week said they wanted a comprehensive, universal prescription drug benefit in Medicare without any coverage gaps. Besides having the biggest gap of them all, today's plan from Senator Graham will still cost the taxpayers more than $400 billion, even though it provides no basic coverage at all for the average senior. And the latest try from Senator Graham still requires the government to decide which medicines to make available to the few seniors who qualify for coverage. It is often said that the third try's a charm. I'm sorry to say that in this case, it isn't. It isn't even close. Now, you might wonder whether there is another alternative that can get affordable coverage to all seniors, regardless of income. I am happy to report that there is. For $30 billion less than the latest plan from Senator Graham, it is possible to have a far better drug benefit that helps all seniors based on the tripartisan approach. The tripartisan proposal costs only $370 billion, including improvements to Medicare besides a meaningful drug benefit. The tripartisan proposal lowers prices for all drug purchases due to negotiated discounts, and provides 50% coinsurance after a $250 deductible, up to $3,450 in drug spending. It also provides catastrophic protection above $3,700 in spending-- better protection than in the more expensive Democrat plan before us today. All this is possible while spending billions less. The tripartisan proposal also strengthens and improves Medicare by adding a voluntary, enhanced fee-for-service option. The new option provides protection against serious illness costs--something missing from Medicare today. The new option also provides better protection against hospitalization costs and free preventive benefits. And seniors who want to keep the same basic Medicare they have today can do so if they wish. Everyone has access to affordable prescription drug coverage. The bottom line is, the tripartisan proposal, at an official cost of $370 billion, provides more generous prescription drug coverage for all seniors at a lower cost to taxpayers then the current Democrat plan, which leaves half of seniors with nothing at all at a cost of $400 billion. I will close by saying against that none of these attempts would have been necessary, had the Finance Committee been given the right to work its bipartisan will on a prescription drug proposal of its own. If the committee process had been followed, we could have built bipartisan consensus and presented the Senate with a compromise proposal that could get 60 votes. Instead, Senator Graham, along with some of the Democrat caucus, has come to the floor time and time again this month with partisan proposals that get worse by the minute and that stand no chance of attracting bipartisan support. In that regard, today's proposal is not different from the others. It's another partisan poison pill. This pill, however, is more dangerous than those before it. It leaves most of our seniors out in the cold, does nothing to contain increasing drug costs, and carries an all too expensive pricetag. I urge my colleagues to reject it. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, we are in morning business, so I yield myself such time as I may consume.

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

Mr. GRASSLEY

Mr. GRASSLEY. There is a very sophisticated, well-coordinated campaign on the part of the Democratic Leadership to derail last year's bipartisan tax relief. It seems that everything that ails us as a nation is laid at the feet of the tax cut. I'm sure that the next attack will be that tax relief causes the Decline of Western Civilization. Or, perhaps, the Democratic Leadership would twist a phrase from Justice Oliver Wendell Holmes and claim that ``record high taxes are the price we must pay for a civilized society.'' Many in the media agree with this concept and rarely, if ever, challenge the factual basis for these attacks on last year's tax cut bill. Well, let me tell my friends in the Democratic Leadership, I'm going to correct the record every time. It's fine to attack tax relief, if you must, on ideological grounds. If the Democratic Leadership thinks we need to maintain record levels of taxation and keep growing government. That's something on which we can disagree. On facts, however. I'm going to correct the use of incorrect data. I'm also going to compare the record of the Democratic Leadership against the specific attack on the tax cut. A couple days ago, I corrected the record on incorrect data used with respect to the scoring of permanent death tax relief. Today, I'm going to take the latest attack and compare it with the record of the Democratic Leadership. The Roll Call Daily article is entitled ``Daschle blames Bush Tax Cut for Failure on Prescription Drug Reform.'' According to the article, the Distinguished Majority Leader said and I quote: We don't have the resources, because, in large measure, the tax cut precludes it. Because of the tax cut and the deficits we are now facing, we've got to be concerned about the overall cost. Now, I noticed this same point being made by others in the Democratic Leadership. I must say the Democratic Leadership spends a lot of time coordinating messages. They are very good at it. Perhaps, though, if less time were spent on perfecting partisan attacks on the President and Congressional Republicans, we might resolve more problems. After all, isn't that what we're paid to do? That is, do the People's business. So, the charge is the tax cut ate the surplus and there's not enough money left for a Medicare prescription drug benefit. It's all the President's fault. It's the fault of the bipartisan budget resolution, Boy, do I get tired of hearing this stuff. It gets very old.

Mr. GRASSLEY. Under that Democratic Alternative, ``resources,'' that's the term Senator Daschle used, set aside for a Medicare prescription drug benefit were $311 billion. Under the bipartisan budget resolution, guess what, it's about the same number, $300 billion. That's right, both sides allocated basically the same resources, $311 billion versus $300 billion for Medicare improvements and a prescription drug benefit. So, the Democratic budget had prevailed, we'd basically be where we are today. There's another part of the record we have to examine. It's last year's Democratic Alternative tax relief package. The Democratic alternative was supported by all members of the Democratic Leadership and all but three members of the Democratic Caucus. Well, guess what. All of those Senators voted for a $1.260 trillion tax cut. That's 93 percent of the cost of the bipartisan tax relief. So, apparently 7 percent is a big difference. It's a big enough difference for the Democratic Leadership to blame President Bush and the bipartisan group of Senators that supported the tax relief package. I make this statement for one basic reason. The issues of budgeting, prescription drugs, and tax relief are important matters. Certainly everyone of us hears about these issues when we are back home. They are issues that our constituents expect us to resolve. Folks back home expect us to be intellectually honest in debating these important matters. When we debate these issues, we ought to be consistent in what we're saying.

Mr. GRASSLEY. Mr. President, yesterday some on the other side attacked last year's bipartisan tax relief legislation. They were led by the distinguished Majority Leader, Senator Tom Daschle. As an example of these claims, I ask unanimous consent to place in the Record an article from yesterday's edition of Roll Call Daily.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, last night and earlier today the Senate debated the Hagel-Ensign prescription drug amendment. During the course of that debate, some Members on the other side made a comparison of the cost of the Graham-Kennedy prescription drug amendment and the revenue loss of a proposal to repeal the ``sunset'' of death tax relief provisions in last year's bipartisan tax relief bill. The essence of the argument was that the budget effects of these proposals are roughly equal. As we heard many times, the Senate was supposedly making a choice between these two proposals. Senator Schumer claimed, during the argument, two different figures for repeal of the sunset. At one point, the Senator from New York claimed the revenue loss was $670 billion. At another point, a few moments later, the Senator from New York claimed the revenue loss was $600 billion. The Congressional Budget Office scored the Graham amendment as a spending increase of $594 billion. This figure covers the 8-year proposal's 10-year budget effect. Now, if you accepted Senator Schumer's figures as is, then there might be some basis for his argument. That is, if, in fact, the Joint Committee on Taxation scored the proposed permanent death tax relief proposal at $600 billion or $670 billion, then Senator Schumer's argument might be worth debate. The facts are different. I don't know where Senator Schumer got his figure. Maybe it was a liberal think tank, such as the Center on Budget Policy and Priorities. Maybe it was a partisan liberal communications shop, like the Senate Democratic Policy Committee. I don't know where he got the number. I do know this: The number doesn't apply. For purposes of the Congressional Budget Act, tax provisions are to be scored by the nonpartisan Joint Committee on Taxation. According to Joint tax, the permanent death tax relief proposal scores at $43.6 billion if you use the fiscal year 2002 budget resolution. That is the one the Senate is currently operating under. If you use the fiscal year 2003 budget resolution, the one under which the House is operating, permanent death tax relief scores at $99.4 billion. So the real number is, at most, $99.4 billion, for permanent death tax relief. That is one-sixth the cost of the Graham amendment. It is interesting to note that during last month's debate on the death tax that the Senator from New York supported Senator Dorgan's amendment. That amendment was scored by Joint Tax as losing $111 billion over 10 years. Basically, Senator Schumer voted for death tax relief of $11 billion more than the proposal he criticized last night and today. So if we are talking about choices between resources for prescription drugs and death tax relief, let's review the record. Let the record reflect that Senator Schumer and 39 other members of the Democratic Caucus voted for $11 billion more in death tax relief than their colleagues. For reference, that's rollcall vote No. 149. It is set out in page S5412 of the Congressional Record of June 12, 2002. The Senator from New York's use of erroneous data on the bipartisan tax relief package is unfortunately part of a coordinated strategy on the part of the Democratic leadership. It is also data unchallenged by many in the media. In fact, many in the media parrot another of the Democratic Leadership's equally erroneous statistics. We keep hearing and reading that the bipartisan tax relief package yielded 40 percent of its benefits to the top 1 percent of taxpayers. This statistic, like Senator Schumer's other tax relief statistics, is dramatically at odds with Joint Tax, the official scorekeeper for Congressional tax relief. According to Joint Tax, the bipartisan tax relief package makes the Tax Code more progressive. I make this statement for one basic reason. The issues of prescription drugs and death tax relief are important matters. Certainly every one of us hears about both of these issues when we are back home. They are issues that our constituents expect us to resolve. Folks back home expect us to be intellectually honest in debating these important matters. When we debate these issues, we ought to use intellectually honest figures. I ask unanimous consent to print the Joint Committee on Taxation's revenue estimate of the proposed estate tax relief and the distribution analysis in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, today, I rise to object to the Dyeing and Finishing Provision found in the 2002 supplemental appropriations bill, H.R. 4775, that is now going through the conference process within the Senate and will soon be voted on by this body. This provision is of serious concern to me because it falls within the jurisdiction of the Finance Committee and it was not voted on nor reviewed by the committee. Senator Baucus and I sent a joint letter in June expressing our deep concern about the inclusion of this provision in the bill and asked the chairman of the Appropriations Committee to oppose this provision due to our jurisdiction concerns. Section 1405 of the House bill pertains language that will amend two U.S. trade preference programs: the Caribbean Basin Economic Recovery Act and the Andean Trade Preference Act. The amendment requires certain fabric to be dyed and finished in the United States in order for apparel sewn from such fabric in the Carribean or Andean region to enter the United States duty-free. Regardless of how my colleagues feel about the requirement for fabric to be dyed and finished in the United States to qualify for duty-free treatment they should respect the jurisdiction of the Finance Committee under the trade laws of this Congress. Our committee has oversight over carefully balanced programs that were developed after years of close study and deliberations in the Finance Committee and the House Committee on Ways and Means. During the debate of the Bipartisan Trade Act of 2002 when Senator Byrd asked for Senator Baucus and I to respect the jurisdiction of the Appropriations Committee by striking all authorization language in the trade bill while we were debating the legislation on the floor. Senator Baucus and I addressed the Senator's concerns by stopping the debate and revising the legislation so as to not encroach upon the jurisdiction of the Appropriations Committee. I am deeply dismayed about the Finance Committees' concerns not seriously being considered about the dyeing and finishing provision which is clearly in our jurisdiction. I would hope my colleagues would be more considerate of the problem we have with the House being able to slip provisions in the supplemental hoping to sneak it through the legislative process otherwise the legislative process will become a free-for-all. If the provision is a good piece of legislation then my colleagues in the House should be willing to have an open dialogue with the Finance Committee members and address our concerns. Alarms should go off when people try to slip legislation by hoping that no one will catch it. I am disappointed because this is not the way we are suppose to do business around here. There are several good reasons why committees were established and given jurisdiction over specific issues. The Finance Committee members are the experts on trade, therefore all issues involving trade should come through our committee. I am just asking my colleagues to respect the rules established by the Senate. I am disappointed that the chairman of the Appropriations Committee did not respect our jurisdiction. This is bad policy and I oppose it. I also want to strongly emphasize how important it is that we do not set a precedent allowing Members to thwart the committee process and smuggle legislation through the Senate under the radar screen.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, our time is very short this morning, so I will be brief. Let me discuss the key criteria Senators should consider. First, is the drug coverage permanent and dependable? Under the tripartisan amendment, drug coverage would be a permanent part of the Medicare entitlement, for the 21st Century. Under the Graham amendment, however, that coverage disappears into a black hole. The benefit expires the very same year the baby boomers begin to retire. In my view, it's terribly irresponsible to pull a ``bait and switch'' on people who depend on Medicare. How will my colleagues explain to seniors in 2010 that they are out of luck because of a gimmick they used to hide the true cost of their proposal? I ask the Senate to support permanent, dependable drug coverage. The Graham amendment seriously restricts Medicare enrollees who want access to brand-name drugs. Its restrictive policy will result in long lines for ground-breaking drugs. Why? Because Senator Graham requires Medicare enrollees to wade through a bureaucratic appeals process in order to get needed drugs that are off the formulary. And it's not a short list--their formulary denies access to at least 90 percent of brand-name drugs! We've heard a lot about gaps in coverage. Mr. President, here's the biggest gap of all: the gap between the large number of brand name drugs beneficiaries may need, and the paltry number Medicare would cover under the Graham amendment. Of the 2,400 brand name drugs approved by FDA, less than 10 percent would be covered. What a gap in coverage. Our amendment, on the other hand, sets policies to ensure that Medicare enrollees get the drugs they need. We do not limit them to an arbitrary number of drugs in each class, as Senator Graham does. We support making generic drugs an option, with lower cost-sharing, but we don't think depriving seniors of access to brand-name drugs is the way to go about it. So that is a key difference. Our opponents have talked a great deal about the fact that less than 20 percent of beneficiaries would face a gap in coverage under the tripartisan amendment. But compare that number with the number of beneficiaries who would experience a gap in coverage under their amendment. Under the Graham amendment, fully 100 percent of enrollees would lack full access to brand-name drugs in Medicare. When you lay the two gaps against one another, isn't it clear that their gap, which will affect all enrollees, is the worse one? Our bill also delivers a cost-effective, quality benefit. CBO says that the only way to contain the cost of a drug benefit is to ensure that drugs are delivered efficiently. In turn, CBO says that the only way to have drugs delivered efficiently is to have true competition among private plans that stand to make money if they drive hard bargains with drug manufacturers. That's what our amendment offers. Now, our opponents have gone on and on about private plans not being willing to deliver a drug benefit. Well, they too rely on a private sector delivery system, although it is non-competitive and thus is so expensive. We have worked hard to ensure our delivery system works. Our opponents say that insurers will refuse to participate, even though the government lays $340 billion on the table and bears 75 percent of the economic risk, and even though CBO projects it to work everywhere in the country. But what happens in the off-chance that private plans won't want to participate? Well, here's what will happen. The government has a duty--mandated in our bill--to do what it takes to ensure a drug benefit for every last Medicare beneficiary. If insurers won't participate at the level of competition we expect, the Secretary must adjust the competition bar downward until they will participate. At a last resort, we would end up with a Graham-type delivery model in which pharmacy benefit managers are simply government contractors, bearing only minimal performance risk. Put another way, our Plan B is Senator Graham's approach. So why are our opponents so afraid of that? Under no circumstances will our bill allow any senior, anywhere, to go without access to a drug plan. It's an ironclad guarantee, and it's right there in our bill. Now, the Senator from Massachusetts has repeatedly objected to the asset test for the low-income benefit in our bill, as if it's something new. What a red herring! There has been asset testing for low-income Medicare populations since 1987, under the Qualified Medicare Beneficiary program and the Specified Medicare Beneficiary programs. And Senator Kennedy and his Democratic colleagues voted for it overwhelmingly. There's nothing but politics behind those objections. Another thing the tripartisan amendment offers is an enhanced option in Medicare. The enhanced option will add protection against the devastating costs of serious illness, and make preventive benefits free to help seniors avoid serious illness in the first place. And it is completely voluntary--seniors get to choose, and they don't need to take it in order to get drug coverage. What does the Graham amendment have to offer beyond drugs? Nothing. Why would anyone want to deny Medicare beneficiaries the choice of free preventive benefits and better protection against serious illness? I will let the other side answer that. The choice is clear. The Graham amendment offers drug coverage that swiftly disappears into a black hole, and it has the biggest gap of coverage of all. The tripartisan amendment is the right prescription for 21st century medicare. Because that is the biggest gap of coverage of all. The tripartisan plan is the right prescription for 21st century Medicare. I yield the floor.

Mr. GRASSLEY. He may have all of that 8 minutes and whatever else the Senate wants to do for another 2 minutes.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I yield 3 minutes to the Senator from Louisiana.

Mr. GRASSLEY. Mr. President, I yield 3 minutes to the Senator from Maine.

Mr. GRASSLEY. Mr. President, pursuant to section 904 of the Budget Act, I move to waive the point of order for the pending amendment and ask for the yeas and nays.

Mr. GRASSLEY. Mr. President, I yield back the remainder of our time. Mr. President, I make a point of order that the Graham amendment, No. 4309, violates section 302(f) of the Budget Act.

Mr. GRASSLEY. Mr. President, soon we will cast what could be our final votes on a new Medicare prescription drug benefit. I am deeply disappointed with the process that brought us to this point, a process that ignored the good bipartisan will on the Finance Committee in favor of politics and partisanship that has seemed to dominate the debate on the floor of the Senate. However, I continue to believe that our bill, the Tripartisan 21st Century Medicare Act, represents the broadest and best approach to providing prescription drug coverage. Our work on this bill over the course of a full year involved fine Senators from every party. I have never been prouder to work in a bipartisan manner than with my colleagues Senator Hatch, Senator Breaux, Senator Snowe, and Senator Jeffords on probably the most important change in Medicare in the 37-year history of that legislation. Together the five of us, bipartisan or tripartisan, whatever one wishes to call it, consulted stakeholders of all political persuasions and the Congressional Budget Office as we developed our policies over the last year. At every step of the way, we faced tradeoffs and made compromises, all in the spirit of cooperation, with the common goal of getting something done that could actually work without breaking the Medicare bank. Our bill reflects the best of what good bipartisan cooperation can do. It offers seniors affordable coverage on a permanent basis. It does not sunset, and it does not take brand name drugs away from our seniors. It improves and enhances other unfair aspects of the Medicare Program, and it does it all on a voluntary basis. It does so at a total cost that reasonable people from both parties should be able to support--$370 billion over 10 years. I urge my colleagues to remember that anything that comes to the floor on a purely partisan basis, such as the Graham-Kennedy bill before us right now, is destined to failure, and I remind everyone again that nothing ever passes this body on a partisan basis alone. Around here, it takes bipartisanship to make things happen, and apparently the Democrat leadership is not interested in making things happen for our senior citizens. Our bill is built on a bipartisan foundation. Had it been given a chance to be debated in the Senate Finance Committee, it could no doubt have been improved further still, but we were denied that chance all because the other side did not want real debate. They wanted a real issue instead. I urge my colleagues, especially those on the other side of the aisle, to listen closely when Senators claim to care about bipartisanship. Our bill is the only bipartisan prescription bill in all of Washington, DC, this year. It deserves consideration of the full Finance Committee, but since we have been denied that right by the Democratic leadership, it deserves your vote today. The bill, other than the tripartisan bill before us, is without a doubt a program for big Government. Rather than allow prescription drug plans to design cost savings and innovative benefits that best suit seniors' needs, the Graham-Kennedy bill requires Federal bureaucrats to set up 10 regional drug formularies, basically deciding which prescription drugs seniors can and cannot access. Under Graham-Kennedy, plans would not compete with one another. It would not be allowed to deviate from a regional drug formula, thus restricting seniors' choices. Plans would be further restricted from offering more than two brand name drugs in a therapeutic class. This approach puts control squarely in the hands of bureaucrats in Government, and we know from experience that exclusive Government control over medicine has not worked well. The Government has lagged many years behind the private sector in covering immunizations, physicals, mammograms, and other preventive care in Medicare. By contrast, the Tripartisan 21st Century Medicare Act approach puts control in the hands of our senior citizens. The bill guarantees multiple plans will compete in each region of the country, giving seniors a choice to pick the plan that best suits their needs and the right to get out of plans that do not meet their needs. The tripartisan bill also does not restrict plans from offering more drug choices and better overall drug coverage. Under the tripartisan bill, private plans compete for seniors, not Government bureaucrats. What if the specific drug a senior relies on is not on the regional Government formulary? The Graham-Kennedy bill forces seniors to go through multiple layers of bureaucratic red tape to convince the Government to give them the drugs that their doctors think they need. The tripartisan bill lets seniors and their doctors decide what drugs they should receive. Take your choice. We have it within the next 5 minutes. I hope you will vote for the tripartisan plan.

Mr. GRASSLEY

Mr. GRASSLEY. I yield myself such time as I may consume of the remaining 2 minutes and 40 seconds. First, I am happy to hear the Senator from North Carolina mention the prescription drug program has to be within the context of a fiscally sound budget process. I agree with that. But I think that is very much an argument for a piece of legislation that is permanent as the tripartisan plan is, as opposed to a sunsetted provision coming from the other side of the aisle that is $370 billion as opposed to $595 billion, the latter being the figure from the other side of the aisle. Just basically getting more for your money in the sense that CBO has scored the tripartisan program as the only program that brings down drug prices because of competition and the efficiency with which they are delivered as opposed to the program on the other side of the aisle that is very much a partisan plan as opposed to our bipartisan plan that drives up the price of drugs according to the CBO, which is our nonpartisan scoring arm. Also, for the benefit of the Senator from Massachusetts who is still here and my colleague from the State of Iowa who is not here, I go back to the assets test. I think they think they have something. But the point of the matter is, they do not. We have heard these repeated objections to the assets test for low-income benefits in our bill as if it is something new. That is a red herring. There has been an assets test for low-income Medicare populations since 1987, and I happen to know that these programs passed by overwhelming margins--under the qualified Medicare beneficiary program as one example, as a specified Medicare beneficiary program as a second--and these programs have passed overwhelmingly with the support of my Democrat friends on the other side of the aisle. I think that is injecting an argument into the program that is not legitimate. Current law excludes from the test the home and property it is on, a car that is necessary. I can also say it happened to be in the 1999 Clinton Medicare bill--that included an assets test as well.

Mr. GRASSLEY. I agree.

Mr. GRASSLEY. Madam President, I yield 1 minute to the Senator from Oklahoma, and then I would like to immediately yield 9 minutes to the Senator from Louisiana.