Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. We reserve the time on our side.

Mr. GRASSLEY. I have to yield time: 1 minute, half a minute, and the remaining time to the Senator from Kansas.

Mr. GRASSLEY. Mr. President, I yield the remainder of our time this way: 1 minute to the Senator from Oklahoma, the remaining time to the Senator from Kansas, and the Senator from Kansas will go first.

Mr. GRASSLEY. I will not object if we have 30 seconds.

Mr. GRASSLEY. Mr. President, how much time is reserved on our side on the Smith amendment?

Mr. GRASSLEY

Mr. GRASSLEY. Additionally, we proposed giving workers a refundable, advanceable tax credit towards the purchase of health insurance equal to 50 percent of the policy's cost. So we moved away from a national emergency grant program to one that is probably more dynamic, with more flexibility for the workers--a tax credit for those who are unemployed to continue the insurance they had where they previously worked and were laid off; and even go beyond that, for people to have health insurance even if they did not have health insurance at their previous job before they were laid off. Democrats objected, claiming that the credit was too small and that sicker people would have trouble buying policies in the individual market. So there was one gripe after another, but we tried to satisfy those gripes to reach a consensus agreement which ended up being the bipartisan centrist-White House program. Our new proposal then was endorsed by the White House even though the President had suggested another approach. It was endorsed by the White House, the House of Representatives, and by the bipartisan centrist group of this body. That program takes a three-pronged approach to getting health insurance assistance to those dislocated workers who used to have health insurance where they first worked. Now they are unemployed. Now they do not have health insurance. Now they would have health insurance under the White House-centrist bipartisan package, but they would not have it under the Daschle amendment before the Senate. Our proposal goes further and wider than any proposal on the table to date and gets more help to more people more quickly than any other proposal to date. What is more, it represents a giant leap in spending on health care. It includes over six times as much money for temporary health insurance assistance as our original Republican, and admittedly partisan, proposal. The House-passed stimulus bill--what the President said he would sign, and the centrist group in the Senate backs--would spend approximately $19 billion on temporary health insurance in the year 2002. And it does it the right way, by using existing programs, along with new ones, designed to get people the help they need quickly. Now I take a minute to describe our three-pronged approach. First, the White House-centrist bipartisan proposal provides a refundable, advanceable tax credit to all displaced workers eligible for unemployment insurance, not just those eligible for COBRA. The value of the credit is 60 percent of the premium, instead of the 50 percent in our original proposal. The credit has no cap and is available to individuals for 12 months between the years 2001 and 2003. Individuals can stay in their employer COBRA coverage or they can choose policies in the individual markets that may better fit their families' needs. This only makes sense because locking people into COBRA, as the Democratic leadership insisted prior to Christmas--and it is not even in their proposal now--forces people to stay with policies that may be too expensive for them to keep, even with a 60-percent subsidy. Our goal was to give dislocated workers access to all health insurance choices available to them in the private marketplace. We have done that in a responsible way that uses the dynamics of the marketplace rather than the straitjacket of a Government program to deliver the help. This bipartisan White House-centrist proposal includes major new insurance reforms to protect people who have had employer-sponsored coverage and go out into the private market for the first time after being laid off. It makes the COBRA protections available to people who have had only 12 months of employer-sponsored coverage, rather than 18 months as under current law. By doing this, we greatly expand the group of displaced workers who cannot be turned down for coverage or excluded from any insurance because of preexisting conditions. The new 12-month standard is especially important for people with chronic conditions who have difficulty obtaining affordable coverage. It is a major step, and I am surprised that the Democratic leadership does not want to take us up on these sweeping new reforms. I turn now to the mechanics of the tax credit proposal. It is much easier to implement than the direct subsidy approach that the Democratic leadership has had in some of their proposals. But there is nothing on health insurance in the Democratic amendment before us. They just forget about the needs of the dislocated workers who used to have health insurance who do not have it now because they are unemployed. While the Democrat proposal requires employers to shoulder the burdens, our proposal relies on existing State unemployment insurance systems. So under this bill, workers will be able to access the credit and begin applying it to their health insurance premiums in a timely way. Let me explain the workings of it. Newly dislocated workers will receive certificates from their State unemployment offices, or ``one stop'' centers, when they apply for unemployment insurance. You can take care of both needs at one time-- unemployment insurance and continue your health insurance from the previous employer. Or if you did not have it there, you can get a certificate to go out and get it for the first time. So you take those certificates and submit them, along with their contribution to the premium, to their employer or insurer, and move on with insurance. Afterwards, insurers then would submit the certificates to the Treasury Department for reimbursement. This approach works because it relies on existing systems to deliver new benefits and, as a result, delivers those benefits in a fast and reliable way. I ask my colleagues, why would anyone insist on a mechanism that just will not deliver the goods to the people who need them? In other words, people who became unemployed yesterday have lost their health insurance, they cannot afford to keep their COBRA up, or maybe they are unemployed from a place that did not even have health insurance and then have to institute some system where they have to wait a long time to get the help. I do not understand the wait. The second prong of this proposal is $4 billion in enhanced national emergency grants for the States, which can be used to help all workers--not just those eligible for the tax credit--to pay for health insurance. States have flexibility under our approach and can use these grants to enroll their workers in high-risk pools or other State-run plans, or even enroll them in Medicaid if the State decides. To address concerns raised by Democratic colleagues, our enhanced national emergency grant program requires all States to spend at least 30 percent of their grant money on temporary health insurance assistance. In addition, we have included protections for the States--a minimum grant of at least $5 million for any State that meets the grant criteria. Finally, the third prong of the proposal responds to Democratic requests by including $4.3 billion for a one-time temporary State health care assistance payment to the States to help bolster their Medicaid Programs. Just this Monday, I had a State senator from Davenport, IA, speak to me at one of my town meetings about the needs of the States for additional Medicaid funds. I said to her that Governor Vilsack and Republican leaders and Democratic leaders had a conference call with me on that very subject before Christmas. I said we have this $4.3 billion in this White House-centrist bipartisan package that the President will sign, that has passed the House of Representatives. What you need to do is get Governor Vilsack, I said to our State Senator, who I said I would help, get him to call Senator Daschle and ask this bill to come up, and you will have Iowa's share of this $4.3 billion. As we know, the Medicaid program is an important safety net for low- income children and families and disabled individuals. Medicaid is a joint Federal and State program that accounts for a large part of State budgets. So in this time of budget constraints due to recession, States are struggling to make ends meet. Iowa is one of those. In fact, I think I read in the newspapers that there are 40 States that have very serious budget problems, and Medicaid is probably the biggest one of those budget problems in almost all of those States. So as a result of the unique and extraordinary economic situation we now face, we need to help those States rather than having those States scale back Medicaid services, including my own State of Iowa. I think we are going to be scaled back by $18 million. This provision provides a one-time emergency cash injection that will help States avoid Medicaid cutbacks. This feature was not part of our original plan. I just say that. You might ask: Senator Grassley, why didn't you have it in your original plan? Well, the process of legislation is evolution of a bill. There are very few bills in Congress that are introduced and passed as they are originally introduced. I would not pretend to believe that every bill I introduce is a perfect piece of legislation. This process of negotiation on these, listening both on the Republican side and the Democratic side, is one of improving a piece of legislation, and even after that is done, with new ideas in it, you have to recognize that many of our colleagues have concerns about even this provision. In fact, I share their reservations, and that is why I am emphasizing that this is not simply a garden variety increase in Medicaid funding; this is to meet the temporary emergency payments that result from a downturn in the economy because of the terrorist attacks of September 11 that have not only affected the Federal budget situation but most of our States. This Nation is calling for a bipartisan compromise. In that spirit, we have agreed to add this proposal on Medicaid to our bill. We made tremendous steps towards the Democratic position in order to find bipartisan compromise on health care, a compromise on health care that is not even in the Democratic proposal that is before the Senate. I said that what we have included in here our Republicans would vote for, I think, maybe except for two Republicans. And then we have enough Democrats that make up a majority to get this bill passed. But those steps have not been reciprocated by the Democratic leadership. Displaced workers then deserve to be treated with respect by this body, and I believe those workers have earned a vote on this bill. In other words, the House has passed this bipartisan White House-centrist package. The President has said he would sign it. So if we have a majority vote here, we could pass this, and it would be out of the way. We would be stimulating the economy, and we would be helping dislocated workers. It is necessary for me now to discuss the individual income tax reductions in the White House-centrist plan and also compare this to the skeletal plan put forth by our distinguished majority leader. The original House stimulus bill would have accelerated the reduction of the 27 percent rate to 25 percent. That otherwise would not be scheduled to go into effect until the year 2007. The White House- centrist package has adopted this approach. Here is another thing on the charts that the majority leader used in his speech this morning. He referred to ``rates reduction''--plural, ``rates.'' We have one rate reduction, the 25 percent bracket, or let's say the 27 percent down to 25. We don't change other rates. We do have other tax provisions, the tax rebate for low-income people. So we have the White House-centrist bipartisan package helping these middle class taxpayers. The skeletal Democrat plan doesn't do this. It does not provide one red cent of tax relief for people who are working for a living, not even one cent of tax relief for working Americans. So let's take a look at who will benefit from our planned rate reduction. I have some charts I will be referring to. The reduction of the 27 percent rate will benefit singles with taxable income of at least $27,000. I want people to think about this, a single person with income as little as $27,000. Somebody is going to be saying before the day is out that these people are not overtaxed. I would like to have you ask people making $27,000 if they couldn't use a reduction of their income tax from 27 percent down to 25 percent. They would probably laugh at us for suggesting that that is not enough. We are talking about heads of households that would have income as little as $36,250 and married couples with taxable income as low as $45,000. These are not wealthy individuals. These are middle class working Americans. I have the chart I referred to that Members can see. I want them to see what the median income for a four-person family for every State in the Nation. Median income is the amount of income right in the middle, with half the incomes above and the other half below. Our chart shows that the average median income for a four-person family in the United States, as we can see, is $62,098. A family of four now, that is the average. Remember, half are below and half are above. A reduction of the 27 percent rate to 25 will benefit married couples with taxable income over $45,000. So it will benefit working people who are well below the national median income level. This chart also shows those States that have family median income that is higher than the national average. And so we can look at where these people live: Connecticut, New Jersey, Delaware, Michigan, Rhode Island, California, Washington State. These are the States where a family of four will benefit the most from our proposed tax cuts. The more surprising figures are shown in the next chart. We can see the States with median income below the national average. So you recall that I said that reducing the 27 percent rate to 25 percent will benefit married couples with taxable incomes over $45,000. Look at the median income distribution of this chart. You can see from this chart that there is not one State on the list that has a median family income of less than $45,000. So you can see that our proposal will benefit everyone, not just the elite few, not just from a few selected States. But the distinguished majority leader's Democratic skeletal plan provides no relief for these States. The Treasury Department has estimated that the White House- centrist bipartisan plan's acceleration of the 27 percent rate will yield $17.9 billion of tax relief in the year 2002 for over 36 million taxpayers. That is one-third of all income tax payers. Small business owners and entrepreneurs account for 10 million or 30 percent of those benefiting from this rate reduction. When you refuse to accelerate the rate cuts, you harm farmers and small businesspersons the most. That is because most small businessowners and farmers operate their businesses as sole proprietors, sub-S corporations, partnerships. The income in these types of entities is reported directly in individual tax returns. Therefore, a rate reduction for individuals reduces taxes for farmers and small businesses. That is why the rate reduction under the bipartisan White House-centrist plan is so important. In 2002 alone, it injects $17.9 billion of stimulus into our ailing economy, and it helps small businesses that create the new jobs. So what would a small business do with these tax savings? Well, considering that most of the recent job growth has come from small businesses, I believe they would feel safe hiring more people and making more business investment. We know that 80 percent of the 11.1 million new jobs created between 1994 and 1998 were from businesses with less than 20 employees. Eighty percent of American businesses have fewer than 20 employees. That is why I refer to this as the 80-80 rule for supporting tax reductions. In addition, lowering taxes now would increase business cashflow during the current economic slowdown. The higher cashflow would increase demand for investment and labor. Don't just take my word for it because we have the National Bureau of Economic Research. They produced, in October 2000, a publication called ``Personal Income Taxes and the Growth of Small Firms.'' As you know, the National Bureau of Economic Research is a well-regarded, nonpartisan organization. It is the organization that determines when official recessions begin and when they end. They said this one began in March 2001. If we trust them to make that determination, I hope we trust the conclusions reached in their report. Their report on individual taxes and small business growth reaches the unambiguous conclusion that when a sole proprietor's marginal tax rate goes up, the rate of growth of his or her business enterprise goes down. Simply stated, high personal income tax rates discourage the growth of small business and right now, in a recession, that is the last thing we need. That is why it is important to do rate reductions and do them the right way and fully accelerate the 27-percent rate reduction. We are simply accelerating a decision the Senate made last summer. We should not, as has been suggested by some in the Democratic leadership, repeal rate reduction or, to state it correctly, we should not increase taxes. Again, that is the last thing you should do in a recession. We know tax cuts are stimulative. When working Americans have more of their own income, they are more financially secure and comfortable with spending. Let me say who really loses when this body fails to act. It is our displaced workers, it is our fellow Americans who still have a job, it is the security of our job base, and it is the soundness of the Nation's economy. The Senate Democrat leadership will not allow an up-or-down vote on our bipartisan White House-centrist stimulus package. At least that was the way it was before our holiday break. The reason why I don't think they allowed it to be done is because it would pass. We have a majority of Senators--obviously, a bipartisan majority. Obviously, this proposal comes from the center of the Senate, from conservative Democrats and moderate Republicans. So what. That is how you get things done in the Senate. I might not agree with everything in the package. I might be considered more conservative than those who put it together, but it is a good package. More importantly, it meets the needs of our country post-September 11. It meets the needs of those dislocated workers, those people who don't have health insurance. So now where are we? We are at a point where the distinguished majority leader has offered the skeletal remains of that package. But I don't think there is a majority of Senators supporting that move. When you get it all said and done, it doesn't help those people who don't have health insurance. I urge Senators to think twice before supporting something less than the full stimulus package that was written by Democrats and Republicans in the center of the Senate and that was so done in a way that satisfies the White House for signature. We need to enact a plan that will stimulate the current economy and serve as insurance against a second downturn in the next few years. For those in this body, both Republican and Democrat, there are a few who say we will be better off if we don't pass the stimulus package, or that we are recovering and we might not need it. I say to them, remember that most recessions have a double downturn. They have it when the original recession kicks in, and then they have an upturn, and then they have a down tick. A down tick probably is not a negative growth situation, but it is still a downturn. This stimulus package will be insurance against having a steady rise in the economy over the next few years, with no down tick, as is traditional for some recoveries. We need to enact a plan that will stimulate the current economy and give us that insurance. The White House-centrist bipartisan package does that. I hope the Senate hears the pleas of the American people and will support a comprehensive stimulus package--one that aids displaced workers, tends to their health care needs, and gives a real turbocharge to our economy, and to do that into a full recovery, a recovery without a down tick, so those who need a job can get it and those who have a job can keep it and relieve a lot of anxiety--particularly anxiety over not having health insurance, which unemployed people have. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. GRASSLEY. Mr. President, if the Senator will yield.

Mr. GRASSLEY. Madam President, I gave some opening remarks a little earlier on this legislation, but I will reiterate a few points I made from that first statement. The most important thing to remember, as we are trying to reach an agreement on a stimulus package, is there has been a lot of work put into this over the last several weeks--not since the holidays but before the holidays--and we have had partisan approaches by both Republicans and Democrats. We have had bipartisan approaches. We have had cooperation between some Members of Congress and the White House, and we have a bipartisan White House-centrist package that has passed the House that the President said he would sign, and one that had a majority vote, if we had taken a vote in the Senate before the holidays, that could have been to the President by now. It would have been to the President, signed into law, and helping 800,000 people unemployed since the September 11 terrorist attacks on America. This White House-centrist bipartisan package is a solid economic stimulus plan. Most important, it has a compassionate approach to put displaced workers first, and even more so than the amendment offered by Senator Daschle because he does--as I would agree to do--put in 13 weeks of additional unemployment compensation. However, his consensus package does nothing for those unemployed workers now who had health insurance previously. They have to pay the health insurance called COBRA out of their own pocket. The proposal I call the White House- centrist bipartisan package has a 60-percent tax credit for that. It is important to have a bipartisan plan. This White House-centrist package is a plan that can pass the Senate. Most important, this plan, if passed, will be signed by the President because he has said so. I was in on that bipartisan meeting the President had with House leaders, with Democrats from the Senate, and with Republican moderates. He said he would sign it. If we pursue the majority leader's plan, workers and businesses will face more delays because that plan will have to be conferenced with the House. That is going to take days probably. It could even take some weeks. The further we get along, the more there tends to be a recovery, the less economic good that stimulus package will do. It will be a delayed effort to help those 800,000 people who are unemployed and those people who do not have health insurance. If we use the bipartisan White House-centrist package, we will be able to get that passed right away. How long would it take to get it through conference? Just remember how long it took to agree that we ought to have the quasi-conference procedure that we operated a couple weeks before the holidays. Remember how long it took to reach the substantive agreement we have, the bipartisan White House-centrist package. All this history--and we ought to learn from history--ought to dictate the time to act is now, not a month from now. We had Chairman Greenspan advising the President, advising Congress in early October, that was a time to pass the stimulus package--not only pass it now as a stimulus, but we need to do it for the workers. That is what we need to do for small business, as well. The bottom line is, if we pass the White House-centrist bipartisan bill, unemployment checks can go out to those people who have exhausted their 26 weeks. Businesses will invest in new plant equipment with a 30-percent, 2-year accelerated depreciation. Unemployed workers will get help for their health insurance so they can continue to have coverage for their families, as they did before they were laid off. Taxpayers will get a payroll tax rebate. Taxpayers will get a little extra income tax relief to spend. New York City, hurt by September 11 terrorist attacks and needing help, will receive aid to rebuild. This could occur tomorrow if we get a chance to vote upon the bill that passed the House of Representatives before the holidays, the very same bill the President said he would sign. We are talking about moving ahead on a stimulus package. Now, instead of talking about the bipartisan White House-centrist package, we are talking about the new, scaled-back stimulus plan offered within the last 24 hours by our distinguished majority leader. This isn't the first time there has been a stimulus plan offered by the other side. This is the third variation on a stimulus plan offered by the distinguished Senator who is our majority leader. As most Members know, the Democrats initially passed the stimulus plan out of the Finance Committee, not in the spirit of how the Finance Committee usually works in a bipartisan fashion, but in a wholly partisan mode. It happens that with all the work put into that committee hearing, that plan was never sent to the floor for a vote. The distinguished majority leader almost immediately radically modified the Senate Finance Committee partisan stimulus proposal--again, acting in a partisan way. And nothing gets done in the Senate if it is done by one party. That is why it is so important to remind people of the White House-centrist bipartisan stimulus package that the President said he would pass. Surprisingly, that revised proposal that the Senate majority leader put on our table immediately after the partisan bill came out of committee looks a great deal like the White House-centrist bipartisan stimulus package I have been referring to that we ought to pass and send to the White House. A substitute back in November, put on the table by Senator Daschle, adopted measures initially promoted by many Republicans. Unfortunately, in December, the majority leader blocked a vote on the White House-centrist plan in large part, I believe, out of fear it would pass. And it would have. Now comes yet another variation of that theme. The majority leader has delivered yet another economic stimulus package--basically the skeletal remains of previous stimulus proposals. I will talk about some of the differences between the White House- centrist bipartisan package and the partisan Democrat skeleton stimulus plan. I will explain, then, why I believe the bipartisan White House- centrist package is better for America and, most importantly, for those dislocated workers, and particularly for the dislocated workers who do not have health insurance. I will look at what it does for displaced workers. This is the White House-centrist package. Our unemployment insurance proposal represents an unprecedented commitment to American workers. We provide up to 13 weeks of additional unemployment benefit to eligible workers who exhaust their regular benefits between March 15, 2001, and December 31, 2002. We have an estimated 3 million unemployed workers qualifying for an average of $230 a week. These benefits would be 100- percent federally funded at a cost of about $10 billion. Our proposal transfers an additional $9 billion to State unemployed trust funds. Such a transfer would provide the States with flexibility to pay administrative costs, provide additional benefits, and avoid raising unemployment taxes which would be a bad thing for them to be forced to do during the current recession. We never want to raise taxes during a recession. The United States enjoyed a growing economy and declining unemployment for much of the previous decade. But the economic slowdown that officially became a recession started in March 2001. We all know that was exacerbated by the terrorist attacks on September 11. That meant more substantial layoffs. I said this recession started in March 2001. Economists officially labeled it a recession. But remember that a long time before that--almost a year, March 2000--we started a downturn in manufacturing. That manufacturing index, going back to the last year of the Clinton administration, has still been going down 19 months in a row. Even though the official recession started in March 2001, those in manufacturing had been in recession for a whole year before that. We have seen the unemployment rate for all segments of the economy rise from 4 percent in November 2000 to 5.7 in November 2001. By historical standards, you could say the current unemployment rate is still substantially below the level at which Congress deemed it necessary to enact extended unemployment benefits based upon what Congress has done for the few times in the past. Over the past 50 years, the Federal Government provided temporary extended unemployment benefits only six other times. The average unemployment rate during those times was far higher than it is right now at 7.3 percent as an average for those six times. Based upon historical record, the President did not go as far with his suggestion for helping unemployed people as the bipartisan centrist stimulus package does. The President originally suggested that extended unemployment benefits--meaning the additional 13 weeks--should be limited to those few States that have a disaster declaration in effect as a result of September 11 and which have a threshold of the 30- percent increase in their unemployment rate. A number of our colleagues on both sides of the aisle insisted we provide immediate assistance, not just to a few States as the President suggested but to every State, regardless of their unemployment rate. We have agreed to do exactly that in our bipartisan centrist stimulus package. The President has agreed to sign it even though it didn't start out at that point. We have some, unfortunately, on the other side of the aisle who continue to insist that what we are doing is not enough. They insist that we should go further by requiring every State to provide specific benefits and establish specific eligibility criteria as a condition of receiving their additional Federal assistance of 13 weeks. In other words, what they are suggesting is that we violate the agreement we had between the States and Federal Government, for the most part letting States decide who should and under what circumstances they qualify for unemployment assistance. We could not agree to the demands on the other side to change this longstanding relationship between the Federal Government and the State governments on the policy of unemployment compensation. We have always left those decisions about benefit levels and eligibility criteria to the States. The changes sought by those on the other side of the aisle destroy this historic relationship and undermine the flexibility needed by States to respond to their unique circumstances while ignoring a fact about America--that we are geographically vast; our population is very heterogeneous. Consequently, you can't pour one mold in Washington, DC, that fits the needs of New Mexico the same as New York City, or Iowa the same as Sacramento, CA. Leave us leave it to the legislatures of California, Iowa, New Mexico, and New York to decide what the policy should be for their States as those people closer to the grassroots see their needs. To me, that is just a commonsense approach to governing. It might not be a commonsense approach in England where the country is small, but it is obviously the sort of thing we need to do in our federal form of government. I would now like to touch on the White House-centrist bipartisan plan commitment to providing health care for dislocated workers because the plan that the distinguished Senator majority leader has put on the table does not deal with this at all. If there is one thing I could point out from his remarks this morning, it is that he tried to make the point that his package has only things in it to which both sides agreed. I think he is misreading the Republican side of the aisle. There is a great deal of commitment on the part of Republicans--the vast majority of our caucus--to meet the health care needs of people who are dislocated workers because of September 11. Quite frankly, it would do this for the first time in the history of our public policy. They have been saying since October that Republicans don't care about helping workers with health insurance. I quote Senator Daschle himself last December saying that his Republican colleagues ``so far have refused to come to the table and negotiate seriously.'' There is nothing further from the truth. Since October, when President Bush first called on Congress to pass the stimulus package, I have worked closely and seriously with both Democrats and Republicans to come up with a meaningful, bipartisan approach to helping people impacted by the events of September 11. Compared to where we started on the issue of health care for the dislocated workers, Republicans have come a very long way to a position with which a majority of our caucus agrees. I do the history on this just to prove the point. This debate began, let us say, back in October--too long ago, I am sorry to say, and embarrassed to say. We should have passed this bill when the recession first hit its lowest point. Our proposal at that time relied on a national emergency grant program to deliver health benefits to workers at a cost of just $3 billion. We look back now, and we say that just doesn't do it. Over time, the number grew. I said publicly that we could double or even triple that number. I also invited Democrats to modify the grant criteria to make the program more responsive to the needs of workers without health insurance. I even offered some Democrats the opportunity to write the criteria, if we could agree on doing it through national emergency grant programs. The reason for that is you can deliver the help to those who do not have health insurance within 30 days after the President would sign the bill. But the Members of the other party refused. And that did not stop us from staying at the negotiating table, regardless of what the distinguished majority leader says about our refusal to negotiate. (Mr. JOHNSON assumed the chair.)

Mr. GRASSLEY. If I understand what the Democratic assistant leader said, we will have a Democrat amendment. So then Senator Bond's should be the first Republican amendment up after we have a Democrat amendment up.

Mr. GRASSLEY. Mr. President, our status is, am I right, that we are on the Finance Committee bill, the tax bill before us?

Mr. GRASSLEY. Mr. President, I think my colleague from South Dakota, the distinguished Democrat leader, has made it very clear where we are compared to where we were before Christmas. Let me repeat that we had been working on an economic stimulus package in various ways for several weeks, most of it not here on the floor of the Senate but in small groups, and different groups, and bipartisan groups, and partisan groups, to come together to see what we could get to get through the Senate--a stimulus package--and the need for it was directly related to the downturn in the economy that came mostly as a result of September 11 terrorist attacks. And then what finally happened was just before we adjourned. A White House-centrist package that was put together by mostly Republican and Democrat centrists, working with the White House, was a bill that passed the House of Representatives before the bill came here to the Senate. Then in the closing days of the Senate, prior to adjournment for the holidays, the bill did not come up on the floor of the Senate. So we are back here now, afterwards, to a point where we are dealing with something that is still very important to help dislocated workers and to help bring the economy back from the recession caused by September 11, the war on terrorism, and the attacks against America. I emphasize again that where we ended up before Christmas was the House of Representatives passing a bill that had been worked out by, I think for the most part--and I hope I am not unfair to the House of Representatives on this--by a group of centrists in the Senate, made up of both Republicans and Democrats, who came up with a plan that had White House support. The President said he would sign it. You never know for sure until you take a vote, but it looked as if this White House-centrist package would have had in the low fifties--but a majority of the Senate--to pass the Senate, if it had been able to be brought up. We were not allowed to bring it up and discuss it. That is a decision, under our Constitution, that the majority leader can make. I may find fault with the decision; I do not find fault with his right to do that. Now on the second day we are back in session in the new year, this bill has been brought up. The sad commentary is we are 1 more month into the recession, 1 more month of 800,000 people unemployed because of the September 11 terrorist attacks, and a lot of people who used to have health insurance do not have health insurance and dislocated workers are not being given the help the bipartisan White House- centrist stimulus plan would have given them. Also, we do not have those tax incentives that will stimulate the economy. As the distinguished majority leader just said, there are certain tax rebate plans the CBO said would be of help in stimulating the economy. There are certain accelerated depreciations that were in the bipartisan package that would help the economy. So, effectively, we have lost 30 days, and people who needed help are not getting the help. I am glad to be back here, though, and I am glad the majority leader has taken the initiative of bringing this issue up. Hopefully we can get an agreement to pass a bill and get it to the President. I need to reiterate that we had a bill worked out by a group of Democrats and Republicans in the middle of the political spectrum in the Senate. That is why we call them centrists. They worked out a bill with the White House. The White House said the President would sign the bill. The bill received a favorable vote in the House of Representatives, and here we are. I would like to get back to where we left off before the holidays, so I am going to spend my time this morning before other speakers come to the Chamber to speak on this very important issue of why the bipartisan White House-centrist stimulus package ought to still be the package before the Senate, even more so than the amendment about which the distinguished majority leader just spoke and why it should pass the Senate, although I sensed in the majority leader's statements that he is willing to look at things beyond his proposal--at least I hope I interpreted that right--so that we can get something to the President. I hope somehow our debate can persuade him to come back to what we have: a bipartisan White House-centrist stimulus plan that was before the Senate because we know that it has passed the House, and all it has to do is pass the Senate and the President will sign it and these 800,000 unemployed workers who do not have health insurance, if they have exhausted their first 26 weeks of unemployment, will still have unemployment compensation. I am going to start with some discussion of the tremendous commitment to displaced workers that the White House-centrist stimulus plan has in it. The plan's unemployment insurance proposal represents what I consider a very unprecedented commitment to dislocated American workers and, in the end, probably may be something, if one looks at long-term solutions to the problems of uninsured, to help uninsured people as well. I start with the fact that it provides an additional 13 weeks of unemployment benefits to eligible workers. Remember that about 10 percent of the unemployed people use up to 26 weeks. Maybe that is even higher than 10 percent now because of the recession. There is always a need for some more unemployment compensation for some people. We do not always respond to that with an additional 13 weeks. We are doing it because there was a calamity on September 11 which has speeded up the unemployment index as a result by 800,000. We have an estimated 3 million unemployed workers who would qualify for benefits averaging $230 a week. These benefits would be 100-percent federally funded. The bipartisan White House-centrist plan would also transfer an additional $9 billion to State unemployment trust funds. This transfer would provide the States with the flexibility to pay administrative costs, provide additional benefits, and avoid raising unemployment taxes during the current recession. Consider the bipartisan White House-centrist commitment to providing health care for dislocated workers. This commitment goes further and wider than any other proposal, and it gets more help to more people more quickly than any other proposal. It commits over $19 billion, out of the total package of about $100 billion, to health insurance assistance. This is over six times as much money for temporary health insurance assistance as provided under the original stimulus proposals. The bipartisan White House-centrist plan takes a three-pronged approach to get health insurance to people in need. First, the plan provides a refundable, advanceable tax credit to all displaced workers eligible for unemployment insurance, not just those eligible for COBRA. The value of the credit is 60 percent of the premium. The credit has no cap and is available to individuals for a total of 12 months for the next 2 years, including 2001 to 2003. The individuals can stay in their employer COBRA coverage, or they can choose policies in the individual market that may better fit their family's needs. This only makes sense because we should not lock people into one straitjacket of health insurance which under some proposals would be just the COBRA approach because sometimes these policies are too expensive for people to keep. I say that even with the 60-percent subsidy that we would provide. The bipartisan White House-centrist proposal also includes a major new insurance reform to protect people who have had employer-sponsored coverage and go out into the private market for the first time after being laid off. The bipartisan White House-centrist proposal makes COBRA protection available to people who have only had 12 months of employer-sponsored coverage rather than 18 months under current law. By doing this, we greatly expand the group of displaced workers who cannot be turned down for coverage or excluded because of a preexisting condition. The new 12-month standard is especially important to people with chronic conditions who have difficulty getting affordable insurance. The second prong of the White House-centrist bipartisan proposal is $4 billion in enhanced national emergency grants for States which can be used to help all workers--not just those eligible for a tax credit-- pay for health insurance because they have become unemployed. The third prong of the proposal includes $4.3 billion for a one-time temporary State health care assistance payment to States to help bolster those States' Medicaid Programs. We are seeing almost all 50 States in trouble with their Medicaid Program because of the recession. As we know, the Medicaid Program is an important safety net program for low-income workers and families of disabled workers. I yield the floor now to other colleagues, but I suggest that we have a lot in this bipartisan White House-centrist proposal that can immediately, when the President signs the bill, help the 800,000 workers who are unemployed because of the September 11 terrorist attacks on America. We ought to get the show on the road. It should have been done before Christmas. It is not too late to do it right now. I hope people would study this proposal that has been developed by a group of people in the center of the Senate, both Democrats and Republicans, and move this bill along. We have 50 votes for it, and if people will study, I think we will even get a much higher percentage. I yield the floor.

Mr. GRASSLEY. Mr. President, I ask unanimous consent to be added as a cosponsor of the amendment of the Senator from Oregon.

Mr. GRASSLEY. Mr. President, I rise to speak in support of the amendment. Bonus depreciation was one of the proposals that both Chairman Greenspan and former Treasury Secretary Robert Rubin uniformly endorsed for a stimulus package. They argued accelerating depreciation was the most stimulative thing that we could do to jump start the economy. They said it would increase cash flows and add to asset values. They lauded its immediate stimulus effect on the economy and emphasized that a temporary enactment would not have long-term budgetary impact. Despite all these advantages and the endorsement of Chairman Greenspan and former Clinton Treasury Secretary Rubin, and Democrats have give us an inadequate depreciation proposal. They would allow 30 percent bonus depreciation for only 1 year. Granted, this is an improvement on their first idea. That was to allow only 1 percent bonus for 1 year. The bipartisan White House-Centrist economic stimulus package offered a solid proposal calling for a 30 percent bonus depreciation over 3 years. Senator Daschle's bonus depreciation proposal is only for one year. Now what does 1-year period allow us to stimulate? Well, it probably gives business people time to buy an office copier, desks, or some new throw rugs for front office. But I do not think this bill includes any incentives to continue projects that are already in the pipeline. It does not give companies time to do a major project, which could generate thousands of jobs. It does not allow us to build heavy equipment, modernize a lumber mill, repair a railbed, revamp a management information system for a factory, or construct an airplane. Farmers may not see an economical turnaround until after 2002. When they do, they will need to update their equipment. The farm economy has been so bad for so long that many farmers have not been in a financial position to replace unreliable equipment. They will need more time than 1 year to do this. And aircraft is an interesting point. This is one of the industries that has been hit the hardest by the events of September 11. We know from our discussions with the few remaining U.S. aircraft manufacturers, that it can take up to 18 months to build an airplane. One year is not enough time to finish a project of this size. Moreover, a 1-year bonus depreciation period does not provide insurance against a future down tick in our recovery cycle. This commonly occurs as an economy struggles to throw off the shackles of recession. We need to capture a booming economy not just for today but for the next several years. Economic growth is key to eliminating the future budget deficits that have been forecast by the CBO. So I must emphasize that the Democrat's 1-year bonus depreciation package is seriously lacking in economic weight. It is a temporary proposal for what should be the centerpiece of an economic recovery package. Bonus depreciation is probably the best idea any stimulus proposal. Senator Daschle's proposal simply fails to recognize its importance to our economy.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that Chuck McFadden, a legislative fellow on the Finance Committee, be afforded floor privileges during the duration of the debate on the economic stimulus bill.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, during consideration of the Defense appropriations bill on Friday, December 7, my distinguished colleagues, the chairman of the Defense Appropriations Subcommittee, Senator Inouye, and Senator Harkin, a member of that subcommittee as well as the chairman of the Agriculture committee, engaged in a colloquy regarding the George Washington University's, proposed Project Alpha. I support this unique effort to deal with potential terrorist threats to the U.S. food supply. I have been working with GWU since May on this project. In July, Iowa State University joined the consortium at my request. I want to point out that support for this very worthwhile program and requests for its expeditious implementation come from both sides of the aisle. I am glad that Iowa State University can contribute its expertise in this area as a major partner in this effort and that the National Animal Disease Center will also be a key player. An important component of the Project Alpha formula is its ``National Decision Assessment Immersion Center,'' to be located in existing facilities at the Virginia Campus of the George Washington University and to serve as a model for replication by those wishing to pursue individual variations of this new approach to complexity management in national security. As was pointed out in the December 7 colloquy, Project Alpha is a proactive approach to terrorist threats to U.S. national security, a concept initiated and developed long before the tragic events of 9-11. It utilize advanced technology in complexity-analysis techniques designed to help us both predict and prevent or ameliorate critical situations before they can become real-world disasters. Project Alpha combines sophisticated information-gathering and data-mining methodologies with high-performance data analysis, professional-level subject and issue expertise, decision support systems of proven efficacy, and state-of-the-art technology for communication and information dissemination. Project Alpha offers the opportunity for exploration of the broadest range of threat possibilities, available options and their effects and ultimate consequences, especially those that would normally remain unforeseen and unpredicted. The program will allow rapid exploration of a massive range of relationships and interactions that are beyond the ability of our liner-reductions minds alone to follow or foresee. Project Alpha provides a mechanism for complexity consequence- projection of far greater scope, magnitude and immediacy than has ever before been available. The crucial element that makes this possible is the rapidly expanding supercomputing technology that has not yet been harnessed for this purpose. Through its use, Project Alpha can facilitate direct encounters with the unexpected and the unintended in order that potential terrorist events may be anticipated and rendered preventable, manageable and unsurprising. The purpose of Project Alpha is to help use learn more what we don't know in ways that we might never imagine, so that real-life catastrophes can be avoided. Protecting the U.S. food supply is high on the list of national security priorities, and the application of Project Alpha to this critical need can be of significant public benefit in dealing with the threat of agroterrorism now and in the future.

Mr. GRASSLEY

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

Mr. GRASSLEY. I will speak for a few minutes.

Mr. GRASSLEY. I inquire of the Presiding Officer, are we in morning business?

Mr. GRASSLEY

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, after the holiday season it is good to be back to do the people's business in the Senate. We have a lot of unfinished business, and we need to do some of this unfinished business right now. I think the American people are looking for the bipartisanship of the post-September 11 environment to continue. I think they are hopeful that a lot of very important legislation will pass, and I hope they are in a position of helping all of us reject political posturing and dueling with press statements. The American people really want results. I guess one would say they want action, not words. Yet we adjourned before the holidays before we could take steps necessary to aid our economy. We did not pass an economic stimulus bill, and we did not pass Trade Promotion Authority. We must do better. We need to pass both of these because they are very central to stimulating the economy, which we always think of being short term, but with the President's authority to negotiate trade agreements, we can have a long-term revival of the economy. I emphasize trade by often quoting President Clinton, who said one- third of the jobs created during his administration were created by trade, which means trade is very important to the betterment of our economy. Generally, trade-related jobs are very good, higher paying jobs. So we did not pass a stimulus package and we did not pass trade promotion authority, although there was bipartisan support for both. There was overwhelming bipartisan support for trade promotion authority, as that bill was reported out of our Finance Committee 18 to 3. So since we did not pass these, I believe we need to do better. Last week, President Bush was in Louisiana where he called upon the Senate to pass Trade Promotion Authority as a necessary part of our economic recovery. He also spoke on this issue near my State of Iowa, across the river in Illinois, in what we call the Quad Cities of our State. He was in Moline, IL, to promote trade promotion authority legislation and economic development legislation. President Bush said, as President Clinton has said, that trade is very much a jobs issue. He said if we trade more, there are more jobs available for hard-working Americans. He is as right as President Clinton was right on this very issue. Trade is essential to our economy. The United States exported over $780 billion in goods and services to more than 200 foreign markets last year. Exports provide more than one-fourth of all economic growth in America. Trade is a very important part of our economy generally over a long period of time, at least for the last 50 years. In the case of the post-September 11 recession, it is very important to our long- term economic recovery. Of course, President Bush knows that trade is an important part of our economic recovery, and that is why he called upon the Senate of the United States to put our political parties aside and focus on what is best for the United States of America and the American people. As I said, we did act on this issue in the Finance Committee before the holidays. We came together in a bipartisan way and, in a vote of 18 to 3, voted out trade promotion authority. The key to the strong bipartisan vote can be found in one word, and that one word is ``compromise.'' Let me be clear. The trade promotion authority bill that passed the Senate Finance Committee is a good bill. It deserves our support. In negotiating that bill with the chairman of the committee, my friend Senator Baucus, we included some items I may not like, but that is the essence of compromise. Neither one of us got everything we wanted, but we put aside our differences to do what is right for the American people. We came together, Democrat and Republican, and passed a good bill out of the Finance Committee that will help create jobs in America. Trade-related jobs, as everybody knows, pay 15 percent above our national average. For that compromise, I commend Senator Baucus. Now we need to do the same thing in the full Senate. We need to do it, and hopefully do it very quickly. The reason for doing it very quickly is that starting, I believe the date is February 7, there are negotiations following on the new round that was agreed to by the 142 nations of the World Trade Organization last November in Doha, Qatar, a new round, and the negotiations would start next month. We can start those negotiations without passing this bill, but the President will never be credible in these negotiations with the other 142 nations unless the President has this trade promotion authority. So we need to do this, and hopefully not have the partisan bickering we have had on some legislation, so we can get it done very soon. Trade promotion authority to the President is not only key to our economic recovery but is also a very important tool which helps us help other nations in the world, especially poorer countries, and maybe was best said by President Kennedy 40 years ago when he said trade, not aid, is the leadership the United States ought to take in the way of helping other nations. We have been giving aid since then, but the long-term benefit is helping another country to help itself, and the ability for them to sell their goods to us and for us in turn to sell our goods to them is very good. It not only is good economically, but I think it brings about a closeness of people around the world, of different societies, of different nations, so we have a greater prospect for peace. That should not be forgotten as well. Although we always talk about this in economic terms, we ought to think in terms of other things it does as well. So it helps us help poorer countries in a way that helps them to help themselves. It creates jobs. It helps lift people out of poverty. Poverty is our enemy. Poverty leads people in the wrong path, towards war, political instability, religious fanaticism. Following World War II, we stabilized Europe through the Marshall Plan and economic development. We won the cold war through our economic strength. Now we are fighting the war on terrorism. We need to keep up strong international economic leadership and bring more nations of the world into democracy and prosperity. The President's political leadership, as our chief diplomat, does that. He does that through his leadership as our Commander in Chief. Also, the President can do this as our chief trade negotiator and know that he not only wants political leadership in the United States, he wants the United States to give economic leadership and do it in a way to help other countries help themselves and have long-term economic recovery. Trade helps America do all these things, and trade promotion authority for President Bush is the key. There is really no reason to wait. The bill has strong bipartisan support. It will pass the Senate by a strong margin. That is why I urge today, as I have in several speeches over the last month, that our distinguished majority leader put trade promotion authority on the floor for a vote in February. There is no reason to wait on trade promotion authority. There is no need to waste time in giving the President the authority he needs to open new markets and create new jobs for the American people. By passing trade promotion authority early this year, the Senate will help the President spur economic growth and continue our world economic leadership, as well as military and political leadership. We will create new jobs. In this time of war on terrorism, it seems when a lot of people are pleading, and probably rightly so, that a lot of fanaticism comes when poverty is present, we will help fight terrorism by bringing more nations into democracy and prosperity. It is time to get the job done. The American people expect no less. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today, with the announcement that the Federal Government is facing near-term budget deficits, as opposed to long-term budget deficits, for the next 2 or 3 years, but not for the next 10 years, we will hear a lot of talk from the critics about the need to postpone or repeal last year's bipartisan tax cut. The critics say we should revisit the tax cut for two reasons. First, they claim the tax cut is responsible for a return of budget deficits; second, the critics claim the tax cut will jeopardize our long-term economic growth. I will consider each of these claims. According to the CBO projections, the tax cut is responsible for less than 15 percent of the reduction in this year's surplus and less than 40 percent of the reduction in the surpluses for the 10 years we project ahead. The slowdown in our economy and the additional spending enacted last year are responsible for most of the deterioration in our budget outlay. The second criticism is that the tax cut will reduce the surplus, thereby exerting upward pressure on interest rates and reduce future economic growth. A recent study by the congressional Joint Economic Committee concludes there is no evidence to support the criticism that interest rates rise because there is budget surplus or that there is a relationship. According to the Joint Economic Committee: Empirical studies on interest rates have uniformly failed to find any statistical significant relationship between interest rates and the budget balance of the U.S. government. This result is likely due to the fact that the deficits we have seen in the past were not large enough to affect the interest rates given the overall size of our financial markets which would also include the global financial markets. If the tax cut is not responsible for the rising deficits and higher interest rates, then why do the critics still complain? Maybe they have not read the studies to which I have referred. Based on the studies, I asked critics the legitimate question, What is there to complain about? One reason I believe they want to delay repeal of the tax cuts is because they have a desire to spend the money, which, in the end, actually, then, if you spend it, because you increase taxes, you still do not have any less deficit. Some critics have already announced they have plans to spend the money by raising taxes, or delaying the tax cuts, as they call it. As other spending plans become public, it will become obvious their cries for fiscal discipline are nothing more than crocodile tears. In addition to the critics who want to spend the tax cut, there are also critics who insist we cannot afford the tax cut because our long- term budget projections show Federal spending will exceed revenue by 25 percent within the next 50 years. To argue, as they do, that we cannot afford a modest tax cut today because we will need a huge tax increase in future years ignores the obvious: Congress cannot provide more government than the taxpayers are willing to pay for. Through our country's history, the Federal Government has never taken more than one-fifth of our Nation's income in taxes. That includes even in wartime. If we are not willing to pay 25 percent more for government, if we are not willing to do that now, why should we be willing to put ourselves into a spending policy where we expect our children and grandchildren to have higher taxes so they can pay for programs we instituted at a time when we were not willing to put taxes higher than they have ever been in the history of our country? Our challenge today is to get beyond the rhetoric and make affordable government once again. In addition to this point, as we prepare for the next budget season, I participated today in the Budget Committee review of the CBO report. Once again we are having this issue brought up about the tax cut being responsible for the budget deficits, as opposed to the war on terrorism, as opposed to the recession that is a result of the war on terrorism, and some technical budget adjustments that are made annually. In regard to the accusation that the tax cuts proposed by President Bush in the last election, and then in turn enacted by Congress--and in turn when it was enacted, it was enacted as a bipartisan tax relief package because several members of the Democratic Party voted for it-- in regard to that being the cause of the deficit, as is the insinuation on the part of those people who make that argument, I made the point this morning, and I would like to repeat the point I made in the Budget Committee to the Members of the entire Senate, that if you look at the $1.3 billion tax cut the bipartisan Members of this body voted for and the President signed on June 7, and you say that is the cause of the deficit, you have to also look at the fact that there was an alternative called the Daschle-Carnahan amendment that was offered that was $1.265 trillion, just 6-percent less than what the President signed. That amendment got 48 votes. It lost, but almost every member of the Democratic Party voted for that amendment. So whether you look at $1.3 billion that passed by a bipartisan majority, and a pretty overwhelming majority, or whether you look at the Daschle-Carnahan amendment, we have all but two or three Members of this Senate who voted for tax cuts of at least $1.265 trillion or the 6-percent higher figure that was finally adopted of $1.3 trillion. Either way, just considering that 6-percent differential, you are going to end up with about the same budget deficit situation, short term or long term, under a policy either way that was backed by all but about two or three Members of this body last spring. So my point is this: It is wrong for Democratic leaders to blame the bipartisan tax cut that the President signed on June 7 for the deficit situation without taking credit themselves for backing such a tax policy that was only 6-percent less than what the President had already proposed. So I don't think we have a bad situation because of the reduction of taxes. We have a bad situation because of the war on terrorism, the economic recession caused by the war on terrorism, because of technical adjustments in the budget, and because of the additional appropriations we had to have for the military and for the domestic war on terrorism. That is where it is. But if you want to blame taxes, there are 97 or 98 of us in this body who have to share that blame, not just the 48 Republicans and 12 Democrats who voted for the bill the President signed. I yield the floor and I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I also ask unanimous consent to have printed in the Record a portion of a November 13 memo from Democracy Corps regarding the economic stimulus proposals.

Mr. GRASSLEY. Mr. President, I am happy to be able to have some time to comment on the fact the Senate is not bringing up the stimulus package. It is to my chagrin, after all the hard work Senator Baucus and I have put into these negotiations. Albeit what we have in front of us is not a product of a conference committee, it is still a White House bipartisan compromise, a White House Centrist compromise, that would get a majority vote of the Senate if we had actually had an opportunity to vote on it. In normal circumstances, I would not be one to say we ought to pass a House bill. These are, however, not normal times and this is not a normal process. Some will say this is a House product that needs to be amended and debated. That assertion, while technically accurate, does not capture the essence of our situation today or right now that we are in a war on terrorism. The House bill is really the product of an agreement between the White House and Senate Centrists so I am going to call the House bill what it really is. It is a White House Centrist agreement, if you are looking for a bipartisan, bicameral product the President will sign. The President said he would sign this. This agreement is the only game in town. To anyone opposing this agreement, including the Democrat leadership, I ask them to show me where they are being bipartisan. All I have seen from the leadership throughout this process is an iron fist cloaked in a velvet glove. Today, we did witness, with the objection to consideration of the stimulus package, the iron fist clothed in an eloquent velvet glove, displayed once again, similar to what we have done on other issues like insurance and like a stimulus package earlier on. Today that iron fist smashed the White House Centrist agreement. The American people will not be well served by the destruction of the White House Centrist agreement. All it means is that after 3 months of long meetings, committee action, floor debates, we, the Senate, will not deliver to the American people. The House has delivered. The President has delivered. One has to wonder, then, why are we stuck? If we can get a bipartisan majority in the Senate, action by the House and a signature by the President, why does a partisan minority of the majority party decide to thwart the will of the people? Why, especially now? Our Nation is in a state of war on terrorism. Our President is necessarily occupied as Commander in Chief to run that war. Why, on a matter of economic stimulus and aid to dislocated workers, did the President have to come to the Hill yesterday to try and break a logjam? Why did the Democratic leadership give his effort the back of their hand? Why did the bipartisan objectives go by the wayside? I will take a few minutes to talk about how we got here. Shortly after September 11, we started out with meetings with Chairman Greenspan and other economic policymakers. For the most part, they were called by the good chairman of the Senate Finance Committee, Senator Baucus. In that period, right after September 11, the President took first steps and took the risk by committing to a stimulus package, fully aware we might be going in the budget ``red'' if we did. We should not discount this leadership by the President. Certainly it took courage, and it was the right thing to do. Chairman Greenspan also took the lead and gave the ``Greenspan green light'' to pursue a stimulus package. It seemed everyone realized our responsibility was to heed the President's directive and Greenspan's advice. Both of these men said Congress should address the economic slowdown. They told us the slowdown started over 1 year ago. Subsequently, the National Board of Economic Research told us the economy might have recovered but for the September 11 attack. The President took the lead in meeting needs of dislocated workers. He proposed extension of unemployment insurance benefits. He also proposed providing health care benefits through the National Emergency Grants. In addition, the President proposed, as a concession to the other party, a new round of rebate collection to those who do not pay income tax. Was there any reciprocation, any movement from the Democratic leadership? No. President Bush, much to the consternation of many in the Republican Party, took capital gains tax off the table because it was not well received by Democrats. Was there any reciprocation on the part of the Democratic leadership? No. This is not to say we did not agree on some things. Bonus depreciation, for instance, was agreed to by each side. Although we did not have it in our caucus position, Republicans agreed with Democrats on liberalizing the net operating loss rules and expensing for small business. I do not also discount the ideologically based opposition to accelerating the reduction of the 27 percent bracket, but it is amazing to me that many on the other side see taxpayers in the 27 percent bracket as rich people. A 2 percent rate cut for single folks earning between $27,000 and $65,000 is seen as a tax cut for the very wealthy by the Democrat leadership. Likewise, a married couple with incomes between $45,000 and $109,000 are considered rich. I recognize this tax cut proposal was difficult for the Democratic leadership to accept. After a series of bipartisan, bicameral talks, the House went its own way with a bill; too heavy for me on corporate AMT. It passed by just two votes. The Senate Democratic leadership responded in kind. The result was a Democratic Caucus partisan position paper reduced to legislation they rammed through our Finance Committee on a party line vote. That bill dead ended in the Senate. The reason is the bill was designed for partisan point making. Its partisan design was its weakness in an institution like the Senate where one only gets things done on a bipartisan basis. That design guaranteed its failure. We could have ended there, but the President forced us back into action. Frankly, the House also yielded on a very bad bill they first passed. The result was a quasi-conference environment to work out differences. By virtue of this quasi-conference, my friends Jay Rockefeller and Max Baucus, our chairman, and I spent many long hours debating the merits of economic stimulus and aid to dislocated workers. In many ways, the discussions were vigorous exchanges of views with our House colleagues. A lot of that discussion was healthy, and some of it helped move the process along. Little real progress was made. Once again, the President intervened and endorsed the Senate Centrist position. Eventually, the House leadership came toward the Centrist position because they wanted to find a way to get a bill through the Senate, and that can only be done if it is done on a bipartisan basis. Even with movement to the Centrist position, the quasi-conference was at an impasse. Senator Daschle's edict about 3 weeks ago that one-third of his caucus could veto a stimulus plan came into clear focus. The sentiments of the House or White House, let alone the sentiments of Joe Six-pack out there working every day to pay taxes, were less important than the opinion of a minority of the Democratic Senators, which would be as few as 18. The failure to obtain a super-majority in the Democratic caucus then imperiled this Centrist package, this Centrist bipartisan package. In the end, the impasse came not from tax cuts. Republicans moved far off their priorities so that tax cuts were not the deal breaker. The impasse was not over unemployment benefits. Republicans had largely moved to the Democratic position. The impasse was not over the amount of the health care benefit package. Again, though the benefit came in the form of a tax credit, Republicans moved toward a Democratic position on the costs of health care benefits. Bizarre as it may seem, the whole agreement broke down over some ideological position on the eligibility of people for health insurance for the unemployed through just COBRA. The impasse came down not over whether to help these workers. The White House Centrist agreement covered these workers with a tax credit. The Senate Democratic bill covers these workers with a new entitlement. Basically, a super- majority of Democrats would not agree to let laid-off workers have the choice of where they wanted to get their health care benefits. But they could still get their health care benefits with the same tax credit. The bottom line is the White House-Centrist agreement does not meet the two-thirds litmus test set for the Democratic caucus by the leader. One has to wonder, why leave all of these good things in the White House-Centrist agreement on the Senate cutting room floor, as just happened about an hour ago? We have before the Senate revolutionary social policies. For the first time, Members have sign-able legislation that guarantees health care benefits for laid-off workers--the biggest change in policy for dislocated workers since unemployment insurance was passed in the 1930s. We have, in the bill that was objected to, extended unemployment benefits as we have done several times in the last 50 years. We have a robust stimulus package with 30 percent bonus depreciation. We have an extension of expiring tax provisions for 2 years. We have the victims of terrorism tax relief and tax incentives to build New York City once again. All of these are good provisions which enjoy broad bipartisan support. They are the foundation of the White House-Centrist agreement. Yet because of this ideological fixation, all of these good things now go by the wayside until we return 1 month from now on January 23. While we are going to be enjoying Christmas, these dislocated workers who could have been guaranteed health benefits and further unemployment compensation are going to go away empty handed. I will look at each key player in the process and see how much movement there has been. Common sense says those who want a deal will show movement. By the same token, those who do not want a deal will not move. Start with the President. As I said, he made several key moves. He put the dollars on the table, knowing it would complicate the fiscal year 2002 budget. He took capital gains off the table. He put the payroll tax rebates on the table. He put the unemployment insurance and health care benefits on the table. Finally, he endorsed even a plan that went much further in the case of health care benefits, from $3 billion up to $19 billion. That is in the White House-Centrist agreement. When you look at the record, it is clear to me that the President of the United States wanted a deal, an economic security package for dislocated workers and to help create jobs for those who do not have jobs. At the House of Representatives, I agree that the first bill, as I said before, from that body was too heavy on the corporate alternative minimum tax. But the chairman of the Ways and Means Committee made many gestures to the other side. For instance, he did not pick and choose among extenders. He included the payroll tax rebate that many of his Members in the other body opposed. The chairman of the Ways and Means Committee increased the resources for unemployment compensation and health care benefits. If you doubt me on the seriousness of that movement, ask many in my caucus their opinion of those proposals. If you look at the record, the House Republicans moved and ultimately ended up as part of the White House-Centrist agreement. Senate Republicans had a caucus position very close to the President's plan. Like the President, Senate Republicans, especially our leader, Senator Lott, constantly worked to try to get a deal. As the President moved, so did the Senate Republican caucus position move. That is in the Record. That brings us to the last and ultimate critical player. Obviously, that is the Senate Democratic leadership. I ask, where has the Senate Democratic leadership really moved? At every stage of the process, whether it is the Finance Committee action, whether the action on the floor, or even the quasi-conference, ultimately we find this leadership position always saying ``no''. Everyone else was saying ``yes''. Now there is a good game being talked by the other side. They say they want an agreement. That is the elegant velvet glove they are noted for, but where is the action? The action today was ``no'' on unanimous consent request. But look at the whole last 3 months on this issue. Where have they moved? If you want an agreement, you have to see movement. There has been none. One has to ask, with so many good provisions in this White House- Centrist agreement, why should the Democratic leadership want to kill it? The President has expressed that polling data, political consultants, and union officials had a big impact on the Senate Democratic leadership strategy. I ask unanimous consent to have printed in the Record an editorial from the Wall Street Journal that states in depth what the consultants say.

Mr. GRASSLEY. The Treasury Department has estimated that White House- Centrist plan's acceleration of the 27 percent rate reduction will yield $17.9 billion of tax relief in 2002 for over 36 million taxpayers, or one-third of all income tax payers. Business owners and entrepreneurs account for 10 million, or 30 percent, of those benefitting from the rate reduction. When you refuse to accelerate the rate cuts you harm farmers and small business persons. This is because most small business owners and farmers operate their businesses as sole proprietorships, partnerships or ``Sub S'' corporations. The income of these types of entities is reported directly on the individual tax returns of the owners. Therefore, a rate reduction for individuals reduces taxes for farms and small businesses. That is why the additional rate reduction under the White House- Centrist plan is so important. In 2002 alone, it injects $17.9 billion of stimulus into our ailing economy and small businesses. So what would a small business do with these tax savings? Well, considering that most of the recent job growth has come from small businesses, I believe they would hire more people and make more business investments. We know that 80 percent of the 11.1 million new jobs created between 1994 and 1998 were from businesses with less than 20 employees. And 80 percent of American businesses have fewer than 20 employees. This is what I refer to as the ``80-80 Rule'' for supporting rate reductions. In addition, lowering taxes now would increase a business' cash flow during the current economic slowdown. The higher cash flow would increase the demand for investment and labor. But don't just take my word for it. Take it from an October 2000 report by the National Bureau of Economic Research, a very well- regarded non-partisan organization, entitled ``Personal Income Taxes and the Growth of Small Firms.'' This report reaches the unambiguous conclusion that when a sole proprietor's marginal tax rate goes up, the rate of growth of his or her business enterprise goes down. Simply stated, high personal income tax rates discourage the growth of small businesses. And right now, that is the last thing we need. That is why it is important to do rate reductions the right way, and fully accelerate the 27% rate reduction. We are simply accelerating a decision this Senate made last summer. We should have confidence in our decision. We know that tax cuts are stimulative. When working Americans have more of their own income, they feel more financially secure and are more comfortable with spending. A full reduction of the 27 percent rate to 25 percent is much more stimulative than a reduction that is deferred to 2007, as called for under the Democrat plan. In closing, let me say who really loses when the Senate loses its right to vote on the White House-Centrist bill. It is our displaced workers, it is our fellow Americans who still have a job and the security of our jobs base; and it is the soundness of our nation's economy. The Senate Democrat Leadership will not allow an up or down vote on our bipartisan White House-Centrist stimulus package. Why? Because it would pass. We have a majority of Senators who support this package. Instead, the Senate Democrat Leadership has created a ``make-believe boogey-man'' over the issue of how health care benefits should be delivered to unemployed. But the majority of this Senate does not agree with them. But voting on this issue and helping the economy recover is not really what is on their minds. It is not their political objective. The Senate Democratic leadership is playing political brinkmanship, hoping that the American public buys into their excuses for inaction. The Senate Democratic Leadership keeps their fingers crossed, hoping that our economic difficulties will last until next fall so they can blame it on the President in their campaign ads. But the blame doesn't go to the President. He has bent over backwards to accommodate their demands. And it still is not enough. The Senate Democratic leadership would rather move the goal post than agree to a solution. This is not what we were elected by to do. This is not in service of our country. It is in no one's best interest. We are at war. Our economy is in crisis. And the only impediment to recovery is the refusal of the Senate Democratic leadership to allow this Senate to pass this economic stimulus package. A majority of our members will vote for this bill. I hope the Senate leadership hears the pleas of the American people and stops blocking this bill through procedural technicalities. The Senate should be allowed to do its job. Exhibit 1 Median income for 4-person families, by state, 2001 United States...................................................$62,098 Connecticut......................................................78,170 New Jersey.......................................................78,088 Maryland.........................................................77,447 Massachusetts....................................................74,220 Alaska...........................................................72,775 Minnesota........................................................69.031 Hawaii...........................................................68,746 Illinois.........................................................68,698 New Hampshire....................................................68,211 Delaware.........................................................67,899 Michigan.........................................................67,778 Rhode Island.....................................................66,895 Virginia.........................................................66,624 Wisconsin........................................................65,675 California.......................................................65,327 Colorado.........................................................65,079 Washington.......................................................64,828 District of Columbia.............................................64,480 Exhibit 2 New York.........................................................61,864 Pennsylvania.....................................................61,648 Nevada...........................................................61,579 Indiana..........................................................60,585 Iowa.............................................................60,125 Georgia..........................................................59,835 Vermont..........................................................59,750 Maine............................................................59,567 Utah.............................................................59,272 Kansas...........................................................59,214 Missouri.........................................................58,674 Ohio.............................................................58,222 North Carolina...................................................58,096 South Carolina...................................................57,954 Nebraska.........................................................57,659 Wyoming..........................................................57,588 Florida..........................................................57,540 Oregon...........................................................55,812 Texas............................................................55,172 Arizona..........................................................54,913 Alabama..........................................................54,255 Oklahoma.........................................................54,106 South Dakota.....................................................54,090 Kentucky.........................................................54,028 Tennessee........................................................53,835 North Dakota.....................................................52,802 Montana..........................................................52,765 Louisiana........................................................51,191 Mississippi......................................................49,606 Idaho............................................................49,387 Arkansas.........................................................48,318 West Virginia....................................................46,798 New Mexico.......................................................46,534 Source: Census (inflated from 1999 date by GDP deflator).

Mr. GRASSLEY. The more surprising figures are shown in the next chart, which shows States with median income below the national average. Recall that I said reducing the 27 percent rate to 25 percent will benefit married couples with taxable income over $45,000. Now look at the median income distributions on this chart. There is not one State on here that has a median family income of less than $45,000. So you can see that our proposal will benefit everyone, not just an elite few, from a few selected states. Mr. President, I ask unanimous consent that my second chart be printed in the Record at the conclusion of my remarks.