Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the Senate recently passed legislation reauthorizing an important child welfare program known as Promoting Safe and Stable Families. Under the auspices of this Social Security Act grant program, States are able to provide services to at-risk families to prevent the need for children to enter the foster care system. Four types of services are included in the program: family preservation; community-based family support; time-limited family reunification; and adoption promotion and support. In addition, the program provides funding for state court improvement projects. I cannot proceed without praising Iowa's court improvement project which, under the leadership of Judge Terry Huitink and Judge Stephen Clarke, has produced valuable research to streamline the court process for children waiting to be adopted. The Iowan project also provides training for judges in order to increase understanding of the needs of children in the foster care system. The reauthorization passed by the Senate ensures that money will be available for the next five years at an annual minimum of $305 million per year. An additional $200 million is authorized to be spent from discretionary funds determined annually by Senate appropriators. I am also pleased the 2002 Senate Labor, Health and Human Services, and education appropriations legislation included $70 million in discretionary spending for the Safe and Stable program, for a total funding level of $375 million in fiscal year 2002. In fact, I and some of my Senate colleagues are sending a letter to President Bush tomorrow requesting that full funding of $505 million for the program be included in the Administration's fiscal year 2003 budget. The Promoting Safe and Stable Families program is a valuable weapon in the fight against child abuse and neglect. The Federal Government spends billions of dollars each year to provide services to children who have already been placed in the foster care system. Much less money is spent on providing services before removal from the home is necessary. In fact, the Congressional Budget Office estimates that between 1999 and 2003, money spent on removing children from their homes and placing them in foster and adoptive homes will exceed by nine times the amount of money spent on services and prevention. Furthermore, annual spending during this period for removal and placement is expected to increase by thirty-five percent, from $4.8 billion to $6.5 billion, while annual spending for prevention and services is expected to increase by only nine percent, from $0.57 billion to $0.62 billion. More than one hundred thirty thousand children are waiting to be adopted out of foster care in the United States, and at least 4,500 of those children live in Iowa. Each child deserves a loving family and a safe environment. Promoting Safe and Stable Families grants provide critical services to vulnerable families and children, and I am pleased the Senate fulfilled its duty and acted to reauthorize the program.

Mr. GRASSLEY

Mr. GRASSLEY. I was not in on the meetings with the Democratic consultant, so I do not know if it is was true or not, but Members can read it and make their own determination. The theory from the articles is the political strategy of the Democratic leadership is to covertly thwart any stimulus and aid to dislocated workers. It is good to keep these issues as ``issues'' to beat up on the President next year and on Republicans, particularly if the economy does not recover. If the economy does recover, what is lost except stimulative tax relief and some worker aid? Better to keep the issue than to act now is the way it turns out. So goes the theory, then. Apply the iron fist, but do it covertly, using the velvet glove so as to escape responsibility for your actions. I hope this is a cynical political theory, but that it is not true. If it is, and only the Democratic leadership really knows if it is true. If it is true, it is sad and it is disappointing. If true, it is politics at its worst. I only hope the articles are not true. There is no better authority on this subject than the former distinguished majority leader, Senator George Mitchell, he said it best in an interview with John McLaughlin. Senator Mitchell said: Good policy results in good politics. Not the other way around. You don't get good policy because of good politics but good politics because of good policy. I hope the Senate Democratic leadership heeds Senator Mitchell's advice here and doesn't get it backwards. I hope the press accounts and rumors around the Hill are not true. But we will have to wait and find out. Regrettably we are not taking up this consensus economic stimulus bill. That says to the workers dislocated because of September 11, at a time when we are in a war environment, that they can not have anything for Christmas. They do not have the 13 more weeks of unemployment compensation; they do not have the additional health insurance. To reiterate, as most of you know, Senator Daschle has radically modified the economic stimulus proposal that the Democrats first tried to pass in the Senate. Surprisingly, it looks a lot like our White House-Centrist stimulus package. It has adopted many measures initially promoted by Republicans. Perhaps some good has come from all these weeks of discussion. I'd like to talk about some of the differences between the White House-Centrist package and the altered Democrat stimulus plan. I want to explain why I believe our bipartisan package is better for America. Let's start with the White House-Centrist plan's tremendous commitment to displaced workers. Our unemployment insurance proposal represents an unprecedented commitment to American workers. We would provide up to 13 weeks of additional unemployment benefits to eligible workers who exhaust their regular benefits between March 15, 2001 and December 31, 2002. An estimated 3 million unemployed workers would qualify for benefits averaging $230 a week. These benefits would be 100 percent federally funded at a cost of nearly $10 billion. Our proposal 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 their unemployment taxes during the current recession. The United States enjoyed a growing economy and declining unemployment for much of the previous decade. But, the economic slowdown that began last year--which was exacerbated by the terrorist acts on September 11--has resulted in substantial layoffs. The unemployment rate has risen from 4.0 percent in November 2000 to 5.7 percent in November 2001. By historical standards, the current unemployment rate is still substantially below the level at which Congress deemed it necessary to enact extended unemployment benefits. Over the past 50 years, the federal government has provided temporary extended unemployment benefits only six other times. The average unemployment rate during those times was 7.3 percent. Based on this historical record, the President originally suggested that extended unemployment benefits should be limited to those states that have a disaster declaration in effect as a result of September 11, or have a 30 percent increase in their unemployment rate. However, a number of our colleagues on both sides of the aisle insisted that we provide immediate assistance to every state regardless of their unemployment rate. We have agreed to do exactly that in our proposal. Unfortunately, some on the other side of the aisle continue to insist this is not enough. They insist we should go further by requiring every state to provide specific benefits and establish specific eligibility criteria as a condition of receiving federal assistance. We could not agree to these demands. The Federal Government has always left decisions about benefit levels and eligibility criteria to the States. The changes sought by those on the other side of the aisle would destroy this historic relationship and undermine the flexibility needed by the states to respond to their unique circumstances. I would now like to discuss our bipartisan plan's commitment to providing health care for dislocated workers. Now, Democrats have been saying since October that Republicans don't care about helping workers with health insurance. Senator Daschle himself said yesterday that his Republican colleagues, and I quote, ``so far have refused to come to the table and negotiate seriously.'' Mr. President, nothing could be farther from the truth. Since October when President Bush first called on Congress to pass a 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, we have come a very long way. Let me give you a little history first. When this debate began, our proposal relied on the National Emergency Grant program to deliver health benefits to workers at a cost of about $3 billion. Over time, that number grew, and I said publicly that we could double, or even triple, that number. I also invited the Democrats to modify the grant criteria to make the program more responsive to the needs of workers without health insurance. They refused. But that didn't stop us from staying at the negotiating table. Next, we proposed giving workers a refundable, advanceable tax credit towards the purchase of health insurance equal to 50 percent of the policy's cost. And when Democrats objected to that, claiming that the credit was too small and that sicker people would have trouble buying policies in the individual market, we came back with yet another offer, which is reflected in this bill. The new proposal, endorsed by the White House, the House of Representatives, and the centrists in this body, takes a three-pronged approach to getting health insurance assistance to people in need. It goes farther 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's 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 proposals. And still the Democratic leadership tells us we are not negotiating seriously. Mr. President, the White House/centrist proposal spends approximately $19 billion on temporary health insurance help in 2002. And it does it the right way, by using existing programs along with new ones designed to get people they help they need quickly. Now let me take a minute to describe our three-pronged approach. First, the White House/centrist 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, up from 50 percent in our original proposal. The credit has no cap, and is available to individuals for a total of 12 months between 2001 and 2003. 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. Locking people into COBRA, as the Democratic leadership insists, forces people to stay with policies that may be too expensive for them to keep, even with a subsidy. Our goal was to give dislocated workers access to all the health insurance choices available to them in the private marketplace, and we've done that in a responsible way. This bill also includes a 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 because of a pre-existing condition. 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'm surprised that the Democratic leadership doesn't want to take us up on these sweeping new reforms. Let me turn to the mechanics of tax credit proposal. It is easier to implement than the direct subsidy approach of the Democratic leadership. While their 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. Here's how it works: Newly dislocated workers will receive vouchers from their state unemployment offices or ``one stop'' centers when they apply for unemployment insurance. Workers can then take those vouchers and submit them, along with their contribution to the premium, to their employer or insurer. Afterwards, insurers would submit the vouchers to the Treasury Department for reimbursement. This approach works because it relies on existing systems to deliver the 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 won't work as well? I don't understand it. The second prong of our 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--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 in Medicaid. 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 funds on temporary health insurance assistance. In addition, we've included protection for states: a minimum grant level of $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. As we know, the Medicaid program is an important safety net program for low-income children and families and disabled individuals. Medicaid is a joint Federal and State program and accounts for a large part of State budgets. So, in this time of budget constraints due to the recession, States are struggling to make ends meet. As a result of the unique and extraordinary economic situation we now face, a number of states are considering scaling back Medicaid services, including my own state of Iowa. 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, and I recognize that many of my colleagues have concerns about it. In fact, I share their reservations, and that is why I'm emphasizing that this is not simply a garden-variety increase in Medicaid funding, but a temporary, emergency payment. The nation is calling for bipartisan compromise, and in that spirit, we've agreed to add this to our proposal. Mr. President, we have made tremendous steps toward the Democratic position in order to find bipartisan compromise on health care. Those steps have not been reciprocated by the Democratic leadership. Displaced workers deserve to be treated with respect by this body, and I believe those workers have earned a vote on this bill. I would now like to discuss the individual income tax rate reductions in the White House-Centrist plan and the resuscitated Daschle plan. The original House stimulus bill would have accelerated the reduction of the 27 percent rate to 25 percent which is scheduled to go into effect in 2007. The White House-Centrist package has adopted this approach. Now, the revamped Democrat plan would reduce the 27 percent rate to 26 percent in 2002, and would not reduce the rate to 25 percent until 2006. Recall that the original Democrat plan did not provide one red cent of rate relief for working Americans. Now think about this. The 1 percent higher rate under the Democrat plan will operate as a 4 percent rate increase until the 27 percent rate is finally lowered to 25 percent 4 years from now. That makes a huge difference to Americans who are struggling to make ends meet. Let's take a look at who will benefit from our plan's rate reduction. The reduction of the 27 percent rate will benefit singles with taxable income over $27,000, heads of household with taxable income over $36,250, and married couples with taxable income over $45,000. These are not wealthy individuals. These are middle class working Americans. I have a chart which shows the median income of 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 it and half below it. This chart shows that the average median income for a four person family in the United States is $62,098. Now, reduction of the 27 percent rate will benefit married couples with taxable income over $45,000. So it will benefit working people who earn well below the national median income level. This chart also lists those states that have a family median income that is higher than the national average. And 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 cut. The Democrat's revamped alternative would impose an additional 4 percent tax rate on these incomes over the next 4 years. That should concern representatives from those states. For example, consider that an additional 4 percent tax on New Jersey's $78,000 median income results in more than $1,300 in additional taxes. Michigan is the same: an additional $900 of tax. Washington State is hit with nearly $800 in additional tax. These are significant numbers for a working family with two children. They would spend this money to meet their families' needs, which would stimulate the economy more than a bunch of liberal Democrat spending programs. Mr. President, I ask unanimous consent that this chart be printed at the conclusion of my remarks.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise to pay tribute to a loyal friend and trusted advisor who left my staff in late August. Caran Kolbe McKee came to work for me 14 years ago. She served the people of Iowa in a number of capacities in my office. In every case, Caran demonstrated remarkable leadership qualities, steadfastness of purpose, and the kind of problem-solving ability that can make our Government work for the people in the best way possible. Caran came to the Senate in 1987, when she joined my staff as assistant press secretary. Two years later, she became my press secretary. During this time, she dealt with a range of important issues, including the Gulf War, Supreme Court nominations, whistle- blower protections, a farm bill, civil rights legislation, a campaign to apply labor and employment laws to Congress, and the budget battle of 1990. She made certain that Iowans had access to accurate and timely information through the news media and fostered a better understanding of the way in which the issues addressed by Congress affect the lives of individuals and families. In 1994, Caran took on new challenges as a special assistant. She developed initiatives and reached out to the grassroots. Caran brought to her work a great appreciation for the people who make Iowa the extraordinary place that it is. She grew up on a farm in Western Iowa, graduated from Iowa State University, and maintains many close family ties in Iowa. Caran is the kind of person who is always looking ahead and making a plan to improve things for others no matter what their stage and place in life. Just last week, President Bush signed into law legislation re- authorizing the Drug Free Communities Act, a bill I sponsored in the Senate. During his remarks, the President took time to recognize a coalition I launched in Iowa to address our state's growing drug problem. Called ``Face It Together''--or FIT--it is the first-ever community-based, statewide anti-drug coalition. The goal is to help Iowans work together to keep their neighborhoods, schools, workplaces and communities drug-free. I hope to see this productive effort continue in the years ahead. No individual deserves more credit for making FIT a reality and a success than Caran Kolbe McKee. Her vision for the project, gift for bringing people together and dedication to making the program happen were vitally important. In recent years, Caran also managed my correspondence with Iowans. In the Senate, I work hard to made the process of representative government work. I keep in close touch with Iowans by returning home when the Senate is not in session. And since 1981, I have conducted a meeting in each of Iowa's 99 counties at least one time every year. I am committed to an active dialogue with constituents, so at town meetings I always say representative government is a two-way street. While I have come to them for a meeting about the issues, they also have a responsibility to write to me expressing concerns and views and asking questions. Well, each and every one of these letters or e-mail messages deserves and receives as answer from me. Caran made sure that Iowans who wrote or called received a reply that was not just a piece of paper but a substantive, informative response. In this way, she helped representative government work for the people in a fundamental, meaningful way. Caran Kolbe McKee was a true public servant. She was a mentor to many of her fellow staff members. And she was an inspiration for the way she handled challenges--both professional and personal--with compassion, strength and courage. Now Caran has decided to spend more time with her family. She will be greatly missed, but I admire her decision and wish her the very best. Above all, I extend to her my deepest thanks.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, last week the Senator from South Dakota and I offered an amendment which would prohibit meat packers from owning, feeding or controlling livestock prior to slaughter. Together, we had introduced legislation in the Senate to accomplish the very goal of our amendment. A majority of our colleagues in the Senate voted in favor of our amendment. However, since that time, concerns have been raised by the Secretary of Agriculture and some in the livestock industry that the language of the amendment, specifically the word ``control'' would affect forward contracts or marketing agreements. I do recall that the Senator from Montana inquired as to whether this amendment affected such contracts and that the Senator from South Dakota responded that the amendment did not affect them. However, I would ask the Senator from South Dakota for further clarification on that issue.

Mr. GRASSLEY. Thank Senator Johnson for clarifying the scope of the amendment.

Mr. GRASSLEY. I concur and understand the distinction between control of livestock production in the operational sense and a mere contract in which a packer has the right to receive delivery of livestock in the future. I also understand that farmer owned cooperatives, including federated agricultural cooperatives, are exempt if they own a packing plant. But there is yet another situation in which some packers enter into joint ventures with farmer-owned cooperatives that has members which would supply the jointly owned packing plant. It has never been our intent to prevent cooperatives from engaging in relationships with packers, and the amendment does not do that. For example, in Iowa, Excel, which is owned by Cargill, is in negotiations with a beef cooperative to build a packing plant to be owned by a joint venture. If that deal is completed, the actual packer would be the joint venture entity formed by Cargill/Excel and the beef cooperative. Co-op members who chose to participate in that endeavor can freely commit all or a portion of their cattle for slaughter without violating this amendment. The reason is that the packer in the exercises no operational control over livestock production. Rather, the package again has a mere contractual right to receive delivery of cattle that meet its specifically on graduate and quality. That contract may be a standards forward contract or marketing agreement, or the contract may take the form of a membership agreement between each farmer member and the beef cooperative. In either even, this amendment does not affect this joint venture arrangement.

Mr. GRASSLEY. Mr. President, I understand that the Senator from South Dakota does not intended the word ``control'' to include forward contracts and marketing agreements. However, how are such contracts different from operational control?

Mr. GRASSLEY. Reserving the right to object, I think I have something better than being part of the unanimous consent agreement, or something better than even a veto to do this. I had the word of the Senate majority whip that I was going to be able to bring my amendment up right after the Durbin amendment this morning after 11:30. It seems to me, if I have the word of a fellow Senator that I have a chance to bring my amendment up, I don't even have to be included in a unanimous consent. If you want to nail it down that way, nail it down; it is OK with me. But it seems to me I was told by the majority leader that I was going to be able to bring my amendment up, and that word is better than anything else that can go on in this body.

Mr. GRASSLEY. I know you are.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in keeping with my policy on public disclosure of holds, today I placed a hold on further action on S. 1803, legislation reported out by the Senate Foreign Relations Committee to authorize appropriations under the Arms Export Control Act and the Foreign Assistance Act of 1961. I am particularly concerned with Section 602 of this legislation. Section 602(a) expresses the sense of Congress that the United States Trade Representative should seek to ensure that Free Trade Agreements are accompanied by specific commitments relating to nonproliferation and export controls. Section 602(b) specifically directs the United States Trade Representative to ensure that any Free Trade Agreement with Singapore contains or is accompanied by a variety of specific nonproliferation and export control commitments. Both of these matters--what sort of commitments Free Trade Agreements should contain, and specific negotiating instructions to USTR relating to the United States-Singapore FTA negotiations--are matters under the jurisdiction of the Senate Finance Committee. Apart from the fact that Section 602 deals with matters that pertain to the jurisdiction of the Finance Committee, I have an additional practical concern as well. According to the Trade Act of 1974, the United States Trade Representative is required to consult with and report to Members of the Senate Finance Committee and the House Committee on Ways and Means on the status of trade negotiations. This includes ongoing negotiations, like the US-Singapore FTA talks, and future FTAs in general. If enacted into law, Section 602 would likely result in a confusing situation in which the Senate Foreign Relations Committee is advancing negotiating instructions to USTR on behalf of Congress, even though the oversight responsibility for such negotiations lies with the Finance Committee. USTR would have to consult with the Finance Committee about its implementation of negotiating instructions developed by the Foreign Relations Committee, instructions Finance Committee Members had no role in developing, and are not familiar with. As far as I know, no Member of the Finance Committee has even seen Section 602 before. Just a few days ago, the Finance Committee approved a bipartisan Trade Promotion Authority bill by a vote of 18-3. This bill contains specific and detailed negotiating instructions relating to multilateral, regional, and bilateral trade negotiations. The issues raised in Section 602, especially those framed as negotiating instructions, should have been considered by the Finance Committee in the context of the mark-up of TPA legislation, not on the floor in the context of legislation authorizing appropriations under the Arms Export Control Act. For these reasons, Mr. President, I will continue to hold this legislation until the concerns I have raised here are addressed.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I compliment the University of Montana. They did, in fact, play well--too well--against the University of Northern Iowa. Before I had bragged to Senator Daschle 2 weeks ago about how we were going to show the University of Montana how to play football, I wish I had researched how they have done so well in the last few years. I probably would not have been so boastful. But we had just come away from a tremendous victory, the UNI Panthers over the University of Maine Black Bears, just the week before. I thought if the Panthers could beat the Black Bears, they could surely beat the Grizzlies. But it did not turn out that way. You played tremendous football, and I thank you very much for being so temperate in your remarks about the Panthers of the University of Northern Iowa.

Mr. GRASSLEY

Mr. GRASSLEY. I am not sure I was aware of it or I would have asked permission to go beyond that because I know all the previous speakers spoke longer than 5 minutes and the gavel was never rapped. So if that is the case----

Mr. GRASSLEY. Mr. President, the session is about to end. I would like to call to the attention of colleagues one proposition that I hope comes before the Senate before we adjourn. That is the so-called economic stimulus package. You might call it an economic security package. Nothing I say is going to in any way detract from the working relationship that I have with Senator Baucus as chairman of the Senate Finance Committee. Maybe in this instance we did not reach an agreement involving he and I having complete agreement on a final product. There were other factors that came into play that maybe kept those negotiations from being one-on-one negotiations where people could freely negotiate and reach an agreement as you should in a conference. But all of this discussion, plus other forums I have been in with Senator Baucus as chairman of that committee, have been very cordial and productive sessions, even when they have not come out with a product. I only wish that when the stimulus package comes to the floor I have the privilege of doing as we did last spring defending that package, along with Senator Baucus, with the two of us working together to get it through the Senate. Hopefully that can still happen. It may not happen, but it doesn't mean that Senator Baucus has not worked hard to help that happen. Hopefully, we can continue next year to do some things in other areas that fall within the jurisdiction of the Senate Finance Committee that will bring bipartisan bills to the Senate floor for successful passage by the Senate. Probably what we are ending up with here, instead of what might come out of the conference committee which I was referring to in my work with Senator Baucus, is kind of a hybrid that involves some individual negotiations and some people who aren't even on the Senate Finance Committee, which has jurisdiction over most of the product. But this is a bill that is going to be introduced in the House. It is my understanding that it is a bill in which I will have some input, and the White House, and a group in the Senate called the centrists, a bipartisan group of Democrats and Republicans who might call themselves kind of middle-of-the-road types. It is an economic stimulus package presumably passing the House and coming to the Senate. I hope people will see it as a very rich proposal that will help displaced workers and give a boost to the economy. Since September 11, we have focused on dislocated workers and unemployed people who have been hurt. But there are also a lot of people who are working and who are in anguish over what the future holds for them. Even if they have very good jobs, that might be the case because things aren't the same since September 11. When we talk about an economic security package, even though we might tend to concentrate on the dislocated workers, we are concerned about all workers because people have some questions about the future. Because of what happened on September 11, they see the future a little differently with a little less security than they did prior to that time. An economic security package addresses the needs of people who are working as well as people who are dislocated. It does what we can to help those who are dislocated through troubled times. But it also is meant to give some confidence to those who are working and to beef up the economy so we will be able to find jobs for people who are dislocated. We are in a state of war. We don't know how long that state of war will be there. But it is not going to end when we find the last Taliban in Afghanistan, or the last al-Qaida member. It isn't going to end when we find bin Laden and other leaders responsible for what happened on September 11. How long the war is going to go on I do not know. But it is not over. We are talking about America being in a state of war since September 11. The Congress of the United States has addressed that and has given the President the backing that our Constitution demands from a partner in a war act, as Congress is a partner in that. We need to remember that we are in a state of war and that things aren't the same. The Senate ought to respond as if we were in a state of war. I think one of the ways to responsibly respond is for the Senate to vote on the economic security or economic stimulus package. I hope the Senate majority leader will let his caucus vote the conscience of the individual Member. I hope there isn't any attempt to put the position of the party ahead of the good of the country in the closing hours of this session so we can pass this bill. It is time to finish our work, but it is also time to do the people's business. There is nothing more important right now than responding to the needs of the people of our country in a time of war when there is a great deal of anxiety and anguish about the future, not only among the dislocated but among those who are even working. We are in the position of finishing the last of the appropriations bills. It is time to help the dislocated workers and those who are working and create jobs for the employed to give a shot in the arm to the economy. I believe the White House centrist agreement is bipartisan and bicameral and is a product that ought to be brought before the Senate after it passes the House. Remember that this isn't something coming to the Senate just on the spur of the moment in the sense that there is a rude awakening and we ought to do something about the economic situation and pass some stimulus. The President recommended it in early October when he proposed a program of accelerated depreciation, tax reduction, tax rebates for low-income people, enhancement of unemployment compensation, and help for the health care needs of the unemployed. The President did that. It wasn't the President who started it. There were lots of meetings held by Senator Baucus with Democrats and Republicans, and maybe meetings with only Democrats. We held separate Republican meetings in early October on whether or not we ought to have a stimulus package. We sought the advice of Chairman Greenspan. There was some question in late September or early October when these meetings were being held about whether or not we needed an economic stimulus. But it was just a matter of a couple weeks until the President, probably on his own, made a determination and a proposal to Congress. Parallel with that, there was a growing conclusion within both Houses of Congress and both parties that an economic stimulus package was needed. So we have been working in this direction for a long period of time. There is a product before us now that is bicameral and bipartisan. Partisanship has been evident in this body, by the Senate Finance Committee voting out a bill on party-line votes, bringing it to the Senate, and finally coming to the determination that that partisan bill could not pass. It is not because everything in it was wrong but just because partisan legislation does not get through this body. You have to have some bipartisanship in order for a product to successfully clear this body. So we have now a further compromise. It is not the President's proposal. We have gone way beyond what the President wanted to do in some of these areas. It does not have some of the baggage of a bill that previously passed the House of Representatives had, such as, for instance, the retroactive alternative minimum tax, where there is a lot of money just coming out of the Federal Treasury back to corporate America. It has many of the things the Democrats wanted and many of the things the Republicans wanted. But it is going down the same road now because it is bipartisan, bicameral, and it is coming to the Senate. As to things such as accelerated depreciation, there are some changes in the alternative minimum tax that reflect the realities that accelerated depreciation will not work if there are not some changes in the alternative minimum tax. It speeds up tax brackets for middle- income taxpayers by reducing the 27 percent bracket down to 25 percent, and doing it January 1, 2002, instead of January 1, 2004, and January 1, 2006. We recognize the needs of stimulating the consumer demand by tax rebates to low-income Americans. We increase unemployment compensation by 13 weeks. We have, for the first time in 70 years, a very dramatic change in the social policy of this country for unemployed people by providing health insurance for unemployed people. That is welcomed by a lot of Republicans. And it ought to be welcomed by a lot of Democrats. So I want to describe that. I would also like to take an opportunity to clear up the record on press conferences that are being held by my friends in the Democrat leadership. Too often it is said, in a disinformation way, that what is really holding this up is that Republicans do not want health benefits for dislocated workers. I think I have just now said, in this new policy--the first in 70 years; the biggest social change in the policy for dislocated workers in 70 years--that we support this. It is part of this package. So why would anyone say that Republicans do not care anything about health benefits for dislocated workers? The President proposed it early on--not in a way I thought was very workable, but he proposed spending money on it. We have a package that has $23 billion of such benefit in it. In fact, it is a package with $2 billion less which helps more people than what some of the Democratic proposals would do. So if you can help more people for less of the taxpayers' money, isn't that good? And isn't it good, too, that there is agreement that it needs to be done? I do not think it is fair for people in the Democratic leadership to say Republicans are against helping with the health benefits for unemployed workers when it has been in every one of our plans and even the President was the first to propose it. I think the bipartisan, bicameral provisions that are coming before the House and Senate within the next 48 hours represent a genuine compromise. Not only does it provide an unemployment insurance extension of 13 weeks, but it also has Reed Act transfers--more money-- to the States for them to spend for enhancing their own----

Mr. GRASSLEY. We give more money to the States if they want to improve even more their unemployment benefits. We are giving a 60- percent tax credit for health care tax for unemployed workers, including people who can use it to extend COBRA insurance benefits. States will have the ability to address problems such as part-time workers. There is a modest proposal to accelerate income tax rate reductions in the 27-percent bracket. I am sure there are a lot of Members of this body, particularly those who voted against the bipartisan tax bill last spring, who are not going to want to speed up, from 27 percent to 25 percent, the reduction of that tax rate. Somehow there is an insinuation that if you do that, you are helping the wealthy. I want my colleagues to remember that this benefits a single taxpayer earning as little as $27,051 and going up to $65,000. And then, for a married couple, that would kick in at $45,201, going up to $109,000. For people making $27,000, where this bracket starts, or for married couples making $45,000, these are not rich people or rich families. What we are talking about is a 2-percentage-point tax cut for these folks. So is there anything wrong with a single person paying $770 less in taxes or a married couple paying $1,281 less in taxes if they fall into this income tax bracket that we would call middle income? It seems to me it is fair, but, most importantly, it is meant to be a stimulus. This is something that middle-of-the-road Democrats and Republicans support. This is part of the original centrist package. We also have a 30-percent bonus depreciation. That is something that was in everybody's package, Republican or Democrat, House or Senate. We have also a 5-year net operating loss carryback. That was not in the President's package. That was not in the Senate Republican package. That was in the Senate Democratic package. On corporate alternative minimum tax, there is no repeal, no retroactivity, like was lambasted when it came out of the House that way. There is no corporate AMT repeal, retroactive or otherwise, in the White House-centrist package. There are some well thought out reforms that cost about one-twentieth of what the House bill did on alternative minimum tax. That is a very major movement. That is why the centrists support this compromise. The White House-centrist package extends expiring tax provisions by 2 years. Finally, the White House-centrist package includes bipartisan tax relief proposals for victims of terrorism and business in New York City. These are much needed, and they are urgent matters. I believe the Senators from New Jersey, New York, and Connecticut ought to find it inviting that these things are in there for their constituents and support this package. Let's get the record straight. Let's have a good debate. Let the votes fall where they may. I can't help but ask our distinguished majority leader, Senator Daschle, to give the people what they want--a bipartisan economic stimulus bill with the largest aid going to dislocated workers in a generation. It is clear that the people and the President don't want stalling, don't want muddling, don't want delay and, most important in this state of war we are in, don't want partisanship. I urge the Senate majority leader to do the right thing: End this session by delivering a bipartisan priority. By doing it, we put the people's business first. If I were the majority leader, I would not know how to explain to the American people, as I returned home to the State of Iowa to enjoy the holiday season there with my family on the farm at New Hartford, why millions of Americans are desperately waiting for the Senate to pass an economic and job security bill that has been in this body for the last 2 months. If I were the majority leader, I don't know how I would explain to the people of Iowa, how I could look my constituents straight in the eye, and all of my taxpayers and all the small business owners of Iowa, and explain, by not passing this bill, how I would choose politics ahead of people. It is time to get the job done. There is still time to do it. If people are allowed to vote their conscience and not have the restriction of party, we can get the job done, I believe. I yield the floor.

Mr. GRASSLEY. I think now that I have spoken this long, I would say about 10 minutes.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, will the Senator yield for a question?

Mr. GRASSLEY. I have to assume that after listening to you and after listening to Senator Harkin, you don't want to hear another point of view on this issue in conformity.

Mr. GRASSLEY. I would like to speak before you speak.

Mr. GRASSLEY. Then let's leave it this way. You are doing exactly what I said. I won't say anything, but I resent your saying that we are stalling on this side when I was here to offer an amendment even at this late date. You told me less than an hour ago, no more amendments. So have the record show that the Senator from Iowa, the senior Senator from Iowa, was ready to offer an amendment and go through a time.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I thank the distinguished Senator for yielding me time. I will address one specific issue of the bill, which is the farmer savings account, and then I would like to speak to the trade-distorting aspects of the farm bill legislation that is before us, which the Cochran-Roberts amendment takes into consideration and alleviates a lot of problems that other farm proposals before us have. I will start with the farmer savings account. I want to make clear the farmer savings account is not an idea that comes only from America. Other countries, not exactly as in this bill, have come up with the idea of farmer savings accounts to help sustain family farmers from two standpoints: One, in a way that is not trade distorting and violative of the trading agreements; and, two, to continue support for the family farmer in a way that is not trade distorting. Few occupations face more uncertainties than agriculture. Each spring, farmers across the nation put their seed in the ground and pray for sufficient rain and heat. A single storm during the growing season can wipe out an entire year's work and place farmers in dire financial distress. Each fall, farmers go to the fields to harvest their crops, the value of which is completely subject to volatile and unpredictable commodity markets. As a result of these factors, farmers experience frequent cyclical downturns in income which can make it difficult to continue their operations from one year to the next. Farmers need the ability to offset these cyclical downturns by deferring income from more prosperous years to use during the lean years. The farmer savings accounts provision in the Roberts-Cochran title would allow a producer to establish a farm counter-cyclical savings account in the name of the producer in a bank or financial institution that has been approved by the Ag Secretary. The Secretary would provide a matching contribution that is equal to the amount deposited by the producer into the account, up to a maximum of 2 percent of the average adjusted gross revenue of the producer. A producer could withdraw the account funds from the account if the estimated net income for a year from the agricultural enterprises of the producer is less than the adjusted gross revenue of the producer. It is important to keep in mind that unlike other counter-cyclical programs before the Senate, this counter-cyclical approach is not dependent on commodity prices, farm production, or farm income. Therefore, this approach is ``green-box,'' or fully compliant with our international trade obligations. It would not subject our farmers to the possibility of retaliation by our trading partners. Moreover, this amendment benefits producers of non-program commodities that would otherwise be ineligible for assistance under our federal farm support programs. Producers of livestock, fruits, and vegetables are often overlooked by our federal farm programs. This amendment would give these producers the same counter-cyclical self- help program that it gives producers of program commodities. In recent years, I have strongly advocated the creation of FARRM accounts to allow farmers to deposit funds in an account and defer income taxes for 5 years. Of course, this legislation would have to be considered within the context of the Finance Committee. The provision we are considering would ensure that matching contributions equal to the amount deposited by the family farmer, up to a maximum of 2 percent of the average adjusted gross revenue of the producer, would be placed in special savings accounts. I have been an advocate of this idea for a very long time. In fact, this is similar to the provision I introduced in my own commodity title working draft earlier this fall. This type of proposal will provide farmers an incentive to save money when they have the money to save. With this type of program, farmers can begin to fashion their own countercyclical protection. Now, this program sometimes is belittled with the fact that farmers are not making enough money to put away anything in savings. Let's not try to set a pattern and assume something for 2.5 million farmers, because 2.5 million farmers are not one to the other the same; they each have different circumstances. We can provide an environment where the farmer can make a determination for himself. This bill does that. In addition, if we are successful in advancing this concept through the Senate, I will push hard to protect these funds from up-front taxable consequences by modifying the bipartsan farm accounts legislation I have already introduced in the Senate. In conclusion, I urge my Senate colleagues to support the Roberts- Cochran amendment. This amendment will give all farmers the much-needed opportunity to help themselves through less prosperous years. And it meets this need without risking a violation of our international trade agreements. Now, when it comes to the trade issues, I don't think there has been enough discussion either in the other body or this body on the impact of various proposals on our trade agreements with the concern about whether or not they violate trade agreements so we can be retaliated against. The Cochran-Roberts proposal takes that into consideration. Our family farmers are highly dependent on exports. For instance, in a given year, the United States exports about one-quarter to one-third of the farm products it produces, either as agricultural commodities or in a value-added form. For the past 25 years, the U.S. has exported far more agricultural goods than it has imported. One of the principal benefits of the Uruguay Round negotiations, perhaps the most important benefit for U.S. agriculture, was the improved condition of market access. For the first time, all agricultural tariffs were ``bound,'' and agricultural tariffs were reduced by 36 percent on average over a 6-year period. In addition, the U.S. made a binding commitment not to exceed its amber box spending limitation. Because we take our legally binding commitments seriously, and because we want our trading partners to do the same, we have never violated those commitments. Were we to do so, the United States and its trading partners would likely be subjected to harmful trade retaliation. What would retaliation mean for our family farmers? If a WTO complaint were brought against the United States for exceeding its domestic support commitments, it is possible that many countries could become complainants in the case and allege injury to their farmers and their economy. If the U.S. were found in violation of our trade obligations, we would be expected to change our current farm program, midstream. If we were not able to, the complaining countries would receive authorization to retaliate by raising duties on U.S. goods. The likely first target of any retaliation would be U.S. agricultural exports, because countries fashion their retaliation lists to pressure the non-complaint country to change its practices. The products chosen for retaliation are those that are the most successful exports. For example, U.S. exports of animal feed products and components could be targeted. This could affect corn, soybeans, wheat, beef, pork, or any of our agricultural exports. However, a country would not be limited to agricultural goods only; if it did not import significant amounts of U.S. agricultural goods, a successful complaining party could also target industrial products. Tariff retaliation against U.S. agricultural products would back products into the U.S. market placing ever greater downward pressure on domestic price. U.S. farm domestic prices would weaken even further, and this could cause the price of U.S. farm programs to rise dramatically. This would particularly be true in basic farm commodities such as wheat, corn, and soybeans where a large portion of the U.S. crop is exported. But if the programs that supported the commodity price were the same programs that were violating our trade commitments, we would not be allowed to provide our family farmers any support, at least above that limit. If our farmers experience a bad year and our farm programs pay out large amounts in no-trade compliant payments, we would be forced to freeze or alter our farm assistance payments. Simply put, the type of program the Senate Agriculture Committee approved would fail family farmers when their need is the greatest. Also, tariff retaliation against U.S. industrial goods due to excessive ``amber-box'' ag spending could create a substantial political backlash against U.S. farm programs. U.S. exporters of non- agricultural products who might suddenly be caught in the crossfire of retaliation would demand that their government officials correct the problem so that they can regain their hard-earned access to foreign exports. U.S. credibility would be undercut if it were determined that the United States was not living up to its current commitments. It's very realistic that the Democratic farm bill we are considering would cause U.S. farmers to become increasingly dependent upon government payments that could vanish at a time when the economic situation is worsening and the federal budget surplus is disappearing. A decision by the United States to exceed its WTO domestic subsidy commitments would undermine the current Uruguay Round arrangement and make it much harder for the United States to achieve a workable multilateral agreement in the new WTO trade negotiations. This could be extremely important to farmers if the budget surplus evaporates and Congress is unable, or unwilling, in more difficult economic times to continue to fund farm programs at recent levels. It is very important the farm bill we pass be one that advances our trade agenda and does not hinder it. The farm bill needs to help family farmers, not limit their potential marketplace. Family farmers in Iowa and across the United States need profitability, and there is no profitability check from the Federal Government. The profitability comes from the marketplace. The Government cannot provide profitability, only that marketplace can. I think the Cochran-Roberts legislation has taken us to a point where we can be WTO compliant, help our farmers, and move ahead.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today Senator Kerry and I introduced bipartisan legislation that will provide some relief to those workers who are facing a massive tax bill on the phantom income they have from incentive stock options. Because it is important that my colleagues understand the unfairness of this matter, let me provide a very brief background. Incentive stock options ISO, are an option given by an employer to an employee to purchase stock at a certain price. An individual does not recognize any income on the grant of the option or exercise thereof if the individual holds the shares for more than 2 years after grant and 1 year after exercise. If the holding period requirements are satisfied, the employee is taxed on the excess of the sale price over the exercise price on his disposition of the shares. The reason these employees have such a significant tax bill is due to the workings of the Tax Code's answer to Rube Goldberg, the Alternative Minimum Tax, AMT. The employee's nonrecognition of income discussed above does not apply for AMT purposes. For AMT purposes, the code requires the recognition of the excess for the stock's fair market value on the date of exercise over the option price when the stock is substantially vested. Thus, while an employee does not have a tax liability of ordinary income for exercising his ISO the employee may be subject to AMT when he exercises his ISO. While in years past, this may not have been too great a problem in a time when share prices are increasing and individuals have the money to pay the AMT. It is a very different story when shares are declining. The individual is then facing the AMT charges based on the exercise value but often has no funds to pay the AMT since the stock that was the source of the AMT has declined in value since it was exercised. It is true that if the individual had sold the stock in the same year he exercised his ISO he would have potentially reduced his AMT liability significantly. However, the code sends a mixed signal to the individual telling him that he must hold the stock for one year after exercise if he wants to avoid taxation at ordinary income on the value at the point of exercise. The above are the facts of the tax code, but they do not reflect the very real disaster this has done to many people across the country. The story of one company in Cedar Rapids, IA, McLeod USA, puts a real face on how this tax has destroyed families. I have received letters from dozens of honest hard-working people of this company telling me how they are making a good salary in Iowa, say $50,000 or $70,000, and were also given these ISOs as an additional incentive to work for McLeod. Now, because of the AMT rules and the declining market, these families are facing tax bills of tens of thousands, if not over a hundred thousand dollars. It is wiping out a lifetime of savings and hardwork, all to pay a tax bill on phantom income, income they never received, never enjoyed and never had. It is outrageous and it is just plain wrong. The bill that Senator Kerry and I have introduced will provide significant relief from the AMT tax bill for workers. It allows employees to determine the value of their stock options on April 15, 2001, (as opposed to the exercise date), which will reflect the downturn of the market. This will go far in minimizing the AMT hit that employees face. In addition, the relief is targeted to assist low- income and middle-income families. I hope my colleagues will join myself and Senator Kerry to put an end to this tax disaster. I ask unanimous consent the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I will address the Senate for a short period of time today. Next week I hope to be able to speak on this subject with a potential amendment I might offer about the trade aspects of the farm bill. I start with the premise that we have a farm bill--and we have had farm legislation for 60 or 70 years--with what we call a safety net to give structure to the economics of agriculture, to give some certainty to agriculture, and to help farmers in times of low prices and problems. So much of farming is beyond the control of the individual farmer. One of those things is international trade. Maybe we don't think of that as often as we do things such as natural disasters that hit farmers, domestic politics which might cause prices to go up or down, and decisions of the Federal Reserve which affect the value of the dollar. Sometimes international policies affect the value of the dollar. There are just a lot of things out there that affect the family farmer over which they don't have any control. Family farmers tend to be more in the position, unlike most businesses, of having to take a price the market dictates for the products they sell over which they don't have any control. Also, they do not have a lot of control over the cost of their input for the production of their products. They are one of the few segments of our economy that have to pay whatever the market demands for their input, and they receive from the market whatever it pays. That is why we have a safety net. We have had a safety net for farmers of one form or another. There hasn't been a lot of difference in those programs over the last 70 years. We tend to speak about farm bills as if this farm bill is much different from the previous farm bill, et cetera. I am not going to go into those things. But there hasn't been that much difference. The premise has been very much the same. We are going to have a safety net for farmers to guarantee a certain floor of income at times of low prices because there is so much affecting the economics of the family farmer that is beyond their control. I start with the premise--and the extent to which my colleagues disagree with me on this, I welcome their disagreement and this debate on it--that the farm bill, whether it is a 1950-type farm bill, or the 1996 farm bill, or even the one we are debating right now, is meant to have a safety net, is meant to sustain farmers in business during the period of time of low prices, which a lot of times is caused by things beyond the farmers' control. This safety net doesn't guarantee profitability. I don't think there is anything in any farm bill I have ever seen to guarantee profitability. That is where trade comes in. When we produce 40 percent more than we consume domestically, it means that farmers have to have the ability to export. Export is very important. When there is no profitability in the farm bill, then the only profitability in farming is going to come from the marketplace. When you produce more than you can consume domestically, that means the world marketplace is where the profitability for agriculture is going to come. In other words, there is not profitability in a check from the Federal Treasury to a farmer when prices are low, as has been the case in recent years, particularly in emergency bills, but there is profitability in exports. Let me put it this way: the only reason there is profitability for farmers is due to the exportation of our surplus agricultural products. That is why trade is an important part of any discussion of farm legislation, even though the trade policies of this country are decided by other committees. One of those happens to be the Finance Committee on which I serve. The Finance Committee has jurisdiction over all trade policy. The most recent one is just about out of committee now--it had an 18-to-3 vote on final passage--which was trade promotion authority. That is why sometimes when news-people ask me, what are we doing for farmers in the farm bill, I give the same spiel you just heard me give about the safety net aspects of farm legislation being very important to helping sustain farmers. But there is no profitability in the check from the Federal Treasury when prices are low. The profitability for farming is going to come through trade. That is why I like to remind people that trade promotion authority, and other trade policies, are probably as important to the family farmer as what is in a farm bill, and particularly when it comes to profitability. So I try to look at a farm bill to make sure it has these opportunities. But the most important fact is that we have had trade agreements. The last General Agreement on Tariffs and Trade, which created the World Trade Organization, had certain limits that could be spent in certain categories of farm support. There is a limit on what we call trade distorting expenditures, that if you exceed those, the United States and, in turn, the U.S. farmer, can be retaliated against legally if those are exceeded. So we have to be concerned about those issues. I am not here to say that in every respect all of the different farm proposals floating around here are unconcerned with trade implications. It does not matter whether it's the farm bill that is before us, it does not matter whether it is the Daschle amendment to that bill, it does not matter whether it is Senator Roberts' and Senator Cochran's proposal, and it does not matter even whether it is the House bill; it is legitimate to bring the issue of trade to the attention of our colleagues. For instance, in the House bill, it is my understanding--and I have not read that bill in its entirety, obviously--but it is my understanding that the House Agriculture Committee was concerned about this, so they put a provision in their farm bill that if the Secretary of Agriculture found that legislation violated the WTO agreements, that it could be suspended. If that is exactly how it works and we have to spend more on agriculture, because that would be trade distorting, due to the fact that prices are low and then we could be retaliated against dollar-for-dollar for the excess expenditure and the farm program has to be suspended, then you are suspending the safety net for farmers at exactly the time they are going to need it. What the bill does is cut off payments when family farmers would very likely need those payments the most. Now, this can be avoided. Maybe my colleagues who are writing these provisions will say they are taking that into consideration and they are going to avoid it, or they may say the conditions under which this happens are not as dangerous as maybe I lead people to believe. So I am not here to question anybody's intentions or motivations or anything. I am just here to ask my colleagues to give further thought to ways in which the legislation that is obviously going to become law--if it does not become law before this year, it is going to become law early next year; and whenever it becomes law, it is going to become law in ample time so we have it for the next crop-year in 2003 that it is needed--to take these things of trade into consideration. (Mrs. CARNAHAN assumed the chair.)

Mr. GRASSLEY. Each year our farmers become more reliant on overseas markets to sell their commodities. In fact, last year, farmers in my home State of Iowa exported more than $3 billion worth of corn, soybeans, meat products, and even live animals. Nationwide, American farmers annually export close to half of their soybeans and 20 percent of their corn production. Given the importance of export markets to American agriculture, the United States must assume a leading role in eliminating tariffs, excess trade-distorting subsidies, and other barriers to trade. In 1994 we joined our trading partners in the World Trade Organization to discipline domestic agricultural support programs and to facilitate more open trade. The agreement, called the Uruguay Round Agreement on Agriculture, capped the level of trade-distorting support that WTO members can provide to producers. Worldwide, agricultural tariffs were reduced by an average of 36 percent over a 6-year period. The United States agreed to reduce its own trade-distorting domestic support, or what is referred to as ``amber box'' spending under this trade agreement, by 20 percent, down to a point of $19.1 billion per year. The Senate must pass legislation that abides by this commitment or our trading partners could take retaliatory action against our farmers and against our agricultural exports. Unfortunately, the farm bills before us, and I think particularly the House bill--and even the bill that was passed out of the Senate Agriculture Committee--leads our Nation down a dangerous road toward exceeding our ``amber box'' limits and opening the door to this WTO legal retaliation. Retaliation through higher tariffs on our exports and reduced market access for our farmers would reduce the worldwide demand for our commodities, resulting in an overwhelmingly domestic surplus and depressing domestic commodity prices. In light of the high stakes for America's farmers, I urge my colleagues to carefully consider the potential impact on America's farmers of a farm bill that could violate our international trade commitments. We need to revisit the piece of legislation that was passed out of committee and work to improve it before we conference with the House because, as I pointed out, I think the House bill has very dramatic problems in this area as well. Our farmers know how important international trade opportunities are for our commodities. That is why farmers support issues such as trade promotion authority and trade with China. That was such a hot issue last year being dealt with in the Congress. But if we don't practice what we preach regarding our World Trade Organization commitments, how will we ever convince our potential trading partners around the world that they should lower their trade barriers? And that is a goal of not only this administration, but also we have to compliment the previous Secretary of Agriculture, Mr. Glickman, the previous Special Trade Representative, Charlene Barshefsky, when about 15 months ago they tabled in Geneva for negotiation purposes of the agricultural negotiations that were going on under the WTO as it was mandated to happen in 1993 to start in the year 2000. They tabled negotiation positions for our country's farmers that were in the best interests of our farmers of zero tariffs in agriculture. This administration has followed through on that in the Doha Round that started in early November, which is the new round of WTO negotiations that are going on. And that is what trade promotion authority is all about, to give the President the authority to make such an agreement. We have followed on the very good suggestions of the Clinton appointees on what sort of direction our agricultural trade ought to take. I don't think there is any partisan disagreement on what we want to do on international trade to help the American farmers. The only thing we have to do is make sure we write farm legislation that is compliant with the intentions of what was initiated in the Clinton administration and followed through on by the Bush administration. As I have said in the past, the Government can provide support, but only the marketplace can provide profitability. This isn't putting anybody in a position of political posturing if they don't agree with that. I just think it is the cold hard truth about our agricultural economy, if we are going to produce to our potential we must sell our surplus on the world market. We surely don't want the alternative, which is to produce for the domestic market only and find ourselves in a position of taking 40 percent of our productive capacity out of production and, through the Federal Treasury, pay the farmers for doing that. I don't think the taxpayers would support that. Worse yet, that might sustain farmers; you could even have support high enough to guarantee profitability. But you would ruin the economy of the United States if you produced 40 percent less farm machinery, 40 percent less input into agriculture. A lot of that comes from the small town main street businesses of the America. We don't want to do anything negative to them. We want to keep our rural areas vibrant. That means economic activity. Economic activity in American agriculture is to produce and to produce not only for the American people but for the hungry of the world, to help our economy, but also to help the economy of other countries as well. It is a simple fact of life that the profitability in farming ought to come from the worldwide marketplace because the Federal budget is not big enough to provide farmers profitable margins year after year. If we don't establish a farm bill that helps us to lower trade barriers, we will not be able to assist the agricultural community develop this long period of profitability. Last week the Food and Agricultural Policy Research Institute, which is located on two campuses--Iowa State University and the University of Missouri--published a paper stating that there was over a 30-percent likelihood that the farm bill coming out of the Senate Agriculture Committee would violate our trade commitments. They could say the same thing about some other ideas floating around here. They surely could say it about the House agriculture bill. Think of it this way: If there was a better than 30-percent likelihood that a ship would sink, you wouldn't get on board. The farm bill before us has the potential to impose significant harm on our family farmers by violating the current trade commitments. If this were to happen, our trading partners could refuse to accept our exports and this action, being legal, at the same time would decimate the price of U.S. commodities affected. We can do better. I hope as the debate on this farm bill continues or the debate on any farm bill continues, these issues of compliance with our international obligations, which is for the benefit of American agriculture, because as we can reduce worldwide tariffs that average about 60 percent down to where U.S. tariffs are single digits on agricultural products, just those facts make it a no-brainer that the United States should pursue free trade policy in agriculture and that it will benefit the American farmer. If our tariffs are here and the worldwide tariffs average 46 percent, whatever we do to negotiate to bring those down--and remember our goal under the Clinton administration, now followed by the Bush administration, is zero tariff--it is a no-brainer that this is going to affect very positively American agriculture and bring profitability to the farmer. The only place for profitability in an industry that exports or that produces more than 40 percent more than we can consume domestically, the only profitability then is in the world market. I yield the floor and suggest the absence of a quorum.

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to inform my colleagues that I have lodged an objection to the Senate proceeding to S. 1805 or to any other legislation or amendment that converts temporary judgeships to permanent judgeships. When there is a temporary judgeship on a court, when the temporary judgeship expires, the next permanent vacancy that occurs will not be filled and will be deemed not to be a vacancy, so that the total number of permanent judgeships allowed by law stays the same. On the other hand, the net effect of converting a temporary judgeship into a permanent judgeship is the creation of a new permanent judgeship for that court. The creation of new judgeships should not be taken lightly. As you know, I firmly believe that the Federal judiciary should not be expanded prior to comprehensive congressional oversight. Congress has not held a single hearing in this Congress on whether additional judges are necessary for the Federal courts, and specifically has not evaluated whether there is a need to convert the temporary judgeships contained in S. 1805 into permanent judgeships. Arguments that the Judicial Conference has recommended these changes should be scrutinized with care, the formula that the Judicial Conference utilizes to create judgeships is flawed and can be substantially manipulated. There needs to be serious congressional oversight of the numbers, which is our responsibility. We need to ensure that the courts are employing all appropriate methods to take care of their caseloads and to make sure that they are utilizing all efficiencies and techniques. Moreover, we should be looking at filling appropriate existing judicial vacancies before we create new judgeships.