Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Our leader also would have 5 minutes. I have talked to Senator Lott, and he said since he spoke this afternoon perhaps Senator Nickles would like to speak. So I hope Senator Nickles or somebody else from our leadership can come and speak. If they do not, I will be glad to do it for them, but right now I will take 5 minutes. Madam President, over the last several days, we have heard about how this process of getting to a stimulus package started with a set of principles that presumably both Republicans and Democrats on the budget process, as well as the finance process, have agreed to. Democratic Senators have particularly been reminding us of this process of having a stimulus package agreed to with a whole set of principles. They have been reminding us of this, and they have particularly been reminding us as they criticize the House bill on the stimulus. They also used it to criticize a proposal I released a few weeks ago that represented the thinking of the Republican caucus. As is often the case, not every principle fits everything they want to talk about, and so what one of the principal proponents of the bill that is before the Senate--and that is the Democratic caucus bill--has failed to mention is that none of the stimulus provisions should be industry specific. It seems that adhering to principle is in the eye of the beholder because the bill that came out of the Finance Committee and is before us now as modified is laden with industry-specific provisions, contrary to one of the principles that has been talked about in the stimulus package that is agreed to. We have specific measures in this bill before us targeted to Amtrak, to broad band, as well as specific agricultural crops and even bison, if one can believe it. We have an incredible expansion of the work opportunity tax credit. I have supported this tax credit which was meant to help welfare recipients find work, but in the Finance Committee bill before us this credit has been grotesquely distorted to give this tax credit to companies in New York investment firms and banks who hire millionaire stockbrokers and lawyers. Can you believe that? Tax credits for millionaires; that is what the Democrat bill stands for. Another principle Democrats have emphasized is these measures should be temporary, and they insist any tax measures cannot be more than 1 year long, but we have all kinds of spending measures in this mix that will have long-term impact. We also have a bond provision in the Democrat plan that the taxpayers will be paying for not 1 year but over 30 years. If that does not establish a double standard, I do not know what does. We have a Washington Post editorial that is on a chart behind me. I am not going to go into detail about reading the whole article, but the headline is ``Meet Patriotic Pork.'' The editorial argues that Members are cloaking their underlying agenda under the name of patriotism and in the fight against terrorism. The editorial criticizes the House bill, which I also agree goes too far, but the editorial goes on to say that ``the Senators who larded this bill in committee ought to be ashamed of themselves.'' Madam President, that kind of says it in a nutshell. My objective is to work to make this bill a product of which we will not be ashamed; we will have a product of which neither Democrats nor Republicans will be ashamed. I know we will have a product of which the chairman of the committee, Senator Baucus, will not be ashamed. And I will be for it. We need to get that process going. We need to do whatever it takes to make sure this bill will accomplish our goals, then, of helping the economy and the American people. Right now, it is obvious it does neither and our country deserves better. So this partisan, pork-ridden, lobbyist-written bill needs to be stopped, and we will stop it. Once this happens, then as things go in the Senate, reasonable heads will prevail, and we can sit down and work out a bipartisan compromise that meets the greatest needs of the Senators and we can vote for it. I ask unanimous consent to have printed in the Record a statement of position of administration policy.

Mr. GRASSLEY. Madam President, I believe I am recognized for 5 minutes?

Mr. GRASSLEY. Madam President, this so called stimulus package includes a lot of money for agriculture. Since I am the only working family farmer in the Senate, I think it's important that I point out the biggest problems with the agriculture spending we are considering. The first problem that I see involves the section on commodity purchases. This section has been described by the chairman as a list of agriculture commodities which have experienced low prices in the 2000 or 2001 crop year. Due to what has been described as an ``economic shortfall'' experienced by these commodities the chairman would like to institute a short-term purchase program. In the past, when I sat on the Agriculture Committee, we did provide short-term relief for specific commodities. But before we provided that relief and spent tax dollars we justified that spending by reviewing economic data which defined the problems specific commodities were experiencing. I know that the Agriculture Subcommittee on Appropriations has also worked on similar assistance packages, and I would bet my farm on the fact that they also justify the cost by reviewing the loss. My point is that if we are going to spend hundreds of millions of dollars on these commodities, doesn't the other side need to at least show us the data that led them to include these commodities? I am the ranking member on the committee, and I have not heard from one farmer in America that this is needed. Let us start this discussion as any committee with jurisdiction over this issue would. Show us the average price of these commodities and what percentage of loss they have experienced. At least show us when and where the loss occurred. While we are talking about where, where are these commodities located? Specifically, which regions of the country benefit from this section. We would have asked this question in the Agriculture Committee, why is no one asking it now? Where are these commodities being produced? For instance, where is the majority of bison slaughtered? I did a little research and found that one cooperative in North Dakota processes over 60 percent of America's bison meat. In fact, this facility, is the world's first processing plant devoted exclusively to bison meat. I am not trying to tell everyone that there might not be a need for us to purchase bison meat. Who knows, maybe the Senators from North Dakota can show us that there is a real need for bison to receive some sort of assistance. But, under this bill, even billionaires who dabble in bison ranching will get taxpayer assistance. What I am trying to demonstrate is that this isn't the committee of jurisdiction for USDA programs and if the Democrats want to give the Finance Committee jurisdiction over USDA because the Agriculture Committee cannot handle its own workload, we should review this as the Agriculture Committee should, or as any committee should review an issue before spending American tax dollars. The second problem I see is the re-establishment of the Natural Disaster Program. Under this program, producers are compensated if their crop losses are more than 35 percent of historic yields. We enacted this program last year to help farmers deal while we were getting the Agriculture Risk Protection Act up to speed. For those of you who do not remember, the Agriculture Risk Protection Act was the crop insurance bill we spent $8 billion taxpayer dollars on to avoid this specific scenario. Congress allocated $8 billion dedicated to getting the government out of the disaster business by making crop insurance more affordable. The chairman would lilke to reinstitute a program that compensates producers if their yields fall off. Sounds a lot like crop insurance to me. Why are we tyring to provide payments to producers who have chosen not to buy insurance? I can see why we did this in the past, but now that the law is in place the U.S. government is subsiding the cost of insurance on wheat at about 55 percent for the family farmer. The message we will be sending is, ``there is no need to take care of your own risk, Uncle Sam will help you cover your losses. And in turn you punish the family farmers who bought insurance to manage their own risk. I know that under this program there is a small premium for producers who carry insurance, but this program does not allow more than the worth of the crop. So, if the farmer has insurance that covers his loss, he does not get much out of this program. It looks like to me we are questioning the policy established in the crop insurance law that the majority of us supported. Isn't this really a question that should be debated at length? Shouldn't the long-term ramifications of this decision at least be considered? How do we tell farmers to follow the direction established in the crop insurance law and manage their own risk by purchasing affordable insurance tools while we are rewarding those that have chosen to save their money and take on more risk by not purchasing crop insurance? If the Finance Committee is now the committee of jurisdiction for crop insurance, I think these questions should be addressed. The third point I want to bring up is the $3 billion to clear the ``backlog'' of Rural Development loan and grant applications at USDA. I realize that this is now being deleted from the chairman's bill, but the Senate was subjected to this awful policy during the markup and up until today, so I think it is worth mentioning. When I read that provision for the first time my first though was, ``How important is it to clear the backlog at Rural Development quickly?'' The reason I ask this question is due to the fact that the legislation required funds be made available only after the next fiscal year 2002 Ag. Appropriation funds had been exhausted. Don't we usually provide enough funds based on the need and ability of USDA to process the applications during the next fiscal year? Under the chairman's proposal, we would have had to first spend the fiscal year 2002 allocation before we used this new money. How many new jobs would this money have created in six months? Not many if we didn't run out of fiscal year 2002 funds until August or September. It is sad that the press had to inform the other side how poor this idea was instead of the Republicans and Democrats working together because I guarantee you, if anyone on the Democratic side of the aisle had asked me I would have pointed this out immediately. This was terrible policy. Just to let everyone know, I contacted USDA about the provision the Democrats pulled and they told me that if those funds had been made available USDA would have needed an extra $100 million in salaries and expenses to get all of the possible loans and grants out the door within a year. My final point is that if this amendment had been successful we would have been asking a mission area of USDA to engage in the single largest expansion of any mission in years, and to do so without an undersecretary. In summary, the Senate Agriculture Committee seems to be unable to manage its own business so I guess it is trying to ``pass the buck'' to the Finance Committee. These are not light-hearted issues and the impact of these provisions will affect both short and long term policy considerations and precedents. Madam President, I'd like to take a few minutes to respond to remarks made earlier today by our distinguished majority leader. The majority leader criticized three of the four proposals in the Senate Republican Caucus' stimulus proposal. The three proposals the majority leader criticized are: one, the acceleration of the marginal tax rate cuts from the bipartisan tax relief package enacted earlier this year; two, the repeal of the corporate alternative minimum tax; and three, the 30 percent bonus depreciation. I would like to address his general criticisms of the proposals. Senator Daschle made the following points: one, the proposals were the same old ``leftover'' tax cut proposals; two, that Senate Republicans were using the September 11 events to push ``ideological'' measures; and three, that these proposals had been ``unanimously'' rejected by economists, editors, governors, and others. I will respond to these general criticisms one by one. On the first one, the ``leftover'' argument, I would like to point out that, with the exception of the marginal rate acceleration, none of these proposals were included in any tax cut bill considered by the House or Senate for this year or last year for that matter. As a matter of fact, bonus depreciation has not been on the table for nearly a decade. These proposals arose subsequent to September 11 as a response to the major economic problem of declining business investment. So let us not characterize these proposals as leftovers. Let us go to the ``ideological'' point. Again, with the exception of the marginal rate acceleration, these proposals were not Republican agenda items. I ask: Does anyone recall signs at the Republican Convention with ``bonus depreciation'' or corporate AMT relief? This charge was coupled with an allegation that Republican Senators were using the events of September 11 to advance these so-called ideological proposals. Of course, these proposals were specifically designed to respond to the economic downturn. Indeed, in a gesture of bipartisanship that has not been reciprocated, Republicans, led by the President, put on the table a proposal that certainly cannot be called a Republican priority, a supplemental rebate. In another gesture of bipartisanship, again with no reciprocation by the Democratic Leadership, Republicans, led by President Bush, took off the table, an arguably stimulative proposal, capital gains tax cuts. Actions speak louder than words. I agree with one part of the majority leader's statement. That is, neither side should use the events of September 11 to advance ideological objectives. I have pointed out two significant examples of Republicans acting in anti-ideological manner. Where in the Democratic caucus proposal, or Democratic leadership's actions, have we seen similar anti-ideological behavior? Indeed, it appears that the events of September 11 are being used as another ``salami slice'' tactic to get to a Democratic ideological objective. That objective is a Government-run universal health care system. Just take a look at the new COBRA entitlement, labeled as temporary here. Now, I would like to address the majority leader's third general criticism. That criticism is that economists and editors have unanimously rejected the Senate Republican caucus stimulus proposal. I guess if you only include some economists that have served in Democratic administrations or some editors that identify themselves with the Democratic agenda, then I would agree with the majority leader. For instance, much is made of Joseph Stiglitz's criticisms. There is a lot of talk about his Nobel Prize, but you do not hear that he chaired the Council of Economic Advisors in the Clinton Administration. I guarantee there are Nobel Prize winners who worked in Republican administrations who would not agree with Joseph Stiglitz. In fact, they would have problems with the Democratic package. As an example of the diversity of opinion, you only have to review the statements of Glen Hubbard, the current chair of the President's Council of Economic Advisors. The charge that economists have ``unanimously'' rejected the Senate Republican caucus stimulus package is not borne out by the facts. With respect to the charge that editors and opinion writers have `'unanimously'' rejected, I would like to print in the Record a couple of articles. One is an article by Kevin Hassett, who was a witness before the Senate Budget Committee. Another is an article from National Review. These are only two of many articles that show that there is support for elements of the Republican causus position. In addition, even the Governors' letter cited by the majority leader does not reject the Senate Republican caucus stimulus package. I also ask unanimous consent to print in the Record an editorial from the Washington Post, that is highly critical of the Finance Committee's stimulus bill, by pointing out that high-priced lobbyists help put the Democratic bill together.

Mr. GRASSLEY. But I also want to address some remarks that were made yesterday by Senator Boxer regarding the Republican caucus stimulative proposal. Under normal circumstances, I would just let these types of remarks go unanswered as typical political rhetoric, tinged with inflammatory untruths. But these days are hardly normal circumstances because the Senate is not working in its usual bipartisan way. So I want to respond to those remarks. The American people have called upon us to act, both in the defense of our country and to restore our economy. Everyone in this Chamber recognizes the impact of the horrific events of September 11 and their impact on the economy. Republicans and Democrats have different ideas on the best way to stimulate the economy. There is nothing new about this. They merely represent different approaches to the same problem. For the past month and a half, I have been pleading with Democrats to find the common ground in our differing approaches. The American people expect us to work together to find common ground for our Nation's common good. Stimulating the economy and winning the war on terrorism is the most immediate. This can and must be done, and it will be done before we adjourn for this year. But just when we hope that constructive bipartisanship can begin, it is slapped down by the type of accusations that were made yesterday by the Senator from California. I would like to state what has been stated by Senator Boxer. Senator Boxer said the Republican approach for stimulating the economy was using the events of September 11 to--and I quote--``pay back'' its ``biggest contributors.'' She called the Republican approach ``nothing less than unpatriotic.'' As I said, normally I would dismiss such reckless remarks as typical politics, designed to pit American against American to gain a political edge. But these are not normal times. These are times when Americans expect us to work together. What is truly shocking, and offensive for that matter, in the Senator's comments is that many items in the Republican Senate caucus proposal are items that were recommended by Chairman Greenspan, former Treasury Secretary Robert Rubin, or are included in Senator Baucus's Democratic proposal. Bonus depreciation, small business expensing, net operating loss carrybacks, cash payments to taxpayers--tax rebates, if you want to call them that--enhanced unemployment benefits, additional health insurance coverage, are all areas that are contained in both a Republican proposal and a Democrat proposal. These are areas of common ground. So to call the Republican approach ``unpatriotic'' is destructive. It is a distortion. Most disturbing is the Senator's own admission that her accusations are baseless. When stating that the House economic stimulus bill was a ``reward to their biggest contributors,'' Senator Boxer said--and I quote--``It is how I feel. It is my opinion. It's not a fact.'' This type of inflammatory rhetoric is useless. It does nothing to further America's economic recovery, and it does nothing to further a bipartisan solution, a solution that is absolutely necessary for the Senate to get to a final product. I hope, for the sake of the American people, this sort of nonsense will stop. It is time to put dignity back into the debates of the Senate Chamber. Senator Boxer did have two specific objections to the House bill. It was the House bill she objected to, not the Senate bill. The House bill is not the Republican Senate caucus proposal. They differ significantly, including with regard to two issues to which Senator Boxer objects. Nonetheless, when a Senator expresses concern about a legislative proposal, the Senator's concerns should be addressed in a responsible and dignified manner. That is what I would like to do. Senator Boxer objected to accelerating the income tax cuts scheduled to occur in 2004 and 2006. She also objected to alternative minimum tax relief for American businesses. I will explain why the Republican caucus believes those issues are important to economic recovery. One of the greatest weaknesses of Senator Baucus' stimulus package now before the Senate is that not one dime, not one red cent, goes to provide relief for people who go to work every day, pay their bills, and may be clinging to their jobs with their fingertips during this economic downturn. We believe that reducing the Government's take from these people's paychecks will give them more resources to ride out the current economic downturn and will spur increased consumer demand over the next year. Besides, money spent by individuals in the private sector turns over many times more in the economy and does more economic good than if spent here through the Federal budget. It is really just a matter of common sense, then. People need more of their money during tight economic times. If they have more money available, they feel more financially secure and are more likely to spend. We only are talking about speeding up a decision that Congress made earlier this year, a bill signed by the President June 7, a product of the bipartisanship of the Senate Finance Committee. Last summer this Senate debated and decided the issue of individual income tax cuts. The Republican caucus proposal would simply accelerate into next year the individual income tax cuts that are currently scheduled to go into effect in the years 2004 and 2006. If we make them effective next year, they will immediately stimulate the economy. If we wait until 2004 and 2006, the economy does not benefit from those reductions at a time when it must. That time is right now because of the terrorist attacks of September 11 and the downturn in the economy. We will talk more about individual income tax cuts later. I turn to Senator Boxer's primary objection--alternative minimum tax relief for American businesses. I would like to propose a terrible idea. Why don't we enact a provision that increases taxes when companies are struggling to stay afloat and then reduces their taxes when the companies are profitable? I think my colleagues would agree that sounds like a dumb idea. I would offer an amendment on this, but the problem is, we have already enacted it. It is what we call the alternative minimum tax. Republicans have been vilified by Democrats for including AMT repeal in an economic stimulus package. Let's ask the question: Why do we include corporate AMT in an economic stimulus package? Because corporate AMT worsens an economic downturn when it increases taxes as corporate profits decline. Explain that again. If that doesn't sound reasonable, it isn't reasonable. But that is what the law is, because AMT, the alternative minimum tax, is imposed only when the AMT tax exceeds the amount of regular corporate income tax. AMT is calculated by starting with regular taxable income and then adding back certain deductions that were taken in computing the regular taxable income. One of the most significant deduction add-backs is depreciation. Consider this very simple example. If regular taxable income falls to zero, then a depreciation add-back will create alternative minimum tax taxable income which will be taxed at the AMT rate of 20 percent, even though the company owes no regular income tax. Regular income tax does not have to fall to zero for this to occur. When investment costs and other expenses increase in proportion to a company's taxable income, which occurs during an economic downturn, the company may still owe alternative minimum tax. Companies that have these higher fixed costs include manufacturing, construction, mining, energy, utilities, wholesale/retail, transportation, agriculture, and other capital intensive industries. In 1997, a study for the Brookings Institution concluded that manufacturing firms could be subjected to alternative minimum tax when their sales decline by just a mere 5 percent. This was largely because of higher fixed costs. So one can see the profound effect that a small economic downturn has on increasing corporate AMT. The Joint Committee on Taxation has recommended that the corporate alternative minimum tax be repealed because it is ineffective and inefficient. With the Joint Committee on Taxation are professional people who work for both Republicans and Democrats. They don't work for the majority. They don't work for the minority. They work for the Congress as a whole. This is their recommendation. So now you may ask: How would repealing the AMT have a stimulative effect? The answer is simple: The alternative minimum tax is a job killer. The alternative minimum tax creates a strong disincentive for companies to undertake new investments or to keep employees on the payroll. Any activity that reduces a company's regular taxable income, such as keeping employees during an economic downturn, increases the likelihood of it becoming subject to the alternative minimum tax. This is because as regular income decreases, the AMT add-backs become larger as a percentage of regular income. As I said, when investment costs and other expenses are large relative to a company's taxable income, the company may end up owing alternative minimum tax. This is particularly true for capital investments, which may throw off depreciation deductions. In fact, increased investment expenditures by a company during periods of low profitability can cause a company to switch from the regular tax to the alternative minimum tax. Therefore, companies that try to maintain a constant level of investment and continued employment during an economic downturn are more likely to pay larger amounts of AMT. That is why the alternative minimum tax is a job killer. We want to create jobs. Particularly we want to create jobs and we have a Government incentive for increasing jobs at a time of economic downturn. More importantly, the alternative minimum tax increases the tax burden during an economic downturn which may result in deeper and more prolonged economic weakness by reducing business activity. So here we have a tax policy already in place that is making the economic downturn worse. According to a recent Treasury study, during the economic slowdowns between 1989 and 1991, nearly 50 percent of America's largest corporations were subjected to the alternative minimum tax. We can't afford to repeat that pattern again. As Chairman Greenspan said: Enhance investment in manufacturing. That is what accelerated depreciation is about. So that is why we have to do something with a tax policy that is already on the books and already is there exacerbating an already bad situation. So please keep in mind that some alternative minimum tax add-back items, such as depreciation, relate to fixed investment decisions that were made years ago during profitable periods. They didn't anticipate what they might be in right now. But they are going to be penalized for it and penalized in a way that hurts the economy. It is inconsistent, then, to consider including bonus depreciation provisions in our stimulus packages, which we do, at the same time we punish prior investments through the AMT. I notice that the Democrats' bill exempts bonus depreciation from the alternative minimum tax. So I don't know why a Democrat Senator would blast away at the alternative minimum tax, when even their proposal makes it quite obvious that there is something that doesn't add up here, doesn't meet the test of common sense. So Democrats recognize the counterproductive effect that the alternative minimum tax has on investment. I also said that the alternative minimum tax increases taxes when companies are struggling to stay afloat, and then it reduces taxes when companies are profitable. This is because any alternative minimum tax paid to the Government today may offset regular taxes owed in a later year. In effect, the AMT is a prepayment of a taxpayer's future income tax liability--and it operates as a no-interest loan from companies to the Federal Government. As of today, companies in America have made about $25 billion in loans to the Federal Government by prepaying their real tax liability through the alternative minimum tax. This is where the controversy kicked up concerning the House bill, and it is the thing to which Senator Boxer most objected. The House bill--not the Senate Republican bill--paid back in the year 2002 all of the alternative minimum tax prepayments that I just talked about, these interest-free loans that have been extracted from American companies over the years. The reason for this is to provide instant cash liquidity for companies that are facing the present economic crunch. We would propose something different. Senate Republicans would allow the alternative minimum tax to offset only a percentage of the regular tax as it is incurred. That way a corporation can never completely zero out their tax liability with AMT credits. So I hope she will consider this and that this will address Senator Boxer's concerns. In addition, we would not accelerate the AMT tax credits or refund them next year. This should address another one of Senator Boxer's concerns. Yes, we would also repeal the alternative minimum tax, and I know that doesn't satisfy some Senators. I hope these other two provisions of our bill would do. If Senators will stop the shouting and stop talking past each other and stop making false accusations, we can find common ground to address at least part of each other's concerns. It is possible to reach consensus on a bipartisan bill that will stimulate the economy. We must do it soon. I urge the Senate to do its job and come up with a bipartisan stimulus package--one that can be passed by this Chamber, sent to conference, and signed by the President. The American people are waiting and they are watching. I yield the floor.

Mr. GRASSLEY. I haven't had that opportunity for a long time. By the way, I am supposed to be in the conference in 2 minutes. I am not going to be there because I want to respond to the Senator about not only bankruptcy but also about these tax provisions. That is to remind the Senate--particularly the 17 Members of the Senate, or maybe it was only 15 Members of the Senate, including the Senator from Minnesota, who voted against the bankruptcy bill. I hope a vote of 84 to 15, or something like that, tells you what a good piece of legislation we had. But in regard to bankruptcy, to allay anybody's fears about what bankruptcy legislation does, even at a time when we are in the midst of a war on terrorism, and we have had an economic downturn because of that terrorist activity, anybody who cannot pay their debt will still be able to go into bankruptcy. What we are trying to do through this bankruptcy reform legislation that is now in conference between the House and the Senate is for those who have the ability to repay--who under present law can go into chapter 7 and get off scot-free--will have to pay. We are talking about people with the ability to repay their debts and who are gaming the system to get away with financial murder. They are not going to be able to do that anymore. In regard to the comments of the Senator from Minnesota and other Senators who have talked about the nonconcern people on this side of the aisle might have about people who are unemployed because of the terrorist attacks of September 11, the whole purpose of this legislation is to address economic problems that exist because of the terrorist attacks of September 11. Where we have separation from people in the other political party is the fact that a lot of people on the other side of the aisle are taking advantage of the September 11 terrorist attacks, and also the economic problems resulting therefrom, to put a lot of legislation on the agenda that would not otherwise be on the agenda. What we are trying to do is what Chairman Greenspan advises us to do--to do those things that are stimulative and related to the downturn in the economy, directly related to the proposition of September 11. First of all, I do not think the Senator from Minnesota gives the President any credit for being concerned about low-income people who are hurt as a result of this because in a way of addressing, in a bipartisan way, the stimulus needs of our Nation, the President has already provided for tax payments, rebates, whatever you want to call them, to low-income people to help the demand and consumer side of the ledger. And, obviously, that proposal by our President that is in the Republican proposal as well has somehow not come to the attention of the Senator from Minnesota. So I bring that to his attention, that the President of the United States has already addressed that. Second, we have followed the advice of Chairman Greenspan, who said there ought to be incentives for investment in manufacturing. As the chart I showed you yesterday--that is not in this Chamber today-- indicates, there has been a very steady increase in consumer spending over the last 10 years. Until recently, there was a very steady increase in manufacturing investment. But in the last three or four quarters, there has been a tremendous downturn in investment in manufacturing. Chairman Greenspan believes that by accelerating depreciation, we will be able to create jobs, stimulate the manufacturing economy, and get that segment of the economy back on the road to recovery and create a lot of jobs in the process. So, again, I do not think Republicans can be accused of not being sympathetic when we are following the advice of Chairman Greenspan on fiscal and tax policies. His point of view ought to be respected in that area the same way a large share of the country respects his view on monetary policy, as now 10 times he has reduced the rate of inflation to help the economy. The Senator from Minnesota must also not be aware of the fact that our proposal has in it help for those who are going to lose health insurance because of being unemployed. In fact, if you look at the Democrat proposal, again, as I said yesterday, by the time they get their program implemented, we will be out of a recession. And, we have a plan that will get help to the people who do not have health insurance within 30 days after the bill is signed by the President of the United States. Their plan creates Federal bureaucracy, a new Federal program, Federal rules and regulations. Just think of the months it is going to take to get all that in place. Plus, there is an unfunded mandate on the States to put a parallel bureaucracy and program in place for the purpose of dispensing help to people who are unemployed but probably 9 to 12 months down the road. We already have a program in place where we can get help to those people within 1 month after the President signs the bill. To say that we have no concern about the unemployed, then let me ask the Senator from Minnesota, how come we have provisions in our bill to extend unemployment compensation by 13 weeks, which is not exactly, but is along the same lines of what their party suggests? So all along there is a division that is being drawn between Republicans and Democrats that is not the tradition of this Senate, surely not the tradition of the Senate Finance Committee that writes tax legislation and unemployment and health-insurance-type legislation. There is no point in having it because this Senate will get nothing done unless it is done in a bipartisan way. I hope we have set the stage for some votes this afternoon that will show that this Senate is only going to address the stimulative needs of this economy in a bipartisan way. The sooner we get that bipartisan process underway, the better. I think that will happen. (Mr. JOHNSON assumed the chair.)

Mr. GRASSLEY. Madam President, let us be accurate when we describe each side's proposals. Upon careful consideration, it is clear: First, the Senate Republican Caucus stimulus proposal is not made up of ``leftover'' tax cuts; Second, the Senate Republicans are not using September 11 as a device to advance ``ideological'' proposals; and Third, the proposals in the Senate Republican Caucus stimulus package have not been ``unanimously'' rejected by economists, editors, and opinion makers. Madam President, I wish to discuss what I consider to be a crucial component of this economic stimulus package: health insurance assistance for dislocated workers. We all know about the high cost of health insurance. For dislocated workers, its even higher. That's because worker continuation or ``COBRA'' coverage is extremely expensive: coverage for a family can cost as much as $500 or $600 per month. And workers who do not qualify for COBRA coverage--because they worked for State or local governments or in small businesses that are exempt--also face high health care costs. So when it comes to providing health insurance assistance to dislocated workers, both sides in this debate are in agreement: People need help, and they need it now. Where we disagree is on how we get there. I have endorsed a program that is already up and running, that has been tried and tested and tailored for the very purpose of providing ready help--not red tape--in emergencies like this. The Democrats, on the other hand, have endorsed the creation of a new Federal bureaucracy, consumed by red tape, that would take many months to get up and running. First, let's talk about structure. For any program to work efficiently, it needs a backbone. The National Emergency Grant program has been in place since 1998. The Labor Department has been getting funds to States quickly and seamlessly for several years. In fact, since September 11th, 3 States have already received funds totaling $37 million, 3 more States are on the verge of approval, and 13 additional State applications are expected. Clearly these numbers indicate the success the National Emergency Grant program has already achieved. By comparison, the new COBRA subsidy program that the Democrats favor has no backbone at all. There is no structure currently in place at the Labor Department or any other Federal agency to administer this new benefit. Next, let's take a look at process. At the Federal level, the National Emergency Grant program requires nothing more than a new set of grant criteria allowing States to use funds for health insurance. The criteria is being drafted under the Labor Department's existing authority, and can be made effective immediately. In contrast, the new COBRA subsidy program proposed by the Democrats requires the deployment of an entirely new Federal program, requiring Congressional authorization and a formal regulatory process under the Administrative Procedures Act before any benefits could be delivered. Moreover, communications and oversight mechanisms would have to be established, and agencies would have to redirect resources to meet program goals. At the State level, the National Emergency Grant program is familiar to governors and other State officials. The program relies on an existing, streamlined process that has been in place since 1998. All States have mechanisms in place to apply for grants and deliver benefits. By comparison, the Democrat-endorsed new Federal subsidy program would impose new and costly mandates on States, which would have to authorize and set-up new systems and departments to comply with the program's rules before workers could start receiving benefits. In many instances, action at the State level would be frozen until State legislatures acted to authorize and fund the new mandates. Finally, let's address the most important question, the one that this whole debate should turn on. How long will this all take? How do the two approaches compare when it comes to getting workers health care assistance quickly? The National Emergency Grant program can guarantee payments to States within 15 days of an application's approval. That speed is simply unsurpassed, and it's the chief reason I support using the grant program today. The new Federal subsidy program, by contrast, would tie up funds in red tape until next summer. Under almost any scenario, financial assistance would not be available until federal regulations are issued, finalized and made effective, a process that could take 6 months, at a minimum. The bottom line is the Democrats' proposal would not be able to get benefits to workers until it's too late. In addition to a lengthy process at the Federal level, States are faced with undue burdens of setting up new systems to coordinate with the Federal Government and finding new resources to do so. The Democratic approach, while well-intentioned, reinvents the wheel. The National Emergency Grant program, by comparison, needs no re- invention. It is ready to go. And so I urge my colleagues to opt for a system that's ready to go and to support the speedy delivery of funds to our dislocated workers through the National Emergency Grant program.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I welcome the opportunity to be with my friend, Chairman Baucus, to discuss an economic stimulative package and to declare that if he and I can work together, we are going to get such an economic stimulative package passed as we did in the case of the tax bill that was passed and signed by the President in June, the largest tax reduction in the last 20 years, a needed tax reduction because the American people are being taxed at the highest level since World War II. About that tax bill, if we had not passed that tax bill with the rebates that went out during August and September, with the flatness of the economy, we would now be discussing what we are going to do about the flatness of the economy because we did not do something last spring. It was fortuitous we were able to pass such a tax bill, and pass it before there was a demonstrated need for it, to get the taxpayers their rebates, to help consumer demand, and to keep the economy going. We would have been considering a tax bill if we had not passed the earlier tax bill, regardless of what happened on September 11. Obviously, we are now debating because of the terrorist attacks of September 11 and the dramatic downturn in the economy that has resulted because of that terrorist act. I suggest as we consider this legislation and what ought to be done for economic stimulus because of the September 11 terrorist attacks and the impact that has made on the economy, that everything be directly related to that incident, and that Members of the Senate not try to get anything on the agenda that would not otherwise be legitimately there because of the September 11 happenings. So I rise for this debate on an economic stimulative package because of the need for it as a result of what happened on September 11 and for no other reason. Chairman Baucus and I shared a goal at the start of this process. We both wanted a bipartisan economic stimulative package that also addressed the needs of people who were hurt because of September 11 and helped those with unemployment benefits and health care needs for dislocated workers. I still have that as my goal. My discussions this afternoon I want to divide into three parts: The process for this bill; the substance of the bill, looking primarily at similarities between what Democrats think need to be done and what I as a Republican leader think needs to be done--in other words, these are positions taken by our respective caucuses--and finally, how to resolve these differences and get a bipartisan bill through the Senate because I think we all know right now there are not enough votes to get a partisan package of either caucus through this body. Chairman Baucus rightly insisted that the Finance Committee act on this matter. There was talk by the majority leader of skipping the committee and bringing it directly to the floor. As a ranking member of the Finance Committee, I support the chairman. He can count on my support in respecting the jurisdiction of the committee. Unfortunately, however, in asserting our jurisdiction, we did not operate in a committee process, in a bipartisan tradition. Despite all the speeches to the contrary, the bill we have now on the Senate floor, put forth last Thursday night by the Senate Finance Committee, was designed to be partisan. Why somebody would make that judgment, I don't have the slightest idea. In all the victories I have had on the floor in this Senate in the 21 years I have been a Member, I don't think any have been a partisan victory. I have been able to work with members of the other party in order to get something done. There is an old saying: You can get anything done if you don't care who gets credit for it. In that respect, I think designing a partisan package was a way to bring this bill to a stone wall. My job--and I think Chairman Baucus shares this with me--is to break down that stone wall, get beyond that, get our people together, get the opposing sides together, and get something to the President with the idea we are here to help the economy and to not help one political party or the other. The economic stimulus package passed out of the Senate Finance Committee embodied then the Democratic caucus position on the issues we felt ought to stimulate the economy. The bill was precooked and passed out of committee because Democrats decided to deal only with themselves. As unfortunate as that event was, obviously we are out here on the floor of the Senate. Last Thursday is history. It is all water under the bridge. Equally unfortunate, however, the partisan acts of the Democrats in the Finance Committee have necessitated a confrontational debate from each side. By choosing a partisan strategy, the Democratic leadership has placed us in a position where, aside from the substantive issues involved, there is necessarily a partisan division. I point this out only because it is a needless barrier to my goal of a bipartisan stimulative package in the tradition of how Senator Baucus and I got the tax bill of last spring to the President for signature on June 7. On the Senate floor, the majority leader does not have an unfettered right to push this bill through on a partisan basis. He has a right to try but he cannot succeed because this bill violates the restrictions of the budget resolution. It is subject to a 60-vote point of order under the rules of the Senate. So, too, if Republicans wanted to push ours, we could not get it passed. It would be subject to a 60-vote point of order. We are in a position where neither side can win. I am frustrated and disappointed right now because there is so much common ground between us and where the Democrat bill is. I am frustrated because, regardless of this common ground, there is little will on the part of the Democratic caucus to meet our side halfway or even part of the way. That unwillingness doesn't make a lot of sense in a Senate that is divided: 50 Democrats, 49 Republicans, and one Independent. Where is the common ground? Starting with the economic stimulus itself, basically the President of the United States and Chairman Greenspan gave us a green light to the stimulus exercise. Chairman Greenspan requested we take a hard look at proposals that were temporary, immediate, and efficient. Since his meetings with the President and with us on the Senate Finance Committee, there has also been indication that what he has done on interest rates, although he can still do more and will probably do more, is reaching the end of the road of what can be done through monetary policy, and that there needs to be a stimulative package that parallels, through Congress, what Chairman Greenspan is trying to do through the Federal Reserve System. We have been working with Chairman Greenspan because we want these programs to complement each other. We also think Chairman Greenspan has a pretty good feel for what it takes to turn this economy around. We sought his advice in a bipartisan way. The President sought his advice. Chairman Greenspan said we needed to pay particular attention to the decline in manufacturing investment. I have a chart that demonstrates the relationship of consumption expenditures and manufacturing expenditures. As the red line shows, we have had a steady growth in personal consumption expenditures. We have had more ups and downs with domestic investment, mostly manufacturing investment. In the last three quarters, we have seen a very dramatic turndown in manufacturing investment. It reached a high and dropped. I am glad to hear the chairman of the committee say in his opening remarks that the 10-percent accelerated depreciation they allow in their legislation is negotiable. We think, and Chairman Greenspan thinks, about 30 percent is what it will take to stimulate the economy. The other side speaks about consumer demand and doing something about consumer demand. The chart shows there has not been an erosion of personal consumption expenditures as there has been a dramatic erosion of manufacturing investment. Of course, why manufacturing investment and encouragement of that? It is time tested from both Republican and Democrat Presidents, changing tax law from time to time in the last 50 years to stimulate the economy because it enhances productivity; but more importantly, the equipment bought by major corporations is made at another manufacturing place that creates jobs. It is a good way to help the economy in two ways: It creates jobs where the enhanced machinery is manufactured, and it also makes each person working where this is installed more productive, as well. We need a balance between demand and manufacturing. If we trust Chairman Greenspan, and a lot of people in the United States have confidence in him according to the polls, we need to pay particular attention to the downturn in manufacturing investment and follow Chairman Greenspan's advice. Now, Democrats and Republicans have agreed to pursue accelerated depreciation as a stimulus. Both caucus plans have this proposal included, but there is an ineffective 10-percent accelerated appreciation in the Democrat plan, compared to the positive 30 percent in the Republican plan. Both caucuses pursued proposals that, while not as stimulative as accelerated depreciation, would still provide much needed relief to struggling businesses. It is another area of common ground that Democrats propose liberalizing the net operating loss carryback rules, but Republicans propose repealing the corporate alternative minimum tax. Here again, there is room for negotiation and compromise that will lead to a bipartisan agreement. Republicans put on the table an acceleration of the income tax rate cuts put in place by the bipartisan tax relief bill I spoke of twice this afternoon that was signed by the President on June 7. That included the tax rebates, as well. The Democratic leadership objects strenuously to the proposal because, although this proposal is stimulative--I have not heard otherwise--it reopened a statute that a majority of the Democrats did not support last spring. I recognize acceleration is not viewed as common ground, but I think it begs a question, if we are going to be intellectually honest with each other. How could the Democrats reopen the statute that the President signed June 7 by putting rebates for payroll and nontaxpayers on the table. It appears a bit inconsistent. In one place you can open the bill, but in another place you cannot open that tax bill of last spring. To those of us on this side, then, it appears the Democratic leadership has taken the positive gesture by the President on rebates because President Bush wants to get money to lower income people to stimulate the economy. So they have taken a positive gesture by the President but have not been flexible in return. Needless to say, by default, both sides have common ground on the next round of rebate checks. This proposal stimulates consumer demand. Former Secretary Rubin was very keen on some modest level of consumer demand stimulus. So on the investment side and the consumers demand side, both Republicans and Democrats have proposals with similar features, with the Republicans placing more emphasis on investment. But the Democratic leadership has made marginal rate cut acceleration some sort of a deal breaker. We Republicans want to provide dislocated workers with assistance for coverage for health insurance. First off, I want to clear up some misstatements. Some have incorrectly said that Republican proposals do nothing to help cover the cost of health insurance for dislocated workers. This is baloney. The President supported health care assistance by proposing funding for health care benefits to laid-off workers. Both the House bill and the Senate Republican caucus position embrace this idea. In negotiations, in particular, I want to say to the Presiding Officer, I was willing to go beyond the President's proposal. I offered to more than triple the amount of money. I also proposed expanding coverage of health benefits to dislocated workers who do not qualify for COBRA, such as small business workers. I then offered Democrats complete flexibility to write the criteria under which the money would be granted so they could be confident in the program doing what they want it to do. So how much more flexible can you be? But the Democratic leadership said no and rejected the offer. So we do have a common ground on the goal of helping dislocated workers with health care benefits. Are there any differences in how we want to provide this assistance? The answer is yes. The whole point of this bill, though, is to get people health care benefits right now, not down the road. Yet the Democratic leadership proposes to create a new bureaucracy that will take many months to get up and running. The Democrats' proposal would not be able to get benefits to workers until it is too late. This is a stimulative package to help us out of the recession, not to give people help way beyond the turn-around in the economy. The reason the Democrats' proposal would do this is because Federal law requires that when a new Federal program is established, regulations must be promulgated and the public be given notice and opportunity to comment. Clearly, these laws affecting new programs are in place for a good reason. We can avoid this hurdle by using existing programs, especially ones that are tailor made for national emergencies. That is why the President took the approach he did through National Emergency Grant Programs. If there is not enough money there to satisfy people on the other side of the aisle, we can take care of that. But we ought to take care of it in a manner that gets the money to the people in a month, not in a year. Our goal was to use the existing National Emergency Grant Program, one that the Federal Government and States have used for years and have experience with, to ensure benefits can get to dislocated workers in the fastest way possible. No new infrastructure would be required by the Federal Government and States could quickly access much needed funds. The bottom line is hard-working Americans who have lost their jobs as a result of the September 11 tragedy cannot wait 6, 9, or 12 months for health care insurance. They need help and need it right now. We propose to do just that. But, again, the Democrat leadership was not interested in bipartisan compromises, even when they represented common sense. I have another problem, though, with the Democratic health package; that is, it places undue burdens on States which are already struggling to respond to adverse impacts of September 11. Requiring a new Federal infrastructure and corresponding new State infrastructures in order to access emergency funds seems to be downright unreasonable. We should be working our hardest to get money to States immediately for them to get it to their workers who do not have health insurance. We should not penalize them by demanding that they, too, establish extensive new bureaucracies to get money to people in need. For example, the Democrats' proposal would require many States to enact legislation in order to set up and fund new State infrastructures to certify and deliver COBRA benefits. This is obviously a nonfunded mandate. But in addition, the Democrats' proposal requires States to use their own money. This means only those States which happen to have extra money in their Medicaid budget could help workers who are not COBRA eligible. I am not aware any State is claiming to have extra Medicaid money burning a hole in its pockets for those people. I think this is just plain wrong. I propose to provide 100 percent Federal funding through National Emergency Grant Programs to allow States, then, to cover non-COBRA eligibles. Once again, I asked the Democrat leadership: Why are you insisting on doing this the hard way, especially when there are much more efficient alternatives? Now I have a few points about extended unemployment benefits to dislocated workers. We want to do more than just provide unemployment checks. First of all, let me make it very clear. Why do you have a stimulus package? It is not to give unemployment checks, even though that is what we are doing. But the idea of stimulating the economy is getting people a job. People want a job; they don't want unemployment checks. We want incentives to get workers back their paychecks. But both sides agree that providing 13 weeks of additional benefit to workers in need is reasonable. We have done that five times in the last 30 years, I believe. The Democratic leadership, however, wants to take finite resources and spread them thinly across every State so the needy will not get enough help. I offered to provide unemployment benefits in two ways-- kind of take your choice. The first was to allow 13 weeks of benefits to be extended to those States which experienced a significant increase in unemployment. So what is a significant increase in unemployment? In that regard, I was completely flexible. In fact, I was more than willing to bring the threshold well below what the President proposed. In addition, I believe that extended unemployment benefits should be made available to particular industries or communities adversely impacted by September 11. This should be the case even if a State as a whole doesn't experience a major increase in unemployment. So I hope I have made it apparent that on our side we care about dislocated workers and getting them unemployment and health benefits. The differences are grounded in how to do it, and not whether to do it. I still believe that we are not that far apart and our differences can be bridged. If we are willing to take the partisan blinders off and focus on getting help to workers immediately instead of winning ideological points, we can come to agreement on a proposal. I have been so flexible that I know how Gumby feels. So, here we are, and I am left asking why we are stuck in this partisan ditch. We have common ground on the investment side, consumer spending side, unemployment benefits, and health coverage for dislocated workers. Why couldn't we work out an agreement? It seems that there are three reasons. The first reason is that the Democratic leadership doesn't want two negotiations with Republicans. They don't want to negotiate with Senate Republicans first and then have to negotiate with the White House and House Republicans later in conference. I have to chuckle when I hear this type of objection coming from the Senate Democratic leadership. When I was negotiating the bipartisan tax cut in the Finance Committee, I ran into the same objection from many in the Senate Republican caucus. You know who would bring this up. They said, Grassley, don't negotiate with Baucus. If you do, you will have to negotiate further to the left on the Senate floor. One negotiation is better than two. If I had followed that ``one negotiation'' directive, we would have had chaos on the Senate floor last spring. As it turned out--and for reference for people who are fearful that maybe the bipartisan Senate Finance Committee agreement couldn't hold in conference right now--the track record of last spring is that the bipartisan Finance Committee agreement held on the Senate floor and largely stayed intact in conference. But if the House and Senate parties agree to a so-called preconference strategy, which has been talked about within just the last 4 or 5 hours due to our constrained time now that we are getting up against adjournment this fall, I will certainly support that effort and hope it happens. So you can't proceed because you don't want to negotiate twice. I hope I have proved that is not a problem here in the Senate, if you do it right. There is a second reason given for not negotiating. It seems that many in the Senate Democratic caucus want some kind of ``payback'' against the bipartisan tax relief legislation. In their view, the bipartisan deal was wrong, and with their caucus now running the Senate, they do not want to see it repeated in any way. In their view, a bipartisan Finance Committee deal would have been a bad deal unless it contained all four corners of the Senate Democratic caucus position. As I said, I showed movement on several issues but could not get movement from the other side. Everyone knows that unless both sides move, you can't get a deal. So here we are with basically the Senate Democratic caucus position as the Finance Committee bill. The bill before us is a partisan product. There is no gesture to the Republican side. The Finance Committee bill says, ``Our way or the highway.'' I only ask, is this what the American people want? I didn't think so at the time of the tax cut last spring, and I don't think so now. There is a third reason we can't get a deal. Senate Democrats say the House Republican partisan process necessitate a partisan response. We are kind of engaged in a game of legislative ping pong. That frustration, while understandable, doesn't justify shutting out Senate Republicans. Senate Republicans are not irrelevant. The House passed a partisan tax bill in the Spring, but that did not stop the Senate from passing a bipartisan package which the President signed on June 7. The Senate should not be rendered irrelevant because of partisan politics in the House. The American people expect us to work together. That is what I have been trying to do over the past few months. Senate Republicans are flexible and willing to move toward Senate Democrats, but it is a two- way street and Democrats must also show movement. To sum up, we want to get a bipartisan stimulus package. Bipartisanship does not mean adopting the Senate Democratic caucus position. At this time, we are struck with this partisan, special interest Democratic bill that came out of committee on an 11-to-10 vote. We see that, even the media, like the Washington Post, call this bill a poor excuse for economic stimulus. They blame lobbyists for shaping a stimulus bill. ``Special Interests Scramble for Tax Break's, Other Windfalls''. The headline of one Post article reads ``Lobbyists Shaping Economic Stimulus bill.'' And it goes on to talk about companies getting tax credits for millionaires and payments going to billionaire bison ranchers. Let me note, however, that extensions of provisions that expire under current law are matters we should address. In the Finance Committee, the Democratic leadership lined the votes up, and we on this side were left out. That was an unfortunate outcome for the Finance Committee, which has a great bipartisan tradition. With some optimism, I noted at the Finance Committee markup that the centrists, a group of some Republicans and some Democrats who consider themselves right in the center of the political spectrum, indicated that things on the Senate floor would be different. I am hopeful of this sentiment expressed by the centrist group and that, combined, we can get enough votes to put together a bill that will get 60 votes to get a bipartisan bill through. I hope this will cause the Democratic leadership then to engage in a bipartisan debate. It is about time the process on this bill changes and reasonable heads prevail. Mr. President, I suggest the absence of a quorum. I ask unanimous consent that the Senator from Massachusetts be recognized after the quorum call.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that my interns, Grace Pandiphurai, Jeremy Mishler, and Brian Fitzgerald, be granted the privilege of the floor for the duration of the economic stimulus debate.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I would like to inform my colleagues that I have lodged an objection to the Senate proceeding to H.R. 3211 or any other legislation dealing with financial netting contracts inside and outside of bankruptcy. While I support these changes to financial netting, I strongly believe that these changes must be enacted as a part of the comprehensive bankruptcy reform bill. I would hate to see the opponents of bankruptcy reform our financial markets at risk solely to satisfy the ideological objections of some members of Congress. My advice to those advocates of a netting-only bill is that if they would put as much effort into getting the entire bankruptcy bill passed as they have put into the separate netting bill, the netting provisions would have been law months ago.

Mr. GRASSLEY

Mr. GRASSLEY. Under Chairman Conrad's methodology, one of two conclusions is apparent from this exercise. One, if tax cuts and new spending are treated similarly, then under Chairman Conrad's methodology, the Democratic caucus package is $350 billion bigger than the Republican caucus package. That is a 2-to-1 ratio in favor of new spending. Alternatively, maybe Senator Conrad is arguing that in scoring there should be a bias against tax cuts and in favor of new spending by assuming that new spending is temporary. Since a key element of the budgeteers' principles was long-term budget effect, you would think Senator Conrad would have more carefully considered the 10-year cost of new appropriations and new entitlements. It seems to me he graded these plans long before he analyzed them. How else can Senator Conrad explain the laxity of the long-term spending effect? Adding new appropriations and new entitlement spending to the budget, even if labeled temporary, brings a long-term budget cost. Otherwise, we are trying to kid people. When was the last time we cut the appropriations baseline or a new entitlement? It doesn't happen around here. Now keep in mind that I have also asked the Joint Committee on Taxation to score the permanent effect of temporary tax cuts in each plan, but I do not have that analysis yet. I have had my staff work on it. They tell me it might narrow the gap some but would simply add to the total 10-year cost of each plan. Keep in mind that in making this comparison, I did not include the revenue loss of the Democratic caucus plan. When former Senator Bradley left this body, he cited many reasons for leaving. One of the colorful references was to the deterioration of the level of floor debate. He referred to Senate debate as deteriorating to competing partisan cartoon-type characters endlessly talking past one another. Unfortunately, yesterday's attack charts seem to me to illustrate the deterioration of the respect to which Senator Bradley was referring. A few months ago, the Washington Post reported approvingly of the Democratic leadership's message strategy. The article referred to a blackboard with a basic daily or weekly message. Apparently, yesterday's message was to attack a good-faith Republican caucus position and to attack me. I guess I say good job, or congratulations are in order, because the people who did it pulled off a well- coordinated attack. What did such a harsh attack accomplish? When I go back to my farm this weekend, I imagine some of the folks back home might ask what the point of all that was. That is where I am, Mr. President. What is the point of this excessive partisan gamesmanship? What is the point of dumbing down the level of civility around here? I say all these things in a constructive manner--from a person who just yesterday met with Senator Baucus to talk about a process of getting a stimulus package--hopefully, a bipartisan stimulus package-- to the floor of the Senate. Although the transgressors in this case were Democrats, at times even my own Republicans have done the same thing. In this case, though, there really seems to be a Democratic rule book that includes a double standard. So as one who practices bipartisanship, I say to those who talk about it: Practice what you preach. As I said, I will have more to say in a comprehensive way about some of Senator Conrad's attacks on the specific pieces of the Senate Republican stimulus package. I suggest the absence of a quorum.

Mr. GRASSLEY. Mr. President, I come to this Chamber to address an issue that was discussed yesterday. I do it because I am the ranking Republican on the Senate Finance Committee. I want to respond to some Senators on the other side of the aisle--meaning the majority side of the aisle--who have raised concerns about legislation that I have put forth as part of a stimulus package. I put forth this legislation for our Republican caucus in my capacity as former chairman and now ranking member of the Finance Committee. So I want to respond, first, to the majority leader's and Budget Committee chairman's comments about the Senate Republican caucus proposal. From my point of view, these comments were destructive of bipartisanship. The attacks came yesterday afternoon on the floor, following a news conference that was held on the Capitol grounds. In contrast, while these things were going on yesterday, I spent time working for an agreement that crossed party lines; in other words, for a bipartisan agreement. In fact, for a number of weeks, the chairman of the Finance Committee, Senator Baucus, and I have been meeting in an attempt to find an agreement on a stimulus package. Last week, Senator Daschle and Senator Baucus released a stimulus proposal that, as they indicated, clearly reflected the more liberal part of the Democratic caucus. Senator Baucus made it clear that it was basically a negotiating position and that he would be willing to move to the center. The proposal was released as a position for the Democratic caucus. It was made very clear in statements, well-intentioned on the part of Senator Baucus, that it was basically a negotiating position and that he would be willing to move to the center, or saw that as necessary as part of the process to get legislation through the Senate. In general, Republicans such as myself reacted constructively to the proposal. I was quoted in the press accordingly. I disagreed with the proposal Senator Baucus put forward, but I recognized it as an essential part of a process of getting a bill through the Senate. I saw it as a positive step. Quite frankly, I viewed it as a response to the bill that passed the House of Representatives. On Tuesday of this week, we Republicans responded to the Democratic caucus position with one from our own caucus. From our point of view, it mirrored the President's stimulus plan. What kind of a reception did we get after we released our plan? In this era of bipartisanship and collegiality, something bad happened. The attack dogs were unleashed and with a fury. The same day, Senator Daschle harshly attacked our proposal in an extremely partisan, stilted manner. The next afternoon, which was yesterday, Senator Conrad was on the floor with the usual props he has--he uses them well--ferociously denouncing the Senate Republican proposal. Rather than recognizing the proposal as part of the process, as we Republicans viewed the Democratic proposal, the Democrats instead have turned up the partisan heat and are trying to torch any real plan that will help our economy and our country. One has to wonder why we have such a double standard. Why is it that one side obsessively attacks the other, that fault is not found on that side? Senator Daschle, along with Senator Lott, has exercised leadership since September 11. This had been a most important feature of doing business in Washington, DC, in these times of anxiety while we are trying to win the war on terrorism. The tone, as much as the substance, has been critical to the success of the process. Senator Daschle himself said we should not be ``strident'' in these times of trying to win a war. So you can imagine my surprise, even anger, and surely disappointment, when I read the tone of Senator Daschle's attack on the plan and, frankly, on me in press reports. Basically, Senator Daschle accused me of unilaterally stopping the stimulus process, particularly as it related to Republicans and Democrats working out a bipartisan agreement. I will read the quote into the Record: We've waited in an effort to try and find a way to work in a bipartisan manner. Unfortunately, as a result of Grassley's decision yesterday . . . that will not be possible, at least in the short run . . . I focus on Senator Daschle's quote because it is a bit ironic. As he was criticizing me, I was preparing for a meeting with Senator Baucus on the stimulus package. I guess if you ignore the fact that Democrats put out a partisan package last week, then Senator Daschle's quote would make some sense. But, of course, that is not true. So Senator Daschle seems to be saying that it is fine for Democrats to put out a caucus position and Republicans to be constructive, but if Republicans respond with our own caucus position, then that is partisanship. The Republican response justifies ramping up the content and the tone of the partisan rhetoric. The American people expect better. They know a double standard when they see it. Let's get back to the tone Senator Daschle set earlier. That is what I am asking for; that is a very good tone. Let's not descend to name calling, destructive partisan comments, and double standards. Now I move to Senator Conrad's attacks which occurred yesterday afternoon. Let me say, this is a preliminary response to Senator Conrad's attack on the Senate Republican caucus plan. I will have a lot more to say on that later, particularly after I get some figures back from the Joint Committee on Taxation. Senator Conrad spent a lot of time yesterday developing charts that were critical of Senate Republican caucus positions which he personalized by calling it the Grassley plan. He personalized his attacks, and that should be avoided. He decided to appoint himself as the teacher and accordingly grade everyone's economic stimulus proposal. That is fine. He has that right. I don't have a problem with that. If he is going to be the grader, though, I think he needs to be objective. He needs to treat those plans that he opposes the same way he treats those plans he supports. He does not do that. The report card Senator Conrad used yesterday is not the whole set of principles upon which the budgeteers agreed. I ask unanimous consent to print in the Record a copy of the budgeteers' documents.

Mr. GRASSLEY. If you compared the budgeteers' principles with the report card Senator Conrad generated, you will see, when you get a chance to read these, interestingly, that Senator Conrad omits four of the nine principles. In other words, Senator Conrad has selected five of the nine principles agreed on by budgeteers. Most importantly, Senator Conrad didn't use the ``overall principle,'' which reads: An economic stimulus package should be based on the recognition that long-term fiscal discipline is essential to economic growth. Measures to stimulate the economy should be limited in time so that as the economy recovers, the budget regains a surplus that is at least equal to the surplus in Social Security. Any short-term economic stimulus should not result in higher long-term interest rates. There is nothing in that comment with which I disagree. The point is, this principle is very important, and it ought to be followed. Senator Conrad spent a lot of time dwelling on the rough 10-year revenue loss numbers of the Senate Republican and Senate Democratic plan. Senator Conrad, however, left out an important assumption. I will explore the assumption Senator Conrad left out. As has been the case with all proposals from the Republican side, Chairman Conrad has attacked the stimulus plan as, among other things, ``fiscally irresponsible.'' Of course, I contest those unfounded and unfair criticisms. The plan is a straightforward proposal that will provide immediate economic stimulus. It will also give aid to dislocated workers, and it will help with their health insurance problems while being laid off, and it is fiscally reasonable. In fact, we have been in discussions with Senator Baucus's staff on these latter issues, such as dislocated workers and health insurance issues. So our plan follows on the President's four principles that were really the starting point of this debate first of all. That is what we ought to give President Bush credit for. He was presenting to the Congress the need for a stimulus package before many other people in Congress were even talking about the need for it. Since his tenure as ranking member, and now chairman, of the Budget Committee, Senator Conrad has placed all Republican tax cut proposals under very strict scrutiny. Senator Conrad has assumed that any temporary tax cut, no matter the terms of the proposal, would be made permanent. The assumption was then incorporated into his budgetary analysis. Without fail, the conclusion is then used as a basis to argue that long-term budget implications of any temporary tax cut make it ``fiscally irresponsible.'' We have before us a Democratic caucus stimulus proposal that contains two elements. One element is a combination of tax cuts and new temporary entitlement spending. Another element of the proposal is Senator Byrd's $20 billion ``infrastructure package.'' The two elements have been frequently mentioned by Democrat leadership, including Senators Daschle and Reid, as the Senate Democratic position. When analyzed, these proposals are described as having a fiscal impact of $90 billion in fiscal year 2002 and $60 billion over 10 years. Here is where you get into this double standard of scoring Republicans one way and Democrats another way. The scoring presented by the Democratic caucus, however, fails to employ Senator Conrad's convention regarding permanency. They don't take that into consideration. If we apply Chairman Conrad's convention to the new spending and assume permanency, the 10-year cost of the new spending package totals $526 billion. Think about it, Mr. President. In these times, Senator Conrad has determined that it is fiscally responsible to spend an additional $526 billion over 10 years. As a point of reference, this figure compares with the tax cuts of roughly $175 billion in the Senate Republican caucus position. I ask unanimous consent that an analysis of the 10-year cost of the new spending in the Democratic caucus stimulus plan be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, before I speak on another subject, I say to the Senator from Minnesota, I hope he knows my practice; when I put a hold on a piece of legislation or an individual, I put a statement in the Record as to why I have put on that hold, so you know that it is Senator Grassley who has a hold on that item. I do not approve of Senators putting holds on legislation and not doing it that way. But, on the other hand, I am doing it for whoever that anonymous person is.

Mr. GRASSLEY. Mr. President, reserving the right to object, the Senator from Minnesota is a good friend of mine, and I happen to be the only Republican in the Chamber. There is a Republican objection. I do not know who that Republican is, and I can maybe find out for the Senator. But I have to object for a Senator on my side, as long as I am in this position of being the only Republican Senator in this Chamber. So I object.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise to comment on the legislation before us, and particularly I want to take this opportunity to thank the chairman and ranking member of the appropriations subcommittee, as well as members of that subcommittee, because they have included some very important pieces in this legislation that deal with issues before the Senate Finance Committee of which I am a member. I would like to speak about those provisions and explain some of the subsequent action we anticipate over the next 12 months. This is obviously a very important bill. There are some key provisions in it that relate to the work of the Finance Committee. First, I thank the Appropriations Committee for its action on the social services block grant. Earlier this year, I wrote a letter to the committee leaders requesting that funding for this key program be restored to the levels agreed to in the 1996 Welfare Reform Act. State and local governments rely on this key block grant, that we call the social services block grant, to address a range of human service needs, particularly for vulnerable children, families, elderly, and persons with disabilities. The bill before us would give States needed flexibility to transfer some of the funds they receive under the Temporary Assistance to Needy Families Program to the Social Services Block Grant Program. Many Governors have asked for this flexibility. I am glad that the Appropriations Committee has acted accordingly. I also note the bill's report language favoring improved health care in rural America, including more equitable Medicare payments. While the appropriations report language is not binding on the Centers for Medicare and Medicaid Services within the Department of Health and Human Services, I appreciate the support for the Finance Committee's efforts to make Medicare payments more fair for providers in rural America. For years I have worked, along with other colleagues, to sustain and support rural communities. As a result, Medicare legislation has passed in recent years to take significant steps to bring greater equity to rural America but still not enough equity, hence the report language, and hence the need for the Finance Committee to do greater work in this area. I will give an example. My Finance Committee colleagues and I have successfully worked to make the Critical Access Hospital designation more widely available, allowing small rural hospitals to actually keep their doors open; otherwise, they would be out of business and we would not have health care in those parts of rural America. As a second point, we worked to begin eliminating the bias of the Medicare Disproportionate Share Program against rural hospitals, and, lastly, to protect small rural facilities against adverse effects from the new outpatient payment system. As I said, we still have a long way to go. So I am working with my Finance Committee colleagues to craft further legislation that will make Medicare more equitable as part of our broader efforts to strengthen Medicare. I plan to work to ensure Finance Committee approval of such legislation next year, in 2002. And I look forward to the support of Appropriations Committee members when it reaches the floor of the Senate. On another point, appropriators have recognized the importance of enhancing education opportunities for Medicare providers, an issue I have been working on for the past 10 months with colleagues on my own Finance Committee. There is broad recognition that health care providers participating in Medicare should have access to timely and clear information about changes to the program. Before the Senate leaves for the year, I expect to introduce some of this legislation on which we have reached agreement, after these months of work with Senators Murkowski, Baucus, and Kerry, to enhance Medicare provider education, improve communication between Health and Human Services and health care providers out in the field, and streamline paperwork burdens among other things this bill does. Providing more money to the Medicare Integrity Program for provider education is one aspect of the legislation, and the Appropriations Committee affirmed their support in its committee report of the bill that is now before us. I applaud, specifically, the efforts of Senator Bayh of Indiana-- there are others who worked with him whom I will not name--to require the General Accounting Office report to the committees of jurisdiction on the status of HIPAA's administrative simplification regulations. Obviously, I look forward to receiving that report in the Finance Committee, and working with my colleagues to implement administrative simplification in a commonsense, rational way so that well-intended legislation will actually accomplish its goals without hurting innocent programs, peoples, or facilities. For today, the good news is that we have already taken steps in the Finance Committee to address immediate problems with administrative simplification. Senator Baucus and I have worked closely with Senator Craig of Idaho and Senator Dorgan of North Dakota to introduce legislation--and we did this just yesterday--allowing States, counties, health care providers, and health plans a much needed additional 1 year to comply with the ``transactions and code sets'' regulation. Our bill will give everyone covered by the rule additional time to plan, implement, and finance the systems changes required under that rule. This is especially important for State and local offices, the public health infrastructure, and, most importantly, the patients who we all want to serve so that they continue to receive timely access to these benefits. I pledge my full support to consider the General Accounting Office's recommendations on administrative simplification in the Finance Committee next year. I also continue to applaud appropriators for their decision to increase funding for survey and certification activities of the Centers for Medicare and Medicaid Services. For years, I have called attention to the need for nursing homes to be examined more carefully. And this cannot be done without the additional funding. The committee's allocation for this purpose represents an $18.5 million increase over the 2001 year level. I am pleased to note that the bill proposes a $20 million increase in funding to the Administration on Aging for the Family Caregiver Program, which supports our Nation's everyday heroes--family caregivers--to a level of $140 million. As the author of this legislation that was passed as part of the Older Americans Act reauthorization last year, I thank the appropriators for their continued support of what I consider an important program that puts us well on the way of recognizing the economic contribution, as well as the quality of life contribution of family caregivers. Finally, I commend the appropriators for their support of the Safe and Stable Families Act. This is a broadly supported program that provides crucial services to at-risk families. I look forward to working with Chairman Baucus to reauthorize that program this year with increased funding levels. Mr. President, I yield the floor.

Mr. GRASSLEY. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. GRASSLEY

Mr. GRASSLEY. I thank the Senator from New Hampshire for his kind yielding of the floor because I have to go to a hearing at 11 o'clock before the Senate Finance Committee when we are going to talk about a stimulus package. So I thank the Senator. I support the joint resolution approving the U.S.-Vietnam Bilateral Trade Agreement. I commend Chairman Baucus for his leadership in helping to bring this historic agreement before the Senate today. I also think we ought to take time to thank Senators McCain and Kerry for their strong support of the agreement. These two Senators just named are people who have been, for a long time, active in trying to work out trade relations between the United States and Vietnam. Many times before now, I have opposed them in those efforts. Many times in the past, I have supported the Senator from New Hampshire in some of his efforts. I served with him for a long period of time on the Select Committee on POW/MIAs during the beginning of the last decade to work things out. The reason I am for this trade agreement, as opposed to positions I have taken in the past, is because I think that trade--for business men and women--between the United States and another country can probably do more to promote human rights, market economic principles, and political freedom and political democracy, much more than we can as political leaders or diplomats working between two countries. I see a very beneficial impact over the long haul--not maybe the short haul--to changing a lot of things in Vietnam. The Senator from New Hampshire has raised issues about it, and legitimately so. It is a fact that our Nation's healing process over Vietnam is not yet complete, nor may it ever be. But passage of this historic agreement, I believe, will aid us in the healing process. Approving the agreement will have other profound consequences for both nations and benefit to our Nation as well because I look at international trade as not benefiting the country that we are having the agreement with but benefiting the United States. If it doesn't benefit us, there is no point in our doing it. When you look at the purpose of our trade arrangements, they are obviously to help our consumers; but more importantly, they are to enhance entrepreneurship within our country, expand our economy, and in the process, create jobs. If we don't create jobs, there is no point in our having the sort of trade arrangements that we have. We do create jobs when we have enhanced international trade. A lot of statistics show thousands and thousands of jobs are created with trade, and not only are jobs created, but jobs that pay 15 percent above the national average. First, as far as this agreement is concerned, having consequences that are good, approval of the resolution will further strengthen our relations with Vietnam, a process that began under President George Bush in the early 1990s. President Clinton, putting our national interests first, diligently pursued the same policy started by the elder Bush. President George W. Bush took another historic step on the road to better and more prosperous relations by sending this Vietnam bilateral trade agreement to Congress for approval on July 8 of this year. Second, approval of this resolution will enable workers and farmers to take advantage of a sweeping bilateral trade agreement with Vietnam. This agreement covers virtually every aspect of trade with Vietnam, from trade in services to intellectual property rights and investment. The agreement includes specific commitments by Vietnam to reduce tariffs on approximately 250 products, about four-fifths of which are agricultural goods, and U.S. investors, in addition, will have specific legal protections unavailable to those same investors today. Government procurement will become more open and transparent. Vietnam will be required to adhere to a number of multilateral disciplines on customs procedures, import licensing and sanitary and phytosanitary measures, which are so important to making sure that we do not have nontariff trade barriers in agricultural products. There is no doubt that implementation of the United States-Vietnam bilateral trade agreement will open new markets for U.S. manufactured goods, services, and our farm products. It is a win for American workers, but it is also going to benefit the Vietnamese people. Continued engagement through open trade will help the country prosper. Adherence to the rule of law, or rule-based trading systems, will also further establish the rule of law in Vietnam. It is truly a win-win for both nations. Finally, it is my sincere hope that passage of this joint resolution will help pave the way for even greater trade accomplishments yet this year. One of the most important things we can do for our Nation before we adjourn is to pass what is now called trade promotion authority which gives the President of the United States authority to negotiate in the manner that we have negotiated down trade barriers and tariffs since 1947, originally under the General Agreements on Tariffs and Trades and now under the World Trade Organization regime. Our President must have all the tools we can offer, particularly at this time of economic uncertainty which happened as a result of the terrorist attacks on September 11. In my mind, there would be no more important tool at this time of economic uncertainty than trade promotion authority. Federal Reserve Chairman Alan Greenspan told the Finance Committee the other day that terror causes people to pull back; in other words, to lose confidence, to not do normal economic activity, the normal spending and investment. That is what September 11 was all about. We see it in our economy today. According to Chairman Greenspan, trade promotion authority is a vital tool encountering the tendency of people and nations to pull back and then lower their confidence in their own economy which affects the world economy collectively. Most important, Alan Greenspan told us that Congress giving the President trade promotion authority will say to terrorists: You will not stop the global economic cooperation that has brought so much good and prosperity to the world just because of terrorist attacks that we have had in this country. I think Chairman Greenspan has it absolutely right. Passing trade promotion authority will enable the President to help jump-start the world economy through trade. Passing trade promotion authority and launching a new round of WTO trade negotiations this November at the ministerial meeting in Qatar is a vital step toward economic recovery and restoring the long-term economic growth that benefits workers and farmers everywhere. As I conclude this comment on the Vietnam bilateral trade agreement, let me say, as important as it is, and that is an important step toward finishing our trade agenda, so is the trade promotion authority for the President. The Vietnam agreement then is just one step. Our trade agenda is not done. Let's do the right thing for the President and for the American people and follow Chairman Greenspan's advice. Let's work together to finish our trade agenda and pass trade promotion authority this year. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I come to the floor today to cosponsor an amendment with the very distinguished gentleman from West Virginia, Senator Byrd. Senator Byrd has crafted a very important and thoughtful piece of legislation designed to help the new Secretary of Defense bring some financial management reform to the Pentagon. This legislation is the end result of a series of questions Senator Byrd raised at a hearing before the Armed Services Committee on January 11th. This was the hearing on the nomination of Mr. Rumsfeld to be the next Secretary of Defense. Senator Byrd's questions pertained to the Pentagon's continuing inability to earn a passing grade, or ``clean'' audit opinion, on its annual financial statements. Under the Chief Financial Officers or CFO Act, the Pentagon must prepare financial statements each year. These are supposed to be an accurate reflection of all the department's assets and liabilities. The financial statements are then subjected to an independent audit by either the General Accounting Office or the Inspector General. Senator Byrd's questions pertained to the department's poor performance on the latest audit. Senator Byrd questioning with this telling point: ``DOD's own auditors say the department cannot account for $2.3 trillion, I repeat $2.3 trillion, in transactions in one year alone.'' I believe that Senator Byrd's question had a profound effect on Mr. Rumsfeld. I think they sent shock waves through the whole department. Since that time, Senator Byrd's staff and my staff have been working together to find a remedy. Our amendment is a byproduct of that process, and Senator Byrd deserves most of the credit for advancing this initiative through the committee review process. It is a great honor and privilege for the Senator from Iowa to work with someone of Senator Byrd's stature. Senator Byrd is a highly respected leader in this body and throughout our government. And when he tells the Pentagon, or any other agency for that matter, to shape up and fly right, they pay attention. They do what he asks. As many of my colleagues know, I have been wrestling with this problem for a number of years. And quite frankly, I have not had a whole lot of success in getting the job done. With Senator Byrd's leadership, I am now confident of success. With his leadership, I believe that meaningful reform is possible. And my confidence is further reinforced by the attitude of the new leadership across the river over in the Pentagon. My gut sense is that Mr. Rumsfeld was truly shocked by Senator Byrd's assessment. As a former chief executive officer in a large corporation, Mr. Rumsfeld knows and understands the importance of having accurate financial information at his fingertips. It's absolutely essential for making informed decisions. It is essential for success. He understands that the financial statement audits are a valuable diagnostic tool. They allow us to examine the patient's vital signs. It's kind of like doing a cat-scan on the government bookkeeping operation. If the books are in order and the numbers add up, it's so easy to roll them all up into a top-line financial statement that can stand up to scrutiny by auditors. Mr. Rumsfeld grasped the magnitude of the problem immediately. He knows that the Secretary of Defense cannot possibly make good decisions with lousy information. Having accurate, up-to-date financial information at his fingertips is mandatory--especially today when we appear to be on the brink of war. The demand for financial resources is starting to escalate rapidly. If DOD does not know what it has in the inventory today and how much it is spending from one day to the next, then how could it possibly know what it needs? I want to be certain that my colleagues understand the goal of the CFO Act. The key to this process is not passing some audit with flying colors. That's not it at all. This is no mickey mouse bean-counter exercise. The goal is to have accurate financial information in the hands of those responsible for making decisions. A ``clean'' opinion tells us that they will have it when they need it. A ``clean'' opinion will tell us that they are in a position to make informed decisions about what needs to be done. A disclaimer of opinion, by comparison, says they don't have it and can't make informed decisions. That's bad, but that's exactly where DOD is today. Secretary Rumsfeld's response to Senator Byrd's questions was so encouraging. It was music to my ears. Secretary Rumsfeld's response tells me that he understands the problem completely, and he wants to solve it. He knows he has to solve it, if he is to be a successful and effective secretary. Secretary Rumsfeld made a personal commitment to me to clean up the department's books. His Chief Financial Officer, Mr. Dov Zakheim, has made a personal commitment to me to fix the books. And Mr. Zakheim's senior deputies, like Mr. Larry Lanzillotta, have made a personal commitment to me to fix the books. So, I now see a willingness in the Pentagon to get a handle on this problem. That's half the battle right there, the will to get the job done. To my knowledge, that attitude never existed at the Pentagon in the past. In the past, I fought endlessly with Mr. Hamre and his predecessors. They denied the problem even existed. Clearly, we have moved way beyond that stage. Mr. Rumsfeld and his team understand the problem and want to fix it. If the will is there, as I think it is, I think we can succeed this time. I would like to assure my colleagues that this is not an attempt to legislate a solution. So long as the Secretary is committed to reform, a legislative solution is unnecessary. I see our amendment more as a device to help the Secretary get the job done. Our only objective is to help the department acquire the tools it needs to put accurate, up-to-date financial information at the secretary's fingertips. First, our amendment establishes a Senior Financial Management Modernization Executive Committee. This group will supervise the acquisition of highly integrated accounting systems and computer technology. These systems will be designed to produce reliable financial statements. Those capabilities simply do not exist today. This group will report directly to Secretary Rumsfeld. Second, the amendment provides some much needed relief. Right now, the Inspector General is pouring audit resources down a rat hole. It makes no sense whatsoever to audit financial statements that are notoriously unreliable. It's a total waste. That practice will be suspended temporarily. Third, while some audits are suspended, the Secretary must provide an estimate of when reliable financial statements will be available for audit. Fourth, the department is put on notice that it has four years to get the new systems up and running. Mr. President, every member of this body understands that the elimination of the terrorist threat to this country is the top defense priority for the foreseeable future. We understand and accept that . Countering this terrible threat must take priority over everything else. At the same time, I hope that efforts to ferret out fraud, waste, abuse and mismanagement are not left behind in a cloud of dust. They have a place, even in the current environment. It will be up to Secretary Rumsfeld to decide how and where reform fits into the new priorities. We have been repeatedly told that the coming campaign against terrorism will be long and difficult. If it is long and difficult as predicted, then we will need to be certain that we don't waste precious resources. Waste and mismanagement could get in the way of our efforts to win the war against terrorism. Amendment No. 1703

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am not going to bring up the same issues the Senator from Texas brought up. But I had a chance to listen to his remarks. I share many of the concerns that he has. Although I have been an enthusiastic supporter of this agreement from day 1 and have not found all of the considerations that he has to specific parts of it, I have reservations about those parts, particularly as they deal with labor and the environment, but to appeal to some extent through an exchange of letters that these issues have been taken care of at least enough to satisfy my concerns to move forward with this legislation. I speak in favor of the United States-Jordan Free Trade Agreement. I urge my colleagues to support it. But before we move forward, I would like to put this agreement in context--not a context different than other speakers have but to emphasize some things that have already been said. First of all, this agreement is very important between two countries that have been friends for a long time and that want to maintain that friendship. It has been almost a year since President Clinton and King Abdulla signed the U.S.-Jordan Free Trade Agreement. By all accounts the agreement should have passed Congress with little controversy. The Kingdom of Jordan and King Abdullah are good friends of the United States. The agreement itself is a good agreement. It opens up new markets for U.S. exports to Jordan. And it enhances Jordan's access to our markets. But there is one part of the agreement that caused problems. These are controversial labor and environment provisions that were put in the U.S.-Jordan Free Trade Agreement. It is these labor and environment provisions which slowed passage of an agreement that should have passed both Houses of Congress quickly. In the Senate legislation was introduced by Max Baucus on March 28, 2001 to implement the agreement. On July 17 the Finance Committee began to debate the bill. During debate many Members expressed concern about the labor and environment provisions in the Jordan agreement. Many others pushed hard for an amendment to the agreement which would give the President trade negotiating authority, which was supported very eloquently by the Senator from Nebraska. Unfortunately, this amendment was withdrawn because of the chairman's opposition. To help move the agreement forward the U.S. Government and the Government of Jordan exchanged official letters on July 23, 2001. These important letters clarified that neither government intends to apply the labor and environment provisions in a way which blocks trade. The exchange of letters was an important development. After all, the purpose of a free trade agreement is to facilitate trade. After all, we are talking about an agreement that has the purpose of facilitating trade. That is pretty clear with the term ``free trade agreement''--not to deal with a bunch of social and environmental issues. While these commitments did not resolve every Senator's concern with the agreement, it was an important step forward. And because of these letters the Finance Committee was able to complete consideration of the bill on July 26, 2001. Unfortunately, some tend to characterize the labor and environment provisions in the Jordan FTA as a precedent for future trade legislation. I want it understood very clearly that I do not accept that, and I want to say that loudly and clearly. This should not be considered as a precedent. It does not mean that the Jordan free trade agreement in other ways does not set a precedent. It is the first free trade agreement we have entered into with a Muslim country. I hope it is not the last. I also hope this sends a loud signal to our Muslim friends and our friends around the world. The United States wants close trading relationships with these countries and their people. We want to help your economies grow through trade. I think it was President Kennedy who said ``trade, not aid.'' It enhances the prosperity throughout the world generally. But as the Jordan agreement is precedent setting with a Muslim country, we would surely expect it to enhance prosperity throughout the Middle East as well as the entire world benefitting because we all know that free trade is a very powerful engine of growth. It can lift millions out of poverty, as we have seen in the development of this regime since 1947 when these free trade agreements started--and under the GATT process the revitalization of Japan and all of Western Europe. Countries that were poverty stricken 50 years ago are very prosperous today--Japan, Taiwan, South Korea, to name a few. Their prosperity depends a great deal upon trade. Lifting millions out of poverty also in the process opens the door to new hope for people. It offers opportunity to people who have only known despair. Trade can help undermine terrorism by taking away the fertile ground of poverty and hopelessness from which that terrorism is sown. It can broaden horizons and lift human spirits to greatness. Our friends and allies must know that we share their hope in the future. But trade and the regime for arriving at free trade agreements and further negotiations within the World Trade Organization are a way to show that we put our actions where our mouth is. It also shows that we have history on our side--that there has been progress made in the past. It can predict the good future that lies ahead as a result of freeing up trade. They must know we will open up our arms and embrace them through trade. Just as trade lifted Germany and Japan from the ashes of World War II, it will lift nations today. However, we have to have the tools to make it work. One of those tools, as you keep hearing in this debate--and a lot of other places-- is the need to give the President of the United States trade promotion authority. We ought to do this in the same apolitical or bipartisan way that it has been done over a long period of time. And this is done because we do not put a lot of preconditions on these negotiations. People of good will sit down to work out their differences, each respecting their own national interests. The President of the United States will not negotiate away the interests of the United States of America and its people. So it is time to give the President the power to negotiate trade agreements with our friends and our allies, and even with countries that we might not consider our friends and allies, if they are in the World Trade Organization. The Finance Committee has quite a history of bipartisanship in this area, to give the President what used to be called fast-track trade negotiating authority, now called trade promotion authority. This type of legislation, over a long period of time, has passed with broad bipartisan support. We in the Senate generally have not waited for others to act. We have seized the reins of leadership and have moved ahead. Today, we need to be doing that as well. I hope I can help move that process along. I hope this bill today helps do that as well. There is bipartisan legislation that is already introduced that would be a good bill for this committee to consider. At a time when the world economy is slowing, we must act. We must put aside our partisan preconditions and excuses to trade and show the world that the United States is ready, willing, and able to lead. I thank the Chair and reserve the remainder of what time I did not use for Senator Gramm.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I am pleased that the Senate is moving with great speed to insure the short-term stability of our nation's airlines. The tragic events of September 11 have unfortunately made this legislation an absolute and immediate necessity. This Senate us wisely moving with great dispatch. This act is difficult for all of us. It has not been easy to negotiate by any means. But the Senate has come together for the good of this great nation to do the right thing. That is, to keep the airlines in the air. The airline industry is a marginal industry, just like farming. And just like farming, it depends upon a constant and consistent flow of cash. That critical cash flow dried up on September 11. This legislation provides needed cash assistance and loan guarantees to make up for the current terrorist induced shortfall. The bill also addresses critical liability issues. As a member of the Judiciary Committee, I will monitor these provisions continually and closely as to their propriety and proper functioning. I will not hesitate to step in as I see necessary should the situation call for further action. I welcome the language concerning Essential Air Service, EAS. This is a proven program with an administrative bureaucracy already in place. State and communities understand the EAS program and its important role in maintaining air service to small, underserved communities. This program has the potential to help several communities in Iowa which now face the loss of air service. It will help to prevent these small communities from bearing the brunt of air service reductions. I strongly urge appropriations to provide the funding necessary to insure the success of the program. I wish this measure was not necessary. But it is. The cowardly acts committed by terrorists on September 11 have made it so. The terrorists will not win. The American airlines will continue to fly, and Americans will continue to fly on them. Our economy and culture will grow and thrive. Of this, I am confident.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, yesterday a cowardly act of terrorism was committed against this Nation. But, today, this Nation stands strong and unified--a Nation of freedom and of hope, a Nation hurting, but resolute in our determination to stamp out terrorism, now even on our own shores. We can no longer ignore the threat that international terrorist groups present to other nations. Yesterday, we faced the reality of that threat. Until yesterday, we had rested in the belief that such an atrocity by foreign hand could not occur on U.S. soil, but now it has, and we must respond. We must safeguard our shores from further acts of violence. We are at war with an enemy of rogues and cowards and they must be crushed. We have received a rude awakening, and now we must act. There is a lot for us to do. More than a year ago, I was critical of the diversion of funds from human intelligence to high tech counter-terrorism efforts. Tomorrow, we will resume that debate, but today is a day for national mourning. My prayers go out to all the victims and their families. I pray that God will grant a comfort and peace that is unspeakable in its depth to those who are hurting and for the families of the victims. I cannot adequately express my sympathy to those who lost loved ones in these tragedies, and across America we share in their grief. Outside of Union Station, a block from the Capitol, fly the flags of all 50 States. It is right that these 50 flags now fly at half mast, for this is a day that will directly touch millions of families across this Nation. We have already learned that at least one Iowan, Karen Kincaid, a native of Waverly, IA, was abroad the hijacked plane that struck the Pentagon on Tuesday morning. Our prayers go out of Karen's family and her loved ones. I fear that in the days to come we may learn of other Iowans whose lives have been destroyed by these tragedies. We all must look for ways to help. We can pray for peace. We can give blood. In the face of all of yesterday's evil, thousands of courageous Americans rose to the challenge. Men and women, filled with the basic decency and goodness that embodies all that is America, rushed to the rescue of the injured and the dying. Firefighters, police, EMTs, doctors and other volunteers have been working around the clock, and we thank them. Unfortunately, we have learned that many of these brave men and women have given that last full measure of devotion. We mourn for them and honor their sacrifice. The greatness of our people stands in sharp contrast to the unnamed cowards who have perpetrated this evil. I also want to recognize and thank Secretary Thompson for his effort to bring 7000 doctors, nurses, and health care professionals to New York. Now, we must go on, unified behind President Bush's leadership. Today's resolution demonstrates the unity of Congress to stand behind the President in the effort to bring the perpetrators to justice. We must commit ourselves to the task of preventing tragedies such as this from ever again happening on our shores. We are a Nation strong and dogged in our commitment to seek out and crush the men who committed these acts of violence against our country. Terrorism is our national enemy and we must fight it as a Nation. These great tragedies were perpetrated not against a particular race, color, religion, or creed. Yesterday's violence was born in a hatred of America and what it stands for. It was an open attach on all our people and our values. Freedom itself was under assault. Truly this was an act of war on America, and we must act accordingly. Our friends in the International community, we now ask you to work by our side to quash those who have engaged in these heinous acts. We will need your assistance to identify and punish those who are behind these acts. State sponsored terrorism is an enemy to all democracies. To see victory over terrorism, we must not just retaliate against the terrorist, but as President Bush said last night, we must also punish those countries who harbor and assist them. Justice must be brought to the terrorists and to the States from which they plan and wage their evil schemes. We must all be unified in this effort to combat terrorism. I am proud to be an American.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I rise to express my strong support for the National Guard's counterdrug mission. I am concerned that proposed Department of Defense, DoD, funding for the National Guard's FY-2002 Counterdrug Program, State Plans, is not sufficient to ensure the continuance of this valuable service to law enforcement and local communities, and request that the funding be increased $40.7 million, from the President's $154.3 million request, to a total of $195 million. The National Guard's Adjutant Generals, from the various States, have indicated to the National Guard Bureau, that without a minimum of $195 million budgeted for this program, large personnel layoffs may occur. My staff has heard reports that one State may have to downsize by as much as one-third their personnel. Over ninety percent of the National Guard's counterdrug program costs are personnel-based, and as such, it is extremely sensitive to variations in funding, taking years to recover from any reduction in trained and experienced personnel. These reductions affect supported agencies, including the Customs Service, DEA, U.S. Border Patrol, FBI, HIDTAs, scores of State and local law enforcement agencies, and community based organizations. I am also concerned about the apparent lack of emphasis, and even distancing of itself, by the Department of Defense, on the counterdrug mission, especially in a year of discussions of increased DoD funding for other military mission areas. I sense this repeatedly in insufficient funding for the National Guard and other critical counterdrug mission areas, and believe this would be a poor policy decision and a poor indication of the nation's priorities. I urge my colleagues and the Department of Defense to give serious consideration to the National Guard program and its contribution to our national drug control strategy.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I rise today be introduce legislation that will ensure the continued availability of the U.S. mail for the shipment of day-old poultry * * * For decades, America's hatcheries and family farmers have relied on the United States Postal Service to safely and efficiently deliver live, day-old poultry. However, Northwest Airlines, the last contractor to provide the service to the Postal Service in the Midwest recently decided to discontinue the shipment of live poultry as of September 1. the decision by the air carriers to stop working with the Postal Service has placed the economic vitality of many rural communities and the livelihoods of many of my constituents in serious jeopardy. In fact, hundreds of Iowans are employed in Iowa hatcheries which supply day-old birds to family farmers and hobbyists. For example, the McMurray Hatchery in Webster City, IA, has shipped day-old chicks and other poultry to customers in all parts of the United States for over eighty years. The hatchery employs up to seventy people in sseason and is a major contributor to the region's economy. Ninety-five percent of the hatchery's orders are shipped through the mail, and carried by Northwest Airlines. Without the ability to deliver their product to their customers, however, the McMurray Hatchery would likely be put out of business. In the community of Rudd, the Hoover Hatchery employs thirty people. The Welp Hatchery in Bancroft employs fifty people. For these small, rural communities, each with fewer than a thousand people, loss of these hatcheries would be devastating. The legislation I introduce today would protect these hatcheries and the economies of Webster City, Rudd, Bancroft, and communities like them across the country. My legislation would authorize the U.S. Postal Service to require an air carrier to accept shipments of any day-old poultry and other live animals that are also allowed by the carriers's cargo service. In addition, my legislation would permit the Postal Service to assess a reasonable postage surcharge on shipments of live poultry to compensate carriers for any necessary additional expenses associated with the handling of live animals. Most importantly, my legislation would ensure that the commitment of the United States Postal Service to deliver all of the mail, without discrimination, would not be broken. Therefore, I urge my Senate colleagues to support this legislation and to uphold our obligation to America's hatcheries and family farmers.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I rise today be introduce legislation that will ensure the continued availability of the U.S. mail for the shipment of day-old poultry * * * For decades, America's hatcheries and family farmers have relied on the United States Postal Service to safely and efficiently deliver live, day-old poultry. However, Northwest Airlines, the last contractor to provide the service to the Postal Service in the Midwest recently decided to discontinue the shipment of live poultry as of September 1. the decision by the air carriers to stop working with the Postal Service has placed the economic vitality of many rural communities and the livelihoods of many of my constituents in serious jeopardy. In fact, hundreds of Iowans are employed in Iowa hatcheries which supply day-old birds to family farmers and hobbyists. For example, the McMurray Hatchery in Webster City, IA, has shipped day-old chicks and other poultry to customers in all parts of the United States for over eighty years. The hatchery employs up to seventy people in sseason and is a major contributor to the region's economy. Ninety-five percent of the hatchery's orders are shipped through the mail, and carried by Northwest Airlines. Without the ability to deliver their product to their customers, however, the McMurray Hatchery would likely be put out of business. In the community of Rudd, the Hoover Hatchery employs thirty people. The Welp Hatchery in Bancroft employs fifty people. For these small, rural communities, each with fewer than a thousand people, loss of these hatcheries would be devastating. The legislation I introduce today would protect these hatcheries and the economies of Webster City, Rudd, Bancroft, and communities like them across the country. My legislation would authorize the U.S. Postal Service to require an air carrier to accept shipments of any day-old poultry and other live animals that are also allowed by the carriers's cargo service. In addition, my legislation would permit the Postal Service to assess a reasonable postage surcharge on shipments of live poultry to compensate carriers for any necessary additional expenses associated with the handling of live animals. Most importantly, my legislation would ensure that the commitment of the United States Postal Service to deliver all of the mail, without discrimination, would not be broken. Therefore, I urge my Senate colleagues to support this legislation and to uphold our obligation to America's hatcheries and family farmers.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, in the last several days, I have received a copy of the most recent PRIDE survey of youth drug use in this country. The numbers are not encouraging. In fact, the numbers over the last several years have not been encouraging. Drug use among teenagers since 1992 has risen sharply. This is true for use of more traditional drugs, like heroin. It is true for the newer or more recently popular designer drugs, like meth and now ecstasy. I have spoken about these trends frequently here and in hearings. The Caucus on International Narcotics Control, which I co-chair, has held a number of hearings on these dangerous trends and their consequences. No one who is familiar with the details can be anything but concerned about what is happening. No one that is except those who seek to legalize drugs in our society and make them even more available than they now are. The legalizers, of course, do not admit that this is their intent. But it is like the old magician's trick, watch the birdie. They cloak their efforts to legalize with various disguises. They want marijuana for sick people. They want treatment not prisons. They want compassion not punishment. But it's an old game. It's just a variation on the useful lie: I am for a good cause so I don't have to be honest. Well, as the old saying has it, fool me once shame on you, fool me twice shame on me. And they are trying to fool people again. The goal this time is to stop the nomination of John Walters to be the nation's drug czar. Their effort is a purely cynical one trying to portray Mr. Walters as some kind of stone age, Neanderthal throwback who is out of step with the needs of real drug policy. But the policy they really advocate is to make drugs more widely available. What they object to is that Mr. Walters does not accept that. So they have begun a campaign to impugn his character, misstate his views, and misrepresent the facts and their own goals. They do not want strong leadership on this issue. They are trying to portray Mr. Walters as a total supply side advocate who cares nothing about treatment or prevention. They are relying on the hope that people will read what they have to say about his record rather than look at his record. Remember, watch the birdie. They hope to block his nomination in order not to help stop drug use but to clear the way for their efforts to legalize. The main voices against him have come from groups funded by billionaire advocates for drug legalization. It is coming from a number of journals and organizations that are on record favoring drug legalization. They would have us believe that their motive for opposing the President's candidate to be the drug czar is out of concern for treatment and prevention. This is like the wolf expecting Little Red Riding Hood to believe it is really grandma in the bed. Some facts. When Mr. Walters was the chief of staff for Bill Bennett, the first Drug Czar, Walters was a key player in helping to ensure that we had a serious demand reduction effort as part of our policy. In the Bush years, demand reduction resources doubled. In 4 years of that administration, the rate of funding for demand was higher than in the 8 years of the last administration. Mr. Walters was a player in making that happen in the first Bush administration. It is true he spoke out a lot on supply reduction. That too was part of the President's strategy and he was responsible for helping to implement that as well. He also became the Deputy Director for Supply at ONDCP. It was his job to speak on these issues. There was a Demand Deputy. It was his job to speak on demand issues. You will not find a lot of supply talk in Dr. Kleber's public comments. As the demand guru it wasn't the focus of his job. You won't find a lot of demand comments in Mr. Walters' statements. Why do you think that is? In the years after he left ONDCP, Mr. Walers made numerous public statements. Many of these were before Congress. He was asked by committees in Congress responsible for dealing with supply issues to speak on them. Is it any wonder that most of those concern supply reduction? It isn't a mystery, but, remember, watch the birdie. Let's be clear. The objection to Mr. Walters is not that he is a supply sider or a hawk on demand. It is that he believes we need a serious drug policy that is comprehensive. That is what Congress wants and funds. The President has made it clear that that is what he wants and expects. It's the President's policy. As a member of the President's Cabinet, Mr. Walters will be a strong voice, a forceful advocate. We need that. The major demand groups in this country recognize that and support him. Mr. Walters is not a drug legalizer. He is a man committed to stopping the flow of illegal drugs across our borders and into our schools and neighborhoods. He is committed to prevention and effective treatment. He has children of his own. He is determined to help protect them in their schools from the drug pushers among us. He cares passionately about this issue. That is why I believe the Senate needs to move quickly on his nomination. We need leadership. We need commitment. We need passion. Mr. Walters can supply those needs in working with Congress to accomplish a common goal. The only people who benefit from blocking this nomination are the legalizers. We should not become their unwitting allies. I support this nomination. I urge my colleagues to join me. It is late in the year. The August recess is almost upon us. We need to give Mr. Walters a speedy hearing and a quick confirmation so that he can get about the Nation's business.