Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the Treasury Department has provided us with data showing the number of farms and small businesses, on a state- by-state basis, that would benefit from the President's tax relief plan. This data is reflected in the two charts that I have placed here on the floor. So now, let's go to our charts and examine the number of small businesses and farms operating in each of our states. And let's ask ourselves whether the life's work reflected on these charts deserves to be honored by relieving these people of an excessive tax burden. We continue to hear our Democrat colleagues claim that other provisions in the budget should be increased at the expense of the tax cut. Well, let's get one thing very clear. Any reduction in the amount of the tax cut means that the benefits of the tax cut proposal are reduced. We do know what the other side of the aisle intends to take in order to pay for politically motivated expenditures--they intend to take away America's tax cut! So let's take a look at what this would mean to the American taxpayer. This means that for families with children, the $1,000 child care credit would be reduced for each child in America. And that will occur for every year of the $1,000 credit. It means that for four-person families earning $45,000 a year will not have their taxes cut in half, as called for in the President's plan. It means that a four-person family earning $35,000 a year could be subjected to income taxes. The President would take those families off the tax rolls. It means that expansion of the education savings accounts could be scaled back. It means that the marriage penalty will continue because there won't be enough funds left to fix it. It means that small business owners and farmers will see an increase in their tax rates above the levels proposed by the President. They are already paying the highest levels of tax since World War II. So remember. Every time there is a politically motivated amendment to reduce the size of the tax cut, someone is going to pay a price for that. So who pays the price of this political posturing? Families, small business owners and farmers, of course, because their well-deserved tax relief will have to be scaled back. The bipartisan amendment would add $5 billion in fiscal year 2001 and $58.5 billion between fiscal year 2002 and fiscal year 2011 to agriculture's mandatory commodity credit corporation price supports, related programs and conservation. Adding $63.5 billion to the existing $94.2 billion already assumed in the baseline would total $157 billion of support. The amendment would stabilize net cash farm income, provide enough funding to greatly strengthen a countercyclical program, provide additional money for regulatory relief, enhance conservation efforts, and be fiscally responsible. From fiscal year 2002 through fiscal year 2011 the Johnson/Conrad amendment is funded out of the tax cut. Our amendment is funded out of the contingency surplus. In plain language, they take $88 billion out of tax cuts, we don't. The major criticism raised last night was that it doesn't spend enough money. This is seemingly always the Democratic philosophy: If a little is good, a boat load is better. Well, let me tell you, that's bunk. The USDA's Economic Research Service has forecast that on-farm income will drop $5.7 billion between 2000 and 2001. But starting in 2002, both the Food and Agricultural Policy Research Institute widely held to be the best source of non-partisan ag-economic information available, and the Congressional Budget Office have forecast that almost all major commodities will realize improved prices. There will not be dramatic growth, but there will be improvement. We have funded our proposal at $7.35 billion in fiscal years 2003, 2004, and 2005. This far exceeds estimated shortcomings of on farm net income and provides enough flexibility to help with the cost imposed by new environmental regulations through EPA. But if your goal is to hurt the family farmer, we should pass a boat load of money here today, then we can stand back and watch cash rent shoot through the roof. Ask any farmer who rents ground how much their rent has increased in the last three years. It's sure not due to inherent value in the land because our commodities have experienced record low prices, yet rent has increased dramatically. I am not saying we shouldn't help farmers. I have been one of the strongest supporters of increased agriculture spending for additional payments in the Senate. I have also always tried to find bipartisan ground, and I know Senator Conrad knows this because I have often reached out to Senator Conrad and Senator Kerrey from Nebraska, when he was in the Senate, to reach that bi-partisan position. The Grassley-Miller amendment allows us to accomplish the same things we have done for agriculture in the past three years, and also gives us the flexibility to write an outstanding farm bill that fits the need of our family farmers. Now I want to mention one last point. Remember the crop insurance legislation that we passed last year? Two years ago we provided budget authority for crop insurance and the Agriculture Committee couldn't pass a bill out. The next year Senator Roberts and Senator Bob Kerrey found middle-ground and developed a bipartisan, broadly supported crop insurance bill. The problem was it didn't fit the number that we had provided in the Budget. When the Agriculture Committee came back to the Budget Committee and explained the dilemma, Chairman Domenici, Senator Conrad, and myself provided flexibility in the budget to accommodate the legislation. Let me offer this thought: If the Agriculture Committee finds a bipartisan position that widely accepted as the right thing to do, in a similar fashion to the crop insurance legislation, we will work on providing more flexibility, but for now let's start here.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the amendment I am offering with Senators Snowe, Domenici, Collins, and Frist this afternoon represents Senate Republicans following through on our commitments. We joined President Bush in committing to strengthen and improve Medicare to meet the needs of older Americans. And the amendment I am offering demonstrates that we will keep that promise. This amendment provides the flexibility necessary for the Finance Committee to craft legislation that not only provides necessary reforms and improves access to prescription drugs, but does so in a responsible fashion--so we're not left with uncontrollable spending. I hear from constituents all the time about things in Medicare that need to be updated. And while prescription drugs is the most visible improvement, it is surely not the only one. Medicare is operating on a system that is almost a half-century old. There is little doubt in anyone's mind that this system is not only out-of-date, but that it cannot support the surge of baby boomers that will enter the program over the next decade. We owe it to our beneficiaries to provide high-quality 21st century medicine, we owe it to our providers to let them deliver the care they were trained to provide instead of spending all of their time on paperwork and regulations, and we owe it to our taxpayers to make sure we're spending every dollar wisely--and not wastefully. I think we have a real opportunity to get Medicare legislation done this year and the amendment I am offering today allows us an opportunity to do just that. I look forward to working with the President and my colleagues here in the Senate to craft a Medicare proposal that makes sense for beneficiaries and that is fiscally responsible for our taxpayers. I yield the floor.

Mr. GRASSLEY. Mr. President, I yield myself the rest of the 18 seconds. Remember, our amendment uses Medicare money for Medicare. Part A Medicare money is going to be used for Medicare. Part B Medicare money is going to be used for Medicare. We are even going to put general fund money in there to use for Medicare. How much more do you want? We're putting medicare money aside for Medicare and we're putting extra money aside for Medicare. How much plainer can it be?

Mr. GRASSLEY. Mr. President, I ask unanimous consent reading of the amendment be dispensed with.

Mr. GRASSLEY. I yield the floor.

Mr. GRASSLEY. Have you ever heard money is fungible?

Mr. GRASSLEY. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 172

Mr. GRASSLEY. Mr. President, I send an amendment to the desk for myself, Senator Miller, and Senator Domenici.

Mr. GRASSLEY. Mr. President, I yield myself such time as I may consume. Amendment No. 173 to Amendment No. 170

Mr. GRASSLEY. I send an amendment to the desk and ask for its immediate consideration. This is for Senator Grassley, Senator Snowe, Senator Domenici, Senator Collins, and Senator Frist.

Mr. GRASSLEY. Mr. President, I rise to offer a fair and very generous bipartisan agricultural amendment. I am a family farmer. To be fair to my son, my son makes most of the decisions and does most of the work; I try to help him on weekends. I see my role on weekends as being a hired man for my son because I don't live with it every day as he does and I want to rely upon his expertise. But I do have that background and I bring that background to my colleagues to show some understanding and sensitivity that we all ought to have toward the family farmer and agriculture in general. I know what the agricultural community is currently going through. I think the plan in this amendment will address the immediate needs to stabilize net income, provide enough funding to significantly strengthen a future counter-cyclical program, offer additional money for regulatory relief, enhance conservation efforts, and is fiscally responsible. Some Members might wonder why it is tough to be a farmer in our current agricultural community. Why, without Government assistance, net income, cash income for the farm is projected to fall to $50.7 billion, which is $4.1 billion below the 1990 to 2000 average of $54.8 billion. I will lay out some factors. First, input cost. Natural gas prices have recently hit record highs, directly impacting farm fertilizer prices and availability. Almost all of the nitrogen we get for the record corn crops we raise in our State comes from anhydrous ammonia, made from natural gas. The cost is passed through to the farmer. Due to the past administration's inability to enact a workable energy policy, farmers were left to cope with significant fluctuations in price and demand. These fluctuations have dramatically increased the cost of hydrogen fertilizers and these increased input costs will certainly have a substantial impact on corn producers across the Nation during the coming growing season. After input costs, it is legitimate to bring up the issue of regulations and their increase in costs. We have the Environmental Protection Agency preparing to implement new rules for concentrated animal feeding operations which will impact an estimated 376,000 confined livestock operations in our country. For example, the costs incurred for compliance for cattlemen could average well over $100,000 per farm. The costs would involve structural measures, engineering fees, and the development of a comprehensive nutrient management plan. After regulations comes low commodity prices. These are probably the most obvious of all things that people in the city read about regarding the farm income situation. Today in my hometown of New Hartford, IA, where we deliver our corn and soybeans, the cash price for corn is $1.78 and $4.03 for soybeans. These are not lucrative margins. The lack of profitability and production hurts. Three years in a row of low prices--except for soybeans--are lower now than ever before. These low prices have been the rule for the last 3 years. These low prices can actually take some of the best farmers to the breaking point. After low commodity prices, we have the frustration with the international trade of agricultural products. The European Union still spends a huge amount on agricultural export subsidies. These subsidies of the European Community are the most trade distorting, even trade disruptive, of all agricultural policies. They depress the prices that would otherwise apply to commercial trade. In so doing, they harm the ability of our farmer to compete with European farmers in third country markets. They also reduce the incentive to engage in more efficient production. The truth is, until we get the European Union to agree to reduce its excessive spending on export subsidies, we will not be as competitive as we could be and should be in world agricultural markets. As a result, our farmers will continue to get lower prices in world agricultural products as long as the American farmer is competing against the German treasury, as opposed to competing against the German farmer. We can compete against that farmer, but it is very difficult to compete against the German treasury. The best way we can address this problem is to launch a comprehensive new round of multilateral trade negotiations at the World Trade Organization ministerial meeting in Qatar and engage the Europeans directly on this issue. Successfully launching a new round of global trade talks is hardly a sure thing. We have a lot of work to do before we can make this happen. I am not certain we have the necessary international political consensus on this point. Even if we were to advance that new round right now, it would still be a few years before we would see the economic impact, assuming--and you cannot always assume--that American agriculture will win at the bargaining table the way we hope we will win. We do get victories. Over a period of time we have seen trade distorting practices on agriculture and tariffs on agriculture come down--quite frankly, not as much in the agricultural area as they have come down in almost every other area of manufactured products and services. We have another trade frustration, and that is the country of China. Currently, negotiations on China's access to the World Trade Organization are stalled in Geneva because China is insisting on claiming developing country status with respect to their agriculture. This would mean that China would be entitled to exempt a higher proportion of trader distorting domestic support spending from the agreed upon caps on such spending than it would be if China is considered to be a developed nation. Higher domestic support for agriculture and China would mean less excess for American farm products to China. Although this is of prospective harm, not one we are facing immediately, it certainly will not help our farmers if we don't get China to change its position. This isn't something for which we have to wait 5 years. These sorts of negotiations of China's success to the World Trade Organization are going on at various times now or in certain periods of the near months we are in and the months that have passed. This is something that China is going to have to agree to if they expect to get in the World Trade Organization, that they are coming in as a developed nation to meet fully their responsibilities in the World Trade Organization, not begging for some special treatment. The list of factors affecting the agricultural economy does not detail all of the reasons that our agricultural economy is failing. But it does lay out a number of good reasons why we should be concerned about the strength of the family farms. Our amendment adds $63.5 billion to agriculture's mandatory Commodity Credit Corporation price supports, related programs, and conservation. Adding this $63.5 billion to the existing $94.2 billion already in the baseline will add up to $150.7 billion in the support for the agricultural economy over the next 10 years of this budget resolution. I believe the additional budget authority provided in the baseline will allow the Agriculture Committee to begin the process of establishing the parameters for our next farm bill. In the interim, the $5 billion provided in fiscal year 2001, the year we are in now, and the $7.35 billion provided for economic assistance, will help farmers survive. I know my friends and neighbors of Iowa need assistance and a better counter-cyclical program; that is, improvements in the farm program. When we use the word ``counter-cyclical,'' that implies that there will not have to be a dependence upon Congress from year to year voting additional money, but there would be a program that would kick in under circumstances of lower prices. I also know we need to provide this assistance in a fashion that improves our fiscal responsibility. Massive cash infusions are not the long-term answer to the challenges facing the American farmer. The 1996 farm bill was not created under the assumption that it was the only tire on the wagon. When we passed the 1996 bill, it was supposed to be supported by tax relief and assistance, like the farmers savings accounts legislation that I have continuously introduced and was in a bill the President vetoed last year, and hopefully will be in a bill the new President will sign. In addition to that, we promised in 1996 increased trade opportunities but, in the period of time since then, we failed to pass trade promotion authority for the President. We also took too long to give farmers new and improved risk management options which, just last year, 4 years late, after it was promised, we finally passed a new crop insurance program. Due to partisan opposition regarding free trade and tax relief, the only additional wheel that has been placed on this wagon is this crop insurance reform I talked about, and the Government was a long time getting that passed. Any farmer knows if you only have two wheels on a four-wheeled wagon, it does not roll along very well. So if there is, during this debate, criticism of the 1996 farm bill--and there can be some legitimate criticism of the 1996 farm bill--remember, it should not be judged as the total product we promised the farmers in 1996 because what we provided for was a safety net. We found out 3 years later that safety net had some holes in it. We had to pass in 1998, 1999, and 2000, as we are doing now for the year 2001, some patching of that safety net, not because that is something we knew needed to be done in 1996, but because it was a promise that we made in 1996 that there would be a safety net there for farmers, and the money that was provided in 1996 for each of the next 7 years was not enough money. Keeping our promise to the family farmers, we enhanced that in 1998, 1999, 2000, and we will do it again in 2001. So if there is criticism of the 1996 farm bill, remember that we have, in fashioning past farm bills, when there was a crisis we didn't anticipate when the bill was passed, we supplemented. Go back to 1985, 1984, 1986, in that period of time when we put the ``payment in kind'' program in place. We did not anticipate using that, but because of the low prices, we did. We did not anticipate using paid diversions to take land out of production, but we used those. They were additional supplemental payments that were not anticipated. So it does not matter whether it is the 1996 farm bill or the 1990 farm bill or the 1985 farm bill or the 1981 farm bill. When you look ahead 5 years, or as we did in 1996, 7 years, nobody expects you to anticipate all the problems farmers are going to have and write a bill that is going to anticipate it all. But somehow I think people want to leave the impression that is what was intended in 1996. There isn't anybody who has that sort of clairvoyance. So, consequently, we have to act from time to time. That is exactly what we are doing here with this amendment. The other thing I do not want to hear criticism of is that we did not include the farmers savings account as was promised in 1996. We did not give other trade opportunities as was promised in 1996. We did not provide crop insurance in 1996 as we promised in 1996. We delivered on that in the year 2000. And there are other issues as well. So we have to keep this in perspective. We have to get those four wheels on the wagon so it rolls along well. As chairman of the Senate Finance Committee, I am committed to providing the much needed tax relief and expand the opportunities our farmers need. But the Congress also made a pledge to family farmers that they would experience this transition throughout the 1996 farm bill. The fact we could not get the wheels on the wagon, coupled with the disastrous recession experienced by our eastern Asian trading partners, which triggered significant slumps in demand for our agricultural commodities has forced the Congress to provide assistance. If during this period of time the Federal Reserve Board had been a little bit more concerned about liquidity as opposed to inflation, we would have had a little easier and better time as well. In addition, this amendment works hand in hand then with the $1.6 trillion tax relief package we hope to pass through the Senate Finance Committee. This tax cut package will help American farmers in several ways. First and foremost, farmers generally do business as proprietors, partners, and in subchapter S corporations. That means marginal rate cuts through this tax bill will help farmers. Second, many family farmers cannot pass on the farm to their children because of the death tax. The Bush tax cut would rid us of this death tax. Finally, there are tax cuts such as the farmer savings accounts, to which I have already alluded three times, that will help farmers weather the downside of the cyclical business patterns of farming. The assistance we provide should not lead to more problems for the family farmers. If government spending is fiscally irresponsible, we will continue to witness artificial land prices and inflated cash rents. This doesn't serve the family farmer. It only makes it more difficult for farmers who rent ground to make a profit. I ask my colleagues to support this amendment. I particularly thank Senator Miller of Georgia for his co-sponsorship of this amendment so that it is in fact a bipartisan amendment. I yield the floor.

Mr. GRASSLEY. I ask unanimous consent reading of the amendment be dispensed with.

Mr. GRASSLEY. I think I have 8 minutes left. I yield myself 4, and then Senator Frist wants to speak again. I will address some of the things the Senator from North Dakota and the Senator from Montana have touched on. The first is to express the philosophy behind the way we have handled this amendment, saying that the Senate budget chairman can plug in a figure after the Senate Finance Committee has produced a bill. The basis of this is that we ought to develop the policy and then put in the amount of money it takes to carry out the policy. I have no crystal ball to tell me what amount might be necessary for a bill. My friends on the other side have this crystal ball telling them we must have $311 billion for Medicare. They are going to develop a policy around a certain amount of money. I don't think that is the way to do business. Another difference between these approaches is that they are going to reduce the amount of tax relief that goes to working men and women by some $158 billion. We will use the reserve fund, meaning the money that is left over. After we take out $153 billion of the surplus for Medicare and $1.6 trillion for tax cuts, there is still $900 billion left. Ever since the President proposed his budget, we all understood that some of this left over money would be used for prescription drugs. We are not going to deny the working men and women of this country a tax break that they deserve. We have the money to fund this, but we don't know how much money we need just yet. We think it is wise to develop the policy first and then pay for the policy you develop, rather than putting up X number of dollars, such as our opposition does, and then building some policy around it. Now, reading my amendment, my opponents came up with the idea that this amendment is too flexible. Well, flexibility does not mean inaction. Our Senate Finance Committee is going to produce a prescription drug program for senior citizens and at the same time make incremental improvements and changes to Medicare. So he may speak about flexibility. The insinuation is that that is an excuse for no action. The last election was all about prescription drugs. The last election was a mandate to deliver on that. This President is committed to delivering on that, and we are going to. I yield myself 1 more minute. I point out to my friend from Montana that his amendment doesn't guarantee a Medicare prescription drug benefit any more than mine. We leave opportunities to develop Medicare policy just as they do. Now, let me just chime in for a second and thank Senator Smith of Oregon for joining me on this amendment. Now let me address the accusation by my colleague from North Dakota that the amendment I offer today raids the Medicare trust fund. This is absolutely ludicrous. I want to make clear that under my amendment the Medicare surplus will continue to go into the Medicare trust fund. The Medicare trust fund is just like a bank account. When you make a deposit, it increases the balance in your account, and only you can take that money out. But this does not mean that the bank can't use that money to make loans and pay expenses. In fact, that is exactly what any good bank does. At the end of the day, when you go to take your money out of the bank, it is there, because the bank has to make good. When it comes to the Medicare trust fund, the Government has to make good too. My amendment does nothing to change that. I yield the remainder of the time we have to the Senator from Tennessee.

Mr. GRASSLEY. Mr. President, when Senator Domenici wants the floor to do something, I will yield. But I want to yield myself such time as I might consume off the resolution to speak about the issue that has been discussed on the other side of the aisle. I do not question the sincerity of the people who have been speaking to the point that we need to know what is down the road before we give tax cuts. The only thing that is strange about that argument is, they use that argument now, at a time when we have an opportunity to let the people keep some of their own money, at a time when we can have tax relief for every taxpayer who pays income tax. This somehow is a little bit unjust, to bring up the argument that maybe we can't quite see what the future holds down the road, so we shouldn't give a tax cut. For decades, I have served in Congress, listening to issues of spending--whether or not we should spend more money. I never heard these arguments back in the days of deficits. No one ever said that we could not see down the road far enough, so we should spend a little bit less. It seems to me that it's very inconsistent to use this argument. I am not questioning the legitimacy of it; I am questioning the fact that it is used when we are talking about tax relief for working men and women, while at the same time, they don't use it when talking about whether we ought to spend more money. Spending more money, without consideration of what is down the road, got us into 28 years of unbalanced budgets and driving up the big budget deficit that we had. So we ought to be as concerned about it on one side of the ledger as we are on the other. I think it is very important--when we are talking about tax relief and the priorities in the budget--that we always keep in mind that the American people are suffering from the highest level of taxation, as a percentage of the gross domestic product, since World War II. Right now, the rate of tax is 20.6 percent of GDP. What does 20.6 percent of GDP mean? Compare it to a 40-year average of around 19 percent. Does 19 percent going up to 26.6 percent mean much? Yes, it means a lot, because that money is run through the Federal Treasury. This means political decisions are made on how it is going to be spent. This process does not create new wealth. If it is in the pockets of the taxpayers, whether it is spent or invested, it is going to create new wealth. Money in the taxpayers' pockets turns over many more times in the economy than if government spends it. Wealth is created only in the private sector. Government does not create wealth, it expends wealth. This situation is as if you had a 7-percent mortgage and you received more income than originally intended. Would you pay down your mortgage at 7 percent or would you invest it in something that was going to pay 9 or 10 percent? If you are a good business person, you are going to invest it in something that pays a higher rate of return. Returning this money to the taxpayers is going to give us a higher rate of return. It will keep us in line with the 19 percent of the gross domestic product which has been paid to the Federal Treasury as taxes from the American people. Hopefully, it will keep us at a level of expenditures around the same amount or a little bit less than we have spent in the past. This way, we will not build up artificially high levels of expenditures. If taxes grow to 21 percent, we could have a downturn in the economy. Our spending never goes down. We would keep our spending at the high level and then return to the days of deficit spending. From a standpoint of consistent policy, the level of taxation ought to be the policy which we have had for a long period of time. Taxpayers consider our historical level a legitimate level of taxation, and no economic harm has come from it because the last 20 years have been the best economic years this country has ever had. From the early days of Reagan through President George W. Bush, these are the best 20 economic years this country has ever had. It is because we have had a fairly consistent policy of taxation that has rewarded productivity and not overtaxed people. Taxes that come to Washington are inefficiently expended. Also, if we do not do something about that 20.6 percent, at the end of this decade it is going to go up to 22.7 percent. It will continue to grow. The reason it will continue to grow is that we have real bracket creep which increases taxation. You go from one bracket to a higher bracket. We have indexation of taxes, but that is to offset inflation. We have real bracket creep when money is earned at higher levels by individuals, that is how we get this high level of taxation. Look at the individual income tax. The income tax 4 or 5 years ago was coming in at about 7.2 percent of gross domestic product. I am talking just about the individual income tax. Of all the taxes that come into the Federal Treasury, individual income taxes were a little over 7 percent of GDP. They are now over 10 percent of GDP. This is a very dramatic increase in the money coming into the Federal Treasury from income taxes. From that standpoint, it seems to me this is another reason the people deserve income tax relief. The individual income tax burden has doubled since President Clinton's tax increase in 1993. That was the biggest tax increase in the history of the country. Reducing the biggest tax increase in the history of our country is where the Bush plan focuses its relief. For the nervous nellies of the Senate who are concerned about whether we can see down the road far enough when it comes to tax decreases but are not so concerned about seeing down the road of the future when it comes to expenditures, they ought to have some confidence in Alan Greenspan. Mr Greenspan says that over the long term, if the Federal Government continues to collect tax revenue at this record rate, the Federal Government will either spend the money or become a significant holder of private assets. The Federal Government becomes a significant holder of private assets when it has paid down every penny of the national debt that has come due and it cannot pay down any more without paying tremendous premiums for calling in the bonds. There are some savings bonds we would not want to call in, whether it is young kids saving money through savings bonds or older people who have their money in savings bonds. They think it is very safe. There may be some of those instruments that we will want to allow people to have for their own well-being. We can pay down every cent on the national debt that can be paid down. But when we get too much money coming in, it burns a hole in our pocket, it will be spent. We do not want that to happen. Suppose it does not burn a hole in our pocket and we do not spend it. What are we going to do with it? We are not going to put it in a mattress at the Treasury Department. We are going to go into the market and buy things that will produce a return on that money. We do not want the Federal Government upsetting the financial markets by buying things on Wall Street or even certificates of deposit. When the Federal Government goes into the market, it goes in a big way that distorts the market. We should not have the Government doing that. Everybody seems to be hung up on this $1.6 trillion tax cut. The $1.6 trillion tax cut is my personal preference, not that there is anything magic about it, but it is something we have talked about in an election. A person who is elected ought to perform in office commensurate with the rhetoric of that campaign. Consequently, if anybody is surprised about President Bush suggesting $1.6 trillion as tax relief for working men and women, the only shock they should have is that there is now somebody in office who ran on a platform and is presenting the program on which he ran. That is unusual in politics at all levels in America. This President is determined to help reduce the cynicism towards Government, so most of the ideas he has suggested to Congress in his first 100 days in office are those ideas on which he ran for office, and he wants to perform in office according to that. I am fortunate as chairman of the Senate Finance Committee to be able to work with the President who has goals I have been trying to accomplish before he ever decided to run for President. I am glad to be able to work through some pieces of legislation that are on his program, which is legislation I have wanted to accomplish. It is quite easy for me to work for this program, and work for the tax relief for working men and women. Some of these parts of the tax package are parts on which I voted to support. Pieces of program have passed the Senate and House and were vetoed by the previous President. We now have a chance to get these through the Congress, have them signed by the President, and give working men and women tax relief. I hope we move forward on these tax issues. Most importantly, for people on the other side who are nervous about a tax cut based on 10-year projections, remember, these are nonpolitical people making these projections. They don't have a 1,000- percent batting average. I have noticed them getting much better in the years I have been in the Senate. They seek outside advice and outside predictors of the economic future may be, and compare that information to their own results. They take a fairly intermediate course, not one that projects the most rosy scenarios for the future or the least rosy scenarios for the future, but intermediate scenarios. That is a fairly responsible approach. For those concerned about taxes, I hope those Members are as consistent and concerned when it comes to expenditures as well. I hope you are just as cautious in making expenditures, not knowing what the future holds, as you want everybody else to be when it comes to tax reductions. I wonder whether or not the people who are concerned about whether we can look 10 years into the future to make budget policy have any concerns about the fact that Jack Kennedy had a tax cut in 1963, bigger than the tax cut we are talking about, and it only looked ahead 1 year. When the second biggest tax cut of this half century was in 1981 under President Reagan, I don't know that there was any concern that we only looked ahead 5 years at that time. We are trying to look further ahead because it is a wiser way to make public policy. On the other hand, I wonder how the very same people, raising the very same concerns about not being able to look down the road far enough to make a decision, ever got nerve enough to take out a 30-year mortgage. Surely they had to go to their banker. They had to ask the banker, can I get a 30-year mortgage? They had to show the banker they had the ability to repay that loan over the next 30 years. They had to think for the next 30 years, what is my income going to be? Will I ever be fired? They got a loan, I bet, based upon having some sort of confidence in the future. That is how we go about making a decision on handling the $28 trillion that is coming into the Federal Treasury over the next 10 years. We decided that a lot of it will be spent and we had to accommodate for inflation during that period of time. We built in 4- percent increases just for inflation and some growth each of the next 10 years. That is all figured into the $28 trillion that is coming in before we figured that we had a $5.6 trillion surplus. Out of the $5.6 trillion surplus, we take all of that money that is in trust funds and put it off the table. We take $1.6 trillion off the table for a tax cut, and what we have left for emergencies is $900 billion. This can be used of prescription drug programs for senior citizens, and unanticipated expenditures. We have been very cautious as we approach the future. We use the same tools at hand that any citizen has in looking into the future as they borrow or make plans on what they will spend down the road. Two trillion dollars is a lot of money. My guess is this growth of the economy has been figured conservatively enough that we will have much more than that over the next 10 years. We just have to wait. I think this is doable. Some of my Republican friends said this tax cut ought to be a lot more than $1.6 trillion. I think it is important to build confidence. I think intellectually we can show it is doable. We can pay down every cent on the national debt that can be paid down over the next 10 years. We can have prescription drugs, fund our priorities, and still keep money for working men and women to be further rewarded for the fruits of their labor and the fruits of their minds that have given us this great economy and the great economic growth we have had.

Mr. GRASSLEY

Mr. GRASSLEY. I ask unanimous consent that Lindsay Crawford, Carlo Moreno, Annabelle Bartsch, and Chris Levy, interns on the Democratic staff of the Senate Finance Committee, be granted floor privileges throughout the Senate debate on the budget resolution.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, improving the campaign finance system is an important priority. Without a doubt constructive criticism works to help cleanse the system. More importantly, good debate helps reduce public cynicism. That is why I would like to commend my colleagues for the good discussions we have had in the past 2 weeks. My goals for campaign finance reform have long included improved citizen participation, enhanced public discourse, full public disclosure and safeguarding the right of Americans to organize and petition their government. To accomplish these objectives, I want reform to give individuals a bigger role in the political process, increase up-front participation of political parties, protect corporate shareholders and union members from being forced to bankroll candidates they oppose, discourage misconduct by political campaigns with swift and sure punishment, and require full public disclosure of contribution sources. Therefore, in evaluating any campaign finance legislation I ask myself, does this bill accomplish these goals? I believe that we made progress with the McCain-Feingold bill by providing for greater disclosure such as requiring all television and radio stations to include in their ``public file'' all media buys for all political advertising, by requiring additional disclosure for Federal candidates and national political parties, and requiring the Federal Election Commission to provide the information on the Internet within a reasonable amount of time. I also believe that it was prudent of us to increase the individual hard money contribution limit set back in 1974. Furthermore, we increased the penalties for election law violators. On the other hand, I was disappointed that the Senate failed to agree to several amendments that I feel would have been good reform. Such amendments were those to provide disclosure and consent to corporate shareholders and union members regarding the use of their funds for political activities and the effort to limit soft money, instead of a complete ban which will likely be thrown out by the Courts. However, there is a more egregious problem with this legislation. This bill fails to protect an individual's right to organize and petition their government and engage in full public disclosure. Virtually every American has a ``special interest,'' whether its lower taxes, endangered species, education, or international trade agreements. To get individual voices heard above the din of American politics, individuals organize to exercise their first amendment rights of free speech. However, this McCain-Feingold bill severely restricts the groups which average citizens join to express themselves: issue advocacy groups and political parties. Therefore, wealthy individuals and the media have a larger role in the political process and the individual role is diminished. I would like to point out three specific ways the McCain-Feingold bill violates our first amendments rights: 1. Issue Advocacy--This bill imposes limits on communications about issues regardless of whether the communication ``expressly advocates'' the election or defeat of a particular candidate and restricts the time that issue advocacy communications can be distributed. 2. Coordination--This legislation grossly expands the concept of coordinated activity between candidates and citizen groups. This regulates and prohibits all but the most insignificant contacts and actions from citizen groups as a ``contribution'' or ``expenditure'' to a specific campaign. 3. Political Parties--This reform measure limits the role of political parties to simply electing politicians. The restrictions on soft money restrict political parties in their ability to support grassroots activity, candidate recruitment and get-out-the-vote efforts. In the 21st Century, it's easy to forget that America's Founding Fathers sacrificed all to give Americans political freedom. These patriots fought and risked their lives and everything they had to secure and protect free political speech, dissent or assent, of all kinds. Free political speech protects us from tyranny. The first amendment forbids Congress to make any law ``abridging the freedom of speech,'' especially political speech. I swore to uphold the Constitution. Therefore, I cannot vote for a bill that I believe violates our first amendments rights.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce the Long-Term Care and Retirement Security Act. This legislation, which I sponsored in the 106th Congress with my distinguished colleague from Florida, Senator Bob Graham, would ease the tremendous cost of long-term care. The bill that Senator Graham and I are re-introducing today would allow individuals a tax deduction for the cost of long-term care insurance premiums. Increasingly, Americans are interested in private long-term care insurance to pay for nursing home stays, assisted living, home health aides, and other services. However, most people find the policies unaffordable. The younger the person, the lower the insurance premium, yet most people aren't ready to buy a policy until retirement. A deduction would encourage more people to buy long-term care insurance. Our proposal also would give individuals or their care givers a $3,000 tax credit to help cover their long-term care expenses. This would apply to those who have been certified by a doctor as needing help with at least three activities of daily living, such as needing help with at least three activities of daily living, such as eating, bathing or dressing. This credit would help care givers pay for medical supplies, nursing care and any other expenses of caring for family members with disabilities. The Van Zee family of Otley, Iowa, typifies many families who would benefit from his legislation. Renee Van Zee at 55 years old has early onset Alzheimer's disease. Three years after her diagnosis, she can't feed, bathe or dress herself. Her daughter, Leanna, and her husband, Albert, are pulling out all the stops to keep Mrs. Van Zee out of a nursing home. They care for her full-time. They've found some services through Medicaid and Medicare and received a donated hospital bed. Even so, caring for Mrs. Van Zee is difficult. She can't be left alone at any time. The family's network of services is piecemeal, like that of many families in similar straits. Those services could change with any change in their circumstances. The family bears considerable out-of- pocket expenses for Mrs. Van Zee's nutritional supplements. The supplements cost $4.96 for a four-pack of cans. Mrs. Van Zee consumes two or three cans a day. It's obvious how this situation affects a family's finances. Working adults quit their jobs to care for a loved one, and take on a host of new expenses at the same time. The Long-Term Care and Retirement Security Act would help the 22 million family caregivers like the Van Zees. A $3,000 tax credit would help to pay for Mrs. Van Zee's nutritional supplements or hire an extra nurse. The legislation also would help families like the Van Zees buy long-term care insurance. Someone like Mrs. Van Zee could have bought herself insurance years ago, had it been an affordable option for her. As it did last year, the bill that Senator Graham and I are introducing today has been endorsed by both the AARP and the Health Insurance Association of America. A companion bill sponsored by Representatives Nancy Johnson, Karen Thurman, and Earl Pomeroy is pending in the House of Representatives. An aging nation has no time to waste in preparing for long-term care, and the need to help people afford long-term care is more pressing than ever. I look forward to working with Senator Graham and our colleagues in the Senate to get our bill passed into law as soon as possible.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce the Long-Term Care and Retirement Security Act. This legislation, which I sponsored in the 106th Congress with my distinguished colleague from Florida, Senator Bob Graham, would ease the tremendous cost of long-term care. The bill that Senator Graham and I are re-introducing today would allow individuals a tax deduction for the cost of long-term care insurance premiums. Increasingly, Americans are interested in private long-term care insurance to pay for nursing home stays, assisted living, home health aides, and other services. However, most people find the policies unaffordable. The younger the person, the lower the insurance premium, yet most people aren't ready to buy a policy until retirement. A deduction would encourage more people to buy long-term care insurance. Our proposal also would give individuals or their care givers a $3,000 tax credit to help cover their long-term care expenses. This would apply to those who have been certified by a doctor as needing help with at least three activities of daily living, such as needing help with at least three activities of daily living, such as eating, bathing or dressing. This credit would help care givers pay for medical supplies, nursing care and any other expenses of caring for family members with disabilities. The Van Zee family of Otley, Iowa, typifies many families who would benefit from his legislation. Renee Van Zee at 55 years old has early onset Alzheimer's disease. Three years after her diagnosis, she can't feed, bathe or dress herself. Her daughter, Leanna, and her husband, Albert, are pulling out all the stops to keep Mrs. Van Zee out of a nursing home. They care for her full-time. They've found some services through Medicaid and Medicare and received a donated hospital bed. Even so, caring for Mrs. Van Zee is difficult. She can't be left alone at any time. The family's network of services is piecemeal, like that of many families in similar straits. Those services could change with any change in their circumstances. The family bears considerable out-of- pocket expenses for Mrs. Van Zee's nutritional supplements. The supplements cost $4.96 for a four-pack of cans. Mrs. Van Zee consumes two or three cans a day. It's obvious how this situation affects a family's finances. Working adults quit their jobs to care for a loved one, and take on a host of new expenses at the same time. The Long-Term Care and Retirement Security Act would help the 22 million family caregivers like the Van Zees. A $3,000 tax credit would help to pay for Mrs. Van Zee's nutritional supplements or hire an extra nurse. The legislation also would help families like the Van Zees buy long-term care insurance. Someone like Mrs. Van Zee could have bought herself insurance years ago, had it been an affordable option for her. As it did last year, the bill that Senator Graham and I are introducing today has been endorsed by both the AARP and the Health Insurance Association of America. A companion bill sponsored by Representatives Nancy Johnson, Karen Thurman, and Earl Pomeroy is pending in the House of Representatives. An aging nation has no time to waste in preparing for long-term care, and the need to help people afford long-term care is more pressing than ever. I look forward to working with Senator Graham and our colleagues in the Senate to get our bill passed into law as soon as possible.

Mr. GRASSLEY

Mr. GRASSLEY. I engage in a colloquy with the distinguished chairman of the Committee on Banking, Housing, and Urban Affairs, Senator Gramm. Tonight, the Senate will pass S. 143, the Competitive Market Supervision Act of 2001. This bill, which has been approved by the Banking Committee, reduces the schedule of Securities and Exchange Commission fees in a manner that properly conforms the structure of these fees to conventional user fees. If enacted, this bill ensures that these fees will be conventional user fees, not taxes, not generate general revenue, and therefore matters within the jurisdiction of the Banking Committee.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I have a few clarifying comments regarding the bankruptcy reform bill which the Senate passed last week, During the debate on the small business provisions in S. 420, Senator Kerry erroneously characterized how the National Bankruptcy Review Commission voted on the small business changes that were contained in the bill. Senator Kerry maintained that the provisions were controversial and passed by a narrow 5-4 vote. This was not true. In fact, the National Bankruptcy Review Commission voted for these provisions by a vote of 8-1. I also want to clarify another point in the bankruptcy legislation. Senator Schumer offered an amendment in committee and then on the floor that changed a provision in the bill that prohibited corporate entities in Chapter 11 from discharging fraud debts in bankruptcy. I opposed this amendment since I think that corporations should not be able to commit fraud and get away with it by filing for bankruptcy. Nevertheless, to accommodate Senator Schumer, I reached this compromise which prohibits corporations from discharging fraud debts owed to Government entities or to plaintiffs under the False Claims Act. I want to make clear for the Record that I oppose letting corporations defraud private businesses and individuals, and then discharging those debts in bankruptcy. Hopefully, I will revisit this issue in the near future to make sure that corporate scam artists can't use bankruptcy as a safe haven. I also want to take this opportunity to thank a number of staff members that were especially helpful in getting this important bill passed: Rene Augustine, Makan Delrahim, and Sharon Prost of Senator Hatch's staff; Ed Haden and Brad Harris of Senator Session's staff; Ed Pagano and Bruce Cohen of Senator Leahy's staff; Jim Greene and Kristin Cabral of Senator Biden's staff; Jennifer Leach of Senator Torricelli's staff; and Rita Lari Jochum and Kolan Davis of my staff. I also want to acknowledge my former staffer John McMickle who worked on this bill for several years. In addition, I want to thank Laura Ayoud in the Office of Senate Legislative Counsel. This bill would not have passed if it were not for the hard work and tremendous efforts of all these staff members. Mr. President, I ask unanimous consent to print in the Record three letters from former Bankruptcy Review Commissioners.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I encourage my colleagues to vote for this important bankruptcy bill. We've been working on bankruptcy reform for a long time, and it's high time that we pass this bill. This bill will be a big step forward in restoring personal responsibility and in cracking down on bankruptcy abuse. It will also be a big step forward in providing key information to credit card customers and helping people manage their debt. Let me remind my colleagues that the fundamental question we face with this bill is whether or not people should repay their debts. S. 420 provides that when a person can repay his or her debts, then that person won't be able to take the easy way out. The bill will end the free ride for wealthy deadbeats who walk away from their debts and pass the tab on to honest consumers. No more will those freeloaders get off scott free. But the bill does this by preserving the ability for people who truly need to go into bankruptcy and wipe away their debts so they can have a fresh start. The point I'm trying to make is that we have a good balance in the bill. Contrary to what our critics say, bankruptcy should not be easy. Yes, we need to have a way for people who are in dire straits to be able to start anew. Our bill does not close out the availability of bankruptcy for these people. Yet, it is just and fair for people who can pay their debts to do just that--pay up. I don't know what people think, but the fact is that someone has to pay if people walk away from their debts. It is not only businesses that have to pay--we all pay when people walk away from their debts. Economic losses from bankruptcy cause higher prices for goods and services, so everyone picks up the tab--consumers, small businesses, the economy. Our bill makes many improvements with the current system. We make it harder for people to commit fraud and abuse. We prioritize certain debts, such as child support and alimony. We include a number of consumer protections, such as more expansive disclosure requirements, credit counseling, and increased penalties for abusive creditors and deceptive advertising. These are all important steps in correcting many problems in the bankruptcy system. An important provision in the bill is the permanent extension of Chapter 12, which expired last June. Our family farmers need this crucial protection because they can face bankruptcy due to low commodity prices. The bill also provides significant new tax relief when they sell off assets. This is an extra reason to vote for this bill for my colleagues from farm country. So, let me remind my colleagues again what this bill does. S. 420 reforms the bankruptcy system to require repayment of debts by individuals who have the ability to pay, while protecting the right of debtors to a financial fresh start. S. 420 strengthens protections for child support and alimony payments by making family support obligations a first priority in bankruptcy. S. 420 makes permanent Chapter 12 bankruptcy for family farmers and lessens the capital gains tax burden on financially strapped farmers who declare bankruptcy. S. 420 also creates new protections for patients when hospitals and nursing homes declare bankruptcy. S. 420 requires credit card companies to disclose the dangers of making only minimum payments and prohibits deceptive advertising of low introductory rates. S. 420 strengthens enforcement and penalties against abusive creditors for predatory debt collection practices. So the bill is fair and balanced. S. 420 deserves to be passed by an overwhelming vote.

Mr. GRASSLEY. Mr. President, under the special circumstances provision, the debtor could explain in the debtor's petition why an additional allowance in excess of the amounts allowed under the Internal Revenue Standards was reasonable and necessary. As a practical matter, if the costs for gas have increased significantly over the costs for gas used by the Internal Revenue Service, the excess costs of gasoline over the IRS standard should and would be allowed under the special circumstances provision.

Mr. GRASSLEY

Mr. GRASSLEY. I have had an opportunity now for 30 minutes to listen to the Senator from Minnesota. Besides responding to his specific amendments, I would like to--on, hopefully, the last day of debating this bill; and there have been a lot of ``last days'' over the last three Congresses to finally get a bill to the President that will be signed into law--take an opportunity to express some history. First of all, let me suggest to the Senator from Minnesota that there are a lot of trade associations that are very interested in getting this bill passed. I am not oblivious to that. But I think you ought to take into consideration how Senator Grassley got to the point of considering legislation such as this. I have town meetings around Iowa, just as I am sure you do in Minnesota. You go to the small towns of Minnesota to hold town meetings; I go to the small towns of Iowa, in each of the 99 counties every year, to hold town meetings. Maybe it is not always a town meeting. It might be at a coffee break for the workers at a factory; it might be at a Rotary Club, and all those things. I have a dialog with my constituents. And over the period of the time I have been in the Senate--maybe not immediately, but in the late 1980s and early 1990s-- where did I first hear about abuses of bankruptcy laws that we passed in 1978, which were not intended to make it easier to get into bankruptcy but it ended up that way, 20 years later, so we realized? It was from the small business people of Main Street USA that I heard about the irritating impact of people declaring bankruptcy. Maybe in some of those cases those bankruptcies would have been legitimate. As we all agree, some people deserve a fresh start. Even under that circumstance, it is irritating to the small businessperson to have somebody declare bankruptcy and then, maybe a month later, to see that person driving a new car. These are the impressions I have of the use of bankruptcy that brought me to this point, along with the Senator from Alabama, Mr. Heflin, who, until he left the Senate in 1996, was either chairman of this subcommittee when Democrats were in the majority, or I was the chairman and he was the ranking member. He and I worked together on bankruptcy legislation. It was nothing very major through the 1980s and early 1990s, just a technical correction here or there. We were impressed with the number of small businesspeople who would tell us about the abuse of bankruptcy laws, people not paying their bills, and then the small businessperson being stuck with it. That is one point. The second point is, over the period since the 1978 law passed, we have had a lot of changes in the economy of our country and also the globalization of the economy. The bankruptcy law has not changed with the economics and the changing conditions of the American economy. So early in the 1990s--and I think it took us about 4 years to get a commission set up--we decided, even though we had been working on bankruptcy legislation for a period of time and making some technical corrections, things of that nature--nothing real major--we had been thinking about how to handle this proposition of some corrections, some fine-tuning of the bankruptcy code--we decided to set up the Bankruptcy Commission. All during that period of time of hearing from our constituents at the grassroots of America about abuse of bankruptcy laws or our seeing the need for some change in bankruptcy laws because of the changing economy, we never heard from these trade associations the Senator is referring to that a commission ought to be set up to change the bankruptcy laws. We set up a commission not made up of political people but experts in bankruptcy laws to bring about some suggested changes. Three Congresses ago, Senator Durbin and I introduced the results of that commission. Obviously, at that point, people started lobbying for and against legislation. That is the way the process has worked for a long time. We are here today not because of those trade associations that are very much involved for and against this bill. Don't forget, when you talk about the business interests, there is as much fighting within business as to who is going to be on top or who is going to be on the bottom in the priorities as there is between business as creditors and the debtors the Senator is protecting. There is a lot of dispute among these trade associations; there is a lot of dispute among various segments of our business community as to just exactly how the laws should be changed. I suggest to the Senator that there is probably as much effort in lobbying between business as there is between all business on one hand and the debtors on the other hand. I am not saying anything he said is incorrect, nothing whatsoever. I am just saying that, please, look at it from the perspective of the 15 years that I have been involved in bankruptcy legislation and how we came from point A to point B today.

Mr. GRASSLEY. I will yield.

Mr. GRASSLEY. I thank the Senator from Minnesota for his kind remarks and his intellectually honest approach to this issue, even though there is great disagreement. One of the tests, I suggest to the Senator from Minnesota, that my position might be right is the fact that this bill passed three Congresses ago, 97-1. It passed two Congresses ago, one time 84-13, another time 70-28. It would be the law of the land now because we had the votes to override a veto, except that it was pocket vetoed by President Clinton. It was not vetoed by President Clinton in the way that we could override it. I hope, for the cynical people--maybe everybody is somewhat cynical about Congress, but some people are more cynical than others--they are a little less cynical on legislation that gets broad bipartisan support. In other words, what I am saying is, there are 31 Members of Senator Wellstone's party who voted for cloture on this bill yesterday to help us get it passed. That is a test that this legislation is well compromised--in my judgment, maybe too much compromised; I would rather have a stronger bill--and it is a good product to send to the President to be the law of the land. This legislation should be passed. I hope it will. I am going to leave to other Republicans to speak about the merits or demerits of the Wellstone legislation because I have to go to a committee meeting. I do want to give a historical context of why we are here today. I pursued this bankruptcy legislation because I have a real conviction that when you are right, you eventually win out. This is the third Congress. It would be the law of the land now except for President Clinton's pocket veto. President Bush has said he will sign it. The bipartisanship shows the rightness of it. We are going to have an example this year of right winning out. I thank the Senator from Utah for coming to the floor. The distinguished chairman of the Judiciary Committee has done so much to help move this legislation along, particularly when I have been so busy as the new chairman of the Senate Finance Committee. I thank Senator Hatch for doing that.