February 06,2006

Grassley Reacts to the President’s Budget Proposal

M E M O R A N D U M

To: Reporters and Editors
Re: President’s Budget Proposal
Da: Monday, Feb. 6, 2006

Sen. Chuck Grassley, chairman of the Committee on Finance, with jurisdiction over taxes
including tax-favored health coverage vehicles such as health savings accounts, and Medicare and
Medicaid, today made the following comment on the President’s budget proposal.

“The President’s budget always sets off a good debate on Capitol Hill. I appreciate President
Bush’s effort to outline his priorities. I agree with making tax relief permanent. Permanence is
important for continued economic growth. By encouraging small business investment, and giving
consumers more of their money to spend, we’ve helped the economy. Sunsetting the bipartisan tax
relief would raise taxes on hard-working taxpayers. Permanence gives taxpayers reliability. They
should know that we won’t pull the rug out from under them. And it’s good to see the budget
include alternative minimum tax relief for millions of middle-income families for one year. It used
to be lonely to call for AMT relief. Now there seems to be near-universal agreement in Congress
and the executive branch that the AMT is a serious problem.

“Congress just finished reducing the growth of Medicare and Medicaid by $11.1 billion over
the next five years, and it wasn’t an easy legislative accomplishment. Any more reductions of a
significant scope could be difficult this year. If Medicare reductions do end up on the table, the
Medicare Advantage regional stabilization fund has to be front and center. Since the plan hasn’t
been used at all, and there are already a good number of plans participating, it’s clear this fund is no
longer needed.

“I look forward to reviewing the President’s proposals to help uninsured Americans get
health coverage. With millions of uninsured people, we need to get off the dime. We need a
thoughtful debate on how to offer more access to good, affordable health care. The Treasury and
Health and Human Services secretaries are both testifying before my committee this week, and I look
forward to the discussion of health savings accounts and other ideas.

“Protecting the American people is the sole responsibility of the executive branch of
government. The President has made clear in his budget that winning the war on terror and defending
our homeland is his top priority.

“The President’s budget also funds several priorities he outlined during his State of the Union
address that help relieve our dependence on foreign sources of oil. The priorities funded show the
importance of using our homegrown, renewable resources with new technology that can bring us the
energy we need without relying on an unstable area of the world for our energy needs.

“Once again, the administration has voiced its support for limiting the farm program
payments that go to big scale farm operations. The President has embraced two major themes from
my comprehensive legislation to focus farm payments to those who need it most. In the President’s
budget he supports my limit of $250,000 for all farm payments and the elimination of the three-entity
rule. This is similar to my legislative proposal that was offered during budget reconciliation that
would have saved the taxpayers nearly $1.1 billion over five years.

“I also applaud the President’s increased funding for the Office of Civil Rights at the
Department of Agriculture. It’s important that USDA continue to increase not only the funding for
this office, but also the authority and the autonomy to help this office make a difference for minority
farmers and employees.”