Floor Statement on the Latest Roadblock to an Economic Stimulus Deal

Floor Statement of Sen. Chuck Grassley, of Iowa
Latest Roadblock to Economic Stimulus Deal
Friday, December 7, 2001

Mr. President, I rise to address the status of the negotiations on an economic stimulus
package. I report to the Senate as the lone Republican Senate negotiator.

Yesterday’s Roll Call quotes numerous Democratic senators as saying Senate Democrats
won't agree to any stimulus deal unless the package has the support of two-thirds of the Democratic
caucus. I ask unanimous consent that a copy of the article be placed in The Record.

As a preliminary comment, I want everyone to know something loud and clear. I am here to
do the peoples’ business. My Republican Caucus is here to the peoples’ business. We are in an
extraordinary time, Mr. President. Our nation is at war. Our commander-in-chief, President Bush,
is occupied with the war effort. Our responsibilities to the people the sent us here are always high,
but they’re extraordinarily high in this time of war. This is not a time to play political games with the
people’s business. In my view, we have a high duty to deliver a legislative product to the President
on economic stimulus and aid to dislocated workers. I have committed all of my energy to get to the
goal line on a package. I believe my Chairman, Senator Baucus, also sincerely wants a stimulus
package that the President can sign. When you look at the record, however, I am doubtful the Senate
Democratic Leadership really wants a package.

Let’s take a look at how we got here. The President has asked us, the House and Senate, to
send him a legislative product on economic stimulus. The President took the lead by proposing
economic stimulus measures and a package of aid to dislocated workers. Chairman Greenspan gave
us a green light on this effort about two months ago. The House passed a bill that the Senate
Democrats, with some justification, viewed as partisan. The Senate Democratic Leadership then
responded with its own partisan bill, shut out all Republicans, and rammed it through the Finance
Committee on a party line vote. That partisan stimulus package dead-ended here on the Senate floor.
We’re were stuck on in a partisan rut for awhile.

After much negotiation, the House and Senate leadership on both sides agreed to an
extraordinary procedure. It’s what I’d call a “quasi conference.” This agreement contemplates a
conference agreement even though the Senate did not pass a bill on the subject matter. This
agreement was a major concession by the House to Senator Daschle’s insistence that Democrats have
only one negotiation. Keep in mind Senator Daschle insisted on one negotiation with a partisan
product that has not passed the Senate because it was designed to be partisan. Republicans
accommodated the Senate Democratic Leadership. After that agreement was reached, I felt some
optimism. It seemed that all sides realized it is our job to get this legislative product to the President.

My optimism was a bit premature.

Now, there has been a lot of speculation about whether the Senate Democratic leadership
really wants a stimulus deal. Some say that, inspired by Democratic interest groups and strategists,
the Senate Democratic leadership has concluded that it is better to have an issue. The speculation
is that armed with polling data, the Senate Democratic leadership has decided on a strategy of
covertly killing a stimulus package while maintaining a public profile of support. If the economy
doesn’t recover, better to save the issue to use against the President and the other side for the fall
2002 elections. If the economy does recover, from a political standpoint, what’s lost? Better to wait
and see, the speculation runs, than to give any more tax relief at this time.

Mr. President, such a strategy, if it is the case, is particularly disappointing in wartime. It is
a cynical strategy. If true, it short changes American workers and struggling businesses for an
anticipated political shot. It makes economy recovery and aid to dislocated workers secondary to
a partisan political objective. I’d ask is that how we ought to be operating in wartime? Though I’ve
heard and read this speculation, I’d hoped, that it was not true.

So, Mr. President, let’s say I was a bit shocked when I read the Roll Call article yesterday.
After reading the article, I concluded Democratic leaders are traveling back in time. They're
regressing, not progressing. They're regressing to earlier contentions that the stimulus package had
to be a Democratic product or nothing at all. I thought we'd moved past that, and on to negotiations
to build a bipartisan stimulus package.

Instead, it appears the Democratic leaders don't want any real compromise. First, they've
engineered a nearly impossible threshold. Second, they're conducting what appear to be required
consultations between the Democratic negotiators and the rest of the Democratic caucus. If they're
trying to prevent a stimulus deal, this is the way to do it.

It's important to remember the Senate is split nearly down the middle. There are 50
Democrats, 49 Republicans and one independent, yet the litmus test set up by the Democratic
leadership ignores the Senate's make-up. By its terms, this litmus test is designed to limit any
agreement to a Democrats-only deal. Because it ignores the reality of an evenly split Senate, this
litmus test guarantees failure. If the Democratic leaders really mean what they say, that they want
a stimulus bill, I'd ask them to remove the partisan litmus test. Any litmus test ought to go to the
substance of the package.

Mr. President, let’s get back to the substance. We’re not that far apart. Let’s not hold the
stimulus package and the aid to dislocated workers hostage to an arbitrary and destructive test like
the two thirds rule. I have been flexible on Republican priorities. It’s time for the Democratic
leadership to show some flexibility on Democratic priorities. The first sign of flexibility will be to
remove a barrier, the two-thirds rule, that guarantees failure. I yield the floor.

[For insertion in the record.]

Democrats Set Stimulus Hurdle; Senators Require Supermajority

By Paul Kane

Setting a high threshold for negotiating an economic-stimulus
package, Senate Democrats have decided they will not accept any
deal unless roughly two-thirds of their caucus agrees to support
the final product.

Before agreeing to begin bipartisan, bicameral negotiations on a
final stimulus plan, Majority Leader Thomas Daschle (S.D.) told
his caucus last week that Democratic Senators in the House-Senate
conference would not agree to a stimulus deal if there was
significant opposition from within Democratic ranks.

"They're not going to agree to anything unless a significant
majority of the caucus agrees with it," said Sen. Kent Conrad
(D-N.D.), chairman of the Budget Committee and a Finance
Committee member. "It's got to be a significant majority,
two-thirds of the caucus."

Other Democratic Senators confirmed that the high bar for a
stimulus deal was set around a two-thirds majority, although some
said Daschle left wiggle room in case he feels the deal is good
and he doesn't have precisely that much support.

"I don't think it's a hard-and-fast number," said Sen. John
Breaux (D-La.), a senior Finance member.

Breaux said he remained hopeful that a deal could be reached
that would gain enough Democratic support for a final package,
but added, "It's going to be tough."

Asked about the threshold for reaching a deal, Sen. Jim Jeffords
(I-Vt.) said, "It's a high one."

Negotiations continued yesterday among six key lawmakers trying
to hammer out a stimulus deal: Senate Finance Chairman Max Baucus
(D-Mont.); Sens. Jay Rockefeller (D-W.Va.) and Chuck Grassley
(R-Iowa), ranking member on Finance; House Ways and Means
Chairman Bill Thomas (R-Calif.); House Majority Leader Dick Armey
(R-Texas); and Rep. Charlie Rangel (D-N.Y.), ranking
member on Ways and Means.

Although some progress was reported on those talks, Senate
Republicans worried that the Democrats were setting an impossible
bar for reaching a deal and openly questioned whether Baucus'
caucus colleagues trust the Montana Senator, who helped Grassley
write a $1.3 trillion tax cut last spring.

"I would hope we would not put [in place] this artificial
threshold that is almost impossible to achieve," said Sen.
Olympia Snowe (R-Maine), a key moderate on Finance. "Why do that?
To set up failure? I hope not."

Snowe said the narrow margin in the Senate gave neither side the
right to predetermine how many votes would come from their
caucus, but rather mandated that negotiators shoot for a deal
that cobbles together 51 votes, or 60 if needed to break a
filibuster. "That is the essential marker here,"
she said.

An aide to Senate Minority Leader Trent Lott (R-Miss.)
indirectly suggested that Daschle and Democrats simply don't
trust Baucus. "Senator Lott has said this before and he'll say it
again: He has every confidence in Senator Grassley's ability to
negotiate a real economic security package on behalf of Senate
Republicans," said Ron Bonjean, Lott's spokesman.

Baucus drew the ire of many Democrats when he and Grassley
co-wrote the Senate tax package, most of which became law. On
final passage, the bill was supported by just 12 Democrats.

In the process, Baucus received numerous tongue lashings from
colleagues at Democratic caucus meetings, including one exchange
in which Daschle told Baucus he did not have "the authority" to
negotiate a deal with Grassley.

Conrad acknowledged that requiring a caucus supermajority for
the stimulus deal was "unusual", but said the circumstances in
this negotiation - not the party's faith in Baucus - necessitated
setting the high threshold. Conrad recalled Senate Democrats
setting similar bars for approval of year-end budget deals in the
early 1990s, including the 1990 compromise struck with the first
Bush administration.

"We've not had an ending to a session quite like this one,"
Conrad said, noting that the Sept. 11 attacks, anthrax letters
and a worsening recession have contributed to leaving Congress
months behind in finishing up its business. "It's important that
the caucus be behind any deal. We're not going to sign up to
anything unless a substantial majority agree."

Conrad noted that it was both Daschle and Baucus who made the
pledge to the caucus that a two-thirds majority would be required
for a deal - a promise made at a caucus meeting held last
Thursday to discuss the stimulus negotiations.

Jeffords, who caucuses with Democrats, said the feeling was that
the stimulus plan was so crucial that everyone agreed a wide
consensus was needed, not that the Senators needed any check on
Baucus. "Max is doing a good job. I haven't heard anybody
complaining."

Aides to Baucus agreed that the caucus is unified in this
approach, noting that his plan to expand unemployment and health
care benefits and reduce some business taxes had unanimous
support in the body.

"We're hopeful that the package we negotiate is one that
reflects the solid core principles we've been talking about
since the beginning of this debate," said Michael Siegel, Baucus'
spokesman.

Other Democrats contended that the bigger problem with
negotiations is trying to forge a compromise with the House
Republican plan, which is primarily tilted toward business taxes.

Digging in for a fight, Senate Democrats from both wings of the
caucus said they would rather kill the stimulus plan than give
away too large a corporate tax break.

"The better alternative may be no bill at all," said Sen. Robert
Torricelli (N.J.), one of the 12 Democrats to support the tax-cut
bill in the spring. "I would rather see that money stay in the
treasury."

"I would rather see no stimulus than that," said Sen. Dick
Durbin (Ill.), an assistant floor leader to Daschle.

Durbin said it was increasingly doubtful that a stimulus plan
would pass, considering there are just two weeks left before the
Christmas break. He noted it took a week to lay the ground rules
for the conference and determine who would take part.

"Do the math. We took a week to set the table and say who would
sit where," he said.

Not a negotiator himself, Daschle has set up a system to monitor
the talks, including Breaux, a key moderate, in postconference
meetings in his office with Baucus, Rockefeller and possibly
Rangel.

Before substantive talks began this week, Rockefeller signaled
that he intended to take a very hard line on the package. "I'm
not much of a compromiser," he said.

But Baucus believes that moves by Thomas this week to offer
unemployment extensions were a sign of compromises to come,
Siegel said. "It's clear that we're making progress."

The entire Democratic caucus, however, will be the final jury on
that outcome. "It was a commitment people wanted to hear,"
Torricelli said of the two-thirds majority decision.

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