January 31,2008

Grassley: Senate Stimulus Bill Improves Upon the House Bill

Statement of Senator Chuck GrassleyFloor Debate of Economic Stimulus Bill

Thursday, January 31, 2008

Mr. President, I want to start out by thanking Chairman Baucus for his courtesy, hard work, andpatience in this legislative effort. As we have in the past, we wanted to process the economicstimulus issues, as we have always done in the past, through the committee. That process startedshortly after this session of Congress opened. We talked substance and process. We had discussionswith the Administration, especially Secretary Paulson. We had discussions with our leaders. Wehad two private meetings and took input from our committee members. We had two hearings oneconomic stimulus.

Our goal was a bipartisan economic stimulus package. We both wanted a bipartisan economicstimulus package that responded to the needs of Americans and business and would provide a verymuch-needed boost for the economy.

During the same period, the President sent a strong message that Congress must act and act quicklyto design a fiscal stimulus plan aimed at boosting the economy. The President said that such a planwould provide a “shot in the arm” to keep the economy healthy.

Last week, the bipartisan, bicameral congressional leadership met with the President. At thatmeeting, the Senate leaders, more or less, yielded the legislative process and substance on thisimportant question to the House and the Senate. In other words, Senate leaders agreed that whateverpackage the House leadership and the White House agreed on would be treated as a “fait accompli”in the Senate.

The Senate leaders’ sudden shift in direction caught Chairman Baucus and me by surprise. As Inoted above, we’d already engaged the committee process for several weeks. We were fullyengaged on a member and staff level. Many of our members and staff brought to the table theexperience from three stimulus bills earlier in this decade.

Now, I respect the role of the leaders here. My guess is Chairman Baucus and the two-thirds of thecommittee members that supported the committee bill yesterday also respect the role of the leaders.Many in the leadership on my side of the aisle worried about the problems that might arise if theSenate had no role other than to rubber stamp the House bill. They are rightly concerned about theSenate processing a bill, dragging it out, and loading the bill up. Certainly, that is a reasonableconcern. Certainly, it is a carefully considered concern. But is that concern, in itself, so great thatthe Senate should abdicate all of its legislative responsibility? Is that concern so great that FinanceCommittee members should have no say over legislation that falls in its jurisdiction?

In my almost quarter century of service on the Finance Committee, I’m not aware of any precedentlike this. I’m also not aware of any precedent on the House side. At the end of last session, someon the House side might have complained about the outcome of legislation favoring the Senate. I’mnot, however, aware of a situation where House leaders, on either side, virtually ceded their role inlegislating on a tax bill this important. As I said, I respect the concern of the leaders about timing.It comes down to this, Mr. President. The leaders’ concern with timing must be weighed against thequestion of the quality of the House bill. In other words, is a take-it or leave-it House bill, whichpasses quickly, better than a Senate bill which allows the Senate to work its will. I’ve laid out theleaders’ concerns about timing. Now, we question of the adequacy of the House bill. That’s theother side of the balance we need to strike. I know other members, on both sides, have askedthemselves this same question, including our chairman.

The chairman makes the ultimate call. Even if I had decided the importance of quick actionoutweighed the benefits of going through the committee process, the chairman would’ve made theultimate call to go forward. That was the call the chairman made back in 2002 and it was the callhe made this time. In 2002, I disagreed on the substance and we had a party-line markup, but thecommittee did process a stimulus bill. So to anyone on my side who says my opposition would havestopped the chairman from going forward, I’d say look at history. It didn’t stop the committee in2002 and it wouldn’t stop it now. The same outcome occurred in 2003 when I was chairman andSenator Baucus was ranking member. We went forward in 2003.

This time we proceeded in a bipartisan manner. And what did the committee process yield, Mr.President? Let’s examine this side of the question. Asked another way, did the committee processimprove the House bill with a Senate amendment? One thing I heard loud and clear fromRepublicans was concern about suffocating income limits. The Chairman heard me out and agreedto eliminate them. Unfortunately, the support from our side of the aisle did not line up with thatprinciple. On the Chairman’s side of the aisle, great controversy developed.

We heard the uncapped proposal, over and over again, defined by Bill and Melinda Gates. To thoseon the left, let me tell you there must be a lot of Bill and Melinda Gateses out there. The reason Isay that is that $12 billion of rebate checks is involved in going back to the House income caps.With the amount of checks capped, it means millions of families, not a few millionaires are the folksaffected. Like I said, those facts didn’t move many on my side away from the House bill thatcontains those caps. So, I revisited the issue with the Chairman. The caps are back, but at a muchhigher level. They begin to phase out at $150,000 for single taxpayers and $300,000 for marriedtaxpayers.

Mr. President, that’s double the House income limits. It’s safe to say that the higher income limitswill aid a lot of AMT tax paying families we hear about. From my perspective, this is a bigimprovement over the House bill. So, if you’re support the Finance Committee bill, you’rerecognizing the burden these taxpaying families bear. I don’t want hear any more demagogueryabout Bill and Melinda Gates getting checks. No billionaires get checks. No millionaires will getchecks. No half-millionaires get checks. But a lot of upper middle income families who won’t geta check under the House bill will get a check under the Finance Committee amendment.

Most on my side would consider these higher income caps an improvement over the House bill. I’dparticularly credit Senators Crapo and Kyl for bringing this point up in our Finance Committeemeetings. Some, on the other side, especially those from high-income, high-tax Blue States willquietly support this change as well.

On the other end of the income scale are 20 million low-income seniors. Let’s underscore this point.The House bill leaves out 20 million low-income seniors. The Chairman’s mark corrects that defect.Here is the House bill. You won’t find seniors with social security income covered in this bill. Youwill find them covered in the Finance Committee bill.

Since we don’t have bill text yet, I’m holding up the chairman’s mark. We made this happen byincluding social security benefits as qualifying income in the Chairman’s mark. Here’s what themark, at page 3, says:

“All eligible individuals are entitled .. if they satisfy at least two of the following criteria: The sumof an individual’s: earned income .. and (2) social security benefits must be at least $3,000.”That language is not in the House bill. Because that language is not in the House bill 20 millionseniors won’t get checks if the House bill passes as is.

During our committee process, many members discussed this defect in the House bill. As a resultof careful Finance Committee member deliberations, we were able to improve the House bill.

Many disabled veterans don’t get checks under the House bill. Disabled veterans get checks underthe Finance Committee amendment. Here’s what the Finance Committee document, at page 2, says:“The provision modifies the Chairman’s mark to expand the rebate benefit to disabled veterans.”During careful Finance Committee deliberations, Senators Lincoln and Snowe filed an amendmentto insure that disabled veterans would be covered. The Chairman incorporated that amendment intohis modified mark. Does anyone think that this is an inappropriate improvement to the House bill?I ask that of those who insist that we rubber stamp this House bill.

So, the House bill, which some are insisting cannot be improved by the Finance Committee, includes20 million seniors and disabled veterans. The House bill also could send checks to illegal aliens.That’s right, Mr. President, the House bill, which some are saying is the best bill we can get, coversillegal aliens.

Let’s turn to the Modification to the Chairman’s mark. On page 2, here’s what the document says:“The provision denies the basic credit and the qualifying child credit to individuals if they do notinclude on their tax return a valid taxpayer identification number for: (1) themselves (and if they aremarried, their spouse); and (2) any children for whom the qualifying child tax credit is claimed. Forthese purposes, a valid taxpayer identification number is defined as a social security number.If an individual fails to provide a correct taxpayer identification number, such omission will betreated as a mathematical or clerical error. As under present law, the Internal Revenue Service (the“IRS”) may summarily assess additional tax due as a result of a mathematical or clerical errorwithout sending the taxpayer a notice of deficiency and giving the taxpayer an opportunity topetition the tax Court. Where the IRS uses the summary assessment procedure for mathematical orclerical errors, the taxpayer must be given an explanation of the asserted error and given 60 days torequest that the IRS abate its assessment.”

Mr. President, this provision uses current IRS verification techniques. It ensures that the taxpayergetting the check is identified by the tax system.

During Finance Committee deliberations, Senator Ensign and his staff raised this important issue.Senator Ensign filed an amendment that was addressed in the modified Chairman’s mark.

The House bill has no provision on this. Here’s the bill. Take a look at this bill. There is nolanguage in the House bill to address the problem Senator Ensign properly raised in the FinanceCommittee. The Finance Committee bill improves the House bill by making sure illegal aliens donot get the check.

The Finance Committee amendment also beefs up the business stimulus package by addingadditional years to the current law net operating loss (“NOL”) carryback rules.

The Finance Committee bill adds extension of unemployment insurance benefits. I know this wasa big sticking point in the negotiations between the House and the White House. In this respect, Ifavor the House bill. My personal preference would be to eliminate this provision. It, however, wasa key issue for all the Democrats. So, in the compromise the Chairman has worked out, it wasessential.

I pushed hard for investment energy incentives and the Chairman agreed with my respect. So, thelast piece of this compromise is an expansion of the investment incentives to seamlessly extendinvestment incentives for wind, biomass and other renewable energy projects. In committee, theseprovisions caught some criticism and I expect we’ll hear more of the same today. I’ll respond indetail when those criticisms arise.

So, Mr. President, I compliment committee members on finding the bipartisan middle ground. TheCommittee’s stimulus package raises the caps on rebate checks, expanding the benefit to moremiddle class Americans, social security recipients and disabled veterans. It makes sure illegalimmigrants don’t get checks. It also expands some of the business relief and addressesunemployment benefits. The energy investment incentives round out the package.

I ask members to go back to the basic question of balancing quick action on the House bill versusimprovements made by the Finance Committee.

The House bill could be passed quickly without improvements. Or we could finish the process herein the Senate and add the improvements made by the Finance Committee. I’d challenge anyone toargue that none of the improvements made by the committee process are important enough to finishthe job here in the Senate.

Having made that point, Mr. President, we could prove our leaders right if we load up the bill in theSenate. We must keep our eye on the ball. We must not load up this stimulus package or else it islikely to sink. Christmas is over folks. Let’s not load this up like a Christmas tree. Thank you, Mr.President.