Congressional Budget for the United States Government for Fiscal Year 2007
CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 2007
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Mr. GRASSLEY. Mr. President, I have some points I would like to make. Before I do that, I will respond to a couple of points that the Senator from Florida made. One was his speaking about the bewilderment among seniors about the program. I would say that a great deal of the bewilderment comes from the confusion that people have because of the rhetoric of people who don't like this plan and have tried to kill it with rhetoric because they didn't have the votes on the floor of the Senate. That has not created a very good environment.
On the other hand, I can say that at my town meetings--I held 16, Monday through Thursday, during our last break--people who came expressed some wonderment about exactly what program to get into. But people who also had already selected a program gave very positive comments about the benefit of the program to them.
The other point I would like to make, Mr. President, is the point that was made that maybe the cost is coming in less than what was anticipated because not enough seniors are coming in. I think it is very clear that the reason this is costing $8 billion less than what 3 years ago CBO estimated it would be for this year is because of the competition. As a conferee, as I was going through ironing out the differences between the House and Senate on this bill, we were very nervous that our anticipation of the premium being $37 a month, on average, might end up being much higher. And we, as writers of this legislation, would be embarrassed about that.
Competition has brought that premium down to $25. Instead of $37, the average premium is $25. We were estimating that there would be all sorts of savings from competition because we were patterning this program after what the Federal Employees Health Benefits Plan had been for 4 years. It worked so well for Federal employees, we felt it would work very well for seniors, and it is working very well in this respect for seniors. But we estimated there would be certain savings.
Quite frankly, we were nervous about whether these savings would materialize. But they did materialize--to the point of adding up to that $8 billion that I have referred to. But with specific drugs--we have drugs and pharmacists coming in under these plans--brand-name drugs are coming in on an average of 18 percent less than otherwise in a pharmacy. If it is mail order, it is about 26 percent less. In the case of generics bought at a pharmacy, it is 55 percent less, and for mail order it is 66 percent less.
So I suggest to the Senator from Florida that enrollment has nothing to do with it. The savings are coming because competition is working.
Now, another confession we have to make is that as we were writing this bill, we wondered whether we would have enough plans sign up so we would have this competition that works so well in the Federal Employees Health Benefits Plan--even to the point where we decided we needed a backup plan. Just in case only one plan signed up, we would make sure the Government set up a competitive plan so that there would be some choice for our seniors. We ended up with lots of plans, and we hear from the other side there are too many plans. Well, the marketplace brought plans in and drove down the price. Some of these plans are going to get out because the marketplace is going to drive them out. Hopefully, we still have plenty of choice when this all happens. But competition is working.
Now, also, I hear the rhetoric about too many plans being confusing. I just read in the newspaper in a whole other area, but to throw it out for comparison, I heard that in regard to people signing up for health savings accounts--HSAs--you have to have a catastrophic insurance policy go with it. There are 96 companies selling catastrophic policies. Yet we have had 3 million Americans sign up in less than a year for catastrophic policies. I don't know whether it is confusing to them or not, but they are joining. That is twice as many plans that are available. We don't hear people complaining about too many plans out there for health savings accounts.
So I don't know why--except for rhetoric to gain political advantage--we talk about too many plans out there for seniors. The more plans, the more choice.
Do you think Congress has the ability to write one plan that is going to fit the needs of 44 million seniors and disabled people? First of all, if you did that, it would have to be mandatory. If you make it mandatory, it would be evidence that you never learned a lesson from the last time we tried to extend Medicare and make it mandatory when we put a catastrophic program in in 1988 or 1989, which passed this body--I don't know--it was a closer vote than it was repealed.
But when you go home to the grassroots of Iowa, and every other State in the Nation, there is an uproar because it was mandatory and people had to pay for something they didn't want to use. And in a year or two it was almost unanimously repealed by this body. So we believed it ought to be voluntary, and it is voluntary. So if you don't want to join, you don't have to join.
But if you want to join, everybody has different needs and desires and you ought to have some choice, just like Federal employees have. If it has worked 40 years for Federal employees, it seems to me that it is a pattern that we ought to have enough respect for the seniors of America to give to them.
Mr. President, I would like to go to the issue before us, an issue that we have discussed before, not an issue that I entirely disagree with the Senator from Florida on because I don't know what the situation is going to be by May 15. But I know if you had an amendment up to extend the deadline for filing income tax on April 15 and you moved it to May 15, everybody would be going to the post office on May 15 to drop in their income tax forms, and I would be one of them. Americans procrastinate until the last minute. Some are going to procrastinate until the last minute on joining one of these plans.
The extent to which people benefit from this plan, particularly lower income people, because it is highly subsidized--up to 98 percent--it seems to me the extent to which you want to give them more leeway, you are not being very humane to them if they can benefit from the program today instead of tomorrow.
So you may be right, but today you are not right. You may be right on May 1. Maybe your timing is off. Maybe I am conceding too much. My staff will probably tell me when I am done I was too good to you, that you are too right. But there are other ways of doing what you want to do, and I am going to suggest a way. You are probably going to disagree with it.
Before I get to that point, I want to give some background. The amendment by Senator Nelson is going to extend the open enrollment period. Information on the Medicare prescription drug benefits first became available last October, and then the open enrollment period began November 15. So today the open enrollment period has been going on for 4 months, and there are still 2 months left before open enrollment ends on May 15.
I personally think that enrollment is going well. About a quarter million people--250,000 beneficiaries, in other words--enroll each week. Enrollment in stand-alone plans in my State of Iowa increased by 71 percent between January and February. At this rate, Medicare is on a track to reach the goal of 28 million to 30 million beneficiaries with coverage by May 15.
I think making decisions about one's health care can, in fact, be difficult. That is why information about the available plans went out way back in October. That is why beneficiaries have 6 months to make a decision. That is why there are many resources to help beneficiaries learn about their options and make their decisions. That is why beneficiaries can change their plan choice once before May 15. But that said, I know there is concern that beneficiaries may need more time. So the amendment I am offering would grant the Secretary of Health and Human Services the authority to extend the enrollment period. We are just 2 1/2 months into this new benefit--the first expansion of Medicare in 40 years.
Personally, I think it is premature to change this date. So I offer this amendment as a compromise. The amendment would grant the Secretary definitive authority to extend the enrollment period. It would waive the application of the late enrollment penalty, and it would extend beneficiaries' rights to change their plan, and to change it once. Despite the rhetoric that we constantly hear around here, I hope everyone wants this benefit to be successful.
I know there have been some disappointing startup problems, especially for some of our Nation's most frail and vulnerable beneficiaries. But what would you expect when, on January 1, you have 44 million people rushing into a brand new Government program? There are obviously going to be some roadblocks, when people sign up on December 31 and go to the drugstore on January 2 to get drugs under a plan that you are trying to squeeze 44 million Americans into. It is quite obvious that there would be some problems.
I think the administration has made great progress in getting these problems solved. The Secretary of HHS has sat down with our committee on three occasions to hear both Republicans and Democrats, to listen to what the problems are.
I think it is mutually agreed that there were about seven areas where there were problems. The question I asked three times was: Is there any change in law that is necessary for the Secretary of HHS in order to grapple with these problems? And the Secretary said, no, he had ample authority to do that. He pointed out to us the seven problems. He pointed out to us how he was going to solve those problems. Between meetings, he gave us updates on progress being made toward solving those problems.
So I think we have a Secretary of Health and Human Services and we have a director of CMS who are working more than full time, and a lot of these problems, quite frankly, are simply the technicians it takes to make sure the computer software is working right.
What is the problem?
The PRESIDING OFFICER (Mr. VITTER). The Senator will note that the time on this amendment has expired, although the amendment of the Senator from Iowa is next in line and it would be appropriate to proceed to that amendment.
Mr. GRASSLEY. Mr. President, I think we have a Secretary who is working hard on it. There are problems, but at the same time, we are writing a million prescriptions a day without incident. Beneficiaries are saving a lot of money.
I spoke with the Senator from Florida about how the average premium is now $25 a month, 20 percent lower than we first projected. I spoke with the Senator from Florida about the lower drug costs, saving the taxpayers dollars as well. Just this year, the benefit, as I said, will cost $8 billion less than originally thought. The 10-year cost has dropped by $180 billion.
I heard from a couple in Iowa who are saving nearly $2,800 a year. Another Iowan is saving $1,750 a year. And here is another one. A person from Massachusetts is saving $17,000--$17,000--a year on medicine because they are participating in this program.
Getting this level of savings depends on strong competition among the plans, and we have that. Many people will remember the skepticism on whether many plans would participate at all. Some would say that we have too many choices and that is why beneficiaries need more time. Those choices, in fact--let me put it this way: It is not just choices, but because of choice, we have competition keeping premiums low, and they are letting people pick the plan that best suits their medical needs.
My amendment strikes an effective compromise, I believe, to Senator Nelson's amendment, which is before us. Senator Nelson's amendment calls for a unilateral extension of the enrollment deadline right now, and it would extend it until the end of the year and into the enrollment period of next year.
As I said, I think it is premature to make that decision now. Some people think 6 months is not enough time to make a decision on a plan. Yet millions are enrolling even now.
Many people are also concerned about the late enrollment penalty. This penalty is modeled after the way Medicare Part B has worked since its origination in 1966. There is a late enrollment penalty in Part B that anybody who doesn't sign up for it when they get to be 65 will pay, and that is there to encourage people to enroll early and to think of Part B as not some Government program, just a Government program, but to see all of this--whether it is Part B or it is Part D, as in drugs--as an insurance policy.
People who are 65 today thinking about signing up for the Part D drug program under Medicare may be very healthy and may think they have never taken a pill in their life and that they will never take a pill, but that is today when they are 65. They are not going to know what their health needs are when they are 70 and maybe get sick and have to take a lot of medication.
It is a little bit as if you were never going to have a car accident, you would never buy car insurance. If you were never going to have a fire in your house, you would never buy fire insurance. But Americans see insurance as a very useful tool, a necessary tool to manage their risks, and our seniors and disabled people ought to see this as an insurance policy, maybe not needed today, but that will be needed some day, and they ought to be enrolled.
Obviously, if you didn't have that penalty in Part B and now in Part D, the drug part, then who would ever sign up until the day before they have to buy their first pill, just as you would not buy your car insurance policy until the day before you were going to have a car accident.
So I hope people see it as a good investment, as an insurance policy, as it has been for Federal employees for the last 40 years.
The late enrollment penalty is designed to encourage enrollment, and as with other coverage of insurance, it spreads these costs across many enrollees. The more people enroll, the lower the costs are for everyone.
So if the Senator from Florida wants to keep these costs continually low, get more people under the umbrella, sell an insurance policy, as he has been so successful selling
people on the importance of keeping Senator Nelson in the Senate.
The open enrollment creates an enrollment deadline. The deadline that is involved in the open enrollment period encourages people to act, to get the protection against unexpected drug costs. We all know that people sometimes wait until they need coverage to get it. It would be the same as if only people with a burning house get fire insurance. If you waited until the day before your house was going to burn down to buy fire insurance, fire insurance would be awfully expensive. That leads to higher costs for everyone.
For the same reasons then, there is an enrollment period and a late enrollment penalty under Medicare Part B, not at all a new idea. The premise of the Nelson amendment is that Congress needs to override that 6-month open enrollment period and make it even longer. The Nelson amendment would do that today even though enrollment is on track. It would extend the open enrollment period now even though we don't know whether it will be necessary 2 months from now. It presupposes a bad outcome to the enrollment of Part D of Medicare. It plans for failure, and I think this plan, particularly with how successful the competition is, for failure is wrong.
Frankly, I think Senator Nelson's amendment has the potential to do more harm than good, regardless of his good intentions. Without the pressure of that May 15 deadline, many beneficiaries may forgo savings by putting off their decision.
Now, it may turn out that the enrollment period needs to be extended, as I said in my first remark to my colleague from Florida. And if that is the case, then my amendment would give the Secretary the authority to do that right away. No further congressional action would be needed.
Under my amendment, if in 2 months the Secretary determines the enrollment period should be extended, if enrollment is lagging, for example, then he has clear authority to do that.
My amendment would also automatically delay the late enrollment penalty if the enrollment period is extended by the Secretary of HHS.
My amendment would provide the funding needed to continue the open enrollment period. This funding is needed to continue the round-the-clock operations of the 1-800 Medicare number, and the expanded operations for that open enrollment period.
I close this debate by reading an editorial from the New York Times in 1966. This was an editorial about the implementation of the original Medicare Program we have had on the books since 1966. A quote from the New York Times:
But as Medicare gets underway, the danger is that the strains on it will generate pressures for unsound change. They will come from those who will be disappointed because they have been led to expect too much as well as from those who see failure in every shortcoming. Changes will come in time, but they should be made on the basis of Medicare's own experience. This great new experiment must be given ample time to get over its growing pains.
Those growing pains for Part D Medicare are now just 2 1/2 months old. So I go back to the first sentence, for the consideration of my friend from Florida, ``that the strains on the system will generate pressures for unsound change.'' I think his is an unsound change. This quote speaks volumes about our current situation with Part D Medicare.
I urge my colleagues to support my amendment and to oppose the Nelson amendment.
Mr. President, do I have to ask to have a previous amendment set aside in order to send my amendment to the desk?
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The Senator from Iowa [Mr. GRASSLEY] proposes an amendment numbered 3073.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To establish a reserve fund to allow for deficit-neutral legislation that would provide for an extension of the Medicare part D enrollment period)
At the end of title III, insert the following:
SEC. __X. RESERVE FUND FOR EXTENSION OF THE MEDICARE PART D ENROLLMENT PERIOD.
If the Committee on Finance of the Senate reports a bill, or if an amendment is offered thereto, or if a conference report is submitted thereon, that--
(1) authorizes the Secretary of Health and Human Services to extend the initial open enrollment period under part D of title XVIII of the Social Security Act beyond May 15, 2006;
(2) provides funding to the Centers for Medicare & Medicaid Services and the Social Security Administration for the purpose of conducting enrollment activities for the period of any extension of the initial open enrollment period;
(3) waives the application of the late enrollment penalty for the period of any extension of the initial open enrollment period; and
(4) permits beneficiaries to change their enrollment election in such part D once during the initial open enrollment period, including throughout any extension of the initial open enrollment period;
the Chairman of the Committee on the Budget of the Senate may make the appropriate adjustments in allocations and aggregates to the extent that such legislation would not increase the deficit for fiscal year 2007 and for the period of fiscal years 2007 through 2011.
Mr. NELSON of Florida. Mr. President, will the Senator yield for a question about this amendment?
Mr. GRASSLEY. Let me get a copy of my amendment.
The PRESIDING OFFICER. The Senator from Iowa has control of the time.
Mr. GRASSLEY. Mr. President, I will yield to whatever the Senator wants me to listen to.
The PRESIDING OFFICER. The Senator from Florida is recognized.
Mr. NELSON of Florida. Mr. President, I want to ask the distinguished Senator from Iowa, does his amendment waive the penalties to senior citizens or does it give the Secretary of HHS discretion to waive the penalties?
Mr. GRASSLEY. Mr. President, to the Senator from Florida, Mr. Nelson, if the Secretary extends the period, it automatically then waives the penalty for that period of time.
Mr. NELSON of Florida. Mr. President, I ask the distinguished Senator, if the Secretary waives the requirement--so the Senator's amendment gives the Secretary discretion to waive the requirements of the May 15 deadline?
Mr. GRASSLEY. The purpose of my amendment is--I think I am answering the Senator's question. Let's say May 14 comes and the Secretary decides we need more time and he makes a decision to extend that period of time. Let's say he extends it from May 15 to September 15. During the period of May 15 to September 15, there would be no penalty.
Mr. NELSON of Florida. Mr. President, I thank the Senator for answering the question.
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Mr. GRASSLEY. Mr. President, I only want to clarify two things. One, if I said there were no complaints at my town meetings about the program, there were, but I found a great deal of people who had enrolled very satisfied and also satisfied with the process.
The second thing is, it has to be a policy decision by Congress to do what I want to do, so it is still up to Congress to make this decision. I would be willing to make this decision if it was made first, but your amendment is up today. So it is still a choice we are making.
I yield the floor.
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Mr. GRASSLEY. Madam President, here we are again. Today's discussion, as the famous words go, is déja 2 vu all over again.
First of all, we heard the words ``sweetheart deal'' for drug companies. If drug companies had their way, they would want no formularies, which is what the Wyden amendment would require. These drug companies would want all drugs covered regardless of cost. So don't tell me this is a sweetheart deal. If we didn't have formularies like we would have if the Wyden amendment is adopted, then all drugs would be covered regardless of cost. Then they would not have to compete. But this legislation requires competition building upon the practices that we have used for the Federal employee health plan for 40 years. We patterned this legislation after that because that is what saves money.
I am beginning to lose count of the number of times that this issue has come before us. So I have to keep repeating--but it doesn't seem to sink in--that the Medicare Modernization Act does not prohibit negotiations with drug companies. Nothing could be further from the truth. But hearing the last speech, one couldn't come to that conclusion. In fact, the law requires Medicare plans to negotiate with drugmakers for better prices. These negotiations are at the heart of the Medicare drug program.
It is an absurd claim that the Government will not be negotiating with drugmakers comes from the noninterference clause in the Medicare law. The noninterference clause does not prohibit Medicare from negotiating with drugmakers. What it does is it prohibits the Center for Medicare Services from interfering with these negotiations.
To be clear, the noninterference clause is at the heart of the bill's structure for delivering prescription drug coverage. This clause ensures those savings will result from market competition rather than through Government price fixing.
The average beneficiary premium is $25. That is $12 less than the $37 that was estimated less than 12 months ago, going back to July of last year. That clearly demonstrates that the law's structure is accomplishing that objective and then some; otherwise, we would have $37-a-month premiums or more instead of the average $25 premiums that we have.
This year's cost to the Government then is $8 billion less than what we thought it would be last July. The 10-year cost has dropped by $180 billion, as we tried to estimate ahead what programs might cost 10 years into the future.
The Center for Medicare Services and the Consumers Union have reported that beneficiaries are getting substantial savings under this drug benefit. These plain and simple facts ought to take the wind out of the sails of the argument that private companies can't deliver an affordable benefit for our beneficiaries and even for the taxpayers. These plans can deliver, and they are delivering. That is competition, not something that they set out to do. That is the market forces bringing down prices.
Some might say: Well, if the plans can do that, imagine what the big bureaucracy of the Federal Government can do. To those folks, I urge a word of caution. First, the Government doesn't have such a great track record when it comes to price negotiation. When we considered the Medicare Modernization Act, the Center for Medicare Services' actuary reported that drugs in Part B:
Were reimbursed at rates that, in many instances, were substantially greater than the prevailing price levels.
Even The Washington Post editorial of February 17, 2004, said:
Governments are notoriously bad at setting prices, and the U.S. Government is notoriously bad at setting prices in the medical realm.
My second point is beneficiaries don't have one-size-fits-all prescription drug needs. They need choices. Forty-four million different Americans have 44 million different solutions--or you can't have one plan fits all, I guess is what I should say. The companies offering the drug benefit must offer coverage for a wide array of brand and generic drugs. The companies also are offering plans with lower or even no deductible. Many are offering additional coverage so that there is no doughnut hole.
The bottom line is the approach taken in the Medicare Modernization Act has resulted in affordable choices for beneficiaries while saving the taxpayers money.
When we crafted this act, the Congressional Budget Office concluded that the market-based approach would result in better prescription drug cost management for Medicare than any other approach that was being considered at that time by the Congress. Here is what the Congressional Budget Office said about eliminating the noninterference clause in a letter last year:
The Secretary would not be able to negotiate prices that further reduce Federal spending to a significant degree.
The Congressional Budget Office went on to say:
CBO estimates that substantial savings will be obtained by the private plans.
That estimate is now a reality.
We also had an analysis from the chief actuary for the Medicare program.
The chief actuary for the Medicare program, who is required by law to provide independent actuarial analysis on issues facing Medicare, concluded that he does not:
believe that the current Administration or future ones would be willing and able to impose price concessions that significantly exceed those that can be achieved in a competitive market.
In fact, more astonishingly, the chief actuary pointed out that if Medicare establishes drug price levels it will reduce competition not increase it.
The report stated that the establishment of drug price levels for Medicare by the Federal government would eliminate the largest factor that prescription drug plans could otherwise use to compete against each other.
So let's be clear, direct Government negotiation is not the answer. The Government does not negotiate drug prices. The Government sets prices and it does not do a very good job at it.
The law's entire approach is to get beneficiaries the best deal through vigorous market competition, not price controls.
The new Medicare drug benefit creates consumer choices among competing, at-risk private plans.
It is abundantly clear that Medicare plans have leveraged the buying power of millions of beneficiaries to lower drug prices.
I urge my colleagues to oppose efforts to change the law and oppose efforts to get the Government involved in setting drug prices.
It is a prescription for higher costs and fewer choices for beneficiaries.
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Mr. GRASSLEY. Madam President, two speakers ago, the Senate heard the Senator from North Dakota say that the drug bill says that the Secretary cannot negotiate. It doesn't say that anywhere in the law. It doesn't say it anyplace. They made that up. I don't know what sort of political points they want to make, but keeping the speeches to what the law says, and not what somebody thinks it says, seems to be very important to intellectually honest debate.
To the Senator from Oregon, drug companies want cash-paying customers with no coverage because those people, as we all know, pay the highest prices. The drug companies don't have to negotiate with anyone when seniors don't have any drug coverage, such as they didn't have before this law went into effect. Part D provides that drug coverage, and now the drug companies have to compete to offer lower prices and to get plans to put their drugs on their preferred drug list. It is very necessary. They would like to have the environment that you want: No formulary. Then they have everything the way they want it. That is how negotiations work, to drive down prices, to get your plan approved, and that is how competition works to reduce prices, and that is what we see after 2 1/2 months of the operation of this legislation. Don't give the drug companies what they want: no formulary.
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Mr. GRASSLEY. I don't think I am going to use more time than has been allotted on this amendment, but just in case, I hope the manager would give me a minute or two off the bill.
Madam President, I wish to speak through the Chair to the Senator from West Virginia. I am going to speak not specifically against your amendment, but you have identified closing corporate tax loopholes as one way of raising revenue to offset yours. I am going to take advantage of my time against your amendment to speak because Members on your side of the aisle have used this approach in the past, and I want to say how there are some problems doing that.
Virtually all Democratic Members had a common theme in their amendments--raising taxes for more spending. The
purported offset for each of these amendments--several yesterday and more today--would close tax loopholes to pay for whatever popular spending program is proposed. The Senate tax relief reconciliation bill that is now in conference between the House and Senate--and that is a reconciliation bill left over from last year's budget resolution, some of the unfinished business of last year that we have to get worked out this spring--this conference's bills already include $20 to $30 billion of loophole closers. Ironically, many of the proponents of these amendments that have been offered on the other side of the aisle, using tax loophole closers, were among the small minority of Members who opposed the tax relief reconciliation bill that contained offsets. In some cases, the proponents have acknowledged that the Finance Committee, which I chair, has already used these loophole closers. The Finance Committee will be responsible, then, if these amendments are adopted, for creating new loophole closers.
That is not a problem. I don't consider that a problem because I am looking to close abusive uses of the Tax Code. My Finance Committee staff has proven itself quite effective in the past in identifying offsets. Just in the period of time since 2001, our committee has raised around $200 billion in new revenues by shutting down tax shelters, by closing inversions, and other abusive tax schemes.
In the year 2004 alone, the Finance Committee fully offset a $137 billion tax bill at no expense to the American taxpayers. This was what was known at that time as the FSC-ETI repeal bill. So I think the Finance Committee, since 2001--or using the year 2004 alone--has a pretty good handle on what is possible in the ``raisers'' category. So, implied, do the Democrats who are proposing closing tax loopholes know it is not necessarily an easy job, a job we have been working on, a job we have been successful at, but the more of this you do, the less there is to take care of what they are trying to bring us to do, closing tax loopholes?
I might imply that maybe they are taking the easy way out because of using the term ``loophole closers.'' That may not be such an easy way out for those of us who have to do it.
This brings me then to the amendments that have been proposed. The sponsors say they have offset the costs of the amendments by closing tax loopholes. I wish to know what loopholes they have in mind. If we use the inventory of Senate-acceptable offsets, we can raise about $11 billion over 5 years. But that $11 billion, even if we accomplish it, is a far cry from the cumulative demands of the amendments that have already been offered from the other side and probably will be offered yet today and tomorrow. We are probably going to have to find more revenue raisers just to cover the items that Members say they support in the tax relief agenda that is out there that everybody wants me to get passed.
The Finance Committee staff hopes to use the full $30 billion that is already in conference in the Senate tax relief reconciliation bill. Some have referred to the recent ``tax gap'' report of the Joint Committee. But this is also going to be a heavy lift. When Members try to use some unidentified loophole closers--and these have all been unidentified--to pay for their amendments, what they are saying is that we should use something out of the $30 billion that has been set by the Finance Committee staff that we are considering in conference committee right now. So, in fact, the proponents' amendment is going to displace something covered by the resolution. That point has to be made crystal clear, because this is the crux of the problem. If you use a loophole closer that is already called for in the tax relief package that is in conference, it means that something in the tax cut package will have to be taken out.
What do my colleagues, who are using loophole closers, suggest that we take out that most of them think ought to be law because they voted for it in the first place? The tax relief reconciliation bill covers a number of items that Members on the other side do support. For example, it covers, through the year 2010, provisions that they support such as tuition deduction, such as low-income savers credit, small business expensing. These are sunsetted. They have to be reenacted to keep existing tax policy. You have to have offsets for them.
Also covered are 1-year provisions that they say they support, such as business extenders like research and development. Several States have sales taxes that will not be deductible anymore if we don't pass this bill. The alternative minimum tax hold harmless----
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. GRASSLEY. Could I have 1 more minute?
Mr. CRAPO. I yield the Senator 2 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRASSLEY. There is the alternative minimum tax hold harmless, so that 22 million more Americans do not get hit by the alternative minimum income tax. Middle-income people who were never intended to pay it will if we don't get this bill out of conference with these offsets in it. Everybody on the other side of the aisle doesn't want an alternative minimum tax to hit middle-income people, so they are going to take those revenue raisers, those tax loophole closers that we are using for this to use for something such as Amtrak, now before us, as an example.
There are other provisions.
The reconciliation number covers these items. Yet this amendment would tear away the revenue offsets needed to pay for these items.
You can't say you are for these items and not provide room for the tax cut that is in the reconciliation bill in conference. You can't use the offsets for something else without providing for those items. You can't have it both ways, in other words.
What is the loophole closer you would use, I ask them. There are none of them identified. Will it be taken from the $30 billion reconciliation already accounted for in that bill or is there a new issue we haven't seen? If you have a secret revenue loophole closer out there, I want to know about it. A loophole closer actually has to raise money. Members need to know that some of the leftover items from last year may not raise any money in the current year when they want to spend it. You can't rely on raisers that were done in the past.
We also need to remember that many of these leftover offsets were rejected by the House.
It is not enough to call for ``more loophole closers.'' The amendment's sponsor needs to tell us where the money is coming from; otherwise the call for offsets is just a call for ``funny money,'' in a sense.
Members need to know that the till is empty. A fictitious offset will not suffice. We have a lot of heavy lifting to do under this resolution as written. If you want to add more weight to the problem, you need to tell us where the money is going to come from.
I ask you to vote against these amendments because they are not identifying loophole closers.
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