Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003

SAFE, ACCOUNTABLE, FLEXIBLE, AND EFFICIENT TRANSPORTATION EQUITY ACT OF 2003

Mr. GRASSLEY. Mr. President, I spoke, similar to what I am going to say today, last week on the floor of the Senate because I heard these very same considerations and very same criticisms of the Senate Finance Committee bill at that particular time. And at that particular time, I thought for Senators who don't have time to read legislation, or be advised by their committees or by their staffs on what the committee might be trying to accomplish-I ought to take time to inform colleagues about what my committee actually did.

I can tell by the debate today that either no one was paying any attention to my explanation last week or they forgot or they didn't care, because I am hearing the same criticism this week. I want to state why that criticism is unfounded, and I want to say to my colleagues that what we are doing in this legislation is following precedent and making sure that money that ought to be in the trust fund is in fact in the trust fund, and that any sort of exemption we have is to make all those exemptions and/or subsidies perfectly consistent.

I have found the unfounded criticism of the legislation that has come out of my committee falling into two categories: First, the general fund money is going into the trust fund. In other words, nonroad-related money is going into the road fund and the highway fund, the trust fund, the transportation fund, whatever you might want to call it. Second, the Senate Finance Committee has made changes that are in fact not legitimate changes but are gimmicks.

Let me respond to those. This response is not much different from what I would have stated last week. In response to the argument that general fund money is going into the trust fund, under the Finance Committee amendment no general revenue is transferred to the highway trust fund. We keep hearing this incorrect allegation. I encourage the critics to read the Finance Committee title of the transportation bill.

Under the Finance Committee amendment, the highway trust fund will retain more excise taxes. It is not general fund revenue. That is excise taxes. And excise taxes go into this trust fund. We accomplish this by eliminating the partial exemption for ethanol-blended fuel. Ethanol-blended fuel users will now pay the full excise tax and the trust fund will receive the money. The benefit will be taken as a tax credit against the general fund. And just to verify that this is a totally consistent policy, this is exactly as all other energy production incentives are handled.

Likewise, the trust fund, as a second source of revenue, will retain the excise taxes collected from certain users, such as exemptions that are given to State and local governments. Those vehicles use our highways, use our transportation systems; should they not be paying taxes? Should that money not be going into the road fund?

Under the Finance Committee amendment, the refund is not charged to the highway trust fund, so that every mile that a city of Des Moines vehicle puts on, that money would go into the road fund, just like the gas tax I pay for the car I drive on the highways in the State of Iowa.

Again, this means, then, that the trust fund retains more of the excise taxes. So let's be clear. The Finance Committee amendment does not transfer general revenue to the trust fund.

The second argument is that we have used accounting gimmicks. We hear the allegations that the Finance Committee is doing this many times on the floor of the Senate. It is an unfair, incorrect allegation. What the Finance Committee did in our amendment to this transportation bill was to ensure that the trust fund keeps more of excise taxes that should actually be in the trust fund and should be spent on our transportation system.

The Finance Committee also recognized that the trust fund should earn interest on its balance. You know, just like we are telling our senior citizens all the time, that surplus in the Social Security payroll taxes coming in, that is not being paid out currently, is invested in Treasury bonds. The interest on that is accumulated and accounted to the Social Security trust fund. So doesn't it make sense to ensure that any surplus in the transportation fund-and there must be some surplus to cover shortages after September 11 when people didn't drive as much and not as much road tax money was coming in-for items beyond what we can plan for needs to be accounted? That surplus then earns interest. That hasn't been accounted for in the highway fund. It now will be. These changes align trust fund receipts with spending purposes.

There are policy initiatives that burden the highway trust fund that have nothing to do with highway policy. We are going to unburden the highway fund. These policy initiatives have, in fact, reduced highway trust fund receipts, money that should have been available to build highways, not available because of exemptions. We accommodate those exemptions. Accommodating an exemption, consistent with good accounting practices, is not a gimmick.

The effect is that these policy initiatives are carried in the general fund where they belong. I heard one of my colleagues'-Senator McCain-harsh criticism of the Finance Committee. Senator McCain's committee, the Commerce Committee, approved new spending of $7 billion in its programs. The Finance Committee didn't question the Commerce Committee's needs and, without reservation, the Finance Committee found a way to fund the needs of this specific committee doing their legitimate work.

The Senator from Arizona legitimately put a burden on the Finance Committee, and we accepted that responsibility within our jurisdiction, within our power, within our responsibility. We bore the Commerce Committee's burden.

Now, after doing their work, the Finance Committee is criticized for what it did. It is easy to put burdens on others. It is easy to criticize those who did the heavy lifting. It is a lot harder to find ways to do the heavy lifting. But that is not their responsibility. They did what they needed to do under the responsibilities of that committee for this transportation bill. I find no fault with what they have done, and I assumed the responsibility as chairman of the Finance Committee, working with my 20 members, to make sure the money was available.

This isn't just because that is something I assumed. This is something that last summer the leader of the Senate, Senator Frist, asked us to do. He got members of the Commerce Committee, the Banking Committee, the Finance Committee, and the Environment and Public Works Committee together and said that we needed to find something, a common ground we could agree on or he didn't want to bring this bill to the floor. That was last summer.

We didn't have time last year to get it done. We extended it until February 29, but as far as I know, that same collegial assumption of responsibility to produce good transportation policy is still in effect. The three committees decided what those programs should be and the Finance Committee, the committee I chair, met our responsibilities.

Let's deal with reality for a second. As the cloture vote shows, the will of the Senate is to provide resources at the levels provided by these three authorizing committees. The Finance Committee did the job and provided funding at the outlay level. The Finance Committee preserved its role by maintaining the importance of the trust fund.

A week ago, I spoke to these points. I asked the critics, in light of where the Senate was on the numbers, how would you fix it? We have a few vocal people throwing rocks at this bill. None of the rock throwers have accepted my challenge and answered the challenge. What would you do and have it be sustained by the Senate, particularly, as I stated last week and I haven't said yet this week, when we did have that vote of 79 to 21 last year where there was a clear decision made by the Senate to spend a lot more money on transportation.

I was one of the 21 who felt we should not go that far, but how are you going to argue with the Senate making a decision, with only 21 dissenting votes, that the Senate is wrong? I still may think they are wrong, but that doesn't change my responsibility to provide the revenue to meet the needs of the three committees, and I assumed that responsibility. That is what we have done.

It is easy to criticize. It is a lot harder to legislate and do the people's business, and that people's business I think is represented by that 79-to-21 vote last year and by the work of the three authorizing committees-the Environment and Public Works Committee, the Banking Committee, and the Commerce Committee-on how much money needs to be spent. It falls on my shoulders to do it. I have done it in a way that is consistent with the way excise tax money ought to be handled. It is done in a way that any subsidy the Congress thinks ought to be established is done. What do you want me to do? Last week I said if you don't like what we did, I am open to suggestion.

I have one promise that I made to my committee, in the meantime, about the package that is before us. We followed the same policy that we did in the tax bill of 2001, and that was to make some changes in the payment of the corporate tax so that we would have a revenue-neutral bill coming before the committee. At least the leaders of the Budget Committee asked me and Senator Baucus during our committee's deliberation to not use that source of revenue, and we are committed to responding to that request. Beyond that, I think the bill voted out of the committee stands, and it is one that meets our responsibility to the Senate, to the leader who asked the four committees to work together, to the transportation needs of our Nation, and, most importantly, in this body doing something in a bipartisan way which, if it isn't done, this body does not have a product for the American people.

I yield the floor.

Mr. GRASSLEY. Mr. President, I would like to say a word about tax provisions being included in non-tax titles. The Finance Committee has sole jurisdiction over tax matters. The reasons for this are rooted in the U.S. Constitution. As a committee, it is imperative that we weigh in on all tax matters. This is particularly true with the provision included in the EPW Committee Substitute. We have heard from the Justice Department that this provision, as drafted, could jeopardize law enforcement efforts against organized crime and money laundering. The provision did not have the benefit of committee review or process. I appreciate the sponsor's interest in this issue. But I would remind Members that the chairman and ranking member take the responsibilities of the Finance Committee seriously. When we go to conference, I also want to ensure that regardless of the fact that the provision is included in the EPW title, the tax-writers are given responsibility to oversee the provision.

MR. GRASSLEY. Mr. President, I will respond to some criticisms of the Finance Committee package.

There is an allegation that the Finance Committee did not pay for this bill. Let me be clear. The Finance Committee adhered to the following principles in carrying out its responsibilities:

The Finance Committee funded the trust fund by increasing the amount of excise tax receipts retained by the trust fund.

The Finance Committee funded the bill at the outlay number-that is the cash flow impact on the trust fund. Some have pointed to obligations and contract authority numbers. Those numbers were not and are not relevant to the Finance Committee role. It is unfair to compare numbers for contract authority or obligation with receipts. That is apples and oranges. The Finance Committee matched receipts and outlays.

In accordance with Finance Committee members' desires, the deficit impact of matching receipts and outlays was offset with general fund revenue raisers. Those numbers match up.

That is the bottom line. The Finance Committee did its job.

I ask unanimous consent to have printed in the RECORD a summary of the Finance Committees funding title for the highway bill.