American Recovery And Reinvestment Act Of 2009

Floor Speech

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Mr. GRASSLEY. Madam President, I want to speak about the trade adjustment assistance amendment that Senator Baucus and I have introduced.

It is amendment No. 404, and it is called the Trade and Globalization Adjustment Assistance Act of 2009.

My colleagues are used to hearing me talk about the importance of trade.

Trade creates good, well paying jobs for American workers, farmers, and service suppliers. Those jobs are more important than ever in this time of economic difficulty.

So we need to keep working hard to open new markets for U.S. goods and services.

But if we are going to engage in international trade, we need to make sure we are looking out for U.S. workers who are affected by foreign competition.

Our trade adjustment assistance program is the primary program the Federal Government has for helping those workers. Unfortunately, the program is out of date. It isn't doing enough to help the workers who need it. And that is why I have joined with Senator Baucus to update it.

Today's amendment is the culmination of months of hard work on the part of Senator Baucus and myself. And this work reflects years of oversight and careful thought. It is also the product of close collaboration and intensive negotiations with our counterparts on the House Ways and Means Committee, Chairman Rangel and Congressman Camp. I want to thank my colleagues for their cooperation and good will.

This amendment truly is a bipartisan, bicameral product. The amendment would update the trade adjustment assistance program in important ways, so it better serves the needs of our workers in the globalized economy of the 21st century. I will mention some of those changes now, and I anticipate that Senator Baucus and I will introduce report language into the Record to reflect the legislative intent behind the provisions we have included in our amendment.

One of the most important changes that the amendment makes is to open the trade adjustment assistance program to workers in the services sector. Those workers aren't currently eligible for trade adjustment assistance.

So, if you are a customer service representative, and your job is outsourced to India, you are out of luck.

That limitation makes no sense to me. Services make up almost 80 percent of our economy, so it makes sense that service workers should be eligible for adjustment assistance if they are adversely impacted by trade. But that last point is critically important. Trade adjustment assistance should be made available to service workers, but only if they can demonstrate a causal nexus between trade and the loss of jobs.

The amendment I introduced with Senator Baucus requires an express determination of such a causal nexus before service workers can be certified for trade adjustment assistance. I wouldn't be here supporting this compromise if it didn't. The same goes for manufacturing workers. Trade adjustment assistance is premised upon an adverse trade impact, and this amendment preserves that nexus. Our amendment fills the hole in existing law so that software developers, customer service reps, and other service workers will be able to seek the same benefits that are currently available to workers in the manufacturing sector, and on the same terms. That is only fair.

We also increase the availability of training funds so that States can handle this expansion in eligibility and provide better training opportunities for displaced workers, to help them train for new careers. Our amendment expands the trade adjustment assistance for firms program to help individual firms better respond to foreign competition and avoid having to cut jobs to begin with. It improves the trade adjustment assistance for farmers program to provide targeted training and to help agricultural producers develop new skills and business plans. It creates a trade adjustment assistance for communities program to help entire communities respond to the pressures of globalization, and to help community colleges and other educational institutions develop new and more targeted courses to assist trade-impacted workers. And it helps States fund caseworker time spent with TAA clients, so that laid-off workers will have someone to help them examine their options and plan next steps.

Our amendment introduces a great deal more flexibility into the program, so that workers can choose between full-time and part-time training, or full-time work with limited wage insurance. Trade-impacted workers can even take advantage of training and case management services before they lose their jobs. Our amendment also improves the accountability and internal oversight of the program, at the State and Federal level, to provide additional assurance that taxpayer monies will be well-spent.

I have already noted that this amendment is a bipartisan effort that reflects the work of four offices. It is a compromise in many respects. There are portions of the amendment that I might have done differently if it were solely up to me. But that is the nature of compromise. And the overall policy embodied in this amendment is a good one that will do a lot of good for a lot of Americans--in Iowa and across the United States. Equally important, if we enact this amendment into law, it will help unlock the trade agenda so we can progress with other important priorities. Chief among those is implementation of the Colombia trade agreement, which is my top trade priority. And then we need to turn to our other trade agreements with Panama and South Korea as well. We need to level the playing field so that our exporters, service suppliers, and farmers can increase their sales to foreign countries. It is more important than ever.

We have had a social compact on trade for over 45 years.

One side of that compact is to address the needs of trade-displaced workers, and we are doing that with the Baucus-Grassley amendment.

The other side is to open up new markets for U.S. exports.

That was a driving principle when President Kennedy established the trade adjustment assistance program. President Obama should hold true to that principle by doing everything he can to create new export opportunities, starting with implementation of our pending trade agreements. A pro-growth trade agenda should be integral to our economic recovery strategy.

Now let me turn to the provisions in this amendment dealing with the health coverage tax credit. The health coverage tax credit was the creation of a bipartisan effort in 2002. It was designed to help those who were losing their jobs and their health coverage due to trade-related restructuring. The health coverage tax credit represented the first time that the Federal Government offered assistance in the form of a tax credit to purchase health coverage. It was a new way of doing things. Instead of the government offering government-run coverage, the government was offering a tax credit to purchase private coverage. That is a good thing.

As a new program, it had start-up challenges. And the program has special challenges that we don't see in the regular insurance market. You see, the trade adjustment assistance program is for a limited number of people. And it is offered just while people who have lost their jobs are going through retraining and finding another job. Health insurers do their best when they are insuring a larger group of people for a longer period of time. That is how insurance normally works. But the TAA program is the opposite.

So this program has some special challenges to manage. And for a new program, I think it has managed those challenges pretty well. But there is always room for improvement. That is especially true for a new program like this one. The Government Accountability Office and the Internal Revenue Service have studied the health coverage tax credit program and offered their recommendations. The health plans have also offered suggestions for how to make the program work better.

The amendment that Senator Baucus and I have worked out would make a number of improvements to the program. These are improvements needed
to make it work better for eligible workers. First, we need to make coverage more affordable. That is something I hope we can address in more comprehensive health reform. But in the meantime, this amendment will make coverage affordable by increasing the tax credit to 80 percent of the cost of coverage. By providing more assistance, we can make private insurance options more affordable. Let's not forget that if we don't preserve access in the private market, many of these unemployed workers and their families will be forced into Medicaid. This amendment also makes important changes that will raise awareness about the program. One of the biggest barriers to enrollment is that people just don't know about the program. We are also going to help people with up-front costs during enrollment, and improve coverage for family members.

As I said before, this is not a perfect program and today's changes are not going to make it perfect. I hope as this process moves forward, we can still look for ways to expand the number of coverage options for people that want to use the credit. We should make sure they have a variety of choices in the individual market. But even though today's changes don't do everything we would like, they represent another step in making this program work better for unemployed workers and their families.

And I compliment Senator Baucus for his hard work and commitment to moving forward on these important reforms. With that, I invite my colleagues to join me in supporting amendment 404, the Trade and Globalization Adjustment Assistance Act of 2009. The reforms in this amendment will provide immediate benefits to workers impacted by trade in Iowa and across the country. Over the long term, these reforms will help to strengthen the global competitiveness of our workforce. And that translates into maintaining good-paying jobs right here in the United States.

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Mr. GRASSLEY. Mr. President, I must object. Before I do so, I will make this little statement. Obviously, the chairman, in keeping his word to me, has gone on to deliver on that word by working out arrangements on some amendments I wanted. It might look confusing to the public at large as to why on this side we are objecting. As we do things in the Senate on unanimous consent, any one person can object.

We have asked a lot of Members on our side what they thought about this particular UC request because we knew about it ahead of time. On behalf of a number of Members on our side of the aisle, acting for them, I must and do reluctantly object.

The PRESIDING OFFICER. Objection is heard.

Mr. GRASSLEY. Mr. President, if I may have the floor, I wish to make some remarks about the stimulus bill generally and about an upcoming vote we have in the Senate that we call waiving the Budget Act.

Today, the Senate will consider whether we should apply budget discipline to this bill before us. Yesterday, there was a lot of revision, or perhaps editing, of recent budget history, and I come to the floor to speak about it in an intellectually honest way. Even our President alluded to it. I agree with the President that there is a lot of revisionism in the debate. The revisionist history basically boils down to two conclusions:

One, that all of the ``good'' fiscal history of the 1990s was derived from a partisan tax increase of 1993; and, two, that all of the ``bad'' fiscal history of this decade we are in now is attributable to the bipartisan tax relief plans of 2001 and 2003, and maybe some lesser tax bills.

Not surprisingly, nearly all of the revisionists who spoke generally oppose tax relief, and somehow always seem to support tax increases. The same crew generally supports spending increases and, not oddly, opposes spending cuts.

In the debate so far on this bill, called the stimulus package, many on this side have pointed out some key undeniable facts. The bill before us, with interest included, increases the deficit by over $1 trillion. The bill before us is a heavy stew of spending increases and refundable tax credits, seasoned with small pieces of tax relief.

The bill before us has new temporary spending that, if made permanent, will burden future budget deficits by over $1 trillion.

That antirecessionary spending, together with lower tax receipts, plus the TARP activities, has set a fiscal table of a deficit of $1.2 trillion. That is the highest deficit, as a percentage of the economy, in post-World War II history.

It is not a pretty fiscal picture, and it is going to get a lot uglier as a result of this bill. So for the folks who see this bill as an opportunity to recover America, with Government taking a larger share of the economy over the long term, I say congratulations. That is where the revisionist history comes from. It is a strategy to divert, through a twisted blame game, from the facts before us.

How is history revisionist? I want to take each conclusion, one by one.

The first conclusion is that all of the good fiscal history was derived from that 1993 tax increase. To knock down this canard, all you have to do is look at this chart I put up.

This chart was not produced by a bunch of Republicans. This chart was produced by the Clinton administration. We can see down in the right corner, the ``Office of Management and Budget.''

The much ballyhooed 1993 partisan tax increase accounts for 13 percent of deficit reduction in the 1990s. We can see in green the 1993 tax increase that has been ballyhooed about the floor of this body several times did not have as much to do with deficit reduction as we are led to believe.

What is more, fiscal revisionist historians in this body tend to forget who the players were. They are correct that there was a Democratic President in the White House, but they conveniently forget that Republicans controlled the Congress for the period where the deficit came down and actually turned into a surplus. They tend to forget that they fought the principle of a balanced budget that was the centerpiece of my party's fiscal policy.

Remember the Government shutdown of 1995? I want the people on the other side of the aisle to remember that, remember what it was all about. It was about a plan to balance the budget. Republicans paid a political price for forcing the issue. But in 1997, President Clinton agreed.

Recall as well all through the 1990s what the yearend battles were about. On one side, congressional Democrats and the Clinton administration pushed for more spending. On the other side, congressional Republicans were pushing for tax relief. In the end, both sides compromised. That is what our Government and Constitution forces, and a lot of that is done because in the Senate we have rules that do not allow one party to push something through.

That is the real fiscal history of the 1990s.

Now let's turn to the other conclusion of the revisionist fiscal historians. That conclusion is that in this decade, since the year 2000, all fiscal problems are attributable to the widespread tax relief enacted in 2001, 2003, 2004, and 2006.

In 2001, President Bush came into office. Just last night, we heard on television about all of the problems today are the result of the last 8 years. Let's take a look at that.

President Bush inherited an economy that was careening downhill. Investments started to go flat in 2000. Do you know NASDAQ lost 50 percent of its value in the year 2000, not in the year 2001 and beyond? Then came the economic shocks of the 9/11 terrorist attacks. I might add, we had 40 or more months of downturn in the manufacturing index that started in February 2000, also before President Bush became President. And then we add in the corporate scandals to that economic environment. We had the 9/11 terrorist attacks.

It is true, as the fiscal year 2001 came to a close, the projected surplus turned into a deficit. I have a chart that shows the start of this decade's fiscal history right here. As we can see, in just the right time, the 2001 tax relief plan started to kick in. The deficit grew smaller. This pattern continued through 2007.

I have another chart that compares the tax receipts for the 4 years after the much ballyhooed 1993 tax increase and the 4-year period after the 2003 tax cuts. If we go to the tax increase, the blue line, we can see there was some uptick, but it stayed flat. Look at tax relief coming, the red line, what that has done for income into the Federal Treasury.

On a year-after-year basis, this chart compares the change in revenues as a percentage of GDP. In 1993, the Clinton tax increase brought in more revenue as compared to the 2003 tax cut. But that trend reversed as both policies moved along. We can see how the extra revenue went up over time relative to the flat line of the 1993 tax increase.

So let's get the fiscal history right. The progrowth tax-and-trade policies of the 1990s, along with a peace dividend, had a lot more to do with the deficit reduction in the 1990s than the 1993 tax increase did. In this decade, deficits went down after tax relief plans were put into full effect.

That is the past. We need to make sure we understand it. But what is most important is the future. All I can say is that my President, President Obama, talked about the future all during the campaign. Why Members of his party have been talking about the last 8 years and not about the future, I don't know. We need to talk about the future. People in our States send us here to deal with the future. They do not send us here to flog one another like partisan cartoon cutout characters and to do it over past policy. They do not send us here to endlessly point fingers of blame around.

Now let's focus on the fiscal consequences of the bill in front of us. That is what the vote in less than an hour is all about.

President Obama rightly focused us on the future with his eloquence during that campaign, as I have already referred to. But I would like to be more specific and paraphrase a quote from the President's nomination acceptance speech: We need a President who can face the threats of the future, not grasping at the ideas of the past.

My President was right. We need a President--and I would like to add Congressmen and Senators--who spends all the time facing the threats of the future. This bill, as currently written, poses considerable threats to our fiscal future. Senator McCain's spending trigger amendment showed us the way. We can rewrite this bill to retain its stimulative effect but turn off the spending when the recovery occurs.

Grasping at ideas of the past or playing the partisan blame game will not deal with the threats to our fiscal future. With a vote to sustain the budget point of order against this bill, I say to my fellow Senators, we can start to deal with threats to the fiscal future in the way Senator McCain would or the way other people might bring good ideas forth.

According to the Senate Finance Republican tax staff analysis of the Joint Committee on Taxation's revenue estimate of the Nelson-Collins substitute amendment, less than $6 billion is provided in that amendment in tax relief for small businesses. Let me be clear, small business tax relief makes up less than 1 percent of the bill. I think that is truly outrageous. Small businesses create approximately three-fourths of the new jobs in our economy. So if this bill is all about jobs, certainly more tax relief would have been provided to small businesses because they are the job-creating engines of our economy.

Less than 1 percent of the bill going to small business tax relief is a puny amount. For example, according to Senator NELSON's Web site summary of this bill, here are just some of the provisions that the Senate Democratic leadership has spent more money on than small business tax relief.

The Senate Democratic leadership is putting your money where their mouth isn't and saying that these items are a higher priority to them than small business tax relief is. Some of these items are: $7 billion for Federal buildings fund, $6.4 billion for State and Tribal assistance EPA grants, and $13.9 billion for Pell grants. While some of the provisions in the bill are worthy of being done in regular order, certainly none should get higher funding than small business tax relief because this is supposedly a stimulus bill that is about creating jobs.

Mr. President, in remarks a few minutes ago, the senior Senator from New York referred to my amendment on the current year's alternative minimum tax, AMT, hold-harmless or patch. He was correct that I pushed for the patch very early in the stimulus discussions.

I mentioned it at before and after our bipartisan Finance Committee Members' meeting. I filed it at the Finance Committee markup. To be fair, so did Senator MENENDEZ. The committee adopted the AMT patch amendment.

If I heard the Senator from New York correctly, he agreed with me on the merits of adding the AMT pacth. His point seemed to be to say I, and others who oppose the bill in its present form, we are taking an inconsistent bill.

Let me repeat what we, on this side, have been saying about the need for this bill. We agree there needs to be a stimulus. But we need to do it right. Including the AMT pacth improves what is an otherwise poorly designed bill.

The patch does not remedy the outyear spending problem. It does not eliminate the rest of new broad entitlement spending.

I am hopeful that, in conference, the senior Senator from New York, and other members of the Democratic leadership, will fight for the Senate position on the AMT patch. There are 124,000 Iowa families who could face an average tax increase of $2,300 per family if the AMT patch is not enacted. I am looking out for them. I hope the Democratic leadership is looking out for them too.

I urge my colleagues to vote for budget discipline, sustaining the point of order.

I yield the floor. I suggest the absence of a quorum.

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