Congressional Budget For The United States Government For Fiscal Year 2010 - Continued

Floor Speech

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Mr. GRASSLEY. Mr. President, I rise to express my concerns about the Dorgan-Snow amendment No. 881.

The IRA rollover was first enacted as temporary provision in the Pension Protection Act which I championed in 2006. Rollovers to grant-making charitable organizations with some element of donor control, such as private foundations, donor advised funds, and supporting organizations, were specifically prohibited. These entities were specifically prohibited from receiving rollover funds because I wanted to make sure that the money would actually get to charities doing work on the frontlines rather than sit in a donor-controlled account.

The provision has become one of the annual ``tax extender'' provisions. So under current law, which expires December 31, 2009, an individual may rollover up to $100,000 from their IRA to a public charity but not to one of the prohibited entities. Amendment No. 881 to the budget resolution, S. Con. Res. 13, promotes the extension of current-law regarding IRA rollovers to charity, which I also support.

However, the amendment also promotes an expansion of the provision by allowing split-interest trusts to receive IRA rollover contributions. Split-interest trusts are more worrisome than those that are currently prohibited from receiving IRA rollover contributions. These trusts allow donors to retain an income stream from the contributed assets for a defined period. So, just like with donor-advised funds and supporting organizations, the contribution does not result in an immediate benefit to a charity actually providing services while the donor receives significant tax benefits at the time of the contribution.

The cost of extending current law through 2009 was almost $1 billion--expanding the IRA rollover provision to allow more entities to receive them would increase the cost. Before we do that, I believe we should make sure that grant-making entities, including split-interest trusts, are accountable for paying out minimum amounts to actual charities before we allow them to receive IRA rollovers.

I understand that Senator Dorgan is willing to work with me and my staff if and when Senator Baucus and I consider an expansion of the IRA rollover provision in the Finance Committee. In light of this good faith offer, I will not object to the unanimous consent request for this amendment today and look forward to working with Senator Dorgan to resolve our differences.

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Mr. GRASSLEY. Mr. President, the distinguished majority leader, my friend, Senator Reid quoted me by name in his remarks in opposition to the Lincoln-Kyl amendment.

The distinguished leader quoted me as describing death tax relief legislation as ``unseemly.''

Since that quote was used to argue against Senator Lincoln's amendment, which I support, I thought it important to respond to the distinguished leader and set the record straight.

The distinguished leader is correct. I did say, at that time shortly after the Katrina hurricane hit, that proceeding to death tax relief would be ``unseemly.''

It is important for everyone to understand the context of that statement. It was made shortly after the terrible hurricane hit the gulf states. At that time, the Senate was about to reconvene after the August recess. The pending business was a cloture motion on the motion to proceed to a House bill that provided death tax relief.

The majority leader, Senator Frist, had filed the cloture motion before the Senate departed for the August recess. Of course, that procedural action occurred weeks before the hurricane hit. When asked about the Senate schedule, I responded that proceeding to the death tax bill, and, thereby not dealing with the hurricane victims, would be unseemly.

The distinguished leader's comments caused me to recall how the finance Committee, which I chaired at the time, dealt with Katrina.

Senator Frist did the right thing and set the Senate in motion to deal with the hurricane victims. The Finance Committee acted with lightning speed on a bipartisan basis, and in concert with the House, to deliver relief to hurricane victims. I was quite proud of our efforts to help people in need. That was the first Katrina tax relief bill.

The second Katrina tax relief bill, unfortunately, took a lot longer to do. Some on the other side saw the Katrina bill as a chance to enact a National agenda of greatly enhancing social programs. I did not question their motives at the time and do not now. But, the bottom line was that this attempt to leverage a crisis for a National agenda, significantly delayed our efforts to rebuild the hard-hit gulf zone.

As the distinguished leader will recall, the gulf state Senators, led by Senator Lott, forced the Senate to focus on helping their states rebuild and recover. A similar effort was underway in the House.

Fortunately, the efforts of the bipartisan group of gulf state Senators caused the leadership on the other side to abandon their efforts to leverage the hurricane disaster for a National agenda. No one accused the leadership on the other side of being unseemly.

Senator Frist did the right thing and focused on the hurricane victims. The leadership on the other side did the right thing and focused on bipartisan hurricane relief efforts.

There is a lesson in this history for all of us. Do not try to leverage a crisis for unrelated purposes.

Senator Lincoln's amendment was not ``unseemly.'' To use my reaction to a question about the Senate schedule is to miss the point I was making The Lincoln/Kyl amendment is a reasonable effort to find a bipartisan compromise on a time-sensitive tax issue. It is an effort to enable a solution to a problem that vexes family farmers and small businesses. The amendment's purpose and substance are the opposite of unseemly. The Lincoln/Kyl amendment is ``decorous.''

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