Service Members Home Ownership Tax Act Of 2009 - Resumed
Floor Speech
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Mr. GRASSLEY. Mr. President, we have two key votes this afternoon on drug reimportation. These votes mean that today is the day we can show the American people whether we can pass drug importation or whether the Senate will give it lipservice and nothing else.
We have heard on the Senate floor the concerns that some have about drug importation and whether it can be safe. Everyone who knows me knows I care deeply about drug safety. The fact is, an unsafe situation is what we have today. Today consumers are ordering drugs over the Internet from who knows where, and the FDA does not have the resources, in fact, to do much of anything about it. The fact is, legislation to legalize importation would not only help to lower the cost of prescription drugs for all Americans but also should shut down the unregulated importation of drugs from foreign pharmacies, the situation we have today. The Dorgan amendment, in fact, would improve drug safety, not threaten it. It would open trade to lower cost drugs.
In 2004, my staff was briefed about an investigation that the Permanent Subcommittee on Investigations of the Senate Governmental Affairs Committee conducted. That subcommittee conducted this investigation into what we would call going on right now, current drug importation. They found about 40,000 parcels containing prescription drugs come through the JFK mail facility every single day of the year, 40,000 packages each day.
Now the JFK airport houses the largest international mail branch in the United States, but even then that is the tip of the iceberg. According to this subcommittee, each day 30,000 packages of drugs enter the U.S. through Miami, 20,000 enter through Chicago. That is another 50,000 more packages each and every day.
What is worse, about 28 percent of the drugs coming in are controlled substances. So we have a situation where we need the basic approach in this amendment to assure that imported drugs are safe. That is what the Dorgan amendment is all about, to give FDA the ability to verify the drug pedigree back to the manufacturer, to require FDA to inspect frequently, and to require fees to give the FDA the resources to do that.
The bottom line is, the Dorgan amendment gives the FDA the authority and the resources it needs to implement drug importation safely.
Certainly, the President knows that a great way to hold drug companies accountable is to allow safe, legal drug importation. I would like to quote this President not when he was a candidate for President but a candidate for the Senate. This is what President Obama said then:
I urge my opponent to stop siding with the drug manufacturers and put aside his opposition to the reimportation of lower priced prescription drugs.
Now we are hearing about the secret deal with big PhRMA. That was revised just this week to solidify support with PhRMA's allies for killing this very important Dorgan amendment. The drug companies will stop at nothing to keep the United States closed to other markets in order to charge higher prices.
With the Dorgan amendment, we are working to get the job done. What we need is to make sure Americans have even greater, more affordable access to wonder drugs by further opening the doors to competition in the global pharmaceutical industry.
Americans are waiting. Too often this thing has been stymied, and it looks like there is another chance to stymie it. Only I am surprised. Most of the time in the past that I have been for the importation of drugs, it was my colleagues over here who were trying to stymie it. But now it looks as though it is the other side. We ought to have a vast majority for this amendment. I would be surprised. It would be a crime, if we didn't.
I yield the floor.
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Mr. GRASSLEY. This is typical of the comity of the Senate. I thank my good friend for doing that. I have a little different view on some of the things he said about taxes here. I respect him giving me some time because we don't have time on this side. It is nice, his doing that.
Republicans and Democrats are working off of the same data provided by the Joint Committee on Taxation. For some reason my friends on the other side of the aisle seem to want to read this data selectively, so I wish to look at this data. I want to stress this data is from the nonpartisan Joint Committee on Taxation. They are experts. They are nonpolitical people who tell it like it is.
My friends on the other side are correct in one thing: This bill provides a tax benefit to a small group of Americans. You can see right here that this benefit is to the people here where the minus sign is in front of the numbers. These numbers are in white.
As I pointed out previously, when you see a negative number on this chart, the Joint Committee on Taxation is telling us these people are receiving a tax benefit. This income category--the income categories where you see these negative numbers begin at zero and stretch to $50,000 for individuals and $75,000 for families. That will be $50,000 to $75,000. I give my Democratic friends credit for being right on this part of the data. But I want to show you where I disagree with them and their choosing to overlook other parts of the data, the data I will soon refer to here on this chart.
When we see negative numbers on this chart, as I have said, the Joint Committee on Taxation is telling us that there is a tax benefit. So, conversely, where there are positive numbers--this will be an example of positive numbers--the Joint Committee on Taxation is telling us these taxpayers are seeing a tax increase. Those numbers I have already pointed to begin at $50,000 for an individual and go up to $200,000 for an individual.
When we see a positive number, then, it is the reverse. The Joint Committee on Taxation is telling us these taxpayers are in fact seeing tax increases. So if we see positive numbers for individuals making more than $50,000 and we see positive numbers for families making more than $75,000, it is just this simple: We know these people's taxes are going to go up.
The Joint Committee on Taxation is telling us that taxes for these individuals, once again, for a third time, will go up under this 2,074-page Reid bill.
These individuals and families are making less than $200,000. What is significant about less than $200,000 is that this violates what the President promised in his campaign, that individuals who are middle class, under $200,000, are not going to see one dime of tax increase.
To come to any different conclusion is saying that the data on this chart--and of course the professionals at the Joint Committee on Taxation--both are wrong. To come to any different conclusion is saying the chart produced by the Joint Committee on Taxation is wrong.
I yield the floor.
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Mr. GRASSLEY. Mr. President, yesterday afternoon, a few of my friends on the other side made some assertions about congressional history, fiscal policy, and the role of bipartisan tax relief for the period of 2001-2006. The speakers were the distinguished junior Senators from Vermont, Ohio, and Minnesota. They are all passionate Members. They are articulate voices of the progressive, as they term it, or very liberal wing, as those of us on this side term it, portion of the Senate Democratic Caucus.
I respect the passion they bring to their views. But, as one of them has said frequently in his early months of Senate service, we are entitled to our opinions, but not entitled to our own facts. I couldn't agree more with that notion. In order to insure an intellectually honest standard of debate, both sides need to correct the record when they feel the other side has misstated the facts. It is in that spirit that I respond today.
I won't take this time to debate the merits of the surtax that they propose as a substitute revenue raiser in this bill. That can wait till we debate their amendment. I am going to focus on their assertions about recent fiscal history and the role of bipartisan tax relief.
Before I address the revisionist fiscal history we heard, I would like to set the record straight on congressional history.
It was said yesterday afternoon that there were 8 years of a George W. Bush administration and Republican Congress. If the Members making these assertions would go back and check the records of the Senate, they would find that during that 8-year period Republicans controlled the Senate when it was evenly divided for a little over 5 months. For almost half the month of January 2001, Democrats held the majority because outgoing Vice President Gore broke ties. For the balance of the period from January 20, 2001, through June 6, 2001, the Senate was evenly divided, but Republicans held because of Vice President Cheney's tie breaking vote.
On June 6, 2001, the Democrats regained the majority when Senator Jeffords, previously a Republican, began caucusing with Senate Democrats. For the balance of 2001, 2002, and in early 2003, Democrats held the majority.
For two Congresses, half of President Bush's term, Republicans held a majority. For the last 2 years of the George W. Bush Presidency, Democrats controlled both Houses of Congress.
When you add it up, with the exception of a little over 4 months when the Senate was equally divided, Democrats controlled the Senate for about half the period of the George W. Bush administration.
When you hear some of our friends on the other side debate recent fiscal history, these basic facts regarding political power and accountability are obscured. Perhaps it is their opinion that Democrats were not exercising majority power during that period, but the fact is that Democrats controlled the Senate for almost half the period of the George W. bush administration.
Now let's turn to the fiscal history assertions from my friends on the other side. The revisionist history basically boils down to two conclusions:
1. That all of the bipartisan tax relief enacted during that period was skewed to the top 1 percent or top two-tenths of 1 percent of taxpayers; and
2. That all of the ``bad'' fiscal history of this decade to date is attributable to the bipartisan tax relief plans.
Not surprisingly, nearly all of the revisionists who spoke generally oppose tax relief and support tax increases. The same crew generally support spending increases and oppose spending cuts.
On the first point, two of the three speakers from the other side voted for the conference report for fiscal year 2010 budget resolution. The third speaker was not a Member of this body at that time the conference report was adopted. I am not aware, however, of his opposition to that budget which was drawn up by the Senate Democratic Caucus.
That budget was similar to President Obama's first budget. A core portion of that budget, much ballyhooed by the Democratic leadership, was an extension of the major portion of the bipartisan tax relief enacted during the period of 2001-2006. As a matter of fact, roughly 80 percent of the revenue loss from that legislation, much criticized by the three speakers yesterday afternoon, is contained in the budget that two of them voted for. Eighty percent is usually a pretty fair endorsement of any policy. Again, I have not heard the third speaker, the junior Senator from Minnesota, indicate that he doesn't support the tax relief included in the Democratic budget. Perhaps I missed something. In addition, the three speakers need to pay attention to analyses from the nonpartisan Joint Committee on Taxation.
If they did examine those analyses, they would find that, in terms of the burden of taxation, the 2001 legislation redistributed the burden from lower income taxpayers to higher income taxpayers.
Now, I turn to the second fiscal revisionist history point. That point is that all of the ``bad'' fiscal history of this decade to date is attributable to the bipartisan tax relief plans.
In the debate so far, many on this side have pointed out some key, undeniable facts. We agree with the President on one key fact. The President inherited a big deficit and a lot of debt.
The antirecessionary spending, together with lower tax receipts, and the TARP activities has set a fiscal table of a deficit of $1.2 trillion. That was on the President's desk when he took over the Oval Office on January 20, 2009. That is the highest deficit, as a percentage of the economy, in Post World War II history.
Not a pretty fiscal picture. And, as predicted several months ago, that fiscal picture got a lot uglier with the $787 billion stimulus bill. So for the folks who saw that bill as an opportunity to ``recover'' America with government taking a larger share of the economy over the long term, I say congratulations.
For those who voted for the stimulus bill, including two of the three speakers to which I refer, they put us on the path to a bigger role for the government. Over a trillion dollars of new deficit spending was hidden in that bill. The Congressional Budget Office concluded that the permanent fiscal impact of that bill totaled over $2.5 trillion over 10 years. It caused some of the extra red ink. Supporters of that bill need to own up to the fiscal course they charted.
Now, to be sure, after the other side pushed through the stimulus bill and the second half of the $700 billion of TARP money, CBO reestimated the baseline. A portion of this new red ink, upfront, is due to that reestimate.
The bottom line, however, is that reestimate occurred several weeks after the President and robust Democratic majorities took over the government. Decisions were made and the fiscal consequences followed.
Some on the other side who raises this point about the March CBO reestimate. That is fine. But, if they were to be consistent and intellectually honest, then they would have to acknowledge the CBO reestimate that occurred in 2001 after President Bush took office. The surplus went south because of economic conditions. The $5.6 trillion number so often quoted by those on the other side was illusory.
The three members should go back and take a look at what CBO said at the time. According to CBO, for the first relevant fiscal year, the tax cut represented barely 14 percent of the total change in the budget. For instance, for the same period, increased appropriations outranked the tax cut by $6 billion. So, spending above baseline, together with lower projected revenues, accounted for 86 percent of the change in the budget picture. Let me repeat that. Bipartisan tax relief was a minimal, 14-percent factor, in the change in the budget situation.
Over the long term, the tax cut was projected to account for 45 percent of the change in the budget picture. Stated another way, the 10-year surplus declined from $5.6 trillion to $1.6 trillion. Of that $4.0 trillion change, the tax cut represented about $1.7 trillion of the decline.
Let's take a look at the fiscal history before the financial meltdown hit. That conclusion is, again, in this decade, all fiscal problems are attributable to the widespread tax relief enacted in 2001, 2003, 2004, and 2006.
In 2001, President Bush came into office. He inherited an economy that was careening downhill. Investment started to go flat in 2000. The tech-fueled stock market bubble was bursting. Then came the economic shocks of the 9/11 terrorist attacks.
Add in the corporate scandals to that economic environment. And it is true, as fiscal year 2001 came to close, the projected surplus turned to a deficit. I referred to the net effects of some of these unforeseen events on the projected $5.6 trillion surplus.
Now, yesterday afternoon's three speakers may so oppose bipartisan tax relief that they want to attribute all fiscal problems to the tax relief. The official scorekeepers show the facts to be different.
Those on this side of the aisle have a different view than the revisionists. In just the right time, the 2001 tax relief plan started to kick in. The fiscal facts show as the tax relief hits its full force in 2003, the deficits grew smaller. They grew smaller in amount. They grew smaller as a percentage of the economy. This pattern continued up through 2007.
If my comments were meant to be partisan shots, I could say this favorable fiscal path from 2003 to 2007 was the only period, aside from 6 months in 2001, where Republicans controlled the White House and the Congress.
But, unlike the fiscal history revisionists, I am not trying to make any partisan points. I am just trying to get to the fiscal facts.
So, let's get the fiscal history right.
In this decade, deficits went down after the tax relief plans were put in full effect. Deficits did start to trend back up after the financial meltdown hit. I doubt the fiscal history revisionists who spoke yesterday would say that bipartisan tax relief was the cause of the financial meltdown. So, aside from that unrelated bad macroeconomic development, the trend line showed revenues on the way back up.
But that is the past. We need to make sure we understand it. But what is most important is the future. People in our States send us here to deal with future policy. This budget debate should not be about Democrats flogging Republicans and vice-versa. The people don't send us here to flog one another, like partisan cartoon cut-out characters, over past policies. They don't send us here to endlessly point fingers of blame. Now, let's focus on the fiscal consequences of the budget that is before the Senate.
President Obama rightly focused us on the future with his eloquence during the campaign. I'd like to take 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.
President Obama was right.
We need a President, and I would add Congressmen and Senators, who can face the threats of the future. The legislation before us, as currently written, poses considerable threats to our fiscal future. It is too important to dodge. It is a bill that restructures one-sixth of the economy. It affects all of us and, more importantly, all of our constituents.
Grasping at ideas of the past or playing the partisan blame game will not deal with the threats to our fiscal future. Let's face the honest fiscal facts. Let's not revise fiscal history as we start this critical debate about the fiscal choices ahead of us. The people who send us here have a right to expect nothing less of us.
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