[Congressional Record Volume 156, Number 124 (Wednesday, September 15, 2010)]
[Senate]
[Pages S7119-S7126]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           SMALL BUSINESS LENDING FUND ACT OF 2010--Continued

  The PRESIDING OFFICER. The Senator from Maryland.
  Ms. MIKULSKI. Mr. President, I rise to speak on behalf of the bill.
  I rise to strongly support the pending bill, the Small Business Jobs 
and Credit Act. I do it because it will help small business create jobs 
in Maryland. I spent much of the last several months visiting worksites 
in Maryland, and it was an exciting time. Maybe orders and customers 
are not up, but enthusiasm and entrepreneurship is up, and absolutely, 
in many areas, consumerism and customers are up.
  I visited bakeries, microbreweries, factories of small machine tool 
companies wanting to retool. During that time I visited Main Street, 
small streets, rural communities. I talked with small business owners 
and their employees.
  What was loud and clear and visible was that small businesses are 
stressed and strained. Small businesses said: Hey, Barb, it is sluggish 
out there. There is uncertainty, but we believe we can expand. We 
believe we can grow our business, but we need help.
  They continually talked about their problems in having access to 
credit--not because they were not good risks but because there was not 
good money out there for them to borrow. Even though these businesses 
are thriving, they could not expand because they could not get the 
loans they needed to grow.
  I visited a startup green energy business whose demand is 
skyrocketing, but they need credit to expand their business and, I 
might add, certainty in an energy bill.
  I visited a wonderful family bakery which reminded me so much of my 
own grandmother's bakery. Well, they just do not bake bread, they build 
community and create jobs. They want to expand. They need access to 
credit.
  I visited a machine tooling business in Baltimore which does 
precision metal work for many of the components for our military, the 
space program. They, too, want to retool.
  These are ``good guy'' businesses, working hard, playing by the 
rules. They have jobs right here in the United States of America. They 
want to expand. They want to hire. They want to upgrade their 
equipment. They want access to credit. They need a government on their 
side and at their side.
  I believe that is what the Small Business Jobs and Credit Act will 
do. It will help businesses be able to get that much needed access to 
credit to be able to strengthen our economy.
  I know people are anxious about the economy. Many are worried their 
middle-class life is slipping away. But in Maryland we know we can 
count on small businesses to create jobs, to help people who are in the 
middle class stay there, and those who want to get there be able to do 
so through hard work.
  From beauty shops to biotech, there are family-owned businesses, 
small businesses in Maryland that need help. What they need is not a 
guaranteed outcome, but they do need to have access to credit.
  I am no Janey come lately on this issue of small business. My 
grandparents owned a local bakery shop. My father ran a small grocery 
store, alongside with my mother. I often watched him open very early 
for local steelworkers and automobile workers, people who worked making 
the famous National Boh beer right down the street. They would come and 
buy their lunches before going to the morning shift.
  We know what it is like to have a small business and to be able to 
meet a payroll and to be able to grow. I saw what it means to be able 
to provide service to the community, lend a helping hand, provide a 
good customer value for a hard day's work. I believe it is through 
these small entrepreneurial efforts that we will get our economy going 
and growing.

[[Page S7120]]

  We have bailed out banks. We have even bailed out other countries. 
Now we have to bail out the people who are building the United States 
of America--the people who are building jobs in the United States of 
America. That is what I think this bill will do.
  What I like about it is, it gets credit flowing to small business. It 
creates a Small Business Lending Fund at the Department of the Treasury 
to help those community banks at the local level lend to small 
businesses. It creates incentives for private businesses to invest by 
making the capital gains from small business stock tax free. It 
provides tax breaks that will help small businesses grow by making it 
less expensive to purchase new equipment. We help small businesses get 
started by doubling the amount of startup costs small businesses can 
deduct from their taxes.
  So let me repeat. No. 1, we create a Small Business Lending Fund at 
Treasury that guarantees access to credit. We make capital gains tax 
free. That will help small business investment. We will help make sure 
small businesses grow by making it less expensive to purchase new 
equipment because of the tax breaks we give, and we are going to double 
the amount of startup costs small businesses can deduct from their 
taxes to help make sure they can get a jump-start on getting underway. 
I believe we have practical, affordable solutions.
  Some people say: Is this a baby TARP? No, this is not a TARP. We do 
not bail out Wall Street. We help Main Street. We help all those people 
with a dream in their heart, with a small business underway, with the 
grit and determination to be able to create a job for themselves and 
for others and add a product and add value to the United States of 
America. These are jobs that will stay in the United States of America.
  So let's say goodbye to tax breaks to send jobs overseas, and let's 
say hello to tax breaks to make sure our small businesses can grow. I 
hope we pass this bill. I hope we get it done this week. I hope we get 
our economy rolling in the way we need to do so.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  The PRESIDING OFFICER. The Senator from North Dakota.


                          Unfinished Business

  Mr. DORGAN. Mr. President, I wish to speak today for a few moments 
about the unfinished business of the Senate, but I will focus on only 
one issue.
  We come now to September of an even-numbered year. We will have an 
election in November, and then we will have a lameduck session, 
apparently, and the Congress will end its session. Then the question 
is, What is left on the table? What is the unfinished business? What 
has not been done that needs to be done for this country? It is a very 
long list, unfortunately. I would say the reason, in most cases, is we 
have experienced in this Congress less cooperation and more 
determination to block almost anything than at any time I have seen in 
the 30 years I have served here. It doesn't matter what the issue is. 
We have had issues that are noncontroversial, that get 94 or 98 votes 
in favor of the issue, that have been blocked when brought to the floor 
on a motion to proceed. We have a noncontroversial issue, a motion to 
proceed brought to the floor on something on which there is no 
controversy, and it is subject to a filibuster, and then a cloture 
motion has to be filed. Then 2 days have to pass before it ripens. We 
have a cloture vote, and then following the cloture vote, the minority 
says: Well, we insist that the 30 hours postcloture be used. So 30 
hours has to be burned off. Only then can you get to a vote on a 
noncontroversial issue. Then you have the vote, and it is 98 to 1. That 
has happened throughout this year--continual efforts to block 
everything; deciding that the best strategy politically, apparently, 
for the minority here in the U.S. Senate is to block everything.
  The result is that the list of unfinished business in this Senate is 
unbelievable. Not one appropriations bill will be done when we break 
for October. An energy bill which I intend to speak about today is 
critically important for this country's future and has not been done. 
Extending the tax extenders, the research and development tax credit, 
and so many other issues that are important have not been done. It is 
not because Senator Reid hasn't tried as majority leader. He has tried 
in every way to make progress on these issues. We have just not been 
able to get it done.
  Let me speak for a moment about one issue that will represent the 
unfinished business, regrettably, unless there is a change of heart 
somehow and perhaps at the end of this session, in a lameduck session, 
we are able to get it done; that is, energy.
  Energy affects everyone's lives. They don't think about it, but they 
get up in the morning and perhaps take a shower. That is energy coming 
from a hot water heater. They turn off an alarm clock first. That is 
energy coming from electricity. They then go down and perhaps have a 
slice of toast. That is energy from the toaster. They have some coffee, 
which uses energy from a stove. They put a key in the ignition and 
drive to work--energy from the gas tank of that vehicle. Almost every 
waking moment is blessed with abundant energy resources in this 
country. We don't even think about it. We do all of those things in the 
first hour of our day and never think about the fact that energy played 
such a central role.
  Here is the dilemma. Our country, in large part, runs on oil--not 
exclusively but in large part--oil and natural gas. Coal is a very 
important part of producing electricity, but oil is 70 percent of our 
transportation, and here is the circumstance we face. Nearly two-thirds 
of the oil we use in America we have to get from somewhere else. We use 
one-quarter of all the oil that is sucked out of this planet every 
single day. We put straws in this planet, called drilling rigs, and we 
drill holes very deep into the surface of this planet, and we find oil 
and we suck oil out of the planet, and one-fourth of it must come to 
this little spot on the globe called the United States of America. That 
is the prodigious appetite we have for energy, and it enhances our 
lives in every way. But it doesn't add up. We use one-fourth of all the 
world's energy in our country, but we produce only 10 percent of the 
world's energy, and we have only 3 percent of the world's energy 
reserves. That is not an equation that adds up.
  So if two-thirds of our oil comes from outside our country--some of 
it from countries that don't like us very well--what are the 
consequences of that? Does that represent adequate national security 
when we are dependent on that amount of oil from others? It does not. 
It represents a very deep vulnerability that one day that supply of oil 
could be cut off from our country, and our economy would be flat on its 
back.
  What do we do about that? Well, we should produce more, to the extent 
we can, and we are, and I will talk about that in a moment. We should 
conserve more. We should be concerned about the efficiency of its use. 
We should find new sources of energy. We should convert the automobile 
fleet, to the extent we can, to an electric fleet. We should continue 
to invest in the longer stream strategies such as fuel cells and 
hydrogen. All of those things are necessary. We should have a renewable 
electricity standard that drives the production of electricity from 
renewable energy that says: Here is where America needs to go. Here is 
what we want to produce in our future. Count on it, believe in it, 
invest in it, because this is America's policy for the next decade. We 
should do that. It is called a renewable electricity standard. We 
should build a transmission capability around the country, just as we 
did interstate highways--an interstate transmission grid that allows us 
to produce energy where the wind blows and the sun shines and move it 
to the load centers that need the energy. All of these things are 
necessary. Yet the prospect is that they will all be left on the 
drawing table at the end of this session of the Congress.
  Let me describe, if I might, what we have done and what we threaten 
to lose. A year ago last June, we passed on a bipartisan basis out of 
the Energy Committee here in the Senate a piece of legislation that 
reduces our dependence on foreign energy; increases our domestic 
production of energy from virtually all sources; establishes a 
renewable electricity standard; helps create a transmission 
superhighway; electrifies and diversifies our vehicle fleet;

[[Page S7121]]

enhances our energy efficiency; expands clean energy technology; and 
will train the energy workforce of tomorrow. We did all of that, passed 
that out of the Energy Committee and did it on a bipartisan basis. And 
we threaten to lose all of that progress at the end of this session 
unless we get some cooperation on the floor of the Senate.
  I have described a bit of this, but let me do it by chart. Our 
dependence on foreign energy--and this translates mostly to foreign oil 
by sector. You can see that the most significant sector that increases 
our dependence on foreign oil is the transportation sector. We use 70 
percent of our oil in the transportation fleet. Seventy percent of our 
oil is used in transportation. That is why all of us understand that we 
have to convert.
  By the way, moving to an electric transportation fleet--and I will 
talk a bit about that later--it is not new; it is back to the past in 
many ways. When President Taft decided that the horse and buggy had 
outlived its usefulness as a mode of transportation outside of the 
White House--he ordered an electric vehicle, the Baker electric 
vehicle. So the fact is, it is not as if electric vehicles haven't been 
around; they have.
  When Henry Ford decided that the Model T shall have an internal 
combustion engine because Thomas Edison suggested that was the way to 
go, that determined for the future what we were going to be doing for a 
long, long time. Then in 1916 our country said: You know what we want 
to do, we want to reward anybody that goes and finds oil and gas 
because we are building this automobile fleet with the internal 
combustion engine that needs to use gas stations every week or two, so 
we need to have gasoline at these gas stations. In 1916, we decided as 
a country to say: If you are looking for oil and gas, God bless you. We 
want to reward you. We are putting in place deep, permanent tax 
incentives to say: You go look for oil and gas because that is good for 
the country.
  So here we are nearly a century later, and the problem is that we now 
know that being dependent on others for two-thirds of our oil--70 
percent of which is used to run our transportation fleet--holds America 
hostage. It holds our economy hostage and holds our future hostage. So 
what do we do about that?
  Here is a chart that shows the use of energy in this country. At this 
point, coal fuels about half of the electricity generated in our 
country. That comes from coal. There is a problem with coal, and that 
is, when you burn it to produce electricity, it puts carbon into the 
atmosphere, and we now know that contributes to climate change and 
global warming, putting more and more carbon into the atmosphere is 
troublesome.
  So now we come to an intersection that is different from any other 
intersection we have been at before: trying to ensure a better energy 
future and at the same time address climate change. That is a pretty 
difficult proposition but not impossible.
  By the way, our energy future will not be a future without coal, so 
the question is, How do we deal with the fact that burning coal 
produces carbon? Well, the energy legislation we have produced begins 
to address that by saying that there are a lot of ways to separate 
carbon when coal is burned and to use that carbon in a lot of different 
ways, one of which is to put it underground to enhance oil recovery 
from an oil well. If you put carbon deep into the ground in an oil well 
that is almost depleted, you can move oil out of that oil well. That is 
called enhanced oil recovery. Another way is just storing this carbon 
underground. Another is to understand there are uses for carbon that 
can produce additional fuel. You can take the carbon from a coal plant, 
strip the carbon from the emissions, and use it to feed algae. Algae is 
that single-cell pond scum that you see--the green scum on top of 
water. But if you grow algae--and how does algae grow? In water, 
sunlight, and CO2. To grow algae, you take the 
CO2, grow algae with it and then harvest the algae, and you 
then get diesel fuel. So you create something--you have a problem that 
creates a solution. Solve a problem by creating a product. That is 
another approach. There are more. There are other ways to address this.
  There is a patent by a guy in California who says he has the silver 
bullet. You can use coal and get rid of the CO2, because he 
mineralizes the entire effluents from a coal plant and turns it into a 
product that encompasses all of the CO2 that is harder and 
more valuable than concrete. So that brings the cost of capturing and 
containing CO2 down to near zero, he says. I don't know 
whether that is accurate; all I know is there are a lot of interesting 
ideas out there about how to continue to use coal and protect this 
country's environment at the same time.
  I would say one other thing about this. A woman scientist from Sandia 
National Laboratory testified before a subcommittee that I chaired, and 
she said: You think of carbon, CO2 emissions, as a problem. 
Why don't you think of carbon as a product? Then she described what you 
can do with carbon as a value-added product. She is absolutely right.
  I believe that in 5, 10, 15, 20 years, if we make the right 
investments, we will almost certainly be able to continue to use coal, 
our most abundant resource, and do it in a way that protects this 
country's environment by sequestering and providing a beneficial use 
for carbon.
  So 48 percent of the fuel used for electricity comes from coal. As 
you see, some comes from natural gas, some is hydroelectric, and that 
represents a descriptive use of the various kinds of resources in this 
country.
  I mentioned a while ago that the Energy bill had what is called a 
renewable electricity standard--RES. Why is that necessary? Because you 
have to decide where you are headed. You have to drive toward a goal. I 
support a 20-percent renewable electric standard. If I buy a kilowatt 
hour of electricity, I want 20 percent of that to come from renewables. 
Twenty percent of that, by 2020, would create 100,000 more new jobs. 
But much more important than that is it would put us on the road to 
what we should be doing; that is, maximizing the production of 
renewable energy.
  The fact is, taking energy from the wind makes a lot of sense. It is 
not polluting. Somewhere in this country, the wind blows almost all the 
time. Perhaps I have a vested interest because the Department of Energy 
says the State of North Dakota is the windiest State in America. We are 
born leaning to the northwest. There is just a lot of wind in our 
State. So we have the capability all across this country to produce 
substantial amounts of wind energy.
  This picture shows what we are doing these days in sunflower fields, 
where we grow sunflowers and harvest energy from the wind. It is really 
pretty simple and works very well.
  This chart describes how dependent and how addicted we are to oil. 
The top oil consumers in 2008--you can see the green line is the United 
States. It far exceeds the use of oil by anyone else on this planet.
  China is next but, of course, China has, I think, 1.4 billion people.
  Tomorrow there will be, on Capitol Hill, a Nissan LEAF. I am not 
advertising for Nissan, I have never driven one. I will drive one 
tomorrow, because they have a new electric car coming here for people 
to test drive. I have described a bit about the electric vehicle 
future, and I, along with Senators Alexander and Merkley, from Oregon, 
have introduced legislation that would move this country toward an 
electric drive future. I think it is a great piece of legislation.
  This country needs to decide where it is headed and then create 
incentives and a roadmap to get there. There is an old saying that if 
you don't care where you are going, you are never going to be lost. It 
is true for this country as well. I believe it is far better for this 
country to set a course, create a destination, and then say to people 
and investors--to everyone--here is where we are headed. You can count 
on it, believe in it, and invest in it, because here is where America 
is going. That is what we ought to do.
  There is not a lot of time left in this legislative session. One of 
the very important pieces of unfinished business reflects what I have 
described in general form; that is, energy production, conservation, 
excessive dependence on foreign oil, a concern about the environment, 
energy conservation and efficiency, and all of this is critically 
important.
  I come from a State that is producing a lot of energy, no question 
about that.

[[Page S7122]]

When I was a little boy, in my hometown of 300 people, there was never 
much going on. So we would drive up and down Main Street forever seeing 
if something was going on, and it never was. Sometimes we would go to 
an adjoining town 20 miles away to see if there was anything going on 
there, because that was a town of about 800 people--much larger--and 
there was never anything going on there either.
  What happened one day is that news reached our town that somebody was 
going to drill an oil well 2 miles west of Regent, ND. We thought this 
was unbelievable, something is going to go on. So they hauled in these 
big rigs with a truck, and lots of metal, and they built this little 
pyramid, and all these strange, new people were in our town, and then 
this oil rig went up--a drilling rig. Then they put lights on it. At 
night, in a town where there was nothing to do, we would drive out and 
park our cars and look at the lights on the oil rig because there was 
something happening. It was so exciting. I can remember as a little boy 
looking at that oil rig thinking that this is unbelievable, something 
has come to our town--it and a circus, but they were in different 
years. It took some while to put it up. They do it now in 30 days. But 
it took a while to drill this well, and then our town was like a 
balloon that lost the air, because they discovered it was a dry hole. 
So that was my acquaintance with oil and drilling and the people who 
decide to go out and look for a source of energy, and remembering the 
lights as a young boy.
  Now, in my State, I asked the U.S. Geological Survey about 3, 3\1/2\ 
years ago, to do an assessment of what is called the Bakken shale. That 
is a formation that is in most of western North Dakota and a fair 
amount of eastern Montana. It is a formation of shale rock that is 
10,000 feet, or 2 miles, below the surface of the ground. It is very 
extensive. They do core samples way down so they know where that shale 
exists. It is 100 feet thick. When I had the U.S. Geological Survey 
assess how much oil would be recoverable from the Bakken formation--
which you could not have gotten 10 years ago, because we didn't know 
how--the USGS said: We believe there is up to 4.3 billion barrels of 
recoverable oil from that. That is the largest amount of recoverable 
oil, using today's technology, that we have ever assessed in the 
history of the lower 48 States. We have 120 or 130 oil rigs in western 
North Dakota drilling wells, and they each drill a new well in 30 days, 
and then it moves. At each well site, there are 1,000 discrete truck 
visits back and forth. You can imagine the activity that is going on. 
They go down 10,000 feet, with 1 drilling rig, 2 miles down, and make a 
big curve with that rig and go out 2 miles searching for the middle 
third of a 100-foot seam. That is how sophisticated it is. When they 
find it, they go out 2 miles, and then they fracture that rock with 
hydraulic fracturing--water under high pressure--and the oil drips, and 
they put a pump in, and they are getting up to 2,000 barrels per day 
out of this Bakken formation in some of these wells. It is 
unbelievable.
  I didn't intend to describe it at that length, but the point is we 
are producing more oil in this country. We are producing more, but not 
nearly enough to make us less dependent, or even close to independent. 
We are still so unbelievably vulnerable to foreign oil. If nothing else 
would drive the Congress to decide we have to do better and do more in 
energy, it ought to be that we are unbelievably dependent. God forbid 
that some day somebody wakes up in this country and understands that 
none of their electricity works because terrorists have interrupted the 
supply of oil, they have brought down the grid system, and somehow we 
don't have electricity and we don't have oil.
  This country needs better security and more energy security than 
that. That is the reason to have an energy bill. I have said often that 
I believe in doing everything. I come from a high school class of nine. 
There were no foreign languages in that class, so I didn't take Latin, 
but I have always felt these Latin words describe my approach on 
energy: totus porcus. I think that means ``whole hog.'' I believe we 
ought to do everything we can and do it well. Should we maximize 
renewables? Yes. Should we drill in areas where there is oil and gas 
domestically? The answer is yes. Should we proceed with ethanol and the 
biofuels? You bet your life. Should we continue to work on coal and 
make the investments necessary to sequester carbon or use it to produce 
other fuel? The answer is, of course, that we should do all of that.
  Should we be more conservation minded? We are prodigious users and 
wasters of energy. I also think of the words totus porcus when I pull 
up to a stop light in Washington, DC, and somebody pulls up next to me 
driving a Hummer; it is like driving a tank down the streets of a major 
American city, and it is getting probably 6 miles per gallon. Now I 
will hear from them, I am sure.
  This country can do better in every single area of energy: 
conservation, efficiency, energy production, and also distribution, and 
the pipelines that are necessary, and the transmission lines that are 
necessary.
  I mentioned earlier that the Energy bill we passed has the capability 
of helping produce an interstate highway of transmission. That is very 
important. When the winds blow--if you are going to gather energy from 
the wind and use it, you have to transmit it someplace on transmission 
lines. We can't build them in this country. We have built 11,000 miles 
of natural gas pipelines in the last 9 years, and do you know what we 
have done on high voltage interstate transmission lines? It is 660 
miles. Why? You can't build them. There are a dozen ways for people to 
say no, and they do: not on my property, not in our State--not here or 
there. So you have planning problems, siting problems, and price 
problems.
  We are probably not going to be able to get to this bill now, which 
will represent the important unfinished business this year and 
addresses these important issues. I may well be the only person who 
cares. There is not a big fuss here about leaving on the floor an 
energy bill that was bipartisan and was passed by the Energy Committee 
a year and a quarter ago now. I think others in this country understand 
the vulnerabilities of this country. We respond sometimes to 
catastrophes. We respond sometimes when something awful happens. So 
some day if, God forbid, we wake up and flip the switch and the lights 
don't come on, or we get in our vehicle and go to find oil and it 
doesn't exist, so there is no gas for the cars, then we will understand 
that somehow, some way, we should have done something that addresses 
what we know is a vulnerability for this country.
  The intersection of better energy policy and policy that addresses 
the issue of climate change is an intersection we can't ignore. We are 
at that intersection, and there is about to be an accident unless we 
make smart choices. I hope in the coming weeks in the Congress we 
might, all of us, decide let's try to reduce that list of unfinished 
business by at least doing something that represents a bipartisan 
consensus out of a committee, a major committee, in this Congress, the 
Energy Committee. This is a good bill that deserves passage. It will 
strengthen this country's energy and America's security generally.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Franken). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LEVIN. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. Mr. President, it is very easy to say we need to create 
more jobs. It has proven much more difficult to get bills passed to 
accomplish that. On both sides of the aisle we say we are in agreement 
that small businesses are the engines of job growth. Before us is a 
bill that would put our words into action by enacting a number of 
provisions that will help these businesses survive and thrive, keeping 
current workers on the payroll and creating new jobs. For months this 
legislation has been bottled up in this Chamber, held up by a 
filibuster. The filibuster has come despite the fact that business 
groups have strongly, almost unanimously--in fact, probably 
unanimously--called for its passage. It promises to help create perhaps 
half a million jobs that our economy needs so desperately to get moving 
again.

[[Page S7123]]

  I am hopeful we will finally end this needless delay and get small 
businesses the support they need, get capital flowing, and get more 
Americans back to work. We are on the verge of doing that, and I hope 
we can do it within the next 24 hours.
  This bill is going to do that by addressing a key problem small 
businesses now face--difficulty in obtaining the capital they need to 
operate, expand, and grow. One of the most important ways in which this 
bill will do that is through a State small business credit initiative. 
I have sought inclusion of this provision along with many Senators, 
including Sherrod Brown and Senators Stabenow, Warner, Baucus, Shaheen, 
Begich, McCaskill, and others, in order to provide badly needed 
assistance to State and local programs across the country that help 
small businesses grow. Let me explain how this works.
  Just as the recession has battered the value of our homes, it has 
also battered the value of business property such as real estate, 
factories, and equipment. That has damaged the ability of small 
businesses to get bank financing because it has lowered the value of 
property they can offer as collateral. Businesses with plenty of 
customers and excellent credit histories have been unable to get the 
financing they have relied on and need, endangering existing jobs and 
preventing the creation of new jobs. My State and many others have 
begun programs designed to deal with this problem. Thanks to our 
collateral support program in Michigan, companies such as Saline 
Electronics, an electronics manufacturing company, and Display Pack, a 
packaging company, have been able to expand production and add workers. 
Just since 2006, with just $3 million in State money, Michigan's 
capital access program has leveraged nearly $88 million in private 
lending and saved or created an estimated 13,000 jobs. But the demand 
for this successful program far exceeds the resources available.
  In Michigan and elsewhere, these programs can't help enough of the 
businesses that could effectively use support. Lack of resources for 
small businesses is stifling job creation by small business.
  The legislation before us includes what we call the State small 
business credit initiative which will make available $1.5 billion to 
State and local programs that help small businesses get the loans they 
need. It will help provide many times that much in private loans to 
small businesses.
  There are other major provisions of this bill that will help small 
businesses create jobs. This bill contains $12 billion in tax cuts for 
small businesses, tax cuts that will help them put their money into 
growing their businesses and creating new jobs. It will more than 
double the limits for two of the Small Business Administration's most 
important loan programs and provide other enhancements to the SBA loan 
programs, enhancements that will increase lending to small business by 
over $5 billion in the first year.
  The bill also includes a proposal which I suggested for what we call 
an intermediary lending pilot program which allows the SBA to make 
loans to intermediary lenders such as business incubators which can 
then loan that money to growing businesses. The bill also includes the 
small business lending fund. This provision is very similar to the Bank 
on Our Communities Act. It will provide capital to local community 
banks, banks on which small businesses depend, so they in turn can lend 
that money to small businesses. It does all this in a way which will 
not add to our budget deficit.
  This legislation has the support of nearly 200 business and financial 
industry groups. If these groups, many of which disagree with one 
another on many issues, can come together to support this legislation, 
it speaks volumes about the positive impact this bill is going to have.
  I thank our Small Business Committee chairman, Senator Landrieu, for 
her extraordinary leadership in guiding this bill to the Senate floor. 
She has shown talent, dedication, a willingness to work with Senators 
of both parties, and a determination to overcome the obstacles that 
have threatened to prevent us from providing the support small 
businesses need. The Senate and the Nation are benefiting greatly from 
the leadership of Senator Landrieu.
  This body should do everything within its power to help the 
businesses of our Nation put workers back on the job. We cannot afford 
to miss opportunities to boost employment because the hundreds of 
thousands of people in my State and the millions across the country who 
have lost their jobs in this recession deserve our very best efforts.
  All of us, Democrats and Republicans, say we support small business. 
We have an opportunity in the next few hours to back up our words with 
actions.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, we have the Small Business Jobs Act of 
2010 before us. For more than a year now, the mantra of my colleagues 
on the other side of the aisle, meaning the majority party, has been: 
jobs, jobs, jobs. Unfortunately, the only jobs the policies of my 
colleagues on the other side of the aisle have created are government 
jobs. The legislative fixes proposed by the other side have fallen 
short in creating private sector job growth.

  I have a chart here that will show unemployment reaching a high of 
10.1 percent in October 2009. The administration promised that 
unemployment would not go above 8 percent if we enacted their $800 
billion stimulus bill. Moreover, they asserted that 90 percent of the 
jobs would be in the private sector. The unemployment numbers have come 
down from their high in October, but this has not been the result of a 
robust hiring in the private sector. To the contrary, many people are 
simply no longer counted as being unemployed because they have stopped 
looking for work. For those who did find work, many found work with the 
U.S. Census Bureau helping to complete the 2010 census. The 
unemployment rate reached a low of 9.5 percent in July but once again 
has ticked up to 9.6 percent as 114,000 temporary census jobs ended. 
While those who put their faith in the stimulus package believed that 
this summer would become known as ``recovery summer'' due to all of the 
stimulus projects underway, it actually has ended in what a National 
Public Radio story termed as an ``economic pothole.''
  To be fair, the private sector employment number has inched up 
slightly in the past few months. For August, the Bureau of Labor 
Statistics reported that private sector employment payroll edged up by 
67,000. However, the problem is that around 150,000 jobs need to be 
added each month just to keep up with the growth in population. So 
basically, by adding 67,000 jobs, we are treading water too slowly to 
keep our head above water. Moreover, as pointed out in the September 
issue of the National Federation of Independent Business Small Business 
Economic Trends, 45,000 of those 67,000 private sector jobs were in 
education and health care. These jobs are heavily dependent on 
government spending, and that means these are not typical small 
business jobs on Main Street.
  It is clear, however, that the small businesses remain pessimistic 
about the economy and are hesitant to hire new workers. According to 
the National Federation of Independent Business's most recent survey--
and we have a chart here on this point--a net negative 1 percent of 
business owners plan to create new jobs in the next 3 months. A net 
negative 8 percent of business owners expect the economy to improve. 
Only 4 percent of the business owners said it was a good time to 
expand. A net negative 30 percent of owners reported higher earnings. 
This last component is especially important for businesses when it 
comes to hiring new employees since businesses need to know that 
revenue generated from an additional employee will exceed the costs.
  Given the current unemployment rate, it is not surprising, then, that 
we are once again looking at ways to create jobs. Hence the bill that 
is before the Senate. The question remains: Are we going to continue to 
look to the government to be the job creator or are we going to realize 
that job creation

[[Page S7124]]

and real economic growth comes from the private sector? This question 
also brings to mind that government doesn't create wealth; government 
consumes wealth. So if we are going to increase the economy in this 
country, it has to be done through the private sector.
  The bill before us appears to recognize the importance of the private 
sector--in particular, the importance of small businesses and 
entrepreneurs in getting our economy back on track and getting the 
employment numbers to move in the right direction. I have been beating 
the drum for some time now that if we want to get our economy back on 
track, we need to focus on small business. After all, small business is 
responsible for creating 70 percent of the jobs in our economy. That is 
not a Republican percentage put out there by my party. That is also a 
figure I have heard the President of the United States, our President, 
say in speeches as well--70 percent of the new jobs are created in 
small business.
  During the debate on the $800 billion stimulus bill, I pointed out 
that it contained too little in terms of provisions aimed at small 
business. In all, less than one-half of 1 percent of the stimulus bill 
was tax relief for small businesses. Unfortunately, my concern that the 
stimulus bill provided too little relief to small businesses has proved 
correct. Since the stimulus bill was signed into law, small businesses 
have been hemorrhaging jobs. According to the ADP national employment 
data, since the stimulus was enacted, small businesses, which are those 
defined as fewer than 500 employees, have lost a net amount of 2.6 
million jobs. During this same time, large businesses, which are those 
with over 500 employees, lost a net amount of 716,000 jobs. According 
to this data, small businesses have accounted for nearly 80 percent of 
the decline in employment since the stimulus bill was signed into law.
  With the consideration of the small business package before us today, 
I hope this body is finally starting to get serious about tracking 
unemployment through a true jobs bill. Compared to previous stimulus or 
jobs bills promoted by the majority, this small business bill has a 
rather modest cost, with tax provisions totaling about $12 billion. It 
is targeted at job creation by providing small businesses with 
incentives to invest in new equipment, expand their operations, and 
ultimately hire new employees. The bill includes provisions that would 
encourage small businesses to invest in new equipment and real property 
by increasing the amount of capital expenditures small businesses can 
expense. For equipment, the amount that can be expensed is increased to 
$500,000 and for real property, to $250,000.
  Moreover, it encourages investment by providing additional first-year 
bonus depreciation. It promotes entrepreneurship in another way by 
increasing the amount allowed as a deduction for startup expenditures. 
It increases access to capital by allowing 100 percent of gain from 
investment in qualified small business stock to be excluded from 
income. It also takes the general business credits out of the 
alternative minimum tax for those sole proprietorships, flowthroughs, 
and nonpublicly traded C corporations with $50 million or less in 
annual gross receipts. Another way is increasing access to capital by 
extending the 1-year carryback for general business credits to a 5-year 
carryback for small businesses.
  Finally, this bill promotes small business fairness by limiting harsh 
penalties that have been imposed on small businesses by the IRS and 
equalizing the tax benefits for health insurance that self-employed 
individuals may receive to those received by employees.
  In regard to the Small Business Administration provisions, I strongly 
support many of the bipartisan provisions included in the bill. This 
legislation would increase small business lending by lowering small 
business loan program fees while at the same time raising loan 
guarantees and lending limits. Specifically, this bill extends the fee 
reductions and eliminations for the Small Business Administration's 
7(a) program and 504 program and the 90-percent loan guarantee limit 
for the SBA's 7(a) program. I am pleased that these well-established, 
effective measures have been included in the bill. Raising the 7(a) 
guarantee rate and reducing lenders' and borrowers' fees in the 7(a) 
and 504 loan programs has been enormously successful. These 
modifications, which expired in May, have led to a significant increase 
in lending capacity and access to capital.
  I am a supporter and, in fact, have been a leader of the many 
bipartisan small business provisions in the current small business 
package. I am an original cosponsor of S. 3604, standalone legislation 
introduced by Senator Snowe, the ranking member of the Committee on 
Small Business and Entrepreneurship, which would extend the same Small 
Business Administration lending provisions that are in the bill 
currently before the Senate.
  Additionally, many of the small business tax incentives included in 
the small business package were taken from legislation I introduced 
last year entitled the ``Small Business Tax Relief Act of 2009.'' Of 
course, there are differences and additional provisions I would have 
liked to have been included, but, as with any piece of legislation in 
the Senate, there is a need to compromise if you want to get anything 
done. My bill generally would have made the small business tax 
provisions permanent law. I believe this would have provided small 
businesses with certainty and promoted job creation over the short run 
as well as the long run. However, the Senate small business package 
generally only makes the tax provisions applicable for 1 year. That 
gets us back to the point that the word ``uncertainty'' crops up so 
often when used by small businesses as well as big businesses--the 
uncertainty of what Congress is going to do or the fact that when they 
make policy, they don't make it for a long enough period of time.

  That word, ``uncertainty,'' is the one reason jobs are not being 
created. It is kind of a sin that Congress would bring about this sort 
of uncertainty--or maybe the executive branch of government is bringing 
about some uncertainty--when, in fact, corporations have a historically 
high amount of cash just lying around. The last figure I saw was $2.1 
trillion, and with $2.1 trillion, one would think there would be a lot 
of jobs expanded, except the people who could do it don't know what 
Congress is going to do to them next, so they are taking caution. Well, 
if we could reduce that caution and encourage them a little bit by 
letting them know what we are doing over the long haul, it would go a 
long way to getting this unemployment down.
  Getting back to what I said, I would have liked to have seen in this 
bill an additional provision from my bill included in the final 
package. This provision would have provided small businesses with a 20-
percent deduction off of their small business income. It is unfortunate 
that this provision was left out. This was the largest and most 
important provision of the bill I introduced in the summer of 2009.
  However, in all, the tax provisions included in the Senate small 
business package provide real relief to small businesses. They 
generally have the support from Members on both sides of the aisle. In 
fact, you would have thought this small business bill would have been a 
slam dunk. However, the Democratic leadership has used the small 
business bill as a political football, scoring political points. The 
majority leader refused to allow the small business bill to be 
considered under regular order. The majority leader filled the 
amendment tree, thereby limiting amendments that could be offered. The 
Democratic leadership and the administration then proceeded to blame 
Republicans for blocking relief for small business. This is despite the 
fact that the Democrats were unable to get their own Members in line on 
the small business package. It still remains unclear whether the 
Democrats in the House, with their large majority, will pass the small 
business bill should it pass this body.
  Moreover, the waters of the small business package were further 
dirtied by the inclusion of a controversial lending provision that 
would create a $30 billion lending fund. This fund is designed to 
provide billions of taxpayer dollars to banks for the purpose of making 
loans to small businesses. To me and to many experts, the fund 
resembles the TARP bailout program, which has been badly mismanaged.

[[Page S7125]]

  Elizabeth Warren, head of the TARP Congressional Oversight Panel, 
expressed skepticism that the fund would be effective in increasing 
small business lending.
  She stated that:

       Such a fund runs the risk of creating moral hazard by 
     encouraging banks to make loans to borrowers who are not 
     creditworthy.

  The Special Inspector General of TARP stated that:

       In terms of its basic designs, its participants, its 
     application process, and perhaps its funding source from an 
     oversight perspective, the [small business lending fund] 
     would essentially be an extension of TARP's Capital Purchase 
     Program.

  There is also disagreement about the cost of the program. Proponents 
argue that the lending fund will raise $1.1 billion. However, the 
Congressional Budget Office has indicated that if you score the fund on 
a fair value basis, the program would score as a cost to taxpayers of 
$6.2 billion. The Congressional Budget Office has indicated that the 
fair value basis is a more comprehensive measure of the cost than 
estimates done on a cash basis.
  Many Members in this body voted for the Emergency Economic 
Stabilization Act in 2008 because we were led to believe our economy 
was on the brink of failure. We were told the Treasury Department would 
purchase toxic assets. But after its passing, the executive branch 
changed course and picked winners and losers. Where? Not on Main Street 
but on Wall Street.
  We should not be fooled again by the same officials at Treasury who 
have mismanaged TARP and have been less than transparent with the 
American people about how the taxpayers' money has been spent.
  I compliment my friend, Chairman Baucus, for diligently pressing the 
tax provisions in this bill. There are many good things in this bill, 
but I believe it could have been better. Unfortunately, the Democratic 
leadership is more interested in scoring political points than actually 
providing relief to small businesses. If the majority was actually 
interested in passing small business relief, a small business package 
could have been put together that would have garnered 80, 90, or more 
votes. But instead the majority leader filled the tree, prohibiting 
amendments being offered to improve the bill.
  The small business fund in the bill just doesn't have the safeguards 
in place to ensure that recipients are creditworthy or that taxpayers 
may be made whole in the end.
  Should this bill be signed into law, I will do my part to make sure 
the implementation is in the best interest of the taxpayers as well as 
small businesses.


                      Watch-Dogging the Watchdogs

  Mr. President, I want to speak about watch-dogging the watchdogs.
  I first started watch-dogging the Pentagon in the early 1980s, when 
President Reagan was trying to ramp up the defense budget. A group of 
Defense reformers were examining spare parts pricing. We found the 
Pentagon buying a $750 toilet seat and $695 ashtrays for military 
airplanes.
  That experience taught me an important lesson: If you are going to 
watch-dog the Pentagon like the inspector general, or IG, is supposed 
to do, then you better sharpen your wits and have the tools of the 
trade ready.
  One of the most important oversight tools is the simple tool of the 
audit. The audit is the IG's main weapon for detecting and reporting 
fraud, waste, and theft. Mr. President, I am sad to report that the 
IG's Audit Office at DOD is not ready to tackle fraud and waste. The 
lack of IG audit readiness comes at a time when aggressive audits are 
sorely needed.
  Secretary Gates recently announced that he wants to cut $100 billion 
in wasteful spending. But he is relying on the Pentagon bureaucrats to 
eliminate it. Asking those who created the waste in the first place to 
then turn around and get rid of it is not a good plan. He needs a 
better mix of weapons. To win this declared war on waste, Secretary 
Gates needs the independent backup from the IG. Unfortunately, the 
inspector general's Audit Office is AWOL doing policy audits instead of 
financial audits.
  Policy audits are not known for exposing waste. Last year, I received 
a series of anonymous letters alleging mismanagement and low 
productivity in the IG's Audit Office. This is a huge Audit Office. It 
has 765 auditors and an annual budget of $90 million.
  In response, I and my staff conducted an indepth review of all the 
pertinent issues. That oversight report was just completed, and I 
forwarded it to Secretary Gates with recommendations within that report 
for corrective action.
  My oversight should fit right in with Secretary Gates' plan to cut 
waste at the Defense Department. My people in Iowa are aching for some 
commonsense fiscal policy in Washington.
  My oversight report puts the spotlight on a good starting point. That 
oversight report indicates this vital piece of inspector general 
oversight machinery--the important tool of the audit--has been 
disabled. It is broken, leaving hundreds of billions of tax dollars 
vulnerable to fraud, waste, and abuse, outright theft.
  The status quo is totally unacceptable. The IG's audit machinery 
needs to be brought back up to standard.
  IG Heddell needs to hit the reset button. He needs to refocus the 
audit effort on priority areas consistent with the inspector general's 
core mission, which is to detect and report fraud, waste, and abuse.
  The problem identified in my oversight report is twofold. The first 
big problem is the broken Defense Department's accounting system. That 
system is incapable of generating accurate and complete financial data.
  The success or failure of an audit turns on the quality of data 
available for that audit. Unfortunately, the quality of Defense 
Department data presented to auditors should probably be rated as poor 
to nonexistent. The consequences are then predictable. Auditors 
consistently report ``no audit trail found.'' But what does ``no audit 
trail found'' mean? It means critical supporting documentation and data 
are missing. Vital records are not available for audit. Money has been 
paid out but for what? When there is no audit trail to follow, that 
question gets no answer.
  The ``no audit trail'' finding is like a bad toothache that doesn't 
go away. The IG's own audit manuals warn that a ``no audit trail'' 
scenario is a red warning flag. It is a very common indicator of fraud. 
So we have clear-cut indicators of fraud that show up in one IG report 
after another and, do you know what. Nothing seems to happen. It is 
like the IG is howling in the wilderness. There is no followup, no 
corrective action.
  Why is this being tolerated? How many more times does the IG need to 
be confronted by such obvious signs of fraud before decisive action is 
taken?
  Maybe next time the auditors can't find an audit trail on a big 
contract, they should ``lock the doors and call the law''--just drop a 
net on the place and call for backup.
  This brings me to my second audit issue. The IG's Audit Office has 
allowed itself to be buffaloed by the ``no audit trail'' scenario. It 
just backs off and rolls over instead of attacking the problem head on 
with solutions.
  The heart and soul of my financial oversight operation is a contract 
audit.
  In the government, there can be no expenditure of public money 
without a written binding contractual agreement. That document must 
specify what goods and services are to be delivered. That is the law. 
That is where the money trail starts, with a contract. That is where 
audit work should begin. It is square 1 on the audit roadmap.
  Beyond the contract, there are a number of critical data points or, 
you might say, dots. These should pop up on the auditor's radar screen. 
These may include contract modifications, recorded obligations, 
inspection and receiving reports, invoices, and payments, eventually.
  To get a handle on fraud and waste, auditors then need to connect all 
the dots between the contract that starts over here at the beginning 
and the final payment of money over here. They need to make all of the 
hookups. For example, when contract requirements can't be matched with 
payment, well then, bingo; there is a potential problem.
  This is what is called a full-scope, end-to-end audit. This is what 
auditors must do to document and verify fraud and waste. Doing that 
work positions them to answer two key oversight questions: Did the 
government get what it ordered at the agreed-upon price and schedule or 
did the government get ripped off?

[[Page S7126]]

  Top audit officials repeatedly and consistently told my investigators 
that doing genuine contract audits was ``impossible, we can't do it, 
it's too difficult.''
  One audit appears to illustrate and typify the seemingly impassable 
obstacle, or brick wall, perceived by the auditors. The report is 
entitled ``The U.S. Air Force's Central War Reserve Material 
Contract.'' It is report No. D-2009-108.
  Instead of attempting to verify payments at the primary source, which 
is the Defense Finance and Accounting Service, the audit team opted for 
an unauthorized shortcut. When you are following the taxpayers' money 
to see if there is fraud involved, you are going to find some shortcut?
  They chose, then, to rely on payment data provided by who? The 
contractor, DynCorp, the target of the audit. Even using this flawed 
audit procedure, examiners were unable to match contract requirements 
with payments. Then when they could not do it, they just give up. The 
report concluded:

       The government did not know what it was paying for. . . . 
     It may have paid for services DynCorp did not perform.

  The auditors then simply turned a blind eye to the potential fraud 
here in this instance.
  One hundred sixty-one million dollars went out the door, and for 
what, we don't know. The report does not tell us. It does not nail down 
all of the pertinent facts. It is inconclusive and unfinished. The 
auditors just kicked the can down the road, bucking it to another 
Defense Department audit agency.
  Clearly, auditing large, complicated Defense Department contracts 
where there is no audit trail to follow is, we have to admit, a 
daunting task. But that does not mean it is a mission impossible. It 
can be done. It has to be done. Senior managers refer to this task as 
``audit trail reconstruction work. It is labor intensive pick and 
shovel work.''

  Today, the inspector general relies on small rinky-dink 5- or 10-
member audit teams. That doesn't cut it. The IG needs to deploy much 
larger teams consisting of 25, 50, or even 100 auditors or more to 
tackle the most egregious contract jobs. And I don't mean hire more 
than the 675 employees who are already there eating up $90 million.
  Let me make one point crystal clear right now--and I am repeating 
because I think it is important. I am not suggesting the IG needs to 
hire more auditors. This should be done within available resources. 
What I am saying is this: The audit office needs to switch from a large 
number of small teams to a small number of large teams. That would be a 
reallocation of audit resources. The top audit office official said it 
would be possible ``to cobble together such an audit team to look at 
one of the big weapons programs.'' However, doing that would ``deplete 
resources needed to meet other priorities.''
  The ``other priorities'' referenced by this top official are probably 
wasteful reviews of the Department's policy and procedures--in other 
words, doing policy auditing instead of doing financial auditing.
  In 2009, the audit office did not conduct one in-depth contract audit 
of a major weapon system or contract. Aren't major weapon systems an 
audit priority? The record suggests that it is not an audit priority.
  To this Senator from Iowa, this is an astonishing revelation. The 
inspector general is not doing contract audits. How can this be? If the 
IG is doing contract audits, then the office of the IG is not or should 
not be open for business--ought not to be spending that $90 million.
  The core IG mission is to detect and report fraud, waste, and abuse 
to the Secretary and to the Congress and to recommend corrective 
action. To detect and verify fraud and waste, auditors need to be on 
the money trail 24/7. That is where most fraud occurs. They need to be 
connecting all the dots between contract signing over here and the last 
payment being made over here.
  Instead of trying to do contract audits, the audit office gave up and 
moved to greener, easier pastures. Most audits now focus on policies 
and procedures. In moving in this direction, the inspector general has 
strayed far from a core mission costing $90 million. Today's preference 
for policy audits yields zero benefits to the taxpayers. These reports 
cost about $800,000 apiece. Cranking out worthless policy audits may 
not qualify as misconduct, but it surely is a blatant waste of precious 
tax dollars, at $90 million a year.
  The current focus on policy audits helps me understand why 765 
auditors--with an annual budget of $90 million--could not root out any 
measurable fraud or waste last year. The IG there at the Department of 
Defense needs to hit the reset button and refocus the audit effort on 
the core IG mission.
  First, he needs to resume full-scope contract audits to root out 
fraud and waste. Second, the audit office needs to aggressively review 
all the Defense Department's plans and programs for deploying a modern 
accounting system. It needs to offer specific recommendations that 
would help the Department reach the 2020 readiness goals.
  I am receiving assurances from the IG at the Department of Defense 
that he is moving smartly in the right direction. The signals from that 
office are very encouraging. Yet I remain skeptical. The audit office 
still seems to think that full-scope contract audits are a nonstarter 
and policy reviews are highly relevant. We need a change of course.
  Mr. President, I yield the floor.

                          ____________________