[Congressional Record (Bound Edition), Volume 147 (2001), Part 20]
[Senate]
[Pages 27750-27756]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    LACK OF ACTION ON STIMULUS BILL

  Mr. GRASSLEY. Mr. President, I am happy to be able to have some time 
to comment on the fact the Senate is not bringing up the stimulus 
package. It is to my chagrin, after all the hard work Senator Baucus 
and I have put into these negotiations. Albeit what we have in front of 
us is not a product of a conference committee, it is still a White 
House bipartisan compromise, a White House Centrist compromise, that 
would get a majority vote of the Senate if we had actually had an 
opportunity to vote on it.
  In normal circumstances, I would not be one to say we ought to pass a 
House bill. These are, however, not normal times and this is not a 
normal process. Some will say this is a House product that needs to be 
amended and debated. That assertion, while technically accurate, does 
not capture the essence of our situation today or right now that we are 
in a war on terrorism.
  The House bill is really the product of an agreement between the 
White House and Senate Centrists so I am going to call the House bill 
what it really is. It is a White House Centrist agreement, if you are 
looking for a bipartisan, bicameral product the President will sign. 
The President said he would sign this. This agreement is the only game 
in town.
  To anyone opposing this agreement, including the Democrat leadership, 
I ask them to show me where they are being bipartisan. All I have seen 
from the leadership throughout this process is an iron fist cloaked in 
a velvet glove.
  Today, we did witness, with the objection to consideration of the 
stimulus package, the iron fist clothed in an eloquent velvet glove, 
displayed once again, similar to what we have done on other issues like 
insurance and like a stimulus package earlier on.
  Today that iron fist smashed the White House Centrist agreement. The 
American people will not be well served by the destruction of the White 
House Centrist agreement. All it means is that after 3 months of long 
meetings, committee action, floor debates, we, the Senate, will not 
deliver to the American people.
  The House has delivered. The President has delivered. One has to 
wonder, then, why are we stuck? If we can get a bipartisan majority in 
the Senate, action by the House and a signature by the President, why 
does a partisan minority of the majority party decide to thwart the 
will of the people? Why, especially now?
  Our Nation is in a state of war on terrorism. Our President is 
necessarily occupied as Commander in Chief to run that war. Why, on a 
matter of economic stimulus and aid to dislocated workers, did the 
President have to come to the Hill yesterday to try and break a logjam? 
Why did the Democratic leadership give his effort the back of their 
hand? Why did the bipartisan objectives go by the wayside? I will take 
a few minutes to talk about how we got here.
  Shortly after September 11, we started out with meetings with 
Chairman Greenspan and other economic policymakers. For the most part, 
they were called by the good chairman of the Senate Finance Committee, 
Senator Baucus. In that period, right after September 11, the President 
took first steps and took the risk by committing to a stimulus package, 
fully aware we might be going in the budget ``red'' if we did.
  We should not discount this leadership by the President. Certainly it 
took courage, and it was the right thing to do. Chairman Greenspan also 
took the lead and gave the ``Greenspan green light'' to pursue a 
stimulus package. It seemed everyone realized our responsibility was to 
heed the President's directive and Greenspan's advice. Both of these 
men said Congress should address the economic slowdown. They told us 
the slowdown started over 1 year ago. Subsequently, the National Board 
of

[[Page 27751]]

Economic Research told us the economy might have recovered but for the 
September 11 attack.
  The President took the lead in meeting needs of dislocated workers. 
He proposed extension of unemployment insurance benefits. He also 
proposed providing health care benefits through the National Emergency 
Grants.
  In addition, the President proposed, as a concession to the other 
party, a new round of rebate collection to those who do not pay income 
tax.
  Was there any reciprocation, any movement from the Democratic 
leadership? No.
  President Bush, much to the consternation of many in the Republican 
Party, took capital gains tax off the table because it was not well 
received by Democrats. Was there any reciprocation on the part of the 
Democratic leadership? No.
  This is not to say we did not agree on some things. Bonus 
depreciation, for instance, was agreed to by each side. Although we did 
not have it in our caucus position, Republicans agreed with Democrats 
on liberalizing the net operating loss rules and expensing for small 
business.
  I do not also discount the ideologically based opposition to 
accelerating the reduction of the 27 percent bracket, but it is amazing 
to me that many on the other side see taxpayers in the 27 percent 
bracket as rich people.
  A 2 percent rate cut for single folks earning between $27,000 and 
$65,000 is seen as a tax cut for the very wealthy by the Democrat 
leadership. Likewise, a married couple with incomes between $45,000 and 
$109,000 are considered rich. I recognize this tax cut proposal was 
difficult for the Democratic leadership to accept. After a series of 
bipartisan, bicameral talks, the House went its own way with a bill; 
too heavy for me on corporate AMT. It passed by just two votes.
  The Senate Democratic leadership responded in kind. The result was a 
Democratic Caucus partisan position paper reduced to legislation they 
rammed through our Finance Committee on a party line vote. That bill 
dead ended in the Senate. The reason is the bill was designed for 
partisan point making. Its partisan design was its weakness in an 
institution like the Senate where one only gets things done on a 
bipartisan basis. That design guaranteed its failure.
  We could have ended there, but the President forced us back into 
action. Frankly, the House also yielded on a very bad bill they first 
passed.
  The result was a quasi-conference environment to work out 
differences. By virtue of this quasi-conference, my friends Jay 
Rockefeller and Max Baucus, our chairman, and I spent many long hours 
debating the merits of economic stimulus and aid to dislocated workers. 
In many ways, the discussions were vigorous exchanges of views with our 
House colleagues. A lot of that discussion was healthy, and some of it 
helped move the process along.
  Little real progress was made. Once again, the President intervened 
and endorsed the Senate Centrist position. Eventually, the House 
leadership came toward the Centrist position because they wanted to 
find a way to get a bill through the Senate, and that can only be done 
if it is done on a bipartisan basis. Even with movement to the Centrist 
position, the quasi-conference was at an impasse. Senator Daschle's 
edict about 3 weeks ago that one-third of his caucus could veto a 
stimulus plan came into clear focus. The sentiments of the House or 
White House, let alone the sentiments of Joe Six-pack out there working 
every day to pay taxes, were less important than the opinion of a 
minority of the Democratic Senators, which would be as few as 18. The 
failure to obtain a super-majority in the Democratic caucus then 
imperiled this Centrist package, this Centrist bipartisan package.
  In the end, the impasse came not from tax cuts. Republicans moved far 
off their priorities so that tax cuts were not the deal breaker. The 
impasse was not over unemployment benefits. Republicans had largely 
moved to the Democratic position. The impasse was not over the amount 
of the health care benefit package. Again, though the benefit came in 
the form of a tax credit, Republicans moved toward a Democratic 
position on the costs of health care benefits.
  Bizarre as it may seem, the whole agreement broke down over some 
ideological position on the eligibility of people for health insurance 
for the unemployed through just COBRA. The impasse came down not over 
whether to help these workers. The White House Centrist agreement 
covered these workers with a tax credit. The Senate Democratic bill 
covers these workers with a new entitlement. Basically, a super-
majority of Democrats would not agree to let laid-off workers have the 
choice of where they wanted to get their health care benefits. But they 
could still get their health care benefits with the same tax credit.
  The bottom line is the White House-Centrist agreement does not meet 
the two-thirds litmus test set for the Democratic caucus by the leader.
  One has to wonder, why leave all of these good things in the White 
House-Centrist agreement on the Senate cutting room floor, as just 
happened about an hour ago? We have before the Senate revolutionary 
social policies. For the first time, Members have sign-able legislation 
that guarantees health care benefits for laid-off workers--the biggest 
change in policy for dislocated workers since unemployment insurance 
was passed in the 1930s.
  We have, in the bill that was objected to, extended unemployment 
benefits as we have done several times in the last 50 years. We have a 
robust stimulus package with 30 percent bonus depreciation. We have an 
extension of expiring tax provisions for 2 years. We have the victims 
of terrorism tax relief and tax incentives to build New York City once 
again.
  All of these are good provisions which enjoy broad bipartisan 
support. They are the foundation of the White House-Centrist agreement. 
Yet because of this ideological fixation, all of these good things now 
go by the wayside until we return 1 month from now on January 23. While 
we are going to be enjoying Christmas, these dislocated workers who 
could have been guaranteed health benefits and further unemployment 
compensation are going to go away empty handed.
  I will look at each key player in the process and see how much 
movement there has been. Common sense says those who want a deal will 
show movement. By the same token, those who do not want a deal will not 
move.
  Start with the President. As I said, he made several key moves. He 
put the dollars on the table, knowing it would complicate the fiscal 
year 2002 budget. He took capital gains off the table. He put the 
payroll tax rebates on the table. He put the unemployment insurance and 
health care benefits on the table. Finally, he endorsed even a plan 
that went much further in the case of health care benefits, from $3 
billion up to $19 billion. That is in the White House-Centrist 
agreement.
  When you look at the record, it is clear to me that the President of 
the United States wanted a deal, an economic security package for 
dislocated workers and to help create jobs for those who do not have 
jobs.
  At the House of Representatives, I agree that the first bill, as I 
said before, from that body was too heavy on the corporate alternative 
minimum tax. But the chairman of the Ways and Means Committee made many 
gestures to the other side. For instance, he did not pick and choose 
among extenders. He included the payroll tax rebate that many of his 
Members in the other body opposed. The chairman of the Ways and Means 
Committee increased the resources for unemployment compensation and 
health care benefits. If you doubt me on the seriousness of that 
movement, ask many in my caucus their opinion of those proposals. If 
you look at the record, the House Republicans moved and ultimately 
ended up as part of the White House-Centrist agreement.
  Senate Republicans had a caucus position very close to the 
President's plan. Like the President, Senate Republicans, especially 
our leader, Senator Lott, constantly worked to try to get a deal. As 
the President moved, so

[[Page 27752]]

did the Senate Republican caucus position move. That is in the Record.
  That brings us to the last and ultimate critical player. Obviously, 
that is the Senate Democratic leadership. I ask, where has the Senate 
Democratic leadership really moved? At every stage of the process, 
whether it is the Finance Committee action, whether the action on the 
floor, or even the quasi-conference, ultimately we find this leadership 
position always saying ``no''. Everyone else was saying ``yes''.
  Now there is a good game being talked by the other side. They say 
they want an agreement. That is the elegant velvet glove they are noted 
for, but where is the action? The action today was ``no'' on unanimous 
consent request. But look at the whole last 3 months on this issue. 
Where have they moved? If you want an agreement, you have to see 
movement. There has been none.
  One has to ask, with so many good provisions in this White House-
Centrist agreement, why should the Democratic leadership want to kill 
it? The President has expressed that polling data, political 
consultants, and union officials had a big impact on the Senate 
Democratic leadership strategy.
  I ask unanimous consent to have printed in the Record an editorial 
from the Wall Street Journal that states in depth what the consultants 
say.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     [From the Wall Street Journal]

                           President Daschle

       One of the more amusing Washington themes of late has been 
     the alleged revival of the Imperial Presidency, with George 
     W. Bush said to be wielding vast, unprecedented powers. Too 
     bad no one seems to have let Senate Majority Leader Tom 
     Daschle in on this secret.
       Because from where we sit Mr. Daschle is the politician 
     wielding by far the most Beltway clout, and in spectacularly 
     partisan fashion. The South Dakotan's political strategy is 
     obvious if cynical: He's wrapping his arms tight around a 
     popular President on the war and foreign policy, but on the 
     domestic front he's conducting his own guerrilla war against 
     Mr. Bush, blocking the President's agenda at every turn. And 
     so far he's getting away with it.
       Mr. Bush has asked Congress to pass three main items before 
     it adjourns for the year: Trade promotion authority, and 
     energy and economic stimulus bills. Mr. Daschle has so far 
     refused to negotiate on any of them, and on two he won't even 
     allow votes. Instead he is moving ahead with a farm bill (see 
     below) the White House opposes, and a railroad retirement 
     bill that is vital to no one but the AFL-CIO.
       Just yesterday Mr. Daschle announced that ``I don't know 
     that we'll have the opportunity'' to call up an energy bill 
     until next year. One might think that after September 11 U.S. 
     energy production would be a war priority. In September alone 
     the U.S. imported 1.2 million barrels of oil a day from Iraq, 
     which we soon may be fighting, the highest rate since just 
     before Saddam Hussein invaded Kuwait in 1990.
       But Mr. Daschle is blocking a vote precisely because he 
     knows Alaskan oil drilling has the votes to pass; earlier 
     this autumn he pulled the bill from Senator Jeff Bingaman's 
     Energy Committee when he saw it had the votes. So much for 
     the new spirit of Beltway cooperation.
       We're not so naive as to think that war will, or should, 
     end partisan disagreement. But what's striking now is that 
     Mr. Daschle is letting his liberal Old Bulls break even the 
     agreements they've already made with the White House. Mr. 
     Bush shook hands weeks ago on an Oval Office education deal 
     with Teddy Kennedy, but now we hear that Mr. Kennedy wants 
     even more spending before he'll sign on. Mr. Daschle is 
     letting Ted have his way.
       The same goes for the $686 billion annual spending limit 
     that Democrats struck with Mr. Bush after September 11. 
     That's a 7% increase from a year earlier (since padded by a 
     $40 billion bipartisan addition), and Democrats made a public 
     fanfare that Mr. Bush had endorsed this for fear some 
     Republicans might use it against them in next year's 
     elections. But now Mr. Daschle is using the issue against Mr. 
     Bush, refusing to even discuss an economic stimulus bill 
     unless West Virginia Democrat Bob Byrd gets his demand for 
     another $15 billion in domestic spending.
       Mr. Byrd, a former majority leader who thinks of Mr. 
     Daschle as his junior partner, may even attach his wish list 
     to the Defense spending bill. That would force Mr. Bush to 
     either veto and forfeit much-needed money for defense, or 
     sign it and swallow Mr. Byrd's megapork for Amtrak and 
     Alaskan airport subsidies.
       All of this adds to the suspicion that Mr. Daschle is only 
     too happy to see no stimulus bill at all. He knows the party 
     holding the White House usually gets most of the blame for a 
     bad economy, so his Democrats can pad their Senate majority 
     next year by blaming Republicans. This is the same strategy 
     that former Democratic leader George Mitchell pursued in 
     blocking a tax cut during the early 1990s and then blaming 
     George H.W. Bush for the recession. Mr. Mitchell's conigliere 
     at the time? Tom Daschle.
       It is certainly true that Republicans have often helped Mr. 
     Daschle's guerrilla campaign. Alaska's Ted Stevens is Bob 
     Byrd's bosom spending buddy; he's pounded White House budget 
     director Mitch Daniels for daring to speak the truth about 
     his pork. And GPO leader Trent Lott contributed to the 
     airline-security rout by letting his Members run for cover.
       The issue now is whether Mr. Bush will continue to let 
     himself get pushed around. Mr. Daschle is behaving badly 
     because he's assumed the President won't challenge him for 
     fear of losing bipartisan support on the war. But this makes 
     no political sense: As long as Mr. Bush's war management is 
     popular, Mr. Daschle isn't about to challenge him on foreign 
     affairs.
       The greater risk to Mr. Bush's popularity and success isn't 
     from clashing with the Daschle Democrats over tax cuts or oil 
     drilling. It's from giving the impression that on everything 
     about the war, Tom Daschle might as well be President.

  Mr. GRASSLEY. Mr. President, I also ask unanimous consent to have 
printed in the Record a portion of a November 13 memo from Democracy 
Corps regarding the economic stimulus proposals.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Politics After the Attack--A Report on Democracy Corps' New National 
Survey and Focus Groups

                           *   *   *   *   *



                         the economic stimulus

       Voters do not currently bring a strong partisan filter to 
     the various economic proposals being considered. Nonetheless, 
     a majority support every Democratic proposal; in fact, two-
     thirds favor every Democratic proposal but one (the tax 
     rebate). Overall, the Democratic proposal does better than 
     the Republican--particularly those features that have led the 
     public debate, like the Alternative Minimum Tax.
       Across the Democratic and Republican packages, the 
     strongest support is for unemployment benefits for the newly 
     unemployed; delaying tax cuts for the wealthiest one percent 
     in order to fund rebuilding and Social Security; funding 
     ready-to-go infrastructure to create jobs; accelerating 
     already scheduled broad middle class tax cuts; Cobra health 
     insurance for the newly unemployed; and tax incentives for 
     business if clearly linked to new investment.
       The public rallies to four elements of the Democratic plan. 
     The starting point is the immediate construction program, 
     including airport improvements and school modernization to 
     create jobs. That has the broadest support (85 percent) and 
     nearly the most intense--48 percent strongly supportive.
       There is strong support for delaying the tax cuts for the 
     top one percent (those earning more than $375,000 a year) in 
     order to fund the rebuilding and security and to make sure we 
     do not keep borrowing from the Social Security trust fund. 
     Two-thirds of the electorate favors this proposal, but most 
     important, more than half (51 percent) strongly favor it--the 
     highest for any Democratic proposal. One person noted that 
     they used to laugh about the ``Social Security lock box,'' 
     ``Well, there it goes. . . . Well, that's all our money.'' 
     That sentiment reverberated across the groups: ``It's not 
     their money anyhow''; ``that's what we paid into for our own 
     security, [and] that's not something they should say, well, 
     we got this money here, we can use it however we want.'' And 
     some said, ``I mean don't delay, just eliminate that tax cut 
     for these people.''
       Cobra coverage health care for the newly unemployed stands 
     out, on its own, as a very important thing to do at this 
     moment. People understand the rising cost of health care and 
     how expensive coverage can be for anyone.
       It is important to underscore that three-quarters of the 
     public favors a Democratic proposal for business tax 
     incentives to encourage investment in new plants and 
     equipment. The public wants tax breaks, including for 
     business, if the provision is linked to investment, not 
     simply consumption. People are looking for initiatives, 
     consistent with this new period. One of the participants 
     observed, ``The tax cut is tied to investment to encourage 
     them to move forward, not just a blanket.''
       Unemployment benefits for the newly unemployed are 
     immensely popular. When offered by the Republicans and 
     targeted at those who have lost their jobs after September 
     11th, 85 percent favor the idea, including 53 percent who 
     strongly favor it. Presented with an expansive Democratic 
     proposal--extending benefits to 26 weeks, while raising 
     weekly benefits and covering part-time employees--more than 
     two-thirds support it, but less enthusiastically.
       In the focus groups, many participants worried that such an 
     expansive proposal

[[Page 27753]]

     might re-open the old welfare system. That is why the 
     unemployment proposals should be part of a broad Democratic 
     economic package.
       On taxes, voters offer a fairly consistent posture, whether 
     offered by Democrats or Republicans. They support business 
     tax cuts, even a capital gains tax cut, when it includes the 
     wording, ``in order to encourage investment.'' Voters seem to 
     support an accelerated schedule for tax cuts aimed at the 
     middle class--such as the marriage penalty. But there is 
     little enthusiasm for the tax rebate whether proposed by 
     Democrats or by Republicans--just 56 percent. The weak 
     reaction to the rebate reflects our earlier observations--a 
     citizenry focused on addressing the community's crisis and 
     long-term needs, rather than simply throwing money at 
     individuals to consume now.
       Cuts in corporate tax rates, with no immediate spur to 
     investment, gets little support (46 percent). Repeal of the 
     Alternative Minimum Tax, providing $25 billion in tax cuts 
     for large businesses wins the support of only 28 percent. 
     When presented specifically with tax cuts for IBM, GE and 
     General Motors, voters are simply incredulous. Now the 
     leading element of the House Republican package, this is 
     likely to shape public perceptions of the Republicans' 
     approach to the economy. This may become one of the 
     substantive elements in the public's desire to balance the 
     President's direction.

  Mr. GRASSLEY. I was not in on the meetings with the Democratic 
consultant, so I do not know if it is was true or not, but Members can 
read it and make their own determination.
  The theory from the articles is the political strategy of the 
Democratic leadership is to covertly thwart any stimulus and aid to 
dislocated workers. It is good to keep these issues as ``issues'' to 
beat up on the President next year and on Republicans, particularly if 
the economy does not recover. If the economy does recover, what is lost 
except stimulative tax relief and some worker aid? Better to keep the 
issue than to act now is the way it turns out.
  So goes the theory, then. Apply the iron fist, but do it covertly, 
using the velvet glove so as to escape responsibility for your actions.
  I hope this is a cynical political theory, but that it is not true. 
If it is, and only the Democratic leadership really knows if it is 
true. If it is true, it is sad and it is disappointing. If true, it is 
politics at its worst. I only hope the articles are not true. There is 
no better authority on this subject than the former distinguished 
majority leader, Senator George Mitchell, he said it best in an 
interview with John McLaughlin. Senator Mitchell said: Good policy 
results in good politics. Not the other way around. You don't get good 
policy because of good politics but good politics because of good 
policy.
  I hope the Senate Democratic leadership heeds Senator Mitchell's 
advice here and doesn't get it backwards. I hope the press accounts and 
rumors around the Hill are not true. But we will have to wait and find 
out. Regrettably we are not taking up this consensus economic stimulus 
bill. That says to the workers dislocated because of September 11, at a 
time when we are in a war environment, that they can not have anything 
for Christmas. They do not have the 13 more weeks of unemployment 
compensation; they do not have the additional health insurance.
  To reiterate, as most of you know, Senator Daschle has radically 
modified the economic stimulus proposal that the Democrats first tried 
to pass in the Senate.
  Surprisingly, it looks a lot like our White House-Centrist stimulus 
package. It has adopted many measures initially promoted by 
Republicans. Perhaps some good has come from all these weeks of 
discussion.
  I'd like to talk about some of the differences between the White 
House-Centrist package and the altered Democrat stimulus plan.
  I want to explain why I believe our bipartisan package is better for 
America.
  Let's start with the White House-Centrist plan's tremendous 
commitment to displaced workers.
  Our unemployment insurance proposal represents an unprecedented 
commitment to American workers. We would provide up to 13 weeks of 
additional unemployment benefits to eligible workers who exhaust their 
regular benefits between March 15, 2001 and December 31, 2002.
  An estimated 3 million unemployed workers would qualify for benefits 
averaging $230 a week. These benefits would be 100 percent federally 
funded at a cost of nearly $10 billion.
  Our proposal would also transfer an additional $9 billion to state 
unemployment trust funds.
  This transfer would provide the states with the flexibility to pay 
administrative costs, provide additional benefits, and avoid raising 
their unemployment taxes during the current recession.
  The United States enjoyed a growing economy and declining 
unemployment for much of the previous decade. But, the economic 
slowdown that began last year--which was exacerbated by the terrorist 
acts on September 11--has resulted in substantial layoffs.
  The unemployment rate has risen from 4.0 percent in November 2000 to 
5.7 percent in November 2001.
  By historical standards, the current unemployment rate is still 
substantially below the level at which Congress deemed it necessary to 
enact extended unemployment benefits.
  Over the past 50 years, the federal government has provided temporary 
extended unemployment benefits only six other times. The average 
unemployment rate during those times was 7.3 percent.
  Based on this historical record, the President originally suggested 
that extended unemployment benefits should be limited to those states 
that have a disaster declaration in effect as a result of September 11, 
or have a 30 percent increase in their unemployment rate.
  However, a number of our colleagues on both sides of the aisle 
insisted that we provide immediate assistance to every state regardless 
of their unemployment rate. We have agreed to do exactly that in our 
proposal.
  Unfortunately, some on the other side of the aisle continue to insist 
this is not enough. They insist we should go further by requiring every 
state to provide specific benefits and establish specific eligibility 
criteria as a condition of receiving federal assistance. We could not 
agree to these demands.
  The Federal Government has always left decisions about benefit levels 
and eligibility criteria to the States.
  The changes sought by those on the other side of the aisle would 
destroy this historic relationship and undermine the flexibility needed 
by the states to respond to their unique circumstances.
  I would now like to discuss our bipartisan plan's commitment to 
providing health care for dislocated workers.
  Now, Democrats have been saying since October that Republicans don't 
care about helping workers with health insurance. Senator Daschle 
himself said yesterday that his Republican colleagues, and I quote, 
``so far have refused to come to the table and negotiate seriously.''
  Mr. President, nothing could be farther from the truth. Since October 
when President Bush first called on Congress to pass a stimulus 
package, I have worked closely and seriously with both Democrats and 
Republicans to come up with a meaningful, bipartisan approach to 
helping people impacted by the events of September 11.
  Compared to where we started on the issue of health care, we have 
come a very long way. Let me give you a little history first.
  When this debate began, our proposal relied on the National Emergency 
Grant program to deliver health benefits to workers at a cost of about 
$3 billion. Over time, that number grew, and I said publicly that we 
could double, or even triple, that number.
  I also invited the Democrats to modify the grant criteria to make the 
program more responsive to the needs of workers without health 
insurance.
  They refused. But that didn't stop us from staying at the negotiating 
table.
  Next, we proposed giving workers a refundable, advanceable tax credit 
towards the purchase of health insurance equal to 50 percent of the 
policy's cost.
  And when Democrats objected to that, claiming that the credit was too 
small and that sicker people would have trouble buying policies in the 
individual market, we came back with

[[Page 27754]]

yet another offer, which is reflected in this bill.
  The new proposal, endorsed by the White House, the House of 
Representatives, and the centrists in this body, takes a three-pronged 
approach to getting health insurance assistance to people in need.
  It goes farther and wider than any proposal on the table to date, and 
gets more help, to more people, more quickly than any other proposal to 
date.
  What's more, it represents a giant leap in spending on health care. 
It includes over six times as much money for temporary health insurance 
assistance as our original Republican proposals.
  And still the Democratic leadership tells us we are not negotiating 
seriously.
  Mr. President, the White House/centrist proposal spends approximately 
$19 billion on temporary health insurance help in 2002. And it does it 
the right way, by using existing programs along with new ones designed 
to get people they help they need quickly.
  Now let me take a minute to describe our three-pronged approach.
  First, the White House/centrist proposal provides a refundable, 
advanceable tax credit to all displaced workers eligible for 
unemployment Insurance, not just those eligible for COBRA. The value of 
the credit is 60 percent of the premium, up from 50 percent in our 
original proposal. The credit has no cap, and is available to 
individuals for a total of 12 months between 2001 and 2003.
  Individuals can stay in their employer COBRA coverage, or they can 
choose policies in the individual market that may better fit their 
family's needs. This only makes sense. Locking people into COBRA, as 
the Democratic leadership insists, forces people to stay with policies 
that may be too expensive for them to keep, even with a subsidy.
  Our goal was to give dislocated workers access to all the health 
insurance choices available to them in the private marketplace, and 
we've done that in a responsible way.
  This bill also includes a major, new insurance reforms to protect 
people who have had employer-sponsored coverage and go out into the 
private market for the first time after being laid off.
  It makes the COBRA protections available to people who have had only 
12 months of employer-sponsored coverage, rather than 18 months, as 
under current law. By doing this, we greatly expand the group of 
displaced workers who cannot be turned down for coverage or excluded 
because of a pre-existing condition.
  The new 12 month standard is especially important for people with 
chronic conditions who have difficulty obtaining affordable coverage. 
It is a major step, and I'm surprised that the Democratic leadership 
doesn't want to take us up on these sweeping new reforms.
  Let me turn to the mechanics of tax credit proposal. It is easier to 
implement than the direct subsidy approach of the Democratic 
leadership.
  While their proposal requires employers to shoulder the burdens, our 
proposal relies on existing state unemployment insurance systems. So 
under this bill, workers will be able to access the credit, and begin 
applying it to their health insurance premiums in a timely way. Here's 
how it works:
  Newly dislocated workers will receive vouchers from their state 
unemployment offices or ``one stop'' centers when they apply for 
unemployment insurance. Workers can then take those vouchers and submit 
them, along with their contribution to the premium, to their employer 
or insurer. Afterwards, insurers would submit the vouchers to the 
Treasury Department for reimbursement.
  This approach works because it relies on existing systems to deliver 
the new benefits, and as a result delivers those benefits in a fast and 
reliable way.
  I ask my colleagues: why would anyone insist on a mechanism that just 
won't work as well? I don't understand it.
  The second prong of our proposal is $4 billion in enhanced National 
Emergency Grants for the States, which can be used to help all 
workers--not just those eligible for the tax credit--pay for health 
insurance. States have flexibility under our approach, and can use 
these grants to enroll their workers in high risk pools or other state-
run plans, or even in Medicaid.
  To address concerns raised by Democratic colleagues, our enhanced 
National Emergency Grant program requires all States to spend at least 
30 percent of their grant funds on temporary health insurance 
assistance. In addition, we've included protection for states: a 
minimum grant level of $5 million for any state that meets the grant 
criteria.
  Finally, the third prong of the proposal responds to Democratic 
requests by including $4.3 billion for a one-time temporary State 
health care assistance payment to the States to help bolster their 
Medicaid programs.
  As we know, the Medicaid program is an important safety net program 
for low-income children and families and disabled individuals. Medicaid 
is a joint Federal and State program and accounts for a large part of 
State budgets.
  So, in this time of budget constraints due to the recession, States 
are struggling to make ends meet.
  As a result of the unique and extraordinary economic situation we now 
face, a number of states are considering scaling back Medicaid 
services, including my own state of Iowa. This provision provides a 
one-time, emergency cash injection that will help States avoid Medicaid 
cutbacks.
  This feature was not part of our original plan, and I recognize that 
many of my colleagues have concerns about it. In fact, I share their 
reservations, and that is why I'm emphasizing that this is not simply a 
garden-variety increase in Medicaid funding, but a temporary, emergency 
payment.
  The nation is calling for bipartisan compromise, and in that spirit, 
we've agreed to add this to our proposal.
  Mr. President, we have made tremendous steps toward the Democratic 
position in order to find bipartisan compromise on health care. Those 
steps have not been reciprocated by the Democratic leadership.
  Displaced workers deserve to be treated with respect by this body, 
and I believe those workers have earned a vote on this bill.
  I would now like to discuss the individual income tax rate reductions 
in the White House-Centrist plan and the resuscitated Daschle plan.
  The original House stimulus bill would have accelerated the reduction 
of the 27 percent rate to 25 percent which is scheduled to go into 
effect in 2007. The White House-Centrist package has adopted this 
approach.
  Now, the revamped Democrat plan would reduce the 27 percent rate to 
26 percent in 2002, and would not reduce the rate to 25 percent until 
2006. Recall that the original Democrat plan did not provide one red 
cent of rate relief for working Americans.
  Now think about this. The 1 percent higher rate under the Democrat 
plan will operate as a 4 percent rate increase until the 27 percent 
rate is finally lowered to 25 percent 4 years from now. That makes a 
huge difference to Americans who are struggling to make ends meet. 
Let's take a look at who will benefit from our plan's rate reduction.
  The reduction of the 27 percent rate will benefit singles with 
taxable income over $27,000, heads of household with taxable income 
over $36,250, and married couples with taxable income over $45,000.
  These are not wealthy individuals. These are middle class working 
Americans.
  I have a chart which shows the median income of a four person family 
for every State in the Nation. Median income is the amount of income 
right in the middle, with half the incomes above it and half below it.
  This chart shows that the average median income for a four person 
family in the United States is $62,098.
  Now, reduction of the 27 percent rate will benefit married couples 
with taxable income over $45,000. So it will benefit working people who 
earn well below the national median income level.

[[Page 27755]]

  This chart also lists those states that have a family median income 
that is higher than the national average. And look at where these 
people live.
  Connecticut, New Jersey, Delaware, Michigan, Rhode Island, 
California, Washington State. These are the states where a family of 
four will benefit the most from our proposed tax cut.
  The Democrat's revamped alternative would impose an additional 4 
percent tax rate on these incomes over the next 4 years. That should 
concern representatives from those states.
  For example, consider that an additional 4 percent tax on New 
Jersey's $78,000 median income results in more than $1,300 in 
additional taxes.
  Michigan is the same: an additional $900 of tax. Washington State is 
hit with nearly $800 in additional tax.
  These are significant numbers for a working family with two children. 
They would spend this money to meet their families' needs, which would 
stimulate the economy more than a bunch of liberal Democrat spending 
programs.
  Mr. President, I ask unanimous consent that this chart be printed at 
the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection it is so ordered.
  (See Exhibit 1.)
  Mr. GRASSLEY. The more surprising figures are shown in the next 
chart, which shows States with median income below the national 
average.
  Recall that I said reducing the 27 percent rate to 25 percent will 
benefit married couples with taxable income over $45,000. Now look at 
the median income distributions on this chart.
  There is not one State on here that has a median family income of 
less than $45,000.
  So you can see that our proposal will benefit everyone, not just an 
elite few, from a few selected states.
  Mr. President, I ask unanimous consent that my second chart be 
printed in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection it is so ordered.
  (See Exhibit 2.)
  Mr. GRASSLEY. The Treasury Department has estimated that White House-
Centrist plan's acceleration of the 27 percent rate reduction will 
yield $17.9 billion of tax relief in 2002 for over 36 million 
taxpayers, or one-third of all income tax payers.
  Business owners and entrepreneurs account for 10 million, or 30 
percent, of those benefitting from the rate reduction.
  When you refuse to accelerate the rate cuts you harm farmers and 
small business persons. This is because most small business owners and 
farmers operate their businesses as sole proprietorships, partnerships 
or ``Sub S'' corporations.
  The income of these types of entities is reported directly on the 
individual tax returns of the owners. Therefore, a rate reduction for 
individuals reduces taxes for farms and small businesses.
  That is why the additional rate reduction under the White House-
Centrist plan is so important. In 2002 alone, it injects $17.9 billion 
of stimulus into our ailing economy and small businesses.
  So what would a small business do with these tax savings? Well, 
considering that most of the recent job growth has come from small 
businesses, I believe they would hire more people and make more 
business investments.
  We know that 80 percent of the 11.1 million new jobs created between 
1994 and 1998 were from businesses with less than 20 employees.
  And 80 percent of American businesses have fewer than 20 employees.
  This is what I refer to as the ``80-80 Rule'' for supporting rate 
reductions.
  In addition, lowering taxes now would increase a business' cash flow 
during the current economic slowdown. The higher cash flow would 
increase the demand for investment and labor.
  But don't just take my word for it. Take it from an October 2000 
report by the National Bureau of Economic Research, a very well-
regarded non-partisan organization, entitled ``Personal Income Taxes 
and the Growth of Small Firms.''
  This report reaches the unambiguous conclusion that when a sole 
proprietor's marginal tax rate goes up, the rate of growth of his or 
her business enterprise goes down.
  Simply stated, high personal income tax rates discourage the growth 
of small businesses. And right now, that is the last thing we need.
  That is why it is important to do rate reductions the right way, and 
fully accelerate the 27% rate reduction. We are simply accelerating a 
decision this Senate made last summer.
  We should have confidence in our decision. We know that tax cuts are 
stimulative.
  When working Americans have more of their own income, they feel more 
financially secure and are more comfortable with spending.
  A full reduction of the 27 percent rate to 25 percent is much more 
stimulative than a reduction that is deferred to 2007, as called for 
under the Democrat plan.
  In closing, let me say who really loses when the Senate loses its 
right to vote on the White House-Centrist bill. It is our displaced 
workers, it is our fellow Americans who still have a job and the 
security of our jobs base; and it is the soundness of our nation's 
economy.
  The Senate Democrat Leadership will not allow an up or down vote on 
our bipartisan White House-Centrist stimulus package. Why? Because it 
would pass. We have a majority of Senators who support this package.
  Instead, the Senate Democrat Leadership has created a ``make-believe 
boogey-man'' over the issue of how health care benefits should be 
delivered to unemployed. But the majority of this Senate does not agree 
with them.
  But voting on this issue and helping the economy recover is not 
really what is on their minds. It is not their political objective.
  The Senate Democratic leadership is playing political brinkmanship, 
hoping that the American public buys into their excuses for inaction.
  The Senate Democratic Leadership keeps their fingers crossed, hoping 
that our economic difficulties will last until next fall so they can 
blame it on the President in their campaign ads.
  But the blame doesn't go to the President. He has bent over backwards 
to accommodate their demands. And it still is not enough. The Senate 
Democratic leadership would rather move the goal post than agree to a 
solution.
  This is not what we were elected by to do. This is not in service of 
our country. It is in no one's best interest.
  We are at war. Our economy is in crisis. And the only impediment to 
recovery is the refusal of the Senate Democratic leadership to allow 
this Senate to pass this economic stimulus package. A majority of our 
members will vote for this bill.
  I hope the Senate leadership hears the pleas of the American people 
and stops blocking this bill through procedural technicalities. The 
Senate should be allowed to do its job.

                               Exhibit 1


          Median income for 4-person families, by state, 2001

United States...................................................$62,098
Connecticut......................................................78,170
New Jersey.......................................................78,088
Maryland.........................................................77,447
Massachusetts....................................................74,220
Alaska...........................................................72,775
Minnesota........................................................69.031
Hawaii...........................................................68,746
Illinois.........................................................68,698
New Hampshire....................................................68,211
Delaware.........................................................67,899
Michigan.........................................................67,778
Rhode Island.....................................................66,895
Virginia.........................................................66,624
Wisconsin........................................................65,675
California.......................................................65,327
Colorado.........................................................65,079
Washington.......................................................64,828
District of Columbia.............................................64,480

                               Exhibit 2

New York.........................................................61,864
Pennsylvania.....................................................61,648
Nevada...........................................................61,579
Indiana..........................................................60,585
Iowa.............................................................60,125
Georgia..........................................................59,835
Vermont..........................................................59,750
Maine............................................................59,567
Utah.............................................................59,272
Kansas...........................................................59,214
Missouri.........................................................58,674
Ohio.............................................................58,222
North Carolina...................................................58,096
South Carolina...................................................57,954
Nebraska.........................................................57,659

[[Page 27756]]

Wyoming..........................................................57,588
Florida..........................................................57,540
Oregon...........................................................55,812
Texas............................................................55,172
Arizona..........................................................54,913
Alabama..........................................................54,255
Oklahoma.........................................................54,106
South Dakota.....................................................54,090
Kentucky.........................................................54,028
Tennessee........................................................53,835
North Dakota.....................................................52,802
Montana..........................................................52,765
Louisiana........................................................51,191
Mississippi......................................................49,606
Idaho............................................................49,387
Arkansas.........................................................48,318
West Virginia....................................................46,798
New Mexico.......................................................46,534

Source: Census (inflated from 1999 date by GDP deflator).
  The PRESIDING OFFICER. The Senator from Nevada.

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