Emergency Supplemental Appropriations

Floor Speech

EMERGENCY SUPPLEMENTAL APPROPRIATIONS -- (Senate - May 24, 2007)

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Mr. GRASSLEY. Mr. President, I would like to talk first about the process and then the substance of this legislation. As everybody knows, we will soon be considering the war supplemental bill entitled ``The U.S. Troop Readiness, Veterans Care, Katrina Recovery and Iraq Accountability Appropriations Act of 2007.''

That title is very important. As the title says, the legislation is an appropriations bill. The title refers to troop readiness. There is finally, after several months of legislative wrangling, funding for the troops that the President can sign.

The title refers to veterans care. There is funding for that. The title refers to Katrina recovery. There are funds for Hurricane Katrina damage. The title also refers to Iraq accountability. There is language finally in the form acceptable to the President so that he can sign it dealing with benchmarks on our mission in Iraq and the role of the Iraqi Government.

The title of the bill, however, does not refer to any matters within the jurisdiction of a committee I am very familiar with, the Finance Committee. But take a look and you will find three categories of Finance Committee matters: One, the small business tax relief package; two, the so-called pension technicals; and, three, Medicaid and SCHIP provisions.

Now, why does it matter whether these policy provisions travel in a tax-writing committee bill or an appropriations bill? It matters for several reasons. I had the pleasure of serving on both the Finance Committee, and for a very short period of time during my career in the Senate, on the Appropriations Committee. They are the money committees of the Senate.

Appropriations bills, by and large, spend money. That is not entitlements, that is the set-asides in the budget. Finance Committee bills, on the other hand, raise revenue and deal with most of the health and welfare entitlement spending.

Both the Appropriations and Finance Committees have very strong constitutional traditions, expertise in the complex subject matter, and seasoned memberships motivated and dedicated to service of the respective committees. All you have to do is look at the careers of Chairman Byrd, the ranking member, or Senator Baucus, to know that they dedicate themselves to these two great money committees of the Senate.

So when policy issues are processed outside of the Appropriations or outside the Finance Committee, necessary care, expertise, and experience is lost. When I was chairman, I took great pains to avoid taking on appropriations matters. More often than not, policy made outside of either of these committee jurisdictions will, it seems, somehow need to be corrected.

There is another reason it matters; that is, policy made through the committee process is very transparent, and that is what American Government and the Congress is all about, transparency--the public business to be done publicly. The committee's role is to air and carefully consider proposals in the areas of committee jurisdiction.

We are really talking about transparency. Sunshine is the best disinfectant. When the committee process is end-run, as I will demonstrate in part of this bill, there is usually no positive reason. Usually the reason is expediency on the part of people, maybe even beyond the control of the committee chairman, and I would suggest legislative leadership.

It has happened not just now, it has happened under Republicans and under Democrats. But I am pleased to say it has been effectively very rare over the last few years. Skipping the committee process on new proposals was the exception rather than the rule.

Unfortunately, now, with respect to the critical pieces of Finance Committee jurisdiction, it looks as if leadership prefers to skip the committee, after I have been told privately and publicly so many times all of the work is going to be done through the committee. So I am hoping that what I am going to complain about is pretty much a temporary pattern.

To sum it up, the people's business should be done in committees in a transparent way so the people of this country know what is going on. Committee process means sunshine. I think the committee process was abused on this legislation.

But the conference process was also abused. We never even went through the trappings of the committee process. We have an amended House bill that because of the imperative of an acceptable war funding package has the force of a conference report.

How was the process abused? Just take a look at the bill, and you will find a patchwork of unconnected provisions in the Finance Committee jurisdiction that is not even mentioned in the title. Aside from a small business tax relief provision, no real back-and-forth discussion occurred on these matters, either in the Finance Committee or in conference.

With respect to the small business tax relief provisions, the House and Senate Democratic leadership set an arbitrary ceiling that constrained our outstanding chairman, Senator Baucus, from reaching a bipartisan agreement which is so much in the tradition of how Senator Baucus and I work together.

The bottom line is, Republicans opened the door to a conference agreement without receiving assurances of a fair deal. I don't think we got a fair deal. Once Republicans opened the door to the conference, the door was effectively shut on full and meaningful participation.

Now, in the past, Republican leadership did similar things, and Democrats cried foul. I am proud to say that on most, not all, Finance Committee conferences, the Senate Democrats were represented and present for final conference agreements. After crying foul about some conference processes, the Senate Democratic leadership insisted in previous years on preconference agreements before letting Republicans go to conference.

As I feared earlier in the year, the Senate Republican leadership will have to similarly insist on assurances before conferences are convened. This supplemental and its vetoed predecessor made the case that the conference process can't be trusted.

Senate Republicans have no recourse other than to insist on preconference agreements, as we can learn from the Democratic minority of the previous 4 years.

Now, I want to turn to the substance of three categories of the Finance Committee matters that were inserted in the process, after spending my previous minutes on that process. Now to the substance.

The first matter deals with the small business tax relief package that traveled with a minimum wage increase. The deal in the conference is basically the same deal presented by the Democratic negotiators on the last appropriations bill. It favors the House position in number and composition of that package, practically ignoring the great work that Senator Baucus and I did on these provisions.

From a small business standpoint, the House bill was a peanut shell. The
Senate bill was real peanuts. Real peanuts--still not enough from my perspective but more, much more than what the House has.

As you can see here, I have got Mr. Peanut up here to demonstrate the Senate bill, the House bill, and the conference report. From a small business standpoint, then, I want to repeat: The House bill was a peanut shell. The Senate bill was real peanuts. It is a missed opportunity because a conference agreement is a single, shriveled peanut, not helping small business the way small business ought to have been helped to offset the negative impacts on small business of a minimum wage tax increase.

We could have, in fact, provided small business with meaningful tax relief that is contemporaneous with the effects of the minimum wage hike that I say, and I think economists agree, are negative toward small business.

This chart shows Mr. Peanut. It shows this bill at each of its stages--a peanut, a peanut shell, and shriveled peanut. What we are going to be voting on will be that shriveled peanut.

There is another matter that bothers me and this is the so-called pension technical corrections. What is a technical correction, one might ask. Technical corrections measures are routine for major tax bills. Last year's landmark bipartisan pension reform bill certainly can be described as a major tax bill. It contained the most significant retirement security policy changes within a generation. There are proposals necessary to ensure that the provisions of the pension reform bill are working consistently within congressional intent and to provide clerical corrections. That is what technical corrections means. Because these measures carry out congressional intent, no revenue gain or loss is scored by the Congressional Budget Office.

Technical corrections is derived from a deliberative and consultative process among the congressional as well as administration tax staffs, where there is a great deal of expertise. That means the Republican as well as the Democratic staffs, regardless of who is in the majority or minority of both the House Ways and Means Committee and the Senate Finance Committee, are involved, as well as Treasury Department personnel, whether we have a Republican or Democratic President. All of this work is performed with the participation and guidance of the nonpartisan professional staff of the Joint Committee on Taxation. A technical enters the list only if all staffs agree it is appropriate. Any one segment I have listed can veto it. That is why we know it is nonpartisan. That is why we know it is technical. That is why we know it is not a substantive change in law. If it were, it would not be technical.

The pension provisions in this bill, the one we will be voting on in a little while, represent then forgetting this process so you know things are done right. It represents a cherry-picking of some, not all, of the technical corrections that these professional people, in a nonpartisan way, are currently trying to put together with a bill that will come up later on.

In addition, there are pension provisions included in this bill that are called technical but are of great substance and are not then technical. Some of these proposals are even controversial. I have reviewed legislative history over the last 15-plus years, and that history informs me that this may be an unprecedented treatment of technical corrections. Techincals were processed on a 2000 year bill that was not a tax-writing committee bill, but that package was a consensus package. All the committees and the administration had signed off that year, 7 years ago. In other instances, technicals were processed on tax-writing committee vehicles. In all these instances, the packages represented an agreement between all the tax-writing committees, Republican and Democratic, and the Treasury.

In this case, there are four committees involved, the two tax-writing committees and the Senate Health, Education, Labor, and Pensions Committee, what we call the HELP Committee, and the House Education and Labor Committee. To illustrate the controversy over the pensions technical package, I ask unanimous consent to print in the Record a copy of a letter from HELP Committee Chairman Kennedy and Ranking Member Enzi. The letter lays out their objections to the House technical process. I also ask unanimous consent that a copy of a letter I wrote regarding the Finance Committee's jurisdiction be printed in the Record.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

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Mr. GRASSLEY. The bottom line is, the Republicans now know that the conference process and the committee process will not be respected. We are doing things of a substantive nature. We are doing things for which there is a process to make sure that the term ``technical'' is abided by. That process that worked so perfectly is ignored. So if the committee process will not be respected, we have to do things to make sure that it is. In the future, we will need to protect the committee and the conference process, and we will need to do some preconferencing agreements as we ought to have learned from now what is the majority, the Democrats, when they were in the minority, that they got Republicans to agree to. It seems to me that is legitimate. It may not be exactly the way it ought to work, but it is something we have to do to make sure these things don't happen again.

I yield the floor.

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