Transcription of Senator Grassley's Agriculture News Conference Call

Interview

MODERATOR: Would you like to update people on what you're doing this week?

GRASSLEY: OK. Yes. Well, I won't go through the 24 counties I'm going to be in. My staff can e-mail that information to you.

But I'm having a series of town meetings. Congress is not in session. And yesterday was a national holiday. Generally, on a national holiday week, we can plan on being home. So I'm starting my 29th year of going to every county every year to have a meeting with constituents so we can have Q&A, let them set the agenda so I can know what's on their minds so I can better represent Iowans.

Most of these meetings are like I just came from a 7:30 meeting, town meeting, in Albia -- 39 -- I guess, 41 people were present. Yesterday, we had 62 and 63 and 93 at three different meetings yesterday.

Now, I usually have five meetings a day. So some of the meetings are like -- yesterday, I visited a meat processing plant for Hormel in Des Moines -- or, I mean, in Osceola. And there I had a -- I toured to meet people but to the too much chance to answer questions that way.

So at the end of my tour, we had a town meeting with what they call their information committee which is a committee to distribute information between workers and management. And at that meeting, we had questions very, very similar to what we would have at a regular town meeting.

So that's the way I try to keep in touch with constituents over a period of 99 town meetings plus a lot of meetings that I have otherwise in the larger communities of Des Moines, Cedar Rapids, or Waterloo, Davenport, Sioux City, et cetera.

I'm ready for questions on any subject.

MODERATOR: OK. Tom in Yankton?

QUESTION: Yes. Good morning, Senator.

Senator, with the passage of the stimulus bill, I was wondering was there anything in it that you like or don't like that was passed?

GRASSLEY: I like tax incentives to encourage investment so that jobs are created in the private sector because they are long-term jobs. As part of that, the tax parts of it, which were 35 percent should have been about 50 percent. But I'm not going to argue over 35 percent except, within that 35 percent, only eight-tenths of 1 percent of the entire package was devoted to small business. And there should have been more tax incentives for small business. And one of those should have been Obama's own plan that he announced during the campaign of having zero capital gains for investment in small business that was kept in at least five years.

And I think he's sincere in offering it, but there's a lot of Democrats on the Hill that don't like to do away with capital gains tax because they like to tax capital gains even at a higher rate than it is right now. But you need a lower capital gains rate for small business because you need to encourage small business because you need to -- it's a -- it's the employment machine of our economy; 75 percent of the new jobs are started in small business.

Then, on the spending side, what was spent in 2009 and 2010, I could have voted for. But so much of the spending is going to be beyond the year 2010, and it should have been in regular appropriation bills and maybe not spent at all. And one example of a pork barrel would be the $8 billion for railroads from -- the railroads -- high- speed railroads from Los Angeles to Las Vegas.

That's -- maybe the want to build hide-speed railroads, but you want to do it where there's more traffic. And consequently, pork barrels like that are not stimulative, particularly, if it's not going to be spent in the year 2009 or 2010.

MODERATOR: Gene at Iowa Farmer Today?

QUESTION: Senator, I know this is -- you've been busy with the stimulus, obviously, lately. But in your committee, will you be looking at the -- at the estate tax this year? Certainly, there's been proposals out there.

GRASSLEY: Yes. It's almost an absolute must that we look at the estate tax. I prefer doing a way with the estate tax, but with Obama as president, we're not going to be able to do away with it. We probably don't even have the possibility of getting a very good compromise that would be satisfactory to small business and to me, as an example.

Something less than absolute abolition of the estate tax would be something like a $5 million to $7 million exemption with a 15 percent tax rate. I don't think now we've got a chance of getting that. Whereas, maybe, two years ago, we did. But we couldn't get it brought up then.

Now, it's got to come up for certain because -- in 2009, because we won't have any estate tax in 2010 and, obviously, Democrats aren't going to get that happen. And I don't want that to happen because, if we don't do anything, in 2011, we don't have a million dollar exemption. So I think in 2009, we've got some hope of getting some permanency by maybe $3.5 million, although I'll be trying for a higher exemption and having maybe a 45 percent tax rate instead of a 55 percent tax rate and I'll be trying for a lower tax rate.

But I think we have to do it and we will do it, and it won't be very satisfactory to most small business. And you've got situations like corporations like Anderson Erickson in Des Moines, Iowa, that was started by a family as a small dairy and now employs hundreds of people. Maybe when that passes on from one generation to another, you know, it may be sold. And if it was sold, maybe we'll lose all those jobs here.

Or you've got Suka (ph) Manufacturing started by a small farmer 40 or 50 years ago now employing 300 people. We had a similar situation where Buffett bought one of those in Indiana, and it's no longer in the family. We don't want Buffett buying Suka (ph) and maybe closing it down and moving it over to his plant in Indiana.

And it's just a sad commentary that when one person uses his ingenuity and builds up a business of tens of millions of dollars and employs hundreds and hundreds of people that we could have a possibility of the next generation not being able to keep that going because they're going to have to borrow a lot of money to pay the estate tax. And it's just -- just -- it's sad that small business is going to get hurt that way.

MODERATOR: Tom at Brownfield?

QUESTION: Good morning, Senator.

I want to briefly revisit the stimulus package. You already talked about it some, but for rural America specifically, would you say good? Bad? What is the package like?

GRASSLEY: Well, various parts of it would be good for rural America. For instance, you know, it's one of the parts of this bill that's going to obligate us for more spending for next decade, but more money coming in for education is going to mean that more rural schools maybe can keep going for a longer period of time or rural America is very dependent upon highways because we don't have mass transit, so we're going to get some of our highways fixed.

But beyond that, I don't think there's a lot in it for rural America.

MODERATOR: Ken at WHO?

QUESTION: Senator, good morning. Good to talk to you today.

GRASSLEY: Good to talk to you.

QUESTION: Doesn't it make you feel good to know, though, that if you time it right you could die and beat the government?

GRASSLEY: I'm not thinking of doing that.

(LAUGHTER)

QUESTION: OK. Here's my question.

GRASSLEY: But I think -- I do often think of people that would fake a suicide -- or I mean, do a suicide -- make it look like it's not a suicide to take advantage of things like that or somebody that's on life support on December 31, 2010, pulling the -- or, I mean, pulling the plug, you know, right before the end of the year if we had 2010 with no estate tax.

QUESTION: Well, you took a perfectly light comment and made me feel bad. So thank you for that, sir.

GRASSLEY: OK.

QUESTION: Let me ask you this. About the ethanol industry, real question. That is, right now, it appears we've got a lot of financial stress on the ethanol industry. A meeting of Barisan (ph) today in Fort Dodge to inform people of their intentions on this sale of assets and Secretary Vilsack saying that that industry needs help.

What type of financial help do you think it should be given?

GRASSLEY: Well, first of all, let me start with first do no harm. And do you know that there's agricultural interests in the United States? Like, let's say, a resolution of the pork producers recently that we ought to do away with the tax exemption -- tax incentive -- for ethanol. Well, that would be a -- if we did that right now, or if there are prospects to continue beyond December 31, 2010, that would be another nail in the coffin of the ethanol industry.

So first do no harm. So that means keep the mandate going, keep the tax exemption going, keep the restriction on imports going, at a minimum. Beyond that, one of the best things we could do would be to make E-11, E-12, E-13 because we're up against the wall where the mandates of 10.5 billion gallons next year may not mean much incentive.

So what we need to do is make sure that we, first, do no harm and then increase the requirements of fuel mixture for gasoline. Short of that, I don't know of anything else. There is a very small program that's not just for ethanol, but it's for any rural economic development, where there could be some help to the ethanol industry. But I think the ethanol industry needs to be very cautious about asking for more help at this point.

And I suppose some consolidation, particularly, of 30-gallon and 40-gallon -- 40 million gallon plants because of a matter of efficiency is something that is going to have to happen. When it happens will be up to the stockholders. But when everybody's building a hundred or 120 million gallon plants now, you can understand by the others are more inefficient. They're probably going to have to be going for management purposes with bigger entities.

It's not something I'm advocating. That's something that the market is going to dictate.

QUESTION: Thank you.

MODERATOR: Troy or Dan at KICD?

OK. Stacia, National Farm Broadcasters?

Gary at ARN?

QUESTION: Senator, I'm not sure if you're familiar with this. I read an article last week that Senator Bingaman may be proposing the establishment of a clean energy bank that would provide loan guarantees for alternative energy projects that would replace an entity that the Department of Energy has that apparently hasn't written any loans at all.

Are you familiar with that? Does something need to be done to provide credit for new energy efforts?

GRASSLEY: Well, based upon what the Bush administration was doing, the answer is yes, but maybe with a new Obama administration and the emphasis that they're putting on promoting alternative energy to a greater extent, it may not need to be done. And I don't know about the proposal, but I'm interested in promoting alternative energy, and it's something I might look favorably upon.

QUESTION: OK. Thank you.

MODERATOR: OK. That's all we had on the list. Does anybody -- did anybody get added late or have a follow up?

QUESTION: This is Jean Simmet from Agrinews.

GRASSLEY: Go ahead, Jean.

QUESTION: Senator Grassley, going back to your answer to Ken's question, you know, about increasing the blend from, you know, to like 11, 12, 13 percent, when do you think that might happen, and what will have to occur for that to happen, and what's the likelihood that that will happen soon?

GRASSLEY: Well, I'm pessimistic with the attitude of some environmental groups and their opposition to it and their impact in this administration on the new EPA. EPA could do it yesterday if it wanted to do it. I've had meetings with EPA on this issue going back to July and September, I think it was, with Senator Thune because we're working together on it.

And I have found that EPA never says no, but they always give you the impression that it's going to take five years for them to make a decision. Now, they don't say five years, but they never see -- they never seem to be in a hurry to do anything, and they have a lot of roadblocks that they would call regulations that they have to follow that maybe in the strictest sense, they do have to follow. But they could do -- they can move faster than they are, and they are not going to move very fast. So I'm pessimistic.

QUESTION: OK. Thank you.

MODERATOR: Anybody else?

GRASSLEY: Maybe I could add for Jean if there's an effort -- maybe I ought to be part of that effort -- if there's an energy bill out, and there will be an energy bill up both out of Finance and out of Energy later on this year, then maybe there's something we could do on that energy bill to push it along.

QUESTION: Senator, this is Ken Root again.

Do you think anything nice to say about Beth? Did you say that she had nine years with you? Good Iowa girl. Anything you'd like to send to her friends and family out here?

GRASSLEY: Yes. I have a farm girl that knows all about agriculture, and she is, just completed eight years with me as of last Saturday. And so I was congratulating her on her ninth year because I -- for two reasons. One, she does an excellent job. And number two, because when -- there are very few farmers in the United States Senate, and even probably fewer employees in the United States Senate that know anything about agriculture, having somebody like Beth that knows somebody about agriculture is very important not only to helping me communicate with my constituents, which is the primary responsibility of a president secretary, but she's also able to educate a lot of urban folks that food grows on farms, it doesn't grow in supermarkets.

And I'm telling you, you may think that that's a tongue-in-cheek statement, but there's a lot of people in New York City that doesn't realize that milk comes out of cows.

QUESTION: And, Beth, who are your parents and where are you from?

MODERATOR: Seriously?

QUESTION: Yes.

MODERATOR: I'm from Atlantic originally. And my parents are Jim and Nancy.

QUESTION: Thank you.

MODERATOR: OK. Anybody else?

QUESTION: Yes, this is Gary Diguiseppe. I'm going jump in with something else.

Senator, reading an article here discussing the possibility of exacting fees on inspected companies to try to rev up FDA inspections in the wake of the PCA disaster.

Do you think an industry-funded inspection program might enhance food safety?

GRASSLEY: I think you get into the same problem we have when 10 or 15 years ago we had pharmaceutical up their fees for financing the Food and Drug Administration. You leave the impression with the people, in that instance, that because FDA's beholden to the pharmaceutical industry, that they owe the pharmaceutical industry and safety is compromised.

We can't do anything with food to compromise people's faith in our food safety system. And so, just like when proposals were put out over several Republican and Democrat administrations to finance meat inspections with fees on those companies, we didn't do it because we felt that we should have food safety be decided by impartial observers.

Now, maybe you could argue, well, those fees maybe that USDA or the FDA could still be impartial. But it's perception that sometimes makes a big difference. And we can't -- for the benefit of prosperity in agriculture as well as for the benefit of safety, we can't let the cynicism of the American people be invoked by having -- by having industry pay fees for the inspection of their products.

QUESTION: OK. Thanks.

MODERATOR: OK. Anybody else? All right. Thanks, everybody.

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