Business & Economy
Forthcoming Disclosure of Medical Device Maker Payments to Doctors Will Help Consumers PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Tuesday, 07 December 2010 09:30
Monday, December 06, 2010

Sen. Chuck Grassley of Iowa, ranking member of the Finance Committee, today joined the committee chairman in releasing a committee report detailing ties between a Maryland doctor who is accused of implanting hundreds of potentially unnecessary cardiac stents and his ties to the drug company that manufactured the stents.  The doctor is said to have accepted payment for at least two social events at his home paid for by the device maker, including a pig roast, and became a paid contractor with the company, Abbott Labs, to promote its stents in China and Japan.  Grassley is the co-author of the provisions enacted through the new health care law that will require drug companies and medical device makers to disclose their payments to doctors.  The payments will be publicly available on Sept. 30, 2013.  Grassley made the following comment on today’s report and future payment disclosure.

“It’s standard operating procedure for drug and device makers to give doctors honoraria or pay for dinner parties or travel to promote certain products.  That’s all legal, but it’s been disclosed to the public only in limited cases, either voluntarily by the drug companies or as part of lawsuits.  For the most part, people scheduled for surgery don’t know if there’s a financial relationship between the doctor implanting a device and the maker of that device.  Starting in 2013, that will change.  The public will have access to the financial information.  There will be transparency.  I hope that bringing this information out of the shadows will help rein in the most questionable cases.  It’s common sense that doctors should choose medical devices because the devices will help their patients, not because the device makers paid the doctors to give a speech about their product.  Also, Medicare and Medicaid can’t spare a penny for procedures that aren’t medically necessary.  Limiting abuse in this area will help program finances.

The Finance Committee report released today is available here.

An article in the Baltimore Sun, which broke the Maryland stent story, on today’s report is available here.

A series of articles about Grassley’s work on payment sunshine is available here.

 
Harkin: Unemployment Extension Should Have Come Without Tax Breaks for the Wealthiest Two Percent PDF Print E-mail
News Releases - Business & Economy
Written by Sen. Tom Harkin   
Tuesday, 07 December 2010 09:27

Washington, D.C. — Senator Tom Harkin (D-IA) released the following statement this evening after the President’s press conference on reaching a deal with Senate Republicans on an extension of the Bush-era tax cuts.

“To say that I am disappointed with the deal the President laid out tonight is an understatement.  Senate Republicans have successfully used the fragile economic security of our middle class and the hardship of millions of jobless Americans as bargaining chips to secure tax breaks for very wealthiest among us.  With record unemployment and millions of Americans falling off the benefit rolls just as we near Christmas, America faces an emergency situation, and under these circumstances the validity of extending unemployment benefits and tax rates for the middle class stands on its own.  The same cannot be said for extending tax breaks for millionaires – they face no immediate hardship, such a move will not spur economic growth, and doing so will only add hundreds of billions to the deficit.  In addition, by extending tax rates for two years but unemployment benefits for only one, we almost ensure that a Republican-led Congress will be able to block a further extension of unemployment benefits if they are needed.

“I’ve asked this question before, and tonight I ask it again - Have the Republicans lost all sense of fairness? Have they lost all sense of justice? Have they lost all sense of what's right and wrong? They can fight for their tax breaks for the wealthy, fine. But to say that we cannot extend unemployment benefits for people out of work without giving tax breaks to the wealthy - that's a moral outrage."

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Tax Relief Framework PDF Print E-mail
News Releases - Business & Economy
Written by Sen Chuck Grassley   
Tuesday, 07 December 2010 09:24

Statement of U.S. Senator Chuck Grassley

Ranking Member of the Committee on Finance

Framework of Tax Relief Agreement

Monday, December 6, 2010

“Republicans support tax relief across-the-board, including the middle class, and have fought for it.  The middle class and the unemployed need job-creating policies that expand the economic pie, not shrink it.  Growing the economy expands the tax base.  Jacking up taxes would be a sure-fire way to deep-freeze hiring and kill the fragile economic recovery.  Job-creating small businesses storing up capital have been reluctant to create jobs and take on new payroll obligations, not knowing what their taxes will be in January.  Part of the blame is attributable to the uncertainty over the direction of tax policy.  Tax incentives that create jobs in renewable energy have been expired for a year, with no action, costing jobs.

“The current leadership is starting to face the reality of last month’s elections.  Americans want Washington to stop overspending and overtaxing.  Contrary to what a lot of Democratic leaders have said, raising taxes is not the magical cure that will shrink the deficit.  Higher taxes give big spenders a license to create new layers of government and put taxpayers on the hook for even more entitlements.  Higher tax rates siphon money out of the private sector and shrink the Gross Domestic Product.

“During the lame-duck session of Congress, arguments have been made that seem to say letting taxpayers keep the same amount of their own money is like handing out ‘bonuses.’  Iowa families who are worried about less take-home pay in January don’t consider preventing a tax increase on them a bonus, a windfall or a handout.  Tax revenue comes from taxpayers’ hard-earned money.  It doesn’t grow on Christmas trees, no matter how fanciful the rhetoric gets about millionaires versus the unemployed.”

 
Stopping a Tax Increase PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Monday, 06 December 2010 14:05

Floor Statement of U.S. Senator Chuck Grassley

Ranking Member of the Committee on Finance

Still Another Chapter of Revisionist Fiscal History: Lame Duck Tax Relief Debate

Thursday, December 2, 2010

Since yesterday, we’ve witnessed in this chamber the resumption of a set of tired and worn talking points that the other side drags out whenever they are forced to finally get around to discussing tax policy.

By once again beating the same dead horse, the other side has attempted to go back in time, again, and talk about fiscal history. Earlier this week there has been a lot of revision or perhaps editing of recent budget history.  I expect more of it from some on the other side.

The revisionist history basically boils down to two conclusions:  1. That all of the “good” fiscal history of the 1990’s was derived from a partisan tax increase bill of 1993; and 2. That all of the “bad” fiscal history of this decade to-date is attributable to the bipartisan tax relief plans

Not surprisingly, nearly all of the revisionists who spoke generally oppose tax relief and support tax increases.  The same crew generally support spending increases and oppose spending cuts.

For this debate, it is important to be aware of some key facts.  The stimulus bill passed by the Senate, with interest included, increased the deficit by over $1 trillion.  The stimulus bill was a heavy stew of spending increases and refundable tax credits, seasoned with small pieces of tax relief.  The bill passed by the Senate had new temporary spending, that, if made permanent, will burden future budget deficits by over $2.5 trillion.  That’s not Senate Republicans speaking.  It’s the official Congressional scorekeeper, the Congressional Budget Office (CBO).  In fact, the deficit effects of the stimulus bill, passed within a short time after Democrats assumed full control of the Federal Government, roughly exceeded the deficit impact of the 8 years of bipartisan tax relief.

All of this occurred in an environment where the automatic economic stabilizers thankfully kicked in to help the most unfortunate in America with unemployment insurance, food stamps and other benefits.

That anti-recessionary spending, together with lower tax receipts, and the TARP activities, set a fiscal table of a deficit of $1.4 trillion that was the highest deficit, as a percentage of the economy, in Post World War II history.

From the perspective of those on our side, this debate seems to be a strategy to divert, through a twisted blame game, from the facts before us.  How is the history revisionist?  Let’s take each conclusion one-by-one.

The first conclusion is that all of the “good” fiscal history was derived from the 1993 tax increase.  To test that assertion, all you have to do is take a look at data from the Clinton Administration.

The much-ballyhooed 1993 partisan tax increase accounts for 13 percent of the deficit reduction in the 1990’s.  Thirteen percent.  That thirteen percent figure was calculated by the Clinton Administration’s Office of Management and Budget (OMB).

The biggest source of deficit reduction, 35%, came from a reduction in defense spending.  Of course, that fiscal benefit originated from President Reagan’s stare-down of the communist regime in Russia.

The same folks on that side who opposed President Reagan’s defense build-up take credit for the fiscal benefit of the “peace dividend.”

The next biggest source of deficit reduction, 32%, came from other revenue.

Basically, this was the fiscal benefit from pro-growth policies, like the bipartisan capital gains tax cut in 1997, and the free-trade agreements President Clinton, with Republican votes, established.

The savings from the policies I’ve pointed out translated to interest savings.  Interest savings account for 15% of the deficit reduction.

Now, for all the chest-thumping about the 1990s, the chest thumpers, who push for big social spending, didn’t bring much to the deficit reduction table in the 1990’s.  Their contribution was 5%.

What’s more the fiscal revisionist historians in this body tend to forget who the players were.  They are correct that there was a Democratic President in the White House.  But they conveniently forget that Republicans controlled the Congress for the period where the deficit came down and turned to surplus. They tend to forget they fought the principle of a balanced budget that was the centerpiece of Republican fiscal policy.

Remember the government shutdown of late 1995?  Remember what that was about?  It was about a plan to balance the budget.  We are constantly reminded of the political price paid by the other side for the record tax increase they put in the law in 1993.  Republicans paid a political price for forcing the balanced budget issue in 1996.  But, in 1997, President Clinton agreed.  Recall as well all through the 1990’s what the year-end battles were about.

On one side, Congressional Democrats and the Clinton Administration pushed for more spending.  On the other side, Congressional Republicans were pushing for tax relief.

In the end, both sides compromised.  That’s the real fiscal history of the 1990’s.

Let’s turn to the other conclusion of the revisionist fiscal historians.  That conclusion is that, in this decade, all fiscal problems are attributable to the widespread tax relief enacted in 2001, 2003, 2004, and 2006.

In 2001, President Bush came into office.  He inherited an economy that was careening downhill.  Investment started to go flat in 2000.  The tech-fueled stock market bubble was bursting.  After that came the economic shocks of the 9-11 terrorist attacks.

Add in the corporate scandals to that economic environment.

And it’s true, as fiscal year 2001 came to close, the projected surplus turned to a deficit.  But it is wrong to attribute the entire deficit occurring during this period to the bipartisan tax relief.  According to CBO, the bipartisan tax relief is responsible for only 25% of the deficit change, while 44% is attributable to higher spending, and 31% is attributable to economic and technical changes. In just the right time, the 2001 tax relief plan started to kick in.   As the tax relief hits its full force in 2003, the deficits grew smaller.  This pattern continued up through 2007.

If my comments were meant to be partisan shots, I could say this favorable fiscal path from 2003 to 2007 was the only period, aside from 6 months in 2001, where Republicans controlled the White House and the Congress.   But, unlike the fiscal history revisionists, I’m not trying to make any partisan points, I’m just trying to get to the fiscal facts.

There is also data that compares the tax receipts for four years after the much-ballyhooed 1993 tax increase and the four year period after the 2003 tax cuts.  I have a chart that tracks those trends.

In 1993, the Clinton tax increase brought in more revenue as compared to the 2003 tax cut.  That trend reversed as both policies moved along.

Over the first few years, the extra revenue went up over time relative to the flat line of the 1993 tax increase.

So, let’s get the fiscal history right.

The pro-growth tax and trade policies of the 1990’s along with the “peace dividend” had a lot more to do with the deficit reduction in the 1990’s than the 1993 tax increase.  In this decade, deficits went down after the tax relief plans were put in full effect.

No economist I’m aware of would link the bursting of the housing bubble with the bipartisan tax relief plans of 2001 and 2003.

Likewise, I know of no economic research that concludes that the bipartisan tax relief of 2001 and 2003 caused the financial meltdown of the September and October 2008.

As I said, from the period of 2003 through 2007, after the bipartisan tax relief program was in full effect, the general pattern was this:  revenues went up and deficits went down.

One major point that needs to be said right here is to state where the government gets the money it spends.  Basically I’m asking “Where do taxes come from?”

I would have thought this would have been perfectly obvious to most people, but I may have been wrong.  Taxes come from taxpayers!  I say this because we have heard tax relief for certain individuals referred to as a bonus.  A search of The Congressional Record for the Senate on December 1, 2010, shows that the word “bonus” was said nearly 50 times.

The implication being that by extending tax relief for all Americans we are giving some people a bonus that other people are paying for.  Let me try to simplify this for my colleagues that are having trouble understanding.  There is no proposal to cut taxes for anyone before this body.  The question is are we going to allow taxes to go up, or are we going to prevent a tax increase?  If we prevent taxes for everyone from going up, we are letting taxpayers keep more of their own money that they have earned and worked hard for.  No one is proposing a bonus or a gift for anyone.  The question is, do we want taxpayers to have more or less of their own money.

My colleagues on the other side have been especially incensed by what they consistently refer to as “tax cuts for the rich” and seem to believe that tax relief for everyone is responsible for our disastrous budget situation.  However, I think nearly everyone serving in the chamber, and certainly the President and House and Senate leadership, supports extending around 80% of tax relief.  If those on the other side are serious in their pleas that taxes must be increased in the name of fiscal responsibility, how can they claim 80% of tax relief is absolutely necessary and that 20% of tax relief is absolutely wrong?

This chart, drawn from Congressional Budget Office (CBO) data, should get more insight into the two groups the other side is talking about.  The orange line measures the effective tax rate paid by the top 5% of taxpayers.  By the way, this is where the Small business owner tax hit occurs.  This group roughly represents those taxpaying families with incomes over $250,000.  Under the Democratic Leadership’s preferred tax policy, this line will go back up to where it was in 2000.  Republicans would prefer to prevent this tax increase, and we have shown that it falls primarily on the backs of small businesses.  The main point this chart shows though is that the tax relief undertaken during the last administration benefited all taxpayers, and characterizing it as “tax-cuts-for-the rich” is simply not accurate.

Of course I want to put our country on a path to fiscal responsibility, but I do not believe that higher taxes will lead us to that path.  Rather we need to carefully examine how we spend the money we already collect.  This debate is about one fundamental question. Who does the money you, the taxpayer, have worked hard for belong to?  Does it belong to the citizen that earned it, or does it belong to the government?  Is whatever the taxpayer is left with an allowance, with the balance to be spent by a government that knows best?  I think most people would answer my last two questions with a strong “No.”

As we continue to discuss pressing tax matters in Congress, we need to keep these fundamental and simple truths in mind.  We need to stop taxes from increasing for all Americans.

Charts used:

Spending Largest Source of Deficit Change Since 2001

Changes in Federal Revenue as a Percentage of GDP

Inherited Deficits 2009 - 2019

Deficits 2001 – 2019

Source of Deficit Reduction 1990 - 2000

Tax Relief vs. Stimulus

Total Effective Federal Tax Rates 1979 - 2007

 
Story Idea: Holiday Spending--10 Ways to Keep It Under Control PDF Print E-mail
News Releases - Business & Economy
Written by Dottie DeHart   
Monday, 22 November 2010 15:14

Staying Off the Naughty (Spending) List: Ten Ways to Manage Your Finances and Avoid Post-Holiday Regrets

The holidays are filled with temptation to go overboard with spending. Financial expert Eric Tyson offers advice on how to manage your holiday spending.

Hoboken, NJ (November 2010)—The holidays are upon us, bringing all those personal and family images and sensations we cherish. But for many of us, there are a few not-so-joyous holiday sights (a purse overflowing with credit card receipts) and sounds (the ca-ching! of the cash registers marking our escalating debt). These negatives can easily outweigh all that we love about the holiday season, especially during this less-than-prosperous economic period.

"Overall, the recession has brought about a renewed dedication to saving," says Tyson, author of Personal Finance for Dummies, 6th Edition (Wiley, ISBN: 978-0-470-50693-6, $21.99). "Before the recession, our national personal savings rate was close to zero, and now it's around 5 percent. But it is very important that you not let your holiday spending zap all of the saving progress you made during the year."

"Whether it's a dedication to the gift-giving tradition, a sense of obligation, or a feeling that the holidays entitle us to have a little more fun than usual, too many of us seem to turn a blind eye to the budget-busting reality of all that spending over just a couple of months," says Tyson. "Don't let excessive holiday spending cause any unnecessary financial stress for you and your family."

What if you could have a wonderful, memorable holiday and avoid the financial hangover afterwards? Tyson provides great tips on how to keep your holiday spending in check.

Find an alternative to gift-giving during the holidays. Many people feel they have to give gifts during the holidays, either because it's a family tradition or because they know their friends and relatives have gotten gifts for them. There are plenty of great ways to trade in this tradition for another one that is even more meaningful, and chances are your family and friends will be happy to save gift-buying dough as well.

"Instead of exchanging gifts, your family members might want to pool their money and spend it on a holiday outing," says Tyson. "If you have kids, you'll probably want to get them a little something, but set strict spending limits. Instead of piling up the toys, let each child choose an outing or event that he or she gets to spend with you one-on-one. Kids will look back on the valuable time you've spent together a lot more fondly than they will any toy or video game they use a couple of times and then toss aside."

If you must buy gifts, cut your expenses elsewhere as necessary. Perhaps you'd rather dine out or go to the movies less, or maybe you can forego that new pair of shoes you've been wanting for yourself in order to afford gifts for the grandparents. "It doesn't matter where you make cuts, just that you make them," says Tyson. "Keeping your other spending under control while you're out there doing your shopping can be a challenge, but just keep repeating to yourself the importance of not over-spending. That way when it comes time to actually pass out those presents you've purchased, you can do it without grimacing as you think about the damage they did to your bank account."

Set a budget and keep tabs on what you are spending. While you're doing your holiday shopping, your new best friends should be your checkbook register, credit card statements, and all of your receipts. It's easy to get into a spending rhythm when shopping for yourself or others, and that's why you need to physically write down every purchase you make and make sure you don't go over your budget. "When you start to add up everything you're spending, you may be shocked at what all those expenses from this store and that store add up to be," says Tyson. "And don't forget about all those 'necessary' holiday extras. Most people don't budget their shopping and don't realize that by the time you buy all the presents, plus wrapping paper, cards, decorations, etc., it's added up to a ridiculous amount. Having a budget that you know you must stick to will help keep your impulse spending from getting out of hand and will help you hone in on the most reasonably priced holiday items."

Plan what you are going to buy, and don't get any extras! Particularly during the holidays, companies pull out their most appealing packaging in hopes of snagging the eyes of shoppers. That's why along with your budget, you're going to want to take an exact list of what you want to buy for your gift recipients. Don't go shopping for someone's gift until you know exactly what you are going to buy.

"It's very easy to go in with no plan, see something you like, and get it simply because you have no idea what else to get for a hard-to-buy-for relative despite the gift's significant price tag," says Tyson. "Another temptation that the list will help you squelch is the desire to buy those little knickknacks here and there that you think will make nice small additions to the gifts you've purchased. Very rarely are things like this necessary, and if you've got your list in hand, it will be easier for you to pass them by without hesitation."

Use the season to set a good example for your kids. Your kids learn about money from you. And if they see you spending left and right during the holiday season, the lesson they come away with isn't going to be a good one. During the holidays, it's very easy for the "gimmee gimmee gimmee" materialistic attitude to get out of control. After all, kids are bombarded with constant advertisements for toys, clothes, and the latest gadgets you can be guaranteed they'll want (or at least think they do!).

"There's plenty you can do to help kids appreciate the true meaning of the holidays," says Tyson. "Have them give some of their money to a local charity, participate in a program in which they buy and wrap gifts for underprivileged kids, or volunteer at a soup kitchen. It can be an eye-opening experience for kids to see that not everyone has enough money to have an enjoyable holiday."

Watch out for deals that seem too good to be true. Retailers run all sorts of specials to induce consumers to buy now, and the holidays offer these companies easy prey in the form of deal-seeking, cash-strapped consumers. For example, furniture stores frequently offer that if you buy now, you don't have to pay a thing for a year, and you might even get free delivery. This sort of "push" marketing can make it harder for you to say no.

"This is just one example of how stores coax in shoppers," says Tyson. "Always remember that free financing for, say, a year is not a huge cost to the dealer, but it is a cost, and if you forgo it, you should be able to negotiate a lower purchase price. Retailers find that buyers are less likely to negotiate the price if they are getting a short-term financing break. Read the fine print on any deal you are considering taking before you go to the store to make the purchase. It can be even harder to say no once you get to the store, so you'll want to know what you are in for before you get there."

Leave the plastic at home. Many of us can explain away spending so much on gifts because we simply charge everything and reason that we can pay it off gradually after the holidays. This is a great way to create a never-ending cycle of consumer debt for yourself. It only creates unnecessary financial stress for you after the holidays.

"Use your budget to figure out how you can purchase the gifts you want to purchase without putting them on your credit card," says Tyson. "If you are so cash-strapped that you think it will be difficult to avoid charging gifts, then you may want to sit down with other friends and family and propose a limit on how much gifts can cost this year—or propose no adult gift exchanges at all. Far from being disappointed, it's likely they'll view this reprieve from gift-buying as a gift in its own right."

Invest in your kids' financial futures. It may not seem as exciting to your kids as a new iPod, but a contribution to their financial well-being will be appreciated long after such expensive "toys" are obsolete. "Have the grandparents contribute to a college tuition fund or savings account rather than buy them more stuff they don't need," suggests Tyson. "Or make one of your gifts to your kids a stock fund portfolio that can start accruing now. Also, make them aware of the budgets and tools you are using to keep your spending in check. The holidays are a great time for them to truly learn that money doesn't grow on trees."

Give the gift of time to your kids. Often, parents buy gifts for their kids with the best of intentions. Either you don't want to deprive them of the toys and gadgets all of their friends have, or you want to give them the things you didn't have as a kid.

"Both of these tendencies are perfectly understandable, but I've found that parents who buy too much for their kids often have difficulty changing the habit," says Tyson. "The holiday season offers great opportunities for you to show your kids how much you love and care for them. For example, you can make time with them each week to watch a holiday film or TV show, go on a walk to see your neighbors' holiday lights and decorations, or emphasize that giving back message again and take them caroling at a local retirement home. All of these activities cost next to nothing, and they will be fun for the kids and for you!"

Remember that meaningful gifts don't necessarily have a big price tag. "Sure, it might be nice to give your mom a brand new TV, but there are other things out there that will be even more meaningful and enjoyable for her—like a photo album with candid shots of the grandkids or something they've made for her themselves," says Tyson. "If you are looking to give a gift that truly means something and that will keep its value for years to come, you are better off looking for nonmaterial gifts to give than for something your gift recipients could get themselves at the local big box store."

"Money can easily become the focus of the holidays when it should be the last thing you are thinking about," says Tyson. "By keeping your spending under control, you can have a great holiday and avoid the sick feeling in the pit of your stomach that occurs when you start getting those credit card bills in the mail. If you prepare properly, you can achieve a happy balance of spending and saving during the holiday season. That's a great gift in and of itself, for both you and the people you love."

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