Business & Economy
Trade agreements before the Finance Committee PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Friday, 08 July 2011 12:04
Statement of U.S. Senator Chuck Grassley
Senate Committee on Finance
Executive Session to consider the U.S.-Korea Free Trade Agreement, the U.S.-Panama Trade Promotion Agreement, and the U.S.-Colombia Trade Promotion Agreement
Thursday, July 7, 2011

Let me start by saying I am glad we are here today trying to work out these trade deals.

We all know how important these agreements are.  We can all cite to statistics and data that tell us how much they mean to our economy.  I don’t need to recite numbers, because we already know them.  We have heard the same speeches on the benefits of these agreements for four years.  But these deals have been kicked around and delayed over partisan fights.  The American people simply can’t afford that anymore.

The Obama administration has finally gotten the message that increasing trade has to be a part of growing our economy.  That is why they are willing to move these deals forward.  But now, as we are on the brink of real action, President Obama has moved the goal-posts once again.  Not only are we told that these deals won’t be sent to Congress without a deal on Trade Adjustment Assistance, but we have the unprecedented move of putting TAA into an implementing bill.

There are parts of TAA that I support.  As Ranking Member of this committee, I helped draft some of the reforms Congress passed in 2009.  But the political gamesmanship with these deals by the administration has to stop.  TAA is a spending bill that should be debated and passed on its merits. 

It’s a violation of the process to put a program like this in an implementing bill.  But I know that the Chairman has spoken of some flexibility that might be in that, and I’ve told him that I’d like to help with that process of having a separate and open and fair debate.  I hope we can move forward with that flexibility.  In telling the Chairman that, I’d also like to urge the administration to reconsider its current approach.  Instead, we should come to terms on an agreement for sequencing four separate bills -  including the three separate implementing bills -  And a fourth bill that addresses TAA, trade promotion authority, and the generalized system of preferences.

I was just contacted by an Iowa cattleman who took a trip to Korea less than three weeks ago.  He had a tremendous trip promoting U.S. beef.  But one of his takeaways was that all of Asia is watching how the United States handles these trade deals.  And want to know if the United Sates wants to be in a leadership role for international trade.  They want to know if we are people of action, or just words.  They want to know if we will follow through with these agreements or will we let them languish even longer.  This cattleman came away with the message loud and clear.  Either we get this done, or our trading partners will be looking at other places for the trading terms that they desire.

We don’t want to let that happen.  American farmers, businesses, and workers need greater access to these markets.  They need these trade deals.  I appreciate the Chairman scheduling this session today, and scheduling it so we have an adequate amount of time to address these important issues and at a time when more members of the committee are able to be present.  Thank you, Mr. Chairman.

Statement of U.S. Senator Chuck Grassley

Wednesday, July 7, 2011

The June unemployment figure is expected on Friday, and this morning there’s a meeting of Finance Committee members about pending international trade agreements with Korea, Panama and Colombia.  Approval of those agreements needs to be part of the economic recovery effort.

These three agreements have been ready for congressional action for more than four years.  Demands made by congressional Democrats were accommodated to get the agreements ready back in 2007.  Even so, the Democratic leadership of Congress has refused to allow a vote.  Since President Obama took office, trade got sidelined even more.  That’s a mistake.  Jobs supported by exports pay 15 percent more than the national average.  Manufacturers, farmers, and the service sector need new markets for their products.  It’s a matter of retaining and creating jobs.

Getting to a congressional vote has been a frustrating process.  A year and a-half ago, President Obama said he wanted to double exports within the next five years.  Still, he let the three trade agreements languish.  This spring, the United States Trade Representative said the trade agreements were ready, but then the administration changed the terms and insisted that the Trade Adjustment Assistance program be passed with the trade agreements.

The Trade Adjustment Assistance program needs to be voted on separately, rather than used to bog down job-generating trade agreements.  The focus needs to stay on helping to spur manufacturing, services and agriculture-related jobs in the United States.  Today, U.S.-Colombia trade is a one-way street.  None of our ag products have duty-free access to the Colombian market, but more than 99 percent of Colombian ag exports enter the U.S. market duty-free.  With a trade agreement, Korea is expected to absorb five percent of total U.S. pork production.  The insurance and financial services industry in the United States, including Iowa, says Korea represents the largest insurance market yet in a free-trade agreement and presents enormous opportunities for domestic job growth.  Panama has tariffs on U.S. beef and corn that would go to zero under a trade agreement.  These trade agreements need to be implemented without delay.

 
Continued Review of Audits of the Defense Department Inspector General PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Tuesday, 05 July 2011 22:47

Floor Statement of U.S. Senator Chuck Grassley

Tuesday, July 5, 2011

Continued Review of Audits of the Defense Department Inspector General

Click here for the video. Prepared remarks are below.

Mr. President, I come to the floor today to set the record straight on a report I issued on June 6th.

This report evaluated audits produced by the Department of Defense (DOD) Office of the Inspector General in fiscal year 2010.

I call it a Report Card because that is exactly what it is.

Each of the 113 unclassified reports published in fiscal year 2010 was reviewed, evaluated and graded in five categories. After each report was graded individually, all the scores for each report in each category were added up and averaged to create a composite score for all 113 reports.

Although 15 top quality audits were highlighted in the Report Card, the overall score awarded was a D minus. That’s low, I know. Maybe the score should be a little higher. I don’t know for sure.

Clearly, none reflected any of the reforms that Inspector General Heddell put in place in December 2010 – as all were published well in advance of that date.

My oversight staff read these reports as educated consumers. We expect these audits to provide leverage in the monumental day-to-day DOD oversight task. We want them to provide assurance that the Defense Department is spending the taxpayers’ money wisely.

Some did that but most did not.

This Senator from Iowa is sure of one thing: The audits, which are the subject of my Report Card, are not somehow exempt from oversight and public scrutiny. They, too, need to be put under the public microscope – especially when they cost almost a million dollars apiece to produce.

So that’s exactly what we did with the Report Card – put them in the public spotlight. And I will keep them there until I see sustained improvement.

As the report states and as I explained on in my speech on June 6th, this grading system was subjective and imperfect.  However, as subjective and inexact as it may be, I believe it provided a reasonable or rough measure of audit quality.

Following my speech, Defense Department Inspector General Heddell pounced on my report. He expressed strong opposition to the low score. He complained that it did not adequately reflect $4.2 billion in “achieved monetary benefits” identified in fiscal year 2010 audits.

To address IG Heddell’s concerns, my staff asked the Audit Office to prepare an information paper that links the $4.2 billion in savings to the audit where those savings were reported. That information was provided to me on June 20th. I call it a “cross-walk.” It takes me to the exact page in each report where the savings were discussed.

This document lists $4.4 billion in “identified potential monetary benefits” and “collections” of $4.2 billion.

After reviewing the “cross-walk,” I have concluded that IG Heddell had a legitimate gripe about the Report Card. He is right. It should have included a section that addressed potential savings. So I will address those issues now, focusing on four reports that contained almost all of the $4.2 billion in savings listed in the “collections” column.

In grading these reports, we did not give sufficient credit for potential savings and efficiencies. They were a casualty of the grading system – for one simple reason. If the exact dollar amounts of alleged fraud and waste were not verified using primary source accounting records, they did not pop up on my oversight radar screen.

My staff is attempting to work with the Audit Office to develop a mutually agreed upon set of standards for grading audits. The purpose of these discussions would be to create a grading process that would accurately capture the true quality of all reports, including policy reviews that uncover real savings and efficiencies.

From the beginning, I have been very critical of the Audit Office for producing far too many policy reviews and far too few hard-core contract and payment audits.

For the most part, the policy audits have no measurable monetary impact whatsoever. However, I have learned recently that at least a few are important for other reasons. I am told that some of these reports are of real value in the work of the Armed Services Committee.

Contract and payment audits are also very important. They go right to the heart of the IG’s core mission: To root out and deter fraud, waste and theft. If done right, they too can produce big pay offs. Those audits earned top scores in the Report Card.

Mr. President, I am not saying that the Audit Office should do nothing but contract and payment audits. What I am saying is this: The current mix of audits creates a huge imbalance in favor of policy reviews. A better balance needs to be established.

That said, Mr. President, I have an admission to make to my colleagues. I finally found a policy audit that I like.

This report is entitled Recapitalization and Acquisition of Light Tactical Wheeled Vehicles, number 2010-039, dated January 29, 2020. It identified potential savings of $3.84 billion. That’s 90% of the savings uncovered in FY 2010 audits.

Now, in my Report Card, I gave this audit a low grade. This audit failed to connect the dots on the money trail and verify dollar amounts using primary source contract and payment records. Plus it took 16 months to complete.  When you add the four to six months of planning that often precedes the audit start date, you are probably looking at two years to complete this audit. That’s far too long.

But this report had other important qualities that were overlooked. It uncovered gross violations of applicable procurement regulations, including use of a sole-source contracting arrangement. It also determined that the proposed vehicle might duplicate the capabilities of existing vehicles.

In the midst of this audit, for reasons that remain unclear, the project manager decided to stop the program “and put the $3.84 billion in funding to better use in FY 2010-2013.” This language suggests that all the money was reallocated within Army accounts for other purposes. Clearly, the audit may have helped to stop $3.84 billion in potential waste. That’s excellent, but this does not constitute savings in the classical sense -- as all the money was shifted to other Army projects. Waste could  happen there, too.

Using a modified grading system to reflect the good qualities of this audit, it would have earned a higher score were it not for an excessively long completion time. In this particular case, however, the impact of the audit was apparently felt while the audit was still in progress. So the timeliness rule may not apply here and probably should be set aside.

There are three other audits containing savings and efficiencies that I wish to discuss today.

The next one is entitled Implementation of the Predator/Sky Warrior Acquisition Decision Memorandum, number 2010-082, dated September 10, 2010.

The purpose of this audit was to determine whether the Air Force and the Army had complied with DOD directives and law to combine the Predator and Sky Warrior drone programs. The Defense Department estimated that $400 million could be saved by merging these two programs.

While the audit was in progress, DOD pulled the rug out from under the auditors. A new directive was issued, stating that the two programs did not have to be combined. To counter this move, the auditors recommended administrative action against those who failed to comply with the original directive. The DOD non-concurred and tossed the auditors a bone. DOD wiggled out of harm’s way by offering to do a meaningless “lessons learned” exercise.  In the end, the auditors caved in, agreeing that the DOD plan was “responsive” and backed off.

Despite what appears to be an unsuccessful outcome, the Office of the Inspector General still claims that this audit produced $60 million in savings.  The audit itself indicates that the $60 million was, in fact, “reprogrammed to meet higher priority operations.” That means it was reallocated to other DOD accounts – and not saved.

Since this audit was all about an opportunity to save $400 million – and DOD balked, maybe these so-called savings might be better characterized as lost savings.

In my Report Card, this audit earned low scores – mainly because it failed to verify actual costs of the two drone contracts, using primary source accounting records. And it failed to assess the validity of DOD’s estimated savings of $400 million.

I am not convinced this audit deserves a higher score – especially since it took 22.5 months to complete, and the recommendations – though initially tough -- were watered down at the end.

The next report claimed $242 million in potential savings.

This one is entitled “Deferred Maintenance and Carryover on the Army Abrams Tank,” number 2010-043, dated March 2, 2010.

This report concluded that contrary to Army claims, depot maintenance on M-1 tanks was not deferred in fiscal year 2008. All planned overhauls were, in fact, completed, but a large sum of money was left-over. The Army requested and received a formal, written waiver to “carryover” $346 million in un-needed and un-used fiscal year 2008 M-1 maintenance funds for use in 2009 and beyond. The reason given was inadequate capacity at the Lima, Ohio tank plant. Without the waiver, this money would have been cancelled and lost. The report concluded that Army documents contained “inaccurate and misleading” information and may have caused a violation of the Anti-Deficiency Act. It recommended that the waiver be recinded and $275 million in FY 2008 money be cancelled, reprogrammed or reduced.

The Army appeared to agree with the recommendation to disclose the $275 million carryover to Congress, but non-concurred with other recommendations.

This report does not point to any real savings.

This report probably deserves higher scores except for timeliness and strength of recommendations.

It was untimely, taking 22 months to complete.

In addition, there were unresolved issues about the waiver document. Did the official, who signed the waiver, know that document may have allegedly contained false and misleading information? Was he questioned about its truthfulness? If so, the report should have recommended that he be held accountable.

The last of four reports uncovered $2.2 million in purported savings, but this one appears to be  more about helping the Army spend – not save – money.

It is entitled “Controls Over Unliquidated Obligations for Department of the Army Contracts,” number 2010-073, dated July 19, 2010.

This report deserves high scores for hitting most of the dots on the money trail, including verification of exact dollar amounts using primary source accounting records. Such nitty gritty accounting work is highly commendable.

Unfortunately, the objective of this audit appears to be questionable. The report finds that sloppy Army accounting work “could increase the risk that funds are unavailable for other needs because funds available for de-obligation are not identified in a timely manner.” Now what does that really mean?

It means that the money in question is no longer needed and is at risk of being “lost” because it is about to expire.

Having un-needed money lying around in the Pentagon is almost always a recipe for more waste. In the Pentagon, there is no such thing as un-needed money. Every dollar has a mission.

This report is all about managing money to make sure that every cent is spent before it expires. Avoiding the loss of appropriations is the primary responsibility of the Army Comptroller or Chief Financial Officer – not the IG.

In this scenario, the IG’s primary focus should be to ensure that “lost” appropriations are not used illegally – or that un-needed monies are not wasted by being shifted to another questionable project.  Money that is not needed should be reported to Congress and returned to the Treasury.

Although this audit deserves high scores in several categories, its long completion time – 16 months – and questionable focus lowers its overall score.

To summarize, Mr. President, there are two main problems with these four reports on savings and collections: 1) None was timely; and 2) Reported savings are unverified and elusive.

First, these four reports took an average of 19 months to complete. Two took a total of 45 months or almost four years to finish. And that does not include the four to six months it takes – I am told -- to get each audit rolling. As I have said on other occasions, the power of top quality audit work is greatly weakened by stale information.

Second, these four audits supposedly produced $4.2 billion in collected savings. But all of that money appears to have been shifted to other DOD accounts and spent. To the best of my knowledge, not one cent was really saved or re-deposited in the taxpayer’s bank account.

Only in the government could you spend all the money and still claim savings.

What we are really talking about here are lost savings that grew out of waste that was thankfully discovered and avoided. And waste that is avoided surely has monetary benefits.

In closing Mr. President, I would like to share a simple observation with my colleagues.

For some reason, auditors in the Office of the Inspector General show a great reluctance to use the word waste in their reports. That word rarely – if ever – appears in their audits. At the same time, auditors seem overly eager to tout savings and efficiencies. Now, why would that be? Could it be that their superiors in the Pentagon take a dim view of the word waste?

Savings may be nothing more that the flip-side of waste. Auditors detect and verify potential waste and then convert it to potential savings by proposing remedies to eliminate the waste. Maybe the auditors need to start calling it what it is – call it waste, and then talk about savings.

I yield the floor.

 
Governor Quinn Promotes Summer Jobs and Internship Program for Teens PDF Print E-mail
News Releases - Business & Economy
Written by Andrew Mason   
Tuesday, 05 July 2011 22:28

Illinois Conservation Corps Provides Valuable Work and Life Experience to Young People Throughout Illinois

CHICAGO – July 5, 2011. As part of his jobs agenda, Governor Pat Quinn today promoted a summer internship and jobs initiative for more than 2,500 teens and young adults throughout Illinois. The Illinois Conservation Corps will provide opportunities at more than 100 not-for-profit conservation, recreation and education-focused employers, including state parks, park districts and nature centers.

“It is never too early for our young people to get started on a career path and to teach them responsibility and leadership skills,” said Governor Quinn. “Green jobs are the jobs of the future, and these internships will prepare our youth to compete in the economy of tomorrow.”

The Illinois Conservation Corps will enable approximately 2,500 young workers to earn $8.50 an hour at more than 100 locations, including park districts, libraries and forest preserves. The effort is being managed by the Illinois Department of Natural Resources (IDNR).

“This is a great opportunity for our youth to gain valuable life and work experience, while furthering Governor Quinn’s priority of leaving no child inside by enhancing local recreational and conservation programs,” said IDNR Director Marc Miller.

Through one component of the program, local units of government, and nonprofit entities will receive grants to employ 16 to 19-year-olds in youth-focused educational, recreational and conservation programs.

A second aspect of the program enables IDNR to employ 18 to 25-year-olds as Seasonal Conservation Workers in state parks and other IDNR properties.

For more information about the Illinois Conservation Corps, please visit Jobs.Illinois.gov.

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Harkin Announces over $121 Million in Funding for Special Education in Iowa PDF Print E-mail
News Releases - Business & Economy
Written by Harkin Press Office   
Tuesday, 05 July 2011 14:34

WASHINGTON, D.C. - Senator Tom Harkin (D-IA) announced today that $121,013,583 from the U.S. Department of Education will be available in funding to the state of Iowa for special education in the 2011-2012 school year. The financial support helps meet the cost of special education and related services for children in Iowa and across the United States with learning and physical disabilities. The funding was made available by the Fiscal Year 2011 Full-Year Continuing Appropriations Act and will help support over six million students across the United States.

“I am pleased to announce this funding for students with disabilities across Iowa,” said Harkin. “It is imperative that we fund efforts that allow students to meet their full potential. This allocation will help ensure students will have access to the instruction and support they need to be successful.”

Harkin chairs the Senate Appropriations subcommittee that funds education and the Senate Health, Education, Labor and Pensions Committee.

 
Weekly Video Address: Deficit-Reduction Talks PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Tuesday, 05 July 2011 14:23

Advisory for Iowa Reporters and Editors

Friday, July 1, 2011

During his weekly video address, Senator Chuck Grassley discusses the status of the deficit-reduction talks and the importance of not leaving a legacy of debt to the next generation.

Click here for audio.

The text of the address is available below.

Grassley Weekly Video Address:

Deficit-Reduction Talks

The President is finally involved in the deficit-reduction talks, where $2.4 trillion in savings over 10 years is needed in order to offset about that level of an increase in the federal debt ceiling.  August 2 is the operational deadline, at this point.

The President’s posture is very combative, and the pressure that’s coming from the White House and Senate Democrats to raise taxes to increase revenues ignores two very important facts, separate from the harm it would do to the economy where job creation is still so weak.

First, Americans sent a clear message in the last election that they want government spending reined in.  They know it’s morally wrong to make the next generation pay the bills for the way we live today, and that the problem isn’t that people are taxed too little but that Washington spends too much.  In just the last two years, government spending increased by 22 percent.

Second, if history is a guide, then an increase in taxes is really a license for Congress to spend more money.  Professor Vedder of Ohio University has found that since World War II, for every dollar in tax increases, Washington has spent $1.17.

Serious spending reforms are needed for the sake of America’s fiscal well-being.

One of those reforms is a balanced budget amendment to the Constitution.  The federal deficit is 15 times bigger today than it was in 1997, the last time there was a vote in Congress on a balanced budget amendment.  It’s time to bring it up again.  I’m a cosponsor of legislation and have formally asked Senate leaders to hold hearings on a balanced budget amendment.  Forty-six of 50 states have a balanced budget requirement, and there should be one at the federal level.

In the meantime, the debt-ceiling debate provides a major opportunity to help bring fiscal accountability and responsibility to Washington.  And it emphasizes the need for pro-growth policies out of Washington – including less debt, but also regulatory relief, more exports, lower and simpler taxes and greater certainty about taxes, lower health care costs and an increased domestic energy supply.

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