01 Aug 2012

the RFS, ethanol and corn

By Grassley Press

Floor Statement of U.S. Senator Chuck Grassley

The Renewable Fuels Standard, Ethanol, and the U.S. Corn Crop

Wednesday, August 1, 2012

 

Mr. President,

The President and CEO of Smithfield Foods, Larry Pope, took to the opinion pages of the Wall Street Journal again to blame all that ails him on the Renewable Fuels Standard.

Some may recall that he did the same thing back in April of 2010 when commodity prices were rising.  At that time, he perpetuated a smear campaign and blamed ethanol in an attempt to deflect blame for rising food prices while boosting Smithfield's profits.  And now he's at it again.

I may start referring to Mr. Pope as Henny Penny from the children's folk tale Chicken Little.  Every time Smithfield has to pay a little more to America's corn farmers to feed his hogs, Mr. Pope starts up with the same argument that the sky is falling and it's all ethanol's fault.

Mr. Pope's opinion piece in the Wall Street Journal might lead some to believe that he's very knowledgeable about the ethanol industry.  But there are many areas where he's not.  He continues to perpetuate the myth that ethanol production consumes 40 percent of the U.S. corn crop.  Mr. Pope states, "ethanol now consumes more corn than animal agriculture does."

Everyone with a basic understanding of a livestock farm, a corn kernel or an ethanol plant knows that's not true.  According to USDA, 37 percent of the corn supply is used in producing ethanol. But the value of the corn does not simply vanish when ethanol is produced.  One-third of the corn re-enters the market as a high value animal feed called dried distillers grains.

I would imagine that millions of hogs raised by Smithfield every year are fed a diet containing this ethanol co-product.  Mr. Pope appears unaware of its existence.  When the distillers' grains are factored in, 43 percent of the corn supply is available for animal feed.  Only 28 percent is used for ethanol.

This is the inconvenient truth for ethanol detractors.  They prefer to live in a bubble where they believe that ethanol is diverting corn from livestock use.  That's just not the case.

Mr. Pope also proclaims, "Ironically, if the ethanol mandate did not exist, even this year's drought-depleted corn crop would have been more than enough to meet the requirements for livestock feed and food production at decent prices."

I'd like to ask Mr. Pope, why do you think that is?  Why did farmers plant 96 million acres of corn this year?  Why have seed producers spent millions to develop better yielding and drought resistant traits?  The answer is simple:  Ethanol.

If not for ethanol, farmers wouldn't have planted 96 million acres of corn this year.  Without ethanol, I doubt we'd have seen investment in higher yielding and more drought tolerant corn plants.

I'm sure Mr. Pope is an intelligent man.  But he's woefully uninformed on the issue of what the ethanol industry and the demand for corn has done for the size and genetic improvement of the corn crop.

It's easy to understand Smithfield's motive.  They benefit from an abundant supply of corn, just not the competing demand for it.  What is Smithfield's primary problem?  Again, the answer is simple:  cost and profit.  They still want to pay $2 for a bushel of corn.

This is an important point that I hope people understand.  For nearly 30 years, until about 2005, companies like Smithfield had the luxury of buying corn below the cost of production.  Corn prices remained at about $1.50 to $3.00 a bushel for nearly 30 years.  Farmers routinely lost money.

The federal government then provided economic support for the farmers.  Producers like Smithfield had the best of both worlds.  They were able to buy corn below the cost of production, and let the federal government subsidize their business by guaranteeing a cheap supply of corn.

In the view corporate livestock producers, subsidies are just fine if they allow them to buy corn below the cost of production.  Anybody could look like a genius with that business model.

Mr. Pope also continues to overstate the impact of corn prices on the consumer.  Agriculture Secretary Vilsack recently stated that farmers receive about 14 cents of every dollar spent on food at the grocery store.  Of that, about three cents is the value of the corn costs.

A research economist at the USDA recently stated that a 50-percent increase in the price of corn will raise the total grocery shopping bill by about one percent.  To put it in perspective, the value of corn in a four-dollar box of corn flakes is about ten cents.

Mr. Pope also exaggerated the impact of ethanol on food prices in 2010, and he's doing it again today.  He's using the devastating drought to once again undermine our nation's food, feed and fuel producers.  And he's doing it to make more money.

Repealing the Renewable Fuels standard won't bolster Smithfield's profits.  Because of the flexibility built into the renewable fuels mandate, a waiver won't significantly reduce corn prices.

A recent study by Professor Bruce Babcock at Iowa State University found that a complete waiver of the Renewable Fuels Standard might reduce corn prices by only 4.6 percent.  The report states, "The desire by livestock groups to see additional flexibility in ethanol mandates may not result in as large a drop in feed costs as hoped."  And, "...the flexibility built into the Renewable Fuels Standard allowing obligated parties to carry over blending credits from previous years significantly lowers the economic impacts of a short crop, because it introduces flexibility into the mandate."

The drought is enormous in both scale and severity.  But we won't know the true impact until September, when the harvest begins.  The latest estimates from USDA indicate an average yield of 146 bushels per acre.  That would result in a harvest of 13 billion bushels.  This would still be one of the largest corn harvests.

I would suggest that those claiming the sky is falling withhold their call for waiving or repealing the Renewable Fuels Standard.  It's a premature action that will not produce the desired result.  And it would increase our dependence on foreign oil and drive up prices at the pump for consumers.
01 Aug 2012

revisionist history on tax increases, economic success

By Grassley Press

Floor Statement of Sen. Chuck Grassley

Revisionist History on Tax Increases, Economic Success

Delivered Wednesday, Aug. 1, 2012

 

Over the past few years, my colleagues on the other side have come to the floor repeatedly to present a revisionist story regarding the fiscal history of the last two decades.  On several occasions, I have come to the floor to refute this history.  Yet, again and again, the other side continues to present the same distorted facts, including just last week.

 

The general misguided argument is that all the economic and fiscal success of the 1990s is thanks to the Clinton tax increases, and the 2001 and 2003 bipartisan tax relief is responsible for all our economic and fiscal ills.

 

Neither of these claims is supported by the facts or a basic understanding of economics.

 

Let me begin with the Clinton tax increase.  Many on the other side of the aisle argue that Clinton tax increases are proof that tax increases will not harm our economy today.

 

They frequently ask, "If our economy grew in the 1990s with higher marginal tax rates, how can it be bad to raise marginal taxes to these former levels?"  Engrained in this argument is the assertion that tax hikes can actually be good for our economy.

 

This assertion fails to take into account the numerous economic factors that occurred alongside the Clinton tax increases. The fact is the economy grew, not because of the 1993 tax increases, but despite them.

 

The economy of the mid-1990s is a result of economic conditions that we may never see again.

 

It was a time of great economic expansion due, in large part, to the advent of the internet economy.  The internet spawned new technologies and created efficiencies in our economy that have never been matched.   In turn, these new technologies and efficiencies spurred startup businesses and new industries.

 

And, many seem to forget the huge Y2K fear that gripped the nation, causing billions and billions of dollars in government spending that helped prop up what became the infamous internet bubble that blew up on all of us.  Nevertheless, before the bubble burst, these factors led to historically low unemployment and high workforce participation.

 

Claiming this was due to the Clinton tax increase is equal to Vice President Gore's claim that he invented the internet.

 

My colleagues on the other side of the aisle would be hard-pressed to find many economic studies indicating tax increases are stimulative.  The focus of economic research in this area is not about whether tax increases are harmful or beneficial to the economy.  Rather, the focus is on the degree to which tax increases are harmful.

 

Admittedly, there are wide variations in the views of economists on the responsiveness of individuals and businesses to taxes.  However, even studies by economists who can hardly be labeled as conservative have concluded that tax increases have a significant negative effect on the economy.

 

For instance, a 2007 study by Christina Romer, President Obama's former chief economist, found that "tax increases are highly contractionary" and "have very large effects on output."

 

In fact, this study found that a tax increase of one percent of Gross Domestic Product could lower real GDP by as much as 3 percent.

 

Another likely contributor to the growth of the 1990s was the peace dividend we reaped from the end of the Cold War.  We have Ronald Reagan's stare down with the Soviet Union to thank for this.

 

The end of the Cold War allowed for a reduction in government spending as a percent of GDP.  Coupled with priorities pushed by the Republican-led Congress to reach a balanced budget and reform welfare, spending as a percent of GDP dropped to its lowest point in over 30 years.

 

With the government spending less of the people's money, more was left in the hands of the private sector. This allowed the private sector to innovate, invest, and create jobs.

 

The peace dividend is also the largest contributor to reigning in deficits in the 1990s.  The biggest source of deficit reduction, 35%, came from a reduction in defense spending.

 

The next biggest source of deficit reduction, 32%, came from other revenue because of the growing economy.

 

Another 15% came from interest savings.

 

The Clinton tax increases, on the other hand, only accounted for 13% of the deficit reduction.  That's right, only 13%.

 

There are further factors that contributed to the economic growth of the 1990s, including the expansion of free trade and the 1997 reduction in the capital gains tax rate.  However, in the interest of time, I won't go into these or other factors.

 

However, one thing is clear: The economic growth in the 1990s was not thanks to the Clinton tax increase.  Nor was it a major player in bringing our deficit into balance.

 

Today, we cannot rely on the unique economic conditions we experienced in the 1990s, some of which were artificial, to buttress the negative effects of a tax increase.    In fact, we are in the middle of one of the worst economic eras since the great depression.

 

Unemployment has remained above 8% now for more than 41 straight months - almost 3 ½ years.  Economic growth has been anemic.

 

Each passing day economic indicators are pointing more and more to the chance of a double dip worldwide recession.  Last Wednesday, it was reported that Great Britain's economy contracted at a rate of .7%. Then on Friday, it was reported that our own economy is stalling.  Real GDP grew at an annual rate of just 1.5%, continuing its downward trend for 3 straight quarters.

 

In a recent blog post, Nobel Laureate Economist Gary Becker addressed the question of whether raising taxes on high-income earners is a good idea.

 

In his post, Professor Becker entertained arguments by supporters of tax increases by hypothesizing that there is a 50-50 chance that higher taxes on the so-called rich would damage the economy.

 

Of course, I believe, as does Professor Becker, that in reality this chance is much higher than 50-50.  However, even granting the other side this generous assumption, he concluded the benefit of raising taxes was outweighed by the potential damage they would cause.

 

According to Professor Becker, even if richer individuals only slightly reduce their work hours and effort at work, the gain in tax revenue from these individuals would not be great.

 

In contrast, "the cost to the economy in the chance that higher taxes greatly discourage their effort is likely to be substantial in terms of fewer hours worked and less work effort by high income individuals, reduced incentives to start businesses, less investments in their human capital, investing abroad rather than in the US..., , and even migration abroad."

 

Yet, my colleagues on the other side are pushing billions of dollars in tax increases.   Just last week, they voted to increase taxes on nearly 1 million flow-throw businesses.  Their vote to increase taxes on job creators came on the heels of an Ernst and Young study detailing its ramifications.

 

This study concluded that these proposed tax hikes ? on top of 3.8 percent tax increase on dividends, interest, and capital gains that was added to pay for so-called health reform ? would reduce our economic output by 1.3 percent.  The Ernst and Young study also found that real after-tax wages would fall by 1.8 percent as a result of President Obama's policies.

 

Even in the face of this information, my colleagues on the other side seem all too willing to gamble with the chance that our stalling economy can withstand such a hit.  By doing this, they are playing Russian roulette with our economy.

 

To my colleagues I ask, how certain are you that tax increases on job creators won't be damaging to the economy?   If you have any doubt, don't pull the trigger.

 

Let me shift gears a little bit to address the record of the 2001 and 2003 tax relief.

 

Just as a perfect storm of good economic conditions blew at the back of the Clinton Administration, a perfect storm of bad economic conditions and unpredictable events blew in the face of the Bush Administration.

 

It is undisputed that, at the end of the Clinton administration, the Congressional Budget Office (CBO) was projecting a ten-year budget surplus of $5.6 billion.  Keep in mind, though, that CBO's projection was based on assumptions that did not pan out.

 

CBO failed to predict the bursting of the tech bubble that was so beneficial in previous years.  CBO also could not predict the September 11, 2001, tragedy that wreaked havoc on our economy.

 

In reaction to the economic recession from these events, Congress enacted the bipartisan 2001 tax relief that cut tax rates across the board, providing tax relief to virtually all taxpayers.

 

Then, in 2003, Congress expedited this relief so the benefit of lower rates would take effect more quickly.  This resulted in one of the shortest and shallowest economic recessions on record.

 

The economy grew for 25 straight quarters, making it the fourth-longest period of economic expansion since 1930.  Additionally, we had 47 straight months of private sector job gains.

 

Moreover, the expanding economy led to higher than expected revenue.  That's right.  Revenue actually rose in the years following the tax relief, peaking at 18.5% of GDP in 2007; well above the historical average of around 18%.

 

In fact, CBO projects that, if we extended all the 2001 and 2003 tax relief today, revenues would once again exceed the historical average.  Under this scenario, the CBO projects that by 2022 revenues will reach 18.5 percent of GDP.

 

From 2004 to 2007, the deficit also shrank from a high of $412.7 billion to a low of $160.7 billion.  That means the budget deficit was cut by more than half in just three years.

 

Given the trillion dollar deficits we are experiencing under President Obama, a deficit below $200 billion would be welcome news.

 

Yet, CBO projects that, even if all the tax increases in the President's budget were enacted, deficits would never drop below $500 billion from 2013 to 2022.

 

I will give the President this: He took office in very tough economic times.  The bursting of the housing bubble and the resulting financial crisis gave him a high hill to climb.

 

But, any assertion that that the 2001 and 2003 tax relief is related to these events is without any merit.

 

There is plenty of blame to go around for the housing bubble.  It was the culmination of housing policies spanning administrations of both parties.  It was further fueled by the Federal Reserve providing historically low interest rates and cheap credit.

 

However, the President's policies have failed at getting us out of this mess. The President's party passed the President's nearly trillion-dollar stimulus bill.  He claimed this would keep the unemployment rate below 8%.  However, the unemployment climbed to a high of 10.1% and has never dropped below 8% during his almost four years in office.

 

The President's party also passed the health care bill, which the President sold as a job creator, and the financial reform bill that was supposed to fix our financial system.  However, both of these bills, which the President signed into law, have actually turned out to be costly to our economy and a hindrance to job creation.

 

Now President Obama appears ready to gamble with the economy.  He appears ready to go all in on raising taxes on our nation's job creators.

 

In doing so, he is betting that raising taxes on the so-called wealthy will result in a political pay-off, exceeding the chance his actions will throw us back into a recession.

 

It is not so long ago I remember the President saying, "You don't raise taxes in a recession."  The President's statement is as true now as it was then.

 

Let's end the political theater of holding votes for the purpose of campaign ads.  Let's instead actually do what the people sent us here to do.   Let's not drive the American economy headlong off the fiscal cliff.

 

-30-
01 Aug 2012

Leahy, Grassley Introduce Legislation To Protect Whistleblowers In Criminal Antitrust Cases

By Grassley Press

WASHINGTON (Tuesday, July 31, 2012) -U.S. Senators Patrick Leahy (D-Vt.) and Chuck Grassley (R-Iowa), chairman and ranking member of the Senate Judiciary Committee, introduced legislation today to extend whistleblower protection for employees who provide information to the Department of Justice related to criminal antitrust violations.

Leahy and Grassley have long worked together on legislative priorities that protect whistleblowers. The Criminal Antitrust Anti-Retaliation Act is based on recommendations in a July 2011 report by the Government Accountability Office that found widespread support for anti-retaliatory protection in criminal antitrust cases. It allows an employee who believes that retaliation has occurred to file a complaint with the Secretary of Labor and provides for the employee to be reinstated to his former status if the Secretary finds in his favor. These protections are modeled on existing whistleblower statutes, including the protections Senators Leahy and Grassley authored as part of the Sarbanes-Oxley Act in 2002.

"Whistleblowers are instrumental in alerting the public, Congress, and law enforcement to wrongdoing," said Leahy. "Congress must encourage employees with reasonable beliefs about criminal activity to report it by offering meaningful protection to those who blow the whistle rather than leaving them vulnerable to reprisals."

Grassley said "Chairman Leahy and I worked together ten years ago to establish whistleblower protections for private sector employees as part of the Sarbanes-Oxley reform effort.  We updated those provisions three years ago, and today's initiative is a further extension of our efforts.  The legislation recognizes the value of whistleblowers that are willing to come forward with information about criminal antitrust violations in the private sector.  Their courage will help make certain antitrust laws are enforced, and they deserve protection and recognition for their actions."

A copy of the legislation can be found online.

 

#####

 

Statement of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,

On Introduction of The Criminal Antitrust Anti-Retaliation Act

July 31, 2012

I am pleased to join with Senator Grassley and today introduce the Criminal Antitrust Anti-Retaliation Act.  This legislation will provide important protections to employees who come forward and disclose to law enforcement price fixing and other criminal antitrust behavior that harm consumers.  Senator Grassley and I have a long history of working together on whistleblower issues, and I am glad we can continue this partnership today.

Whistleblowers are instrumental in alerting the public, Congress, and law enforcement to wrongdoing.  In many cases, their willingness to step forward has resulted in important reforms and even saved lives. Congress must encourage employees with reasonable beliefs about criminal activity to report such fraud or abuse by offering meaningful protection to those who blow the whistle rather than leaving them vulnerable to reprisals.

The legislation we introduce today was inspired by a recent report and recommendation from the Government Accountability Office which, based on interviews with key stakeholders, found widespread support for anti-retaliatory protection in criminal antitrust cases.  It is modeled on the successful anti-retaliation provisions of the Sarbanes Oxley Act, and is carefully drafted to ensure that whistleblowers have no economic incentive to bring forth false claims.

I have long supported vigorous enforcement of the antitrust laws, which have been called the "Magna Carta of free enterprise." Today's legislation is a necessary complement to them.  It has bipartisan support and was recommended by the Government Accountability Office.  I urge the Senate to quickly take up and pass this important legislation.  I ask unanimous consent that the full bill text be inserted in the Record.

# # # # #
01 Aug 2012

Report on Operation Fast and Furious

By Grassley Press

Congressional Investigators Release First Part of Final Joint Report on Operation Fast and Furious

Report Focuses on Role of ATF and Arizona U.S. Attorney's Office

WASHINGTON, DC -House Oversight and Government Reform Committee Chairman Darrell Issa and Senate Judiciary Committee Ranking Member Senator Chuck Grassley today released the first part of the final report on the joint congressional investigation of conduct in Operation Fast and Furious.  The report presents evidence detailing numerous errors and decisions by ATF officials and the Arizona U.S. Attorney's Office that led to serious problems - including inter-agency communication failures between ATF, DEA, and FBI.  The failed operation might have contributed to the deaths of U.S. Border Patrol Agent Brian Terry and an unknown number of Mexican citizens.  It also created an ongoing public safety hazard on both sides of the border.  The failures happened because of conscious decisions not to interdict weapons and not to stop suspects in the hope that they would lead to cartel connections and a larger case.

"ATF and the Arizona U.S. Attorney's Office failed to consider and protect the safety of Americans, Mexicans, and fellow law enforcement personnel throughout Operation Fast and Furious," said Chairman Issa.  "Testimony and a persistent reluctance to fully cooperate make clear that many officials at ATF and the Department of Justice would have preferred to quietly sweep this matter under the rug.  Though they are among the most vocal objectors to oversight by Congress, this investigation has also shown that both agencies are among those most in need of additional scrutiny and attention from Congress."

"The ATF wasted time, money and resources on wiretaps and put agents in harm's way trying to learn about the links that other agencies had already made," Grassley said.  "It's a classic case of government agencies' failure to connect the dots.  The ATF leadership claims it didn't get the full picture from the FBI until after the case was over.  We know the DEA was actively giving information to the ATF, but the ATF dropped the ball.  Whistleblowers put the spotlight on Operation Fast and Furious.  The ATF clearly needs to clean up its act, and the Department of Justice needs to make certain this kind of program is never allowed to happen again.  This report provides a road map of what went wrong."

This new report, "Fast and Furious: The Anatomy of a Failed Operation, Part I of III," is based on transcribed interviews with 24 individuals, some covering multiple days; informal interviews with more than 50 individuals; and the review of more than 10,000 pages of documents.  While the Justice Department has withheld tens of thousands of pages of documents and denied access to numerous witnesses, the investigation did find sufficient evidence to draw conclusions concerning the origins of Operation Fast and Furious, the detrimental effect of inter-agency miscommunications and turf issues, flawed strategies, delays, and an overall failure to effectively supervise subordinate offices.

The complete report consists of 2,359 pages, including 211 pages of text with 692 footnotes, 266 exhibits, and three appendices.

Below are excerpts from the report's conclusion (starting on p. 210):

"From the outset, the case was marred by missteps, poor judgments, and an inherently reckless strategy. In the summer of 2009, the Deputy Attorney General at the Department of Justice in Washington, D.C. promulgated a 'Strategy for Combating the Mexican Cartels.' The new aim was to zero in on the firearms trafficking networks. Agents were advised that 'merely seizing firearms' purchased illegally by straw buyers should take a back seat to gathering information in hopes of dismantling entire firearms trafficking networks. To effectuate the new plan, ATF agents in Phoenix convinced local gun dealers to cooperate by supplying ATF with real-time information on the straw purchases, even though ATF knew the buyers were illegally obtaining firearms destined for the Mexican drug cartels. The gun dealers were reassured that ATF was closely monitoring the transactions, and interdicting the weapons. That was false."

***

"Shortly after the case began, in December 2009, DEA supplied ATF with extensive information on what would become ATF's prime target. At that point, ATF should have shut Fast and Furious down, but it failed to recognize the significance of the information the DEA had shared. Instead, ATF continued with its plan to identify all the players in the trafficking network rather than disrupt or deter them through confrontation and arrest. So, hundreds of guns flowed to criminals while two of the trafficking network's customers, who were its connection to the Mexican drug cartels, were already known to U.S. law enforcement. Both the FBI and DEA had key information on the network's connection drug cartels in Mexico by the time ATF's wiretaps were approved."

***

"Though Attorney General Holder testified that the case was 'fundamentally flawed' and President Obama has stated that mistakes may have been made, all responsible ATF officials still work either at the ATF or within the Department of Justice. The two men most closely identified with the failed strategy of the case and who bear the brunt of responsibility for supervising the operation on a day-to-day basis, William Newell and David Voth, have both kept their jobs at ATF."

***

"This report is not intended to imply in any way that the mistakes and responsibility for Operation Fast and Furious are limited to ATF and other federal officials who were based in Arizona. While mistakes by figures in Arizona were immense, the joint Congressional investigation into Operation Fast and Furious will issue a second report detailing the mistakes and culpability of Department of Justice officials based in Washington, D.C."

***

"Operation Fast and Furious was the largest firearms trafficking case involving the U.S.-Mexico border in the history of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case began in the fall of 2009 in ATF's Phoenix Field Division under the leadership of Special Agent in Charge William Newell, an agent with a history of sanctioning the dangerous investigative technique known as gunwalking. Newell had been reprimanded before by ATF management for pushing the envelope with discredited tactics. But Newell had an audacious goal. He intended to dismantle the U.S.-based gun trafficking network that supplied the formidable Mexican Sinaloa Cartel. When the Obama administration resurrected an earlier case in which his division used reckless gunwalking tactics, Newell saw his opportunity."

***

Click here for a copy of the report, "Fast and Furious: The Anatomy of a Failed Operation, Part I of III" and the 2,148 page appendices.

###
31 Jul 2012

Treasury nominees, whistleblower office responses

By Grassley Press

WASHINGTON - Sen. Chuck Grassley of Iowa has released his objection to proceeding to the nominations of two Treasury nominees after receiving responses to his inquiries urging action to correct slow progress on whistleblower claim processing and the issuance of awards at the Internal Revenue Service whistleblower office.

 

The text of Grassley's floor statement lifting his objection follows.

 

Grassley's July 20, 2012, letter to the Treasury secretary and IRS commissioner is available here.

 

The IRS' response to Grassley's July 20, 2012, letter is available here.

 

Treasury's response to Grassley's July 20, 2012, letter is available here.

 

Grassley's June 21 letter is available here.

 

The IRS' response to Grassley's June 21, 2012, letter is available here.

 

Treasury's response to Grassley's June 21, 2012, letter is available here.

 

The IRS' June 20, 2012, directive to IRS executives and senior managers is available here.

 

 

Floor Statement of Sen. Chuck Grassley

Monday, July 30, 2012

 

On June 27, I provided notice of my intent to object to proceeding to the nominations of Mark J. Mazur, to be an Assistant Secretary of the Treasury and Matthew S. Rutherford to be an Assistant Secretary of the Treasury.  My support for the final confirmation of these nominees depended on receiving information from both the Treasury Department and the Internal Revenue Service regarding their implementation of the tax whistleblower program. Since I have received the responses, I no longer object to proceeding to these nominations.

 

The IRS is making progress in paying whistleblower awards under the old statute - over 90 awards paid from October 1, 2011, until now.  However, I want to make clear that the responses do not alleviate my concerns about these agencies' implementation of changes to the tax whistleblower statute I authored almost six years ago.  Regulations to implement the new reward program have yet to be issued and only a handful of awards are expected to be paid out before the end of this year.

 

I began asking questions about the program's implementation in 2010.  I wrote again in 2011 and then again on April 30 of this year.  Unfortunately, I did not get complete answers until I objected to proceeding to the nominations of Mr. Mazur and Mr. Rutherford.

 

If I hadn't objected to proceeding to these nominations, Congress would not have received the most recent annual report on the whistleblower program that is mandated by law.  It was provided to Congress on June 13, 2012, for the fiscal year ended September 30, 2011.  That's almost nine months from the end of the year for which it contains data.

 

If I hadn't objected to proceeding to these nominations, the IRS like would not have acknowledged that there is, in fact, a problem with timely processing whistleblower claims.  IRS Deputy Commissioner Miller's June 20, 2012, directive to IRS executives and senior managers is a good first step towards correcting this problem.

 

However, more needs to be done. IRS still has not committed to prioritizing claims raised by whistleblowers.  In addition, the important protections afforded to taxpayers, including the right to appeal IRS decisions, delay IRS from actually collecting the taxes for years and, as the law is currently written, the taxes must be collected first before a whistleblower can be paid any money.

 

From my long history of oversight of the IRS, I know that it is essential that taxpayers be protected from sometimes overeager IRS employees.  Yet, there must be a way to ensure that the process and procedures that exist to protect taxpayers don't deter whistleblowers from coming forward. The Treasury Department and the IRS have agreed to participate in a roundtable discussion that I hope will help identify solutions.

 

It is unfortunate that objecting to these nominees, both of whom were approved by the Finance Committee by unanimous, bipartisan votes, was the only way I could get information about the whistleblower program.  At least there is now more information than ever before about the IRS whistleblower program.

 

-30-
31 Jul 2012

Grassley plans additional August meetings in Iowa

By Grassley Press

WASHINGTON - Senator Chuck Grassley will hold town meetings with Iowans in Atlantic, Villisca, Bedford, Clarinda, Percival, Glenwood, Logan, Harlan, Audubon, and Carroll, speak with a service club in Corning and tour a business in Council Bluffs during the third week of the Senate's August recess.

 

"I look forward to these events and meetings to listen to comments and respond to questions.  My town meetings are open to the public, and everyone is welcome.  I also appreciate the opportunity to go to service clubs and workplaces for Q and A with Iowans" Grassley said.  "Representative government is a two-way street and strengthened by dialogue between elected officials and the people we represent."

 

Grassley has held at least one meeting with Iowans in every one of the state's 99 counties since 1980, when he was first elected to serve in the U.S. Senate.

 

Next week, on August 7, 8 and 9, Grassley will hold town meetings and speak to service clubs in Columbus Junction, Donnellson, Burlington, Agency, Bloomfield, Keosauqua, Mount Pleasant, Lockridge, and Cedar Rapids.

 

The Senate will be in recess from August 6 through September 4.  In addition to meetings with Iowans in 21 counties during this recess, Grassley will attend the Iowa State Fair in Des Moines.

 

Immediately below is more information about the August 20, 21 and 22 schedule.  Previously released details of Grassley's schedule on August 7, 8 and 9 also are below.   Grassley will be available to answer questions from reporters immediately following each event.

 

Monday, August 20, 2012

8:15-9:15 a.m.

Cass County Town Meeting

Cass County Community Center, Atlantic Room

805 West 10th Street in Atlantic

 

10:15-11:15 a.m.

Meet with Students at Villisca High School

Villisca High School Library

406 East 3rd Street in Villisca

 

12 noon-1 p.m.

Speak to Corning Rotary

Community Building

601 6th Street in Corning

 

2-3 p.m.

Taylor County Town Meeting

Taylor County Farm Bureau, Meeting Room

607 Pollock Boulevard in Bedford

 

3:45-4:45 p.m.

Page County Town Meeting

Page County Courthouse, Meeting Room, 3rd floor

112 East Main Street in Clarinda

 

Tuesday, August 21, 2012

7:30-8:30 a.m.

Fremont County Town Meeting

Sapp Brothers Travel Center

Apple Barrel Restaurant

2496 210th Avenue in Percival

 

10:15-11:15 a.m.

Mills County Town Meeting

Glenwood Senior Center

20 North Vine in Glenwood

 

12 noon-1 p.m.

Tour and Meet with Employees at Google Data Center 

1430 Veterans Memorial Highway in Council Bluffs

 

2-3 p.m.

Harrison County Town Meeting

Logan Community Center

108 West 4th Street in Logan

 

4-5 p.m.

Shelby County Town Meeting

Harlan Community Library

718 Court Street in Harlan

 

5:45-6:45 p.m.

Audubon County Town Meeting

Audubon County Economic Development

Community Room

800 Market Street in Audubon

 

Wednesday, August 22, 2012

7:45-8:45 a.m.

Carroll County Town Meeting

Carroll County Courthouse

Meeting Room, Use West Entrance

114 East 6th Street in Carroll

 

***

 

Tuesday, August 7

9:15-10:15 a.m.

Louisa County Town Meeting

Columbus Junction City Hall, ICN Room

232 2nd Street in Columbus Junction

 

12 noon-1 p.m.

Lee County Town Meeting

Pilot Grove Savings Bank, Community Center

506 North Main Street in Donnellson

 

2-3 p.m.

Speak at the Burlington Chamber of Commerce Meeting

Connect with Leadership Series

River Park Place

610 North 4th Street, Suite 200 in Burlington

 

4:30-5:30 p.m.

Wapello County Town Meeting

Agency Area Community Center

100 West Main Street in Agency

 

Wednesday, August 8

6:45-7:45 a.m.

Speak to the Bloomfield Rotary Club

Davis County Hospital, Conference Room D

509 North Madison Street in Bloomfield

 

8:45-9:45 a.m.

Van Buren County Town Meeting

Village Cup and Cakes

202 Main Street in Keosauqua

 

12 noon-1 p.m.

Speak to the Mount Pleasant Noon Rotary Club

Iowa Wesleyan College Student Center

Second Floor, Food Services Area

Mount Pleasant

 

1:30-2:30 p.m.

Jefferson County Town Meeting

Lockridge Senior Center

104 West Main Street in Lockridge

 

Thursday, August 9

5:30 p.m.

Speak at the Central States Shrine Association Legions of Honor Banquet

Cedar Rapids Marriott

1200 Collins Road Northeast in Cedar Rapids

 

-30-
27 Jul 2012

National crackdown on synthetic drugs

By Grassley Press

Sen. Chuck Grassley of Iowa is the sponsor of legislation enacted earlier this month that bans the chemicals used to make a dangerous synthetic drug called K2 or spice.  Grassley's measure is named for David Rozga, an 18-year-old Iowan who committed suicide shortly after trying the product, bought from a local store.  This week, the Drug Enforcement Administration is leading a national crackdown against the manufacturers, distributors and vendors of synthetic drugs.  Grassley made the following comment on the national crackdown.  The DEA's press release is available here.

"The Drug Enforcement Administration is doing exactly what needs to be done.  These drugs are poison.  It's a testament to the cynicism and greed of manufacturers, importers, and distributors that these products were ever put on store shelves.  But now that these drugs are illegal from Florida to Alaska, law enforcement is right to crack down and spare more kids the cruel fate of my constituent, David Rozga.  I realize drug manufacturers will continue to change formulas to skirt the law as fast as we can enact it.  If they have any conscience, they'll find legitimate ways to make money instead of preying on 18-year-olds.  Congress will enact new laws as needed."

 


25 Jul 2012

Grassley Asks FDA to Explain Instructions to Contractor on Documents

By Grassley Press

WASHINGTON - Sen. Chuck Grassley of Iowa is asking the Food and Drug Administration to explain a purchase order with a contractor certifying that 80,000 pages of employee communications posted online did not contain sensitive or personally identifiable information.

"The documents contained screen shots of employees' personal email and their email addresses," Grassley said. "That's personally identifiable information by common-sense standards, and it's protected by the Privacy Act.  It appears the purchase order certifying there was no personally identifiable information was incorrect, and the FDA needs to account for that."

Grassley is investigating the FDA's email surveillance of a group of whistleblowers who are concerned about the safety and effectiveness of certain medical devices.  A government contractor, Quality Associates, Inc., and the FDA put 80,000 pages of documents related to the whistleblowers on the Internet in the process of archiving them, raising questions about violations of privacy protection laws.

Grassley wrote to FDA Commissioner Margaret A. Hamburg to seek an explanation of the purchase order.  His letter is available here.  Last week, Grassley wrote to Hamburg, seeking information about the scope of the surveillance project and who exactly authorized it.  That letter is available here.

Grassley also wrote to other agencies, including the National Institutes of Health, that had documents made publicly available through the same contractor.

-30-
25 Jul 2012

Hearing on Judicial Independence and Civics Education, with testimony from Justice Sandra Day O'Connor

By Grassley Press

Wednesday, July 25, 2012

Thank you for holding this hearing, Mr. Chairman.  And I extend hearty greetings to Justice O'Connor for being with us today.  You were not only the first woman to serve on the Supreme Court.  You were the first Justice whose confirmation I voted for.  Your performance justified the confidence that the Senate placed in you.

We would like to believe that our judges, whose independence is guaranteed by the Constitution, rule based only on the Constitution and not on their policy preferences.  Judicial independence was established to make the courts independent of the other branches and independent of popular views.  It is not designed to make the judges independent of the Constitution so that they can impose their policy preferences.  We hear that if only our citizens properly understood the role of the courts, unprecedented attacks on judicial rulings would vanish.

This view is at odds with both current reality and the history of our country.  In fact, the leading reason for the so-called attack on judicial independence is the judges themselves.  Only last week, The New York Times reported that only a few weeks before the Court's health care decision, the public approved of the Supreme Court's performance by a 44-36 margin.

But the article reported that after the ruling, as many Americans disapprove of the Supreme Court as approve of its performance.  That decision, which some have speculated was issued, at least in part, to reduce political opposition to the Court, appears to have accomplished exactly the opposite result.

The article states that most Americans believe the decision was based mainly on the justices' personal or political views.  Only about 30 percent of Americans say the decision was made mainly on legal analysis.  For myself, I respect the decision, even if I am disappointed by it.  And I question no one's motives.  But I do not think that the poll results would be different if only the public had a better understanding of the Court.  In fact, I think the poll reflects that the public does have reason to suspect that politics enters into some Justices' decisions.  They accept them anyway, as shown by the polling on 18 earlier major cases presented in the article, two-thirds of which were unpopular with the population when they were decided.

Although unfortunate, this perception should not be a cause for alarm, so long as it does not lead to threats of violence, threats of impeachment, or threats to imprison judges for their rulings.  Much more serious threats to judicial independence have occurred regularly in our history when the citizens were convinced that what courts presented as law was not constitutionally sound, such as when Andrew Jackson refused to be bound by the Supreme Court's opinion of the constitutionality of the Bank of the United States or its rulings on Indian rights.  Or, when Abraham Lincoln said that the Dred Scott decision was "erroneous" and refused to accept it as a precedent because it reflected "apparent political bias."  Or, when Theodore Roosevelt ran the most successful third party candidacy in our country's history on a platform of "restriction of the power of the courts [so] as to leave to the people the ultimate authority to determine fundamental questions of social welfare and public policy," including the ability of voters to overturn constitutional rulings of state courts.  And, when Franklin Roosevelt tried to "pack" the Supreme Court because of its rulings striking down New Deal legislation.  So let us keep perspective.

It is not a violation of judicial independence for a senator to criticize court rulings that he or she believes are incorrect   It is not a violation of judicial independence for a senator to conduct legitimate oversight of the judiciary.   Those are appropriate ways of ensuring accountability.

But judicial independence could be jeopardized when a President at the State of the Union misstates the holding of a Supreme Court case in front of Justices when they cannot respond.  Judicial independence could be threatened when, after a pending case is briefed or argued, the President publicly misstates the process of judicial review and claims that the Court's legitimacy, and a particular Justice's legacy, will be tainted unless the Court decides that case as the President wants.  And judicial independence is certainly weakened if Justices give in to those attacks, rather than decide based on the Constitution, or appear to do so.

Finally, I appreciate Justice O'Connor's work in advancing civic education.  I believe that all citizens in a democracy benefit from the participation of informed and active citizens.  I think the ICivics site is a good one, although I wish CourtQuest told students that citizens can challenge laws on constitutional grounds in state as well as federal courts.  It should also say that a trial held for violation of a state criminal law claimed to violate the federal Constitution would be held in state and not federal court.  And, although I have supported federal efforts to promote greater understanding of our constitutional system, I do not believe that the federal government should develop and mandate civics standards.  And I do not think the Framers of the Constitution thought they had given Congress the authority to impose such standards.

Justice O'Connor, I look forward to your testimony.
24 Jul 2012

Ongoing questions on federal loan to Fisker Automotive Corporation

By Grassley Press

Monday, July 23, 2012

Grassley, Thune Continue to Seek Answers on Federal Loan to Luxury Car Maker

WASHINGTON - Sen. Chuck Grassley and Sen. John Thune today continued their pursuit of information about the Department of Energy's selection of a luxury automaker -described as "troubled" in various media reports -- for a $529 million federal loan for advanced technology vehicles manufacturing.  The federal government made part of the loan to the Fisker Automotive Corporation, then froze the remaining portion, raising questions about whether the company was vetted properly in the first place.

Grassley and Thune have sought answers from the Energy Department about the loan.  So far, the Energy Department has not provided much of the requested information.  Grassley and Thune today wrote to the Fisker Automotive Corporation, seeking much of the same information they requested from the Energy Department.

"The taxpayers deserve an accounting of what went wrong with the Fisker loan and whether the Administration misled the public about the economic benefits of the loan," Grassley said.  "The riskiness of loans to companies that may or may not be able to pay them back deserves scrutiny.  The taxpayers can't and shouldn't have to subsidize these decisions."

"There continues to be more questions than answers when it comes to the Obama administration's decision to loan Fisker Automotive $529 million of taxpayer funds," said Thune.  "Taxpayers deserve to know what went wrong and why this loan was approved in the first place.  Although taxpayers have already lost millions on bad Obama administration loans, this administration continues to ignore our basic questions on how these risky bets were made."

The senators' letter today to the Fisker Automotive Corporation is available here.  The senators' June 25 letter to the Energy Department available here.  The senators' initial letter to the Energy Department is available here.  The Energy Department's response is available here.

The Energy Independence and Security Act of 2007 required the creation of a direct loan program from the federal government to car companies through the Advanced Technology Vehicles Manufacturing incentive program.   Fisker's two planned vehicles would sell for more than $100,000 and about $50,000.  The high retail prices seem to indicate the vehicles would be out of reach for most Americans, thereby seeming like a questionable choice of investment for a federal program.  Also, the senators questioned whether the company's vehicle production in Finland diminishes the goal of developing advanced vehicle technology to create jobs in the United States.

-30-

Pages

Subscribe & Listen to Reader Podcasts

On Stands Now

 

Tagged Content

Two Ways to Subscribe

1. Subscribe to free weekly e-mail content updates.

You'll get both the current official narrative challenge and What's Happenin' in the Quad Cities.
(Did you know we publish a new Real Astrology and RCR Crossword every week?) 

Subscribe!

* indicates required

2. Get 12 monthly issues mailed first class for $48

Get 12 issues mailed monthly for $48 per year.

Get the printed Reader edition mailed to you (or anyone you want) first-class for 12 months for $48.
$24 goes to postage and handling, $24 goes to keeping the doors open!

Click this link to Subscribe now.