WASHINGTON - Senator Chuck Grassley, along with Senator Ron Wyden, this week filed an amendment to the banking reform bill that would make it even harder for individual senators to secretly obstruct the legislative process.  Grassley and Wyden have led the fight to eliminate secret holds, and in 2007, a modified version of their proposal was included in the Honest Leadership and Open Government Act.  The amendment offered to the banking reform bill is the same as legislation the Senators introduced on April 27.

"Secret holds have been a staple of the Senate for years, and there's no question that both Democrats and Republicans are responsible for the current abuses," said Grassley.  "The previous version of our legislation was so watered down in the final version that I stated at the time it was bound to be abused and ignored.  Many of our colleagues have finally taken notice, and have been sharing their thoughts on the Senate floor.  I welcome their involvement and I hope they'll work with us to get this real reform done and make holds transparent and accountable."

The amendment, and legislation, would eliminate a Senator's ability to indefinitely hold legislation in secret by requiring Senators to submit their holds to leadership in writing and to publically disclose all holds within two days whether or not the bill or nomination has been brought to the floor for consideration.  Leadership will only honor holds that they have in writing and that comply with the two day rule.

The current provision requires Senators to disclose their holds after six days, but the holding period has proven too long to be effective.  This requirement is triggered only when the bill is brought to the floor for consideration, so it's possible for Senators to indefinitely block legislation from reaching the floor without ever disclosing their actions.

Grassley has a long-standing practice of making all his holds public by placing a formal statement announcing and explaining the rationale for the hold in the Congressional Record.

Here is a copy of the prepared text of Grassley's floor statement after the ethics bill was signed into law, containing the requirements for disclosing holds.


Prepared Floor Statement of Senator Chuck Grassley

Secret Holds

Wednesday, September 19, 2007

Mr. President,

The Ethics Bill has now been signed into law and, as my colleagues are aware, it contains new requirements for "holds."  Senators may be wondering what exactly is required and how it will all work.  Well, as a co-author of the original measure, I have to tell you that I don't know.  The provisions have been rewritten.  I'm not even sure by whom because it was a closed process and Republicans were not invited to participate.  Now I'm trying to understand how these provisions will work.  Let me give a little background.

I have been working for some time, along with Senator Wyden, to end the practice of secret holds though a rules change or standing order.  I don't believe there is any legitimate reason why a single senator should be able to anonymously block a bill or nomination.  If a senator has the guts to place a hold, they ought to have the guts to say who they are and why they have a hold.  If there is a legitimate reason for a hold, then senators should have no fear of it being public.  I'm not talking hypothetically either.  I'm speaking from experience.  I have voluntarily practiced public holds for a decade or more and have had absolutely no cause to regret it.

Through the years, there have been several times where the leaders of the two parties have agreed to work with Senator Wyden and myself to address this issue, albeit in a way different than we proposed.  I have approached these opportunities with optimism only to be disappointed.  In 1999, at the start of the 106th Congress, Majority Leader Lott and Minority Leader Daschle sent a Dear Colleague to all senators outlining a new policy that any senators placing a hold must notify the sponsor of the legislation and the committee of jurisdiction.  It went on to state that written notification of holds should be provided to the respective Leader, and staff holds would not be honored unless accompanied by a written notification.  This policy was quickly forgotten or ignored by senators.

Then, recognizing that the previous Dear Colleague letter was not effective, Leaders Frist and Daschle sent another Dear Colleague in 2003 that purported to have an enforcement mechanism.  The new policy required notification of the legislation's sponsor, IF, and only if, a member of their party, as well as notification of the senior party member on the committee of jurisdiction.  In other words, this new policy required less disclosure than the previous policy since it only affected holds by members of the same party.  Nevertheless, the Leaders promised that if the disclosure was not made, they would disclose the hold.  It also reiterated that staff holds would not be honored unless accompanied by written notification.  That policy had more holes in it than Swiss cheese.  I'm not sure anyone understood the policy, and it had no effect that I can tell on improving transparency.

No longer willing to settle for half-measures that don't end secret holds once and for all, last Congress, Senator Wyden and I offered our standing order to require full public disclosure of all holds as an amendment to the Lobbying Reform Bill.  It was a well thought out measure that was drafted with the help and support of Senators Lott and Byrd, using their insights and knowledge of Senate procedure as former Majority Leaders.  Our standing order passed the Senate by a vote of 84-13.  While that bill did not become law, it became the starting point for the Ethics Bill passed by the Senate this year.  I thought that the Leaders had finally accepted that we would have full disclosure of holds.  In fact, our secret holds provisions remained intact in the version of the Ethics Bill that originally passed by the Senate earlier this year.  Then, even though the secret holds provisions related only to the Senate, and had already passed the Senate, they were rewritten behind closed doors by members of the majority party.  Once again, I feel like half-measures have been substituted for real reform.

Under the rewritten provisions, a senator will only have to disclose a hold "following the objection to a unanimous consent to proceeding to, and, or passage of, a measure or matter on their behalf."  Obviously in this case the hold would already have existed well before any objection.  In fact, most holds never get to this stage because the threat of the hold prevents a unanimous consent request from being made in the first place.  This is particularly true if the senator placing the hold is a member of the majority party.  In that case, the Majority Leader would simply not ask unanimous consent knowing that a member of his party has a hold.

For instance, it is not clear to me what would happen if the Minority Leader asked unanimous consent to proceed to a bill and the Majority Leader objected on his own behalf to protect his prerogative to set the agenda, but also having the effect of honoring the hold of another member of the Majority Leader's caucus.  Or, what if the Majority Leader asks unanimous consent to proceed to a bill, and the Minority Leader objects, but does not specify on whose behalf, even though a member of the minority party has a hold.  Would the minority senator with the hold then be required to disclose the hold?

I asked the office of the Parliamentarian for an opinion about how the new provisions would work in such instances, but with no legislative history for the changes to the Wyden-Grassley measure, the intent of the rewritten provisions was not evident.  Therefore, I wrote to the Senate Rules Committee to provide insight into the intent of the rewritten provisions.  The response referred me to a Section by Section Analysis of the bill in the Congressional Record that essentially restates the provisions, but sheds no light on my specific questions.  Perhaps that's because the answer is a little embarrassing.  Depending on how the new provisions are interpreted, in the first instance I mentioned, it is possible that holds by members of the majority party will never be made public.  In the second instance, a literal interpretation of the provision might indicate that either Leader could choose to keep a hold by a member of their party secret so long as they do not specify publicly that their objection is on behalf of another senator.

The Rules Committee letter claims that the changes were intended to make the provision "workable."  I don't see how the new provisions are any more workable than the original.  On the contrary, they are not only unworkable, but undermine transparency.

Under the changes, not only is disclosure of holds only required after a formal objection has been made to a unanimous consent request, but senators have a full six session days to make their disclosure.  What's more, a new provision was added specifying that holds lasting up to six days may remain secret forever.  What's the justification for that?  Six days is more than enough time to kill a bill at the end of the session.  And we are saying that it is OK for senators to do that in secret?  There are other changes that are puzzling to me.  For instance, our original measure required holds to be submitted in writing in order to be honored to prevent staff from placing holds without the knowledge of the senator.  However, in the rewrite, senators now must give written notice to the respective Leader of their "intent to object" only AFTER the Leader has ALREADY objected on the senator's behalf.  That is not only unworkable, it's absurd.

Mr. President, I have stated repeatedly and emphatically that, as a matter relating to Senate procedure, it would be completely illegitimate to alter in any way the original Senate-passed measure requiring FULL disclosure of holds.  The U.S. Constitution makes clear that, "Each House may determine the Rules of its Proceedings..."  The hold is a unique feature of the Senate, arising out of its own rules and practices with no equivalent in the House of Representatives.  As such, there is no legitimate reason why this provision, having already passed the Senate, should be altered in any way.  Nevertheless, it was altered in a very substantial way.  In fact, it was altered in a way that I fear will allow secrecy to continue in this institution.  Clearly, the so called "Honest Leadership and Open Government Act" was handled by the majority party in a way that is anything but.  Mr. President, I have been frustrated so far in my attempts to find answers about how the rewritten provisions will be applied, but we'll find out soon enough.  I can assure you that I will not give up until I am satisfied that the public's business is being done in public.



WASHINGTON --- Senator Chuck Grassley is working to make greater transparency at the Federal Reserve part of the financial regulation bill under consideration this week in the U.S. Senate.

"During the last two and a-half years, the Fed has gone well beyond what was viewed as its historical authority, and it's happened without any transparency and resulted in very little accountability," Grassley said.  "The Fed's extraordinary power outside of monetary policy should be subject to the light of day.  Trillions of tax dollars have been provided to financial institutions and corporations, and the public has a right to know who has taken the money and how it's been spent."

With Senator Byron Dorgan of North Dakota, Grassley has filed an amendment to the banking bill that would require the Federal Reserve to release information about its emergency lending program.  The Federal Reserve is appealing a March ruling by a federal court that required this action.

Grassley has cosponsored a separate amendment with Senator Bernie Sanders of Vermont to allow the investigative arm of Congress - the Government Accountability Office, or GAO - to audit the Federal Reserve.  It's based on legislation introduced last year and would require that a GAO audit be delivered to Congress within the year.

A year ago, Grassley won passage of an amendment he offered to the housing bill that gave the GAO the authority, for the first time, to access information from the Federal Reserve about its stabilization efforts with certain entities.  Grassley said the pending amendment to the banking bill allows independent investigators to review all of the Fed's actions where tax dollars were given to failing private-sector entities.


Prepared Floor Statement of Senator Chuck Grassley

Extension of the Biodiesel Tax Credit

Tuesday, May 4, 2010

Mr. President,

Last Tuesday, President Obama traveled to Iowa.  He visited counties and towns that have been hit particularly hard by the economic downturn.

While Iowa's average unemployment rate stands at 6.8 percent, Lee County's unemployment rate stands near 11 percent.  Wapello County's unemployment rate is at 9.5 percent.

Over 1,000 jobs have been lost in each of the three counties he visited since the recession began.

The visit to Iowa was billed as an effort to highlight the steps taken to achieve long-term growth and prosperity by creating a new, clean energy economy.  During his trip, the President visited a Siemens wind blade manufacturing facility in Ft. Madison.

The President touted Iowa's leadership in the production of wind energy.  I've had an opportunity to visit and tour the facility myself.  It's a great facility.

I recall just a few years ago speaking to the Siemens management when they were looking for a site for their first wind production facility in the United States.

I told the executives at Siemens they wouldn't be disappointed if they chose Ft. Madison for their facility, because Iowans are some of the hardest working and honest people in the county.

I'm particularly proud of the second-in-the-nation status of Iowa's wind production.

I first authored and won enactment of the Wind Production Tax Credit in 1992.  This incentive has led to the exponential growth in the production of wind across the country.

It has also helped Iowa to become a leader in the production of wind energy component manufacturing.

The emerging wind industry has created thousands of jobs in recent years in Newton, West Branch, Cedar Rapids, and Ft. Madison.

So, when President Obama says that energy security should be a top priority, I agree with him.

When he says we need to rely more on homegrown fuels and clean energy, I agree with him.

When he says our security and our economy depend on making America more energy independent, I couldn't agree more.

During a subsequent visit to an ethanol facility in Missouri, President Obama stated unequivocally that his administration would ensure the domestic biofuels industry would be successful.

The President and I are in strong agreement that renewable biofuels are a key part of our future.

Unfortunately, I believe President Obama missed an important opportunity to make a push for passage of the biodiesel tax credit.

While the President was in Iowa touting green jobs, this Democratic Congress has in effect sent pink slips to about 18,000 people who depend on the production of biodiesel for their livelihood.

On December 31, 2009, the biodiesel tax credit, which is essential in keeping a young biodiesel industry competitive, expired.

In anticipation of the expiration of the tax credit, Senator Cantwell and I introduced a long-term extension in August of 2009.  That bill was never considered last year.

In December, as the expiration loomed, I came to the Senate floor to implore my colleagues to put partisan politics aside and pass a clean extension of the biodiesel tax credit. Without an extension, I knew the industry would come to a grinding halt.

But, for whatever reason, the Democratic leadership in the House and Senate has never considered this extension a priority, and now the industry is experiencing the dire situation that I predicted.

On January 1st of this year, about 23,000 people were employed in the biodiesel industry. Because of the lapse in the credit, nearly every biodiesel facility in the country is idled or operating at a fraction of their capacity.

Nearly all of Iowa's 15 biodiesel refineries have completely halted their operations.  This has led to the loss of about 2,000 jobs in Iowa alone.

So, the thousands of jobs created by the wind industry in Iowa have essentially been offset by the thousands of jobs lost in the biodiesel industry.

You don't have to take my word for the dire state of the industry.  A $50 million biodiesel facility in Farley, Iowa, announced that they just laid off 23 workers and cut the pay for the rest of the staff.

Renewable Energy Group laid off 9 employees at a facility in Ralston, Iowa, and 13 in Newton, Iowa.

Ironically, the Newton biodiesel facility is a mile down the road from a wind manufacturing facility that President Obama visited on Earth Day last year.

And, during President Obama's trip to Iowa, he was within a few miles of three biodiesel facilities that are idled -- one in Keokuk, one in Washington, and another in Crawfordsville.

According to a press release from the Iowa Renewable Fuels Association, an Iowan affiliated with the biodiesel industry was able to speak to President Obama very briefly following the town hall session in Ottumwa.

Mr. Albin, a vice president with Renewable Energy Group, told President Obama that plants are idled and 90 percent of the biodiesel employees have been laid off as a result of the tax credit lapse.

According to Mr. Albin, President Obama assured him that he would not let the biodiesel industry die.  He recalls him saying, "I'm the President and I promise I'll do whatever I can.  Look, I'm on your side, but I've got a Congress to deal with."

It seems that even President Obama is frustrated by the lack of action by the Democratic Congressional leadership on this issue.

I'd ask unanimous consent to place the press release in the record at the conclusion of my remarks.

The board president of Western Iowa Energy in Wall Lake, Iowa, recently stated:

"Due to the continued lapse of the biodiesel tax credit, Western Iowa Energy continues to suffer from significantly limited sales and reduced sales forecasts.  Due to these market conditions, we have made the difficult decision to idle our facility. Today we are laying off 15 full-time employees. This represents more than 50 percent of our staff."

On February 10th, Senator Baucus and I worked in a bipartisan fashion to develop an $84 billion jobs package that included a one-year extension of several energy tax credits, including the biodiesel tax incentive.

Before the ink was even dry on the paper, Majority Leader Reid scuttled our bipartisan package in favor of a partisan approach.  That delayed passage of an extension in the Senate until March.

Now, it's been languishing for six weeks. Where is the urgency?

This Congress jammed through a stimulus bill that spent $800 billion to keep the unemployment rate below 8 percent.

Yet, we can't find the time to pass a simple tax extension that will likely reinstate 20,000 jobs overnight?

We're four months delinquent on our obligation to these biofuels producers, with no endgame in sight.  The lack of action on this issue defies logic or common sense.

So, while the Democratic leadership talks about creating green jobs, their action has led to job cuts.  Americans are unemployed today because of the action, or more aptly inaction, of the Democratic Congressional leadership.

The United States is more dependent on foreign oil because of the inaction of the Democratic Congress.

Automobiles are producing more pollution because we've essentially eliminated this renewable, cleaner burning biofuel.

Rural economies are being stripped of the economic gain of this value added product.

I urge the Senate to take immediate action to extend this tax incentive and reduce our dependence on foreign oil and save these green jobs.


Statement of Senator Chuck Grassley

Hearing of the Committee on Finance

The President's Proposed Fee on Financial Institutions Regarding TARP:  Part 2
Tuesday, May 4, 2010

I want to thank two Iowans who will be testifying on our second panel today.  They are John Sorensen, the president and CEO of the Iowa Bankers Association, and Pat Baird, the chairman of AEGON USA and the last chairman of the American Council of Life Insurers.

The statute that created TARP said that the President is supposed to propose a plan in 2013 to repay taxpayers for any losses from TARP.  However, earlier this year, three years before he was supposed to under the statute, the President proposed what he called a Financial Crisis Responsibility Fee. The President's top tax official, the Assistant Secretary for Tax Policy, admitted that the President's proposal is actually an excise tax, and not a fee. Obviously, in 2013 we will have a much better estimate of projected TARP losses than we have now in 2010.

The President said that one of the purposes of the TARP tax is to repay taxpayers for any losses from TARP.  I completely agree that taxpayers should be paid back every penny of TARP losses. Any losses that result from TARP will increase the deficit, which has ballooned under President Obama.  Therefore, to pay back taxpayers for any TARP losses, any money raised from the TARP tax would have to be used to pay down the deficit.  Let me repeat that, any money raised from a TARP tax would have to be used to pay down the deficit in order to pay back taxpayers.

If a TARP tax is imposed and the money is simply spent, that doesn't repay taxpayers one cent for any TARP losses.  It's just more tax-and-spend big government, while the taxpayers foot the bill for Washington's out-of-control spending.  I've heard that some of my friends on the other side of the aisle are already looking to use the money raised from a TARP tax to spend it under their arbitrary pay-go rules.

These are the same pay-go rules that say expiring spending provisions don't need to be paid for, but expiring tax provisions do need to be paid for.  That's inconsistent, until you realize that it leads to more taxing and more spending, which results in bigger government.

I hope that Secretary Geithner will assure us that the President means what he says about repaying taxpayers, and that the President will veto any TARP tax that simply spends the TARP tax money without paying down the deficit.

In looking at the President's TARP tax proposal, which I understand the President has already felt the need to change, I find it interesting that GM and Chrysler, which are responsible for about 30 billion of projected losses in TARP, are not subject to the President's proposed tax.

Also, Fannie and Freddie are not subject to the tax.  And hedge funds, like John Paulson's that is involved in the recent Goldman scandal, are not subject to the President's proposed tax.  Meanwhile, companies that did not take any TARP money are subject to the proposed tax. Also, companies that weren't eligible to take any TARP money are subject to the proposed tax. So, it's a questionable design that has been proposed by the President.

When I asked CBO to tell me who would bear the burden of the TARP tax, they said that one of the groups that would bear the burden of the tax would be consumers. I ask unanimous consent that the CBO letter, and a letter from the Independent Community Bankers Association in opposition to the TARP tax be printed in the record.

One of the purposes stated by the President was to reduce risky behavior by financial institutions.  However, CBO stated in their letter to me that the TARP tax "would not have a significant impact on the stability of financial institutions or significantly alter the risk that government outlays will be needed to cover future losses."

One area I'm concerned about is the effect of the tax on small business lending.  CBO stated in their letter to me that it will reduce small business lending.  This comes at a time when the President and my friends on the other side of the aisle are trying to increase the tax rates on small businesses at the end of this year.

The nonpartisan Joint Committee on Taxation has written that 47 percent of all flow-through business income will be hit with the President's proposed tax rate hikes.  This hits small businesses especially hard, because most small businesses are operated as flow-through entities.  I have yet to hear Administration officials even acknowledge this fact.  Instead, Administration officials choose to use the misleading talking point that the tax increases will only affect 2 or 3 percent of small businesses.  I look forward to hearing the testimony of Secretary Geithner and the other witnesses on the President's proposed TARP tax.


April 30, 2010

Sen. Chuck Grassley, ranking member of the Committee on Finance, today made the following comment on a report he requested from the Congressional Budget Office on the practice of some college and universities' maintaining a large untaxed portfolio of assets while simultaneously borrowing with tax-exempt debt. The report came out today.  Grassley requested the report in 2007 as part of his broad look at the non-profit sector, aimed at making sure non-profit institutions provide public benefit in exchange for their tax-exempt status and are not misused for individual benefit at taxpayer expense.  Universities and hospitals have the vast majority of assets in the tax-exempt sector.  An earlier CBO report looked at non-profit hospitals and tax arbitrage.

"This report finds that the majority of tax-exempt bonds are held by schools that have large investment assets. These schools are using their tax exemption to amass investments, receive tax-deductible donations, and float tax-exempt bonds.  These benefits are unique to tax-exempt entities. The federal government forgoes the revenue from tax-exempt entities in exchange for the social benefit from these institutions.  This report raises questions for parents, students, and taxpayers about universities' issuing bonds and going into debt when they have money in the bank.  Issuing bonds costs money on interest and management fees.  Does the expense of debt service take money away from student aid or academic service? Do bond issuances occur even as universities raise tuition and build investment assets?  These are further questions to explore."

The report is available at http://www.cbo.gov/ftpdocs/112xx/doc11226/04-30-TaxArbitrage.pdf

Grassley Legislation to Promote Greater Public Access to Federal Courtrooms Clears Committee

WASHINGTON - Legislation introduced by Chuck Grassley to allow federal trial and appellate judges to permit cameras in the courtroom today passed the Senate Judiciary Committee.  Grassley, along with Senator Charles Schumer of New York, have led efforts over the last several years to ensure the sun shines in on the federal courts.   The bill has broad bi-partisan support and has passed the Judiciary Committee several times.  The legislation has the support of the chairman of the Senate Judiciary Committee, Patrick Leahy of Vermont.

"Our judicial system is one of the best kept secrets in the United States.  Letting the sun shine in on federal courtrooms will give Americans an opportunity to better understand the judicial process.  This bill is the best way to maintain confidence and accountability in the judicial system and help judges do a better job," Grassley said.  "Cameras in our federal courts will be a tremendous learning tool for the American people and with the safeguards in place we have really good bill to help bring our courts into the 21st century."

Grassley said that states, including Iowa, have had great success in allowing the sun to shine on the court system.  Grassley also noted that the bill has safeguards in place to protect vulnerable witnesses, to exclude jurors from broadcast, and to allow a judge to use his or her discretion in determining whether to allow cameras in the courtroom.

During the confirmation hearings for the three most recent Supreme Court Justice nominees, Grassley asked the nominees about their support for allowing cameras in court proceedings.  The nominees indicated that they would consider having cameras in the courts.  Grassley expects to ask the President's next nominee as well.

The bipartisan "Sunshine in the Courtroom" bill allows the chief judge of federal trial appellate courts to permit cameras in their courtrooms.  The bill also directs the Judicial Conference, the principal policy-making entity for the federal courts, to draft nonbinding guidelines that judges can refer to in making a decision pertaining to the coverage of a particular case.  It also instructs the Judicial Conference to issue mandatory guidelines for obscuring vulnerable witnesses such as undercover officers, victims of crime, and their families.

Forty-eight states currently permit some form of audio-video coverage in their courtrooms and at least 37 directly televise trials.  Studies and surveys conducted in many of those states have confirmed that electronic media coverage of trials boosts public understanding of the court system without interfering with court proceedings.  Fifteen states have conducted studies aimed specifically at the educational benefits that are derived from camera access to courtrooms.  They all determined that camera coverage contributes to greater public understanding of the judicial system.

In order to provide a mechanism for Congress to study the effects of this legislation on the judiciary before making this change permanent, a three-year sunset provision is included in the bill.

The "Sunshine in the Courtroom" bill does not require a federal judge in a federal court to allow camera access to judicial proceedings.  The bill gives federal judges the discretion to allow cameras or other electronic media access if they see fit.  The bill also protects the privacy and safety of non-party witnesses by giving them the right to have their faces and voices obscured.

- 30 -


April 27, 2010

WASHINGTON - Senator Chuck Grassley has asked the Chairman of the Securities and Exchange Commission for more information about the agency's response to employees who used government computers to view pornography, noting that none of the employees identified by the Inspector General review was terminated, despite the Chairman's statement last Friday that termination would be the consequence for such violations.

Grassley also asked the Chairman to address claims made by an SEC employee that one of the employees was a supervisor received no more than a slap on the wrist.  The whistleblower employee said this same supervisor "bullied" examiners in an attempt to prevent them from pursuing "certain red flags" in an examination that uncovered a "massive fraud."  In his letter to the Chairman, Grassley said, "this complaint appears to allege a direct tie between a regulatory failure at the SEC and a supervisor who the SEC did not adequately discipline for viewing pornography on government computers and on government time."

Click here to read Grassley's letter to Chairman Mary L. Schapiro, along with the document containing allegations about the supervisor who was among the employees who engaged in misconduct.  Here is a copy of the letter Grassley received today from Inspector General David Kotz about the status of all the employees in question.

WASHINGTON - Senator Chuck Grassley applauded today's Senate passage of major veterans health legislation, which includes several provisions that Grassley worked to pass.  The legislation now goes to the President to be signed into law.

The Caregiver and Veterans Omnibus Health Services Act enhances VA health care for female veterans, provides additional support for family caregivers, expands mental health services, and improves traumatic brain injury care.

"Our veterans are the reason we enjoy the freedoms we have today.  Their efforts keep our country safe from those who wish to harm our democracy and way of life.  When they return from war, we must redouble our efforts to give them what they need to adjust.  This includes doing everything possible to heal both physical and mental wounds, as well as helping our veterans transition back to their everyday lives," Grassley said.  "The provisions in this bill are an important step in moving the veterans health care system forward and better addressing mental health injuries that are occurring at alarming rates."

Grassley cosponsored the Caregiver and Veterans Health Services Act, which is a major portion of the bill that was passed today. This legislation will provide training, financial assistance, medical and mental health care, and respite care to a family member who is the full-time caregiver of a veteran injured in the line of duty.

The Caregiver and Veterans Omnibus Health Services Act also includes provisions of the Honor Act, a Grassley co-sponsored bill, which will improve treatment for veterans and service members who have incurred mental injuries and better prepare them for stress associated with combat as well as their return home.

The bill also includes additional Grassley co-sponsored provisions that will improve access to VA health care for rural veterans.


Thursday, April 22, 2010

Grassley asks about GM repaying TARP loans with other TARP funds

WASHINGTON --- Senator Chuck Grassley is asking the Treasury Secretary to justify claims that General Motors has repaid its TARP loans when GM is using other TARP funds to repay the loans.

"It looks like the announcement is really just an elaborate TARP money shuffle," Grassley said.  "The repayment dollars haven't come from GM selling cars but, instead, from a TARP escrow account at the Treasury Department."

Grassley said his concern is based upon the most recently quarterly report from the Special Inspector General for TARP.  Mr. Neil Barofsky testified before the Finance Committee this week and stated that the funds GM is using to repay its TARP debt are not coming from GM earnings.

Grassley said it's a matter of the Treasury Department being straightforward with taxpayers about its management of the $700 billion taxpayer funded TARP program.  Click here to read Grassley's letter of inquiry to Secretary Timothy Geithner.

The Special Inspector General for TARP was created at the urging of Grassley and Senator Max Baucus of Montana, and when the Treasury Department changed the focus of the program less than a month after it began, Grassley worked with Senator Claire McCaskill of Missouri to retool the Inspector General's authority and empower the office to adequately scrutinize TARP spending and management.

Grassley has gone to bat for the Inspector General throughout the year, when the White House and Treasury Department put up barriers to the Inspector General asking questions and collecting information about where the money has gone.  Grassley has been an outspoken critic about the lack of transparency with how TARP funds have been used.  Last fall, he cosponsored legislation to end the program.

Opening Statement of Sen. Chuck Grassley

Hearing, "The President's Proposed Fee on Financial Institutions Regarding TARP"

Tuesday, April 20, 2010

Mr. Barofsky, I want to welcome you here today.  You and I are both big believers in oversight, accountability and transparency. Today we're discussing what the President calls a Financial Crisis Responsibility Fee.  However, the Assistant Secretary for Tax Policy told the dozens of people in attendance at a briefing for Senate staff on the President's fiscal year 2011 budget earlier this year that the President's proposed fee is actually an excise tax.

This is similar to the name game that the Administration and Congressional Majority played with the excise taxes in their health care bill.  Although they referred to the excise taxes as fees, the legislative text clearly states that they are actually excise taxes.  I will refer to it as the TARP tax, and not the bank tax as some call it, because the proposal applies not only to banks, but also to insurance companies, securities brokers, and thrifts, among others.

The statute that created TARP required the President to submit a plan by 2013 to recover any losses under TARP so that the taxpayers are fully repaid for any TARP losses.  However, three years before it was required, the President proposed this excise tax?the TARP tax.  One problem that surfaced recently is that Congressional Democrats are already reportedly planning ways to spend the money raised by the proposed TARP tax.

One proposal gaining steam among many on the other side lately is to add the TARP tax to the financial regulatory reform bill.  The Congressional Majority is so strapped for money to pay for out of control spending that members are looking to the banks and other financial institutions for money.  This reminds me of the story about a reporter asking Willie Sutton, a notorious bank robber, why he robbed banks.  Sutton allegedly said, "because that's where the money is."  I cannot emphasize this next point enough, if Congress decides to pass a TARP tax, that money should only go toward paying down the deficit.  Otherwise, the TARP tax wouldn't even pay for losses from TARP, it would just enable more taxing and spending by those who want to spend more.

All economists state that corporate entities don't actually bear the burden of taxes -- people do.  I wanted to know which people would bear the burden of the proposed TARP tax.  So I wrote a letter asking the nonpartisan experts at the Congressional Budget Office and Joint Committee on Taxation a series of questions.

The CBO responded to my letter by saying that customers would probably pay higher borrowing rates and other charges, employees might bear some of the cost, and investors could bear some of the cost.  The CBO also said that the TARP tax "would also probably slightly decrease the availability of credit for small businesses." In addition, the CBO said that, "for the most part, the firms paying the fee would not be those that are directly responsible for loss realized by the TARP."

One other item from the CBO letter worth noting is that the TARP tax would not apply to firms in the automotive industry.  That is really odd, since CBO's March 2010 TARP report states that the automotive industry accounts for $34 billion of the program's estimated total cost of $109 billion.  Chairman Baucus and I invited GM to testify before our Committee at one of the later hearings, but GM representatives said they didn't want to testify.  I believe GM's silence is deafening.

On another TAR-related matter, I want to thank you for investigating the multi-million dollar severance payments that Treasury is allowing TARP recipients like AIG to pay their departing executives.  As you know, I have communicated on several occasions with Treasury and the TARP Special Master for Executive Compensation about this troubling issue, and I have run into a stone wall.  I am also pleased that you are going to investigate the possible conflicts of interest on the part of key people at Treasury who worked on the TARP executive compensation regulations.

Since those regulations helped executives walk away with huge severance payments, we need to find out if they were drafted by people who used to represent the very executives affected by the regulations.  Treasury claims that all the proper recusals were made, but it has provided none of the documentation necessary to verify that claim.  I trust that you will be able to get to the bottom of these important questions and report back to the Committee in the near future.