Wednesday, September 4, 2013

Grassley Presses the White House to Ensure Protection for Whistleblowers

WASHINGTON - Senator Chuck Grassley, Ranking Member of the Senate Judiciary Committee, is pushing President Barack Obama to clarify protections for federal whistleblowers after a recent decision by the Federal Circuit Court that could be devastating for whistleblowers and may discourage them from reporting wrongdoing.

"The Federal Circuit has historically been unsympathetic to whistleblowers, but the Conyers ruling is over-the-top.  It's essentially a death knell to whistleblowers who are simply trying to help root out waste, fraud and abuse," Grassley said.  "Not only does the decision appear to exempt some employees from the provisions of the Whistleblower Protection Act, it will also have a chilling effect on potential whistleblowers throughout the federal government.  Even if a federal employee's current position is not considered sensitive, an employee who blows the whistle will now fear that his or her position may be designated non-critical sensitive as a means of retaliation."

A long-time advocate for whistleblowers, in addition to co-authoring the 1989 whistleblower law designed to protect federal whistleblowers, Grassley authored changes made in 1986 to the President Lincoln-era federal False Claims Act to empower private sector whistleblowers.  Since the 1986 amendments were signed into law, the False Claims Act has brought back more than $30 billion to the federal treasury, and has deterred even more fraudulent activity. In 2009, in coordination with Senator Patrick Leahy, Grassley worked to pass legislation to shore up whistleblower protections in the False Claims Act that had been eroded by the courts after years of litigation by defense and healthcare contractors.

Here is a copy of the text of Grassley's letter to the President.  A signed copy of the letter can be found here.

 

September 3, 2013

 

President Barack Obama

The White House

1600 Pennsylvania Avenue, NW

Washington, DC 20500

 

Dear Mr. President:

 

On August 20, 2013, the U.S. Court of Appeals for the Federal Circuit released an en banc decision in the case of Kaplan v. Conyers (Case 11-3207).[1] The majority held in Kaplan that the Merit Systems Protection Board (MSPB) cannot review the merits of Department of Defense (DOD) national security determinations concerning the eligibility of an employee to occupy a sensitive position.[2] I am extremely concerned about this decision and its impact on whistleblower protections.

 

With the passage of the Civil Service Reform Act of 1978 (CSRA), Congress created a process for employees against whom adverse personnel actions are taken.  That process, found in 5 U.S.C. § 7513, includes a provision which states in part: "An employee against whom an action is taken under this section is entitled to appeal to the Merit Systems Protection Board under section 7701 of this title."[3] An alternate process is outlined in 5 U.S.C. § 7532, which provides that "[n]otwithstanding other statutes, the head of an agency may suspend without pay an employee of his agency when he considers that action necessary in the interests of national security."[4] Further, the head of an agency may remove such an employee if he determines that removal is necessary or advisable in the interests of national security.[5] When action is taken under this section, the determination of the head of the agency is final.[6] Nevertheless, this process requires that if certain criteria are met, the employee must be provided with due process protection, such as a written statement of the charges against him and a hearing before an agency authority.[7]

 

In Kaplan, DOD chose not to exercise its authority under § 7532, yet nevertheless argued that it had the authority to make final determinations.  However, unlike the authority that has been delegated by executive order with respect to final security clearance determinations and which was upheld in Department of the Navy v. Egan,[8] DOD has had no authority delegated to it to make final decisions on suitability determinations.[9] In Kaplan, Circuit Judge Timothy Dyk wrote in a dissenting opinion joined by Judges Pauline Newman and Jimmie Reyna: "[T]he majority's decision rests on the flawed premise that the DoD, acting on its own?without either Congressional or Presidential authority?has 'inherent authority' to discharge employees on national security grounds.  No decision of the Supreme Court or any other court supports this proposition."[10]

 

By holding in DOD's favor, the majority in Kaplan strips several hundred thousand employees of rights under CSRA and the Whistleblower Protection Act (WPA) when an agency bases an adverse action on an eligibility determination.  In Conyers v. Department of Defense, the December 22, 2010, MSPB decision which was appealed by DOD, the MSPB warned: "Accepting the agency's view could, without any Congressional mandate or imprimatur, preclude Board and judicial review of alleged unlawful discrimination, whistleblower retaliation, and a whole host of other constitutional and statutory violations."[11] The Office of Special Counsel noted in an amicus brief that over 25% of the existing federal work force would be impacted by this exception from the CSRA and the WPA.[12]

 

In addition to automatically exempting some employees from the provisions of the WPA, this decision will also have a chilling effect on other potential whistleblowers throughout the federal government.  Even if a federal employee's current position is not considered sensitive, an employee who blows the whistle will now fear that his or her position may be designated non-critical sensitive as a means of retaliation.  A new rule proposed by the Office of Personnel Management (OPM) and the Office of the Director of National Intelligence (ODNI) would expand the range of federal employees whose positions could be deemed non-critical sensitive,[13] and as the dissent in Kaplan stated: "If positions of grocery store clerk and accounting secretary are deemed to be sensitive, it is difficult to see which positions in the DoD or other executive agencies would not be deemed sensitive."[14] OSC reasoned in its amicus brief that the arguments for deeming these positions sensitive "could be made about most federal employees, by virtue of their access to federal facilities and their ability to observe their surroundings."[15] OSC noted: "At a minimum, such logic could be extended to virtually any employee of DOD, DHS, and DOE.  The combined workforces for these three departments alone account for nearly 50% of the approximately two million federal employees who are covered by the CSRA."[16]

 

Without clear rules preventing a suitability determination being made in retaliation for a protected disclosure, federal employees will have a clear disincentive against blowing the whistle.  In MacLean v. Department of Homeland Security, a Federal Air Marshal disclosed to the press a text message stating that Air Marshal missions were cancelled for a period, which the Marshal believed was detrimental to public safety.[17] After the Marshal disclosed the text message to the press, he subsequently received a notice of proposed removal alleging that he had violated a regulation prohibiting the disclosure of "sensitive security information" (SSI).  Although the text message had not been labeled as SSI when it was sent, nearly one year later, while the Marshal was appealing the notice before the MSPB, the Transportation Safety Agency (TSA) issued a final order stating that the text message's content was SSI.[18] Among other things, the Marshal argued that his disclosure of the text message was protected under the WPA, an issue which the U.S. Court of Appeals for the Federal Circuit recently remanded to the MSPB for determination.[19] Regardless of the propriety of disclosing information to the press or whether the MSPB finds this particular instance to be a protected disclosure, this case illustrates the type of scenario a whistleblower could face after making a disclosure that would ordinarily be protected under the WPA.  Kaplan eliminates the procedural protection of being able to turn to the MSPB if such a whistleblower suffered from an adverse suitability determination as retaliation.

 

Therefore, I respectfully request that you issue an executive order clarifying that neither DOD nor any other agency has received the authority delegated from you to make final, unreviewable decisions regarding suitability determinations and clarifying that such determinations should be made under the provisions of 5 U.S.C. § 7513, which permits MSPB review.  At the very least, please direct that all employees who are not subject to the provisions of § 7513 must be given the protections offered by 5 U.S.C. § 7532.  Finally, please ensure that rules are promulgated to ensure that whistleblowers do not have their positions deemed non-critical sensitive after the fact when they have already blown the whistle.  This could be accomplished by amending the rule proposed by OPM and ODNI on designating national security positions.  Without such protective guidelines, federal employees will be left in limbo, with no certainty about whether disclosing information about waste, fraud, and abuse will be protected or not.  The chilling effect of such uncertainty would be devastating and would certainly discourage whistleblowers from reporting wrongdoing.

 

Your transition website from 2008 states:

 

Often the best source of information about waste, fraud, and abuse in government is an existing government employee committed to public integrity and willing to speak out. Such acts of courage and patriotism, which can sometimes save lives and often save taxpayer dollars, should be encouraged rather than stifled. We need to empower federal employees as watchdogs of wrongdoing and partners in performance. Barack Obama will strengthen whistleblower laws to protect federal workers who expose waste, fraud, and abuse of authority in government. Obama will ensure that federal agencies expedite the process for reviewing whistleblower claims and whistleblowers have full access to courts and due process.[20]

 

I trust that you will keep the commitment you made to the American people to ensure due process for whistleblowers.

 

Thank you for your prompt attention to this important matter.

 

Sincerely,

 

Charles E. Grassley
Ranking Member
Committee on the Judiciary

 

[1] Kaplan v. Conyers, 2013 U.S. App. LEXIS 17278 (Fed. Cir. 2013) (en banc).

[2] Id. at 34.  The definitions for critical-sensitive, noncritical-sensitive, and nonsensitive positions were established by Congress and are found in 32 C.F.R. § 154.13.

[3] 5 U.S.C. § 7513(d) (2012).

[4] 5 U.S.C. § 7532(a) (2012).

[5] 5 U.S.C. § 7532(b) (2012).

[6] Id.

[7] 5 U.S.C. § 7532(c) (2012).

[8] Dep't of the Navy v. Egan, 484 U.S. 518 (1988).

[9] Exec. Order No. 10,865, 3 CFR 398 (1959-1963).

[10] Kaplan, 2013 U.S. App. LEXIS 17278 at 2 (Dyk, J., dissenting).

[11] Conyers v. the Dep't of Defense, 2010 MSPB 247 (2010).

[12] Brief for Amicus Curiae The United States Office of Special Counsel in Support of Respondents and in Favor of Affirming the Merit Systems Protection Board's Decision at 4, Berry v. Conyers, 692 F.3d 1223 (Fed. Cir. 2012).

[13] Designation of National Security Positions in the Competitive Service, and Related Matters, 78 Fed. Reg. 102 (proposed May 28, 2013) (to be codified at 5 C.F.R. pt. 732), available at http://www.gpo.gov/fdsys/pkg/FR-2013-05-28/html/2013-12556.htm.

[14] Kaplan, 2013 U.S. App. LEXIS 17278 at 2 (Dyk, J., dissenting).

[15] Brief for Amicus Curiae, supra note 12, at 10.

[16] Id.

[17] MacLean v. Dep't of Homeland Security, 543 F.3d 1145, 1148 (9th. Cir. 2008).

[18] Id. at 1149.

[19] MacLean v. Dep't of Homeland Security, 714 F.3d 1301 (Fed. Cir. 2013).

[20] The Office of the President-Elect, "Agenda: Ethics," http://change.gov/agenda/ethics_agenda (last visited Aug. 29, 2013).

Just before Labor Day, I wrapped up 15 county meetings in Northwest Iowa.  Since Iowans first hired me to represent them in the U.S. Senate in 1980, I've held at least one meeting in each of Iowa's 99 counties every year.  Iowans are my boss.  As workers across Iowa know, keeping on top of what's on the mind of your boss is important to doing a good job and keeping it.  Representative government is a two-way street.  That's why I make it a priority to keep in touch with Iowans.  My annual road trip across the state adds up to an invaluable give-and-take that strengthens our system of self-government.

Despite deep-rooted cynicism about dysfunction in Washington, Iowans are active, vocal and respectful participants.  Levels of engagement ranged from downright fired up to earnest curiosity.  Iowa's longstanding record of civic participation in electoral politics and public policy leaves little room for apathy.  That's good news for making sure that our government works of, for and by the people.

Issues such as immigration, health care, employment, education and government overreach generated the most outspoken reaction among those who attended my meetings throughout the year.  Getting the economy back to life, tax-and-spending issues, gas prices, renewing the farm bill and U.S. military action in Syria also shared widespread concern.

Attendance ranged from a few dozen to more than 100 people.  When elected members of Congress hear unfiltered feedback from the grass roots, they can better understand how decisions made in Washington are impacting employers, workers, families, students and retirees.  By scheduling meetings in libraries and community centers, I want to foster an open dialogue with a cross-section of the public.  Visiting schools and touring manufacturing facilities, hospitals and other businesses allows me to bring my question-and-answer format to those who otherwise wouldn't be able to attend a meeting during the workday.  These workplace visits, in particular, provide a good opportunity to discuss how regulatory and tax policy decisions influence job creation, business expansion, workplace safety and health insurance.  Plus, it's always worthwhile to get to see in person Iowa's impressive scope of products and services in the marketplace.  It's good to see and hear how hard-working Iowans are helping to grow the local economy, create jobs, and build vitality and pride in our hometown communities.

Listening and visiting with Iowans is one of the most rewarding responsibilities of my job as Iowa's senior U.S. Senator.  A few grass roots' concerns I've recently put on Washington's radar screen include :

·         Seeking greater transparency and accountability from the National Security Agency, I've asked the Inspector General to check into NSA employees who intentionally may have abused surveillance authorities. Congressional oversight serves an essential role in our system of checks and balances to protect Constitutional boundaries and national security interests of the American public.

·         Advocating for nursing home residents who are receiving unnecessary anti-psychotic prescriptions and the taxpaying public's footing the bill.

·         Working to shield college-bound students from soaring tuition and student debt by holding tax-exempt institutions of higher learning to account for their spending decisions and seeking user-friendly tools to help families better understand college costs and types of student aid.

·         Tracking effectiveness of the 2010 Physician Payments Sunshine Act, a bipartisan law I championed to bring transparency to the financial ties between doctors and drug companies as taxpayers pick up the tab for billions of dollars of public health spending through Medicare, Medicaid, veterans benefits and starting next year, federal subsidies flowing through the Affordable Care Act.

Lawmakers return to a full plate of business after returning to Washington in September.  First, Congress will consider the President's proposal to use military force in Syria.  Work on tax-and-spending issues will take center stage as Congress sets funding levels for the new fiscal year starting Oct. 1.  Washington also must address the $16.7 trillion debt limit.  The Treasury Department expects to hit its borrowing authority by mid-October.

Throughout my 99 county meetings in 2013, one grass roots refrain shared from one side of the state to the other had a similar chorus:  disgust with Washington's spinning merry-go-round of debt and deficits.  Iowa households must make tough decisions to make ends meet, and it's time for Washington to get real on reining in runaway spending.  Iowans can be certain I will put that grass roots message squarely on Washington's radar screen during the looming debate on raising the debt limit.

Wednesday, September 4, 2013

by U.S. Senator Chuck Grassley

At the end of this year, the coverage provisions of the Affordable Care Act will take effect.  Regardless of what a person thinks about the massive changes the law will make to America's health care system, it's important to understand the economic impact of the health care law's regulatory burden and 23 tax increases.

The reality is that the Affordable Care Act creates multiple levels of new government regulation and the cost of the law is covered with taxes and penalties on businesses and consumers who already pay for their insurance.  Health insurance premiums are expected to jump significantly as insurers shift costs to comply with mandated health care benefits.

The law also continues to cause great uncertainty among employers.  The employer mandate requires companies with at least 50 workers to provide health insurance to those who work at least 30 hours.  In anticipation, some employers have cut back hours or added part-time staff instead of full-time positions.  The Bureau of Labor Statistics' recent employment report shows that of the 162,000 jobs added in July, a disproportionate share is skewed towards lower-wage, part-time work.  The ranks of part-timers being hired are swelling due to the uncertainty created by the employer insurance mandate.  The White House in July unilaterally decided to postpone the employer mandate, but the one-year delay does not remove the future burden on employers.  The delay also opens up insurance subsidies to fraud, as the IRS likely will not be able to certify if those who apply legally qualify.

The tax increases prescribed in the Affordable Care Act to raise $1 trillion over a decade include :

  • a 2.3 percent excise tax on the sale of medical devices effective January 1, 2013, increasing the cost of hip and knee replacements and other medical innovations that our aging society has come to depend on to extend quality of life;
  • a tax penalty on individuals for not buying qualifying coverage effective January 1, 2014, that gradually increases over the next three years.  In 2014 the penalty tax is limited to $95 or 1 percent of taxable income, whichever is greater, but by 2016 the tax grows to $695, or 2.5 percent of taxable income.  In the years following, the penalty will increase by a cost-of-living adjustment;
  • a payroll tax hike on higher-income taxpayers, lifting Medicare Part A's tax bite to 2.35 percent from those workers' paychecks;
  • a 3.8 percent surtax on investment income for higher-income taxpayers;

·         a tax increase that limits contributions to Flexible Savings Accounts (FSAs) to $2,500 and eliminates tax-free reimbursements for over-the-counter medicine for both FSAs and Health Savings Accounts;

  • limits on medical itemized deductions;
  • an excise tax on insurers of employer-sponsored, high-end health plans, effective in 2018;  this change places a punitive tax on those who have health coverage to help pay for those who do not;
  • annual fees on prescription drug manufacturing and health insurers; and,
  • a 10 percent tax on indoor tanning services.

Expanding access to health care coverage for the uninsured has broad support and steps need to be taken to increase access to coverage, especially for individuals, and to increase transparency and competitiveness in the cost of health care services.  But the new federal taxes, excises, penalties, mandates and fees in the Affordable Care Act come with tremendous economic costs.  What's more, the health care law won't bend the spending curve on exploding health care costs or encourage medical innovation.

All things considered, just as Washington can't tax our way to prosperity, the federal government can't tax its way to universal health care coverage without inflicting more harm than good.

Monday, August 26, 2013

Q:        What is the farm bill?

A:        About every five years, Congress passes a comprehensive farm and food policy bill, covering a range of programs and provisions.  The last farm bill, in 2008, contained 15 titles for commodity price and income supports, farm credit, trade, agricultural conservation, research, rural development, energy, and foreign and domestic food programs including food stamps and other food programs.  Most of the federal spending for programs in the 2008 farm bill went to four of those titles.  Nutrition accounted for 76 percent of the spending.  Crop insurance was nine percent.  Farm commodity support was seven percent.  And, conservation was seven percent of spending in the farm bill, according to estimates from the nonpartisan Congressional Budget Office.

 

Q:        What about the next farm bill?

A:        Debate over the 2012 farm bill is underway.  I'm a member of the Senate Agriculture Committee, where several hearings have been held this year to prepare for new legislation.  In August, I held three town meetings that focused on priorities for the new farm bill.  Iowa farmers told me that they want crop insurance to be maintained even if other programs need to be reduced, given the federal budget crisis, because crop insurance is a necessary tool for managing risk.  Farmers also are concerned about disproportionate cuts to the agriculture budget.  As I've said, everything's got to be on the table in the effort to reduce deficits and control spending, but the agriculture budget should be treated fairly.

 

Q:        How can farm commodity support be justified to taxpayers?

A:        The safety net for American agriculture is a way to make sure the United States has continued access to the most abundant and affordable food supply in the world.  Without a reliable food supply, nothing less than social cohesion and survival is in jeopardy.  The food safety net needs to be effective, efficient and responsible.  I hope the upcoming farm bill will include a farm-program reform that I've sought for a long time.  My farm program payment limits initiative would put a hard cap and other safeguards on payments farmers can receive from the federal farm program, including requirements to make sure those who receive payments are actively engaged in the farming operation.  The farm program was not designed to help big farmers get bigger but, today, 10 percent of the biggest farmers collect nearly 70 percent of total farm payments.  That runs counter to the goal of the farm program, which is intended to help small and medium-sized farmers - who play an important role in producing America's food supply - weather the downturns in the agricultural economy.  The farm program needs to focus on these farmers because when a farming operation gets larger, it's in a position to withstand tough years on its own.  The trend in farm program payments going to big farmers also has a negative impact on the next generation of farmers.  When 70 percent of farm payments go to 10 percent of farmers, it puts upward pressure on land prices and makes it a lot harder for smaller and beginning farmers to buy ground or afford to cash rent, which helps them get a foothold in farming.

 

Q:        How else does Washington impact the family farm?

A:        Just like other businesses and employers nationwide, farmers face headwind from heavy-handed regulations out of Washington.  During my meetings with Iowans, I hear time and again from farmers fed up with the lack of common sense behind too many of those regulations, whether it's the Environmental Protection Agency (EPA) trying to regulate the dust kicked up by the combine at harvest time or the U.S. Department of Transportation trying to treat locally-used farm vehicles like over-the-road semi-trailer trucks when it comes to licensing, permits and fees.

 

Farmers also need access the new market opportunities created by international trade agreements.  Congress is still waiting for a chance to pass long-readied trade agreements with South Korea, Colombia and Panama.  Lawmakers can't act until the President submits the agreements.  There's no doubt that Washington needs to open new doors for agriculture to overseas exports, to generate new economic activity and opportunity.

 

Iowa has a lot at stake in all of these areas.  Our state is the number one producer of corn, soybeans, pork and eggs.  Cow-calf operations in Iowa produce some of the finest beef cattle in the world.  Iowa dairy farms are integral to communities statewide.

 

Friday, September 2, 2011

by U.S. Senator Chuck Grassley

A decade after vicious terrorist attacks killed thousands of innocent people and caused immeasurable grief to victims and survivors, America has shown the world that 9/11 may have changed life as we knew it, but it has not changed America's commitment to freedom, liberty and the pursuit of happiness.

The national tragedy tapped an overwhelming sense of solidarity and sacrifice among Americans from across the country. Consider the selfless acts of courage and patriotism from the moment the hijackers commandeered three airplanes on that clear September morning 10 years ago: from the passengers aboard United Flight 93, to the first responders who reported to the World Trade Center and the Pentagon, and the heroes who serve on the front lines from within the nation's military and from behind-the-scenes in our intelligence and counterterrorism operations. Thanks to the allegiance of public servants and private citizens, our men and women in uniform and our captains of commerce and industry, the United States of America continues to serve as a beacon of hope, freedom and opportunity to the rest of the world. Those who sought to undermine the exceptionalism of the American people underestimated the resiliency of the American people.

Just consider the recent protests across the globe, where after decades of oppression, the people of Tunisia, Egypt and Libya have thrown out autocratic regimes in the pursuit of self-government, economic opportunity, higher standards of living and personal freedoms. The 10th anniversary of 9/11 offers Americans and our friends around the world the opportunity to embrace the common threads that tie us together.

For more than two centuries, the United States has attracted millions of newcomers to live and work in the land of opportunity. Generations of Americans have scaled the ladder of economic and social mobility, enjoyed the freedoms of press, speech and religion, and embraced the ups and downs of entrepreneurship, risk-taking and innovation. Unleashing the power of the individual has served as a catalyst for economic growth and prosperity for the last 235 years.

Along the way, the United States evolved as an economic, cultural and military leader in the world. The 9/11 terror attacks dealt a devastating blow to America and all of humanity. And yet, 10 years later, America still stands as the shining city on the hill. Despite the economic downturn, America still bears the promise of better days ahead. Despite high unemployment and unprecedented public debt, the American Dream still serves as the magical elixir that ultimately defines the nation's resiliency and bone-deep belief in the goodness of America.

That bone-deep belief in the goodness of America flows through the veins of those called to serve their country in the U.S. military, including one of Iowa's own hometown heroes who lost his life in the line of duty this summer. Jon Tumilson enlisted in the Navy after graduating from high school in 1995.  A 35-year-old Navy SEAL from Rockford, he was one of 30 Americans killed in one of the deadliest attacks on U.S. forces since 9/11. Barbara and I were able to pay our respects to this fallen Navy SEAL at his funeral in August. The long-time Iowa Hawkeye football and wrestling fan left behind family members and loved ones, including his beloved Labrador retriever named Hawkeye. The black lab led family members into the school gymnasium for the service and proceeded to lie next to the casket of his owner. They say a picture is worth a 1,000 words. The image of Tumilson's dog lying next to the flag-draped casket brought three words to mind; loyalty, loss and love.

Let's honor the memory of the many Iowans who've died in military service since 9/11, and all the soldiers and veterans who have served their country to protect U.S. national security and preserve our American way of life.

May their sacrifice remind us of their bone-deep belief in America's goodness. As policymakers return to Washington, D.C. and Americans observe the 10th anniversary of 9/11, let's keep their legacy and love of country close to mind as we work to put America back on the right track towards economic growth and prosperity.

 

Friday, September 2, 2011

Tuesday, March 29, 2011

Grassley Warns of Bailed-out Banks' Repaying Bail-outs With Government Funds

WASHINGTON - Sen. Chuck Grassley is asking the Treasury secretary for assurances that banks bailed out with government funds will not be allowed to use another government program to pay back their bailouts.

"The reports that banks from New York to Nashville are using federal dollars from the so-called Small Business Lending Fund to increase profits and 'pay back' TARP make this look like another TARP-style money shuffle," Grassley said. "Replacing one form of government subsidy with another wasn't a repayment when GM did it and it still isn't.  The Treasury Department has an obligation to put the brakes on any tricky bookkeeping that misleads the American taxpayer and subverts what this program was supposed to do."

Grassley wrote to Treasury Secretary Timothy Geithner, citing media reports and a bank earnings statement to investors that banks in Pennsylvania, Nashville and New York that received money through the $700 billion Troubled Asset Relief Program (TARP) are considering paying back that bailout with money received through the federal Small Business Lending Fund.  One bank touted increased "profitability" in converting TARP funds to Small Business Lending Funds in its quarterly earnings report.

Grassley asked Geithner for assurances that a repayment shuffle will not take place.  He asked for a description of Treasury's oversight plans to prevent such a shuffle and for information including a list of banks that have applied for loans under the small business program.

Last year, Grassley exposed the misleading nature of claims from the Treasury Department and General Motors that the company repaid a TARP loan through a business turn-around.  In fact, its repayment was via federal money held by the government.

The text of Grassley's letter to the Treasury secretary is available here.

Watchdog Group Names Grassley a "Taxpayer Hero"

WASHINGTON - August 10, 2010 - Senator Chuck Grassley has been named a "Taxpayer Hero" by the Council for Citizens Against Government Waste.

The elected representatives earning this designation "demonstrated unparalleled commitment to cutting wasteful spending, reducing the tax burden, and making government more accountable to taxpayers," according to Tom Schatz, the President of the Council for Citizens Against Government Waste.

"The problem isn't that Americans are taxed too little; it's that Washington spends too much," Grassley said.

Grassley is a leader in the effort to stop the massive, across-the-board tax increase on individuals, families and small businesses that will occur on January 1, 2011, if Democratic congressional leaders fail to act by the end of the year to prevent it.  Grassley is spearheading a separate effort to extend tax incentives for renewable energy, including biodiesel and ethanol.  Tens of thousands of green-energy jobs have been lost nationwide because congressional leaders failed to renew the biodiesel tax credit at the end of 2009.  Grassley also has advanced a comprehensive tax relief plan for America's small businesses, where 70 percent of net new jobs are created.  He's urged the President to say no to tax increases and remove the uncertainty about tax policy that is hurting the economic recovery.

Grassley serves as the Ranking Member of the Senate Committee on Finance, which is responsible for tax policy.

In addition, Grassley conducts proactive, ongoing oversight of the federal bureaucracy to protect taxpayers from waste, fraud and abuse.  And, he continually works to safeguard and strengthen a law he updated in 1986 by empowering whistleblowers.  As a result of his effort, including legislation enacted this year, the False Claims Act has recovered over $22 billion in tax dollars that otherwise would be lost to fraud.  The Grassley provisions of the law, which he originally sponsored with Representative Howard Berman of California, have proven to be the government's most effective weapon against health care fraud.  These amendments also have served as a model for new whistleblower legislation that Grassley has championed for the IRS and SEC.  Grassley also has won enactment of incentives to encourage state-level False Claims Act to fight Medicaid fraud.

News release issued today by the Council for Citizens Against Government Waste:

Taxpayer Watchdog Group Releases 2009 Congressional Ratings

(Washington, D.C.) - The Council for Citizens Against Government Waste (CCAGW) today released its 2009 Congressional Ratings, highlighting the voting records of all 535 members of Congress.  The report identifies members whose stellar voting records protecting taxpayers and saving money have won them the moniker of Taxpayer Hero and Super Hero.  CCAGW's 2009 Congressional Ratings also name hundreds of members who consistently voted against the fiscal interest of taxpayers.

CCAGW's 2009 Congressional Ratings scored 120 votes in the House and 74 in the Senate.  The average for the entire House was 31 percent (a 4 percentage point drop from 2008).  The average for the Senate was 39 percent (a one percentage point drop from 2008).  This year marks the twenty-first anniversary of the Congressional Ratings.

The 2009 Congressional Ratings cover the voting year 2009, the first session of the 111th Congress.  CCAGW rates members on a 0 to 100 percent scale.  Members are placed in the following categories: 0-19 percent Hostile; 20-39 percent Unfriendly; 40-59 percent Lukewarm; 60-79 percent Friendly; 80-99 percent Taxpayer Hero; 100 percent Taxpayer Super Hero.  CCAGW's website, www.ccagw.org, features the complete 2009 Congressional Ratings, including vote descriptions, scorecards for the House and Senate, and averages by chamber, party, and state delegation.

There were a total of seven House "Taxpayer Super Heroes," with a grade of 100 percent:  Reps. Paul Broun (R-Ga.), Jeff Flake (R-Ariz.), Jeb Hensarling (R-Texas), Cynthia Lummis (R-Wyo.), Mike Pence (R-Ind.), John Shadegg (R-Ariz.), and Lynn Westmoreland (R-Ga.).  In 2009, there were 89 "Taxpayer Heroes" in the House with a grade of 80 percent or above, a 51 percent increase from the 59 in 2008.  The big difference was in the number of Democratic House members with a perfectly abysmal score of zero.  In 2008 there were only 34.  In 2009, however, the number of members with a score of zero skyrocketed to 105, which is 41 percent of the 256 House Democrats.  The lone Democrat in the Taxpayer Hero category was Rep. Walt Minnick (D-Idaho), with 83 percent.

From 2006 through 2008, there were no Senate "Taxpayer Super Heroes" (scoring 100 percent), but fortunately there were two in 2009, Sens. John Barrasso (R-Wyo.) and Mike Enzi (R-Wyo.).  There were a total of 29 Senate "Taxpayer Heroes," 52 percent greater than the 14 in 2008.  The two next highest performers were Sens. John McCain (R-Ariz.) and Tom Coburn (R-Okla.) at 99 percent.  There were no senators with a score of zero, compared to 17 in 2008.

"Taxpayer Heroes and Super Heroes demonstrated unparalleled commitment to cutting wasteful spending, reducing the tax burden, and make government more accountable to taxpayers," said CCAGW President Tom Schatz.  "Their ratings are even more impressive given the record number of votes rated by CCAGW and the record number of representatives who could not vote even once to cut wasteful spending or taxes.  While far too many members of Congress on both sides of the Capitol demonstrated little regard for the consequences of failing to reduce the record $1.4 trillion deficit and $13 trillion debt, the Taxpayer Heroes and Super Heroes give taxpayers hope for the future."

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

WASHINGTON -Monday, June 21, 2010

Senators Chuck Grassley and Kit Bond have sent a letter to the Secretary of the Department of Housing and Urban Development, or HUD, reiterating their concerns about possible waste, fraud and abuse in the Department's distribution of stimulus funds to troubled Public Housing Authorities.

"Our oversight is focused on making sure the federal agencies handling the $787 billion in stimulus dollars passed by Congress and signed by the president last year are operating with the highest level of transparency and accountability.  In this case, taxpayers deserve an answer to why the federal agency gave tens of millions in stimulus dollars to housing authorities it found to be 'high risk.'  Is there so much pressure to shovel stimulus dollars out the door that responsible stewardship has been abandoned?" Grassley said.

"When families across the nation are still struggling to pay bills and put food on the table, the Administration owes Americans answers on why they chose to gamble with taxpayer dollars on risky organizations," Bond said.

Grassley initially sent a letter to HUD on March 15, 2010, in which he cited problems with a number of Public Housing Authorities that had been raised by the HUD Office of Inspector General and not adequately addressed in the HUD response.  Today, Grassley and Bond are seeking answers on the accuracy of troubled housing designations and the abuse of stimulus funds.

As ranking member of the Senate appropriations subcommittee that funds our nation's housing programs, Bond has questioned the Administration on their lack of oversight of stimulus funds awarded to troubled PHAs. Bond continues to stress that Congress - and the taxpayer - deserves answers on the benchmarks the Administration is using to hold PHA's accountable for their use of taxpayer dollars. The Senator also has concerns on whether the Administration is putting scarce resources to the best use - including whether they are investing in projects that will address the huge backlog of public housing capital needs. 

In its response, HUD agreed to Grassley's suggestion of posting Public Housing Assessment System scores on the HUD website.  Grassley and Bond also request that HUD post the following information on its website:  location of the Public Housing Authority; fiscal year in which the Public Housing Authority was designated as troubled; categorization of the Public Housing Authority problems (Troubled, Substandard Financial, Substandard Physical, and Substandard Management); the applicable narrative and corrective plan; total number of units involved; level of concern (high, medium, low); stimulus funding risk level; and amount of stimulus funding awarded to Public Housing Authority.

Click here to read Grassley's initial letter.

Click here to read HUD's response to Grassley.

Click here to read Grassley and Bond's June 16 letter to HUD.

Senator Chuck Grassley made the following statement after the U.S. Department of Agriculture released proposed rules to increase competitiveness in the livestock and poultry industry.  Grassley fought to ensure competition was addressed in the 2008 farm bill, which required the proposed rules.  This includes rules for specific legislation that Grassley pushed which required any arbitration provision in a contract be voluntarily agreed upon by both parties to settle disputes at the time a dispute arises, not when the contract is signed.

Grassley has led the congressional effort to address unfair practices, monopsony and vertical integration in agriculture.  He is the author of comprehensive legislation that would help ensure a level playing field for all market participants in the agriculture industry, including the independent producer and family farmer.

"The Department of Agriculture has made a concerted effort to address some of the unprecedented levels of concentration in the agriculture industry.  There's still more work to be done, but these proposed rules are a step in the right direction.  Producers of all sizes will benefit by having more bargaining power and additional rights to negotiate.  It gives producers an opportunity to have some control over a process that has all-too-often skewed against family farmers and independent producers.

"It's also important that the proposed rules for arbitration will be available.   I've fought for several years to allow farmers the opportunity to choose the best form of dispute resolution so they didn't have to submit to packers.  This will help level the playing field for independent producers."  

Here is a copy of USDA's press release.

USDA Announces Proposed Rule to Increase Fairness

In the Marketing of Livestock and Poultry

WASHINGTON, June 18, 2010?Agriculture Secretary Tom Vilsack today announced that on June 22, 2010 USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) will publish a proposed rule, as required by the 2008 farm bill and through existing authority under the Packers and Stockyards Act, that would provide significant new protections for producers against unfair, fraudulent or retaliatory practices.

"Concerns about a lack of fairness and commonsense treatment for livestock and poultry producers have gone unaddressed far too long," said Vilsack. "This proposed rule will help ensure a level playing field for producers by providing additional protections against unfair practices and addressing new market conditions not covered by existing rules."

The proposed rules address concerns that have been discussed for many years and were developed at the direction of the 2008 farm bill, which requires USDA to carry out specific rulemaking to improve fairness in the marketing of livestock and poultry.  During farm bill discussions in 2007, over 200 organizations across the country urged Congress to include a livestock title to improve market fairness and competition for producers.  Additionally, USDA identified other areas where new rulemaking is needed to ensure the marketplace is fair and competitive for producers.  Many of the concerns addressed in the rule were raised during the dozens of Administration Rural Tour stops attended by Secretary Vilsack last year, and the joint USDA-Department of Justice Competition Workshops held this year.  Additionally, GIPSA held three public meetings in 2008 to gather comments, information, and recommendations from interested parties.

Many of the concerns were related to increasing consolidation and vertical integration in the livestock and poultry marketplace, and shrinking farm numbers.  For instance, there were over 666,000 hog farms in 1980, but only roughly 71,000 today.  In the cattle industry, there were over 1.6 million farms in 1980, but only roughly 950,000 today.  In the hog industry, producers received 50% of the retail value of a hog in 1980, but only 24.5 percent in 2009.  For cattle, producers received 62 percent of the retail value of a steer in 1980, but only 42.5 percent in 2009.  In the poultry industry today, a grower makes 34 cents per bird, while the processing company however on average makes $3.23 a bird.

The proposed rule announced today would provide the following protections:

· Provide further definition to practices that are unfair, unjustly discriminatory or deceptive, including outlining actions that are retaliatory in nature, efforts that would limit a producer's legal rights, or representations that would be fraudulent or misleading.  Additionally, the proposed rule reiterates USDA's position that a producer need not overcome unnecessary obstacles and have to always prove a harm to competition when they have suffered a violation under the Act ;

· Define undue or unreasonable  preferences or advantages;

· Establish new protections for producers required to provide expensive capital upgrades to their growing facilities, including  protections to ensure producers  have the opportunity to recoup 80 percent of the cost of a required capital investment;

· Prohibit packers from purchasing, acquiring or receiving livestock from other packers, and communicate prices to competitors;

· Enable a fair and equitable process for producers that choose to use arbitration to remedy a dispute.  Additionally, clear and conspicuous print in the contract will be required to ensure producers are provided the option to decline the use of arbitration to settle a dispute.

· Require that companies paying growers under a tournament system provide the same base pay to growers that raise the same type and kind of poultry, including ensuring that  the growers pay cannot go below the base pay amount;

· Provide poultry growers with a written notice of a company's intent to suspend the delivery of birds under a poultry growing arrangement at least 90 days prior to the date it intends to suspend the delivery;

· Improve market transparency by making sample contracts (except for trade secrets or other confidential information) be made available on GIPSA's website for producers;

· Outline protections so that producers can remedy a breach of contract;

· Improve competition in markets by limiting exclusive arrangements between packers and dealers.

The proposed rule will be published in the June 22, 2010, Federal Register. GIPSA will consider comments received by August 23, 2010.  Comments may be sent via email to comments.gipsa@usda.gov or sent by mail to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW, Room 1643-S, Washington, D.C. 20250-3604.  Copies of the proposed rule and additional information can be found at: http://www.gipsa.usda.gov by clicking on Federal Register.

Floor Statement of Senator Chuck Grassley Unfinished Time-Sensitive Tax Legislative Business: Expiring Lower Marginal Rates and Family Tax Relief

Delivered June 17, 2010

Last week, I discussed the unfinished tax legislative business.  I used this chart.  The legislation before the Senate deals with only one small, but important, piece of unfinished tax legislative business.  These tax extenders are on their second Senate stop.   As the chart shows, the tax extenders, which are overdue by almost half-a-year, are not alone.  There are three other major areas of unfinished business.

One area is the one I discussed a couple of days ago. It's the Alternative Minimum Tax ("AMT") patch.

Another area is the death tax.  That's the area I talked about yesterday.

The third area is the 2001-2003 tax rate cuts and family tax relief package.  I'm going to discuss that policy today.

As important as the AMT patch and the death tax are, they are dwarfed by the impact of this third package of expiring tax provisions.   I'm referring to the marginal rate cuts and the family tax relief of the bipartisan tax relief that was enacted in 2001 and 2003.

Efforts to make these tax relief packages permanent were rebuffed.  The resistance was the result of a hard and determined Minority, marshaled by the Senate Democratic Leadership.  It was reflected in the budget resolutions offered and filibusters.  Even more inexplicable than the Democratic Leadership's failure to extend popular and bipartisan tax relief enacted in 2001 and 2003, were some of the reasons given.  It was basically said that since Republicans wrote the law, it is our, meaning Republicans', problem.  The left wing of the blog-o-sphere echoed the Democratic Leadership.

Some of those reflections in the blog-o-sphere even alleged that the sunset was a Republican conspiracy.

I came across a 2007 posting on the Daily Kos blog. The poster reviewed the provisions of the Tax Increase Prevention and Reconciliation Act of 2005, which was enacted in May 2006.  That legislation contained two basic pieces.  One was an extension of lower rates for capital gains and dividends.  Another was an extension of the Alternative Minimum Tax ("AMT") patch.   The poster's analysis concluded that that the bill was a "poison pill" designed to sabotage the economy to increase the prospects of Republican candidates in 2012.  The argument seems to be that having popular and bipartisan tax relief from 2001 and 2003 all sunset at the end of 2010 would cause such an economic mess that the Democrats, assumed by the poster to be in power at the time, will take the blame and suffer at the polls.

In a posting titled "The Monster Republican Tax Hike," the poster stated that "Republican Congresses chose not to make their tax cuts...permanent."  The argument seems to be that Republicans put sunset clauses in the bill solely to improve long term budget projections and that responsibility for the expiration of tax relief rests completely with Republicans.  The implication is that by lowering taxes, Republicans are responsible for a tax increase that would occur when the Democratic majorities control both houses of Congress.

The commentaries I just referred to are available to everyone in the April 12, 2007, edition of the Congressional Record.  I've heard that some Members on the other side, as well as key staff, have made similar assertions.

As one who was involved in the writing of these tax relief plans, I can tell the Senate, without reservation, that these assertions are untrue.  To begin with, it is completely ridiculous to suggest that President Bush and Republicans in general did not intend or desire the permanence of tax relief.  President Bush and Republicans in general have favored tax relief permanence.

You need look no further than the budgets I've referred to.  The Administration and Republican Congress budgeted for an extension of the bipartisan tax relief provisions.  That action affected the bottom lines of those budgets.  We heard, over and over and over and over again, the criticisms of those budgets.  We heard it from the Democratic Leadership, liberal think tanks, and some sympathetic East Coast media.

As a matter of fact, after three and one-half years of Congressional control, we still hear the Democratic Leadership's criticisms every day.  Just recently, the Speaker of the House was asked when the Democratic Leadership would cease laying the blame for all fiscal problems on Republican budgets for the years 2001-2006.  MSNBC's Chuck Todd recently interviewed the highest-ranking Democrat in the House.  Mr. Todd asked if there was a statue of limitations on placing responsibility on President Bush. "At what point do you think the public says, 'You know what, yes, we were unhappy with the Bush administration ... [but] stop blaming the Bush administration.' When does that run out?"  Mr. Todd asked.  "Well, it runs out when the problems go away," the Speaker replied.

The blame game is no substitute for doing the job you've been hired on to do.  People elect folks to public office to govern.  Governing isn't just about enjoying the benefits of public office.  Part of governing is also about making choices.  Some of those choices are tough.  And those of us in public life need to be accountable for those choices.  The Democratic Leadership can't have it both ways.  They can't continue the bipartisan tax relief and not be responsible for deficit impact those policies carry.  No family can make decisions about its budget and evade the consequences by blaming their next-door neighbors.  No business can make decisions about its budget and evade the consequences by blaming a competing business.

The fiscal consequences are an important part of that decision.  The statutory pay-go regime was enacted as part of the last debt limit increase.  It covers only part of the revenue loss of making permanent the bipartisan tax relief plans of 2001 and 2003.  For instance, the alternative minimum tax ("AMT") patch is extended for two years only.  Death tax policy is extended at 2009 levels only through 2011.  Even with those limitations, the Joint Committee on Taxation states complying with the pay-go rule means a revenue loss of over $1.5 trillion over 10 years.  I ask unanimous consent to insert in the record a copy of a Joint Committee on Taxation estimate of the tax relief covered by statutory pay-go.

The expiring tax relief I'm talking about today includes the marginal rate cuts and family tax relief.  Under statutory pay-go, the amount permitted in this area is about $1.4 trillion.  It covers about 80% of extending all of the marginal rate cuts and family tax relief from the 2001 and 2003 bipartisan plans.

That number makes sense because the bipartisan tax relief plans cut taxes for virtually every American family that pays income tax.  How significant and widespread is this tax relief?  This chart, drawn from Congressional Budget Office ("CBO") data, may shed some light.

The line measures the effective tax rate paid by the top 5% of taxpayers.

This group roughly represents those taxpaying families with incomes over $250,000.  Under the Democratic Leadership's budget, this line will go back up to where it was in 2000.  That is also where the President's budget and the statutory pay-go regime would take the rates.

Republicans believe this significant tax increase will be a mistake.  We hope that we will be able to debate this policy in the House and Senate in committee and on the floor.  That was, after all, the process we followed when the bipartisan tax relief plans were passed in 2001, 2003, and 2005.  We will point out that about half the heavy tax increases will fall on small business owners.  The top marginal rate on small business owners will rise by almost 17%.  Democrats and Republicans agree small businesses are the key job creators of the future.  President Obama correctly pointed out that small businesses create 70% of new jobs.  The rest will also hit investment hard.  The top capital gains rate will rise by 33%.  The top dividend rate could rise by almost 275%.  All of this is set to occur not at some far distant future point.  It occurs in a little over half a year from now.   We all hope the economy is on a path to recovery, but does this heavy tax increase on small business owners and investment ever make sense?   Even the most liberal member on the other side might wonder whether it makes sense now.  Do we really think the private sector will grow if we hit small business and investors this hard 6 months from now?

You can see that the bipartisan tax relief brought the effective rate down with respect to the bottom 95% of taxpayers.  That's the red line.  Here it is.

Some of my colleagues on the other side of the aisle may be thinking to themselves, sure this is true for income taxes, but what about other federal taxes like Social Security, which make up a large percentage of taxes paid by middle and low-income individuals?  Well, this chart is not just a depiction of federal income taxes, but includes all federal taxes.  This includes Social Security, other payroll taxes, and excise taxes frequently referred to by my colleagues on the other side of the aisle as regressive taxes.

Even including all federal taxes, over the last 30 years, the top five percent have paid a lot higher effective tax rate than the bottom 95%.   It's been that way no matter which party has controlled the White House, Congress, or both.  It shows something you would never know if you listen to the rhetoric of some on the other side, the punditry on the left, and some in the media.  Here's what it shows: a progressive income tax system is deeply embedded in our culture.  The bipartisan tax relief plans of 2001 and 2003 made the system more progressive.  Those plans brought the rates down for the bottom 95% of taxpayers.

The 2001-2003 tax relief plans dropped the effective tax rates for taxpaying families under $250,000 to their lowest levels in a generation.   This is the current law level of taxation.  In a little over half a year, these rates will pop back up for all these taxpayers.

I have a couple of charts that illustrate how significant the tax hits will be.  Middle income families will run right into these tax walls.  For a family of four with income of $50,000, that's a tax wall of $2,300.  For a single mom with two kids earning $30,000, that tax wall means $1,100.

The President, as powerful as he is, cannot unilaterally hike or cut taxes.  He needs a bill from Congress to do that.

On our side, we want all the tax relief made permanent.  We want the opportunity to debate and amend a bill that deals with this basic level of taxation.  As has been made clear for the last three and one-half years, Republicans do not control this Congress.  We cannot decide the fate of the marginal rate cuts and family tax relief.   This is unfinished business.  It's unfinished tax legislative business that affects virtually every American taxpayer.

It will have fiscal consequences.  They are pretty significant fiscal consequences.  But, if the Democratic Leadership wants to keep these levels of taxation low, then they have to deal with the fiscal consequences.  Alternatively, the Democratic Leadership can raise taxes and claim the revenue.  Not changing the law, by failing to act, is the same as raising rates on virtually every American taxpayer.  But they will have to explain to taxpayers why they raised taxes by almost 10% on average.

In the 2006 election, almost 4 years ago, the American People provided the Democratic Leadership with control of the Congress.   In the 2008 election, over 18 months ago, the American People provided the Democratic Leadership with the largest majorities in more than a generation.

They also provided the Democratic Leadership with a President of their party.

The Democratic Leadership spent the period of 2001-2006 thwarting efforts to make the bipartisan tax relief of 2001 and 2003 permanent.  Upon assuming control, they have spent three and one-half years with no legislation to make permanent or even extend the marginal rate cuts and family tax relief packages.   My friends in the Democratic Leadership need to step up to the plate.  We've had budgets and statutory pay-go.  We've debated and voted on the breadth and composition of the marginal rate cuts and family tax relief in those contexts.  No legislative action.  No House committee and floor action.  No Senate committee and floor action.

The Democratic Leadership needs to step up to the plate.  Blaming Former President George W. Bush and Republican Congresses of many sessions ago is no substitute for running this time-sensitive tax legislative business through the process.  Put forward proposals.  Debate them.  Allow for amendments.  Allow votes on amendments.  Do the People's Business.  It's time to check these boxes.

Pages