WASHINGTON - Chuck Grassley today said that that he will be holding meetings in 25 counties from March 29 - April 6. The visits are part of Grassley's annual meetings in each of Iowa's 99 counties. The Senate will not be in session for a scheduled congressional recess.

"I've met with Iowans in every county, every year I've represented Iowa in the United States Senate. It's this exchange of ideas that gives me important insight directly from Iowans," Grassley said. "Holding a meeting in each of Iowa's 99 counties gives me the opportunity to have an open and honest dialogue with the people I serve in the U.S. Senate."

Grassley's meetings will take him to the counties of Allamakee, Buchanan, Butler, Cerro Gordo, Clay, Clayton, Dallas, Delaware, Dickinson, Dubuque, Emmet, Fayette, Floyd, Franklin, Hancock, Howard, Kossuth, Lyon, Mitchell, Osceola, Palo Alto, Warren, Winnebago, Winneshiek and Worth.

Grassley will hold town hall meetings in Aplington, Calmar, Cresco, Estherville, Forest City, Garner, Independence, Indianola, Manchester, Mason City, Northwood, Ocheydan, Rock Rapids, Strawberry Point, Waukee, Waukon, West Bend and West Union.

He will tour and meet with employees at Eaton Manufacturing in Spencer. He will also attend a ribbon cutting for the new Hormel Foods Plant in Dubuque.

He will meet with students at St. Ansgar Community High School in St. Ansgar, Charles City High School in Charles City and Harris-Lake Park Middle/High School in Lake Park.  In addition, he will speak with the Algona Rotary in Algona, and will meet with members of the Chamber of Commerce in Hampton.

Here is detailed information about Grassley's upcoming county visits.

Monday, March 29, 2010

7:30 - 8:30 a.m.- hold Warren County Town Hall Meeting, Warren County Administration Building, Board Room, Second Floor, 301 North Buxton Street, Indianola

9:30 - 10:30 a.m.- hold Dallas County Town Hall Meeting, Maple Street Community Center, 445 Maple Street, Waukee

Tuesday, March 30, 2010

8:30 - 9:30 a.m.- hold Buchanan County Town Hall Meeting, Buchanan County Courthouse, Assembly Room, 210 5th Avenue NE, Independence

Noon - 1:45 p.m.- Attend Hormel Foods Plant Ribbon Cutting, Progressive Processing, LLC, 1205 Chavenelle Court, Dubuque

3 - 4 p.m. - hold Delaware County Town Hall Meeting, Regional Medical Center, Veterans Memorial Event Center, Third Floor, 709 West Main Street, Manchester

4:45 - 5:45 p.m.- hold Clayton County Town Hall Meeting, Strawberry Point Public Library, 401 Commercial Street, Strawberry Point

Wednesday, March 31, 2010

7:30 - 8:30 a.m. - hold Fayette County Town Hall Meeting, Fayette County Courthouse, Assembly Room, 114 North Vine Street, West Union

9:45 - 10:45 a.m. - hold Allamakee County Town Hall Meeting, Farmers & Merchants Savings Bank, Community Room, 201 West Main Street, Waukon

Noon - 1 p.m. - hold Winneshiek County Town Hall Meeting, Calmar Public Library, Community Room, 101 South Washington Street, Calmar

2:15 - 3:15 p.m. - hold Howard County Town Hall Meeting, Cresco Bank and Trust, Community Room, 126 Second Avenue SE, Cresco

5:30 - 6:30 p.m. - hold Worth County Town Hall Meeting, Worth County Courthouse, Magistrate Room, 1000 Central Avenue, Northwood

Thursday, April 1, 2010

7:30 - 8:30 a.m. - hold Cerro Gordo County Town Hall Meeting, North Iowa Area Community College, Muse-Norris Conference Center, Rooms 180 A, B and C, 500 College Drive, Mason City

9:45 - 10:45 a.m. visit St. Ansgar Community High School, 206 East 8th Street, St. Ansgar

Noon - 1:15 p.m. - visit Charles City High School, #1 Comet Drive, Charles City

2:30 - 3:30 p.m. - Deliver keynote speech and answer questions at the Hampton Chamber Spring Meeting, Windsor Theatre, 103 Federal Street North, Hampton

4:30 - 5:30 p.m. - hold Butler County Town Hall Meeting, Aplington Community Center, Corner of 10th Street and Parriott Street, Aplington

Monday, April 5, 2010

8 - 9 a.m. - hold Winnebago County Town Hall Meeting, Winnebago County Courthouse, Courtroom, 126 South Clark Street, Forest City

9:45 - 10:45 a.m. - hold Hancock County Town Hall Meeting, Garner Education Center, 325 West 8th Street, Garner

Noon - 1 p.m. - speak with Algona Rotary, Algona Country Club, 400 Country Club Road, Algona

2 - 3 p.m. - hold Palo Alto County Town Hall Meeting, West Bend Golf Course, Club House, 4829 580th Avenue, West Bend

4:30 - 5:30 p.m. - hold Emmet County Town Hall Meeting, Iowa Lakes Community College, Auditorium, Room 16, 300 South 18th Street, Estherville

Tuesday, April 6, 2010

7:30 - 8:30 a.m. - Tour and answer questions from employees at Eaton Manufacturing, Power Division, Hydraulics Business, 803 32nd Avenue West, Spencer

9:30 - 10:30 a.m. - Visit Harris-Lake Park High School, Harris-Lake Park Middle/High School, 905 South Market, Lake Park

Noon - 1 p.m. - Hold Osceola County Town Hall Meeting, Senior Activities Center, 845 Main Street, Ocheydan

2:45 - 3:45 p.m. - Hold Lyon County Town Hall Meeting, US Bank, Community Room, 203 South 2nd Avenue, Rock Rapids

***Senator Grassley will be available for 15 minutes to the press following each of these events. Grassley is a guest of the service clubs, schools, businesses and events. Please contact those organizations with any questions about availability during those meetings.

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Floor Speech by Senator Grassley on the Build America Bonds provision in the HIRE Act

Delivered Tuesday, March 16, 2010

One of the few provisions the Democratic leadership decided to put in the HIRE bill is an expansion of Build America Bonds.  Build America Bonds is a very rich spending program disguised as a tax cut.

One Democratic Senator was asked why the Build America Bonds program is viewed differently than appropriations, and she replied, "It has a good name."  Ironically, the Finance Committee is returning to its roots of doing appropriations bills.

When it was established in 1816, the Finance Committee handled the major appropriations bills that came before the Congress.  I ask unanimous consent that a portion of the document outlining the history of the Finance Committee be printed in the record.

Bloomberg News reported that large Wall Street investment banks were charging 37 percent higher underwriting fees on Build America Bonds deals than on tax-exempt bond deals.

Therefore, American taxpayers appear to be funding huge underwriting fees for large Wall Street investment banks as part of the Build America Bonds program.

A Wall Street Journal article dated March 10, 2010, stated that Wall Street investment banks have made over $1 billion in underwriting fees on Build America Bonds in less than one year.

And the Wall Street Journal article, based on data from Thomson Reuters, stated that the underwriting fees on Build America Bonds deals are higher than those for tax-exempt bond deals.  That sounds like a great deal for the fat cats on Wall Street, but how about the taxpayers from Main Street who have to pick up the tab?

The Democratic leadership has said the Build America Bonds program is about creating jobs, but I want to know whether it's about lining the pockets of Wall Street executives.  Recently, I asked the CEO of a large Wall Street investment bank a number of questions about these larger underwriting fees that are subsidized by American taxpayers.

He confirmed that the underwriting fees for Build America Bonds deals are larger than those for tax-exempt bond deals.  The Senate and House have recently passed different versions of the bill we're currently debating, which includes a provision that expands the Build America Bonds program, created in the stimulus bill, to four types of tax-credit bonds.

These four types of tax-credit bonds are Qualified School Construction Bonds, Qualified Zone Academy Bonds, Clean Renewable Energy Bonds, and Qualified Energy Conservation Bonds.  The Build America Bonds program contains an option for the issuer of the bonds, which is a non-taxpaying entity, to receive a check from the Treasury Department based on a percentage of the interest cost incurred by the issuer.

Some refer to this option as the direct-pay option.  The percentage of the interest cost on the four tax-credit bonds subsidized by American taxpayers under the direct-pay option in the Senate bill is 45 percent, and is increased to 65 percent for small issuers.  Small issuers are defined as those issuing less than $30 million in bonds per year.

The House version increased the direct-pay subsidy to 100 percent for Qualified School Construction Bonds and Qualified Zone Academy Bonds, and increased the subsidy to 70 percent for Clean Renewable Energy Bonds and Qualified Energy Conservation Bonds.

To put this in context, the Build America Bonds program created in the stimulus bill contains a 35 percent direct-pay subsidy.  And the President has proposed in his fiscal year 2011 budget that it be lowered to 28 percent.

It was reported in a March 11, 2010, Bond Buyer article that a senior House staffer asserted that no issuers would opt to issue direct-pay bonds under the lower Senate rates of 45 percent and 65 percent.  When I read that assertion, I asked Finance Committee Republican staff to reconcile that assertion with the scoring of the Build America Bonds proposal in the Senate-passed bill.

Finance Committee Republican staff reviewed the Joint Committee of Taxation's final estimate of the Senate-passed bill and found that the senior House staffer's assertion was directly contradicted by the estimate provided by the Joint Committee on Taxation, which is the nonpartisan official scorekeeper for Congress on tax matters.

In fact, footnote 2 of the estimate of the Senate Build America Bonds provision states that the Joint Committee's estimate of the Senate direct-pay bonds option includes an increase in outlays of $8.006 billion.  This means that the Joint Committee on Taxation's estimate assumed that a large number of issuers would elect to use the direct-pay option, contrary to the staffer's assertion.

The Bond Buyer also reported that the senior House staffer stated, "There's nobody that I know who does not view the Build America Bonds program as an enormous success with the possible exception of one person."  I assume that staffer was referring to me.  There are many federal taxpayers who do not view the Build America Bonds program as an enormous success.

To understand why, let's see which states benefit the most from Build America Bonds.  In looking at data from Thomson Reuters on the ten-largest Build America Bonds deals, California alone issued 73 percent of those bonds.

Between California and New York together, those two states alone issued 92 percent of the bonds from the ten-largest Build America Bonds deals.

So California and New York are the biggest winners under Build America Bonds, while American taxpayers from the remaining 48 states subsidize these states.

As Senator Kyl pointed out in his Dear Colleague letter on Build America Bonds circulated on March 15, the Build America Bonds program actually rewards states for having a riskier credit rating by giving them more money.

Build America Bonds create a perverse incentive that causes state and local governments to borrow more than they otherwise would.  This is especially true regarding the school tax-credit bonds.  This bill creates incentives where states and local governments should not care what the interest rate is.  The American taxpayers are picking up 100 percent of the interest costs.

And actually, the cost borne by American taxpayers is more than 100 percent.  At least with tax credit bonds, the taxpayer includes the amount of the tax credit in income, and the federal government collects taxes on that income.  The only purchasers of tax credit bonds are those that have tax liabilities.

Otherwise, it makes no sense to buy a tax credit bond.  However, Build America Bonds are technically taxable bonds, but most of the investors do not pay tax on these bonds.  For example, under our tax rules, if a foreign person or a pension fund or a tax-exempt entity buys a Build America Bond, they do not pay tax on the interest they receive.

Thus, the federal government not only cuts a check for 100 percent of the bonds' interest costs, it also loses most of the revenue it would have collected from the tax-credit bonds.

States and local governments can view this federal money as free money, because they don't even have to collect it from their residents.  Therefore, of course state and local governments are big fans of the Build America Bonds program ? they get federal money that they don't have to pay back.  And the large Wall Street investment banks love Build America Bonds ? they're getting richer off of them.

However, we all know there's no such thing as a free lunch.  Federal taxpayers are footing the bill for this big spending program, which only gets bigger every time Congress touches it.  And American taxpayers are the ones I'm looking out for.

And American taxpayers are the ones who, in the words of the senior house staffer, do "not view the Build America Bonds program as an enormous success."

I urge my colleagues to look beyond the fancy, well-funded lobbying campaign for this rich subsidy.  Take a look at who wins.  The winners are the big Wall Street banks.  Maybe a small number of governments will issue bonds they otherwise wouldn't.

The only certainty is that the federal taxpayer is on the hook for the interest costs.  With record budget deficits under this Congress and Administration, we cannot casually look away as new, open-ended subsidies are proposed.

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Floor Statement of Senator Chuck Grassley

Ranking Member of the Committee on Finance

Monday, March 1, 2010

Today the Senate starts debate on expiring tax and health provisions.  They are known around here as "extenders."  I'd like to make a couple of points on the process before I get into the substance of the substitute.

What I find surprising is that we are taking up a package, that like last week's exercise, absolutely belongs to the Senate Democratic Leadership.  That is to say we are not taking up a bipartisan package that I put together with Finance Committee Chairman Baucus.  To be sure, some of the structure reflects the agreement my friend, the chairman, and I reached.  But this package is almost three times the size of the package we agreed on.  Virtually all of the additional cost is due to proposals that I would not have agreed to in representing the Republican Conference.  I was under the impression that the Senate Democratic Leadership was genuine in its desire to work on a bipartisan basis, but clearly I was mistaken.  Although the Senate Democratic Leadership was highly involved in the development of a bipartisan bill, they arbitrarily decided to replace it with a bill that skews toward their liberal wing.

So, my first comment to my colleagues, the media, and the public is, don't let this package be mislabeled as the Baucus-Grassley package.  It is not the package my friend Chairman Baucus and I negotiated.  Again, the package before the Senate dramatically differs in cost, balance, and intent from the Baucus-Grassley deal, announced on February 11.

My second preliminary comment goes to the way in which these expiring tax provisions have been described by many on the other side, including those in the Democratic Leadership.  If you rolled the videotape back a week or so ago, you'd hear a lot of disparaging comments about these routine, bipartisan extenders.  From my perspective, those comments were made in an effort to sully the

If you take a look at newspaper accounts of a week or so ago, you'd come away with the impression that the tax extenders are partisan pork for Republicans.  A representative sample comes from one report, which describes the bipartisan bill as "an extension of soon-to-expire tax breaks that are highly beneficial to major corporations, known as tax extenders, as well as other corporate giveaways that had been designed to win GOP support."  The Washington Post included this attribution to the Senate Democratic Leadership in an article last week.  " "We're pretty close," {the majority leader} said Friday during a television appearance in Nevada, adding that he thought "fat cats" would have benefitted too much from the larger Baucus-Grassley bill."

The portrait that was painted by certain members of the majority, echoed without critical examination, in some press reports was inaccurate.  For one thing the tax extenders include provisions such as the deduction for qualified tuition and related expenses and also the deduction for certain expenses of elementary and secondary school teachers.  If you are going to school or if you are a grade school teacher, the Senate Democratic Leadership apparently viewed you as a fat cat.  If your house was destroyed in a recent natural disaster and you still need any of the temporary disaster relief provisions contained in the extenders package, too bad, because helping you would amount to a corporate giveaway in the eyes of some.

The tax extenders have been routinely passed repeatedly because they are bipartisan and very popular.  Democrats have consistently voted in favor of extending these tax provisions.  House Speaker Nancy Pelosi released a very strong statement upon House passage of tax extenders in December of 2009, saying this was "good for businesses, good for homeowners, and good for our communities."  December of 2009 was not very long ago.  In 2006, the then-Democratic Leader released a blistering statement "after Bush Republicans in the Senate blocked passage of critical tax extenders" because "American families and businesses are paying the price because this Do Nothing Republican Congress refuses to extend important tax breaks."

Recent bipartisan votes in the Senate on extending expiring tax provisions have come in the Emergency Economic Stabilization Act of 2008, the Tax Relief and Health Care Act of 2006, which passed the Senate by unanimous consent, and the Working Families Tax Relief Act of 2004, which originally passed the Senate by voice vote although the conference report only received 92 votes in favor and a whopping 3 against.  According to the non-partisan Congressional Research Service, extension of several of these provisions goes back even further, including the Tax Relief Extension Act of 1999, which again passed the Senate by unanimous consent but lost 1 vote on the conference report.

One member on the other side said, "Our side isn't sure that the Republicans are real interested in developing good policy and to move forward together.  Instead, they are more inclined to play rope-a-dope again, my own view is, let's test them."  Another member of this large 59 vote majority exclaimed, "It looks more like a tax bill than a jobs bill to me.  What the Democratic Caucus is going to put on the floor is something that's more focused on job creation than on tax breaks."

Reading those comments I found myself scratching my head.  The only explanation for this behavior is that certain senators decided last week that it serves a deeply partisan goal to slander what have been for several years bipartisan and popular tax provisions benefitting many different people.  The Washington Post article I quoted from earlier includes a statement from a Senate Democratic leadership aide saying that, "No decisions have been made, but anyone expecting us immediately to go back to a bill that includes tax extenders will be sorely disappointed."

You can imagine, that today, a little over a week after these comments, I'm really scratching my head.  We have before us the expiring tax and health provisions that were disparaged just a short time ago.  Have they morphed from corporate tax pork?  Have they suddenly re-acquired their bipartisan character?  Are these time-sensitive items, now expired for more than two months, suddenly jobs-related?

Now, as we begin to debate another, quote, jobs bill, I want to focus on the economy, small businesses, and jobs.

We all agree that our nation is currently facing challenging economic times.  While there have been some signs of improvements such as the recent growth in our gross domestic product, job losses continue to mount and many hardworking Americans are struggling to make ends meet.  According the Bureau of labor Statistics, over 8 million jobs have been lost since our economy officially slipped into a recession in December of 2007.  The unemployment rate is currently at 9.7 percent, which is simply an unacceptable level.

The lack of job creation continues despite aggressive actions taken at the federal level in order to stabilize the economy.  This includes the enactment of TARP and the $800 billion dollar stimulus bill.  However, these bills were all missing a critical ingredient for spurring job creation-substantial tax relief targeted at small business.

In October of 2008, Congress enacted the Troubled Asset Relief Program (TARP), a $700 billion dollar financial bailout bill that we were told had to be enacted immediately  in order to deal with so-called toxic assets to prevent credit from drying up, which would have choked off the lifeblood of the American economy.   What we actually got was direct infusions of cash into the largest Wall Street banks, which was 180 degrees different than what we were told by Treasury.

And later came the bailout of GM and Chrysler using TARP money after the Senate had just voted not to bail GM and Chrysler out.  This inconsistent policy by Treasury created uncertainty in the financial markets and business community.  Moreover, exorbitant bonuses were paid to executives and managers of firms that would have been out of a job if not for Congress, Treasury, and the Federal Reserve intervening.

And how effective was the bailout at improving credit markets?  In October 2009, the Government Accountability Office released a report reviewing TARPs first year performance. The GAO report found credit had improved based on certain market indicators.  However, they were not able to determine how much, if any, was attributed to TARP, as compared to general market forces or other federal actions.

While it is unclear to the extent credit has been freed up as a result of TARP, it is clear who has reaped the benefits of the program.  This past year, many financial firms, including Goldman Sachs, J.P. Morgan Chase and others who received TARP funds posted record or near record profits.

While Wall Street executives have clearly benefited from TARP, small businesses and their employees have not been so fortunate.  Small businesses continue to struggle to obtain credit in order to expand their operations, purchase inventory, or even to make payroll.

The so-called stimulus bill enacted almost solely by an overwhelming Democratic majority in Congress last February has not spurred job creation. The massive $800 billion spending bill was hastily rushed to the floor with little time to deliberate its merits.

Lawrence Summers, the Director of President Obama's National Economic Council, said the test for stimulus is whether it is timely, targeted, and temporary.  This stimulus bill hit the tri-fecta; it failed on all three.

Through a report issued in January of 2009 by the current chair of President Obama's Council of Economic Advisors, Christina Romer, the administration predicted that the stimulus would save or create 3.7 million jobs.

We were told by the Obama Administration that if the bill was not passed quickly we would experience unemployment of nine percent.  However, we were also told by the Obama Administration that if the stimulus bill passed, unemployment would not go over 8 percent.

Well, Mr. President, the bill was passed but what did we get for the $800 billion in debt, before interest, that was laid at the feet of our children and grandchildren?  The unemployment rate jumped from 7.7 percent in January -- right before the stimulus was enacted -- to a high of 10.1 percent in October.  While unemployment recently dipped slightly to 9.7 percent, this was not due to job creation, but because millions of individuals have literally given up looking for work.  The Obama Administration also stated that quote "more than 90 percent of the jobs created are likely to be in the private sector."  In all, 3.3 million jobs have been lost since the stimulus bill was enacted, and 3.2 million of those jobs were private sector jobs.  In summary, the Obama Administration was terribly inaccurate regarding its stimulus jobs projection.

At the time the stimulus bill was passed, I raised concerns that the bill was not targeted enough at small businesses and job creation.  However, my point of view lost out and less than one-half of one percent of the bill included tax relief for small businesses.  The money in the stimulus bill to give tax credits to people who buy electric plug-in golf carts, or to pay for rattlesnake husbandry in Oregon, among numerous other ill-advised provisions, would have been better allocated to small business tax relief.   Since the stimulus, small businesses have been bearing the brunt of job losses in our economy.  However, the words of those on the other side regarding the importance of small business to job creation does not match their actions when looking at the paltry amount of small business tax relief that they have provided.  Again, in the jobs bill or stimulus bill or whatever you want to call it that passed the Senate last week, there was only one provision directed solely to small business tax relief.  That was a provision that I support, increased expensing of equipment purchased by small businesses, but it is a very small provision and it only gave small businesses what they've already been getting for the last couple years.

That provision was only $35 million out of a $62 billion bill?the $15 billion that everyone talks about plus the $47 billion for the highway trust fund that is typically not mentioned.  Last year, I introduced S. 1381, the Small Business Tax Relief Act of 2009.  My bill would double the amount of equipment that a small business could expense, and it would make those higher levels permanent, instead of just for one year as the Reid bill did.  In my negotiations on a "jobs bill", I sought to include provisions from my small business tax relief bill, but there was no agreement to put small business tax relief provisions from my bill in the bipartisan compromise we reached.  Instead, we were asked to defer those provisions.

According to ADP National Employment data, from February of 2009 through January of 2010 small businesses with fewer than 500 employees saw employment decline by 2.67 million, while large businesses with 500 or more employees saw employment decline by 694,000.

While I am sure many of us disagree about the effectiveness of the financial bailout and stimulus spending in getting our economy back on track, I know we all agree that there has been a lack of job creation and too many people continue to be unemployed.

Because the stimulus bill has so clearly failed what it was supposed to do, which is to create jobs, the Administration and Congressional Democratic Leadership are running away from the word stimulus faster than the triple-crown winning horse, Secratariat. Everything proposed now is called a jobs bill, even if it includes proposals that were always labeled stimulus in the past.  Only 6 percent of Americans believe the stimulus bill created jobs.  That is less than the 7 percent of Americans who believe that Elvis is still alive.

Last week the Senate passed a bill that included a provision designed to increase hiring. This includes a payroll tax holiday for business that hire unemployed workers and a tax credit for the retention of newly hired individuals in 2010.

The payroll tax holiday part of this proposal is likely to spark some modest hiring at businesses at the margins, among those that have seen some improvements in their business, but are on the fence about whether to hire somebody now or wait until later.  However, many businesses continue to struggle and won't hire new employees just because it is the stated policy goal of Congress.  Before a business can hire a new employee, they need to know that that the new employee will generate additional revenue that exceeds the cost of the employee.

The latest survey of Small Business Economic Trends by the National Federation of Independent Businesses (NFIB) shows that many small businesses may not be in a place that they could afford to hire new employees, even with the payroll tax holiday.

I have here a chart from NFIB with selected components from their Small Business Optimism Index.  While many components of this index improved slightly from December, it is clear that small businesses continue to struggle.

• A net negative 1 percent of owners plan to create new jobs in the next three months;

• A net positive of only 1 percent of businesses owners expect the economy to improve. Only 4% of  business owners said it was a good time to expand

• A net negative 42 percent of owners reported higher earnings

This last component is especially important for businesses when it comes to hiring new employees.  If earnings are declining there is little a payroll holiday will do to spark hiring since the businesses needs to know that the revenue generated from the additional employee will exceed the cost, not just today but in the future as well.

According to the NFIB survey, when businesses are asked what the single most important problem facing their business is, the answer is lack of sales.  But, this is closely followed by taxes and then government regulations and red tape.

I am glad that my colleagues on the other side have recognized that true job creation comes through the private sector and have thus sought hiring incentives through payroll tax relief.

However, this minor tax relief is a drop in the bucket considering the challenges small businesses are facing due to the economy and proposed increased taxes and red tape included in the President's budget -- whether we are speaking about "cap and trade" that will drastically increase their energy costs, health care reform that would mandate small businesses to offer health benefits that will increase the cost of labor, or the call for tax increases on so-called wealthy taxpayers earning over $200,000 that will largely fall on the backs of small business.

If our intention is to increase long-term employment, the last thing we should be doing in this time of economic uncertainty is increase taxes or place additional burdens on those who are  responsible for creating 70 percent of the jobs in our economy --  namely small businesses.

Providing small businesses a payroll tax holiday while intending to impose increased taxes, regulations and mandates amounts to throwing them a few peanuts while taking away their supper.

In recent months, I have spoken at length about the impact of the tax increases set to kick in 10 months from today.  I've examined the impact of these tax increases on small businesses.  Let's take a close look at this impact.

The President and my colleagues on the other side of the aisle have proposed increasing the top two marginal tax rates from 33 and 35 percent to 36 and 39.6 percent, respectively; increasing the tax rates on capital gains and dividends to 20 percent; fully reinstating the personal exemption phase-out, known as PEP, for those making over $200,000; and fully reinstating the limitation on itemized deductions, which is known as Pease, for those making over $200,000.  With PEP and Pease fully reinstated, individuals in the top two rates could see their marginal tax rate increased over 15 percent or more.

My colleagues on the other side of the aisle respond that these proposals will only hit "wealthy" individuals and only a small percentage of small businesses fall into this category.  What my colleagues fail to understand is that the small businesses that fit into this group are not static, but consist of different businesses over time that go in and out of the top two tax brackets depending on the market.  Data from the Joint Committee on Taxation, which is the nonpartisan official Congressional scorekeeper on tax issues, shows that 44 percent of the flow-through business income will be hit with the increase in the top two tax rates proposed by the President and Democratic Congressional Leadership.  This hits small businesses particularly hard, since most small businesses are organized as flow-through entities.  It will increase taxes on single small business owners that make more than $200,000 per year, even if they plow all of their income back into their small business to keep paying their workers or hire additional workers.

Increasing taxes on this group punishes their success. It limits their ability reinvest in their company. It prevents them from putting away funds for tough economic times to keep their business afloat.

Government is currently creating a climate of uncertainty where the private sector does not know what we will do next, what taxes will be raised, or what regulatory barriers will be put in their way.

We can start to put some certainty back into the business world by declaring we will not increase taxes on businesses one dime by making the 2001 and 2003 bipartisan tax measures permanent.  But let me be clear, businesses do not want to be certain that the government is going to raise their taxes and make them go through more red tape.  They want to be certain that's not going to happen.  Until then, many will simply sit on the sidelines and not hire more workers.

Moreover, we can directly provide targeted relief to small businesses.  Last June, I proposed legislation to do just that.  I introduced the Small Business Tax Relief Act of 2009 to lower taxes on job-creating small businesses.

Since the Democratic leadership barred any amendments last week, I'm hopeful we'll debate and vote on an amendment offered by Senator Thune.  Many provisions in my bill are contained in the Thune amendment, which I support.

My bill contains a number of provisions that will leave more money in the hands of small businesses so that they can hire more workers, continue to pay the salaries of their current employees, and make additional investments in their business.   This includes allowing flow-through small businesses such as partnerships, S corporations, LLCs, and sole proprietorships to deduct 20 percent of their income, effectively reducing their taxes by 20 percent.  My bill also includes relief for small business owners from the unfair alternative minimum tax.  It takes the general business credits, such as the employer-provided child care credit, out of the alternative minimum tax.  This allows a mom and pop retail store that provides child care for their employees to get the same tax relief that a Fortune 500 company gets when it provides child care for its employees.  My bill would also allow more of the nearly two-million small C corporations to benefit from the lower tax rates for the smallest C corporations.  There are so many small C corporations because they were formed as C corporations before other entities such as LLCs become more widely used.  Among other provisions, my bill would also lower the potential tax burden on small C corporations that convert into S corporations.

The NFIB has written a letter supporting my small business tax relief bill, stating, quote, "To get the small business economy moving again, small businesses need the tools and incentives to expand and grow their business.  S. 1381 provides the kinds of tools and incentives that small businesses need."

I'd now like to talk about an opportunity for true bipartisanship that was killed by the Democratic leadership.  The same day that Chairman Baucus and I released a bipartisan bill that contained significant compromises, behind closed doors Democratic leaders cherry-picked just 4 provisions out of the larger bill that Chairman Baucus and I agreed to.  Those provisions had been agreed to in a meeting of senior members of the other side only while Chairman Baucus and I were negotiating.  I was extremely disappointed to see the Democratic leadership blow up the bipartisan deal that Chairman Baucus and I reached.  To pour a little salt into the wound, the Democratic leadership then prohibited any senator on either side of the aisle from even offering an amendment to improve the bill that he hijacked.

One of the four provisions the Democratic leadership cherry-picked is Build America Bonds.  If it had been just me drafting a bill, I wouldn't have included this provision.  However, in the sake of bipartisanship and compromise in the context of a much larger bill, I reluctantly agreed that putting this provision in the bill would not cause the overall bill to lose my support.  Build America Bonds is a very rich spending program disguised as a tax cut.  Bloomberg reported that large Wall Street investment banks have been charging 37 percent higher underwriting fees on Build America Bonds deals than on other deals.  Therefore, American taxpayers appear to be funding huge underwriting fees for large Wall Street investment banks as part of the Build America Bonds program.

The Democratic leadership has said the Build America Bonds program is about creating jobs, but I want to know whether it's about lining the pockets of Wall Street executives.  Last week, I asked Goldman Sachs CEO a number of questions about these much larger underwriting fees subsidized by American taxpayers.  I expect to have that discussion shortly.

Turning back to the bill being debated this week, the Thune amendment, which incorporates many of the provisions from my small business tax relief bill, provides substantial small business tax relief and should be adopted.

In this bill, I hope that we can all work together toward improving our economy -- not through more government -- but by letting the engine of job creation-small business-keep more of their own money in the form of substantial small business tax relief.

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Senator Chuck Grassley issued the comment below about a newly released report of the Government Accountability Office regarding the criminal division of the Food and Drug Administration.  Grassley requested the review, in 2009, in response to allegations about lax standards and poor accountability in the criminal division.  The senator has conducted extensive oversight of the FDA's performance and he has worked to hold federal officials accountable for mismanagement.

The report is linked below and also posted with this memo at http://finance.senate.gov and http://grassley.senate.gov.  Also linked below and posted with the report is a letter from the FDA Commissioner to Grassley regarding agency plans to respond to the shortcomings identified by the GAO.

Senator Grassley's comment:

"This report has made a difference already by securing a much needed commitment from the Commissioner to make the FDA's investigative unit live up to its significant responsibilities.  There's no excuse for the fact that this division's failures have gone unchecked for years, and having the FDA leadership focused on fixing what's broken is the first, very important step needed."

GAO Report

FDA Commissioner's letter to Grassley