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

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

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

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

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

WASHINGTON, July 25, 2012 - As part of the Obama Administration's all-of-the-above strategy to enhance U.S. energy security, reduce America's reliance on imported oil and leverage our domestic energy supply, while also supporting rural economies, the U.S. Departments of Agriculture (USDA) and Energy today announced a $6 million investment in two Iowa projects that will drive more efficient biofuels production and feedstock improvements.

"If we want to develop affordable alternatives for oil and gasoline that will help reduce our dependence on foreign oil, we need investments like these projects to spur innovation in bioenergy," said Agriculture Secretary Tom Vilsack. "By producing energy more efficiently and sustainably, we can create rural jobs, boost rural economies and help U.S. farmers, ranchers and foresters prosper."

"As part of President Obama's all-of-the-above strategy to deploy every available source of American energy, we continue to strive for more efficient, cost-competitive technologies to produce U.S. energy," said Energy Secretary Steven Chu. "The investments announced today are helping to accelerate innovation across America's growing biofuels industry, which will help to reduce our dependence on imported oil and support job creation across rural America."

New Biomass Research and Development Initiative Investments

Through the joint Biomass Research and Development Initiative (BRDI), USDA and the Energy Department are working to develop economically and environmentally sustainable sources of renewable biomass and increase the availability of renewable fuels and biobased products. The five projects announced today will help to diversify the nation's energy portfolio and replace the need for gasoline and diesel in vehicles.

The cost-shared projects include :

• Quad County Corn Cooperative ($4.25 million - Galva, Iowa). This project will retrofit an existing corn starch ethanol plant to add value to its byproducts, which will be marketed to the non-ruminant feed markets and to the biodiesel industry. This project enables creation of diverse product streams from this facility, opening new markets for the cooperative and contributing to the U.S. Environmental Protection Agency's goals for cellulosic ethanol production and use.

Additional information on the Biomass Development and Research Initiative is available HERE.

Leveraging Genomics for More Efficient, Cost-Effective Bioenergy

Today, the Energy Department and USDA are also announcing $10 million for eight research projects aimed at applying biomass genomics to improve promising biofuel feedstocks and drive more efficient, cost-effective energy production. These projects will use genetic mapping to advance sustainable biofuels production by analyzing and seeking to maximize genetic traits like feedstock durability, how tolerant feedstocks are to various environmental stresses, and the potential for feedstocks to be used in energy production.

A full list of the projects selected today is available HERE. The projects selected today include :

• Iowa State University ($1.4 million - Ames, Iowa). Research will explore the genetic architecture of sorghum biomass yield component traits identified using field-based analysis of the feedstock's physical and genetic traits.

Since 2006, the Plant Feedstocks Genomics for Bioenergy research program has invested nearly $70 million helping to identify key genes affecting biomass yield and quality in feedstocks and to accelerate breeding efforts to improve bioenergy-relevant traits.

More information is available HERE.

The Energy Department also released today a new video, Biofuels 101, highlighting how technological advances are increasing biofuel efficiency and reducing production costs.

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• Ankeny Walk– Wagner Park Bandshell, 8:30 am
• Cedar Rapids Walk–Noelridge Park Lagoon Pavilion, 8:00 a.m.
• Mason City Walk–East Park Prairie Playground, 8:30 am
• Quad Cities Walk & 5K Run–Crow Creek Park, 8 am
• Sioux City Walk–Bacon Creek Park, Shelter #1, 8:30 a.m.
• Washington Walk & 5K Run- Sunset Park, Run at 7 am, Walk at 8:30 am
• What Cheer Walk- Keokuk County Fairgrounds, 8:30 am

Statement of Sen. Chuck Grassley

Committee on Finance Hearing, "Education Tax Incentives and Tax Reform"

Wednesday, July 25, 2012

As we consider how tax incentives help students and families pay for college, we should consider whether and how these incentives also increase costs.  A 2010 study by Nicholas Turner at the University of California-San Diego suggests that schools are reducing financial aid awards by the amount of tax benefits a student or family may receive.

In addition, a 2011 article in the Washington Monthly by Benjamin Ginsberg exposes the explosion in spending on administrators and support staff that are not directly involved in instruction or research. Such spending includes hefty increases in executive compensation and benefits.

Aside from getting a handle on rising costs and tax incentives for students and families, it is also important to consider the tax benefits that tax-exempt college and universities receive.

Just like tax-exempt hospitals, tax-exempt colleges and universities are exempt from income tax.  They also have the ability to raise capital through tax-deductible charitable contributions and the issuance of tax-exempt bonds.

The Joint Committee on Taxation, in the document prepared for today's hearing, indicates that the most expensive Federal tax expenditure for education is the charitable deduction at more than $32 billion. The tax exemption for bonds is the third most expensive at more than $18 billion.

The charitable deduction for sure fuels the growth in multi-billion dollar in college and university endowment funds.  According to the most recent annual NACUBO-Commonfund endowment study, endowments with more than $1 billion in assets had a one-year rate of return of more than 20% and a ten-year rate of return of almost 7%.

So, even though they had a couple of rough years in 2007 and 2008, they are still doing great.  Yet, despite their success and skyrocketing tuition, their payout rate hovers around 5%.

Part of their success results from their investment strategies. The same endowment study tells us that these endowments with more than $1 billion are sixty percent invested in "alternative strategies."

Such investments include private equity, international private equity, mergers and acquisition funds, hedge funds, derivatives and energy and natural resources, including oil, gas, timber and commodities.

Aside from their lack of spending on students, it's unclear whether such investments may also be contributing to the erosion of the tax base by sheltering otherwise taxable, commercial activity in tax-exempt entities.  Commodity speculation is another issue that has been of concern to both me and Senator Wyden.

When it comes to tax-exempt bonds, it seems that the ease of borrowing is causing a race to spend without considering whether such spending adds to a student's learning.

In a May 1, 2012, CNBC report, the Dean of Admissions at Pomona College suggests a $53 million investment in student housing is important because students are not making choices based on whether they are going to get a good education.  The same report highlights other California colleges offering perks such as dorm rooms with ocean front views and cafeterias with gourmet food.

In addition, an April 30, 2010, Congressional Budget Office study suggests that colleges and universities may benefit from indirect tax arbitrage by using tax-exempt bonds to fund building and equipment while hoarding money to invest in the assets I just mentioned that provide a higher rate of return.

Bottom line - the incentives for students and families are not the only ones that should be reviewed in the context of tax reform.  All education related tax expenditures should be examined to ensure that students and families, in addition to taxpayers, are getting the most bang for their buck.