Prepared Floor Statement of U.S. Senator Chuck Grassley

Opposition to Coburn Amendment

Wednesday, March 30, 2011

Mr. President, I'd like to express my strong opposition to amendment #220 offered by Senator Coburn.  Senator Coburn's amendment would raise the tax on domestic energy production by repealing an incentive for the use of homegrown ethanol.

I'm astonished that given our current situation, there are some who would prefer less domestic energy production.  With conflicts in the Middle East and crude oil more than $100 a barrel, we should be on the same side.  We should all be on the side of more domestically produced energy.  The tremendous cost of America's dependence on foreign oil has never been more clear.

In light of this threat, we should have an energy policy of "all of the above."  I support drilling here, and drilling now.  I support renewable energy.  I support conservation.  And, I support nuclear energy.  It's counterproductive for senators from Big Oil country to single out energy that comes from American agriculture.  I didn't pick this fight.  I support energy from all sources.  I support traditional oil and gas.  And so do American taxpayers with tax incentives, for an industry that's 100 years old.

So, the attack on homegrown energy is really remarkable.  We shouldn't be fighting each other over domestic energy sources.  We should be fighting OPEC and foreign dictators and oil sheiks that hold our economy hostage.

The author of the amendment has argued that the production of clean, homegrown ethanol is fiscally irresponsible.  It's important to remember that the incentive exists to help the producers of ethanol compete with the oil industry.  And remember, the oil industry has been well supported by the federal treasury for more than a century.  President Obama, in his budget request for 2012, has advocated repealing a dozen or so subsidies to big oil.  He's argued that a century-old industry no longer needs tax breaks.  With oil prices at one-hundred dollars a barrel and record profits being made, some could certainly question why this industry needs any taxpayer subsidies at all.  President Obama's proposal would repeal about $44 billion in oil and gas subsidies over 10 years.

I'd like to remind my colleagues of a debate we had last summer on an amendment offered by Senator Sanders.  The amendment he offered would have, among other things, repealed about $35 billion in tax subsidies enjoyed by the oil and gas industry.  Opponents of the Sanders amendment argued that repealing the oil and gas subsidies would reduce domestic energy production and drive up our dependence on foreign oil.  Opponents also argued that it would cost U.S. jobs, and increase prices at the pump for consumers.

I tend to agreed with these arguments.  All of my Republican colleagues and more than one-third of Democrats did as well.  But, a repeal of the ethanol tax incentive is a tax increase that will surely be passed on to American consumers.  Repealing incentives for ethanol would have the same exact result.

I know that removing incentives for oil and gas will have the same impact as removing incentives for ethanol.  We'll get less domestically produced ethanol.  It will cost U.S. jobs.  It will increase our dependence on foreign oil.  It will increase prices at the pump for American consumers.  Mr. President, we're already dependent on foreign sources for more than 60 percent of our oil needs.  Why do my colleagues want to increase our foreign energy dependence when we can produce it here a home?

So, I'd like to ask my colleagues who voted against repealing oil and gas subsidies but support repealing incentives for renewable fuels:  why the inconsistency?  Where are the amendments from fiscal conservatives and deficit hawks to repeal the oil and gas subsidies?  The fact is, it's intellectually inconsistent to say that increasing taxes on ethanol is justified, but that it's irresponsible to do so on oil and gas production.  If tax incentives lead to more domestic energy production and good paying jobs, why are only incentives for oil and gas important?

It's even more ridiculous to claim that the 30 year-old ethanol industry is mature and thus no longer needs government support, while the century old oil industry still receives $35 billion in taxpayer dollars.  Regardless, I don't believe we should be raising taxes on any type of energy production or on any individual, particularly during this weak economy.

The senator from Oklahoma insists that because the renewable fuel is required to be used, it doesn't need an incentive.  But, with oil prices at $100 a barrel, oil companies are doing everything they can to extract more oil from the ground. There isn't a mandate to use oil, but it has a 100-year monopoly on our transportation infrastructure.  When there is little competition to oil and it's enormously profitable, wouldn't he argue that the necessary incentives exist to produce it without additional taxpayer support?  Oil essentially has a mandate today.  The economics of oil production are clearly in favor of the producers. Why do they need taxpayer support?

It's also important to understand the hidden cost of our dependence on foreign oil.  A peer-reviewed paper published in 2010 concluded that "....$27 to $138 billion dollars is spent annually by the U.S. military for protection of Middle Eastern maritime oil transit routes and oil infrastructure, with an average of $84 billion a year."  Mr. President, this is $84 billion in American treasure spent on the defense of shipping lanes to quench our thirst for foreign oil.  It's not reflected in the price at the pump.  It's a hidden cost.

Milton Copulos, an advisor to President Ronald Reagan and a veteran of the Heritage Foundation, testified before Congress in 2006 on this issue.  He testified that the hidden cost of imported oil is equivalent to adding $8.35 to the price of a gallon of gasoline from the Persian Gulf.  There is no hidden U.S. military cost attributable to homegrown ethanol.

Let's have the debate on ethanol.  But, let's debate it in the context of a comprehensive energy plan.  This debate should include the subsidies for all energy production. Don't single out ethanol.

Nearly every type of energy gets some market distorting subsidy from the federal government.  An honest energy debate should include ethanol, oil, natural gas, nuclear, hydropower, wind, solar, and biomass.  It's hypocritical to put our economic and national security at risk by targeting ethanol, while disregarding the subsidies for all other energy sources.  Repealing the ethanol tax incentive will raise taxes on producers, blenders and ultimately consumers of renewable fuel.  This amendment is a gas tax increase of over five cents a gallon at the pump.

I just don't see the logic in arguing for a gas tax increase when we have so many Americans unemployed or underemployed and struggling just to get by.  I know we all agree that we cannot and should not allow job-killing tax hikes during this time of economic uncertainty.  Unfortunately, those members who have called for ending the ethanol incentive have directly contradicted this pledge because a lapse in the credit will raise taxes, cost over 100,000 U.S. jobs at a time of near nine-percent unemployment, and increase our dependence on foreign oil.

The taxpayer watchdog group, Americans for Tax Reform, considers a repeal of this incentive to be a tax hike.  Americans for Tax Reform states, "Repealing the ethanol credit is a corporate income tax increase."  I agree with them.

Now is not the time to impose a gas tax hike on the American people.  Now is not the time to send pink slips to ethanol related jobs.  Ethanol currently accounts for 10 percent of our transportation fuel.  A study concluded that the ethanol industry contributed $8.4 billion to the federal treasury in 2009 -- $3.4 billion more than the ethanol incentive.  Today, the industry supports 400,000 U.S. jobs.  That's why I support a homegrown, renewable fuels industry.

I'd like to conclude by asking my colleagues: If we allow the tax incentive to lapse, from where should we import an additional 10 percent of our oil?  Should we rely on Middle Eastern oil sheiks, or Hugo Chavez?  I'd prefer we support our renewable fuel producers based right here at home, rather than send them a pink slip.  I'd prefer we decrease our dependence on Hugo Chavez, not increase it.  And I certainly don't support raising the tax on gasoline during this weak economy.

DES MOINES - Thirty-five Iowa high schools, including Davenport Central, will partner with the Iowa Department of Education to work on solutions to eliminate barriers to learning, including bullying and substance abuse.

Iowa is one of 11 states to be chosen for the prestigious federal grant to participate in the Safe and Supportive program. Nearly $14 million will be spent in Iowa over the next four years to support efforts that will measure and improve statewide conditions for learning, which include school safety, student engagement in school, and the overall school environment.

This spring, the Iowa Department of Education will ask students, parents and faculty at the high schools to simply fill out a confidential survey.  The survey will focus on issues ranging from student safety, to student relationships with other students and adults and to whether students have adequate resources in their schools.

"We look forward to embarking on this new, groundbreaking program," said Iowa Department of Education Director Jason Glass.  "For the first time, we will measure conditions for learning by surveying the real experts - students, parents and faculty."

After the initial survey is taken, 80% of the grant funding will be used for direct support of the schools that show the greatest opportunity for improvement.  The Iowa Department of Education will provide resources and work with those schools to implement activities that improve conditions for learning.

Information will be gathered each year for four years.  By the fourth year, the final survey will show the nation how much progress Iowa has made in improving conditions for learning.

"It's our responsibility to offer Iowa students our support and give them the best environment we can for them to learn and succeed," continued Director Glass.  "In doing so, we will once again reclaim our status as the national leader in education."

High schools were randomly selected across the state and have agreed to participate in this important program. Attached below is a list of the participating schools across the state.

To receive online updates, find us on our social networks:

• Facebook:  http://on.fb.me/SafeSupportiveSchoolsIowa

• Twitter:  http://twitter.com/SafeSupportIowa

Prepared Statement of Ranking Member Chuck Grassley

U.S. Senate Committee on the Judiciary

FBI Oversight Hearing

Wednesday, March 30, 2010

Chairman Leahy, thank you for calling this hearing today.  Before I get started, I wanted to take a moment to say a public thank you to Director Mueller for his service to the country.  This is likely to be the last time he comes before this Committee as the Director of the FBI.  While we have had our share of disagreements on a number of issues, I have always appreciated Director Mueller's candor and his willingness to work with us to get answers?even if we don't always agree with what those answers are.

That said, I look forward to raising a number of issues with the Director today.  First and foremost, I want to talk about the PATRIOT Act and the need to extend the provisions that are set to expire in May.  The three expiring provisions of the PATRIOT Act are important tools used by federal law enforcement and the intelligence community to investigate national security threats.  They are vital to our ability to investigate, identify, track, and deter terrorist attacks.  For example, it was recently revealed that the FBI successfully utilized a section 215 order as part of the investigation that prevented a terrorist attack planned by a Saudi national in Texas.  In that case it was revealed that the individual in question purchased bomb making materials such as 3 gallons of sulfuric acid, clocks, chemistry sets, and a gas mask from online retailers Amazon.com and eBay.  This case is the latest of many examples of the successes of the PATRIOT Act provisions.  Given the dangerous threats we face and the fact that the three expiring provisions have not been found to have been abused, the Senate should work to reauthorize the expiring authorities without amendment.

Aside from the critical national security authorities we need to reauthorize, I want to ask Director Mueller about a recent report that was issued by our colleagues in the Homeland Security and Government Affairs Committee.  That committee released a report in February entitled, "A Ticking Time Bomb" that examined the tragic shootings at Fort Hood that occurred in November 2009.  That report highlighted a number of problems at both the Department of Defense and the FBI and found "systematic failures in the Government's handling of the Hasan case."  I was troubled to hear some of the allegations contained in the report including that an analyst on a joint terrorism task force was not provided full access to a key FBI database simply because he was from a non-FBI agency.  I want to hear from the Director whether he agreed with some of these key findings, what is being done to correct any deficiencies in the way terrorism cases are reviewed, and whether information sharing has been improved

I also want to ask the Director some questions about FBI employee personnel matters.  I have long been concerned about the plight of whistleblowers at the FBI.  I appreciate that Director Mueller has made it a priority to instruct all employees of the FBI that retaliation against whistleblowers will not be tolerated.  I think this is an important message for employees to hear from the Director.  Unfortunately, that directive has not always been followed by agents in the field.  I find one case particularly troubling.

In 2007, the Department of Justice Inspector General issued a memorandum finding that a 30-year non-agent employee of the FBI, Robert Kobus, was retaliated against for protected whistleblowing.  The Inspector General found that "FBI Management in the New York Field Division improperly moved Kobus from the position of a senior administrative support manager to several non-supervisory positions."  One of those positions included being demoted to OSHA safety officer.  The retaliation was blatant and included moving his office to a cubicle on the vacant 24^th floor of the FBI office building.  The Inspector General ultimately concluded that the decision to move him was in retaliation for disclosing wrongdoing, to the Special Agent in Charge of the Field Office, in this case time and attendance fraud by FBI agents.  This is exactly the type of retaliation against whistleblowers that should never occur

Despite these findings by the Inspector General, the matter was appealed by the FBI to the Department of Justice where the case has now languished for four years.  Four years is entirely too long for an employee to wait for an appeal.  What makes matters worse is that the underlying allegations occurred in 2005.  It is often said that justice delayed is justice denied.  In this case that couldn't be any clearer.  I asked the Attorney General about this case a year ago and just received a reply in December that failed to answer why it has taken so long to review the IG's findings.  I want to hear from Director Mueller what he thinks about this sort of retaliation and why the agents who retaliated against Kobus were promoted.

The Kobus case raises a number of questions about the Department of Justice's process for investigating and adjudicating FBI whistleblower complaints.  So, I am working on a request that I have shared with Chairman Leahy, and I'm hoping we can work together on this, but I want the Government Accountability Office to conduct a top to bottom review of the Department of Justice's process for dealing with FBI Whistleblowers.  Delays like the one in the Kobus case send a clear signal to potential whistleblowers that reporting wrongdoing will only land you in an expensive bureaucratic mess.  Because the DOJ Inspector General is part of the FBI whistleblower process, I feel it is necessary for an impartial arbiter like GAO to look at things and see what is and isn't working.  Given the significant budget deficits we face and the need to cut waste and fraud wherever possible, we can't send signals to whistleblowers that coming forward isn't worth the hassle.  I would hope all my colleagues would join me in this request to make sure the process is working.

Another area of concern I have relates to FBI employee misconduct.  In January of this year, internal FBI Office of Professional Responsibility documents were leaked to the press.  Those documents contained a number of shocking allegations about misconduct committed by FBI employees.  For example, the documents detailed FBI agents who were dismissed because they: were arrested for drunk driving, engaged in improper relationships with FBI informants, leaked classified information to reporters, sought reimbursement for expenditures they never made, and in one instance, bringing foreign nationals back into FBI space after hours.  These are troubling allegations and I am glad that a number of them were accompanied by the summary dismissal of those employees.  However, a couple of the cases raised an old concern I have about whether punishments are handed out uniformly.  For example, two of the cases that were reported in the media involved inappropriate relations between FBI agents and sources.  One agent was dismissed while another was simply given a 40-day suspension.  It appears from the documents that the only difference in the cases was that in one case, the inappropriate relationship also involved improper use of a government vehicle, while the other did not.  I want to know more about how these penalties are determined.  I think this is especially important to know in light of the fact that the Inspector General found in a May 2009 report that there is a perception among FBI employees that there is a double standard for discipline between higher ranking and lower ranking employees.

Director Mueller, over the past eight months I have been investigating systemic problems at the Philadelphia Public Housing Authority.  Outlandish salaries, sexual harassment settlements, and excessive legal billings just to name a few of the problems.  I want to express my appreciation regarding the FBI's ongoing investigation and recent seizure of expensive luggage purchased as gifts by the Philadelphia Public Housing Authority.  I hope the FBI follows through vigorously on any criminal violations that may have occurred at the Philadelphia Public Housing Authority.

Finally, I want to ask the Director about the fiscal 2012 Budget request that was submitted to Congress.  I continue to have concerns with the FBI's agency-wide case management system known as Sentinel.  This project was originally supposed to cost $400 million and be complete no later than 2010.  As it stands today, the prime contractor Lockheed Martin has been removed from the job by the FBI, the project continues, and the projected cost is over $450 million.  I want to know when this is going to end, how much more taxpayer money will be necessary, and how the FBI plans to maintain the older case management database as part of the new system.  After a decade of upgrading the system, not another dime of taxpayer money should be awarded until the FBI can prove the system will work and will be done on time.

There is a lot to cover so I look forward to Director Mueller's testimony and his responses to these important matters.  Thank you.

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