Prepared Floor Statement of Senator Chuck Grassley of Iowa

Ranking Member, Senate Committee on the Judiciary

Debate on the Balanced Budget Amendment

Tuesday, December 13, 2011

Mr. President, I am very pleased that the Senate is today taking up the Balanced Budget Amendment.  The Senate has passed a balanced budget amendment in the past. More recently, it has come close to passing a balanced budget amendment.  I regret that this amendment has not become law.  I believe that had the Constitution been amended to require a balance budget, we would not today face the dire budgetary situation that is before us.

The balanced budget amendment before us today is straightforward.  It provides that total outlays shall not exceed total receipts unless each House of Congress by a 2/3 vote agrees otherwise.  To provide spending discipline, total outlays cannot exceed 18% of GDP unless 2/3 of both Houses of Congress vote to waive the cap.  The President will be required to submit a balanced budget to the Congress.  To avoid balancing the budget by imposing tax burdens, new taxes or increases in total revenues can be imposed only by a 2/3 vote of both Houses.  And the debt limit will be able to be raised only if 3/5 of both Houses vote to increase it.

To provide a level of flexibility in wartime, the provisions on outlays and receipts, total outlays, and the debt limit can be overcome by a 3/5 vote.  To minimize disruption, the amendment will not take place for five years.  Finally, the courts cannot enforce the balanced budget amendment by ordering a tax increase.

Reverence for the Constitution is a sentiment we all share.  But the Constitution provides for an amendment process.  When it is necessary, each generation has amended the Constitution.  When a guarantee of free speech, or the abolition of slavery, or giving women the right to vote was necessary, the Constitution was amended.  No one said that reverence for the Constitution was the end of the matter.

We have reached that point of necessity with the balanced budget amendment.  The Congressional Research Service reports:

"The budget deficit each year from 2009 to 2011 has been the highest ever in dollar terms, and significantly higher as a share of GDP, than at any time since World War II.  Under current policies, the federal debt is projected to grow more quickly than GDP, leading observers to term it unsustainable."

The very purpose of the Constitution, according to its Preamble, was to extend the blessings of liberty to ourselves and our posterity.  It is because the growth in the national debt is unsustainable that our posterity may not receive those blessings.

It is hard to imagine an amendment more in keeping with the goals of the Constitution than this one.  Otherwise, runaway debt will expand exponentially.  A permanent spiral can be created in which the debt feeds on itself.  Take a look at Europe today.  Nations risk default when they overspend.  If we are not careful, the United States at some point will face that same crisis.  It is frightening to contemplate.

We hear from opponents that Congress can balance the budget now, without a balanced budget amendment.  But the fact is that it cannot.

For more than 40 years, Congress has been unable to summon the ability to balance the budget.  Statutes that sought to provide a path to a balanced budget failed.  The only exception was for three years going into this century when a financial bubble provided windfall revenues.  Because Congress has been unable to control spending, the budgets have been in deficit and the national debt has increased.  The only way that Congress will exercise the discipline to balance the budget is if the Constitution forces it to do so.

Forty-six state constitutions require that their budgets be in balance.  They meet that requirement.  As members of Congress, we take an oath to adhere to defend the Constitution.  We take that oath seriously.  If the balanced budget amendment became a part of the Constitution, we will adhere to it or face the consequences from the voters.

Mr. President, this amendment wisely contains effective tax limitations as an integral part.  I have favored a balanced budget with tax limitations for more than 20 years.

For decades, federal spending has far outpaced even the steady and sizeable growth in taxes and revenues.  Raising taxes does not produce surpluses.  The historical fact is that they spur more spending.  For every additional dollar in taxes Congress has raised since World War II, it has spent an additional $1.13.  Raising taxes would make balancing the budget harder, not easier.  Without a supermajority requirement for tax increases, a balanced budget amendment may well encourage tax increases, fueling greater spending, and the continuation of additional debt and costs of servicing the debt.

The failure to balance the budget is a fiscal issue of the greatest importance.  But it is also a moral issue.  Without a balanced budget amendment, our children and grandchildren will pay for this generation's chronic inability to live within its means.  In the absence of an amendment, the standard of living for future generations will likely decline.  The fears of many Americans that the next generation will not live as well as this one are in many respects traceable to decades of fiscal irresponsibility on the part of the Congress.  This balanced budget amendment would mean a stronger economy, good government, and more jobs.

I believe the American people are willing to do their part to prevent future generations from being saddled with an unconscionable level of debt.  They are willing to do so even if it means that some federal spending they support would be affected.  This is especially true if our budgeting is done fairly.

Mr. President, I believe that if one listens closely to the arguments of the opponents of this measure, one will hear more arguments against a balanced budget than against a balanced budget amendment.  There will need to be difficult actions taken.  It is those difficulties that have prevented Congress from balancing the budget.  Those difficulties are therefore reasons for a constitutional amendment, not reasons against one.  But balancing the budget is necessary.  And it will take an amendment to do it consistently.

We also hear arguments about the need to run deficits when the economy is in a recession. The amendment before us permits Congress to vote to run a deficit in that situation.  But be skeptical of the argument.  If deficits and debt gave us a strong economy, right now we would be in the midst of the greatest economic boom in our history.  Obviously, we are not.  Deficits of $1 trillion plus and a national debt of $15 trillion are not stabilizing the economy.

In fact, I believe that the size of the deficit and debt is one reason the economy is not performing well.  The size of looming deficits and debt is another.  The markets are not viewing that debt as stabilizing a weak economy.  Rather, they view it correctly as a drag on the economy.

On the issue of enforcement, the opponents attack straw men.  They say either that the amendment cannot be enforced, so it is toothless, or they say that the courts will enforce it, leading to chaos.  Both of these arguments cannot be true.

The amendment will be enforced by the President submitting a balanced budget and Congress complying with the amendment, as do state legislators all over the country.  Members take an oath and voters will punish those who do not obey the constitutional command.  With respect to the courts, the text of the amendment prohibits courts from raising taxes.  And standing requirements, ripeness, and the doctrine of a political question will mean that the courts will continue to lack the power of the purse, as has been the case throughout our history.

Mr. President, in the past dozen years, Congress has been unable to balance the budget even when times are good.  Had we passed a balanced budget amendment when it was before us in the past, we would not have racked up the huge deficits that now confront us.

We have heard in the past that a balanced budget amendment was not necessary because Congress could balance the budget on its own.  Those arguments were wrong.

Today, we face one of the worst debt pictures in our history.  If nothing is done, the future will be even worse.  We owe a responsibility to the American people and to future generations to maintain the fiscal discipline that has allowed us to be the world's biggest economy.  Our pleas for a balanced budget amendment have been denied by a minority in the past.

We warned what road lay ahead if we failed to pass a balanced budget amendment.  Time has unfortunately proved us right.  It is not too late if we act now.  But time is growing shorter each year.

I urge my colleagues to do the right thing and enact a constitutional requirement that the budget be balanced.

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Prepared Statement of Senator Chuck Grassley of Iowa

Ranking Member, Senate Committee on the Judiciary

"Reauthorizing the EB-5 Regional Center Program: Promoting Job Creation

and Economic Development in American Communities"

Wednesday, December 7, 2011

Today, this committee will focus on the EB-5 Regional Center program.  This program, now 21 years old, was created with the intention to benefit American communities through investment and job creation.  Certainly, at a time of economic uncertainty, high national unemployment, and stagnate growth, we must consider all the tools at our disposal to increase economic activity.  While I have supported the EB-5 Regional Center program in the past, I do hope to hear how this program can better serve our nation's needs in the future.  Today's hearing is a way for us to conduct our constitutional duty of oversight.  It's important for us to review the EB-5 program, determine if it's truly creating jobs, and hear whether the program is increasing economic activity in areas that need it most.

The EB-5 Regional Center program is set to expire on September 31, 2012.  I hope to work with the Chairman on re-authorizing a reformed and more cost efficient program, in addition to several other immigration programs that will expire at the same time.  We need to enact reforms that will make the EB-5 Regional Center program worth keeping around.

Some may argue that the EB-5 Regional Center program is doing very little to stimulate the economy.  I appreciate the administration's recent attempt to focus energy and attention on reforming the program and increase participation in regional centers.  The changes they institute may help, but at the end of the day, one fact remains:  the program is simply a way for wealthy investors to buy a greencard - not only for themselves, but for their families.  No skills or management experience is needed.  One only needs to write a check to gain entry into the United States.  While taking a financial risk in projects or businesses in the United States is admirable, evidence suggests that it's not doing enough to spur real job creation.

Since Congress capped the number of employment based immigrants that are allowed entry into the U.S. each year, it's important that we utilize those visas to the best extent possible.  We must have an immigration system that is based on merit.  We should be taking the best and brightest.  We can afford to be choosey, so we must elect to provide immigrant visas to those with tremendous skills that will benefit our country in the long term.

So, in that vein, we must figure out where the EB-5 Regional Center program fits into the equation.  Is the EB-5 program attracting the individuals we need, or are we simply selling visas to the highest bidders?

I want to take a moment to express serious concern about reports that the EB-5 Regional Center program is creating jobs for people in this country illegally.  The U.S. Citizenship and Immigration Services' Administrative Appeals Office (AAO) reviewed the application for one investor in a South Dakota regional center.  The AAO said that the agency was correct in denying his request for greencard status because the employees were in the country illegally.  If we're going to allow wealthy foreign nationals to enter the U.S. under the guise of creating jobs, I'd sure hope that U.S. citizens are the benefactors.  I'd like to hear today about how the centers create jobs, how they report this information to the federal government, and whether USCIS is doing substantial auditing of centers to verify the information received from the regional centers.

We must also do a better job of rooting out abuse by EB-5 promoters abroad.  Reuters recently reported on how cash-hungry American businesses are working abroad to promote the EB-5 regional center program.  Many of these EB-5 promoters are mischaracterizing the program, luring investors here and robbing them of the American dream.  In fact, China has reportedly put restrictions on these promoters.  When asked by Reuters, both the USCIS and the Securities and Exchange Commission were unaware of any marketing abuses.  Maybe it's time these agencies wake up and figure out what's truly going on.

I'd like to work with Chairman Leahy on ways to strengthen oversight over the program.  I think he may have some good ideas for doing that, including requiring more reporting by the centers and ending centers that aren't producing as they promised.  In addition to restoring program integrity, I think it's important to consider whether the dollar amounts should be raised.  They have remained at $500,000 and $1 million since the early 1990s.  Finally, we must close any loophole that allows a foreign investor to bring capital to the table, receive a greencard, and then withdraw his financial support and walk away from the regional center.

I realize we could have testimony from every single regional center in the program citing the benefits that foreign investments have provided their community.  I appreciate Mr. Stenger appearing before us again today and sharing with us how the program has benefited Northern Vermont.

Conversely, I look forward to hearing from Mr. North, a fellow from the Center for Immigration Studies.  Mr. North will provide a different perspective that exposes some of the problems with the program, and highlight how some bad actors have tarnished the program's reputation.  I also look forward to hearing from Mr. Devine, who has had the experience of overseeing the operation of the program when he worked as Chief Counsel and Acting Director of U.S. Citizenship and Immigration Service.

Thank you for holding this hearing, Mr. Chairman.  I look forward to listening to our witnesses.

Extending tax credit before end of next year would boost jobs and growth in wind energy sector 

Washington, DC - Rep. Bruce Braley (IA-01) today urged Republican and Democratic House leaders to include legislation extending the wind energy production tax credit for another four years in any year-end tax cut extension deal.

Congressional leaders are negotiating an agreement to extend a number of job creation tax cuts that are set to expire at the end of this year, including a payroll tax cut and a biofuels tax credit.

In a letter to House leadership, Braley said that an immediate, four-year extension of the wind energy production tax credit would provide more certainty for the wind energy industry, encouraging increased investment and job creation.  Historically, investment in wind energy projects has collapsed when the wind energy production tax credit has been allowed to expire.

"Though the Production Tax Credit isn't set to expire until the end of 2012, wind project developers are hesitant to schedule future projects without the certainty of having this credit extended," Braley wrote.  "When the credit has expired in the past, the installation of new wind turbines dropped as much as 93 percent, with corresponding job losses.  By not waiting until the last minute, we can maintain certainty for investors and continue to create jobs in this growing industry."

At the beginning of November, Braley introduced the American Renewable Energy Production Tax Credit Extension Act, a bill that extends the wind energy production tax credit for another four years.  Without Congressional action, the existing wind energy production tax credit will expire at the end of 2012.

Wind energy is a major growth industry in Iowa.  Iowa is first in the nation in per-capita wind energy production, and second nationally in total annual wind energy production in megawatt-hours.  According to the Iowa Wind Energy Association, the Iowa wind energy industry already employs over 3,000 full-time workers.  That number could grow with a more certain investment climate for the wind energy.

The text of Braley's letter to House leaders is below; a copy can be viewed at the following link: http://go.usa.gov/5YT

--

November 29, 2011

Speaker John Boehner

H 232, U.S. Capitol

Washington, D.C. 20515

Minority Leader Nancy Pelosi

H 204, U.S. Capitol

Washington, D.C. 20515

Majority Leader Eric Cantor

H 329, U.S. Capitol

Washington, D.C. 20515

Minority Whip Steny Hoyer

H 148, U.S. Capitol

Washington, D.C. 20515

Dear Speaker Boehner, Leader Cantor, Leader Pelosi and Minority Whip Hoyer,

I urge you to include the American Renewable Energy Production Tax Credit Extension Act, which would extend the production tax credit (PTC) for four years, as part of any tax extenders package that may be considered before the end of the year.  Extending this credit is essential to maintaining and expanding a domestic wind energy industry.

Wind is still a comparatively new energy industry and we must have a consistent and long-term federal policy to encourage continued investment. Even though the production tax credit isn't set to expire until the end of 2012, wind project developers are hesitant to schedule future projects without the certainty of having this credit extended. When the credit has expired in the past, the installation of new wind turbines dropped as much as 93 percent, with corresponding job losses.

By not waiting until the last minute, we can maintain certainty for investors and continue to create jobs in this growing industry.

Wind has already had a positive impact on our economy and added 40 percent of all new electricity capacity between 2008 and 2009. It has provided a steady source of income for thousands of farmers and ranchers, with Iowa landowners making roughly $12.6 million per year leasing land for turbines. Additionally, over 400 manufacturing facilities across the U.S. now make major turbine components, towers, and blades. In Iowa alone, the wind industry supports more than 3,000 jobs with a combined payroll of over $70 million per year.

Wind energy is helping meet America's increasing demand for electricity. Please consider a long-term extension of the wind PTC to make sure that this industry continues to create jobs and be part of a long-term solution to meet our energy needs.

Sincerely,

/s/ Bruce Braley

Member of Congress

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