Floor Statements

Mr. President, I am pleased to be here again to speak in support of the Fraud Enforcement Recovery Act. I urge my colleagues to join me in supporting this bill so we can pass this important legislation. I cosponsored this bill because I believe that we need to do something to show the American people that we are taking their tax dollars seriously and committed to rooting out fraud, waste, and abuse of Government programs.

The fraud enforcement tools and resources provided in this bill will help Federal agents and Federal prosecutors devote more resources to investigations into financial and mortgage frauds. The criminal fraud law updates in this bill will also help send a message to individuals in the future that fraud against homeowners and investors won't be tolerated. While it is true the criminal law provisions can't apply retroactively to conduct that led us the current financial and housing crises, they will help prosecutors in the future and will help to deter future criminal conduct.

Finally, and perhaps most importantly, this bill makes critical amendments to the Federal False Claims Act that will ensure those who rip off the Government can't hide behind judicial loopholes created in the law. These edits to the False Claims Act are important to ensure that the Justice Department and individual qui tam whistleblowers aren't blocked by some procedural hurdle put in place by judges. When I authored the 1986 amendments to the False Claims Act, I couldn't imagine the types of decisions we have seen from courts. These courts have read all sorts of new procedural and intent requirements into the false claims that were never imagined nor were they intended by Congress. These amendments will help restore the original intent of the False Claims Act and keep it working into the future so it can continue to add to the $22 billion already recovered under this powerful law.

I urge my colleagues to join me in supporting this important legislation so we can show the taxpayers we are serious about fighting fraud against homeowners, investors, and the Federal Government.

Madam President, I heard the kind remarks of the Senator from Vermont. I thank him for those remarks about this Senator and I thank him for his cooperation on this bill, including some things I am very much interested in, but also the basis of the legislation that he proposed, and I support it as enthusiastically as I do the rest of the bill. I thank the Senator from Vermont.

I am here, obviously, to speak in support of the Fraud Enforcement Recovery Act which has been so thoroughly discussed by our distinguished chairman of the Judiciary Committee. As the lead Republican cosponsor of this timely antifraud legislation, I believe it is a very important component--a very important component--to help get both the financial and the housing markets back on track. The fraud enforcement tools and resources provided in this bill are very necessary. They will ensure that the taxpayers' dollars that have been expended to shore up bank and financial institutions and corporations and Freddie Mac and Fannie Mae and others aren't lost to fraud, waste, and abuse.

This bill sends a very clear message to would-be bad actors that their conduct will have repercussions from here on out. It will also make sure money lost to fraud can be recovered through the False Claims Act. Most importantly, this bill will help show the American people we are doing something to try and prevent future fraud and recover moneys lost to that fraud and that abuse. That is why I am voting for cloture on this bill.

Early in the process of bringing this bill to the floor, I explained to the Democratic leadership that I wanted an open process for amendments to be considered on this bill before I supported the cloture that we will be voting on. The leadership honored that and we had a number of amendments filed on this bill. We have spent a week and have debated and disposed of a number of amendments to the bill. We have some other amendments that remain outstanding that are good amendments and should be debated on a housing or banking bill that is coming up in the very near future. It is now time to pass this bill. Our law enforcement officials need these tools and they need these resources and they need them now. That is why I am going to vote for cloture on this bill.

Taxpayers have been asked to shoulder an enormous burden at this time of economic crisis created by a credit crisis. They have shouldered an enormous burden, be it the bailout of financial institutions, an economic stimulus bill that handed out $1 trillion, and more recently the Omnibus appropriations bill loaded full of Government spending. To my colleagues: Whether you agree with these expenditures, we simply cannot allow these funds to be unprotected from fraud, waste, and abuse.

This legislation ensures that our law enforcement officials and our prosecutors have the tools necessary to enforce our laws and the resources to hunt down the bad actors. It makes revisions to our criminal fraud laws to ensure that complex financial and mortgage crimes aren't outside the scope of Federal jurisdiction in the future. It also makes necessary corrections to our antimoney laundering laws to ensure that a recent Supreme Court decision doesn't limit the ability of our Department of Justice to go after criminals who launder their ill-gotten funds.

Finally, and perhaps most importantly from the standpoint of this Senator, the bill amends the civil False Claims Act to ensure that taxpayers' money lost to fraud, waste, and abuse can, in fact, be recovered and particularly when that recovery is associated with a patriotic work of whistleblowers who make that known. Back in 1986, I authored major revisions to the False Claims Act and did that so we could fight fraud, particularly against Government then more so than now, by defense contractors. Now it seems to be Medicare and the health care industry. Since those revisions were signed into law in 1986 by President Reagan, the False Claims Act has recovered over $22 billion of taxpayer money.

This powerful law allows citizen taxpayers to act as private attorneys general by going to court on behalf of our Government when they know of fraud against the Government. These qui tam whistleblowers are the heart and soul of the False Claims Act. They uncover fraud from the inside, bringing schemes to light so taxpayers are not taken for a ride. However, in recent years, litigation fueled by powerful Government defense and health care contractors has created legal loopholes that threaten the application of this powerful tool that has brought in billions of dollars. This legislation fixes this, thus ensuring that no fraud can go unpunished by simply navigating through the legal loopholes.

This bill will help deter potential defrauders from attempting to scam the Government and the taxpayers. In addition, this legislation will help instill confidence back into the housing and financial markets. I hope my colleagues will join me by voting for cloture on this bill to help make sure these taxpayer dollars are protected.

I yield the floor.

Madam President. I wish to pay tribute to a 100-year tradition in my home State of Iowa . This past weekend, the Drake Relays in Des Moines, IA, celebrated a century of competition for the world's elite track and field athletes.

Schools and athletes from all over the country come to Des Moines each year to compete in this classic. The display put on by the Drake community every year brings alumni, Iowans, athletes, friends, and families together to cheer competitors in victory and defeat.

The Drake Relays has been creating memorable moments for 100 years. It is moments created by Jesse Owens, Michael Johnson, Carl Lewis, Jim Ryun, Gwen Torrence, and Iowa's very own Lolo Jones, Natasha Kaiser- Brown, Kevin Little, and Joey Woody. It is unknown athletes making their own mark in history and taking the first step toward fame far beyond the borders of Iowa. It is high school kids, like my son Robin, whose capstone moment of their athletic career was participating in the Drake Relays.

Anybody who has attended the Relays understands the marvel of this one-of-a-kind sporting event. For some it is the blue track that helps athletes run a little faster, jump a little longer and higher, and throw a little further. For others it is the fans filling every seat to cheer for the athletes who cross the finish line in first and for those who cross last. And for some it is the intense competition from the high school kids all the way to the top athletes in the world who are standing shoulder to shoulder waiting for their event.

Whatever it is, there is a reason fans and athletes alike keep coming back to the Drake Relays year after year.

Just as Jesse Owens said, ``There's something special about the Drake Relays.''

Congratulations to the Drake Relays on 100 years of ``America's Athletic Classic.''

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, the first point I wish to make is that with the false claims provisions in the Leahy-Grassley bill, which deals with other provisions as well, but the False Claims Act is essential to accomplishing the overall purposes of the bill, along with other tools to do it--to get rid of fraud. We are trying to just, in this bill, in a very rifle shot way, correct some court opinions that have been detrimental and weaken the False Claims Act. That is all we are trying to accomplish in this bill that deals with bigger things as well.

What Senator Kyl is bringing up is a legitimate subject of discussion because it has been brought up at other times since passage of the False Claims Act 22 years ago. I don't say it is not legitimate to discuss it. But there is broader false claims legislation in the Judiciary, and it ought to be discussed at a time when we have hearings on this subject. There have been no hearings on this.

These amendments should be reviewed by the full committee under the regular order process. That is the first point I wish to make to Senator Kyl about why not to consider this amendment right now.

The second one is the point he made on how big of an award is big enough to incentivize people to turn in fraud.

Yes.

Mr. President, the second point I wish to make before I get to my formal remarks is on the question the Senator from Arizona raised about how big of an incentive is enough to get reported. That is a legitimate question.

Here is my experience with 22 years of the False Claims Act, dealing with whistleblowers, Government agencies listening to whistleblowers or not, the Justice Department taking a case or not taking a case, or whether the whistleblower initiates the case on their own. What I have found is that the False Claims Act does not come up early in anybody's thought process--about initiating a thought process that there might be fraud out there and somebody ought to be investigating and get to the bottom of it. Usually,

the whistleblower has ample evidence of that or they wouldn't be doing it in the first place. They jeopardize their profession and their job in Government. That isn't right, but whistleblowers who want to do the patriotic thing actually jeopardize their professional future. What I have found is they don't even know about the False Claims Act or about getting a percentage of it. They don't even know about whistleblower protection laws. They want to do the patriotic thing. They want to report fraud.

So to talk about the award being the incentive to come forward, I don't want to say that in some cases that may not be the case, but in most cases these are patriotic people knowing about the fraudulent use of taxpayer money, they think it is wrong and ought to stop, and they think it ought to stop within the agency. They don't get anywhere with the agency, so they come to other people, and eventually along the line, probably, somebody says: You need to take this to court, and you can get something out of this if you win and if you have a case. Probably the majority of them don't win. So they get nothing out of it. But they are trying to be patriotic citizens.

I think that bringing up the issue of how much of an award is big enough to get this information out should not even be a part of the debate. It is still something because we are talking about taxpayer money and what is an incentive to do this, but it ought to be discussed in a thoughtful way, not on an amendment to a bill that is trying to correct a few bad court decisions to get the False Claims Act back to its original purpose.

I thank the Senator from Vermont for letting me cooperate with him on this issue. The Senator from Vermont also recognizes that the False Claims Act is a very useful tool against fraud, which is the overall purpose of the rest of Senator Leahy's and my bill.

The other thing you have to remember is that this has brought in $22 billion. Senator Leahy made that very clear. There are so many court cases I can tell you about where the Government, through the Justice Department, came in and tried to belittle the whistleblower, the claimant, to reduce, or even eliminate, any access to an award; how many times judges have had to berate people in the Justice Department. I am not talking about Presidents Obama, Bush, Reagan, Bush 1, or Clinton; I am talking about several of them where you wouldn't even have a case--in other words, saying to the prosecutor and the Justice Department: Do you realize you would not even have had a case without this patriotic whistleblower coming forward?

More recently, there has been a case where the Justice Department asked not to proceed forward. The judge stepped in and said: We are going to go forward; there is something wrong here, and we are going to get to the bottom of it.

So we have $22 billion back because of patriotic Americans. Do you know what. Just because the False Claims Act has been out there, it has been a preventive to fraud, like all the other tools Senator Leahy has in this bill that will not only help with prosecution, but the possibility of prosecution is going to be a preventive factor.

So I feel strongly that if the issue of an award limit comes up, it ought to be discussed thoroughly and thoughtfully in a tool--the False Claims Act--which has proven its worth by $22 billion and a lot of unknown preventable fraud out there. We ought to think through it thoughtfully.

I want this amendment defeated. The False Claims Act is the No. 1 tool for recovering taxpayer dollars lost to waste, fraud, and abuse. Whistleblowers who bring fraud cases on behalf of the Government, known as qui tam relators, often risk everything to uncover truth.

Currently, the False Claims Act provides a reward to whistleblowers who come forward with good-faith allegations of fraud, waste, or abuse of Government dollars.

They are allowed to file a lawsuit on behalf of the Federal Government, and the case remains under judicial seal in Federal court. The Justice Department then decides to join a case or not join a case. If the Justice Department joins a case and the case is successful, a whistleblower can recover 15 to 25 percent of the funds recovered. If the Justice Department does not join--then it is going to be a much more difficult process for the whistleblower and his or her counsel-- the whistleblower can go forward with the case and if they are successful, they can recover more, somewhere between 25 and 30 percent, depending upon the judge.

While some are arguing that this represents a windfall for whistleblowers, the statistics paint a different picture.

In fact, in cases where the Department of Justice joins the whistleblower, the average share for the whistleblower is not 25 percent or 30 percent, it is 16 percent. Compare that 16 percent with the percentage it takes to administer Government generally, throughout Government--about 12 percent. Do you, Mr. President, think there are enough people in the Justice Department, enough FBI people to know where all the skeletons are buried, where all the frauds are being committed? No. This average award is not too far out of line with the average administrative costs of Government.

There have been 6,197 qui tam complaints filed since 1986 which have resulted in $13.7 billion in recoveries to the Federal Government. That averages about $2.2 million recovered for complaint filed.

In these 6,197 cases, the Government has paid qui tam whistleblowers $2.2 billion in awards. That means the average share award for a qui tam whistleblower is about $350,000. This is hardly a windfall that one would seek, particularly if one is ruining their professional career by being a whistleblower, coming forth to do what is patriotic, to do what is right. It is, in fact, an incentive that helps fuel complaints coming in.

However, if we start adding new caps to the already existing whistleblower caps, we could reduce the incentive for whistleblowers to proceed through the cases--or coming forward in the first place--that would help us then recover billions of dollars.

I wish to share the story of Tina Gonter who was a qui tam whistleblower who testified before the Judiciary Committee last year. Ms. Gonter worked closely with the Government and went undercover at the company for months collecting documents and evidence of a fraud against the Navy. She even wore a wire for the Federal agents of the Defense Department.

Ultimately, a couple of individuals went to jail as a result of Ms. Gonter's work. But the Government refused to sue the contractor for fraud. Believe that, the Government refused to sue with obvious evidence. Ms. Gonter filed a false claims case against the company, and it was not joined by our own Justice Department. The judge in that case even scolded the Justice Department and the Navy for not joining the case.

Ultimately, Ms. Gonter prevailed, and the contractor paid over $13 million to the Federal Government. Ms. Gonter received a share of that money, but had she not brought this case, the Justice Department and the Defense Department would have been satisfied with simply putting two people in jail and allowing the contractor to walk away with the money it received for providing fraudulent product to the Navy. And it is not just a case of fraudulent product to the Navy. It is a serious safety matter for the people in the military who put their lives on the line in the defense of our freedom.

That is only one example out of 6,197 that the False Claims Act provides power to get fraudulent activity under control. It is a check on the power of the Government bureaucracy to look the other way--that is what the Justice Department did in this case--and pretend that fraud did not happen on their watch. However, it is fueled by courageous whistleblowers, such as Tina Gonter, and without sufficient financial incentives to come forward and fight these cases for 5 to 10 years they can take in court, we may lose this valuable tool against fraud.

It is about recovering money, taxpayers' money. I find it ironic--I hope people are listening now because there is a conflict here between maybe people on my side of the aisle who think this is a good idea--I find it very ironic that those outside groups supporting this amendment were in staunch opposition to the idea of the Senate imposing any caps on executive compensation at companies receiving bailout funds. Now instead, they want to cap

the recovery of good-faith whistleblowers to come forward with claims of fraud at companies that are ripping off American taxpayers.

The False Claims Act works and will continue to work if we do not cut the incentives for relators to go to court. The law already has a cap for whistleblower recoveries. I urge my colleagues to oppose this amendment which is based on a couple of extreme examples from outlier cases that are not the norm.

We have $22 billion coming in under this act. Early on, we fought the defense industry to get this bill passed, and the defense industry tried to gut it after it was passed. When they could not because they did not have the proper prestige, they came to the American hospital industry to fight a front for them. That did not happen. I don't know exactly what groups are out there now backing all this. But when are you ever going to realize that in this country, the taxpayers deserve some respect? And if there is fraud in your industry, it is no holds barred on the recovery and the preventing of fraud.

I yield the floor.

Mr. President, I ask unanimous consent for 15 seconds.

Mr. President, I would like to point out, as I did in my debate, that we have a much larger False Claims Act bill pending in the Judiciary Committee. I think what the Senator from Arizona brought up is a legitimate subject for discussion, but it ought to be discussed in the wider global issue of the False Claims Act and not in a fraud bill where we are just trying to make some very short changes in the False Claims Act.

I ask my colleagues to vote against the Kyl amendment.

I will take it off your time.

Pretty soon we are going to have a motion dealing with small business. I want to address that issue now so that I get it addressed properly as a senior member of the Senate Finance Committee.

Everyone in this body knows that small businesses are an extremely important and dynamic part of the U.S. economy. I wish to say, and I often do, that small business is the employment machine of our economy.

President Obama agrees with that. Small businesses have generated 70 percent of the net increase in jobs in the United States over a long period of time. Three weeks ago, we debated this issue during the budget resolution debate. During the debate, the Senate spoke on this point, because Senator Cornyn had a small business tax relief amendment. That amendment passed by an overwhelming vote of 82 to 16.

America's small businesses have been suffering during this recession. If you go back to your States frequently, as I do, you will hear about it from your small businesses very directly. A few weeks ago, Senator Landrieu and Senator Snowe held a hearing on the crunch hitting small business. They found that big banks have been cranking down lending to small businesses. At a time we are putting more money into big banks, why? I do not know that we got an explanation. I have been trying to get an answer out of Treasury on whether banks receiving the bailout money have been similarly squeezing out small business customers. I am still waiting for an answer from our Treasury Department.

A very good source of answer, though, as we turn elsewhere, an answer about the environment of small business, is found in the monthly surveys of small businesses conducted by the National Federation of Independent Business. We all know about the NFIB, the largest small business organization. NFIB has been conducting these surveys now for 35 years.

The membership of that organization includes hundreds of thousands of small businesses all across America. You can find the survey on NFIB's Web site www.nfib.org. I wish to encourage every Member to check out this month's survey, because I am going to be referring to it with charts I have with me.

The survey shows some extremely disturbing trends on credit availability. Small businesses depend on credit. Small businesses are getting squeezed very hard. That chart is up now. As you can see, the chart shows the availability of loans has fallen off the cliff as late as 2007 and gets worse as you get into 2009.

You see on the right side of the chart the sharp downturn evidencing the lack of ability of small businesses to get loans. This credit crunch as well as other factors has contributed to the near record low in the NFIB's index of small business optimism. I wish to have you view this, something like we regularly view, the University of Michigan's monthly index on consumer confidence.

The NFIB takes surveys regularly. This chart shows small business owners turning extremely pessimistic in the last couple of years. You can see how that has ``downturned'' very rapidly at the right end of the chart. What you see here is the attitude of decisionmakers in small business of America,

the people who create the jobs. Those are the decisionmakers for the businesses that President Obama and we in the Congress agree are most likely to grow or contract jobs.

The pessimism evidenced by the chart is at its second lowest point in the 35-year survey. This data should concern every policymaker in this body. As bad as the two sets of charts are, I have a worse picture.

This chart shows the net increase or decrease in small business hiring plans. The survey asks the small business owner simply whether he or she plans to expand, on the one hand, or contract, on the other hand, employment over the next 3 months.

As you can see even more dramatically, look at the right-hand side of the chart here. If I said on those others to the left hand, in each case I was talking about the right. I do know the difference between the left and right hand. But as you can see even more dramatically on the other two charts, this chart shows small business activity contracting tremendously.

Small business hiring plans are at their most negative level in the entire 35-year history of this survey, again, the right side of the chart. Let me repeat, because it is so important, this goes back to 1974, those surveys. Since NFIB started doing them, the likelihood of small business owners adding workers has never been worse.

With this pessimism, we should not be surprised then that job losses for small businesses have been growing dramatically. The national employment report recently released by Automatic Data Processing shows 742,000 nonfarm private sector jobs were lost from February to March 2009. Of those 742,000 lost jobs, 614,000 or 83 percent, were from small business.

The President's recent efforts to increase lending to the small business sector are commendable. The centerpiece of his small business plan will allow the Federal Government to spend up to $25 billion to purchase the small business loans that are now hindering community banks and other lenders.

Unfortunately, that is only a drop in the bucket.

Remember that small business accounts for about half of the private sector. Moreover, the positives that will come to small businesses from this relatively small package of loans--which will ultimately and obviously have to be paid back--will be heavily outweighed by the negative impact of the President's proposed tax increases. Helping small businesses get loans just to take that money back in the form of tax hikes is not helping the economy or small businesses.

The President's budget proposes to raise the top two marginal rates from 33 percent and 35 percent to 40 percent and 41 percent respectively, when PEP and Pease are fully reinstated. President Obama's marginal rate increase would mean an approximately 20 percent marginal tax rate increase on small business owners in the top two brackets.

Many of my friends on the other side will say that while they agree that successful small businesses are vital to the success of the U.S. economy, the marginal tax increases for the top two brackets will not have a significant negative impact on small businesses. I take exception to that argument. They used Tax Policy Center data, and I want to show why that should not be allowed.

Proponents of these tax increases seek to minimize their impact by referring to Tax Policy Center data that indicate about 2 percent of small business filers pay taxes in the top two brackets. In testimony before the Senate Finance Committee, the liberal think tank, Center on Budget Policy and Priorities, also used that figure. Moreover, Secretary Geithner has testified using that figure. They argue that a minimal amount of small business activity is affected.

However, there are two faulty assumptions to this small business filer argument.

The first faulty assumption is that the percentage of small business filers is static. In fact, small businesses move in and out of gain and loss status depending on the nature of the business and the business cycle. The nonpartisan Joint Committee on Taxation has indicated that, for 2011, approximately 3 percent of small business filers will be hit by these proposed higher rates. These statistics compare to a 2007 Treasury which showed 7 percent of flow-through business owners paying the top rate. In the latest analysis, when the impact of the alternative minimum tax is fully included, that percentage may drop some.

The second faulty assumption is that the level of small business activity, including employment, is proportionate to the filer percentage. This is where the argument is hogwash.

According to NFIB survey data, 50 percent of owners of small businesses that employ 20-249 workers would fall in the top two brackets. You can see it right here on this chart. It shows what I am talking about. According to the Small Business Administration, about two-thirds of the Nation's small business workers are employed by small businesses with 20 to 500 employees.

Do we really want to raise taxes on these small businesses that create new jobs and employ two-thirds of all small business workers? Of course, we don't. But that is exactly what the majority is going to do if they follow the President's lead.

With these small businesses already suffering from the credit crunch, do we really think it's wise to hit them with the double-whammy of a 20 percent increase in their marginal tax rates?

Newly developed data from the Joint Committee on Taxation demonstrates that 55 percent of the tax from the higher rates will be borne by small business owners with income over $250,000. This is a conservative number, because it doesn't include flow-through business owners making between $200,000 and $250,000 that will also be hit with the budget's proposed tax hikes.

If the proponents of the marginal rate increase on small business owners agree that a 20 percent tax increase for half of the small businesses that employee two-thirds of all small business workers is not wise, then they should either oppose these tax increases, or present data that show a different result for this group of people.

As we prepare for the conference on the budget resolution, the President and the congressional Democratic leadership have an opportunity to change course. They have an opportunity to revisit the tax heavy, spending heavy, and debt heavy budget they have passed 2 weeks ago. Both budgets would perpetuate the double whammy of constricted credit on the one hand and high taxes on the other, directed at America's job creation engine--small business.

In the coming days, we Republicans will try to persuade our Democratic friends who have all the controls of fiscal policy to change course for the benefit of small business that we all agree ought to be our first concern. One way they can change course is to focus, like a laser beam, on jump-starting the Nation's job engine--small business America. We need an upturn in the small business optimism index that is contrary to what this chart shows. We need to reverse the direction of this sharply downward sloping arrow. If we ignore this negative environment, we are just kidding ourselves. We need to change course and reverse this even more sharply downward sloping hiring plan arrow.

That is where the President and Congress agree we need to get more job growth. As we take the final steps on the budget, let's match that budget with this reality

I yield the floor.

Mr. President, over the last 5 years I have conducted extensive oversight of the Food and Drug Administration. As a result of my oversight activities, I identified serious problems at the FDA that included: the quashing of scientific opinion within the agency; delays in informing the public of emerging safety problems; too cozy a relationship between the FDA and the industries it is supposed to regulate; and a failure to be adequately transparent and accountable to the public.

The FDA will require strong leadership to rebuild public confidence and tackle the cultural and organizational problems that have plagued the agency.

Strong leadership alone, however, will not fix all the problems.

The agency needs additional tools, resources, and authorities to fulfill its mission of protecting the health and safety of the American people.

In September 2007, the Congress passed the Food and Drug Administration Amendments Act to provide FDA some of the needed tools, resources, and authorities.

This legislation was a positive step forward in strengthening the agency and restoring the public's trust in the FDA, but Congress's work is not done.

Today, I am here to talk about another FDA bill.

In the summer of 2007, I started examining FDA's program for inspections of foreign pharmaceutical manufacturing plants.

I expressed concerns to the FDA regarding, among other things, inspection funding, emerging exporters, and severe weaknesses in the inspection process.

An increasing amount of the drugs and active pharmaceutical ingredients Americans use are being manufactured in foreign countries, primarily in China and India.

Yet as reported by the Government Accountability Office in November 2007, the Food and Drug Administration does not know how many foreign establishments are subject to inspection and the agency conducts relatively few foreign inspections each year.

According to the FDA, from fiscal year 2002 through fiscal year 2007, the agency conducted fewer than 1,400 inspections of foreign pharmaceutical facilities.

And these inspections were often conducted in countries with few reported quality concerns.

In China, the world's largest producer of active pharmaceutical ingredients, and where we have seen increasing reports of contaminated products, only 11 inspections were conducted during fiscal year 2007-- that is way too few.

During the same year, FDA conducted 14 inspections in Switzerland, 18 in Germany, and 24 in France--all countries with advanced regulatory infrastructures.

In addition, FDA officials estimated that the agency inspected foreign class II device makers every 27 years and foreign class III device makers every 6 years.

Class III devices are devices that support or sustain human life or present a potentially unreasonable risk of illness or injury, such as pacemakers and heart defibrillators.

In January 2008, we saw too well what happens when we have a broken inspection system.

Baxter International Inc. temporarily suspended production of its

blood thinner Heparin because of an increase in reports of adverse events that may be associated with its drug. Then recalls were announced. There were serious concerns about whether or not this country would have enough Heparin to meet patient needs as a result of the contamination. After several months, FDA's investigation found that the active ingredient in Heparin, which was made at a facility in China, was contaminated. And the serious adverse events in patients who received Heparin were linked to the contaminated blood thinner.

The recalls and investigation of contaminated Heparin highlighted significant weaknesses in FDA's oversight of the production and supply chain and emphasized the need to improve FDA's protection of the safety of products made in this country and abroad.

The FDA is charged with ensuring the safety and efficacy of drugs, pharmaceutical ingredients, and devices produced around the world despite its inadequate budget for inspections, in particular foreign inspections.

It is troubling that the FDA is grossly under-resourced at a time when foreign production of drugs and active pharmaceutical ingredients is growing at record rates.

Last Congress, I introduced the Drug and Device Accountability Act of 2008 with Senator Kennedy, chairman of the Committee on Health, Education, Labor, and Pensions. The Congress did not have an opportunity to act on that legislation. So today Senator Kennedy and I are introducing the Drug and Device Accountability Act of 2009.

Senator Kennedy is not able to join me on the Senate floor, but I thank him for his cooperation and work with my office on this important legislation.

I also want to take this opportunity to express my appreciation for his commitment and efforts over the years to reform and improve the

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

I will speak on a provisions of the bill dealing with money laundering. This section of the bill that I am referring to would amend the criminal money laundering statute to make clear that the proceeds of specified unlawful activity include the gross receipts of illegal activity and not just the profits of that illegal activity.

The money laundering statutes make it an offense to conduct financial transactions involving the ``proceeds'' of a crime, sometimes referred to as ``specific unlawful activity'' in the statutes.

These statutes, however, do not define what the term ``proceeds'' amounts to. Instead, the term has been left to definition by our courts.

For 22 years, since the money laundering statute was enacted in 1986, courts have construed ``proceeds'' to mean ``gross receipts'' and not ``net profits'' of illegal activities consistent with the original intent of Congress.

However, last year, the Supreme Court entered into it and, of course, reverses the definition in a case called United States v. Santos.

The Supreme Court suggested that the term ``proceeds'' was ``ambiguous''--that is their word--and as a result, under the rule of lenity, the Court gave the term a much narrower definition.

In this decision, the Court mistakenly limited the term ``proceeds'' to the ``profits'' of a crime, not the more global word ``receipts.''

As a result, the Court's decision has limited the money laundering statutes to only profitable crimes. It gives criminal defendants an argument against their criminal conduct by forcing the Government to prove that they actually made a profit, regardless of the criminal activity.

This decision of the Court is contrary to the intent of Congress in passing the money laundering statutes and weakens one of the Federal Government's primary tools used to recover the proceeds of illegal activity, including mortgages and securities fraud.

For example, these are some of the problems created by the Santos decision.

If a drug dealer committed a financial transaction with the proceeds of illegal drug dealing but the money was only used to purchase drugs, then they could not be prosecuted for money laundering. I know, everybody hears that, and they say common sense dictates otherwise. But the Supreme Court interpretation puts us in that sense that is contrary to common opinion.

Another example: If a fraudulent broker, such as a mortgage broker, intentionally overvalued the fair market of a home for purposes of a mortgage, that broker could only be charged for money laundering related to any fees or potential profit made in the fraudulent transaction, not based on the full value of the house.

Another example: An executive who committed security fraud could not be charged with money laundering if the fraud were unsuccessful in making a profit even though there was a fully completed financial transaction.

Those are just three of many examples I could give about how Santos very narrowly construes the possible prosecution and limits the prosecution of certain unlawful activity in the area of money laundering.

This legislation corrects the Santos decision and moves us forward so that profit or not, there is money laundering actually going on, we will have an opportunity to prosecute and hopefully succeed in the prosecution.

I yield the floor and suggest the absence of a quorum.

Would the Chair please inform me as to the time allotted on this side?

I thank the Chair.

Mr. President, I thank the Senator from Vermont for his leadership in this area. I very much enjoy working with him. We may come from different political parties, but he has been very cooperative in a lot of the efforts I wanted to make on individual pieces of legislation. On this one, he and I are working together very closely. I thank him for the opportunity to work with him and thank him very much for including within this legislation some things both he and I have an interest in dealing with the False Claims Act.

I am pleased to be an original cosponsor of the Fraud Enforcement Recovery Act. This is a timely piece of legislation, given the current economic downturn and the unprecedented amount of taxpayer dollars that are being expended to shore up banks and financial institutions, corporations, Fannie Mae, Freddie Mac, et cetera. When taxpayer money is being injected into these corporations, there is more opportunity for fraud, and we ought to stay on top of it. We have a responsibility as Senators, as guardians of taxpayer money, to make sure fraud does not occur anytime but, more importantly, when there is taxpayer money keeping a lot of these organizations afloat that would not otherwise be there.

There can be honest differences between Senators about whether this taxpayer money should have been used in the first place. Some of that I have voted against using. But the fact is, we were in the minority. The money is being used to sustain some of these institutions and corporations and, consequently, we have every responsibility to make sure taxpayer money is protected. That is what this piece of legislation is all about.

For instance, the economic stimulus package handed out nearly $1 trillion in new spending. Whether a Member supported or opposed these expenditures, he or she must agree we simply cannot allow unscrupulous individuals defrauding the Government and ripping off the taxpayers. This legislation ensures that our law enforcement officials as well as prosecutors have the tools necessary to enforce our laws and also the resources to hunt down bad actors. It makes minor revisions to our criminal fraud laws to ensure that bad actors are not outside the scope of Federal jurisdiction. Further, it amends the civil False Claims Act to ensure that taxpayer money lost to fraud, waste, and abuse can be recovered. These changes will deter potential defrauders from attempting to scam the Government. In addition, this legislation will help instill confidence back into the housing and financial markets.

Over the last few years, unscrupulous individuals found housing and financial markets that were lax in oversight enforcement and regulation. As a result, it was easy for these unscrupulous individuals to commit fraud against homeowners, lenders, and businesses across the country. For example, the Financial Crimes Enforcement Network, referred to as FinCEN, released an updated report outlining filing trends in mortgage loan fraud suspicious activity reports. This report showed that SARs have continued to increase and for the last year ending in June 2008, there were more than 62,000 suspicious activity reports, SARs, filed related to mortgage fraud alone.

While this raw data simply represents investigative leads, it represents a 44-percent increase in suspicious activity from the preceding year. We need to act now to stamp out new fraud claims, to send a message that American taxpayers will not be taken for a ride.

This rise in the number of suspicious activity reports has also increased the need to investigate leads that come in these reports. As a result, we need to make sure there are resources available so that law enforcement agencies can follow these leads.

During the height of the savings and loan crisis in the late 1980s and early 1990s, the FBI had over 1,000 agents and experts working mortgage fraud cases. Today, it is a lot less, compared to a much bigger amount of money that is at stake. Today the FBI has 180 agents dedicated to mortgage fraud investigations, a significant decrease compared to the 1,000 agents and experts during the S&L crisis.

While this number represents an effort to combat fraud, it is a significant decrease when we consider the hundreds of millions of dollars in write-downs during the S&L crisis--in other words, small-- compared to the estimated $1 trillion in write-downs that may occur as a result of the financial and housing crisis. This bill enables law enforcement agencies, including the FBI, Secret Service, the Housing and Urban Development inspector general, and the Postal Inspection Service to procure the funding necessary to make sure this fraud doesn't happen because you need this sort of joint effort to combat what will be complex financial crimes.

It is important to note this bill recognizes the important work of a number of Federal law enforcement agencies that work to combat and prevent financial crimes.

You don't often think of the Secret Service when you think of mortgage fraud, but the dedicated men and women at the Secret Service have been on the front lines in combating mortgage fraud since the S&L crisis and continue to unravel complex financial crimes. The Postal Inspection Service and the inspector general of the Department of Housing and Urban Development also continue to make significant contributions to stamping out mortgage fraud that abuses Federal Government programs and utilizes the mail to commit this fraud.

In addition to authorizing funding for law enforcement prosecutors so we get the number of people to get the job

done, the bill also makes some necessary changes in Federal criminal law. The bill redefines ``financial institution'' to include mortgage lending businesses, a category currently missing in that definition. It also amends the statute to make it illegal to make false statements on mortgage applications and appraisals. It might surprise Members since common sense ought to dictate that, but common sense has not prevailed in that instance, so we will make that a crime.

Further, it ensures that economic relief funds and TARP funds are included in criminal laws prohibiting fraud against the Government. It adds commodities futures to the securities fraud statute. The bill also makes two important clarifications to the antimoney laundering laws; first, by defining the term ``proceeds'' so that a recent Supreme Court decision doesn't limit the ability to go after criminals and drug dealers who launder the proceeds of their ill-gotten gain. This is an incredibly important provision, especially given the recent concerns about the outbound bulk cash smuggling going across the border with Mexico.

Second, the bill amends the international money laundering statute to make it a crime to transport or transfer money out of the country to evade taxes. This provision is also timely given the recent efforts by the Justice Department and the Internal Revenue Service to clamp down on tax cheats and evaders who move money offshore for the sole purpose of avoiding paying taxes with no economic rationale behind it.

Finally and most importantly, the legislation makes important changes to the Federal False Claims Act. The False Claims Act is the Government's premier tool to recover Government money lost to fraud and abuse. The Government has used the False Claims Act to recover over $22 billion since 1986 when I introduced legislation that amended the previous False Claims Act. This legislation will ensure that the law adheres to the original intent of the False Claims Act.

I think I have some expertise in that area, being the author of this legislation and finding the Supreme Court's ruling contrary to congressional intent, albeit their motivation may be to interpret the law and that is the way they interpret it, but it does not keep us from going back to what we think is the original intent and saying to the courts: You got it wrong.

Specifically, these amendments address a loophole that was created in the False Claims Act by the Supreme Court decision in the Allison Engine case which could be used by fraudfeasors to evade liability by hiring subcontractors to perform work on Government contracts. Some defendants are already filing briefs in court seeking to have the false claims cases dismissed because of that decision. It needs to be addressed to protect taxpayer dollars.

This legislation could not come at a more important time. It will send a message to those who have defrauded homeowners and mortgage lenders and will send an even stronger message to those thinking about committing a future crime. I hope my colleagues will join in supporting the legislation to make sure that taxpayer dollars are protected.

I want to add a little editorial comment outside of this piece of legislation we have before us. There will be a lot of new Members coming to the Senate, maybe not understanding the motivation behind the False Claims Act of 1986. There was tremendous fraud, particularly in defense contracting, that caused me at that time, as a first-term Senator, to be concerned about it. We got proper amendments to the False Claims Act to protect whistleblowers and to use the information that whistleblowers give us to bring cases.

The motivation behind the False Claims Act is that maybe for philosophical reasons, the Justice Department might want to pursue something or maybe their workload is such that a certain case might have a lower priority. It gives the individual citizen in qui tam type suits the ability to bring cases in a sense as a citizen prosecutor. Of course, if a person is not a lawyer, they will have to hire lawyers to do that for them. But as a motivation for doing it, they get a percent of what is recovered.

Remember, $22 billion has been recovered since this law was passed. That may not be a lot of money over the period of years, but it sure is one big hunk of money that we wouldn't have access to if it wasn't for whistleblowers and people who were willing to pursue it to the nth degree to make sure that the case is made and to bring back the taxpayer money at the same time.

Consequently, I am sure somebody is going to try to make a case that when some whistleblower gets $1 million, well, isn't that an awful lot of money for information that has brought back maybe tens of millions of dollars or maybe hundreds of millions of dollars? But the point is, we would not have the case if it was not for the information from the whistleblower.

A lot of people will make a judgment: Well, if you are a public employee or connected to a government program, it is your duty to report that. Well, that is exactly what a lot of people have done without even knowing the false claims law exists. A lot of people whom I have met as whistleblowers have brought to the attention of people higher up in the Government attempts at fraud or actual fraud and got nowhere, and then everybody assumes the only reason they brought it up is because they knew: Well, I can make a case out of this, and I can get a large award for bringing this to people's attention. Most of the whistleblowers whom I know about did not even know about whistleblower protection laws, did not even know about false claims laws until they got into it. Then they find out there is some law that protects them, there is some law that encourages them to move forward.

The point I am trying to make is that when Government cannot do its job of recovering fraud or does not know about it, it seems to me both the $22 billion that has come back to the Federal Treasury as well as the nature of preventing fraud that is behind it--and that probably does much more good, but you cannot measure it, than what is evidenced by the $22 billion--should not be challenged.

Defense contractors during the late 1980s into the 1990s tried to gut this legislation through amendments on appropriations bills or through other attempts. When the defense contractors could not do it, they got people in the health care industry to front for them to try to gut it. In almost every respect, in 20 years, we have stopped various special interests in this town from gutting this legislation. But as we brought this bill forward with Senator Leahy, we have found those people kind of coming to the surface once again.

I say to my colleagues--and particularly I would like my new colleagues to be aware of this--you are going to find those same special interests that have been around for over a period of the last 20 years trying to gut this legislation because it is one of the most effective tools against fraud. You are going to find them surfacing, not necessarily in amendments that are very transparent that there is a special interest behind it. But let me tell you from the experience I have had defending this legislation over the last 20 years, they are there. They do not like the False Claims Act. I do not mean these interests are about doing fraud, but they do not want the overseer the False Claims Act is, and they do not want the encouragement to whistleblowers that if something is wrong, it might be reported.

I hope my colleagues--as the False Claims Act provisions of this bill might be countered by some of our colleagues--think in terms of this not being a new attack, this is just a return of a constant attack this legislation had on it from maybe 1986 for about 10 years. I have not heard it surface a whole lot since then. But it is there.

Remember, this was a piece of legislation that was originally intended to go after military contract fraud. But let me tell you, now it is one of the best tools to get at health care fraud. That is sometimes the impetus for some of these crippling amendments. So please keep that in the back of your mind as we consider this legislation, or at least this part of this bill dealing with the False Claims Act.

I surely thank Senator Leahy for including this in the bill, bringing this back to its original intent, so it can be even a more forceful tool to be used against false claims, since it has been

weakened by some court decisions. It will help us ferret out fraud. I am sure happy we have a President who is also interested in doing that.

I yield the floor.

Mr. President, it is with great sadness that I rise today to call attention to a fallen hero. Cpl Jason G. Pautsch, a 20- year-old soldier from Davenport, Iowa, died on April 10, 2009 in Mosque, Iraq, of injuries sustained when an explosive device detonated near his vehicle. My thoughts and prayers go out to his parents, David Pautsch and Teri Johnson, his siblings Jared, Jacob, Josef, and Jenna, and all his friends and family.

Jason was the squadron leader in the Army's 4th Infantry Division and a graduate of Davenport North High School. Graduating a semester early so he could join the Army, Jason was deployed to Iraq last September. His family has a history of military service and his older brother Jacob is currently serving in the Army's 82nd Airborne.

Always a thrill-seeker, Jason enjoyed hunting and racing BMX bikes in his free time. His high school football coach describes him as a strong young man who was passionate about everything he did. Jason had an excellent sense of humor, was a tremendous competitor, and showed dedication in all he did.

Jason told his father David, he ``believed in what he was doing'' and his sense of patriotic duty is inspirational. I express the greatest respect and sincere gratitude on behalf of all Americans for Jason's commitment to our country. His is a true hero, and his sacrifice will not be forgotten.

Mr. President, I ask unanimous consent that Thomas Edwards, a Secret Service detailee in my office, be granted floor privileges for the remainder of the first session of the 111th Congress.

Mr. President, do you know what, so many of you stayed around. I do not know how many times I have heard of other Senators having voted 10,000 or 12,000 times and I probably did not stay around, and I probably have not earned what you have said about me because I did not pay that much attention to the rest of you who have gone before. So let me apologize for that, and I will bet next time I will stay around.

So I am not flying under false colors, I would like to say a couple things. One person spoke about my being a farmer, and that is absolutely right. I am. But I can tell you this, that when you get a 25-year-old grandson, grandfathers are not as important in the farming operation as you would like to be. So I consider myself now more of a hired man for Robin Grassley and Pat Grassley than I am a family farmer. But I still am a crop sharer with my son, and I market my own crops, and I am there to help put the crop in when they need me--and wish they needed me more--and help get the crop out, and wish they needed me more. So I do appreciate that.

As much as I would like to be called Dr. Grassley--you can get that impression maybe because I did do 2 years of graduate work beyond my master's degree, but I did not quite finish it because I was elected to the State legislature and I never went back to the University of Iowa to finish it, and I kind of regret that. But I did not get back.

Yes, I will yield.

Well, it is one of these cases where I passed the French test, and I was ready to write a dissertation, and I never quite got around to it.

One other thing I would like to say is, obviously, thank you for the recognition. I enjoy my job in the Senate very much. I guess if you vote 10,000 times, you are just doing what we are paid to do.

It is a wonderful experience serving here in the Senate. And I think I can say--as Senator Baucus has inferred, I hope I am liked by everybody. I like every one of you. I do not know any of you who consider me an enemy. And if you do, I do not want to know who you are.

(Laughter.)

If you wonder why there is some emphasis upon voting, people in this country are very cynical about those of us in elected office. I think: What can you

do to reduce cynicism? And I thought a long time ago, sitting in a restaurant one time--and probably nobody at that time knew who I was. I overheard them saying something like: Well, it must be election time; the politicians are in town.

I heard that 30 years ago, and I made up my mind that at least one way I was going to try to overcome that for politicians generally was to make sure the process of representive government works. So when I was elected to the Senate, it was not something I promised the people of Iowa, it was just something I promised myself: that I am going to go to every county every year to hold at least one town meeting so that person who was griping about only seeing a politician at election time could not say that about Chuck Grassley, and I hope in the process it has raised the respect people have for those of us who are elected.

The other thing about voting as often as I do here in the Senate, it is an opportunity to let people know when you are in session, you are here working. And when we are not in session, I am back in Iowa with my people. It is an opportunity to kind of quantify what our job is all about and to get over this business of people who, I think, think we are only here in Washington sitting around with our feet up on our desk waiting to take a phone call from somebody--that we are actually doing something. This is one way--maybe a very elementary way, but sometimes that is the way you have to explain government to the American people-- that we are on the job, doing our job, and when we are not here, we are at home making the process of representative government work.

So I very much appreciate the kind words that have been said. And I did not record them, but if I did, I would play them back during election time.

Thank you very much for the honor.

I would yield to the Senator--oh, the Senator from Illinois said something nice about me one time, and I did use it in my literature. And some people of his party got on him: Why are you doing that?

Well, I think he said: It was true.

And he came to me one time and he said: Will you say something nice about me? I could put it in my literature.

And I gave him a slip of paper that said: He is not as bad as you think he is.

I yield the floor.

(Applause, Senators rising.)

Mr. President, this amendment would create a deficit neutral fund in order to provide for reform of the current foster care system.

The foster care system is broken tremendously overburdened and needs to be fixed.

The system is understaffed and under trained. Children linger too long before securing a safe and permanent home. More funding could be available for family reunification services. Administrative funds could be used more efficiently.

Data collection is insufficient. The foster care financing structure is antiquated and inflexible and prevents states from responding to a variety of challenges.

We need to replace the old system with one that improves the foster care payment structure to support children

rather than programs, promotes and improves family preservation and ensures that public funds are used effectively.

Our amendment sets us on a course to make these vital improvements to the foster care system.

I urge my colleagues to support the Landrieu-Grassley amendment.

Madam President, the chairman's resolution patches the AMT for 2010 through 2012. Now, that is good, but it is not good enough. Since we have a 5-year window, we should patch AMT for all 5 years. My amendment is to make sure that AMT is patched 2013 and 2014 so that the entire 5-year period has an AMT patch.

This would provide tax relief to 18 million families at a cost of $114 billion. This patch is essential to honest budgeting because we all know that the AMT will eventually pass without being patched. This amendment also helps families plan their financial affairs properly, rather than leave them guessing as to what their future tax burden will be.

Also, by giving greater stability to this area of the tax law, tax professionals will administer the law better, leading to better compliance and a smaller tax gap.

I ask support for this amendment to patch AMT for 2013 and 2014, and I yield the floor.

Mr. President, I rise to express my concerns about the Dorgan-Snow amendment No. 881.

The IRA rollover was first enacted as temporary provision in the Pension Protection Act which I championed in 2006. Rollovers to grant- making charitable organizations with some element of donor control, such as private foundations, donor advised funds, and supporting organizations, were specifically prohibited. These entities were specifically prohibited from receiving rollover funds because I wanted to make sure that the money would actually get to charities doing work on the frontlines rather than sit in a donor-controlled account.

The provision has become one of the annual ``tax extender'' provisions. So under current law, which expires December 31, 2009, an individual may rollover up to $100,000 from their IRA to a public charity but not to one of the prohibited entities. Amendment No. 881 to the budget resolution, S. Con. Res. 13, promotes the extension of current-law regarding IRA rollovers to charity, which I also support.

However, the amendment also promotes an expansion of the provision by allowing split-interest trusts to receive IRA rollover contributions. Split-interest trusts are more worrisome than those that are currently prohibited from receiving IRA rollover contributions. These trusts allow donors to retain an income stream from the contributed assets for a defined period. So, just like with donor-advised funds and supporting organizations, the contribution does not result in an immediate benefit to a charity actually providing services while the donor receives significant tax benefits at the time of the contribution.

The cost of extending current law through 2009 was almost $1 billion--expanding the IRA rollover provision to allow more entities to receive them would increase the cost. Before we do that, I believe we should make sure that grant-making entities, including split-interest trusts, are accountable for paying out minimum amounts to actual charities before we allow them to receive IRA rollovers.

I understand that Senator Dorgan is willing to work with me and my staff if and when Senator Baucus and I consider an expansion of the IRA rollover provision in the Finance Committee. In light of this good faith offer, I will not object to the unanimous consent request for this amendment today and look forward to working with Senator Dorgan to resolve our differences.

Amendment No. 876

Mr. President, the distinguished majority leader, my friend, Senator Reid quoted me by name in his remarks in opposition to the Lincoln-Kyl amendment.

The distinguished leader quoted me as describing death tax relief legislation as ``unseemly.''

Since that quote was used to argue against Senator Lincoln's amendment, which I support, I thought it important to respond to the distinguished leader and set the record straight.

The distinguished leader is correct. I did say, at that time shortly after the Katrina hurricane hit, that proceeding to death tax relief would be ``unseemly.''

It is important for everyone to understand the context of that statement. It was made shortly after the terrible hurricane hit the gulf states. At that time, the Senate was about to reconvene after the August recess. The pending business was a cloture motion on the motion to proceed to a House bill that provided death tax relief.

The majority leader, Senator Frist, had filed the cloture motion before the Senate departed for the August recess. Of course, that procedural action occurred weeks before the hurricane hit. When asked about the Senate schedule, I responded that proceeding to the death tax bill, and, thereby not dealing with the hurricane victims, would be unseemly.

The distinguished leader's comments caused me to recall how the finance Committee, which I chaired at the time, dealt with Katrina.

Senator Frist did the right thing and set the Senate in motion to deal with the hurricane victims. The Finance Committee acted with lightning speed on a bipartisan basis, and in concert with the House, to deliver relief to hurricane victims. I was quite proud of our efforts to help people in need. That was the first Katrina tax relief bill.

The second Katrina tax relief bill, unfortunately, took a lot longer to do. Some on the other side saw the Katrina bill as a chance to enact a National agenda of greatly enhancing social programs. I did not question their motives at the time and do not now. But, the bottom line was that this attempt to leverage a crisis for a National agenda, significantly delayed our efforts to rebuild the hard-hit gulf zone.

As the distinguished leader will recall, the gulf state Senators, led by Senator Lott, forced the Senate to focus on helping their states rebuild and recover. A similar effort was underway in the House.

Fortunately, the efforts of the bipartisan group of gulf state Senators caused the leadership on the other side to abandon their efforts to leverage the hurricane disaster for a National agenda. No one accused the leadership on the other side of being unseemly.

Senator Frist did the right thing and focused on the hurricane victims. The leadership on the other side did the right thing and focused on bipartisan hurricane relief efforts.

There is a lesson in this history for all of us. Do not try to leverage a crisis for unrelated purposes.

Senator Lincoln's amendment was not ``unseemly.'' To use my reaction to a question about the Senate schedule is to miss the point I was making The Lincoln/Kyl amendment is a reasonable effort to find a bipartisan compromise on a time-sensitive tax issue. It is an effort to enable a solution to a problem that vexes family farmers and small businesses. The amendment's purpose and substance are the opposite of unseemly. The Lincoln/Kyl amendment is ``decorous.''

Madam President, everyone in this body knows that small businesses are an extremely important dynamic part of the U.S. economy. I like to say that small business is the engine that drives the U.S. economy. President Obama agrees that small businesses have generated 70 percent of net new jobs over the past decade. I was pleased to see that Senator Cornyn's small business amendment passed earlier tonight by an overwhelming vote of 82 to 16.

America's small businesses have been suffering during this recession. Big banks have been cranking down lending to small businesses.

In addition, job losses for small businesses have been staggering. A national employment report released today by Automatic Data Processing shows that 742,000 nonfarm private sector jobs were lost from February to March 2009. Of those 742,000 lost jobs, 614,000, or 83 percent, were from small businesses. Let me repeat that. From February to March, small businesses lost 614,000 jobs, or 83 percent of all nonfarm private sector job losses.

The President's recent efforts to increase lending to the small business sector are commendable. The centerpiece of his small business plan will allow the Federal Government to spend up to $15 billion to purchase the small-business loans that are now hindering community banks and lenders. However, the positives that will come to small businesses from these loans which will ultimately have to be paid back will be heavily outweighed by the negative impact of the President's proposed tax increases. Helping small businesses get loans just to take that money back in the form of tax hikes is not wise.

The President's Budget proposes to raise the top two marginal rates from 33 percent and 35 percent to 40 percent and 41 percent respectively, when PEP and Pease are fully reinstated. President Obama's marginal rate increase would mean an approximately 20 percent marginal tax rate increase on small business owners in the top two brackets.

Many of my friends on the other side will say that while they agree that successful small businesses are vital to the success of the U.S. economy, the marginal tax increases for the top two brackets will not have a significant negative impact on small businesses.

Proponents of these tax increases seek to minimize their impact by referring to Tax Policy Center data that indicate about 2 percent of small business filers pay taxes in the top two brackets. They argue that a minimal amount of small business activity is affected.

However, there are two faulty assumptions to this small business filer argument.

The first faulty assumption is that the percentage of small business filers is static. In fact, small businesses move in and out of gain and loss status depending on the nature of the business and business cycle. Also, the 2 percent figure from the Tax Policy Center is

well below the percentage actually reported by the Government. For example, a 2007 Treasury study states that, for flow-through businesses in 2006, 7 percent to 9 percent of small business owners paid the top two marginal rates.

The second faulty assumption is that the level of small business activity, including employment, is proportionate to the filer percentage.

According to NFIB survey data, 50 percent of owners of small businesses that employ 20 to 249 workers would fall in the top two brackets. According to the Small Business Administration, about two- thirds of the Nation's small business workers are employed by small businesses with 20 to 500 employees.

Do we really want to raise taxes on these small businesses that create jobs and employ two-thirds of all small business workers? With these small businesses already suffering from the credit crunch, do we really think it is wise to hit them with the double-whammy of a 20- percent increase in their marginal tax rates?

Newly released data from the Joint Committee on Taxation demonstrates that in 2006, the last year for which data is available, 65 percent of the flow-through business income was earned by those making over $250,000. That flow-through business income will be subject to this budget's tax increases. This is a conservative number because it doesn't include flow-through business owners making between $200,000 and $250,000 that will also be hit with the budget's proposed tax hikes.

If the proponents of the marginal rate increase on small business owners agree that a 20 percent tax increase for half of the small businesses that employee two-thirds of all small business workers is not wise, then they should either oppose these tax increases or present data that show a different result.

Madam President, today is April 1. It is known as April Fools Day. It is a day when folks play jokes on one another. But the state of our job-creating machinery, small business America, is no joke.

Sadly, Senators Kerry and Snowe found out in a Small Business Committee hearing a short time ago that small business is getting the short end of the stick from the big banks. I suspect the treatment is even worse when the big banks getting the bailout money is considered. I put that question to the TARP oversight team the other day in a Finance Committee TARP oversight hearing.

I told one of the witnesses, Professor Warren from Harvard, that we Senators need to stand behind the oversight committee, so that we can get answers from the Treasury.

In any event, it seems to me that we need to step back from the big pieces of recent economic policy and take a look at the big picture. We need to look at what we are doing. The three pieces I am referring to are the TARP program, the stimulus bill, and this budget. All of these efforts involve trillions of taxpayer dollars.

If our goal is doing the best we can to get jobs to every American who wants a job, then we need to recalibrate our actions. We ought to focus, as President Clinton once said, like a laser beam on job creation.

President Obama and all of us agree at least 70 percent of new jobs come from small business. Let's take a look at how each of these three major pieces of legislation affects small business. On TARP, it looks like we need to make sure that the TARP recipients are providing credit to small business. On stimulus, less than one-half of 1 percent of the $787 billion went to small business tax relief. Less than one-half of 1 percent.

Now, on the budget, 82 Senators, a big bipartisan margin, agreed with Senator Cornyn that we ought to not raise taxes on small business. Senator Snowe, likewise, will be pressing the case for small business in a separate amendment.

It may be April Fools Day, but this is no joke. We need to keep our eye on the job creation ball. Rather than hitting a foul ball with taxes on small business, we can hit a home run if we leave their taxes low. Future jobs depend on it.

Mr. President, I rise today to congratulate the University of Iowa wrestling team for their national championship victory two weekends ago.

On March 21, 2009 wrestling fans all across the country were treated to an exceptional match in St. Louis, MO, while watching the University of Iowa clinch the NCAA Division I Wrestling Championship. Throughout the year, the Hawkeyes maintained an overall No. 1 ranking in the Nation.

This year's wrestling team finished the season with a perfect record for the 12th time in the school's history. The outstanding grapplers and coaches produced a great season, winning numerous awards and praise throughout the country. I also want to take a special moment and congratulate the University of Iowa wrestling head coach Tom Brands, who has led the team to two straight national championships in only 3 years at the helm of the Hawkeye wrestling team.

The University of Iowa students, alumni, faculty and fans are committed to keeping alive the tradition of wrestling in Iowa and bringing pride to the state, as well as the University of Iowa. I want to congratulate the University of Iowa Hawkeyes for winning the 2009 NCAA Division I Wrestling Championship and recognize the achievements and efforts of the wrestlers, coaches, fans and staff who helped the team achieve this significant victory.

I also want to speak to congratulate the Morningside College women's basketball team for winning the 2009 National Association of Intercollegiate Athletics--NAIA--Division II national championship.

On March 27, 2009, the Morningside College Mustangs won the national title game over the Hastings College Broncos in Sioux City. Just a day before, the Mustangs captured the Great Plains Athletic Conference-- GPAC--championship title and finished with a perfect 18-0 record.

A couple of individual congratulations are in order here today also. Head Coach Jamie Sale was named NAIA Division II National Coach of the Year, senior Autumn Bartel was named Most Valuable Player (MVP) of the NAIA Division II national championship, and senior Dani Gass was also named NAIA Division II Player of the Year.

Of special recognition are the seven members of the Mustangs team who were named 2009 Daktronics-NAIA Scholar-Athletes for maintaining a minimum grade point average of 3.5. These members included Cara Anderson, Autumn Bartel, Emily Christen, Sarah Culp, Mackenzi Mendlik, Roni Miller, and Brittany Williamson.

The Morningside College Mustangs received a unanimous number one ranking in the final NAIA Division II Women's Basketball Coaches Top 25 Poll while finishing the season with a perfect 38-0 record, only the second team in NAIA Division II women's basketball history to do so.

I want to congratulate these athletes on demonstrating exceptional accomplishments both in the classroom and on the court.

Mr. President, today the Senate begins consideration of whether we should apply more or less budget discipline to record debts and deficits that my President, President Obama, inherited when he came into office January 20 of this year.

Last week, we heard a lot of revisionist fiscal history or it might best be described as heavy editing of recent budget history. Our President has alluded to it several times. I agree with the President there is a lot of revisionism in this debate. The revisionist history basically boils down to two conclusions: The first is that all the good fiscal history of the 1990s was derived somehow from a partisan tax increase bill that passed in 1993; and that, two, all the bad fiscal history of this decade to date is attributable to the bipartisan tax relief plans of 2001 and later.

Not surprisingly, nearly all the revisionists who speak generally oppose tax relief and support tax increases. The same crew generally supports spending increases and opposes spending cuts.

In the debate so far, many on this side of the aisle have pointed out some key and undeniable facts. It might surprise you, but we happen to agree with President Obama on one key fact. This President did inherit a big deficit and a lot of debt.

During the last quarter of 2008, the antirecessionary spending, together with lower tax receipts because of the recession, and the TARP activities has set a fiscal table of a deficit of $1.2 trillion. That was, in fact, on the President's desk when he took over the Oval Office on January 20 of this year. That is the highest deficit as a percentage of the economy in post-World War II history inherited by any of the Presidents since World War II.

Quite obviously, this is not a pretty fiscal picture. I have a chart that shows the history of that fiscal time, through the last administration and the big deficit at this point about which President Obama speaks.

As predicted a couple months ago, that fiscal picture got a lot uglier with the stimulus bill. For the folks who saw that bill as an opportunity to recover America, with Government taking a larger share of the economy over the long term, I say congratulations because you got what you wanted. For those Senators who voted for the stimulus bill, those Senators put us on a path to a bigger role in Government.

So let me make it clear. Those Senators who voted for the stimulus bill, you put us on a path to a bigger role in Government. Over a trillion dollars of new deficit spending was hidden in that bill. It caused some of the extra ink on this chart for the year we are in. This is what was inherited by January 20, but legislation passed since January 20 adds that much. Supporters of that bill, then, as far as I am concerned, need to own up to the fiscal course that has been charted by actions of this Congress and this President since January 20.

Now, to be sure, after the other side pushed through the stimulus bill and the second $350 billion of TARP money, the Congressional Budget Office reestimated the baseline. A portion of this new red ink upfront is due to that reestimate. The bottom line, however, is that the reestimate occurred several weeks after the President and a robust Democratic majority took over the Government. Decisions were made, and the fiscal consequences followed. Those fiscal consequences are in these red figures, above what would have been if Bush's budget had stayed in place during this period of time. That is where we would be.

Some on the other side raise this point about the March CBO reestimate. Of course, that is fine, but if they were to be consistent and intellectually honest, then they would have to acknowledge the CBO reestimate that occurred in 2001, after President Bush took office. The surplus went south because of what? Because of economic conditions. The $5.6 trillion number--so often quoted by those on the other side--was illusory. And I will say more about that in just a few minutes.

Here is where the revisionist history comes from. It is a strategy to divert, through a twisted blame game, from the facts before us. How is the history revisionist? Well, I would like to take each conclusion one by one.

The first conclusion is that all of the good fiscal history was derived from the 1993 tax increase. To knock down that falsehood, all you have to do is

take a look at this chart. And this chart is not produced by data I accumulated but data from the Clinton administration. So here we have a history put forth with data from the Clinton administration about the tax increase of 1993 and whether it did a lot of good or not so much good.

Much of the ballyhooed partisan 1993 tax increase accounts for just 13 percent--just 13 percent--of the deficit reduction that took place during all of the 1990s--again, just 13 percent.

Now let's look at what are the biggest sources of deficit reduction, because obviously it is not the tax increase.

Thirty-five percent came from a reduction in defense expenditures. Of course, that fiscal benefit originated from President Reagan, who stared down the Communist regime in Russia. The same folks on that side who opposed President Reagan's buildup somehow want to take credit for the fiscal benefit of the peace dividend--that 35 percent.

The next biggest source of deficit reduction--32 percent--came from other revenue. Basically, this was the fiscal benefit from progrowth policies, such as the bipartisan capital gains tax cut of 1997 and, of course, the free-trade agreements President Clinton, with Republican votes, established. That is the 32 percent that reduced the deficit from that point of view.

The savings from the policies that I earlier mentioned translated, obviously, into interest savings, and that interest savings is this 15 percent right here.

Now, for all the chest thumping about the 1990s, the chest thumpers who pushed for big social spending didn't bring much to the deficit reduction table of 1990. That amounted to a mere 5 percent.

What is more, the fiscal revisionists in this body tend to forget who the players were. They are correct that there was a Democratic President in the White House, but they conveniently forget that the Republicans controlled the Congress for the period where the deficit came down and turned to surplus. They tend to forget that they fought the principle of balanced budgets, which was the centerpiece of the Republican fiscal policy that led, over a 4-year period of time in the late 1990s, to paying down $570 billion on the national debt.

Now, you may remember the Government shutdowns of late 1995. Remember what that was all about? It was about a plan to balance the budget. Republicans paid a pretty high political price for forcing that issue. But in 1997, President Clinton agreed. You may recall all through the 1990s what those yearend battles were all about. On one side were congressional Democrats and the Clinton administration pushing for more spending, and on this side of the aisle congressional Republicans were pushing for tax relief. Well, what happens when you have that extreme-- more spending on the one end, less spending and tax decreases on the other? Both sides end up compromising. That is the real fiscal history of the 1990s.

So now let's turn to the other conclusion of the fiscal revisionists. That conclusion happens to be that in this decade, since the year 2000, all fiscal problems are attributable to the widespread tax relief enacted in 2001, 2003, 2004, and 2006. In 2001, President Bush came into office. He inherited an economy that was careening downhill. You know, NASDAQ lost 50 percent of its value in the year 2000, not in the year 2001. That bubble burst. You may remember that starting in February 2000, we started on a 46-month decline in manufacturing, so we had a manufacturing recession already set in place. Then, of course, came the economic shock of the 9/11 terrorist attacks. And, of course, you have to add in corporate scandals to that economic environment. You will remember Enron.

It is true--very true--that as fiscal year 2001 came to a close, the projected surplus turned into a deficit, and the chart shows that right here in 2001. In just the right time, though, the 2001 tax relief plan kicked in. As the tax relief hit its full force in 2003, the deficit grew smaller. This pattern continued from 2003 through 2007.

If my comments were meant to be a partisan shot, I could say that this favorable fiscal path from 2003 to 2007 was the only period--aside from the 6 months in 2001--where Republicans controlled the White House and the Congress. But, unlike fiscal history revisionists, I am not trying to make any partisan points. I am just trying to get to the fiscal facts.

I have another chart that compares the tax receipts for 4 years after the much-ballyhooed 1993 tax increase and the 4-year period after the 2003 tax cuts. Observe this chart. On a year-to-year basis, this chart compares the change in revenues as a percentage of GDP. In 1993, the Clinton tax increase brought in more revenue as compared to the 2003 tax cut. You can see here, compared to here. That trend does reverse, as you see here, as both policies moved along. You can see how the extra revenue went up over time relative to the flat line of the 1993 tax increase.

This is the 1993 tax increase bringing in revenue and then pretty much flat-lining out over a long period of time; whereas you can see the tax relief bill of 2001 went down and then very dramatically increased in revenue. This ought to disabuse people who think that every time you increase tax rates you bring in more revenue and when you decrease tax rates you bring in less revenue. This chart shows that you can decrease tax rates and bring in more revenue.

So let's get the fiscal history right. The progrowth tax and trade policies of the 1990s, along with the peace dividend, had a lot more to do with deficit reduction in the 1990s than the 1993 tax increase. In this decade, deficits went down after tax relief plans were put into full effect.

Now that is the past. We need to make sure we understand it. You have to understand the past because the past is going to be brought up the next 4 days of this week as we are on this budget resolution. And, by golly, people ought to be accurate when they state what the impact is of the 1993 tax increase versus all the blame that is given on this side of the aisle for actions taken in 2001 and beyond with those tax reductions.

What is most important is the future. People in our States send us here to deal with future policy. This budget debate should not be about Democrats flogging Republicans and vice versa. The people don't send us here to flog one another like partisan cartoon cutout characters, and do it over past policies. They do not send us here to endlessly point fingers of blame. Let's focus on the fiscal consequences of the budget that is before the Senate over the next 4 days.

President Obama rightly focused us on the future with his eloquence during his campaign. I would like to paraphrase a quote from the President's nomination acceptance speech:

We need a President who can face the threats of the future,

not grasping at the ideas of the past.

Well, President Obama was right. We need a President--and I would add Congressmen and Senators--who can face the threats of the future. This budget as currently written poses considerable threats to the fiscal future. It taxes too much, it spends too much, and it borrows too much. Grasping at ideas of the past, or playing the partisan blame game, will not deal with the threats to our fiscal future.

Let's face the honest fiscal facts. Let's not revise fiscal history as we start this critical debate about the fiscal choices ahead of us. The people who send us here have a right to expect nothing less of us.

As I noted in remarks just completed a shorttime ago, a portion of the new deficits to the Congressional Budget Office March re-estimate. CBO revised the deficit downward by $1.3 trillion over 10 years. The revision is attributable to much worse economic conditions. The bottomline, however, is that re-estimate occurred several weeks after the President and robust Democratic majorities took over the government. Decisions were made and the fiscal consequences followed.

Some on the other side raise this point about the March CBO re- estimate. That's fine, but, if they were to be consistent and intellectually honest, then they would have to acknowledge the CBO re- estimate that occurred in 2001 after President Bush took office. The surplus went South because of economic conditions and new spending needed to deal with the consequences of the 9/11 terrorist attacks. The $5.6

trillion number so often quoted by those on the other side was revised within a year of President George W. Bush's presidency.

In January 2002, CBO revised the $5.6 trillion number downward to $1.6 trillion. To listen to folks on the other side, you would think all of that $4 trillion downward adjustment was attributable to the bipartisan tax relief of 2001.

In fact, the tax relief accounted for 40 percent of the adjustment. Most of the balance, $2.6 trillion, was due to factors that had noting to do with the tax relief. I am talking about the reduced revenues, increased spending for the war on terror and homeland security and other factors.

So, if folks on the other side want to be intellectually honest about the budget and fiscal history, they need to be consistent on how the CBO re-estimates are treated. If you are going to give President Obama $1.3 trillion for the post-January 20, 2009 re-estimates, then you have to give President George W. Bush credit for twice as much, $2.6 trillion. That's what CBO said in January 2002. we can't have different standards for different people and be intellectually honest.

One other point that came up was the comparative corporate tax rates. As Senator Hatch pointed out, the U.S. statutory corporate rate is very high. The Chairman of the Budget Committee agreed but then stated that the U.S. effective corporate rate is relatively low. Business taxation occurs in corporate and non-corporate form, through S corporations, partnerships, and proprietorships. If you want to compare U.S. taxation with the rest of the developed world, it is best to look at comparative business tax rates on investment. If you do so, you will find the U.S. has a higher rate than the G-7 group of comparative economies. You will find this data in an analysis prepared by former Senior Treasury Economist Robert Carroll.

This analysis is contained in an August 2008, Tax Foundation paper entitled ``Fiscal Fact Comparing International Corporate Tax Rates: U.S. Corporate Tax Rate Increasingly Out of Line by Various Measures.''

Mr. President, I wish to pay tribute to a native son of Iowa as he prepares to leave the nest he has diligently feathered for more than three decades. A journalist who has earned his keep for 34 years at the Des Moines Register, David Yepsen honed his skills as a fair and balanced reporter upon whom his readers grew to depend to separate the wheat from the chaff.

With a few strokes of the keyboard, David Yepsen cut through layers of political posturing to identify stalemates at the statehouse or expose stonewalling from Terrace Hill. A no-nonsense newspaperman, David built a reputation for his astute understanding of Iowa politics and policymaking on the local, State, and Federal levels of government. From local boards of education to county seats of government, statehouse politics, and the Presidential campaign trail, David Yepsen knew how to boil down an issue and size up a candidate's prospects.

Like most Iowans, pomp and circumstance isn't his style. The genius of his political commentary is his ability to cut off grandstanding and get down to brass tacks. If the political leadership got bogged down in partisan gridlock, David would simply explain to voters in his next column how their elected representatives were baling political hay on the public's dime instead of ironing out the looming State budget deficit.

A shrewd journalist, David Yepsen understood how to cultivate contacts and build a reputation built on trust and truth. Cut from the gold standard cloth of journalism, David exercised independence and discovered that loyalty, like representative government, is a two-way street. No doubt the mutual agreement or lively disagreement with his subjects, readers, and publishers made his job all the more satisfying.

Although schooled decades before the Internet, blogs, and other tools delivered news to our laptops and cell phones, this seasoned reporter embraced the 24-hours news cycle. His profession bears the responsibility and privileges granted by the freedom of the press in American society. He upheld his end of the bargain by holding officeholders, public officials, and candidates accountable to the people. But he didn't fall victim to the ``gotcha'' style of ambush journalism that adds to public cynicism about the media and politics.

Instead, David fell back on his commitment to fairness and evenhandedness. That is the legacy David Yepsen will leave behind as he pursues the next chapter in his professional career. Next month, he will hang up his press credentials to assume leadership of the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale.

As I mentioned earlier, David Yepsen for more than 30 years has earned his paycheck and served the public as a reporter and political columnist at the Des Moines Register. For more than three decades, he immersed himself whole hog into politics, issues, and campaigns that have colored Iowa's landscape from the Missouri to the Mississippi Rivers. David earned a scholarly grasp of public policy that will prepare him well for his new position. Hot-button issues in recent times have included regulating hog lots; legalizing gambling; preparing for natural disasters and flood control; consolidating government from the courthouse to the schoolhouse; harmonizing Iowa's production agriculture heritage with sustainable stewardship of our natural resources; investing in renewable energy; bringing 21st century technology to rural areas; developing tourism, parks, and trails; balancing needs of an aging society; addressing Iowa's ``brain drain'', handling immigration; and juggling interests of labor and business or rural and urban. Instead of treating these issues as lightning rods that polarize people, David took the opportunity to challenge Iowans, whether newcomers or oldtimers, to find common ground that would make our State an even better place to work, raise a family, enjoy a vacation, earn a world-class education, and retire.

David could slice through the debate with a lucid and logical reminder about just why it matters to taxpayers if the gas tax is raised during a recession or why Iowa lawmakers should seize the opportunity to take bold steps to restore and improve crumbling infrastructure projects. He provoked Iowans to think outside the box, choosing flattery or insult when necessary.

David faced the relentless scrutiny of his readers and also enjoyed many personal and professional rewards. Iowa's David Yepsen was often called upon by national news organizations for his respected analysis of Presidential politics. His departure leaves behind a big set of footprints in the fields of Iowa journalism and politics. I will really miss seeing ``what Yepsen had to say in the Register'' but wish him all the best.