Floor Statements

Mr. President, the Smithsonian Institution is an important icon to many Americans. It houses treasures of our national history in its museums across the country. The Smithsonian Institution is not just a museum but also an educational institution and a research complex. It consists of 19 museums and galleries, 9 research facilities, and has 144 affiliated museums around the world. The Smithsonian manages this vast array of facilities and receives 70 percent of its funding directly from the federal government through congressional appropriations. There is no debate that the Smithsonian is an important part of our country.

However, over the last few years I have been critical of the management

of the Smithsonian Institution, beginning with story after story detailing the ``Champagne lifestyle'' the former Secretary of the Smithsonian enjoyed at institution expense. Through my oversight of the Smithsonian as a tax-exempt entity, and investigative reporting by the Washington Post, other egregious examples have emerged. These revelations have detailed the Smithsonian's management failures and lax accountability over the spending of millions of institution dollars.

The former secretary spent millions of institution dollars on the redecoration of his office, housing allowances, and household expenses including chandelier cleaning and a new heater pump for his lap pool. He and his wife enjoyed first-class plane travel and top hotels.

Ultimately, Secretary Small resigned on March 26, 2007.

The deputy secretary and chief operating officer of the Smithsonian Institution, announced her resignation on June 18, 2007, after earning more than $1.2 million in 6 years for outside duties, including highly compensated seats on corporate boards, and that she and other top executives were frequently absent from their Smithsonian duties.

An independent management report released in June 2007 concluded that Smithsonian leaders took extraordinary measures to keep secret top executives' compensation, expense-account spending, ethical missteps, and management failures.

In August 2007, the Smithsonian replaced Gary M. Beer as chief executive of Smithsonian Business Ventures after an inspector general's report found he had abused his institution-issued credit card and billed thousands of dollars in expenditures that were unauthorized or lacked evidence of a business purpose.

In December 2007, W. Richard West, Jr., who was the founding director of the National Museum of the American Indian, retired after disclosures that he spent extensive time away from the museum and spent more than $250,000 in 4 years on trips to places including Paris, Venice, Singapore, and Indonesia.

In February 2008, Pilar O'Leary, the head of the Smithsonian Latino Center, resigned after an internal investigation found that she violated a variety of rules and ethics policies by abusing her expense account, trying to steer a contract to a friend and soliciting free tickets for fashion shows, concerts, and music award ceremonies. Ultimately, the Smithsonian Inspector General concluded that there were 14 violations of ethical and conflict of interest policies. The public did not learn of the reason for her resignation until April 15, 2008, when the Washington Post published a story after requesting under the Freedom of Information Act and ultimately receiving a heavily redacted copy of the Smithsonian Inspector General's report on Ms. O'Leary.

When Ms. O'Leary's resignation was announced to Smithsonian staff, the Smithsonian's official e-mail did not mention ethical lapses and in fact praised her work.

Only upon the specter of public disclosure did the Smithsonian's acting secretary say in a second e-mail to staff that O'Leary had ``engaged in behavior that violated our Standards of Conduct and other Smithsonian policies between August 2005 and September 2007.''

The acting secretary at the time said such reports from the Inspector General were not always public, but Smithsonian officials determined O'Leary ``held a position of such significant responsibility and public visibility that disclosure . . . was warranted.''

This raises a series of disturbing questions. What if a Post reporter had not somehow learned of the O'Leary report and formally asked the Smithsonian for a copy? Would the circumstances of Ms. O'Leary's resignation ever have seen the light of day? Once the report was released in a redacted form, was it appropriately redacted or was it redacted beyond what is reasonable to protect the privacy of third parties? Does the Smithsonian withhold other potentially embarrassing reports? If the individual had not been the head of a Smithsonian agency, and had a lower stature, would the report ever have been disclosed in any form?

If the past is prologue, probably not. The Smithsonian points out that it is not subject to the Freedom of Information Act, FOIA.

Many people would naturally think that the Smithsonian is subject to FOIA and must comply with requests. I know that I believed it was, especially given that taxpayer funds make up 70 percent of its budget. However, because the creation of the Smithsonian was different than the creation of other Federal Government agencies, there is an open question as to what open government and good governance statutes apply to the Smithsonian. For example, the Smithsonian's own website states, ``The Smithsonian Institution is not an executive branch agency and is not required by statute to provide documents to the public.'' However, the Smithsonian does state that it is guided by ``internal policy, and by FOIA and other relevant law'' when providing documents to the public. What this highly technical answer means is that the Smithsonian doesn't believe it is required to respond under FOIA but it will as long as its interests are in line with the release.

The legal status of the Smithsonian is also an open question with the prevailing law finding that for purposes of the Privacy Act and FOIA, the Smithsonian is not a government ``agency'' subject to the requirements. Instead, the Smithsonian calls itself a ``trust instrumentality of the United States.'' However, the Smithsonian takes a different position when it is faced with a lawsuit filed under the Federal Tort Claims Act and considers itself a ``federal agency.'' Taken together, these decisions have given the Smithsonian the best of both worlds--they are a government entity when information is sought that could embarrass them, but when they are sued, they get all the defenses of a government entity.

In light of the oversight findings and the many scandals that have raised questions about accountability and mismanagement at the Smithsonian, I'm introducing the Open and Transparent Smithsonian Act of 2008. This bill simply states that for the purposes of FOIA, the Privacy Act, and the Federal Advisory Committee Act, the Smithsonian shall be considered a Federal Government agency. This is a simple, straightforward way to bring transparency and accountability to the Smithsonian without expending additional Federal resources. This is especially important given that the Smithsonian received continual increases in congressional appropriations from fiscal years 1999-2008, now totaling $682 million in taxpayer dollars for fiscal year 2008.

On July 1, Wayne Clough took over as only the 12th secretary in Smithsonian history. He comes at a critical juncture. Will the Smithsonian recover from a series of scandals and regain its sterling reputation? Or will it backslide into bad old habits that could lead to more scandals?

The new secretary deserves the best possible chance to succeed. One of the best tools Congress can give him is a clear, definitive statement through legislative action that the Freedom of Information Act does indeed apply to the Institution, and that the Smithsonian's business is the people's business.

In addition to adding the Smithsonian to FOIA and Privacy Act, section 3 of this bill includes another important transparency fix to the Privacy Act. Currently, the Privacy Act provides that disclosure of information by a government agency is limited unless an enumerated exception applies. One of the most widely used exceptions allows for the disclosure of information to ``either House of Congress, or, to the extent of matter within its jurisdiction, any committee or subcommittee thereof.'' However, the Department of Justice has interpreted this to only allow for disclosures to chairmen of committees, excluding information from ranking minority members.

In a December 2001 letter opinion, the Department of Justice concluded, ``the Privacy Act prohibits the disclosure of Privacy Act- protected information to the ranking minority member.'' The rationale for this decision was that longstanding executive branch practice on this question shows that ``ranking minority members are not authorized to make committee requests.'' This opinion clearly looks past the plain language of the statute that says that the exception applies to ``either House

of Congress or to the extent of matter within its jurisdiction, any committee or subcommittee thereof.'' This interpretation clearly bypasses the inclusion of the word ``or'' and instead reads that Congress only intended it to apply to committee chairman. Conveniently, this opinion has been repeatedly used to block information requested from ranking members.

Section 3 of the bill corrects this erroneous interpretation by clearly adding in that chairman and ranking members may qualify for the exception under the Privacy Act. This provision is consistent with the intent of the Privacy Act exception and the goals of making the government more transparent and accountable under good governance statutes.

This bill is a simple, straightforward effort to make our Federal Government more accountable to the American taxpayers. Further, it will help ensure that Congress has the necessary access to documents from the executive branch so it can conduct its constitutionally required duty of oversight. I am pleased that Senator Specter has joined as an original cosponsor and urge my colleagues to support swift passage of this important legislation.

Mr. President, it is a very unfortunate and disappointing set of circumstances that got us to the point we are in today.

I want to make very clear where we stand on the physician fix. There is widespread Republican support to block the 10.6-percent reduction in physician fees and replace it with a 1.1-percent update.

I introduced S. 3118 on June 11 with Senators McConnell and Kyl and others to do just that.

In fact, the doctors would not be getting a 1.1-percent update in this bill if it had not been for Republicans who announced support for the higher update.

Everything that I have been trying to do is to get to a bipartisan solution that would avoid a veto and avoid the pay cut from going into effect even for a short time.

But the other side decided to play politics with this issue.

They ran the clock right up to the deadline and then refused to agree to an extension to keep the cut from going into effect. They repeatedly objected to an extension even though the Senate had passed 28 extensions on other matters just during this session alone.

And, to my absolute amazement, the majority leader said that Republicans had been given months to work out a Medicare bill so that was why no amendments would be allowed.

The fact is that Republicans and Democrats had been working together for months until the Democratic leadership pulled the rug right out from under that effort.

Let's review the facts here. At the end of last year, we agreed to a short-term Medicare extension so that we could complete work on a bipartisan Medicare package this year. We were very close to a deal then and needed time to finish that work.

Both sides agreed we would work quickly to get a bill that could be signed into law.

Unfortunately, that effort has been intentionally derailed by the majority's desire to play politics with Medicare.

The fact is that the majority has twice walked away from good faith bipartisan negotiations.

The fact is that we had been working for months before they pulled the plug.

The fact is that we had actually completed that bipartisan deal 2 weeks ago. It was a deal that would get signed into law, not vetoed.

But the other side thought they saw a political advantage and they have taken it. They scuttled that deal in favor of a bill that would get vetoed.

So it is a bit on the laughable side to blame us for failed negotiations that they seem to have intentionally sabotaged.

The fact is that the other side is more than willing to play politics with this issue. I believe that has been the wrong approach. It was not the approach I took as chairman of the Finance Committee. It was not the approach that Republicans took while we were in the majority.

Playing this kind of brinksmanship politics with Medicare and with people's lives is not what we should be doing around here.

I also warned the White House early on in this debate that their position on private fee for service was not defensible. As Republicans, we should not support the idea of allowing private plans to use government-set payment rates.

The basic premise of Medicare Advantage is that the private sector can do a better job than government in delivering health benefits to seniors. When we allow those private plans to force providers to accept the government rates, we undermine the philosophy behind the Medicare Advantage program. When we do that, we have conceded defeat up front.

There are some serious problems with this bill. I think the bill has some significant flaws that need to be addressed. I am going to be looking for opportunities to fix this bill and look forward to coming to the floor to do so.

As I have said before, I know the other side wants to argue that Republicans are only fighting this fight to protect Medicare Advantage plans. That is a good soundbite, but it is simply not true.

I, for one, could live with some Medicare Advantage reforms.

There would have been more than enough Republicans who would support more reforms, if the Democrats had been willing to make changes in other areas.

So let's talk about some of the problems that would have been fixed if this had been a truly bipartisan process.

First and foremost, if this bill becomes law, it will do serious harm to the Medicare drug benefit that millions of seniors have come to depend on.

It would tie the hands of the Medicare Part D plans resulting in higher drug prices and higher premiums on seniors.

Medicare's Office of the Actuary concluded that it will raise Part D drug costs. And outside analysts have likewise concluded that this provision has the potential to undermine the long-term financial sustainability of the Medicare drug benefit.

This bill also includes entitlement expansions that are well- intentioned but ill-timed with the pending insolvency of the program.

Let's spend a moment on what a truly bipartisan bill would have looked like.

A truly bipartisan bill would have included much-needed assistance for the so-called ``tweener hospitals.'' This is something myself and Senator Harkin consider a high priority because of the tweener hospitals we have across Iowa.

A truly bipartisan bill would have included hospital value based purchasing in Medicare.

A truly bipartisan bill would have included physician payment sunshine provisions that Senator Kohl and I have worked out together.

A truly bipartisan bill wouldn't undermine the Medicare drug benefit and cause increased premiums on seniors.

The bill is riddled with problems and missed opportunities.

But instead of writing a bipartisan bill, the Democrats twice walked away from the table and now here we are. They scuttled a deal that could have become law right away.

Now I believe I have shown myself willing to join in bipartisan efforts to solve major issues. We have health care reform and more Medicare bills in the future. But this process has called into question whether the other side is willing to start and stick with a truly bipartisan effort.

The process that has been followed on this bill has done a great disservice to the Senate. But more than that, it does a disservice to seniors, doctors and everyone who depends on Medicare.

And I would hope that the other side will not take us down this path again. Bipartisanship is more than lipservice. It requires action and sometimes difficult choices. Compromise is not easy work. But if you want to tackle the big issues that are ahead of us, then it will require a better process than the one followed to produce this bill.

To my colleagues today, that is the full story on this vote today.

I yield the floor.

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

Madam President, as the upcoming Presidential election approaches, we are learning more about changes each of the major candidates would make in our tax system.

Most of the attention in this regard is going to issues such as income tax rates, corporate tax rates, and the alternative minimum tax. These are very important parts of our Tax Code and do deserve the attention they are getting--particularly in a Presidential race-- because then you have an opportunity not only to state your views but to educate the public about the complications of the Tax Code. This is what the public needs to know more about.

Now, my purpose for coming to the floor, too, is to discuss some of the lesser known parts of the Tax Code that are becoming part of the Presidential debate on taxes. Changes made in these areas can still make big differences in what citizens pay to the Government every year.

I am here to discuss what is termed the ``Pease limit,'' the overall limitation on itemized deductions. That name comes from a Member of Congress probably 20 years ago who thought up the term. Then the word ``PEP'' is a phaseout of personal exemptions. So we are talking about a

part of the Tax Code that does things in a stealth way to make people pay higher marginal tax rates, even though the law would say that the marginal tax rate is only 35 percent--or in the case of Senator Obama's proposal, 39.6 percent. But yet when you put limitations in there and a phaseout of the personal exemption, you have a higher marginal tax rate, but it doesn't look very--it is not transparent.

So PEP and Pease were originally enacted by a Democratic Congress as a way of evading the first President Bush's refusal to raise the top statutory tax rate. By phasing out the personal exemption and itemized deductions for upper income taxpayers, the Democratic Congress was able to enact a kind of backdoor tax increase. However, in 2001, when I became chairman of the Senate Finance Committee, Congress reduced PEP and Pease in order to reduce taxpayer confusion and minimize inequalities based on a taxpayer's understanding of the law. But from my point of view, I figured if you are going to have a higher marginal tax rate, you should not camouflage them. You ought to simply say, instead of a 33 percent marginal tax rate, we are going to have 36 or 37 percent. Maybe for people who have income from subchapter S, it is even higher than that. Why not be honest with the taxpayers and say what the marginal tax rate is, instead of hiding it in this camouflaged way called PEP and Pease?

That bipartisan simplification was done at the recommendation of the nonpartisan Committee on Taxation to get around a principle that was put in place--or that recommendation was carried out by the nonpartisan Joint Tax Committee because we ought to be very transparent in our tax laws.

Despite this, those who see more Government spending as the solution to all the problems are desperate to seize more money from the American taxpayers.

We are hearing rumors of let's go back to camouflage. The junior Senator from Illinois would need more money to fund all the promises he is making. Restoring the phaseouts for itemized deductions and personal exemptions seems a likely source of some of that money. In discussing the tax proposals of the likely Democratic nominee, I am referring to a publication titled ``A Preliminary Analysis of the 2008 Presidential Candidates' Tax Plans.'' This was prepared by an organization called the Tax Policy Center. The Tax Policy Center is a joint venture of the Urban Institute and the Brookings Institution, both well-respected think tanks.

According to this publication, my distinguished colleague from Illinois would restore PEP and Pease. In other words, he would bring less transparency to what is a higher marginal tax rate. That is, he would restore the phaseouts and the complexity they would mean for millions of tax-paying families. However, it is also noted that he would set an increased income threshold of $250,000 for married couples filing jointly. This is consistent with the candidate's stated goal of targeting tax breaks to low- and middle-income taxpayers while shifting more of the tax burden on the higher income taxpayers.

If your family makes less than $250,000 a year, you might think this sounds like a good deal. For singles, the threshold for phaseout of personal exemptions would probably be lower, but the phaseout of itemized deductions would not vary with the filing status if current law is followed.

As an aside, the proposal of the distinguished junior Senator from Illinois would create a new marriage penalty. For those considered by the Senator from Illinois to be low- and middle-income taxpayers, the idea of raising taxes on other people might sound like a good idea but hold on.

On March 14 of this year, this body approved a budget with 51 votes. One of those 51 ``yea'' votes was cast by the Presidential candidate from Illinois. That same Senator voted again for the budget on June 4, when the Senate voted on that conference report. I am not sure if he is not communicating with the rest of the Democratic caucus or was too busy campaigning to become completely familiar with the budget. But he is making promises that the budget he voted for will not allow.

The budget passed by Congress earlier this year would protect taxpayers in the 10-percent and 15-percent brackets but would subject filers in the 25-percent bracket and brackets above to these camouflage provisions I have been talking about that we call PEP and Pease. To get an idea of what this means, I wish to walk through the 25-percent bracket, the 28-percent bracket, and the 33-percent bracket.

These particular brackets are important because they contain families with less than $250,000 in income and singles with less than $125,000 in annual income. It has been implied that the junior Senator from Illinois would protect these filers from tax increases as President. But restoring PEP and Pease provisions within the confines of this year's budget would subject filers in these brackets to this backdoor camouflage, the less transparent tax increase. The Senator from Illinois may say he is going to protect families earning less than $250,000 a year, but the budget he voted for will not do that.

According to the Internal Revenue Service, single individuals falling within the 25-percent bracket in 2008 start at taxable income of more than $32,550. That is not a high-income person. They earn taxable income of no more than $78,850--in a lot of places in this country, that is not a very high income. It is high for my State of Iowa, but it is not high for a lot of States. Singles in the 28-percent bracket will earn taxable income of more than $78,850 but less than $164,550. The important number is $125,000. If that many filers in the 25-percent and 28-percent brackets make less than that, based on the Democratic budget, these taxpayers would be hit with a PEP and Pease camouflage, less transparent rates of taxation.

Looking at the brackets for married filing jointly for the 2008 tax year, according to the IRS, married filers in the 25-percent bracket will start at a taxable income of more than $65,100. Taxpayers in this bracket will earn taxable income of no more than $131,450 annually. In the 28-percent bracket, they will earn taxable income of no more than $200,300. For the 33-percent bracket, married filers filing jointly will earn no more than $357,700 but more than $200,300. For married individuals filing jointly, the important number is $250,000.

Filers in the tax brackets I have walked through may expect the Senator from Illinois to protect them from tax increases if he is elected President. But the budget he voted for earlier this year makes that impossible.

As I said, the reinstatement of PEP and Pease amounts to a backdoor tax increase. I say backdoor because it increases the effective rate for many filers without really increasing the statutory tax rate. That is why it is camouflaged. That is why it is less transparent. And if you want to increase taxes, you ought to have guts enough to say what is the real marginal tax rate and put it in the tax laws, just like the 25, the 28, the 33, and the 35 are now.

For a family of four, this backdoor tax increase would be significant. If your family falls in the 25-percent tax bracket, according to the Finance Committee Republican staff analysis from March 2001, PEP and Pease could make your actual rate 26 percent. We can see the difference between the green line and the red line is when you are hit with PEPs and Peases. Your tax increase is going to be at a higher rate than what your tax form really says it will be. Again, why camouflage it?

The news is even worse--and I will have charts on this point--for filers in the 28-percent bracket and the 33-percent bracket. In the 28- percent bracket, a family of four could pay a real tax rate of 32 percent. So if you want people of that tax bracket to actually pay 32 percent, why don't you have a tax bracket that says it instead of camouflaging it? A family in the 33-percent bracket, as we can see in the next chart, a family of four could pay a rate of 37 percent. Again, the difference between the 33 is what you are told in your tax rate chart you are going to pay, but as a practical matter, you are paying 4 percentage points higher.

I end by stating that I believe taxes are a necessary part of life. We all benefit from the services our Government provides, and that Government needs money to function. We collect that money from taxes. However, I think our tax system should be transparent

and honest, not camouflaged. Raising money by limiting personal exemptions and itemized deductions is not transparent. As I have said, it amounts to a backdoor tax increase. If anyone thinks people should hand over a greater percentage of their income to the Government, that person should openly advocate increasing statutory rates.

I am also concerned that many people around the country may be relying on the latest campaign position of the junior Senator from Illinois. That latest campaign position says he intends to protect low- and middle-income tax filers from tax increases. Right now, he is at odds with his own party and with a budget for which he voted. I bet that being subjected to a backdoor tax increase is not the sort of change most Americans believe in, to say nothing of restoring what the nonpartisan Joint Committee on Taxation stated was a very serious source of complexity for the American taxpayers, a complexity we took out in the 2001 tax bill.

A series of correspondence has gone back and forth between the Republican and Democratic leadership regarding the extension of expiring tax provisions and energy tax incentives. On July 3, Leader McConnell sent a letter to the majority leader urging that he work with us to find areas of bipartisan agreement in order to break the current impasse over extending time-sensitive provisions that we call extenders, both for energy and the other category of extenders, such as R&D tax credits, an example of about 40 that have to be extended.

On that day, the majority leader responded in a fairly sharp manner:

While I am pleased the Republicans appear to have abandoned

their fiscally irresponsible ways when it comes to the

extenders bill, it is hard to comprehend why Senators

McConnell and Grassley would choose to cut programs to help

working families, seniors and veterans in need of health care

in Kentucky and Iowa in an effort to protect multinational

corporations and hedge fund managers.

On a preliminary point, in all the back and forth on this issue, I have not criticized the majority leader by name. In the tensions that come in Senate debate and the political environment, I think it is best to stick to that course. So I am disappointed that the majority leader did not keep the discussion on that level.

With all due respect to him, he seems to have misread the letter, so I will set the record straight on a couple of important points.

First, a simple extension of expiring tax relief, including extension of the AMT patch, should not be offset with accompanying tax increases. This does not mean we are opposed to offsetting the revenue loss from new tax relief policy with spending reductions or revenue raised from tax proposals that are grounded in good tax policy.

Then my second point. The distinguished majority leader accused Leader McConnell and me of protecting hedge fund managers. This is simply not the case, which I will demonstrate. In fact, the House extenders bill contains an offshore deferred compensation proposal.

This proposal that the Democrats actually support allows these same hedge fund managers a very generous tax break that is not available to the average taxpayer. The House-passed hedge fund proposal allows these hedge fund managers to avoid paying taxes on their offshore deferred compensation if they make a cash donation to a charity equal to 100 percent of the amount of the offshore deferred compensation. Meanwhile, the average taxpayer is limited in how much they can deduct even for contributions to charity. They can only deduct charitable contributions if those contributions do not exceed 50 percent of their adjusted gross income. So if a teacher donated his or her entire salary to charity, he or she would only be able to claim about half of that as a deduction. But a hedge fund manager who sheltered income in the Grand Caymans would be allowed to claim a deduction for the entire amount of his or her sheltered income.

I want to make it clear, not only do I support the policy of changing the tax treatment of offshore deferred compensation for hedge fund managers, but I would make sure that we corrected the giant loophole that came over here from the House of Representatives benefiting hedge fund managers. We should make sure that if we are going to tax the deferred income, we do not leave an escape hatch in the future.

With respect to the spending cut allegation, the majority leader's comments again, with all due respect, implied that he has not read the Republican leader's letter correctly. The Republican leader's offer to break the stalemate does not pit spending cuts for benefits for working families, for seniors, for veterans against expired tax relief provisions. The spending described in the letter is for unspecified and unwritten appropriations bills as far as 10 years in the future. The general spending account identified represents the excess of new future spending levels over the current levels for nondefense discretionary spending plus inflation. None of the current-law levels of these categories of spending would be cut. What is more, the Republican leader's offer would leave intact nearly all of the $350 billion in new extra spending. On its face, it is an extremely modest revision of this extra spending.

I ask unanimous consent to have printed in the Record a copy of the letter from the Republican leader and the majority leader's response.

Madam President, to put the matter in some perspective, I ask unanimous consent to have printed in the Record an article containing a summary of an analysis by noted economist Kevin Hassett, a senior fellow and director of economic policy at the American Enterprise Institute.

According to the analysis, if the last Clinton administration budget were the baseline, Federal spending would be $400 billion less than it is this fiscal year. Dr. Hassett's analysis accounts for spending increases for the global war on terror and related matters that were anticipated at the end of the Clinton administration. The analysis shows that other Government spending is trending $400 billion above where it otherwise would be.

In essence, the Republican leader's offered offset categories are future undefined spending budget room that did not materialize until the conference report on the budget was adopted a few weeks ago. Keep in mind that this new undefined future spending sits on top of a baseline that is, as Dr. Hassett's analysis shows, $400 billion higher than the trendline from the Clinton administration.

If the majority leader does not engage us on this deficit-neutral offer, then he is putting taxpayers in his State at risk for the loss of several deductions they used on tax returns for last year. Included are the sales tax deduction, college tuition deduction, and teachers' classroom expense deduction.

The latest IRS statistics of income data on the number of families and individuals claiming these benefits for the States of Nevada, Kentucky, and Iowa will appear in the Record after my discussion.

The tradeoff is clear. Deal with these tax benefits which affect taxpayers now. Offset them with undefined extra spending accounts for appropriations bills that will not be written until several years down the road under the present budget. All that can be accomplished without adding a penny to the Federal deficit.

I ask unanimous consent to have printed in the Record the IRS statistics of income data to which I earlier referred.

I yield the floor.

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

Madam President, I ask the question, are we in morning business?

I ask unanimous consent to speak for a few minutes as in morning business.

We are all aware of the impact rising energy costs have had on Americans and our economy. Every home and business in America has seen energy costs skyrocket. That is true with the price of home heating oil, electricity generated from natural gas or the gasoline and diesel for our cars and trucks, and probably a lot of

other energy uses and sources of energy you could throw in there as well. These costs permeate through our economy by driving up costs for the transportation and production of food, to the manufacturing and industrial sectors of our economy. Obviously, those hurt most are the families who feel it in their pocketbooks when they pay their utility bills, fill their cars or trucks to get to work or take their kids to school, or even buy groceries. They do not have the ability to pass it on, as do people in the middle of the chain.

A key component of a strong and vibrant economy is reliable and affordable energy. For businesses to grow, for productivity to increase, we need more energy. And in the process of more energy, I mean more sources of energy, but I do not preclude any way we can save energy, and an ethic to save energy as well.

It is a fact of life that each American generation has lived better than the predecessor generation, and my generation and the next generation and the next generation expects to live a little better than the previous generation. That is the American dream; that is the American way. It is not going to happen if we do not have affordable energy. To have affordable energy, it is as simple as economics 101: when the price is high, with an increased supply, the price will go down.

So all of this means that we need to use energy not only more but more efficiently. It also means you cannot rely just on fossil fuels. God only made so much of that. We need to develop alternative and renewable sources of energy. But renewable energy and energy efficiency are only a part of the solution. I guess I would say that when you talk about energy, you talk about three: No. 1, more sources of present fossil fuels; No. 2, alternative energy--and for a guy like me from corn country, I am not talking only about ethanol, but biodiesel, biomass, wind. I happened to sponsor, 15 years ago, the wind energy tax credit that now exists and which has brought vibrant wind energy to a lot of the Midwest. And also, lastly, conservation. I am talking about not only a Government policy on conservation which we have in place in the sense of a tax incentive for fuel-efficient cars and also tax incentives for energy-efficient home appliances, to name two, but there is a personal ethic of more conservation that we are seeing in America right now. The latest figures I know of are March 2008 versus March 2007. Because of the increased price of gasoline, we drove 5 percent less miles this March than a year ago, and that is the largest decrease or greatest decrease in energy use since energy was this high on an inflationary basis back in 1979.

So Americans are conserving price, they are conserving when they buy these fuel cell cars where you get the tax credit. But it cannot only be conservation. And too often I hear in this body: Do not drill; conserve.

You have to do drilling and you have to do conserving. But you also have to have that third factor, which is very popular with a person like me, alternative energy, because alternative energy, in the case of ethanol as an example, is good for farmers, is good for the environment, and it is good for jobs in rural America. We never thought we would have these kinds of jobs where we set up a refinery in rural America to make alternative energy. It is good for our national security, and it is good for our economic security. So you have to have a broad base.

One area in which we have done little, though, to help ourselves is the developing of domestic sources of traditional energy. For too many years, we have shunned the use of domestic affordable coal and we have hindered the expansion of our domestic nuclear energy. Why would we do that when France gets 80 percent of its energy from nuclear? Why would we not have the reprocessing of spent nuclear fuel when they do it in other countries to reduce the necessity of finding a storage place for it to such a great extent as we have in this country?

What is it that people, young people, would come to my office last fall and say: We ought to stop using coal. Well, when you generate 55 percent of your electricity on average from coal, what do they expect-- that we should not have lights, we should not have electric motors on our air-conditioning, et cetera? Where do they get ideas like that?

There is something wrong when there is not some reality to what the energy situation is in this country and you should not use coal and you should not use nuclear energy. Where does that sort of thought take you? It does not meet the commonsense test that we would establish in the Midwest of something being a good idea or a bad idea.

As a result of our policies here in Washington, we have driven the exponential demand for clean-burning natural gas and pushed our oil dependancy to nearly 60 percent. Yet we have done very little to increase the supply of energy to meet new demand because of an attitude of ``no drill, no drill.''

What is the sense of paying $140 for a barrel of oil, sending it over to some Arab nation where they are going to train terrorists to kill us because they do not like us? It would be better to keep that $140 here in the United States. It would be good for our economy. It would be better for our national defense. It would be better all around.

It is intellectually dishonest to talk about the offensively high prices of home heating fuel or $4 gasoline for our cars while also opposing every effort to increase the supply of home heating oil and natural gas that would lower these prices, a la economics 101: if you increase supply, the price goes down. It seems to me that some of my colleagues whom I listen to here--the very same ones who are blaming high gasoline prices on the Bush administration are the very same ones who do not want to drill. It does not add up. That is why I say it is intellectually dishonest. It is disingenuous to clamor about the cost of crude oil and gasoline while ignoring half of the law of supply and demand.

Members of this body continue to point out the outrageous burden to our citizens because of high energy costs. I would suggest that some should look closely at the votes they cast that limited the development of our domestic resources. We have a responsibility here in Congress to address the underlying causes of high energy costs. That includes increasing energy efficiency, producing alternatives and renewables, and developing domestic traditional sources. In other words, let me get back to the three-finger rule: No 1, more drilling; No. 2, Government incentives for alternative energy; No. 3, Government incentives for conservation and also what individuals can do in conservation.

I point out something that is just irrational, irrational right here on Capitol Hill. I saw it--let's see, what time was it today? It was 11 o'clock. I was out on the steps to meet with members of the Iowa FFA, the Future Farmers of America, the leaders who are here to study leadership and to learn about the political process. Lined up across this new brick area out here east of the Capitol were a whole bunch of black SUVs idling, parked and idling. Why can't we have an ethic on Capitol Hill, whether it is Ambassadors who are coming up here, whether it is the Vice President coming up here, or whether it is our own elected leaders who have chauffeur-driven cars, to turn off the cars? If you want to stay cool, come in this building and save the $4 gas. We have to promote some leadership on conservation here, and it can start right here with the Federal Government. I do not know who owns those black SUVs. I got a couple of license plates I am going to look up. But we can set an ethic here.

But you have to have all three of these, and conservation is one of them. You can have tax incentives for conservation, but you can also do a lot of personal conservation. Even with my own staff sometimes, you drive up to park to go into a town meeting, and they sit there for 10 seconds before they turn off the ignition. I have learned to reach over and turn it off just as soon as the car has come to a complete stop or even just a little bit before.

Another problem we have in this country is the United States is the only country I am aware of that is choosing not to drill where we know oil and gas exist.

How many times have we heard on the Senate floor: There is only 13 billion barrels of oil in Alaska. It is going to take 10 years to access and get it down here. It is not going to make any difference.

That is not supposed to be a big deal? If that isn't a big deal, how come just within the last year they found 5 or 6 billion barrels of oil offshore of Brazil, and it was a big deal, a big deal from the standpoint of energy efficiency for Brazil? And it was a big point for enhancing the inventory of known oil supplies worldwide because, just like money is fungible, oil is fungible. Wherever you find another drop of oil, it has some impact on the inventory. It has some impact on supply. So it ought to be just as big or twice as big of a deal because we have 13 billion barrels of oil in Alaska, as an example.

Isn't this silly? Here in the United States, these lower 48, we have Mexico south of us, Canada north of us. They are doing everything they can to find every drop of oil they can; in Canada, getting it out of the tar sands. Yet what is unique about the United States? We are part of North America. We are right in the middle of North America. North and south of us is every attempt to get every drop of energy they can but not here. Isn't there something wrong with us when we take that attitude? But while you take that attitude, it is OK to ask the Saudis for more oil. It is OK to ask to be dependent on countries such as Iran and Venezuela for our economic security. It is OK to send $140 a barrel over there. But, boy, don't take a drop of oil out of the ground here where we are not drilling now and keep the $140 here. It is not OK to open areas at home where we know there is oil and gas.

As I say so often, this defies common sense. I think my constituents know it because in every one of the 14 town meetings I had Monday, Tuesday, Wednesday, and Thursday of last week in western Iowa, this issue of why we don't drill for our own oil has come up. For 4 years before that, I don't think I heard much about it. But it sure is a big deal waking up people. Maybe that is some advantage of $4 gas. It is harmful to the economy, harmful to middle-income people, more harmful to low-income people, but it might wake up America to have a more balanced energy policy, which is threefold: drill, alternative energy, and conservation.

There are some on the other side of the aisle who wouldn't be able to point to a single area where we should look for oil and natural gas. We have four or five people on my side of the aisle. So this is just not a Democratic thing, but there are more Democrats who believe that than Republicans.

In 2006, Congress took action and voted to open 8.3 million acres in the Gulf of Mexico to oil and gas drilling. However, when the Senate considered the Gulf of Mexico Energy Security Act in August of that year, 24 Democrats, including Senator Obama, or 57 percent of the caucus opposed that legislation. This was even after Hurricanes Katrina and Rita ripped through the gulf without a single oil or gas incident.

Today oil is more than $135 a barrel. Families, small businesses, and truckers are suffering from the increased cost of energy. Farmers have been forced to pay outrageous prices for anhydrous ammonia fertilizer this spring because of the cost of natural gas. Ten years ago we produced domestically nearly all of our fertilizer needs. Now we are dependent upon other countries for 55 percent of that fertilizer. Congress must act to develop our resources at home. We can take action today to develop in responsible ways our own domestic supplies of oil and natural gas What I am saying is, you can do this and not harm the environment.

A bill I recently cosponsored, introduced by Senator McConnell, would take action to reduce gas prices. It would allow States to explore for oil or natural gas in the Outer Continental Shelf. It would allow Governors in coastal States to petition for a lifting of a moratorium within their State boundaries. The Pacific and Atlantic regions of the Outer Continental Shelf, which this bill would allow for leasing, hold an estimated 14 billion barrels of recoverable oil and 55 trillion cubic feet of natural gas. But a moratorium currently prohibits production in those very areas. The Gas Price Reduction Act would take sensible action to allow these resources to be developed.

It is time that we end the obstruction of reasonable, environmentally responsible development of domestic oil and gas resources.

Bottom line: I hope my colleagues will recognize the extreme burden American consumers are experiencing. It is past time to take action to increase our energy supply, increase our economic and national security, and develop the resources that God gave us.

I yield the floor.

Madam President, I ask unanimous consent that Lynda Simmons of my Finance Committee staff have privileges of the floor for the duration of the 110th Congress.

Madam President, I will yield 3 minutes to the Senator from Oklahoma.

Madam President, I wish to review some facts.

At the end of last year, we agreed to a short-term Medicare extension so that we could complete work on a bipartisan Medicare package this year that would fill out the 2 years that we previously had planned to do it. We were very close to a deal then and needed time to finish that work, so that is why we did the short-term extension. Both sides agreed that we would work quickly to get a bill that could be signed into law. Unfortunately, that effort has been intentionally derailed by the majority's desire to play politics with Medicare.

The fact is that the majority has twice walked away from good-faith, bipartisan negotiations. The fact is that we had been working for months before the rug was pulled. The fact is that we had actually completed that bipartisan deal 2 weeks ago yesterday, about 11 o'clock in the morning. It was a deal that would be signed into law--in other words, not be vetoed by the President of the United States. But the other side thought they saw a political advantage, and they have taken that into consideration. So they scuttled the deal in favor of a bill that would, in fact, be vetoed by the President of the United States, and that is where we are again right now. Now they have spent the last 2 weeks engaged in an effort to scare seniors and providers, and the worst thing yet is that it has been aided and abetted by the American Medical Association.

The bill is riddled with problems and missed opportunities. First and foremost, the bill we are going to be voting on would do serious harm to Medicare drug benefits on which millions of seniors have come to depend. It would tie the hands of Medicare Part D plans, resulting in higher drug prices and higher premiums for seniors.

Let me quote from a communication I received today from the Medicare Office of the Actuary. Their conclusion is that it would ``very likely result in additional Federal spending for the Part D program.'' Also, outside analysts have likewise concluded that this provision has the potential to undermine the long-term financial sustainability of the Medicare drug benefit.

This provision, which is tucked away in a seemingly harmless provision intended to clarify what classes of drugs might be protected under Part D, is a perfect example of why we work best in this body when we work together and

when we do it in a bipartisan way. When we work together, we catch these little landmines tucked away in House-passed bills that could do real harm to a program seniors rely on for their drug coverage.

Instead of writing a bipartisan bill, the majority twice walked away from the table, and now we are in a position of ``take it or leave it.'' The process here today does a disservice to the purpose of the Senate, but more than that, it does a disservice to seniors, to doctors, and everyone who depends on Medicare.

There is a deal to be reached here. We could vote on a deal today that includes many of the policies in the underlying bill but fixes glaring problems. We could vote today on a bill that would provide a 1.1-percent update for physicians. We could vote on a bill today that would not be vetoed.

To my colleagues today, I say we should vote no on this motion so we can get back to something the President will sign and get it done and get it done quickly.

I yield the floor.

Mr. President, for the past few weeks, I have been leading an effort to dispel the myths surrounding the impact of biofuels policies on our food prices. You may remember that back on May 15, I came to the Senate floor to announce to my colleagues that the campaign to smear ethanol is a well-funded and seemingly well- coordinated campaign. It is being led by none other than the Grocery Manufacturers Association.

In the weeks since that floor statement, I have been using every opportunity I can to beat back this smear campaign and inject the facts into the debate.

Biofuels are being scapegoated for rising wheat prices, even though the 2007 crop was the largest planted in 4 years. Biofuels are being blamed for the increased price of products such as rice and bananas, which have no correlation to corn production or our biofuels policies.

According to economists across the administration, biofuels have caused a tiny fraction of the increase in global and domestic food prices. They are also responsible for only a small portion of even the increase in the price of corn.

The fact is, the increased cost of oil is the biggest driver behind the increased price of food. In other words, energy and how energy fits into the food chain and the dramatic increase in the price of oil to $130, $140 a barrel is the biggest driver in the increased price of food.

But we also have drought in wheat-producing countries, such as Australia last year, adding to this increase. We have also had increased demand by the middle class of China and India for meats in their diet to a greater extent than ever before. Yet the grocery manufacturers and their association have focused the entire effort on ethanol. They see ethanol and renewable fuels as the root cause and most vulnerable to their attack.

Even with oil at $135 a barrel, they see their victory in undermining biofuels policies. It is important to note that biofuels are actually working to lower the price of gasoline at the pump. In fact, in Iowa, you can buy gasoline with biofuels in it for about 13 cents a gallon cheaper than you can 100 percent gasoline.

So while high energy costs are driving increases in food prices, the grocery manufacturers would have you believe that the solution is less energy supply. That is counterintuitive.

The Grocery Manufacturers Association does not seem to care much about facts. Their criticism and talking points are not based on sound science, sound economics, or even common sense.

While biofuels are easy to blame, it is intellectually dishonest to make these claims. But maybe intellectual dishonesty does not make any difference to the Grocery Manufacturers Association.

They have indicated that they fully support advanced biofuels from biomass rather than food crops, and maybe with ethanol we think of that as cellulosic ethanol, and of course, we are all supportive of efforts to promote the next generation of biofuels. But undercutting the current industry is not the way to get fuels into that second generation coming from biomass instead of from grain.

Those who are determined to pull the rug out from under today's biofuels should know that the next generation will not exist if the current generation is undermined.

I hope the Grocery Manufacturers Association has taken notice that I am not going to sit quietly while they try to undermine 30 years of public policy. In other words, 30 years ago, we decided in this Congress we needed more emphasis on renewable fuels because God only made so much fossil fuel. So you have to get to what you are going to do postpetroleum, and it is renewables. Of course, conservation is the other part of that as well.

So 30 years ago, we started out with incentives for biofuels. It is still not a mature industry, but it is maturing very quickly. If you cut the legs out from under that industry right now and the agriculture that supports it and the jobs in rural America that do the work, you are not going to have the next generation.

I sometimes think, even though I blame the Grocery Manufacturers Association because they announced this campaign of scapegoating ethanol, that somehow it is not just the Grocery Manufacturers Association. I cannot help but think that big oil is back there applauding everything the grocery manufacturers are doing.

Until now, in fact, the only significant opposition to developing renewable fuels over the past 30 years has come from big oil. I was not afraid to stand up to big oil over the last 30 years, and I am not going to stand by while the Grocery Manufacturers Association, with their smear tactics, destroy what the American people have been calling for--an industry so we can produce renewable fuels. And because of our national defense, the stakes are too high.

The Grocery Manufacturers Association's efforts, if successful, will raise prices at the pump in Iowa. I said 13 cents higher if you have 100 percent gasoline instead of 10 percent ethanol and 90 percent gasoline. And in the process, we would be increasing our dependence on foreign oil. Why not keep the money in the United States instead of spending $130 a barrel and sending it over to the Arabs where they will allow terrorists to train against us? Is risking our national and economic security worth the bottom line of a few multimillion-dollar food companies? Don't be fooled. Their campaign is not altruistic. It came directly from their mouths that this campaign is about their ``bottom line.''

Where is the outrage? American consumers need to know that a few big food companies are jeopardizing our efforts toward energy independence so that they can raise the price of food and increase their profits. They want to do away with this industry and, in the process, as Iowa State University tells us, without ethanol, gasoline would be on average about 30 cents higher per gallon. If the increased price of energy goes up, and energy is the cause for about one-third of the increase in the cost of food, then obviously food is going to go yet higher.

We are on a path, from the standpoint of national security and economic security, to reduce our dependence on oil from the likes of Venezuela and Iran. The Grocery Manufacturers Association wants to put the brakes on our efforts toward energy independence. They apparently prefer putting our economic security in the hands of crazy people, such as the President of Venezuela and the President of Iran, rather than putting their economic security in the hands of American farmers growing renewable fuels.

The Grocery Manufacturers Association, through their president and CEO, Cal Dooley, requested to have a meeting with me to discuss the impact of

food-to-fuel policies. Given the association's objectives to ``obliterate whatever intellectual justification might still exist for their corn-based ethanol among policy elites''--and that is what their public relations firm said about ethanol--I was pleased to accept former Congressman Dooley's efforts to talk to me about it.

U.S. Secretary of Agriculture Ed Schafer was also kind enough to accept my offer to participate in that meeting. However, I thought to have a meaningful discussion on their campaign to smear ethanol and my justification for renewable fuels, and so I requested the attendance of chief executives of 15 of the GMA's member companies. I thought it would be important for the CEOs of these companies, who are members of the association, to speak for themselves about the impact biofuel policies are having on their businesses. The companies themselves are in a much better position to explain why they believe the anti-ethanol campaign they have underwritten would be warranted. So I invited the CEOs of Campbell's Soup, Del Monte Foods, Lakeside Foods, Sarah Lee, Dean Foods, Hormel Foods, Procter & Gamble, Kellogg's, Land O'Lakes, ConAgra Foods, General Mills, Kraft, Ralston Foods, Cargill, and Archer Daniels Midland to come to the meeting. I expected to have many of the CEOs jump at the opportunity to tell me I am wrong. I thought I would hear firsthand how the increase in corn prices was affecting the bottom line of General Mills or Kellogg's or Kraft.

Many of the CEOs I invited are members of that trade association's board of directors. Naturally, I expected the CEOs to want to defend their association's campaigns and its tactics. Unfortunately, that is not what I got. Only one CEO--Chris Policinski of Land O'Lakes--agreed to attend, and Cargill offered a senior executive in place of their CEO. But of 15 companies, only one CEO thought it was worth their time to come to Washington and visit with me and Secretary of Agriculture Schafer about their trade association's campaign to smear ethanol. So I had no choice but to cancel the meeting.

They have hired a high-priced public relations firm to coordinate their campaign. One would assume they believe in the policies they are promoting. So why wouldn't they take advantage of this opportunity to convince Secretary Schafer and me that we have it all wrong? This is clearly a high priority for them. They seem to have invested a great deal in it, and a lot of dollars in it. Why wouldn't they attend the meeting? Don't they believe in what they are doing?

It appears all they want to do is to give a thumbs-up to their trade association's hiring of expensive PR firms to do their dirty work, instead of entering into real dialog with those of us who feel strongly that this country needs a policy of renewable energy, and more renewable energy every day.

I don't know whether GMA encouraged these CEOs not to attend. My colleagues might find it amusing, however, that two companies declined my invitation with a form letter. The letter from Mr. Conant, CEO of Campbell's, and the letter from Mr. Mackay, CEO of Kellogg's, used the same text declining my invitation. Now isn't that something? CEOs of two major companies coming up with exactly the same words in letters signed by them to decline. I don't know who wrote it first, but I might expect CEOs of such primary companies to be a little more original in their communication with me. It makes one wonder who wrote the letter.

Mr. President, I ask unanimous consent to have printed in the Record at the end of my remarks these two letters.

Mr. President, I am going to keep pounding home the facts behind the relationship between food prices and biofuels, because it is not supported by economics, it is not supported by common sense, and it is not supported by sound science. The fact is, biofuels are increasing our national security, biofuels are helping our balance of trade, and they are reducing our dependence on Middle East oil and the whims of big oil. Every barrel we use of biofuels is $135 not going to some foreign land where they train terrorists to kill Americans.

So it is time we cleared the air, it is time we looked at the facts, and it is time we recognize, once again, that everything about our domestic renewable fuel industry is good, good, good. I emphasize it is good for the environment--less CO2 in the air--it is good for good jobs in rural America, because a lot of these ethanol refineries are in rural America, where we never thought we would have good-paying jobs, and a lot of these refineries respond to another problem--we don't have enough oil refineries in this country. In a sense, every ethanol plant, every biofuels plant is a refinery. It is good for our national security, which I think I have made very clear, and it is good for agriculture. It is good that we don't have Government supporting surplus grains. We are not having taxpayers' money go out to farmers. Farmers are getting their money from the marketplace now that prices are higher.

So I don't know how many times I have to say it, but there are no negatives about biofuels and everything about them is good, good, good.

Exhibit 1

Campbell Soup Company,

Camden, NJ, June 18, 2008.

Hon. Charles Grassley,

U.S. Senate,

Washington, DC.

Dear Senator: Thank you for your invitation to meet

regarding the relationship between US biofuels policies and

their impact on commodity and food prices. Regrettably, I am

unable to attend.

In my stead, however, the Grocery Manufacturers Association

and a number of other organizations with similar concerns

plan to participate. I also unders1and GMA will extend to you

an invitation to attend the November meeting of the GMA Board

of Directors, where we can have a full and productive

discussion regarding our nation's energy policy.

As you know, GMA is working with many farm organizations,

including the National Turkey Federation, the National

Chicken Council, and the National Cattleman's Beef

Association, to improve our federal food-to-fuel policies by

accelerating the development of biofuels made from crop

wastes and other energy feedstocks. Many experts have

concluded that cellulosic biofuels hold enormous promise and

will not pit our energy needs against the needs of food

companies, livestock farmers and consumers. The Campbell Soup

Company strongly supports biofuel policies that boost the

income of farmers and simultaneously meet the needs of food

companies and consumers.

In light of growing prices for corn and other commodities,

we support policies that will reduce the use of food and feed

crops to produce fuels. Although there are many factors

contributing to rising commodity prices, federal policies

that divert one-third of the U.S. corn crop is the only

factor legislators have the power to change. Recent studies

by the World Bank, the United Nations, and America's leading

agricultural think tanks have linked rising commodity prices

to these federal food-to-fuel policies.

Again, I thank you for your kind invitation to join you and

Secretary Schaffer to discuss these concerns and regret that

I am unable to attend. If appropriate, I would be happy to

offer Kelly Johnston, Campbell's Vice President--Government

Affairs, whom you know, to represent our company. The

Campbell Soup Company looks forward to working with you and

all interested parties to craft sensible and sustainable

energy policy.

Sincerely,

D.R. Conant,

President and Chief Executive Officer.

Mr. President, I yield the floor, and I suggest the absence of a quorum.

Mr. President, I want to address the Senate on the issue of tax policy. Serving as a member of the Senate Finance Committee with jurisdiction over this, I watch tax policy pretty closely. We are almost half through the year 2008. Since January 1 of this year, several tax relief provisions have expired. I am talking about what we call tax extenders that have been on the books in the Tax Code for several years, in some cases decades, that sunset from time to time that must continue to be extended if you want the benefits of that tax policy.

In most cases, we think this tax policy is good policy because many times these policies have been on the books and expired, and we have extended them. So the term ``tax extender'' means keeping existing tax policy in place; however, it has sunset so Congress must act to keep it going.

The biggest one is called the AMT. Most people know it by the alternative minimum tax fix. That affects 25 million families. There are a number of other widely applicable tax relief provisions that fit into the term ``tax extenders.''

One provides millions of families with a deduction for college tuition, another provides deduction for our schoolteachers for out-of- pocket expenses that they might pay for that the school district does not pay for. One that is very important to innovation in American business is called the research and development tax credit, which has been part of the Tax Code since 1981.

All of these tax relief provisions expired not just today but 6 months ago.

This Congress has not passed legislation yet to deal with this problem. We have had two cloture votes in the Senate on taking care of this, but those votes have been on a bill that will not pass the Senate. And even if the House bill were to pass the Senate, the President would not sign it. So the issue is, do we want to get these things extended or not? If you are going to do it, you have to do it in a way that is going to get it through the House and Senate, as well as the President's signature.

What is holding up this bipartisan, time-sensitive tax relief? It is an obsession with the Democratic leadership, a version of pay-go or pay-as-you-go. I have spoken on this before, but the hangup is the Democratic Party's feeling and obsession over raising taxes to offset continuing current law tax relief policies.

I have offered a deficit-neutral path to these tax extenders, that being a restraint on new spending. But I have no takers from the other side. I haven't even received a response on the merits of my offer that I made to the other side. The action or lack of action thus far proves my point. The leadership of the other party--or maybe all Members of that party--is so obsessed with raising taxes that they are willing to hold hostage popular bipartisan tax relief measures.

Democratic spokespersons are threatening to kill these tax extenders unless they get tax increases they want so badly. It reminds me of a nursery story. I am referring to the story of the big bad wolf. I have a chart here so people don't forget who the big bad wolf is. You remember the story. The big bad wolf in that nursery story threatened the three little pigs. He said something like: I am going to huff and puff and blow your house down. The Democratic

leadership is playing the role of big bad wolf right now.

Here is what my friend the distinguished House leader said:

The extender bill is not going to pass unless it's paid

for.

When asked if he would make a similar pledge regarding the $62 billion cost of preventing the alternative minimum tax from hitting 21 million more taxpayers, the distinguished leader of the other body demurred:

The extender bill is not going to pass if it's not paid

for.

I call this an obsession.

I might add, I have been pleased to work with the House majority leader in the past, particularly on the children's health insurance bill and other matters. But in the case of the tax extenders, I beg to differ with the distinguished leader of the other body. That is some very serious huffing and puffing. For those millions of families sending their kids to college, forget about your tuition tax deduction unless the Democrats get their offsetting tax increase. They have ignored the spending cut proposal I circulated over a week ago, so they are not holding tax extenders hostage to a pledge to pay for them. They are holding extenders hostage to their version of pay-as-you-go, which is guaranteed tax increases. More revenue, from their judgment, means more spending and yet bigger government.

Now I will show you the big bad wolf can sometimes be a Republican. I have another chart with a famous quote on it from a former majority leader of this body. Senator Frist said:

If the Senate kills the trifecta bill, we will not return

to it this year. That means we would have no permanent death-

tax reform, no tax-policy extenders, and no minimum-wage

increase. It's now or never. It's this week.

That is what was said approximately 18 months ago. At the time, Republicans were in the majority. It was also the last time folks in control of Congress were holding extenders hostage for an unrelated reason. In that case, the unrelated issue was death tax relief. Extenders were part of what was referred to then as the ``trifecta.'' A third part of the trifecta was a minimum wage increase.

Here is what then-Senate majority leader Bill Frist said, kind of a repeat:

If the Senate kills the trifecta bill, we will not return

to it this year. That means we would have no death-tax

reform, no tax-policy extenders, no minimum-wage increase.

He went on to say:

It's now or never. It's this week.

What we have is huffing and puffing, a threat to blow the extender House down--the big bad wolf once again. So you can see my criticism is not partisan. I have shown a case where the Republican majority held tax extenders hostage.

As we know, soon the then-Republican leader, the then-majority leader, Dr. Frist, came to his senses. He finally brought forward a bill that addressed the tax extenders in the lameduck session of December 2006.

The bottom line is, the folks on our side recognized, although it took a long time, the merits of continuing tax policy that has been on the books for a long period of time, that a vast majority of the Congress knows is good policy and it ought to be extended. They recognized that the unsuccessful effort to leverage the popularity of these tax benefits did not mean the extenders had to die on the vine. This recognition occurred despite earlier threats I have already spoken to to kill the extenders.

It will be the same tale of the big bad wolf 2 years later. A partisan obsession with a tax-increase version of pay-go or pay-as-you- go will not, at the end of the day, trump bipartisan popular tax relief measures that millions of families are counting on and have been on the books for a long time. If I am wrong, the spokespeople for the Democratic Party should tell those millions of families and thousands of innovative businesses that their partisan agenda is more important than doing the people's business. I will continue to wait for a response. More importantly, the people should hear the answer.

I feel very strongly that these are tax matters we ought to address very soon. Certainty of tax policy and predictability in tax policy is very important for our economy to move forward. In this case, I am referring to the bipartisan tax relief this Congress passed in 2001 and 2003.

I wish to emphasize the word ``bipartisan.'' The reason I wish to emphasize ``bipartisan'' is too often this policy of 2001 and 2003 that ought to be extended is referred to as ``the Bush tax cuts,'' as my friends on the other side of the aisle would like our friends in the media to call them, and the friends in the media are catching on. But why not bipartisan tax relief? Because I remember when that suggestion first came from the White House. It was $1.7 trillion worth of tax cuts over 10 years. I immediately said we were not going to be able to do that because we had to do something in a bipartisan way. So it ended up, because of my decision, in conjunction with Senator Baucus, that it was not going to be more than $1.3 trillion. So I come to the floor with legitimacy to denigrate the label of ``Bush tax cuts'' and emphasize bipartisan tax cuts.

I have actually noticed that my Democratic colleagues like the reference ``tax relief.'' They have used the reference on the campaign trail of their Presidential candidate. How ironic. My Democratic friends label the bipartisan tax relief the ``Bush tax cuts,'' yet they call their own tax plan ``tax relief,'' especially when this so-called Democratic tax relief is merely an extension of the 2001 reduction in tax rates for certain taxpayers, not all taxpayers. I am not surprised. After all, it is political season. But I feel a little bit disgruntled about it all. Sometimes I get mad about it. But I also am dismayed. I am disappointed that the poll-driven use of the term ``Bush tax cuts'' flows so easily off the tongues of people in the other party. The media folks can't get enough, so they continue to repeat the ``Bush tax cuts'' over and over and over. You can imagine how an author of a bipartisan tax relief measure would feel if it is referred to this way.

But do you know what really disappoints me? The fact that the spokespeople for the Democratic Party and their Presidential candidate are telling Americans who make less than $250,000 a year that their taxes will not go up if they vote Democratic in November. I think this is intellectually dishonest, and the folks in the media should call them on this and make it very clear that it is otherwise. Why do I say this? Because my friends on the other side will increase capital gains rates. They will also increase the tax rate on dividend income. I told this body and any friends in the media that Americans earning less than $250,000 a year have capital gains each year. They also claim dividend income. Here I will remind my colleagues and the media that over 24 million tax returns last year claimed dividend income. There is not that many taxpayers over $250,000 a year.

Also, over 9 million Americans claimed capital gains. We have another chart on capital gains. You would be correct if you guessed that not all of these Americans were making more than $250,000.

So how do you get away with saying we are just going to increase the taxes on people over $250,000 and let the capital gains rate go up, let the tax on dividends go up? You are hitting many Americans under $250,000. I will bet some of them were even low-income taxpayers because we established a policy just a few years ago that under a certain income and a very low income, we want low-income people to have a savings ethic, not only that, but the ability to actually save, people who today have a zero rate of taxation on capital gains--zero.

Speaking of zero, the junior Senator from Illinois has proposed to reduce the capital gains rate for startup companies from 7.5 percent, which is the current rate, to zero. I like his thinking on that policy because it is going to help small business, it is going to help entrepreneurship.

But the distinguished Senator will increase the capital rates in other areas by at least 33 percent. That strikes me as being counterproductive. That is rearranging the deck chairs. It is simply squeezing the balloon. And in a sense, I consider it hot air and certainly not change you can believe in. It is not change I believe in, and eventually the American voters are going to see through this.

Let me get back to the tax increase that Americans making less than

$250,000 will see. I want to take a moment to talk about an interview conducted by Wolf Blitzer of CNN. On his program Sunday, June 15, Mr. Blitzer delved into the capital gains and dividend income tax issue. He asked his guest--the chairman of the Democratic Congressional Campaign Committee--whether Senator Obama's plan to tax dividends and capital gains would increase taxes for Americans of every background, not just rich people. I am glad Mr. Blitzer asked the question.

The most interesting point to this story is the response. The response was that Senator Obama will increase the capital gains rate. Let me repeat that. If the distinguished Senator from Illinois is elected President, he will raise rates on capital gains. Why? Apparently the junior Senator from Illinois thinks investment income is, quote, unquote, leisure income. He thinks that ``leisure income'' should not get the same breaks as income earned through labor.

I wish to submit for the Record an excerpt of the transcript from the June 15 show on CNN so folks in the media can see this. The excerpt is the full interview of the DCCC chairman. I have highlighted the portion of the interview I wish folks to pay attention to.

To quote the chairman:

Obama has said that you shouldn't give a break to leisure

over labor.

The DCCC chairman expounded upon this by saying:

In other words, people who are making money simply by

investing it, rather than through their work in the labor

force, shouldn't be getting a break over the people who are

going to work every day.

The DCCC chairman thinks ``that makes sense.''

So the Democratic leadership, and their Presidential candidate, believe the current tax policy favors leisure over labor, and they consider that all investment income is leisure income. So what they are saying is anyone who saves and anyone who invests is a person of leisure.

Maybe my friends on the other side of the aisle have been reading the writings of Thorstein Veblen. Professor Veblen, as shown in this picture, authored ``The Theory of the Leisure Class.'' ``The Theory of the Leisure Class'' took a satiric approach to American society and economics. ``The Theory of the Leisure Class'' characterizes this ``leisure class'' as individuals who only benefited society in a minor or peripheral way because they did not engage in labor-intensive jobs. Instead, the ``leisure class'' often prevailed over ``labor income'' classes by making profits without producing goods and services.

Professor Veblen also argued that certain labor income individuals began to mimic or emulate the ``leisure class'' to do nothing more than achieve a so-called higher status.

So is the distinguished DCCC chairman, or his Presidential candidate, suggesting that all people who invest money are part of a leisure class, a leisure class that is making money rather than producing goods and services? And as a result, somehow, they should not get any breaks over those who are laboring for their money?

Do they want to discourage those who labor and produce goods and services from saving and investing? Do they want to discourage laborers from mimicking or emulating those profiting off of investments? They seem to think that all folks who invest are higher income people.

As an aside, if the DCCC chairman were correct, we would not have at least 5 million Americans using the low-income saver's credit, adopted in a bipartisan way here in this Congress. I have a chart in the Chamber. It shows the number of low-income taxpayers on a State-by- State basis claiming the saver's credit.

This is data from 2003.

In Iowa, for instance, there were almost 96,000 low-income families and individuals using the saver's credit.

Chairman Baucus and I designed this policy in the 2001 bipartisan tax relief legislation. Now it is permanent law. About 5.5 million low- income savers--and these are not people of leisure--use the credit. I would tell the DCCC chairman and the junior Senator from Illinois that these low-income savers are not figments of somebody's imagination. They are real people. I do not think they consider themselves members of the ``leisure class.''

I encourage everyone to study this transcript. You will see that the distinguished Senator from Illinois, according to his surrogates, wants to tax investments because he believes that making investment income is leisure. He believes that hard-working Americans should not get a break on this type of income. He believes that taxpayers do not work hard enough to earn money they can invest and then, in turn, have investment income, and that those who do work hard should not be given an incentive to invest.

I wish my friends on the other side to know that investments begin with taxpayers' hard-earned income. So in order to invest it, they first have to work hard to even earn it.

Also, I would like my friends on the other side, who agree with the DCCC chairman, to ask any taxpayer who saves, any taxpayer who invests their money, whether they think investment is easy. Investment is hard work. You have to educate yourself. You have to make prudent decisions. Ask them if investing their own money is leisure. The other side thinks it is kind of like sitting out there on the beach in the Sun all the time, not having a worry in the world.

It is almost like the other side is reviving the ``two Americas'' that the former Democratic Presidential candidate--former Senator John Edwards--was all about. But here, my friends on the other side are saying that higher income people--or folks in the ``leisure class,'' according to Professor Veblen--are the only taxpayers who invest. They contend that these folks are bad, that this ``leisure class'' should no longer have incentives to invest.

At the same time, my friends are taking away incentives for hard- working Americans to save and invest. The implication is if you save and invest, you are bad, and if you do not save and invest, you are good.

But that is going too far. It is off the reservation. Separating workers who save and invest from workers who do not save and invest is new territory for the other party and should not go unchecked.

The junior Senator from Illinois eloquently states that we need to move past division and that we as Americans need to come together. Who is going to disagree with that? My friend talks about his disdain for old-style politics and emphasizes change. But it is interesting to hear the surrogates of Senator Obama reaching back to the class warfare discussions that took place in the last century.

This is not change you can believe in.

Middle- and low-income investors should be appalled--appalled because their Government believes their pursuit of the American dream is all leisure and that the Government wants to increase their taxes, yes, on Americans who make less than $250,000.

So following the question of Mr. Blitzer, I wish to ask my friends on the other side of the aisle--or whoever wants to speak for them-- whether Americans making less than $250,000 will see a tax increase under a new Democratic administration. Because if you take their words for what they are now, you are going to see a lot of big tax increases for people making less than $250,000 a year.

I wish to know whether they agree with Senator Obama and the Democratic leadership and believe that investment income is leisure.

My Democratic friends may respond that the junior Senator from Illinois wants to give middle-income folks a tax cut. But this middle- class tax cut is fiction for those middle-income taxpayers who save and who have investment. I challenge my media friends to tell Americans what is going on here.

Mr. President, I ask unanimous consent that the excerpt from the transcript of ``CNN Late Edition'' of June 15, 2008, be printed in the Record.

Mr. President, I yield the floor.

Mr. President, here we are again. Once again the Senate is being asked to vote to proceed to a bill that is written on a partisan basis. As everybody knows who knows how the Senate functions, anything that is on a partisan basis does not get done.

Once again we are being asked if we want to agree to a process where no

amendments will be allowed. Once again we are being told to take it or leave it. The damage that is being done to the ability of this body to function is extraordinary. It should not be this way and it doesn't have to be this way.

I say this from a lot of experience I have had on the Finance Committee and, most importantly, my experience working with Senator Baucus, the chairman of the committee. During the last several years, the Finance Committee has produced numerous bipartisan health care products.

In 2003, Senator Baucus and I joined together, defied the long odds against it and produced a Medicare Prescription Drug bill.

In 2005, we worked together on a relief package in the aftermath of Hurricane Katrina.

In 2006, we passed the Tax Relief and Health Care Act.

In 2007, we worked together on a bipartisan Children's Health Insurance Program Reauthorization Bill. We also passed the Medicare, Medicaid, and Children's Health Insurance Program Extension Act of 2007.

I could go on and on. For years the Finance Committee has been the model of how a committee can work on a cooperative--and that basically means on a bipartisan--basis. I think we work best when we work together. For some reason that has not seemed to be the case this year and that is not Senator Baucus's fault.

I have tried to work this year to get a bill that could get signed into law. I personally think the White House is drawing lines in the sand that are unreasonable. However, there is a fact of our Constitution: The President holds the veto pen and if this bill passes today, we will see it used, and that is regardless of this Senator's position that maybe the White House has been too strict.

I tried to work toward a bill that can be signed by the President, because those are the facts of life. Obviously that was not the path the majority of the Senate--meaning the majority party--could follow. Even after the first cloture vote, even after it failed in the Senate, I tried to get a bipartisan compromise that could be signed into law. That effort was abandoned when the House voted to support the bill on which the Senate couldn't get cloture. That is not a realistic position for the other body to take but it doesn't matter; they took it, so we are here.

When we were in charge around here, I can say we certainly didn't appreciate it when, under Republican control in the House of Representatives, the Ways and Means Committee tried to dictate terms to this body. When Ways and Means Chairman Thomas tried to roll the Senate, I think I successfully defended the bipartisan Senate position. When I was chairman of the Finance Committee, I don't recall our bipartisan efforts being determined by House votes. To the contrary, I think we worked together in spite of House votes. In fact, the House budget--or the congressional budget adopted in the year 2003 that had provisions in it for taxes when the President of the United States wanted a $700 billion tax cut--I told enough Republicans in the Senate that I would not bring out of conference a tax bill that had more than half that amount, $350 billion.

I didn't tell the House of Representatives that before they voted on their budget, but they passed a budget that we could get enough votes to pass in the Senate because of the promise I made to some Republicans that we were not going to be dictated to by the White House or by the House of Representatives. And we didn't do more than a $350 billion package. Was there an uproar among House Republicans against me, when I had told enough Republicans in the House what we would do on that tax bill. So I think I have defended our position.

But let's be clear about another thing. That House vote I referred to went the way it did because Members were assured that the Senate was going to fix the problem in this bill. But we are in a process where we cannot fix that problem. They are counting on us to fix it so we would have a bill the President would sign. They are right about one thing: This bill does need to be improved. The bill the Democrats are trying to pass is woefully lacking in what it provides for rural America as opposed to what Senator Baucus and I were agreeing to by 11 o'clock Tuesday of this week.

I wish to call out one specific provision. Senator Harkin and I have worked extensively on a provision for so-called ``tweener'' hospitals. These are hospitals which are too large to be critical access hospitals but too small to do well under the current Medicare payment systems. We had a provision to improve payments to these hospitals. It is not in the House Democrats bill, so a vote for cloture misses an opportunity to provide critical assistance to rural hospitals all over the country. I am sure Senator Harkin and others are disappointed, as I am, with this omission. This is not something just for Iowa and for Senator Harkin and for Senator Grassley; this is something that affects 181 hospitals in 31 different States in this country. But that was left out in the House of Representatives. Why? Because the House of Representatives is controlled by the big States, by the big cities, and they don't care about rural America.

Voting for this bill accomplishes nothing. It will not become law. How much more clear can we be about that? To keep the pay cut of doctors from happening, we have to defeat this motion so we can sit down and finally produce a bill that can become law.

To improve Medicare, we have to produce a bill that can become law, and that means being signed by the President of the United States. To make sure that beneficiaries continue to have access to essential therapy services, we have to produce a bill that can become law. To help beneficiaries, we have to produce a bill that can become law. How many times do I have to say that?

To preserve access for durable medical equipment for seniors, we have to produce a bill that can become law. We have to be allowed to do our work in the Senate. And that work only gets done if we have bipartisanship.

We have to be allowed to produce the best bill possible through bipartisan compromise. Let's show that we can work on a cooperative basis. We have to defeat this motion so that we preserve the right of the Senate to have input on legislation, that we are not simply a rubberstamp for the House.

We should defeat this motion so that we can show that bipartisanship is not dead on important health care issues that matter to millions of people who depend on us as stewards of Medicare. Let's do the right thing and vote no. Vote no so this body does not abdicate its duties under the Constitution. Vote no so that we can get a bill done this week that can become law. Vote no so that we can get the job done.

A ``yes'' vote accomplishes nothing because it is going to delay for 2 weeks everything to be considered because of the President vetoing this bill.

I yield the floor.

Mr. President, 20 years ago this summer, the Connie Belin & Jacqueline N. Blank International Center for Gifted Education and Talent Development was established at the University of Iowa. Originally created by the Iowa Board of Regents as the Belin National Center for Gifted Education, the center was made possible by a million- dollar endowment that established the Myron and Jacqueline Blank Chair in Gifted Education, which is held to this day by Professor Nicholas Colangelo. In 1995, the center was renamed the Connie Belin & Jacqueline N. Blank International Center for Gifted Education and Talent Development, honoring a longtime leader in gifted education and a Des Moines philanthropist. In 2008, the Belin-Blank Center celebrates two decades of service to the international gifted education community.

The Belin-Blank Center has earned a strong national and international reputation for its work on behalf of gifted and talented children, which my colleagues know is a subject of great interest to me. Since its inception, the center has pioneered unique and innovative opportunities for students, including academic talent searches designed to discover gifted students; weekend and summer programs on everything from algebra, art, and 3D design to chemistry, creative writing and LEGO robotics; and the National Academy of Arts, Sciences, and Engineering, which provides early admission to the university.

Professional development for educators has been the foundation upon which the work of the center has been built. Examples of the center's work in this area include producing internationally acclaimed research symposia and developing specially designed coursework for Iowa's teachers to earn a State of Iowa endorsement in gifted education. As a result of the Belin-Blank Center's efforts, more educators today understand that supporting high-achieving students is an important aspect of successful teaching.

The Belin-Blank Center has successfully competed for private, Federal, and State grants. I am proud to say that this includes two Federal Jacob K. Javits Gifted and Talented Education Grants. This program, which I have championed, is designed to improve our ability to meet the unique learning needs of gifted students nationwide. The limited funding is quite competitive and it is a testament to the quality of the Belin-Blank Center's work that it has secured two such grants. The first grant, for the years 2003 to 2006, focused on the discovery and development of giftedness in students who attend alternative high schools and the second, for the years 2005 to 2008, focused on twice-exceptional students, which are students who are gifted and also have a disability. These projects have contributed substantially to our ability to serve these populations of students, who are often overlooked for gifted education programming.

In 2004, the director and associate director of the Belin-Blank Center, Nicholas Colangelo and Susan Assouline, along with Miraca U.M. Gross, a colleague from Australia, published ``A Nation Deceived: How Schools Hold Back America's Brightest Students.'' The landmark report helped move the subject of gifted education and accelerated programs for high-achieving students into the educational mainstream, drawing notice from Time, the New York Times, the Washington Post, and hundreds of other media venues.

An important milestone for the center also occurred in 2004 when the Belin-Blank Center and the University of Iowa's Honors Program moved into a new building, the Myron and Jacqueline N. Blank Honors Center, which is located in the heart of the University of Iowa campus. In bringing the two programs together, the University of Iowa became one of the Nation's first schools to offer kindergarten-through-college support for gifted students under one roof.

As an Iowan and an advocate for gifted and talented education, I am very proud to have such a highly esteemed center in Iowa. For its tremendous contribution to the field of gifted education internationally and for its positive impact on the lives of countless gifted and talented students, the Belin-Blank Center is truly deserving of recognition on the occasion of its 20th anniversary.

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

Mr. President, I ask unanimous consent to speak as in morning business.

I am here today to discuss a very serious matter that goes right to the heart of one of Congress's most important responsibilities, the responsibility of constitutional oversight to see that the laws are faithfully executed by the executive branch of Government.

American taxpayers expect Congress to exercise oversight in order to ensure that their hard-earned dollars are not wasted. To conduct more effective oversight, Congress adopted the Inspector General Act in 1978, creating a system of inspectors general. I will probably refer to them as everyone else does, as IGs.

We did this throughout many departments of Government. The IGs are supposed to be watchdogs or, as I like to say, a junkyard dog. They are our first line of defense against fraud, waste, and abuse. When it happens, the IGs are supposed to report it to the agency head and to Congress and to recommend appropriate corrective action.

IGs are the top cops inside of each agency in the executive branch of Government. They police the Federal workforce. If rules are broken, then they have to investigate allegations of misconduct and refer their findings to proper authorities.

To be credible, IGs must be beyond reproach. Above all, they must live by the rules they themselves enforce. They must set an example of excellence in their personal conduct and they must always do so; otherwise, they lack credibility. So I tend to, as a Member of the Senate, watch the watchdogs. Over the years in doing oversight work, I have found inspectors general who do not seem to meet these standards. I am disappointed to have to report to the Senate today about a new IG trouble spot.

There are allegations of misconduct in the upper echelons of the Treasury's IG office. A tip from a whistleblower earlier this year first alerted me to this problem. On February 12, 2008, I wrote a letter to Acting Treasury IG Schindel asking for a copy of the investigative report and all pertinent material bearing on the matter that was reported to me.

I also asked Mr. Schindel to tell me how and when he intended to address and resolve the issues raised in that report. Mr. Schindel responded promptly, providing a redacted copy of the report on February 15. On February 29, he assured me that senior level officials involved had been placed on paid administrative leave. They would remain on that status, he told me, ``until all investigative matters have been adjudicated,'' and ``one of them'' was reassigned to what appeared to be a questionable post.

The report of investigation on this matter was prepared by the Department of Labor IG. It is dated January 14, 2008. Since the Treasury IG lacks an internal affairs unit, IG Schindel referred the case to the Department of Labor IG for investigation. This was to ensure maximum independence.

Acting IG Schindel made the referral on June 18, 2007. He was briefed on the findings in the final report on September 26 of last year. The Department of Labor report of investigations substantiated wrongdoing on the part of senior Treasury IG officials. The allegations are very serious. My staff has carefully reviewed all of the materials provided by IG Schindel and interviewed a number of witnesses with knowledge on the issue.

Based on the oversight investigation conducted by my staff, I wrote to Treasury Secretary Paulson on February 28 this year. In that letter, I expressed grave concern to Secretary Paulson about the way the Acting IG Schindel appeared to be responding to the allegations that were substantiated by the more independent review by the Labor Department IG, as was reported in his writings.

This is what I said to my friend, Secretary Paulson:

Mr. Schindel stated that the report showed no corruption, criminal activity, or serious wrongdoing on the part of the senior officials. I am stunned that anyone with management responsibilities could make this statement after reading the Labor IG report.

The Labor IG presented a compelling case of high-level IG misconduct backed up with rock solid evidence. Mr. Schindel seemed unable to see what the Labor inspector general sees. Is he turning a blind eye to an obvious problem?

Secretary Paulson responded to my letter on March 10. He informed me that he has been briefed on the Labor IG's report and ``communicated to Acting IG Schindel'' his ``views'' on the matter.

The Labor IG report seems to leave little or no wiggle room. Based on a continuous stream of information being provided to my staff, there is growing concern about Acting IG Schindel's commitment to solving these problems. I think of these as obvious problems.

Acting IG Schindel has known about the findings in this report for 9 months until now. To bring the issue into sharper focus, take a moment to review the Labor IG's findings. This is what the Labor IG report found:

Our investigation corroborated the allegation that senior

IG officials violated the Public Transit Subsidy program.

This program provides money in the form of fare cards to Government employees to help cover the high cost of using public transportation to get to work.

There is an added benefit to the public transit subsidy program. The value of fare cards received in this program is not taxable. Subjects of the Labor IG investigation signed applications to participate in the public transit subsidy. In signing that document, they certified that they would abide by the terms of the program. The public transit subsidy program application forms, which these individuals sign, state:

Making a false, fictitious or fraudulent certification may

render the maker subject to criminal investigation under

title 18, United States Code, section 1001.

They allegedly took transit subsidies while accepting free rides to work from fellow agents, sometimes in Government vehicles.

The findings of the Labor IG's report are of particular concern to me for another reason, and this seems to be the most troubling part for me. The senior Treasury IG officials involved in fare card abuse were responsible for investigating and referring for criminal prosecution a number of other Treasury Department employees who had allegedly violated this same program called the Transit Subsidy Program.

As I said up front, the IGs must live by the rules they are sworn to enforce. When they do not, then inspectors general lose credibility. The Labor report also finds that the officials involved ``inappropriately intervened in closing [another] investigation'' of alleged PTSP abuse. This one concerned an employee at another agency who also allegedly violated the transit subsidy program. According to the Labor IG's report, the senior Treasury IG officials ``escorted'' the agent in charge of this investigation to their office ``where they discussed closing the case.'' They apparently ``instructed him to cancel'' a key interview and ``told him the case would be closed.''

Since the investigation was essentially complete and there was credible evidence to support the allegations, this meeting gave the appearance of impropriety. The Labor IG's investigators interviewed the Treasury IG officials about this meeting. The Treasury IG officials reportedly cited high agent caseloads as an excuse for their attempt to close it down. They also claimed the police at that agency ``were capable of working the investigation'' and that ``there was no fraud or loss.''

The Labor investigators make one point crystal clear: The claims put forward by Treasury IG officials did not stand up to scrutiny. The Labor IG's investigators determined that the Treasury IG's office had worked similar cases involving this agency's employees in the past. They found that special agents in the Treasury IG's office had a typical caseload of 15 to 16 cases and not the usual 30 caseload claimed by one of the subjects of this investigation.

I understand the employee involved in these allegations of public transit subsidy program violations was given a

proposed notice of removal on June 18, 2008. This agency is trying hard to crack down on such violations. This should be a wake-up call for Mr. Schindel. The abuse of the public transit subsidy program alleged in the Labor IG's report constitutes, at best, misuse or abuse of public moneys and, at worst, outright theft.

There is one more very disturbing finding in the Labor IG's report I should highlight. The Labor report ``questions the judgment'' of the senior Treasury IG officials for their alleged involvement in the reinvestigation of another employee misconduct case. This particular investigation was originally conducted by the Treasury IG for Tax Administration or TIGTA. Once again, this investigation was referred to an outside agency to ensure greater independence.

According to the Labor report, the TIGTA investigation determined that the Treasury IG agent ``misused his position, his issued vehicle, and made false and misleading statements'' during the course of the investigation. For a Federal law enforcement officer, making false statements during an investigation, as alleged, could be a career- ending mistake. As chronicled in the Labor IG's report, the senior Treasury IG didn't like the TIGTA's findings and wanted them changed. The Labor IG's report is very clear in stating that the only reason for the reinvestigation was to change the findings of the original Treasury IG for Tax Administration investigation. The Labor IG report concluded:

The appearance is that the sole purpose of intervening in

the aftermath of [the Treasury Inspector General for Tax

Administration's] investigation was to mitigate [the]

findings, particularly by undermining [the inspector

general's] apparently well supported finding that . . . [the

agent involved] . . . had made false statements.

The report goes on to say:

The evidence suggests that TIGTA's findings were correct.

It is clear that the only purpose of the reinvestigation . .

. was to change the findings of the investigation so [the

agent involved] would not have a Giglio issue.

The person involved in this case was suspended for 10 days 2 years ago. The Labor IG also questioned the leniency of the agent's punishment, noting that misuse of a Government vehicle alone normally carries a 30-day suspension. The Treasury Inspector General for Tax Administration also alleges that the legal counsel to the Treasury IG may have been involved in an attempt to quash or alter TIGTA's final report of investigation. TIGTA provided a document which indicates that the Treasury IG's legal counsel ``disagreed with the results of the investigation.'' He ``expected a draft ROI'' and ``asked if the Final Report of Investigation could be changed.''

Fiddling with these kinds of reports ought to raise a lot of questions among people in authority about whether things are being done right.

He was informed by the agent in charge that TIGTA ``did not submit draft ROIs and would not make any changes to the final ROI.'' The legal counsel denies these allegations.

The Labor IG also found the legal counsel's ``advice to the DOT-OIG questionable regarding the investigation.'' The Labor IG reached this conclusion because the legal counsel had listened to the tape-recorded interview, during which the subject allegedly ``made a false statement under oath to the TIGTA agent.''

The three substantiated allegations I have laid out, which are presented clearly in the Labor IG's report, are each disturbing in their own right. But if you take them all together, they paint a truly awful picture of what is going on in that office. This report is the result of an independent investigation conducted by professional law enforcement officers. The results of this investigation demand serious, thorough, fair, and prompt action. I met with Acting Treasury IG Schindel on March 13 to review this matter. He assured me he would take decisive action to clean up this mess. More recently, I was told the Acting Treasury IG is wrestling with new allegations. Addressing the Department of Labor IG report must be a first priority to show us in Congress that he is carrying out his responsibilities. He needs to sink his teeth into that material and close it out once and for all. In a letter on May 30, I asked the acting inspector general again to proceed with his review of this matter ``as quickly as possible.'' I also insisted it be done by the book, ``consistent with all applicable rules and regulations.''

I call on Acting Treasury Inspector General Schindel to keep his word. That is all I ask, just keep his word, do what he told me he was going to do. I want him to stick to his repeated assurances--in his letters of February 15 and February 29, at our March 13 meeting, and again in a letter of June 2. I expect no more and no less.

Indecision is costing the taxpayers money. To date, these officials have collected 3 months' worth of paid administrative leave. They are senior executives earning top dollar. Their administrative leave has already cost the taxpayers about $90,000, and the number is climbing. Continuing mismanagement and indecision in the Treasury IG's office is wasting precious taxpayer dollars. Acting IG Schindel has a responsibility to show he runs a first-class inspector general's office, one that is beyond reproach. He cannot operate effectively as an IG until he gets his own house in order. His job is to deter, to detect, and report waste but not to do it himself.

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

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

Mr. President, I ask unanimous consent to speak for a few minutes as in morning business.

Mr. President, I want to address an issue of corporate responsibility, particularly as it relates to my hometown of New Hartford, IA, and the flood that recently took place there, and whether a large chain

of convenient stores that is headquartered across Wisconsin is going to take the corporate responsibility of continuing to serve a small town that has been devastated by a flood.

It has been a tough and challenging time for Iowans over the past few weeks. I have come to the floor on a few occasions already to update my colleagues on the natural disasters that have hit Iowa so hard.

Tornadoes and floods have caused economic and emotional toil and pain and have, sadly, taken 24 lives across the Midwest.

Just a mile from my farm is the town of New Hartford, where I have lived my entire 74 years. It is a modest town of about 650 people. On May 25, the north edge of the town suffered extensive damage from a tornado.

That same tornado destroyed half the town of Parkersburg, IA, just 10 miles west of my hometown of New Hartford, and continued damaging towns over a 43-mile range, including Dunkerton and Hazleton, as that tornado traveled east.

Then came the floods. The town and residents of New Hartford were devastated by the flood waters of what we call Beaver Creek. Much of the town's homes and businesses suffered damages from the floods.

But Iowans are resilient people. The residents and the entire community are pulling together to help their neighbors get back on their feet.

But one resident is abandoning the people of New Hartford. Kwik Star has announced that the only convenience gas store in town will not be rebuilt. The decision by Kwik Star to not reopen their store is a serious setback for the town of New Hartford.

These folks have endured a tornado and a damaging flood, but they are working to rebuild, pull themselves together, and somehow get their lives back to normal.

But the one gas station and convenience store will not be around to help with that rebuilding. They view the damage to their facility as too great, too daunting to overcome. This news has added another devastation to the residents of the community. We get the story: Well, we will not rebuild in New Hartford. We will put one double the size of that one in Parkersburg, so then all the people in New Hartford can drive 10 miles to get whatever they would get in their local community.

This is a large chain of convenience stores. I am begging for corporate responsibility, to continue to serve the community. And, particularly, don't ditch people when they are most in need.

Well, their decision doesn't sit well with the residents of New Hartford. As you can tell, it doesn't sit well with me.

As the residents are cleaning up their homes, parks, and businesses, Kwik Star has decided to abandon them. Kwik Star is hurting my neighbors and friends emotionally and economically.

If they don't see the value in rebuilding in New Hartford, why should the residents have any hope? These folks are doing everything they can to bring their properties back from this disaster, to rebuild our hometown, and Kwik Star is leaving them high and dry during this time of devastation.

It is not just the emotional pain of their decision that hurts the people of New Hartford, IA; it is also economic because Kwik Star employed 15 people before the flood. Three full-time employees--Deana Ackerson, Brenda Smith, and Barb Harper--have each worked for Kwik Star for many years.

Twelve other employees--Cindy Huberg, John Mulder, John Anderson, Matt Winkelman, Rich Moore, Teresa Peverill, Carol Grooms, Lauri and Roger Palmersheim, Mitch Konken, Pam Hargema, and Heather Hugelucht-- depended on Kwik Star for employment as well.

The bottom line is that the residents of New Hartford are clinging to their hope that the town will come back even stronger than before these disasters. They are using that hope to get through this.

But Kwik Star is dashing that hope. Kwik Star is telling them that their town no longer deserves a gas station and convenience store. One flood is all that this big corporation can seem to handle. If you want gas, milk, or bread, you will have to drive 10 miles to get it in a new, refurbished store that is twice as large.

I can tell them that in another town, just 15 miles away, they had a flood, and they had two stores in that town. One of the two stores in Waverly was flooded, but they are going to rebuild that store. I don't understand this. I am working for tax changes, which is the very same thing we did for Katrina in New Orleans, and with the help of Senator Baucus and Congressman Rangel, chairman of the House Ways and Means Committee, we are working to enact tax relief for victims of natural disasters similar to what was done to the victims of the hurricane. I hope this will encourage Kwik Star to stay in New Hartford.

This includes expensing for demolition and cleanup of debris. Another major provision would allow additional depreciation to greatly reduce or eliminate the business tax liability for the current year, including an operating loss carryback, as an example, for 5 years, which ought to be plenty of incentive for these businesses to continue in the communities where they work.

In the case of the floods, we are talking about 250 different communities in eastern Iowa, just as an example; and, in addition, Wisconsin, Illinois, and Indiana--and now it looks as though it is going to cover Missouri as well.

I am pushing these provisions to help businesses such as Kwik Star cope with the cost of damage and rebuilding.

Mr. President, I am here to appeal to this major convenience store and corporation serving the Midwest, the Kwik Star Corporation, and tell them that New Hartford is worthy of a convenience store. Our residents deserve Kwik Star's commitment to the community. They need to know that a company they have depended on and they have done business with for over 20 years will reverse this decision and join them in bringing New Hartford back from disaster.

Iowa Flooding

Mr. President, I want to take a moment to provide another update on the flooding in Iowa. As you are aware, Iowa is in the middle of a crisis. Across the State, floods have devastated homes, businesses, farms, and communities, and that continues.

I have been traveling back and forth to Iowa to see the catastrophic damage, and I have been anguished to see my fellow Iowans suffering. People are hurting, and it will take a long time and a lot of hard work just to get back to normal.

However, in the midst of this devastation, I have also witnessed incredible examples of the spirit of Iowa. I have seen Iowans come together in communities across the State sandbagging, consoling, sharing, and providing a helping hand to neighbors and strangers alike. This spirit of dedication, a natural inclination to put others before self, is what makes me most proud to call myself an Iowan.

I cannot talk about the spirit of Iowa without talking about the dedication and efforts of our police, fire, emergency medical services, National Guard forces, and the Civil Air Patrol. These first responders are the frontline of defense for all Iowans. These selfless individuals come to the aid of all Iowans, putting duty first to help others defend their homes, livelihoods, and lives. They do this without thinking twice and put others' lives before their own. They have worked tirelessly to build levees, to sandbag, to secure dangerous areas, and to make water rescues. They have suffered loss, just as all Iowans have; but they never waiver and they always continue to come to the aid of others.

For instance, police and fire stations across the flood zone have been damaged or destroyed. News reports have documented how the fire station in Columbus Junction, IA, was under 10 feet of water. Other reports point to devastation of police, fire, and EMS facilities across the State, including the second largest city in our State, Cedar Rapids. Despite this, first responders still continue to provide security and to help communities in distress. Their efforts are nothing short of heroic.

It is not just local police, fire, EMS personnel who are helping out. Law enforcement officers with the Iowa State Patrol and from other agencies across the State have come to the flood zone to lend a helping hand.

Some have come from out of State. For instance, Coast Guard rescue teams based out of St. Louis came to

provide search and rescue. State troopers and police officers from Nebraska and Minnesota have helped the Cedar Rapids Police Department keep the city secure as the floodwaters recede and cleanup begins.

I appreciate the sacrifice and dedication these folks have made to help Iowa in its time of need.

But it does not stop there. The Iowa National Guard has deployed over 4,000 of their members across the State, providing vital manpower to assist local communities. They have used their skills and training to help meet numerous local needs. They have helped with sandbagging, shoring up levees, saving homes and businesses, and they have secured bridges and patrolled levees. They have been assisting local law enforcement with security. They have distributed clean drinking water to communities that have no running water and provided generators to those without power.

The National Guard has also provided air support via helicopters to support the assessment of damage and transportation of vital equipment. The list of needs met by our Iowa Guardsmen goes on and on, and their dedication knows no bounds.

In fact, one Iowa Guardsman, National Guard SPC Curtis L. White, had to change his wedding plans when he was deployed in support of the flood effort. He married his wife Daniele on Thursday, June 19, on the viaduct on the corner of Highway 92 and 2nd Street in Columbus Junction where he had been assisting with the flood operations. I thank him, his new wife, and his fellow Iowa National Guard soldiers and airmen for their sacrifices and compassion for their fellow Iowans.

I also thank those in the Iowa wing of the Civil Air Patrol who flew Senator Harkin and this Senator around the State to view the impacted areas. The Civil Air Patrol also flew photo missions to examine the extent of flooding. I commend the Civil Air Patrol for their dedication.

Finally, I thank the men and women across the State who are serving in hospitals, emergency rooms, long-term care facilities, community health centers, home health agencies, and hospices. Many of these people lost their homes to flooding, and yet they still showed up at work to do the right thing. They are to be commended for those efforts.

I know these folks were on the frontline working to evacuate patients from places such as Mercy Medical Center in Cedar Rapids as floodwaters rose. When this happened, facilities such as Saint Luke's Hospital in the same city and others nearby jumped up without hesitation to take in these displaced hospital patients.

We cannot forget the hard work and dedication of our health care professionals during this crisis, and as they are on the road to recovery. With people such as these, I have no doubt that facilities such as Mercy Medical Center will be fully operational in no time.

As the floodwaters start to recede and Iowa moves toward rebuilding, the responsibility of public safety will still be on the shoulders of our first responders. These capable men and women who serve in law enforcement, fire departments, EMS, the National Guard, and in hospitals across the State need all the resources we can provide them in this time of need. We have a responsibility to make sure they are equipped for the job and any future natural disasters we have.

That is why I led the Iowa congressional delegation in writing to Federal agencies, such as the Department of Homeland Security and the Department of Justice, asking that deadlines for law enforcement and first responder grant programs be extended for communities impacted by the flooding.

Communities in Iowa should not be penalized from receiving grants because they have not had the time to hurry up and beat a deadline that does not take into consideration such natural disasters. These communities should be given special consideration for applying for grant moneys because of the extensive damage.

Programs such as the Assistance to Firefighters and the Staffing for Adequate Fire and Emergency Response Firefighters can provide vital assistance to fire departments that were impacted by the flooding. These departments may need new equipment, radios, computers, and repairs to their fire stations. These grants can provide that assistance.

Further, programs such as the Edward Byrne Memorial Justice Assistance Program, called Byrne/JAG, as we all know it around here, and the Community Oriented Policing Services, and we refer to that as the COPS Program, can also provide these same types of resources to police departments in need.

Iowans will soon be facing a long process toward rebuilding. It will not be easy. However, I am proud to say that I know Iowans will be helping others to rebuild in the Iowa spirit of hard work and generosity. We in Congress are doing all we can on our end to ensure that first responders in the field have the resources they need.

So I applaud, maybe now a third or fourth time but you cannot do it too many times, these brave men and women who serve their communities and carry on the spirit of Iowa.

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

Mr. President, I am pleased to be an original cosponsor of this Senate resolution to pay tribute to the four boy scouts who lost their lives almost 2 weeks ago when a tornado struck Little Sioux Scout Ranch in western Iowa: Aaron Eilerts of Eagle Grove, Iowa and Sam Thomsen, Josh Fennen, and Ben Petrizilka of Omaha, Nebraska. I would like also to recognize the bravery and dedication of all the other scouts affected by this tragedy and of the emergency crews who responded.

All of these remarkable young people had already established themselves as leaders in their community. The loss of four of them is a tragedy for Iowa and Nebraska.

I would like in particular to express my condolences to the four families who have suffered such a devastating loss. My thoughts and prayers are with them at this difficult time.

The Boy Scouts of America is an organization that never fails to exceed expectations. All the Scouts at Little Sioux Ranch that day kept their courage when all about them was chaos. Many of those who survived suffered considerable injuries. As the storm passed, the Boy Scouts immediately began to administer first aid to the injured and set to work to clear the roads, allowing the emergency crews to move in. In their bravery and resourcefulness, they did honor to Boy Scouts throughout the country. We are proud of them and humbled by their service.

I am saddened that we must be here today at all offering this resolution, but I am honored to pay tribute to these young leaders, and I extend my deepest sympathy to all those affected by this tragedy.

Madam President, I started looking at the financial relationships between physicians and drug companies several years ago. I first began this inquiry by examining payments to individuals who served on FDA's Advisory Boards. More recently, I began looking at payments from drug companies to professors at our nation's medical schools and more specifically at the payments from Astra Zeneca to a professor of psychiatry at the University of Cincinnati.

I then moved on to look at several psychiatrists at Harvard and Mass General Hospital. These physicians are some of the top psychiatrists in the country, and their research is some of the most important in the field. They have also taken millions of dollars from the drug companies and failed to report those payments accurately to Harvard and Mass General.

For instance, in 2000 the National Institutes of Health awarded one Harvard physician a grant to study atomoxetine in children. At that time, this physician disclosed that he received less than $10,000 in payments from Eli Lilly which makes Straterra, a brand name of atomoxetine. But Eli Lilly reported that it paid this same physician more than $14,000 for advisory services that year--a difference of at least $4,000.

I would now like to report what I have found out about another researcher--Dr. Alan Schatzberg at Stanford. In the late nineties, Dr. Schatzberg helped to start a company called Corcept Therapeutics--Dr. Schatzberg is a copatent owner on a drug developed by Corcept. That company applied to the Food and Drug Administration for approval to market Mifepristone for psychotic depression.

Dr. Schatzberg is a well-known psychiatrist and has received several grants from the National Institutes of Health to study Mifepristone. While Dr. Schatzberg has reported some of his income from Corcept Therapeutics to Stanford, he did not report a profit of $109,179 from the sale of 15,597 shares of Corcept stock on August 15, 2005 because he was not required to do that under Stanford's rules.

But if it is not required by Stanford, I submit to you that it should be. Why? Because in his Stanford disclosures, Dr. Schatzberg only had to report whether he had more than $100,000 of stock in Corcept Therapeutics. However, his filings with the U.S. Securities and Exchange Commission show that he has control of 2,738,749 shares of Corcept stock worth over $6 million.

In addition, in 2002 Dr. Schatzberg did not report any income from Johnson & Johnson, but the company reported to me that it paid Dr. Schatzberg $22,000 that year. And in 2004, Dr. Schatzberg reported receiving between $10,000-$50,000 from Eli Lilly. But Eli Lilly reported to me that they paid Dr. Schaztberg over $52,000 that year.

Before closing, I would like to say that Stanford has been very cooperative in this investigation, as have been many of the drug companies. I ask unanimous consent to have my letter to Stanford printed in the Record.