American Recovery And Reinvestment Act Of 2009

Floor Speech

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Mr. GRASSLEY. Madam President, our Nation's fiscal outlook is very grim. The Congressional Budget Office projects the Federal budget deficit will exceed $1 trillion. Despite this enormous deficit, President Obama is urging Congress to enact a massive stimulus plan that would add another $1 trillion in Government debt over the next 10 years. The President and his advisers insist that we must spend this money as quickly as possible in order to save our economy.

In the grassroots of my State, I don't think people argue with things that are in this bill that are truly stimulus, but I am getting outrage from my constituents about the large part of this bill that is strictly big-time spending.

In normal times, such fiscal excess, stimulus or otherwise, would be widely criticized and promptly rejected. But we all know these are not normal times. Our economy faces the worst recession since the Great Depression. Such comparisons may be overblown but everybody is understandably concerned about the present state of our economy. Congress needs to take action--and we are doing that--to address declining growth and rising unemployment. But we must not let our desire for a quick fix undermine our ability to address the real challenges we face.

A sustainable fiscal policy depends on a growing economy. A sound economy depends on a sound fiscal policy. Unfortunately, there doesn't seem to be any consensus on what constitutes sound policy. But I think we can all agree that Government doesn't create wealth; Government only expends wealth. So we have to be about the business of having an environment that creates wealth.

There are two opposing views on how to help the economy. Some people say consumption is the key to economic growth. When people go shopping, the economy is good, so we need to spend more, they say. Other people say investment is the key. When businesses invest, the economy is good, so they say we need to save more.

Some economists try to reconcile these opposing views by suggesting the correct route depends upon the circumstances. When workers are fully employed and factories are fully utilized, they say we need to save more and increase supply. But when workers are unemployed and factories are idled, they say we need to spend more and increase demand. While this explanation is appealing, it doesn't withstand careful scrutiny.

We are told that in order to stimulate the economy, all the Government has to do is put more money into the hands of consumers and they will spend it back into prosperity. The problem with this approach is that the only way the Government can put money into somebody else's hands is by taking it from somebody else's pockets--either in the form of taxes or borrowing. Now, this is a zero-sum game in which one person's loss is another's gain. Some economists try to obscure this fact by introducing a concept known as the marginal propensity to consume. In my judgment, that is just a fancy way of saying some people spend more of their money than others.

According to this concept, low-income people are more likely to spend an extra dollar than higher income people; thus, taking from the rich and giving it to the poor will stimulate consumer demand and boost the overall economy. It is the Government kind of playing the role of Robin Hood.

This concept is flawed because it ignores the very important role of people saving. Money that is saved does not disappear; it flows back into the economy in the form of business loans or consumer credit. Saving is just another form of spending--specifically spending on capital goods, such as factories and equipment, or consumer goods such as cars and houses.

Of course, the critics say this is not always true. During a recession, banks are less willing to lend and businesses are less willing to borrow. Thus, some of the money previously available in the economy is no longer being used, like right now with the credit crunch. It has been stuffed, in some cases, under the proverbial mattress, whether that is in anybody's home or in a bank vault. Thus, advocates of fiscal stimulus claim the Government can borrow and spend during a recession without crowding out other private sector spending. This is true only in a very narrow sense that increasing money supply allows the Government to borrow and spend without reducing the amount of money available to the rest of our population. That is monetary policy masquerading as fiscal policy. Moreover, when the Government borrows money, whether it is new money or old money, what the Government is really borrowing is the resources it acquires; thus, every dollar the Government spends has an ``opportunity cost'' in terms of the potential uses of those resources.

Much of the confusion over this point comes from the failure to recognize the nature of money in our economy. Economists often talk about the multiplier effect in order to explain how each dollar of Government spending can result in more than a dollar of economic activity. But the multiplier effect is simply a way of illustrating the fact that if I give you a dollar, you will spend part of it and save part of it. The portion you spend goes to someone, who spends a portion and saves a portion, and so on and so on; thus, $1 effectively multiplies into many dollars.

Contrary to what some people might have you believe, the multiplier effect applies to every dollar, not just the dollar spent by the Government. According to Federal Reserve data over the past 50 years, the ratio between gross domestic product and our money supply--defined as currency plus bank reserves--has ranged from a ratio of 10 to 1, to 20 to 1. In other words, every dollar in our economy supports between $10 and $20 of economic activity.

During a recession, there are fewer workers producing fewer goods and services. That is why this is called a recession. Because the level of output is lower, the level of spending is lower as well. That means the available dollars are being used less. Economists often refer to this as a decline in the velocity of money. The money no longer being used reflects the goods and services no longer being produced. With fewer goods and services available to buy, Government efforts to borrow and spend will increase the money supply. Instead of the Federal Reserve increasing bank reserves to boost private lending, the Government will increase borrowing to boost private spending. But this is really monetary policy disguised as fiscal policy.

The success or failure of this policy will depend upon how the additional money is used. Unfortunately, when some advocates of Government stimulus talk about priming the pump, they give the impression that we can grow our economy by simply spending money and it doesn't matter in any way how you spend that money.

Consider the following comments by the great economist John Maynard Keynes, whom I don't agree with very much. He said this:

If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines ..... and leave it to private enterprise ..... to dig the notes up again ..... there need be no more unemployment. .....

People are probably laughing at that. Nearly everyone would recognize the ill effects of printing up $1 trillion and dropping it from helicopters. But what if the Government hired 10 million Americans to dig holes and fill those holes back up and paid them each $100,000? Would this prime the pump and get our economy moving again? The answer should be obvious: It would be a complete waste of resources.

The 19th century economist Fredrick Bastiat once observed:

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

When the Government borrows money for some activity, that is what is seen. But what is not seen is what could have been created had those workers and resources been used in some different way. The benefit of a Government stimulus plan must then be weighted against cost. So far, there has been no comprehensive cost-benefit analysis of this proposed stimulus bill.

I may have talked about a lot of economic philosophy, but it is pertinent to what we are doing on the Senate floor this week, the stimulus bill. There is a glaring omission given in recent comments that have been made by President Obama. So I want my colleagues to take into consideration what my President says.

Shortly before his inauguration, President Obama gave a series of speeches and interviews. I will read a couple sentences from them. According to the January 16 Washington Post:

Obama repeated his assurance that there is ``near unanimity'' among economists that government spending will help restore jobs in the short term, adding that some estimates of necessary stimulus now reach $1.3 trillion.

The President-elect said he believes that direct Government spending provides the most ``bang for the buck'' and that his advisers have worked to design tax cuts that would be most likely to spur consumer spending.

They quote President Obama:

``The theory behind it is I set the tone,'' Obama said. ``If the tone I set is that we bring as much intellectual firepower to a problem, that people act respectfully toward each other, that disagreements are fully aired, and that we make decisions based on facts and evidence as opposed to ideology, that people will adapt to that culture and we'll be able to move together effectively as a team.''

Going on to quote President Obama:

I have a pretty good track record at doing that.

I was quoting from the Washington Post, but also quoting within that article what the President said.

Now I want to go to a January 10 radio address by then-President-elect Obama, now our President:

Our first job is to put people back to work and get our economy working again. This is an extraordinary challenge, which is why I've taken the extraordinary step of working--even before I take office--with my economic team and leaders of both parties on an American recovery and reinvestment plan that will call for major investments to revive our economy, create jobs, and lay a solid foundation for future growth.

I asked my nominee for chair of the Council of Economic Advisers, Dr. Christina Romer, and the Vice President-elect's chief economic adviser, Jared Bernstein, to conduct a rigorous analysis of this plan and come up with projections of how many jobs it will create--and what kind of jobs they will be. .....

The report confirms that our plan will likely save or create 3 to 4 million jobs. .....

The jobs we create will be in businesses large and small across a wide range of industries. And they'll be the kind of jobs that don't just put people to work in the short term, but position our economy to lead the world in the long term.

That is a quote from the January 10 radio address by then-President-elect but now our President.

These comments from President Obama are noteworthy for several reasons. First, he is our President, and we ought to respect his views, not always agreeing with them but consider them. First, he suggests a level, in these quotes I just gave, of unanimity among economists, and that unanimity does not exist. Second, he suggests his administration will make decisions based on the facts instead of ideology. Third, he suggests his plan will create jobs that are more than just temporary.

In that regard, I note that the Congressional Budget Office released an analysis of the House stimulus bill. According to the Congressional Budget Office, the House stimulus bill will create between 3 million and 8 million new jobs over the next 3 years, depending on whether the multiplier assumption is low--that will be 3 million--or high--that will be 8 million.

Given the cost of the House bill, these figures imply a very surprising and a very troubling result. The CBO estimate shows it will cost between $90,000 and $250,000 per job created. These numbers should be contrasted to those under the CBO baseline which show the gross domestic product per worker is about $100,000.

In other words, the jobs being created by the House bill could cost as much as 2 1/2 times more than the jobs that would be created without the stimulus bill. There has been a lot of talk about ``bang for the buck,'' particularly during this debate. But there doesn't seem to be any interest in actually making sure it happens. In other words, that it actually happens, we get bang for the buck. Before we spend another $1 trillion, we ought to make sure we are getting our money's worth.

It should also be noted that the Congressional Budget Office's analysis only covers the years 2009 through 2011, but if you assume the ratio of employment to Government spending remains the same throughout the 10-year projection period that we always have in our bills, there will be only a few thousand new jobs. Moreover, if you adopt the standard assumption that increasing the national debt by $1 trillion will crowd out private sector investment, the net result will be fewer jobs because of this stimulus bill.

I have written a letter to the Congressional Budget Office Director requesting an analysis of both the House and Senate stimulus bills. This analysis will cover the full 10-year period, consistent with the January baseline.

The Director has indicated to me that this is a very complicated process, and their analysis may not be completed until next week. I strongly encourage my colleagues to have the CBO analysis before we have a final vote on this bill. The Senate must have the opportunity to carefully review the Congressional Budget Office analysis.

Let me repeat what I said at the beginning. Congress needs to take action to address declining growth and rising unemployment. At the grassroots of America, there may not be consensus on that, but there is an overwhelming feeling that Congress can do things that will help the economy. But for sure, before we spend another $1 trillion, Congress must take time to look before we leap.

I yield the floor.

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Mr. GRASSLEY. Mr. President, one specific area of this cobbled-together bill is spending. The bill provides significant increases in Medicaid spending. There is $87 billion in Medicaid funds in this bill. There is a fundamental change to Medicaid that is in the House bill waiting to be put into the Senate bill when it comes to conference.

There are numerous amendments to try to fix some of the problems with the Medicaid provisions of this bill, and I wish to discuss some of those at this point. I start with this $87 billion of FMAP money they have referred to. This is a huge payment to States. Now, some will say that $87 billion in Medicaid payments in this spending party bill is meant to help States pay for people already enrolled, but the facts tell a different story.

In January, the Urban Institute produced a report for the Kaiser Commission on Medicaid and uninsured titled ``Rising Unemployment, Medicaid and the Uninsured.'' The Urban Institute's research asserts that for every 1 percent increase in nationwide unemployment, Medicaid and Children's Health Insurance Programs will see an increase of 1 million additional beneficiaries nationwide.

I want to make clear that for the unemployed who qualify, we ought to provide enough money in Medicaid to take care of it, but we are raising questions about money beyond that. So we have this formula that is kind of a benchmark--this Urban Institute research. Using that formula and the unemployment baseline that is in the bill, I had the Congressional Budget Office prepare a cost estimate for an amendment giving States additional funding based on the Urban Institute's published research. This amendment would provide for an additional per capita Federal payment to States for every new enrollee--every new enrollee--that the Urban Institute research assumes will go on Medicaid or SCHIP during the 27 months contemplated in this bill.

Everyone watching probably knows that the Urban Institute is not exactly a conservative think tank, so their research should be credible to my friends on the other side of the aisle. Now, remember, the cost of the additional Medicaid funds for States in this bill is a whopping $87 billion. The cost of my amendment to take care of the unemployed going on SCHIP or on Medicaid--$10.8 billion. That is $10.8 billion for what the Urban Institute suggests are enrollment-driven increases in Medicaid spending due to the recession.

So the question is: Why does this bill provide almost eight times what the States actually need for new enrollments resulting from this economic downturn? The Senate is considering $87 billion in funding because States are facing deficits of as much as $312 billion in the aggregate over the next 2 years. So let us not kid ourselves. What this is all about is a bill giving States money to help them fill their deficits. This outlandish sum of money is not needed for Medicaid. It might be needed for something else--and we ought to discuss it in terms of the something else--but not for Medicaid.

So you may want to ask: What commitment is Congress getting from the States in exchange for $87 billion, of which only $10.8 billion might be used for the need for which is supposedly in this legislation? Congress is giving States $87 billion and hoping that States don't take actions contrary to Medicaid actually providing the care that people need. I use the word ``hope'' because the underlying bill doesn't do enough to make sure the States do what is best for Medicaid. Does the bill prevent States from cutting their Medicaid Programs? It does not. The bill only prevents States from cutting Medicaid income eligibility. But if Congress is giving States $87 billion and telling them not to cut Medicaid eligibility, I think it is very important we in Congress also tell the States that they can't cut benefits. But this bill doesn't do that.

If Congress is giving States $87 billion and telling them not to cut Medicaid eligibility, shouldn't Congress also tell States they can't cut payments to providers? So you have eligibility, you have providers, you have benefits--and we are only dealing with eligibility in this bill--and, yet, giving out $87 billion of which almost $11 billion is needed for the purpose of unemployed going on Medicaid.

States cannot change income eligibility, but under this bill as written they can cut provider payments to doctors, pharmacists, dentists, and benefits to providers.

Will there be Medicaid beneficiaries who are elderly or disabled, able to receive home- and community-based services? If we want to keep seniors and the disabled in their homes rather than in institutions, paying direct care workers to provide home- and community-based services is very critical to that goal.

Will there be enough pharmacists taking Medicaid? Will there be enough rural hospitals and public hospitals taking Medicaid?

I had one member of the Senate Finance Committee on my side of the aisle tell me in that State, their State legislature owes $400 million to hospitals. Shouldn't we be taking care of problems like that?

Will there be enough community health centers taking Medicaid? Will Medicaid beneficiaries who are elderly or disabled get into nursing homes if they need to do that?

Will States cut mental health services because Congress didn't prevent them from doing so in this bill, even at the same time giving them $87 billion, which is about $76 billion more than the demands of Medicaid because of unemployment?

Will there be pediatricians or children's hospitals there for children on Medicaid?

If the Senate does nothing to protect access to these vital providers, nobody will be able to assure the people who count on Medicaid that the care they need will be there for them. I have filed an amendment that prevents States from generally cutting eligibility and benefits and provider payment rates while they are receiving the $87 billion in additional aid. In other words, I go beyond just a requirement in the underlying bill that eligibility can't be changed. We go to benefits and we go to protecting providers.

If we want to protect Medicaid, then we ought to really protect Medicaid. I hope we will do that by adopting this amendment.

As written, the bill gives States $87 billion, also in the hopes that States do not take action that is contrary to economic growth. Here again, I use the word ``hope'' because the bill doesn't do enough to make sure States do what is best for the economy either. We should ask for more guarantees that States will spend the money appropriately and not make decisions that work against economic recovery. If Congress gives States $87 billion and tells them not to cut Medicaid, should Congress also tell States not to raise taxes because, if States react to their deficit by increasing taxes--even in view of getting this $87 billion--they will defeat the goal of economic recovery that we in Congress are trying to make happen through this legislation. For sure you do not increase taxes at a time of economic distress because it is going to make that distress worse. It makes no sense for us to leave the door wide open then for States to raise taxes while getting a $87 billion windfall from the Federal Government.

I have an amendment that prevents States from raising income, personal property, or sales taxes as a condition of the receipt of $87 billion in Federal assistance. If Congress gives States $87 billion and tells them not to cut Medicaid, should Congress also tell States not to raise tuition at State universities? There is a report out just today that I heard about on the news about how unaffordable college is becoming, particularly to middle-income Americans. People are not going to go to college even though a college degree is very essential for success in our society, and we are here giving $87 billion to States without any direction to the States whether or not they increase tuition once again, as they tend to do every year.

If States can price young people out of an education, that does nothing for preparing our workforce for the 21st century. So I also have an amendment that prevents States from raising tuition rates at State colleges and universities as a condition of the receipt of the $87 billion of Federal assistance.

For $87 billion--we are talking about $87 billion, just to give to the States--shouldn't Congress expect States to modernize their Medicaid Program? We have heard my friend and colleague, Dr. COBURN, having an amendment requiring States to improve chronic care in Medicaid and develop medical homes as a condition of the receipt of $87 billion in Federal assistance--because these things are some of the best advancements you can make in the practice of medicine that are going to improve the quality of life, but more important they save taxpayer dollars or even private dollars. For $87 billion, what does this bill do to ensure that all those Federal taxpayers' dollars are being spent appropriately? Almost nothing.

During the markup we were able to get funding for the Department of Health and Human Services Office of Inspector General increased by $3.25 million. For those of you doing the math back home, $3,250,000 is just under four one hundredths of 1 percent of the $87 billion Medicaid spending on the bill. Senator Cornyn and I have an amendment that requires States to do something to improve their waste, fraud, and abuse rates in exchange for the $87 billion in Federal taxpayers' money. That is what that money for the inspector general is all about. It provides a list of eight options to combat waste, fraud, and abuse, and the Secretary can provide more options at his or her discretion as well.

States are given time to plan and implement options. States can choose to make their payments transparent. States can choose to implement recovery audit contractors--as is used very successfully in Medicare. States can choose the Medicare/Medicaid data matching program. States can implement third party liability programs that find other insurers who should pay before Medicaid pays out of the public fisc. States can implement electronic verification systems to limit fraud and abuse. States can implement the recently passed Paris system to protect the integrity of the program. States can comply with the recently implemented disproportionate share hospital audit requirement. States can choose to increase their budget for Medicare fraud control units. These are all very reasonable steps that States could and should take, if Congress is going to send them $87 billion in additional Medicaid dollars, when only $10.8 billion of that is necessary to take care of the people who will go on Medicaid because they are unemployed.

They do not have to do all these options I just gave. They only have to do four of these many options; just show the American people that States can take four simple steps to reduce fraud, waste, and abuse. Shouldn't Congress at least ask that much of the State, for $87 billion? If Congress is going to give States $87 billion in Medicaid funds, shouldn't the formula be fair?

While I admire the hard work devoted to the exceedingly complex formula in this bill, it simply is not fair to certain States. States with low unemployment rates, States that have not seen the recession hit in full yet--those States will see less of the $87 billion than other States.

Senator Bingaman started down this road to correct this in our Finance Committee markup. You have an amendment that picks up the baton and drives it the rest of the way home. Each State gets a flat 9.5-percent increase in their FMAP payment and States can choose which 9 consecutive quarters in an 11-quarter period best fits the economic needs of their specific State. This is a better, this is a fairer way to spend $87 billion.

If Congress passes all of this Medicaid spending, what guarantee do we have that the fiscal challenges facing Medicaid in the future will be solved? Sooner rather than later, we all must recognize our entitlements are unsustainable as currently constructed.

President Obama has acknowledged this himself on numerous occasions recently. One of my concerns about the additional Medicaid funding that is in this bill is that it places too much emphasis on Medicaid in the here and now,
the short term, and ignores future fiscal challenges down the road, the next two or three decades.

Just last year the Center for Medicare Services Office of Actuary reported that Medicaid costs will double over the next decade. That is simply unsustainable, and I think every Senator knows that. It is critical that both the Federal Government and States recognize the fiscal challenges we face and the need to take action right now. Senators Cornyn and Hatch and I have an amendment that requires States to submit a report to the Secretary detailing how they plan to address Medicaid sustainability. It is critical that we look at the future of Medicaid if Congress is to give States $87 billion in additional Medicaid funding when it is only going to take about $10.8 billion to take care of the uninsured because of the economic recession we are in.

The House bill has a provision that fundamentally changes Medicaid. Medicaid is a program that is generally, as we know, for low-income pregnant women, children, and low-income seniors. Under the House bill, the Federal taxpayer would step in to pay the full cost to provide Medicaid coverage to people who lose their jobs and are not eligible for continuing coverage from their employer. Normally, Medicaid is supposed to be a shared State/Federal responsibility, with the States and the Federal Government sharing the costs on a national average--57 percent to 43 percent. In my particular State, the Federal Government pays 62 percent--but not in this new Medicaid Program the House would create because under the House bill--get this--the Federal Government, for the first time ever, would pick up 100 percent of the costs. The House bill transforms Medicaid into a coverage for anyone who loses their job if they do not have access to COBRA coverage from their former employer, and the House bill would offer this taxpayer-paid Medicaid coverage regardless of how wealthy they might be.

Now Medicaid is for low-income people, but it is being expanded in the House to, no matter how wealthy you might be, but being unemployed, you could qualify for Medicaid. Tell me if that is not a waste of taxpayers' money. It is taxing low-income people to help wealthy people, just the opposite of what we normally do in this country.

With all the fiscal challenges this country faces, and with entitlement spending already out of control, this ought to be seen by every Member of the Senate as an outrage. Obviously, it was not an outrage to the 244 people who voted for it in the other body. I hope folks on the other side of the aisle will come to the floor and defend a policy that, if you are unemployed--I suppose if you are an unemployed CEO who previously made $5 million, you can walk into the State office and get Medicaid. I don't understand it.

My bigger concern is what happens in 2 years when the money goes away. On December 31, 2010, what happens to all the people who have been covered by this massive expansion of Medicaid entitlement? What happens to all of the people who have been added to the rolls in States that expand coverage with the $87 billion influx in this bill, when only $10.8 billion is needed, according to CBO, based on the Urban Institute program, for those who are going to be unemployed? Mr. President, $76 billion more is going to be spent someplace.

Someone on the other side needs to convince me that this policy we are putting in place is truly temporary. I do not buy that it is temporary. Every one of us knows the States will be coming back in the middle of next year to beg for an extension so they don't have to cut Medicaid rolls. There are too many former Governors in this Chamber for anyone to argue that it is not going to happen.

I know a lot of people have worked very hard putting this bill together. I respect that they have worked hard. I wish they would have worked smarter. Giving States $87 billion even though that is about eight times what they need to stay ahead of enrollment-driven Medicaid increases is not well thought out. Giving States $87 billion while still allowing them to cut their Medicaid Program is not well thought out. Giving States $87 billion while still allowing them to raise taxes or tuition is not well thought out. Giving States $87 billion without requiring them to do a better job of addressing fraud, waste, and abuse is not well thought out. Giving States $87 billion without making them address the fiscal sustainability of their Medicaid Program is not well thought out. A massive expansion of the entitlements under the guise of the word ``temporary'' is not well thought out.

This bill is cobbled together--a spending party. It is not well thought out. It is out of control. The Senate should support numerous amendments, as I have discussed this afternoon, to address the shortcomings that occur when partisan bills are moved too quickly.

I filed what is referred to as a Grassley-Schumer amendment to amend the American Opportunity Tax Credit work. In my opinion, the amendment makes the American Opportunity Tax Credit better. Senator Schumer agrees with the me, or obviously he would not be cosponsoring this with me, because he is joining me.

I thank Senator Schumer for his support and look forward to working with him on simplifying the education tax credit Congress has put into the Tax Code. I have long been an advocate for helping Americans afford college through the Tax Code. So when I was chairman of the Finance Committee, I successfully included a number of education measures in that tax bill of 2001. These measures were enacted into law as part of a bipartisan agreement--I want to emphasize, bipartisan agreement. Now Americans can take an above-the-line deduction for the cost of higher education expenses because of that bill. In addition, people with student loans have greater flexibility when deducting student loan interest. I have also promoted section 529 qualified tuition programs by repealing the sunset provisions Congress imposed back in 2001.

The other education tax provisions we included in the 2001 bipartisan tax legislation should also be made permanent. Several provisions would fall into that category, but that debate will be left to another day. We are not pursuing that on this bill.

Today, Senator Schumer and I are here to build on the American Opportunity Tax Credit included in the legislation we are debating today. This is how we do it. The amendment Senator Schumer and I are offering would increase the tax credit while maintaining a refundable portion of the tax credit, which will help low-income individuals with college expenses. The amendment would also spread out the way the tax credit is calculated. Under this amendment, more Americans will receive a more robust and uniform tax credit regardless of income. In addition, taxpayers currently claiming the HOPE scholarship credit will get a bigger tax benefit. Again, low-income individuals will continue to benefit from the credit's refundability feature, which I will note has never been done in the area of education tax until now.

If my Senate colleagues argue that the Grassley-Schumer amendment adds to the cost of the stimulus package--which, in full disclosure, the amendment adds $3 billion to the existing $10 billion price tag on the American Opportunity Tax Credit--I will tell them to cut wasteful spending that is included in the bill.

The Grassley-Schumer amendment is stimulative. The same cannot be said for the spending provisions in the bill, including millions upon millions of dollars for parking garages or millions upon millions of dollars for swimming pools, water slides. This spending does not pass the stimulative test.

The Joint Committee on Taxation has even said that under the Grassley-Schumer amendment, we will ``lower the cost of higher education, which will induce more individuals to enroll in higher education programs.''

So I hope everybody agrees that this is a very good thing, particularly considering the fact that there was this report on the news today where there is, particularly because of the recession we are in, not enough middle-income people going to college because of the problems we have. So we need to make more help available for people going to college, especially for displaced workers who would like to go back to school for training in another career. That is more essential during an economic downturn like we now have. An education means jobs, and that is what a large part of this stimulus package is all about.

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

Lastly, and then I will yield the floor, I have a statement I wish to read entitled ``CBO Analysis'' that shows stimulus bill jobs to cost as much as $300,000 each. A preliminary analysis by the Congressional Budget Office shows that the jobs created by the economic stimulus legislation being debated in the Senate will cost taxpayers between $100,000 and $300,000 apiece. These numbers should be contrasted to those under the January baseline of the Congressional Budget Office in which there is no stimulus. That shows the gross domestic product per worker is about $100,000. The new analysis indicates the cost of each stimulus job to be as much as three times more than jobs created without the stimulus bill.

There has been a lot of talk about bang for the buck, but there is no talk about actually making sure it happens so that Americans get the help they need. Before Congress spends another $1 trillion, we ought to make sure we are getting our money's worth. Congressional leaders should postpone a final vote on a stimulus bill until the Senate has had the opportunity to carefully review a full analysis of the Congressional Budget Office.

Mr. President, I ask unanimous consent to have the February 4, 2009, CBO report printed in the Record.

There being no objection, the material was ordered to be printed in the RECORD

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Mr. GRASSLEY. Madam President, I will vote for DeMint Amendment No. 168 because it provides long-term tax relief. However, I do not agree that
State and local tax deductions and other itemized deductions should be eliminated. If the amendment passes, I would work in conference to restore the State and local tax deductions, as well as other itemized deductions.

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Mr. GRASSLEY. Mr. President, I am pleased to express my support for the Dorgan amendment that would clarify that the Buy American provisions of this bill shall be applied in a manner that is consistent with our international trade obligations.

The original Buy American language in the bill doesn't specifically provide an exemption for countries that provide reciprocal access for the United States in the area of government procurement. But we are obligated under international agreements to provide such a carveout. This amendment will fix this problem.

The United States has obligations to its trading partners. If we don't live up to our commitments to other countries under trade agreements, we can't expect them to live up to their commitments to us. The last thing that we should do in this time of economic uncertainty is fail to comply with our international obligations.

I would like to thank Senator Dorgan and Senator Baucus for working together to craft this amendment.

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