GRASSLEY: ... questions, since I'm late and won't be able to spend very much time with you. So I'll start with Dan, Successful Farming.
QUESTION: Good morning, Senator. I just wanted to get your reaction to the president's proposed USDA budget.
GRASSLEY: Well, the only thing I've concentrated on is an effort that I've been involved in, and I haven't studied it in detail so I can say that I agree with it totally, but it's in the -- it's in the area of limitations on help for people with higher incomes. And of course I've been an advocate for that for a long time. And so I look at that fairly positively.
I haven't checked the impact of the cut in direct payments, but that may be a negative. But remember, the president proposes, we dispose, and we can still be for maybe this across-the-board freeze of 16 percent of the budget that you call discretionary expenditures and still not agree with the details of the president's budget. So you can -- you know, we could increase something someplace and decrease something someplace else.
But I don't -- I haven't studied it beyond those two issues, so I just don't know beyond that .
QUESTION: And you're not sure you would support -- does it eliminate direct payments or...
(CROSSTALK)
GRASSLEY: No, cuts it back from $40,000 to $30,000.
QUESTION: And what is your thinking about that?
GRASSLEY: Well, that's what I said, I haven't studied the impact of that. But that could be a negative. But it's very much a positive on trying to tighten up higher-income people getting payments.
QUESTION: OK. Well, thank you very much.
GRASSLEY: Tom Rider?
OK, Julie Harker?
Dan Skelton?
QUESTION: Good morning, Senator.
Staying with the president's budget proposal for a moment, apparently he would also like to see some restructuring of the crop insurance in an effort to save money. Do you have -- have you had a chance to take a look at that proposal?
GRASSLEY: It's the same thing that we've been dealing with them on, a meeting I -- well, they asked to have a meeting with me, and I met with them, and then people from the industry has met with us as well. And they want to save $4 billion.
I'm not saying some money can't be saved, but I'm looking at the -- from the standpoint of policy.
The policy that I support is that we maintain a private sector group of people -- meaning the people that sell and the people that check on it, the agents, et cetera -- that we have a group so that it works for farmers, because that's what we set up 20 years ago, so that we would people going around encouraging farmers to manage their own risk, having a product that was saleable. And I think we've been very successful at having 92 percent of the Iowa farmers sign up.
I want to maintain that because I don't want farmers to go on back to the government, depending entirely upon the political whims of Washington, are you going to get disaster relief or not.
And so the policy is how much can be saved and still maintain that workforce. That's where I'm coming from.
Whether that's, you know -- and I've heard from industry that $4 billion is going to kill some companies, that you might end up with two or three or four big companies and that's it, whereas now we've probably got more than a dozen and the competition that goes with having more companies.
Stacia?
Philip?
QUESTION: Yes, Senator, could you address the export, what they're doing on exports, because the president talked in the State of the Union about doubling exports. I mean, he talked about how that would help farmers as well as other sectors of the economy.
GRASSLEY: Yes.
(CROSSTALK)
QUESTION: But the budget, they do have some additional money for technical assistance.
GRASSLEY: I can -- I can comment for you -- I can comment for you based upon the president's speech, but I can't comment for you based on any study of the budget I've had on exports. But I thought it was very positive, and I agree with what the president said.
But here's what I didn't hear: I didn't hear how he was going to follow through on Colombia and -- and follow through on Colombia, Panama and South Korea, or what he's going to do to push trade promotion authority so he can negotiate.
And I need to know that there's going to be action follow the rhetoric. And we found out that the president, being very free trade, didn't hardly lift a finger on getting these agreements through during 2009.
And so -- and I'm not sure whether he mentioned it in any speeches early 2009, but he's definitely said that he knows the importance of free trade, he wants to do something about it. He's got to start with meetings in the House of Representatives with people of his political party to get them off of this protectionist angle that they're on right now.
And I want you to know that I did write to the president last week urging him to send implementation legislation on the free trade -- three free trade agreements, and I did that because I was encouraged by what he said in his speech.
QUESTION: One follow-up. There's a report that Shell is -- Shell Oil is investing heavily in Brazilian sugar cane ethanol, suggesting there's going to be additional pressure to try to relax the U.S. tariffs on imported ethanol.
What do you...
GRASSLEY: Well...
QUESTION: What do you make of -- what do you make of this? Is that going to...
GRASSLEY: Yes. Well, I don't...
QUESTION: ... make any difference.
GRASSLEY: ... I don't want my answer to your question to be interpreted that I've made some sort of a judgment about some oil company investing in sugar as being the basis for what I'm saying.
But I think you probably have heard me say that of the three things that are kind of helpful to ethanol, the tax incentive and the mandate and the tariff on ethanol coming into this country, that probably the biggest battle is going to be over the tariff coming into this country when that runs out at the end of the year.
But I also want to remind you of how I said I was going to fight thing, that already Brazil has duty-free access to the U.S. markets through the Caribbean Basin Initiative, and I think they hardly use up half of that space that they have there. So if people want to import into the United States, they need to do it through the CBI.
And Brazil, which is a growing economy and a contributing economy to the world effort, and even helping in some -- getting involved in world issues like global warming, and, you know, even some economic help to some other countries, they're coming along. They can help the Caribbean nation -- Caribbean nations -- by running some of their ethanol through there and helping create jobs in those beleaguered countries, low-income countries.
So I want to see the Caribbean Basin Initiative, that 7 percent loophole, and I use that term complimentary, because we're trying to help the Caribbean Basin Initiatives, or through the initiative. We ought to -- that ought to be filled up to 100 percent, and then I'll talk about what we need to do others.
George Ford?
QUESTION: Yes, Senator, back to the budget again and the direct payments, $500,000 instead of $750,000. We've heard this before, and each time the question becomes are we talking gross income or are we talking AGI?
GRASSLEY: Well, you'd have to...
(CROSSTALK)
GRASSLEY: ... you'd have to be talking AGI, and it does talk AGI.
QUESTION: All right. Sorry...
(CROSSTALK)
GRASSLEY: Now, we -- now, we did have -- last year it was a question about whether it was gross, and I got the opinion that it was gross last year. But that's unrealistic.
OK, I've gone through the entire list. Anybody have a follow-up?
QUESTION: This is Dan in Spencer again.
GRASSLEY: Go ahead, Dan.
QUESTION: Senator, I see that both you and Senator Harkin voted against the reconfirmation of Ben Bernanke. Can you explain why?
GRASSLEY: Yes. I don't think he's taken the proper steps that he needs to take to inform us that he's concerned about hyperinflation and stagflation that's coming down the line as bad as we had, or worse than we had in '79 and '80. And maybe now is not the time to take those steps.
But I think he ought to be bringing some confidence to the economy that we are not going to have hyperinflation by saying under what conditions he would raise interest rates as one tool, or another tool, sopping up some of the money that he printed and spread around the world.
OK. Anybody else?
QUESTION: Senator, this is Chris Clayton. I joined a little bit late.
But when are we looking at maybe some of the tax provisions beginning to move ahead, the things such as the biodiesel tax credit, the estate tax, some sort of change in estate tax? Any idea when something may begin to advance?
GRASSLEY: Well, throughout the last few days and right now at the staff level, at least as far as the extenders are concerned, there's being work done on that in conjunction with an effort to use tax incentives to stimulate employment by small business.
On estate tax, there are talks going on, but with a separate bill, unrelated to the extenders.
OK. Anybody else?
OK. Thank you all very much.
END