GRASSLEY: Good morning, everybody. Sorry I'm 10 minutes late. I've come from a strategy session on the stimulus bill.
We'll have the floor all day because Democrats are in retreat -- in a retreat, I should say. And they are going to not be on the floor until about 5 o'clock. And we'll have a lot of votes.
I want to talk about the bill I introduced to stop brand-name prescription drug makers from using payoff agreements which is a game to keep cheaper generic equivalent drugs off the market. This bill is sponsored with Senator Kohl of Wisconsin. It's a bipartisan bill.
The legislation goes after anti-competitive, anti-consumer payoff of patents where brand-name drug companies pay generic manufacturers millions of dollars, probably tens of millions of dollars, maybe even hundreds of millions of dollars, I think I've read, to keep their generic competition off the market. The Federal Trade Commission is opposed to these settlements, but two court decisions of three years ago have allowed these deals to continue.
There's a lot of stuff at stake here for consumers. Experts estimate that $26 million could be saved over the next five years with the use of generic versions of 14 popular drugs that are scheduled to lose patent protection before 2010. Our bill works to stop wheeling and dealing that delay the entry of lower-priced alternatives to the marketplace.
Given the fiscal strains on Medicare and Medicaid out of every family's pocketbook, Congress should act very quickly to pass a pro-consumer piece of legislation. And let me give some further explanation because people might say, well, aren't you cutting into the profits of pharmaceutical companies and having research delayed or maybe stopped for another generation of new drugs.
Well, I'm not raising any complaints whatsoever with the patent time -- I think 20 years for a drug to be on the market in exclusivity. I'm saying that that 20 years and the profit that comes from that 20 years ought to be enough to make sure that we get the next generation of drugs.
And the extent to which you have this manipulation that my bill is trying to stop, I think that that's wrong and very costly to consumers. And the extent to which a large share of these drugs come -- are paid for the by federal government, costly to the taxpayers.
Kerry?
QUESTION: Thank you. Senator, can you give us an example on the stimulus bill of a couple of provisions that you would require that would be in there before you could support it or a couple of things of the House bill that have to come out in order to get your support?
GRASSLEY: Well, a couple things that would have to come out would be, probably, dozens of things would have to come out to support it for what comes out. But what would help us to vote for the entire package would be more emphasis upon housing.
So we're going to have an alternative that would have 4 percent mortgages, 30-year fixed. And until we take care of housing and get the price of housing bottoming out or deleveraging housing, we're never going to get this credit crunch over.
And so we're going to concentrate on that. And if that's adopted, I'll vote for it regardless of what else might be in the bill.
But let's suppose that doesn't get done. Then I want to ask -- answer not just a couple of things but a philosophy of the bill that I think is being violated. And everything that violates it ought to come out. Not that everything would have to come out before I'd vote for it, but there's so much in there.
In other words, a stimulus bill is to spend a lot of money in two years to get us out of a recession and create jobs. And creating jobs are part of getting us out of a recession.
Now, that's also got to be along with the credit crunch deal which we're working on through the administration and TARP and all that stuff, but those two things together.
So now we're on the stimulus. So stimulus is money spent that won't be spent after the two years. And so much in this bill is taking the concept of the stimulus as a foundation and a platform to either expand existing programs or start new programs that will go on forever into the future. You know how federal programs are. You start them and they never stop.
And there's nothing wrong with thinking about those programs. But they ought to go through the normal appropriation process, which takes months and be well thought out as opposed to trying to shove them through in this.
And I'll give you an example of where the president and me would be on the -- the president and I would be on the same wave length. There was a quote in Congress Daily a couple days ago. Chairman Miller of the Education Committee in the House of Representatives asked Obama about these programs I just described that are in the stimulus and are going to go on forever.
GRASSLEY: And Obama said, "Well, those bills -- that money will not be in my baseline when I submit my next budget." Which means, then, in the case of doing something that probably needs to be done, educating more -- or putting more people in Head Start by 55,000 and hiring the teachers to do it, are you going to do that just for two years and then lay all of those teachers off and kick all those kids out of Head Start? No. That ought to be done through the appropriation process where you weigh Head Start against other priorities and decide how much you ought to do. And you surely aren't going to start Head Start in the normal appropriation process and quit it in two years.
So if the president's not going to have it in his baseline, that means that you're not going to do it unless Congress would override the president. But I -- but there's so much in a president's budget that's not changed, I don't think you override it. And I think this president is sticking by what a stimulus is supposed to do and what it's not supposed to do, and I'm on that same wave length.
It's another thing, like, you know, maybe contraceptives are important, but what's contraceptives got to do with stimulus? You know, as an example.
So those are -- those -- spending versus stimulus has to come out of the bill before I'd support it. And it doesn't -- let me tell you. Back home at the grassroots of Iowa, what did I do this weekend? I went to a UNI volleyball game. I went to a church supper in the Methodist Church in Waterloo. I went to my own church on Sunday. I went to Village Inn, Cedar Falls afterwards.
And what else did I do? But you talk to a lot of people at all these places. And, boy, I'm telling you, people at the grassroots see this more pork than probably really pork -- but they see it as a lot of spending which they're absolutely right. There's a lot of spending and not very much stimulus.
So, you know, somebody thinks they're fooling the people of this country with stimulus package, but they aren't.
Tom Beaumont?
QUESTION: Senator, I want to make sure I heard you right. Did I hear you say that you can support the bill if it contains a provision for 4 percent, 30-year fixed-rate mortgages?
GRASSLEY: Yes. We're -- that would be based -- 30-year fixed- rate mortgages.
QUESTION: Right.
GRASSLEY: And that's going to be a Republican substitute that we're going offer. Yes.
QUESTION: Then the other thing I was going ask you is, as it is, do you expect the bill to pick up any Republican votes in the Senate? And if I doesn't, to what extent do you think that we can -- it's overall acceptance by the public?
GRASSLEY: OK. I'm going to take a long answer to your question so everybody else behave here.
We got a situation where what is bipartisanship? Well, let me tell you what they're trying to -- how they're trying to make this bipartisan. They call Senator Snowe down to the White House. They're going to call -- they'll probably call down Senator Collins to the White House and Senator Specter. Three Republicans and maybe more, maybe a few more, but at least those three.
And if they can put something in this bill to satisfy each one of them separately, then they're going to -- they're going to pass the bill, you know, 58 to 361, and they're going to say, you know, this is a bipartisan bill.
Well you've heard me say twice in the last two weeks on the floor of the Senate how do you -- has a bipartisan bill? Well, Grassley-Baucus knows about bipartisan bills because, for eight years, we've had Grassley-Baucus marks or Baucus-Grassley marks before the committee. We sit down across the table from each other for a couple of days, a couple of weeks, you know, and for hours at a time. And you build a bill up.
Everybody gives and takes. But you eventually have something that two -- one Republican and one Democrat is going to say this -- we can get 60 or 70 votes for this. We're going to stick together. We're going to defeat every amendment from the extreme right or extreme left of our political parties and move forward.
It's not like the Democrats write a bill and then go out and see where you can get one Republican here and one Republican there and say you've got a bipartisan bill. It's a little bit like -- if you're going to have a family effort to buy a car, you're not going to go to your wife or your husband and say, honey, I'd decided we're going to buy a black Chevy, and if you don't like it, lump it.
But we -- but we've got a family deal here, don't we? No. You sit down with your wife and you decide, you know, a Chevrolet, blue, black, white, what things are on it, and you're going to go to the dealer together to buy it. Then you've got a family deal. It's no different here in Congress except some people are trying to redefine bipartisanship.
So what was your question, Tom?
QUESTION: Do you expect the bill to get any Republican votes?
GRASSLEY: Yes. Just the way I said. But don't -- I don't want to read in the Des Moines Register it's a bipartisan bill.
QUESTION: Very good
GRASSLEY: And I know there's freedom of the press, but maybe you can -- I tried to have a little bit of intellectual dishonesty -- or honesty, as I described to you bipartisanship.
Mike Myers?
QUESTION: Senator, what is the cost of your provision on the mortgages? And a follow-up, please?
GRASSLEY: There is a price, and I'll get it for you, but I don't have it in my head. And I just came from a meeting where it was -- where that issue was discussed, but I don't remember the figure.
QUESTION: Is that the finance meeting or the leadership...
GRASSLEY: Leadership meeting.
QUESTION: And this is a take-it-or-leave-it? This would bring Republicans on board or it would drive them overboard if it's rejected?
GRASSLEY: I think -- I wouldn't want to say we'd have unanimity because it's pretty difficult to keep 41 Republicans together a hundred percent, you know.
QUESTION: Yes.
GRASSLEY: But I think it'll have overwhelming support among Republicans.
QUESTION: Enough, you think...
GRASSLEY: I don't want to say it's a take-it-or-leave-it deal. It's a deal -- it's where Republicans are trying to be, as the president said 48 hours ago, Republicans have a lot of good ideas. We ought to work for a bipartisan bill.
QUESTION: Is this bill going to be settled, do you think, on the floor in debate this week or, say Republicans do not support it -- a little speculation here -- is the real bill going to be drafted and formed in conference?
So you're just playing, in effect? This is skirmishing?
GRASSLEY: Well, as a practical matter -- and this one's -- every bill is settled in conference. This one is probably going to have more changes in conference than most bills. But I think that, depending on how we come out with the final product here, it's going to dictate the extent to which it's going to be bipartisan or not depending upon whether there's 60 votes.
QUESTION: Thank you.
GRASSLEY: OK. Let's see, the next one is Mike Glover.
Joe Morton?
Jim Boyd?
Ed Tibetts?
QUESTION: Senator, I just want to make sure I understand -- kind of a follow-up to Tom's question.
You would support this housing provision as an add-on to some of the spending that you've objected to or as a substitute?
GRASSLEY: It'll be a substitute.
QUESTION: OK. So it's not as if...
GRASSLEY: Yes.
QUESTION: ... they could tack this on and you'd support it?
GRASSLEY: No. Well, our approach is not to tack it on.
QUESTION: OK. It's a substitute?
GRASSLEY: Yes. Well, even at that -- if it was added on, Democrats wouldn't support it because it would be such a bigger bill that it would be more than they could vote for.
QUESTION: OK. And...
GRASSLEY: Now, then don't forget there's a lot of individual amendments were offered the extent to which a lot of those would be adopted would still leave a chance that I could support it. But I won't know that until the midnight hour.
QUESTION: OK. And I guess this housing plan, wouldn't this best be handled through the TARP?
GRASSLEY: No. Because we would be -- TARP would have to have the machinery of TARP and all the bankers going the same direction. And what this really boils down to, when you do it the way we want to do it, you're going to have each -- an individual decide for themselves whether or not they want to refinance directly through the government, although they'd do it through a bank and the government would be a secondary mortgage for it.
And, also, included in it would be the difference between that 4 percent and what the going rate would be. The extent to which that fell through, the government would be a guarantee for a percentage of that to the bank.
QUESTION: What's to prevent people from getting mortgages and defaulting on them in much the way that Republicans have said happened with Fannie and Freddie?
GRASSLEY: Well, the deal is that -- that at 4 percent, that's enough basis points below where we expect it to be over the next near-term years that it would -- that based upon the income that people have -- so this would have to be do they have the ability to pay this off -- this 4 percent off and this -- over this 30-year period of time, the prospective of it.
Otherwise, you could -- you wouldn't be refinancing this for somebody that couldn't pay it. So the best judgment you use at the time plus the fact that it's several basis points below that the market is right now, we think, is going to get housing moving.
So then if you get housing moving and credit moving and you've stabilized the price of housing, then you take the panic out of the market that's there now that there's no more loans going.
And it gets back to what even Democrats have been saying maybe more strongly than Republicans have over the last five or six months that we ought to be doing more for housing.
QUESTION: And if I may, one other question. I'm curious what you think of the argument that the TARP -- sorry -- that the stimulus package spends somewhere in the order of 75 percent of its funding in -- by, I believe it's fiscal 2010. And that, in states like Iowa, where recessions tend to roll in a little later, that this actually would have a greater stimulative impact?
GRASSLEY: Well, you'd want it to have a greater stimulative impact in Iowa by spending out more in Iowa to keep us out of a recession, wouldn't you, and not to have us going into it the extent it is nationally? Wouldn't that be your -- wouldn't we want that to be our goal? So we'd want to spend more money up front in Iowa.
QUESTION: I guess what I was trying to get at was that the argument is that most of this me is being spent during a time when the country is either in recession or at least suffering some of the unemployment effects of a recession and that whatever you spend it on there's a great stimulative impact.
GRASSLEY: Well, listen, I gave, in my speech yesterday, that the Congressional Budget Office was belittling that to the extent that when the money ought to be spent up front in the first year, such a small percentage was going to be spent.
Now, Democrats are making other points of view. But I don't know how they argue with their own Congressional Budget Office, which is nonpartisan, but their appointees are running it.
OK. That was...
QUESTION: Thanks.
GRASSLEY: ... Ed.