"Our bill maintains the much needed safety net for farmers so we are assured that the American people will have a safe, abundant and inexpensive food supply.  It also closes loopholes that have reduced urban support for the farm bill," Grassley said.  "This is an easy way to save some additional funds in what's a very difficult task for the committee."

"Particularly given the budget environment we're in, it's important that our farm programs are effectively targeted to those who need the assistance the most: the small and medium-sized family farmers.  I hope that our bill can be incorporated into any recommendations made by the deficit reduction committee," said Johnson.

Grassley and Johnson introduced the legislation on June 9, 2011.  The legislation would set a limit of $250,000 for married couples for farm payments in an attempt to better target farm program payments to family farmers.  Specifically, the bill caps direct payments at $40,000; counter-cyclical payments at $60,000; and marketing loan gains (including forfeitures), loan deficiency payments, and commodity certificates at $150,000.  The bill also improves the standard which the Department of Agriculture uses to determine farmers who are actively engaged in their operations.

Here is a copy of the text of the letter.  A signed copy of the letter can be found by clicking here.

October 14, 2011

The Honorable Patty Murray                         The Honorable Jeb Hensarling

Co-Chair                       Co-Chair

Joint Select Committee on Deficit Reduction            Joint Select Committee on Deficit Reduction

The Capitol                        The Capitol

Washington, D.C.                           Washington, D.C.

Dear Senator Murray and Representative Hensarling:

We are truly in uncharted territory with the debt reduction process now before us.  We are hard pressed to recall any process quite as unique as this one during our careers here in Congress.  You and the rest of the Joint Select Committee have a big task in front of you, and surely there will be some difficult decisions made in the coming weeks.

With all the hard decisions before you, we are providing a proposal that should be a common sense change to agriculture policy.  It is time for us to finally set hard payment limits on all commodity farm programs, as well as close the loopholes in current payment limitation law.

The specific changes we are proposing to the Joint Select Committee are contained in the bill we introduced, the Rural America Preservation Act of 2011 (S.1161).  That bill would do the following:

• It would establish caps of $20,000 on direct (fixed) payments, $30,000 on counter cyclical payments, and $75,000 on loan deficiency payments and marketing loan gains.

• The combined limit for married couples would be $250,000.  These limits would be reduced by varying amounts depending on the farmer's participation in ACRE, essentially setting the payment limitations at the effective caps, less the reductions in direct payments and marketing loan gains.

• The amendment improves the "measurable standard" by which USDA determines who should and should not receive farm payments.  It requires that management be personally provided on a regular, substantial, and continuous basis through direct supervision and direction of farming activities and labor and on-site services.

• It would provide savings of approximately $1.5 billion.

While we support commodity programs that provide a needed safety-net for farmers, the programs should not help big farmers get even bigger.  There's no problem with a farmer growing his operation, but the taxpayer should not have to subsidize it.  Under current law, nearly 70 percent of commodity farm payments go to the largest 10 percent of farmers.  There comes a point where some farms reach levels that allow them to weather the tough times on their own. Smaller farms do not have the same luxury.  In addition, setting a measurable standard for management of a farming operation will help prevent abuse of farm programs that is present under current law.

These proposed changes to payment limitations will help us target farm payments to those who really need them, the small- and medium-sized farmers who need a safety-net to help them get through rough patches as they produce this nation's food.

We understand there may be proposals submitted to the Joint Select Committee that would fundamentally change the commodity farm programs.  If one of these proposals is adopted by the Joint Select Committee, the language of our bill also would need to be revised to set a meaningful payment limitation for commodity programs.  Whatever the result, our main point is that setting a meaningful payment limitation and closing current loopholes in the law will provide savings and add integrity to the farm programs.  No matter what decision the Joint Select Committee makes regarding commodity programs, we urge you to ensure payment limitations and closing of loopholes plays a meaningful part.

We request the Joint Select Committee consider the policy reforms set out above, and if you have any questions, please contact us.

Sincerely,

Charles E. Grassley                       Tim Johnson

United States Senator                        United States Senato

Here is information about Senator Grassley's schedule this week in Washington.  The Senate is in session.

• Senator Grassley will meet during the week with Iowans from Stonehill Franciscan Services, Quakerdale, the Iowa Association of Homes and Services for the Aging, the College of American Pathologists, the American Society of Clinical Oncology, and the March of Dimes.

• Senator Grassley will meet during the week with Iowa families visiting Washington from Red Oak, Dubuque and Des Moines.

• Senator Grassley will be a guest during the week on public affairs programs on KDTH Radio in Dubuque with Cindy Kohlmann, KASI Radio in Ames with Trent Rice, KSCJ Radio in Sioux City with Sam Clovis, KCPS in Burlington with Fred Hoffman, and WMT Radio in Cedar Rapids with Ryan Schlader.

• On Monday, October 17, at 4 p.m. (ET), Senator Grassley will meet with Michael Horowitz, the President's nominee to serve as Inspector General for the Department of Justice.  Grassley has worked for many years to strengthen the role of Inspectors General in overseeing the federal bureaucracy.  He also has worked to hold Inspectors General accountable when the responsibilities of the office haven't been carried out in an independent or effective way.

• On Tuesday, October 18, at 8 a.m. (ET), Senator Grassley will speak to a meeting of Judicial Watch, a non-profit foundation that promotes transparency and accountability in government.

• On Tuesday, October 18, at 10 a.m. (ET), Senator Grassley will testify at a hearing of the Senate Committee on the Environment and Public Works.  The hearing has been called to review the 2011 floods and the condition of the nation's flood-control systems.  In addition, Grassley is meeting in his office that afternoon, at 4:45 p.m. (ET), with Brigadier General John McMahon, who is in charge of the Northwest Division of the U.S. Army Corps of Engineers that handles the portion of the Missouri River in Iowa.  Grassley said he wants to talk with McMahon about when the Corps plans to evacuate water being held upstream in order to make room for next year's runoff, while also allowing time this year for evaluation and repair of dams and water-logged levees downstream.

• On Tuesday, October 18, at 10 a.m. (ET), the Senate Committee on Finance is holding a hearing about tax incentives for charitable giving in anticipation of a tax-reform debate.  Senator Grassley will participate in this hearing.  As both Chairman and Ranking Member of the Senate's tax policy committee during the last decade, Grassley led an active review of the tax-exempt laws, including oversight of the non-profit sector.

• On Tuesday, October 18, at 12 noon, Senator Grassley will participate in an Honor Flight gathering of 92 World War II veterans from Iowa.  Seventy-nine of these veterans are from Cedar Rapids and Iowa City.  Five are from Tama County, six are from Anamosa, and two are from Benton County.  The Honor Flight Network was created to help veterans visit their memorial in Washington, D.C.  The program is currently focused on World War II survivors and other veterans with terminal illnesses.  The non-profit program plans to transition to honoring veterans of the Korean, Vietnam and other wars on a chronological basis.

• On Wednesday, October 19, at 9:30 a.m. (ET), Senator Grassley will meet with the Chairman of the Federal Trade Commission, Jon Leibowitz, regarding bipartisan legislation Grassley is advancing to prohibit brand-name and generic drug makers from making agreements to keep cheaper generic prescription drugs off the market.  These pay-off agreements cost consumers as much as $3.5 billion every year in higher drug costs, according to the Federal Trade Commission.  The agreements cost the U.S. Treasury another $2.6 billion because of prescription drug coverage under Medicare and Medicaid, according to information from the Congressional Budget Office.

• On Wednesday, October 19, at 10 a.m. (ET), Senator Grassley will participate in a hearing of the Judiciary Committee, where he serves as Ranking Member.  The hearing will focus on oversight of the U.S. Department of Homeland Security, and Secretary Janet Napolitano will testify.

• On Wednesday, October 19, at 2:30 p.m. (ET), Senator Grassley will participate in a hearing of the Caucus on International Narcotics Control, where he serves as Co-Chair.  The hearing will focus on opportunities for increased U.S. counternarcotics cooperation with Colombia, Peru, Ecuador, Bolivia and Venezuela.  Drug traffickers' increased use of submarines to transport cocaine from the Andean region to the United States will be discussed, along with efforts to reduce narcotics-related violence in Colombia.

• On Wednesday, October 19, at 2:30 p.m. (ET), Senator Grassley will participate in a hearing of the Judiciary Committee to consider the nomination of Michael Horowitz to be Inspector General for the Department of Justice, and Susie Morgan to be United States District Judge for the Eastern District of Louisiana.

• On Thursday, October 20, at 10 a.m. (ET), Senator Grassley will participate in the weekly business meeting of the Judiciary Committee.  These nominations are on the committee calendar for possible consideration:  Stephanie Dawn Thacker, to be United States Circuit Judge for the Fourth Circuit; Michael Walter Fitzgerald, to be United States District Judge for the Central District of California; Ronnie Abrams, to be United States District Judge for the Southern District of New York; Rudolph Contreras, to be United States District Judge for the District of Columbia; and Miranda Du, to be United States District Judge for the District of Nevada.  Additionally, the committee may consider the Discount Pricing Consumer Protection Act, S.75, sponsored by Senators Kohl, Feinstein, Durbin, Whitehouse, Klobuchar, Franken and Schumer.

On Saturday, October 22, Senator Grassley will be in Des Moines to participate in the Komen Iowa Race for the Cure.  Mrs. Barbara Grassley is a 23-year breast cancer survivor.

Judiciary Committee Ranking Member Submits Ideas to Deficit Reduction Committee

WASHINGTON - Senate Judiciary Committee Ranking Member Chuck Grassley today submitted 18 pages of ideas to the Deficit Reduction Committee for possible savings of taxpayer money as the committee attempts to cut the deficit by more than $1 trillion.

Grassley focuses on administrative restructuring, reduction of duplicate and overlapping programs, and unnecessary and wasteful programs under the authority and jurisdiction of the Senate Committee on the Judiciary.

"I think it's important that each committee of jurisdiction put forth ideas that can be used to reduce the deficit.  No one agency should take an unfair percentage of the cuts, so it's up to those of us with the expertise in different subject matters to explain the best areas to save taxpayer money," Grassley said.

The Senate Judiciary Committee has jurisdiction over the Department of Justice, including the Federal Bureau of Investigation, and various agencies within the Department of Homeland Security.  The committee also considers policy pertaining to subjects such as bankruptcy, mutiny, espionage, and counterfeiting, Constitutional amendments, Federal courts and judges, Immigration and naturalization, Judicial proceedings, civil and criminal, the U.S. Patent Office, Patents, copyrights, and trademarks, Protection of trade and commerce against unlawful restraints and monopolies.

Click here to read Grassley's letter to the Deficit Reduction Committee.

WASHINGTON - As the Joint Select Committee on Deficit Reduction works to adopt deficit reduction measures, Senators Herb Kohl and Chuck Grassley are urging the panel to include a bipartisan bill that cuts costs by encouraging competition from generic drugs.

The Preserve Access to Affordable Generic Drugs Act (S. 27) would deter "pay-for delay" settlements in which brand name drug companies settle patent disputes by paying generic drug manufacturers in exchange for the promise of keeping the generic version of the drug off the market. Under the bill, these anti-consumer pay-off agreements would be presumed illegal and the Federal Trade Commission (FTC) would be given the authority to stop the agreements.

"Keeping generic drugs out of the market costs taxpayers and consumers billions of dollars," Kohl said. "By ending these kinds of backroom deals, generic drugs will get to market sooner and prescription drug costs will go down."

"The wheeling and dealing that these companies take part in only hurts the pocketbooks of taxpayers.  Our bill is a win-win for both the federal government and the consumer.  It won't solve our fiscal problems, but every little bit helps," Grassley said.

The Congressional Budget Office estimated that the bill would save the federal government - which pays approximately one-third of all prescription costs - $2.68 billion over ten years. The president included a provision to end pay-for-delay settlements in his FY 2012 budget and estimated it would save the federal government $8 billion over ten years. The FTC estimated that ending these settlements would save consumers, who pay for prescription drugs through private insurance or on their own, $3.5 billion per year.

The text of the letter is included below and a copy of the letter can be found here.

October 13, 2011

The Honorable Patty Murray

Co-Chairman

Joint Select Committee on Deficit Reduction

United States Congress

Washington, DC 20510

The Honorable Jeb Hensarling

Co-Chairman

Joint Select Committee on Deficit Reduction

United States Congress

Washington, DC 20510

Dear Senator Murray and Representative Hensarling:

As the Joint Select Committee on Deficit Reduction considers measures to accomplish deficit reduction, we urge you to include our bipartisan  pro-consumer legislation to remove barriers to generic drug competition, the Preserve Access to Affordable Generics Act, S. 27.  Because it would increase the availability of low cost generic drugs to millions of Americans, this legislation has been scored by the Congressional Budget Office as saving the federal government over $ 2.68 billion in reduced drug reimbursement payment in federal health programs over the next decade.    The President's budget for FY 2012 estimated that adoption of our bill would save the federal government $ 8.79 billion over the next decade.

Our bill would presume illegal so-called "pay for delay" pharmaceutical patent settlements.   In these settlements, brand name pharmaceutical companies pay millions of dollars in cash or other valuable consideration to generic drug companies to settle drug patent litigation, in return for the generic drug company agreeing to withhold marketing its generic drug until the end, or shortly before, the expiration of the patent.

These pay for delay settlements deprive consumers of years of generic drug competition, while enriching both the generic drug company and the brand name manufacturer, which maintains its monopoly on the drug.   However, consumers lose by paying substantially higher prices and the government loses by paying substantially higher drug reimbursement payments under Medicare and other federal health programs.

In the late 1990s, the FTC challenged several pay-for-delay agreements as being anti-competitive and shortly thereafter, the use of these agreements declined.  From 2000 to 2004, patent cases continued to settle, but the settlements did not include payments to generic drug makers.  Since 2005, however, three Circuit Courts of Appeal decisions have rejected these antitrust challenges, and held that the rights of patent holders make virtually any patent settlement permissible, even anti-competitive settlements, trumping antitrust law.  And the effects of these court decisions were immediate - the FTC found that half of the settlements made in 2006 and 2007 between brand name and generic companies included a pay-off from the brand name manufacturer in exchange for a promise from the generic company to delay entry into the market.  These precedents have made it very difficult for the FTC to successfully challenge these pay-for-delay patent settlements.  Our legislation would ensure that these anticompetitive pay-for-delay agreements are properly subject to antitrust scrutiny.

The Preserve Affordable Access to Generics Act is a balanced solution to addressing this problem.  Under our legislation, these pay-for-delay agreements will be presumed illegal and the FTC will have to pursue legal action under the FTC Act to invalidate a settlement.  During the proceeding, the drug companies will have the opportunity to prove to a judge by clear and convincing evidence that these agreements are pro-competitive.  Significant penalties may be assessed against companies that enter into agreements which are found to be illegal.  This legislation will therefore prevent anti-competitive pay-for-delay agreements while permitting settlements which truly do not harm competition.

In addition, we should stress that our bill would in no way prevent pharmaceutical patent settlements that do not contain pay for delay provisions.   In FY 2010, the FTC reviewed 113 settlements agreements under the Medicare Modernization Act.  Of those, 31 contained pay-for-delay provisions, of which 22 involved different drugs for a total of $9.3 billion in U.S. sales.  The 81 remaining settlements did not have a pay-for-delay provision in them.  This data suggests that these cases can be settled without resorting to a pay-for delay agreement.   Our legislation only targets those settlements that harm competition - pay-for-delay agreements in which cash or other valuable consideration is exchanged for delay in generic entry.

Our legislation passed the Senate Judiciary Committee with bipartisan support in both of the last two Congresses, most recently in July.   By removing a significant barrier to the availability of generic drugs, this bill will reduce the federal deficit and benefit millions of consumers. We urge the Joint Select Committee to include our bill as part of any overall deficit reduction measure that you adopt.

Thank you for your consideration.

Sincerely,

_____________________________ 

HERB KOHL                           CHUCK GRASSLEY                      

Chairman, Subcommittee on                   Ranking Member, Committee on the

Antitrust,  Competition Policy                    Judiciary

and Consumer Rights

CC:

Senator Max Baucus

Senator John Kerry

Senator Jon Kyl

Senator Rob Portman

Senator Pat Toomey

Congressman Xavier Becerra

Congressman Dave Camp

Congressman James Clyburn

Congressman Fred Upton