Sen. Chuck Grassley
The Business Record was invited last week to take part in a 15-minute long question and answer session with Iowa Sen. Chuck Grassley, a Republican who is chairman of the powerful finance committee. What follows are excerpts from the conversation. A reporter from a radio station in Creston also took part in the session.
Q: The Sarbanes-Oxley Act of 2002 is a year old this week. Has it made a difference?
A: I think people watching it closer than I have – I can’t watch just the markets – are feeling that is has had a very beneficial impact. It’s not just the words of the law, or the potential for retribution for somebody who’s violating the law, so much as an awakening among management generally. Most managers are honest. But now extra precautions are being taken to make sure that nothing has been done wrong by corporations. Boards of directors are doing what they should have been doing for long time, and that is looking out for stockholders and not just CEOs. Auditing committees are now independent of the boards and management to make sure that, ethically and financially, the right things are being done. Even within the accounting profession, there has been much more caution to avoid conflicts of interest, particular between auditors and outside consultants. We’ve also given the Securities and Exchange Commission the resources to do the job that they have to do. All of these things together, I think are reestablishing confidence in business and have had something to do with the stock market going up.
Q: Can you comment on the Smithfield Foods-Farmland Foods Transaction? There’s a meeting scheduled soon.
A: I’ve been expressing views over a long period of time. I am very much against it. I wrote a letter to the attorney general stating that I wanted strict enforcement of antitrust laws. Then I had telephone conversation 72 hours ago with the attorney general and brought him up to date. The meeting you’re asking about is a follow up to that conversation I had with John Ashcroft. (At the meeting) I plan to lay out in more detail my feelings on why this is an anti-competitive merger.
Q: What effect are the tax cuts having on the U.S. economy?
A: I think they will have a very beneficial effect, giving $80 billion back to taxpayers to spend, instead of leaving it for me to spend. Next year, there will be $120 billion in tax cuts going back into the economy. It’s small compared to overall size of our economy, which is $11 trillion. Economists who worked with us as we were passing the bill felt this would bring growth to the economy of three percent. Any level above three percent creates jobs. Currently, I think it’s just beginning to have an impact because the checks are going out now.