His visit was part of a series of "town hall" meetings across the state.
There was a standing room only crowd at the Washington meeting which began at 7:15 a.m.
There were questions regarding what was referred to as the "Wall Street bailout." One bank official expressed concern that smaller banks with responsible lending practices might suffer from the regulations which accompany assistance to larger financial institutions that are insolvent.
Another audience member questioned whether the federal government should break up some of the larger companies.
Grassley said that market forces are breaking up some financial institutions or making them smaller.
Grassley said he challenged the Secretary of the Treasury regarding a decision he made allowing Wells Fargo to obtain billions of dollars in tax breaks by acquiring Wachovia Corporation and claiming Wachovia's financial losses for tax purposes. Grassley said he questioned whether the Secretary of the Treasury has the legal authority to make that decision.
Grassley noted that federal support for failing companies is not new. He referred to federal support for Chrysler 30 years ago in which over $300 billion was paid back to the federal government. During the late 1980s, the Savings and Loan crisis resulted in loans that were paid back to the federal government at 80 cents on the dollar.
Alexander Ockenfels, the 12-year-old son of Dave and Pam Ockenfels of rural Wellman, asked what the government will do about the national debt. He and his 14-year-old brother Aaron are home schooled and were present at the meeting with their father.
"There are only two sources of getting rid of the debt - either raise taxes, which sometimes does more harm than good, or spend less," Grassley said.
He said that the country paid down the national debt during 1997 through 2000 but then three years of recession resulted in the national debt rising again. He said that right now some people are thinking that spending more might get us out of the recession.
"It might work and might not work," Grassley said.
He said that it is important to look at the national debt in terms of percentage of the Gross National Product. Grassley noted that there is a 40-year average for national debt of about 42 percent of GNP.
"Some are predicting this will go over 50 percent, perhaps 60 percent," Grassley said.
Regarding Medicaid, Grassley criticized the funding formula, which he says does not allow Iowa to get its fair share.
He supports health care reform but is opposed to a single-payer system like Canada has.
"If the Democrats get their way, we'll go down the road to where we'll eventually have a single payer system," Grassley said.
There was a comment from the audience that the U.S. is not doing a good job of protecting our borders from the influx of illegal immigrants.
For the full story, see the Feb. 19 edition of The Washington Evening Journal
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