[Congressional Record Volume 153, Number 13 (Tuesday, January 23, 2007)]
[Senate]
[Pages S888-S904]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FAIR MINIMUM WAGE ACT OF 2007--Continued
Amendment No. 103
The PRESIDING OFFICER. Under the previous order, there are now 30
minutes equally divided on amendment No. 103, as modified. Who yields
time?
The Senator from Wyoming is recognized.
Mr. ENZI. Mr. President, I yield myself 3 minutes.
The PRESIDING OFFICER. The Senator is recognized for 3 minutes.
Mr. ENZI. Mr. President, I rise today in support of the amendment
offered by Senator Snowe, Senator Landrieu, and others, to provide
regulatory assistance to our Nation's small businesses.
This amendment requires that when Federal agencies issue new rules
and regulations that impact small business, they also must issue
compliance guides for small businesses. The amendment also requires
that the compliance guides be written in plain English and made
available in a timely manner.
I think this is a commonsense requirement. It not only reduces the
administrative costs for small business, but it also increases the
level of compliance with such new rules and regulations. I think the
work opportunity tax credit is an example. That isn't a program that a
lot of small businesses have taken advantage of. Part of it is because
they don't know about it, and part is they don't know how to comply
with it. They don't have the opportunity to hire the specialists that
might be needed to understand it or to do the recordkeeping on it. So
they don't take advantage of it to the level they could. It is a
provision in the tax bill that could make quite a difference to small
employers.
Many small employers simply lack the resources, the outside
consultants, the experts necessary to continually advise them of
changes in Federal rules that impact the way they must run their
business. As it now stands, smaller businesses currently pay
disproportionate per employee compliance costs when compared to larger
employers. The average per employee cost for Federal regulatory
compliance in a business with less than 20 employees is 45 percent
higher than the same cost for a business with 500 or more employees. So
it is about $7,600 for a small business to comply versus $5,200 for a
big business to comply. Those numbers stagger me--the cost for small
business to comply with Federal rules and regulations. That doesn't
count the cost of complying with the Tax Code, which is a whole other
range of costs.
Cost mandates, such as a minimum wage increase, impose significant
financial burdens on our small employers. We must do everything we can
to help alleviate this burden and ensure that small businesses remain
the well-run engine of our economy, and providing the kind of
compliance assistance called for in Senator Snowe's amendment is one of
the ways we can assist small businesses in meeting the administrative
costs associated with Federal regulation.
I commend Senator Snowe for her efforts on behalf of small businesses
and am proud to be a cosponsor of this legislation with her. She has
put in diligent efforts to hold hearings and get this into place in the
committee that she chaired, the Small Business Committee, on which she
is now the ranking member.
I urge my colleagues to support this amendment that not only provides
assistance that reduces employer costs but also assistance that
increases employer compliance. That is two goals. This amendment will
do both of those. I ask for your support.
I yield the floor and suggest the absence of a quorum, and I ask
unanimous consent that the time be equally divided between the sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KENNEDY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KENNEDY. Mr. President, we still anticipate a vote at 2:45 p.m.
As I mentioned, we are going to urge the Senate to accept the amendment
offered by Senator Snowe. I think it is an important contribution to
small businesses and their understanding of the kinds of rules and
regulations that have been out there and do it in ways that are
understandable and in a timely way and to ensure that the relevant
committee is going to find out how that is being implemented. We are
certainly in strong support of that concept and idea. I commend those
who have been involved in it.
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We are going to vote at 2:45. We have amendments that are related to
the Finance Committee. I talked with Senator Baucus during the noon
hour. His staff is working on some that have been offered by Senator
Sessions, and we are in the process of trying to work with the Senator
to see what progress can be made, and the Finance Committee staff, as
well as Senator Baucus, is attentive to those issues.
Senator Roberts has an amendment dealing with childcare and small
business. It was a subject matter he talked about during our hearing in
the Health, Education, Labor, and Pensions Committee. He will come over
to the floor now and address the Senate about that issue. We have been
trying to work with him. We think most of us have been strong
supporters in terms of childcare. Senator Dodd has been a real leader
with Senator Hatch in the past with the block grant childcare program.
We have a childcare program that is also tied in with the Social
Security program, and we have a very effective childcare program in the
military which receives awards. It is very close, actually, to the bill
that was initially introduced by Senator Dodd a number of years ago.
We will have a chance to consider those amendments in a short period
of time. I will take a few minutes now to review for the Senate what
will be the first vote tomorrow, and that will be on what we call the
line-item veto amendment.
We had an excellent debate and discussion on that amendment
yesterday. I refer any of those interested to read the Record, the
excellent comments that were made on this issue by the chairman of the
Appropriations Committee, Senator Byrd, and also the chairman of the
Budget Committee, Senator Conrad, enormously, I think, comprehensive
comments on it. I urge they read the comments of Senator Gregg as well,
who is the proponent of the amendment.
Senator Conrad and Senator Byrd made excellent presentations. We will
be considering that early tomorrow. I hope those who are interested in
the amendment will take a few moments and look back at the Record. It
is a very complete record on that issue. I stand with Senator Conrad
and Senator Byrd, for the reasons they have outlined, in opposition to
the Gregg amendment.
Next we will have a chance to vote on what we call a clean increase
in the minimum wage. That means a vote on the increase in the minimum
wage over a 2-year period to rise from $5.15 to $7.25 an hour.
I strongly urge our colleagues to vote for what we call a clean bill
on the minimum wage. I do so for a number of reasons.
First, this is the area of need. It is among workers who haven't
gotten a raise in the last 10 years. For 10 years, the longest time
since we had a minimum wage increase, they have lost effectively 20
percent of their purchasing power, and they are working in tough and
difficult jobs. These are men and women of great pride and dignity.
They do hard, difficult, trying work, and they do it to the best of
their ability. They deserve to have a raise.
I don't think any of us in this country thought the minimum wage
would be a permanent wage for millions of Americans, and yet,
nonetheless, if one looks at the figures, effectively 40 percent of
those earning the minimum wage were earning the minimum wage 4 years
ago. That they have been able to make ends meet over this amount of
time is extraordinary, particularly when they have members of their
family to look after.
This country has said if one works hard 40 hours a week, 52 weeks of
the year, one shouldn't have to live in poverty in the richest nation
in the world. That is an issue of fairness. It is a moral issue.
As we demonstrated earlier, the Members of the great face of this
country have all spoken about the morality of this issue. It is part of
our Constitution that talks about the general welfare, how are we going
to treat each other. It is as old as the Mayflower Compact. In my State
of Massachusetts, before landing, the Pilgrims gathered together near
Provincetown. Most people think they landed at Plymouth Rock, but they
landed at Provincetown, MA. Before they landed--they had been at sea
for close to 100 days, and many had died and many suffered from
disease--they got together and talked about their Compact, their
willingness to work together for a common purpose and common respect
for their fellow human beings. That was going to be the essence of
their whole life experiment in the United States.
It is reflected in the actions that have been taken in this body with
the minimum wage. On only one occasion in the last nine occasions when
we raised the minimum wage have we added a tax provision.
Again, the minimum wage has lost 20 percent of all of its purchasing
power. It was a good deal higher in the sixties, seventies, and
eighties. It has dropped and dropped significantly over time and has
lost that purchasing power.
Secondly, only once in 1996 did we pair a minimum wage increase with
tax cuts. Previous increases had strong bipartisan support, despite the
lack of tax cuts. In 1989, the minimum wage was raised with no tax cuts
and passed by a margin of 89 to 8. In 1977, with no giveaways, an
increase passed 63 to 24. We have seen what has happened. Only one
time--it didn't happen in 1938, 1949, 1955, 1961, 1966, 1974, 1977,
1989--only in 1996. And look in the last 10 years what has happened in
terms of the reduction of taxes for corporations and for small
businesses. In corporations, it is $276 billion in tax breaks; small
businesses, $36 billion; and no raise for minimum wage workers.
We didn't hesitate. We were around here to provide tax benefits to
small businesses and large corporations. Where were the voices to say
let's give the minimum wage workers a little boost?
Now, all of a sudden, we are trying to get minimum wage workers a
little boost, and everybody is running around to get an increase in tax
provisions. Fair is fair, Mr. President; fair is fair.
We have seen what has happened in productivity. Over the last 10
years--here are the statistics from the Bureau of Labor Statistics--
profits are up 45 percent, productivity is up 29 percent, and the
minimum wage is down 20 percent. These minimum wage workers haven't
even had the opportunity to get an increase in their salaries in spite
of the fact that we have seen a real increase in productivity.
Historically, when we saw an increase in productivity, that was
reflected in an increase in the minimum wage. That was all true in the
1960s, 1970s, up to the 1980s. As productivity increased, so did the
minimum wage increase over a considerable period of time, but not in
the last few years.
As I have pointed out, a recent Gallup Poll found that 86 percent of
small business owners do not think the minimum wage affects their
businesses. Three out of four small businesses said an increase in the
minimum wage would have no effect on their company. Many small
businesses are already paying higher wages to recruit and retain
quality workers. A higher minimum wage actually benefits them because
it levels the playing field and allows them to compete with the bigger
business.
What we have found over time, when we provide a decent wage to
workers--and this is demonstrated; I mentioned it here, I spelled it
out in some greater degree on yesterday--what we find is we get workers
who are loyal to the business. We find there is less of a turnover when
there was an increase in the minimum wage to a living wage.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. KENNEDY. Our time has expired. That is interesting. Have we
reserved the last 5 minutes for debate on the Snowe amendment?
The PRESIDING OFFICER. That was not the unanimous consent agreement.
There is 30 minutes equally divided.
Mr. KENNEDY. I thank the Chair.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Mr. President, how much time is remaining on our side?
The PRESIDING OFFICER. The Senator has 6\1/2\ minutes remaining.
Mr. ENZI. I thank the Chair.
I appreciate the comments of the Senator from Massachusetts and the
diligence with which he has worked on this issue and the number of
times we have debated it. I appreciate the majority leader making it
possible for us to consider amendments on this bill. I understand how
some people would like
[[Page S890]]
to have this as a clean amendment, that we just do the increase. The
debate the last three times we have done it has been about whether we
can have some provisions for small businesses to offset the impact of
the raise in the minimum wage.
I want to bring a more personal face to this small business. We
confuse that sometimes even with General Motors and some of the
airlines. Those are big corporations. In fact, the ones I am
particularly concerned about are the ones with 50 employees or less,
and even more concerned about the ones that only have 2 or 3 employees.
The impact and their ability to adjust is much more limited. We are
talking about the inventors in their garages who have an idea and who
will employ another person to help put their product together and
market it. We are talking about the corner grocery store. We are
talking about the laundry. We are talking about the little shoe store,
the independent one.
These are families that are eking out a living. These are not
families that are getting rich. These are families that took on a lot
of risk for the American dream. They are hoping that with all of the
loans they put in place to be able to do this business that they always
dreamed of doing, they might make a return on their investment and
enough to keep their family going. But there is no guarantee.
These are the people who--and I know; I used to be a small
businessman. I used to own shoe stores. One of my definitions of a
small businessman is the guy who wakes up, sits up straight in bed in
the middle of the night and says: Tomorrow is payday; how do I meet
payroll? And they figure out a way because the employees get paid
first.
These are people worrying about how to stay in business, how to make
a living, and taking on a whole lot of risk to make sure other people
have jobs.
We have to remember that the small businessman will be forced to come
up with additional funds to pay his or her workers on what we are
mandating today. Those funds don't come from a money tree or some pot
of gold at the end of the rainbow. They come out of the pockets of the
Nation's small businessmen. It is the penalty they pay for taking the
risk associated with running a small business.
I have about 3 minutes. I yield the remainder of the time to the
Senator from Maine.
The PRESIDING OFFICER. The Senator from Maine is recognized for 3
minutes.
Ms. SNOWE. Mr. President, I thank the Senator from Wyoming for his
leadership on this amendment that is so important to the small business
sector of our economy. I also thank Chairman Kennedy as well for
bringing this legislation to the floor.
I rise today in support of the pending modified amendment we will be
voting on shortly that has been offered by the Senator from Wyoming,
Mr. Enzi, the Senator from Louisiana, Ms. Landrieu, as well by the
Senator from Massachusetts, Mr. Kennedy, to enhance compliance
assistance for small businesses. I truly appreciate all those joining
me in this effort.
I ask unanimous consent to add Senators Kerry, Bond, Sununu, and
Roberts as cosponsors to this amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. SNOWE. Mr. President, I want to say to Members of the Senate,
this amendment would significantly help to reduce the regulatory burden
imposed on small businesses throughout this country. The amendment is
designed to clarify an existing Federal law that the Senate unanimously
passed back in 1996. The Government Accountability Office has suggested
that we needed to have further clarification to the existing law
because many Federal agencies are circumventing the law. These agencies
are using loopholes to ignore requirements under the law that the
agencies publish small business compliance guides so that small
businesses know how to comply with complex Federal regulations. The
agencies have used ambiguity in the law as a rationale for not
assisting small businesses.
This amendment would clarify existing Federal rules and regulations,
by requiring that Federal agencies produce compliance assistance
materials to help small businesses satisfy their regulatory
obligations. Because the GAO has found widespread and pervasive
disregard of this law by agencies, we felt it was very important to
clarify the law so that small business not only gets the assistance it
requires but also can meet the regulatory requirements promulgated by
the Federal government. As we well know, small businesses face a
disproportionate burden of the impact of regulations in rules issued by
Federal agencies. In fact, employers with 20 or fewer employees face
44.8 percent more of a regulatory burden than companies with 500 or
more employees, in terms of compliance costs per employee.
So you can see that for our Nation's small businesses, we clearly
need to do better so they can continue to drive our economy, by
creating three-quarters of all the net new jobs each year. This
amendment will go a long way toward easing the impact of the cost of
small business regulatory compliance and making sure the agencies
comply with requirements under existing law to provide the support
small businesses rightly deserve.
Mr. President, I yield the floor.
The PRESIDING OFFICER. All time has expired.
Mr. KENNEDY. Mr. President, have the yeas and nays been ordered?
The PRESIDING OFFICER. They have not been ordered.
Mr. KENNEDY. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second.
The question is on agreeing to the amendment. The clerk will call the
roll.
The bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from South Dakota (Mr.
Johnson) is necessarily absent.
The PRESIDING OFFICER (Mrs. McCaskill). Are there any other Senators
in the Chamber desiring to vote?
The result was announced--yeas 99, nays 0, as follows:
[Rollcall Vote No. 20 Leg.]
YEAS--99
Akaka
Alexander
Allard
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Brown
Brownback
Bunning
Burr
Byrd
Cantwell
Cardin
Carper
Casey
Chambliss
Clinton
Coburn
Cochran
Coleman
Collins
Conrad
Corker
Cornyn
Craig
Crapo
DeMint
Dodd
Dole
Domenici
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Graham
Grassley
Gregg
Hagel
Harkin
Hatch
Hutchison
Inhofe
Inouye
Isakson
Kennedy
Kerry
Klobuchar
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lott
Lugar
Martinez
McCain
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Roberts
Rockefeller
Salazar
Sanders
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Tester
Thomas
Thune
Vitter
Voinovich
Warner
Webb
Whitehouse
Wyden
NOT VOTING--1
Johnson
The amendment (No. 103), as modified, was agreed to.
Mrs. LINCOLN. Madam President, I move to reconsider the vote, and I
move to lay that motion on the table.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KENNEDY. Madam President, the Senator from Kansas has an
amendment. He has brought it up during the course of meetings of our
Health, Education, Labor, and Pensions Committee, and he has been
advocating for it for some period of time. He wishes to address the
Senate at this time, if we could have order so that the Senator could
be heard.
The PRESIDING OFFICER. The Senator from Kansas is recognized.
Amendment No. 102
Mr. ROBERTS. Madam President, I rise today to offer amendment No.
102.
As we debate the issue of minimum wage, we can't forget the impact on
the employers who hire these minimum wage workers. Small businesses pay
45 percent of the payroll in the United States, and they have created
60 to 80 percent of new jobs over the last decade. In my home State of
Kansas, small businesses actually employ the brunt of hard-working
families. I often hear from these employers who agree with their
workers that they deserve a fair wage for a fair day's work, but they
[[Page S891]]
admit, however, that they struggle to offer the basic benefits to their
employees such as childcare. With a mandated increase in the minimum
wage, that struggle will only grow. So affordable childcare oftentimes
becomes a factor in keeping a job for many Americans in small
communities such as Dodge City, my hometown, and other very similar
communities. Childcare facilities are very scarce, limiting the
possibilities for families to earn----
Mr. KENNEDY. Madam President, if the Senator will yield, maybe we
could have order. We are making good progress on this legislation. This
is an important amendment. The Senator has spent a good deal of time,
and we welcome the opportunity to hear him on it. We would ask our
colleagues and friends if they would be good enough to take their
conversations to another part of the Senate so we can hear the Senator.
The PRESIDING OFFICER. Senators, please remove your conversations out
of the well.
The Senator from Kansas is recognized.
Mr. ROBERTS. I thank the Senator from Massachusetts and I thank the
Presiding Officer and I thank my colleagues to my right who, hopefully,
will take their conversation from the floor of the Senate.
Unfortunately, small businesses generally do not have the resources
required to start up and support a childcare center like happens in
many areas in urban America and big cities.
When I came to the Senate in 1997, one of the first bills I
introduced was the Small Business Child Care Act, which authorized a
short-term flexible grant as a program to encourage small businesses to
work together or with other local childcare agencies to provide
childcare services for their employees. This amendment includes the
bipartisan language of the Small Business Child Care Act that was
passed out of the HELP Committee in August of 2005 as part of the
larger childcare and development block grant.
Under the amendment, small businesses are eligible for grants up to
$500,000 for startup costs and training and scholarships and other
related activities, with priority given to grantees who work with other
small businesses or local childcare organizations. These grants all
have a matching requirement which encourages self-sustaining facilities
that will go on well after the program ends.
In many small Kansas towns, childcare facilities can be very scarce,
as I have said before. This amendment would alleviate the strain on
working families who often have to close the door on the opportunity to
be a double-income family because of the lack of childcare options in
their communities.
When I first ran for the House back in 1980, I was going door to door
in Dodge City. I was in south Dodge and I knocked on a door and a young
lady came to the door and two children were immediately right there
with her. I handed her a brochure, and I said: I am running for
Congress. What can I do for you? Is there anything I can do for you as
a candidate?
She looked at me with the two kids behind her--she was obviously a
single mother--and she said: Mr. Roberts, it's your world, I'm just
living in it.
That made a big impression on me.
I said: What do you need more than anything else?
She said: If there could be a possibility that there could be any
childcare for these two children, I could go to work. I could go back
to work.
But that was not the case at that particular time. Then I promised
myself that we would try our very best so that in a small community
with a bank, the implement dealer, and, say, a restaurant, they could
come together, and with these kinds of grants offer affordable
childcare.
So I am very hopeful we can get this amendment passed. It is a small
change that will make a big difference in the lives of many employees
and employers who see a need for childcare in their communities. I hope
my colleagues will join me in supporting this amendment.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, I rise to thank the Senator from Kansas
for offering this amendment. Back about 20 years ago, the Senator from
Utah and I, along with Senator Kennedy and others, authored the first
childcare development block grant ever to be proposed by the Congress.
We had hoped in those days that we would be able to expand the
availability, affordability, and quality of childcare to millions of
Americans and their children who are lacking those resources.
Over the years, we have provided some good assistance. I am grateful
to my colleagues over the years who have been supportive.
We have gone stale on the commitment over the last 5 or 6 years. The
funding has not gone up at all and demand continues to grow. We have
done a fairly good job in serving some of the working poor. We must do
better, however. We have not done a good job, in my view, on the most
critical issue most parents and others care about, and that is the
quality of childcare. This amendment gets to the quality of child care
by providing small businesses the opportunity to use the grant for
facilities and to create partnerships with local organizations such as
health departments.
What is happening with our colleague's amendment is that it is trying
to expand opportunities for families, and I am grateful to him for
proposing it. Everyday I hear about the communities in which the demand
for child care for exceeds the supply. This amendment would increase
the supply and allow more parents to go to work knowing that their
children are safe.
I am supporting it. I think it is worthwhile, and it will help make a
difference of expanding quality and access.
It is good for everyone involved. A lot of times we offer legislation
with winners and losers. Here, everybody wins. From a business
standpoint, they are retaining good employees, allowing parents' minds
to be focused on their jobs. In no small measure, this depends on how
you feel, where your children are, who is caring for them, and what the
conditions are. In terms of productivity and retention, all the
elements businesses desire for employees, childcare is a major
component. For the parents, obviously, not to be worried or concerned
about the quality of the care their children receive and whether they
can afford it is a major issue. I am preaching to the choir for those
who understand what I am talking about. Obviously, from the child's
perspective, it's essential to be able to have that good, nurturing
environment. There is not a guarantee they will get it in every case,
but it is more likely if this amendment passes.
The difficult area is with smaller businesses. Many larger
corporations have installed childcare facilities onsite. In fact, in
some cases they have offered less in salaries and wages in exchange for
providing better childcare; I am not saying that is great, but people
are so hungry to have a good, safe, childcare environment, they will
opt for lesser wage or salary in exchange for the assurance their
children are in a safe place. Smaller businesses cannot do that. Some
of them are at shopping malls, and they develop consortiums and set
aside space. There are a lot of creative ideas. But it is the hardest
thing in the world for smaller business to provide child care. It is
not that they do not recognize the need for it. They understand the
value of it. This amendment, from a child's perspective, from a
parent's perspective, and from a business perspective is a win for all.
I commend my colleague. We have talked of this in the past and agreed
on its importance. I thank Senator Enzi.
While I am here, I would like to talk about the underlying bill, to
raise the minimum wage. Exactly because of what the Senator from Kansas
has offered, it is important to know that his amendment is a related
matter when it comes to children. The increase in the minimum wage has
a huge impact on children.
So I am taking advantage of a couple of minutes on his amendment to
highlight this point. In the last 5 years, we have watched child
poverty in this country increase by 1.3 million children. This figure
is from the U.S. Census Bureau, not a private think tank making this
up. Nearly 12.9 million children in this country live in poverty.
Obviously, that is a matter of great concern, I hope to all of us.
What is bothersome to me and should be to every single one of us--I
don't care what your politics are or your political persuasion--the
fact that the United
[[Page S892]]
States of America, at the outset of the 21st century, has one of the
highest rate of child poverty among all the industrialized nations.
That is something that ought to concern each and every one of us, not
just because of what a shameful statistic that is. As we look to the
21st century, watching our country grow, meeting the challenges in
front of us, we have to do a better job if we are going to have a well-
prepared generation to meet the challenges.
Aside from providing decent child care, we know by increasing the
earning capacity of parents we make a difference. In fact, nearly 6
million children will benefit from a minimum wage increase.
Children whose parents are economically secure--and this increase is
not going to guarantee security, but it moves a family closer to it--
have better attendance in school and have a higher concentration on the
work they are asked to do. Performance levels go up, test scores go up,
and graduation rates increase when a family's economic circumstances
are far more stable. In addition, children have stronger immune
systems, better health, fewer expensive hospital visits and fewer run-
ins with the juvenile justice system. Those are facts when you have a
family doing better economically. For the families who have the
greatest economic stability at home, these statistics improve in almost
every category.
Because of what the Senator from Kansas has offered, focusing on
childcare, combined with what the Senator from Massachusetts, Senator
Kennedy, is leading today on the minimum wage, we can make a difference
for these children. That is the point I wanted to make to my
colleagues.
I commend them both. It is long overdue. My hope is that the
amendment from my friend from Kansas will be a forerunner this year for
increasing our commitments to child care. My colleague from Maine,
Senator Snowe, has been terrific on this issue over the years. Senator
Hatch was my principal cosponsor on this many years ago. It was
courageous of him then. A lot of people did not realize the value of
it. I am remiss not mentioning those who played a significant role. And
let me add my colleague, Senator Roberts, for his leadership on this
issue. I thank him immensely. I thank Senator Kennedy for his
leadership on minimum wage. We can make a difference for children with
both of these proposals.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Madam President, I thank my friend and colleague for his
excellent presentation. He has been the leader of the children's caucus
and a leader on this issue of childcare.
We have 14,000 family members now waiting, parents who are waiting
for childcare slots in my State of Massachusetts.
I have listened to the Senator give the statistics nationwide. This
is all related to work. It is obviously related to lower income because
those at the lower income levels have less opportunity as far as
affordability.
I can remember when the Senator first offered the childcare
legislation. I remember the debates we had about limiting the childcare
legislation. We debated for about 10 days or so while it was constantly
adjusted, altered, and changed. Eventually, it passed. The childcare
block grant has done an enormous amount of good.
The Senator has been very much involved in the other childcare
programs that have come out through the CDBG and the other Social
Security programs. There is a third childcare program, the one in the
military. If you read back in the history books, that particular
program passed by over 90 votes. This, effectively, was the legislation
the Senator from Connecticut introduced. Today, when we have
comparisons about which childcare programs work the best, everyone
points to the military. The Senator from Connecticut can give the
reasons for it.
The point is, this is a matter of enormous importance to working
families, with the whole change in the workforce, the increasing number
of women in the workforce, the increasing number of women with
children, the increasing demands upon those women, in particular, but
not exclusively.
We appreciate the fact that the Senator from Kansas would give focus
and attention to this issue. We wish to work with the Senator. We can
do part of the job in terms of the authorization. We are going to rely
on him to help get limited resources to make sure we bring life to this
program. I thank the Senator for his statements and comments.
We look forward to hearing from my friend and colleague from Wyoming,
hopefully, urging acceptance of the amendment.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Madam President, I echo what the Senator from Massachusetts
said, that this does provide for authorization. There is room for that
to be included, and we can help look for the resources to do something
on that.
I commend both Senator Roberts and Senator Dodd for their
tenaciousness and their active work to be able to bring this to the
Senate at this point in time. I note that Senator Roberts has been
working on this for about 10 years. Six years is the average for a bill
around here. That should qualify.
I ask we make this part of that package.
The PRESIDING OFFICER. The Senator from Kansas.
Mr. ROBERTS. Madam President, I say to the Senator from Connecticut,
I thank him very much for his comments. He has been absolutely
tenacious, as described by the Senator from Wyoming.
I can remember, it was about, what, 5, 6, 7 years ago, that we all
were over, on a cold day, at the childcare center that is offered for
employees on Capitol Hill over by the Hart building. We had a press
conference. Senator Kennedy was there, I was there, Senator Dodd was
there, I think Senator Jeffords was there at that time. That was 4 or 5
years ago.
So we should be moving on these things. I pledge my support to see
what we can do down the road.
I rise to call up Senate amendment 102.
The PRESIDING OFFICER. Without objection the pending amendments are
set aside.
The clerk will report.
The legislative clerk read as follows:
The Senator from Kansas [Mr. Roberts] proposes an amendment
numbered 102.
Mr. ROBERTS. Madam President, I ask unanimous consent the reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To establish a small business child care grant program)
At the appropriate place, insert the following:
SEC. __. SMALL BUSINESS CHILD CARE GRANT PROGRAM.
(a) Establishment.--The Secretary of Health and Human
Services (referred to in this section as the ``Secretary'')
shall establish a program to award grants to States, on a
competitive basis, to assist States in providing funds to
encourage the establishment and operation of employer-
operated child care programs.
(b) Application.--To be eligible to receive a grant under
this section, a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require,
including an assurance that the funds required under
subsection (e) will be provided.
(c) Amount and Period of Grant.--The Secretary shall
determine the amount of a grant to a State under this section
based on the population of the State as compared to the
population of all States receiving grants under this section.
The Secretary shall make the grant for a period of 3 years.
(d) Use of Funds.--
(1) In general.--A State shall use amounts provided under a
grant awarded under this section to provide assistance to
small businesses (or consortia formed in accordance with
paragraph (3)) located in the State to enable the small
businesses (or consortia) to establish and operate child care
programs. Such assistance may include--
(A) technical assistance in the establishment of a child
care program;
(B) assistance for the startup costs related to a child
care program;
(C) assistance for the training of child care providers;
(D) scholarships for low-income wage earners;
(E) the provision of services to care for sick children or
to provide care to school-aged children;
(F) the entering into of contracts with local resource and
referral organizations or local health departments;
(G) assistance for care for children with disabilities;
(H) payment of expenses for renovation or operation of a
child care facility; or
[[Page S893]]
(I) assistance for any other activity determined
appropriate by the State.
(2) Application.--In order for a small business or
consortium to be eligible to receive assistance from a State
under this section, the small business involved shall prepare
and submit to the State an application at such time, in such
manner, and containing such information as the State may
require.
(3) Preference.--
(A) In general.--In providing assistance under this
section, a State shall give priority to an applicant that
desires to form a consortium to provide child care in a
geographic area within the State where such care is not
generally available or accessible.
(B) Consortium.--For purposes of subparagraph (A), a
consortium shall be made up of 2 or more entities that shall
include small businesses and that may include large
businesses, nonprofit agencies or organizations, local
governments, or other appropriate entities.
(4) Limitations.--With respect to grant funds received
under this section, a State may not provide in excess of
$500,000 in assistance from such funds to any single
applicant.
(e) Matching Requirement.--To be eligible to receive a
grant under this section, a State shall provide assurances to
the Secretary that, with respect to the costs to be incurred
by a covered entity receiving assistance in carrying out
activities under this section, the covered entity will make
available (directly or through donations from public or
private entities) non-Federal contributions to such costs in
an amount equal to--
(1) for the first fiscal year in which the covered entity
receives such assistance, not less than 50 percent of such
costs ($1 for each $1 of assistance provided to the covered
entity under the grant);
(2) for the second fiscal year in which the covered entity
receives such assistance, not less than 66\2/3\ percent of
such costs ($2 for each $1 of assistance provided to the
covered entity under the grant); and
(3) for the third fiscal year in which the covered entity
receives such assistance, not less than 75 percent of such
costs ($3 for each $1 of assistance provided to the covered
entity under the grant).
(f) Requirements of Providers.--To be eligible to receive
assistance under a grant awarded under this section, a child
care provider--
(1) who receives assistance from a State shall comply with
all applicable State and local licensing and regulatory
requirements and all applicable health and safety standards
in effect in the State; and
(2) who receives assistance from an Indian tribe or tribal
organization shall comply with all applicable regulatory
standards.
(g) State-Level Activities.--A State may not retain more
than 3 percent of the amount described in subsection (c) for
State administration and other State-level activities.
(h) Administration.--
(1) State responsibility.--A State shall have
responsibility for administering a grant awarded for the
State under this section and for monitoring covered entities
that receive assistance under such grant.
(2) Audits.--A State shall require each covered entity
receiving assistance under the grant awarded under this
section to conduct an annual audit with respect to the
activities of the covered entity. Such audits shall be
submitted to the State.
(3) Misuse of funds.--
(A) Repayment.--If the State determines, through an audit
or otherwise, that a covered entity receiving assistance
under a grant awarded under this section has misused the
assistance, the State shall notify the Secretary of the
misuse. The Secretary, upon such a notification, may seek
from such a covered entity the repayment of an amount equal
to the amount of any such misused assistance plus interest.
(B) Appeals process.--The Secretary shall by regulation
provide for an appeals process with respect to repayments
under this paragraph.
(i) Reporting Requirements.--
(1) 2-year study.--
(A) In general.--Not later than 2 years after the date on
which the Secretary first awards grants under this section,
the Secretary shall conduct a study to determine--
(i) the capacity of covered entities to meet the child care
needs of communities within States;
(ii) the kinds of consortia that are being formed with
respect to child care at the local level to carry out
programs funded under this section; and
(iii) who is using the programs funded under this section
and the income levels of such individuals.
(B) Report.--Not later than 28 months after the date on
which the Secretary first awards grants under this section,
the Secretary shall prepare and submit to the appropriate
committees of Congress a report on the results of the study
conducted in accordance with subparagraph (A).
(2) 4-year study.--
(A) In general.--Not later than 4 years after the date on
which the Secretary first awards grants under this section,
the Secretary shall conduct a study to determine the number
of child care facilities that are funded through covered
entities that received assistance through a grant awarded
under this section and that remain in operation, and the
extent to which such facilities are meeting the child care
needs of the individuals served by such facilities.
(B) Report.--Not later than 52 months after the date on
which the Secretary first awards grants under this section,
the Secretary shall prepare and submit to the appropriate
committees of Congress a report on the results of the study
conducted in accordance with subparagraph (A).
(j) Definitions.--In this section:
(1) Covered entity.--The term ``covered entity'' means a
small business or a consortium formed in accordance with
subsection (d)(3).
(2) Indian community.--The term ``Indian community'' means
a community served by an Indian tribe or tribal organization.
(3) Indian tribe; tribal organization.--The terms ``Indian
tribe'' and ``tribal organization'' have the meanings given
the terms in section 658P of the Child Care and Development
Block Grant Act of 1990 (42 U.S.C. 9858n).
(4) Small business.--The term ``small business'' means an
employer who employed an average of at least 2 but not more
than 50 employees on the business days during the preceding
calendar year.
(5) State.--The term ``State'' has the meaning given the
term in section 658P of the Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858n).
(k) Application to Indian Tribes and Tribal
Organizations.--In this section:
(1) In general.--Except as provided in subsection (f)(1),
and in paragraphs (2) and (3), the term ``State'' includes an
Indian tribe or tribal organization.
(2) Geographic references.--The term ``State'' includes an
Indian community in subsections (c) (the second and third
place the term appears), (d)(1) (the second place the term
appears), (d)(3)(A) (the second place the term appears), and
(i)(1)(A)(i).
(3) State-level activities.--The term ``State-level
activities'' includes activities at the tribal level.
(l) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated to
carry out this section, $50,000,000 for the period of fiscal
years 2008 through 2012.
(2) Studies and administration.--With respect to the total
amount appropriated for such period in accordance with this
subsection, not more than $2,500,000 of that amount may be
used for expenditures related to conducting studies required
under, and the administration of, this section.
(m) Termination of Program.--The program established under
subsection (a) shall terminate on September 30, 2012.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 102) was agreed to.
Mr. KENNEDY. Madam President, I see the Senator from Alabama looking
for recognition. He has filed some amendments. Hopefully, I will have
an opportunity to discuss some of those.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. I thank Senator Kennedy and Senator Enzi for their
courtesy as we discuss some of the issues I have raised by my
amendments.
What is the pending business?
The PRESIDING OFFICER. The pending question is amendment 118 offered
by Senator Kyl.
Amendment No. 106, as Modified
Mr. SESSIONS. I call for the regular order with respect to Senate
amendment 106 and send a modification to the desk.
The PRESIDING OFFICER. The Senator has that right.
The amendment will be so modified.
The amendment (No. 106), as modified, is as follows:
At the appropriate place, insert the following:
SEC. __. SENSE OF THE SENATE CONCERNING PERSONAL SAVINGS.
(a) Findings.--The Senate finds that--
(1) the personal saving rate in the United States is at its
lowest point since the Great Depression, with the rate having
fallen into negative territory;
(2) the United States ranks at the bottom of the Group of
Twenty (G-20) nations in terms of net national saving rate;
(3) approximately half of all the working people of the
United States work for an employer that does not offer any
kind of retirement plan;
(4) existing savings policies enacted by Congress provide
limited incentives to save for low- and moderate-income
families; and
(5) the Social Security program was enacted to serve as the
safest component of a retirement system that also includes
employer-sponsored retirement plans and personal savings.
(b) Sense of the Senate.--It is the sense of the Senate
that--
(1) Congress should enact policies that promote savings
vehicles for retirement that are simple, easily accessible
and provide adequate financial security for all the people of
the United States;
(2) it is important to begin retirement saving as early as
possible to take full advantage of the power of compound
interest; and
(3) regularly contributing money to a financially-sound
investment account is one
[[Page S894]]
important method for helping to achieve one's retirement
goals.
Mr. SESSIONS. Madam President, it is important as we think about low-
and middle-income, middle-class workers in America today, to think
about how they are getting along and whether they are saving
adequately. Savings is a part of any person's financial security. It
makes a difference between how a person thinks about his life, how he
or she thinks about her job, and how they can live in the latter years.
Most Americans today depend upon Social Security to finance their
retirement as Social Security provides 73 percent of the retirement
income of the typical household. That is not enough money for the
average American to live on adequately. The truth is, they can have so
much more so easily. I would like to talk about that today.
To live the comfortable life that Americans deserve after 40-plus
years of work, most need to supplement their Social Security income
with additional savings, either through an employer-sponsored plan or
their own savings plan. Yet despite this need, most Americans are not
putting aside money for their future.
Statistic after statistic tragically shows this. The personal savings
rate in the United States, as this chart demonstrates, is at its lowest
ebb since the Great Depression. It is a matter of national importance,
as the Chairman of the Reserve Board and others have discussed.
Look at this chart. It shows, since 1946, our savings rate has fallen
steadily; in 2006, it is below zero. We are spending our savings now
more than we are saving. It is a very troubling matter. We have to do
something about it.
After having averaged better than 7 percent throughout most of the
post-World War II period, the personal savings rate dipped into
negative territory by 2005 for the first time since 1933. This trend
continued last year as the personal savings rate remained in negative
territory for the first three quarters of 2006, with the fourth quarter
numbers not yet reported.
These statistics indicate that the average American household has
been spending more during the last 2 years by either drawing down past
savings or selling assets or borrowing.
An alarming number of Americans also lack any financial resources
beyond personal income. According to a Federal Reserve 2004 survey of
consumer finances, 17 percent of all households have zero or a negative
net worth, while 30 percent have a net worth of less than $10,000. This
is especially a problem for African-American households, as they are
more than twice as likely to have zero or a negative net worth.
Perhaps most troubling, as this next chart demonstrates, almost half
of the 152 million Americans who worked in 2004, 71.5 million
employees, worked for an employer that did not sponsor a retirement
plan of any kind. Another 17 million did not participate in the plan
their employer offered. That means over 58 percent of working Americans
in 2004 were not participating in an employer-sponsored retirement
plan.
Higher income people take care of their plans, but the average
working American tends to focus his savings through his business and
employer. In particular, younger workers are much less likely to
participate in their employer's 401(k) plan, as only about one-third of
workers age 21 to 30 participate in any retirement plan at work. Even
if a worker is participating in an employer-sponsored retirement plan,
he or she is unlikely to be saving sufficiently for the future.
The average American worker holds nine jobs by the time they are 35,
meaning that he or she often leaves the job before their retirement
benefits become vested. In fact, frequently they cash it out. I had the
opportunity to be on an airplane recently with a young man, 37, with
two kids. He is beginning to work for the Federal Government. He is
going to be saving through the thrift plan. I asked him what he had
done before about savings. I told him the average person had nine jobs.
He said: I had nine jobs. And when asked about savings, he said: I
cashed in my plans. I just had a few hundred dollars in this one and a
few hundred in that one. It didn't make sense to hold on to them. I
cashed them in and paid my penalties. So at 35 with two kids, he has
missed those first 10 or 15 or 20 years of work that he could have been
saving and having the power of compound interest at work. About 45
percent of the participants in employer-sponsored retirement plans
cashed out when they changed jobs in 2004. A lot of plans don't offer
savings until you have worked with the company 6 months or a year;
some, 2 years.
As this next chart shows, if we considered business and Government
savings, we find that the United States has the lowest national savings
rate of any of the group of 20 industrial nations. Whereas Japan's
savings rate was 10.8 percent in 2003, Germany's was 5.4 percent, and
India's was 15.4 percent, the United States had a net national savings
rate of 1.6 percent in 2003. This is a World Bank chart. We can see we
have the lowest rate on the chart. That is significant, not only for
individuals, most importantly for individual working Americans, but
also for our economy because economists tell us that this is a major
detriment to our economy. In fact, all but two of the nations listed on
the chart I just showed have a net national savings rate of more than
twice that of the United States, if not more than 10 times our savings
rate.
The lack of personal savings is a particular problem in my State of
Alabama. An A.G. Edwards study rated Alabama the Nation's 46th lowest
savings State. This lack of personal savings is a national tragedy, as
few Americans are putting money aside to ensure their financial
security upon retirement, during a time where we have growth and
relative prosperity in our Nation. I will repeat that. Think about the
tragedy that is occurring when people are not setting aside even a
small percentage of their salary, when if they do, they could retire
with hundreds of thousands of dollars in a savings account at age 65.
This is very realistic. It is very possible. I will talk about it a
little bit more in a minute. But as anybody knows who has studied the
compound interest factor, the earlier you save, the more important it
is. So it is a special tragedy when we see this lack of savings. For
example, according to an analysis by Fidelity Investments, if one is 25
years old and has 40 years until retirement, every additional dollar a
person saves would be worth $8.14 at retirement, adjusted for
inflation. So a dollar saved, if you are 25, is worth $8.14 at
retirement.
Increasing savings also allows Americans to achieve greater control
and choice over their lives. According to the Center for Social
Development, the presence of savings is even associated with improved
health and psychological well-being.
The benefits of increasing our Nation's personal savings rate go
beyond the financial security of individual families. By increasing
household savings, we will be providing the investment capital our
Nation needs to ensure long-term economic growth and create more and
better jobs. Increasing savings will allow the United States to depend
less on foreign capital. America's current account deficit, the amount
of domestic investment financed by borrowing from abroad, hit a record
high of over 6 percent of GDP in 2005. Foreign capital can sustain our
economy in the short run, but I don't know if we can depend on that in
the long run. Moreover, we, as a country, benefit from the interest and
dividends our assets generate when we own them.
So what can we do to increase personal savings for retirement? I will
soon be introducing a bill to help solve our savings problem by
creating a national savings system that would give every American the
opportunity to retire a half-millionaire. Not a chicken in every pot,
not a car in every garage, we desire that every American be able to
retire with half a million dollars in the bank. That is possible,
realistic, so easily within our grasp if we set forth the right plans
today.
Under the plan I will be introducing, individual savings accounts, or
PLUS Accounts--for Portable, Lifelong, Universal Savings accounts--
would be created for every working American. One percent of every
paycheck earned would be deposited automatically, pretax, into
individual PLUS Accounts, along with a 1-percent match from every
employer, and invested in a new system like our Federal thrift system,
a new 401(k)-type system. Under this plan, a savings account would be
established for every American at birth, endowing these accounts with
$1,000.
[[Page S895]]
This is a proposal which the British are already doing. The UK has a
plan similar to this plan. They are very excited about how well it is
working. Savings among families in Britain has gone up 40 percent since
they started this plan. It has educated people to the power of savings
and compound interest.
Senators, such as Mr. Schumer, Mr. Santorum, and others, have
previously offered legislation of this kind.
So these funds contributed to PLUS Accounts would be the legal
property of each account holder, but they could not be spent until age
65. Any funds remaining when an individual died would be passed on as
they chose to their spouse, children, grandchildren, or any one of the
holder's choosing, including a favorite charity. Account assets would
be protected from creditors and would not be considered in determining
eligibility for any federally funded benefits or in calculating estate
tax liability.
Finally, my plan would simply serve as a supplement to Social
Security, not altering the Social Security system in any way. I
supported the President's idea of changes in Social Security. I thought
it made sense. We did not have the votes to do that in this Congress.
So I say, let's do it on top of Social Security.
I believe this can work. If we begin PLUS Accounts at birth and
require a portion of every paycheck to be invested, the first check you
get, the first job you go to work at, the average American citizen
could retire with a rather sizable nest egg. For example, given a
reasonable rate of return, someone who makes $46,000 a year--the median
household income in 2005--and only contributes 1 percent of each
paycheck would retire with almost $300,000 in the bank. Think about
that. You put in 1 percent, your employer puts in 1 percent. You have a
$1,000 deposit at birth. With no more money put in there other than
what you pay out, you would retire with $300,000 in your account. What
a remarkable and great country this is. At age 65, this account could
be converted to an annuity that would pay the recipient $2,100 per
month for life, which is probably more than they will get from Social
Security. If the same individual were to contribute 3 percent, if they
would just contribute 3 percent of their paycheck over the course of
their working life, they could expect to retire with half a million
dollars in their account--enough to purchase an annuity that pays over
$3,700 per month for life, if they chose, or they could simply live off
the income of it and have assets for their children or the charity they
chose. This is if the company, the employer, only puts in 1 percent.
But many employers today offer more than that.
I have to say, I was talking with Senator Corker from Tennessee, a
successful businessman, about this issue. He said: I believe in
savings. We have a savings plan in my company that our people all sign
up for.
I said: Tell me about it.
He said: We put in 10 percent, if they will put in 5 percent.
Think about that. That is what Senator Corker does. A lot of
businesses would do this. A lot of businesses would put in more. Many
already are, but many businesses would step up to the plate and put in
more than 1 percent. But if the employee put in 3 percent and the
employer put in 1, at age 65, it would be worth half a million dollars,
if you are operating at median income. That is remarkable.
Thus, I would say that if we care about working Americans, if we
really want to do something historic, I believe we have an opportunity,
a bipartisan opportunity to establish a savings program for Americans.
That program should be modeled, in my view, although I am open to other
suggestions, on the Federal thrift plan that our employees admire so
much and they value so much, you couldn't take it from them with a
crowbar. The Federal employees like it. They pay Social Security, and
they get a thrift plan where the Government puts in 5 percent if they
put in 5 percent. And they can put in more than that. Many of these
young people working today who work a career in the Government are
going to retire with a very sizable nest egg, something they own, an
asset they have earned themselves from their work, and they will be
able to retire comfortably, whereas otherwise they may be dependent on
Social Security.
It is a national tragedy that we are not educating our children to
save. It is a national tragedy that our savings rate has fallen below
zero. I believe we can do better. I am offering this sense-of-the-
Senate resolution to have the Senate think about it, to affirm its
commitment to increasing savings. As we go forward in the weeks to
come, we could be talking about the various proposals that are out
there to actually make this happen.
I see Senator Kennedy is off the floor. As I understand, we will set
the vote on this resolution for an appropriate time.
Hopefully, we will have strong support from my colleagues.
I yield the floor.
The PRESIDING OFFICER. The Senator from Kentucky is recognized.
Amendment No. 119
Mr. BUNNING. Madam President, I call up amendment No. 119.
The PRESIDING OFFICER. Without objection, the pending amendment is
set aside.
The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Kentucky [Mr. Bunning] proposes an
amendment numbered 119.
Mr. BUNNING. Madam President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To amend the Internal Revenue Code of 1986 to repeal the 1993
income tax increase on Social Security benefits)
At the appropriate place insert the following:
SEC. __. REPEAL OF 1993 INCOME TAX INCREASE ON SOCIAL
SECURITY BENEFITS.
(a) Restoration of Prior Law Formula.--Subsection (a) of
section 86 (relating to social security and tier 1 railroad
retirement benefits) is amended to read as follows:
``(a) In General.--Gross income for the taxable year of any
taxpayer described in subsection (b) (notwithstanding section
207 of the Social Security Act) includes social security
benefits in an amount equal to the lesser of--
``(1) one-half of the social security benefits received
during the taxable year, or
``(2) one-half of the excess described in subsection
(b)(1).''.
(b) Repeal of Adjusted Base Amount.--Subsection (c) of
section 86 is amended to read as follows:
``(c) Base Amount.--For purposes of this section, the term
`base amount' means--
``(1) except as otherwise provided in this subsection,
$25,000,
``(2) $32,000 in the case of a joint return, and
``(3) zero in the case of a taxpayer who--
``(A) is married as of the close of the taxable year
(within the meaning of section 7703) but does not file a
joint return for such year, and
``(B) does not live apart from his spouse at all times
during the taxable year.''.
(c) Conforming Amendments.--
(1) Subparagraph (A) of section 871(a)(3) is amended by
striking ``85 percent'' and inserting ``50 percent''.
(2)(A) Subparagraph (A) of section 121(e)(1) of the Social
Security Amendments of 1983 (Public Law 98-21) is amended--
(i) by striking ``(A) There'' and inserting ``There'';
(ii) by striking ``(i)'' immediately following ``amounts
equivalent to''; and
(iii) by striking ``, less (ii)'' and all that follows and
inserting a period.
(B) Paragraph (1) of section 121(e) of such Act is amended
by striking subparagraph (B).
(C) Paragraph (3) of section 121(e) of such Act is amended
by striking subparagraph (B) and by redesignating
subparagraph (C) as subparagraph (B).
(D) Paragraph (2) of section 121(e) of such Act is amended
in the first sentence by striking ``paragraph (1)(A)'' and
inserting ``paragraph (1)''.
(d) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years beginning after December 31, 2007.
(2) Subsection (c)(1).--The amendment made by subsection
(c)(1) shall apply to benefits paid after December 31, 2007.
(3) Subsection (c)(2).--The amendments made by subsection
(c)(2) shall apply to tax liabilities for taxable years
beginning after December 31, 2007.
SEC. __. MAINTENANCE OF TRANSFERS TO HOSPITAL INSURANCE TRUST
FUND.
There are hereby appropriated to the Federal Hospital
Insurance Trust Fund established under section 1817 of the
Social Security Act (42 U.S.C. 1395i) amounts equal to the
reduction in revenues to the Treasury by reason of the
enactment of this Act. Amounts appropriated by the preceding
sentence shall be transferred from the general fund at such
times and in such manner as to replicate to the extent
possible the transfers
[[Page S896]]
which would have occurred to such Trust Fund had this Act not
been enacted.
Mr. BUNNING. Madam President, this is an important amendment for many
of our seniors because it deals with the taxes on Social Security
benefits. I have brought this issue before this Chamber before, so it
should be familiar to many of my colleagues.
When the Social Security program was created, benefits were not
taxed. However, in 1983, Congress changed the rules of the game by
passing legislation to begin taxing up to 50 percent of a senior's
Social Security benefit if their income was over $25,000 for a single
individual or $32,000 for a couple.
Many seniors across the country were hit with a tax they never
anticipated and were forced to send a portion of their Social Security
benefits back to the IRS.
In 1993, Congress felt taxing 50 percent of benefits wasn't good
enough. That year, Congress passed and President Clinton signed a bill
that allows 85 percent of a senior's Social Security benefits to be
taxed if their income is above $34,000 for a single and $44,000 for a
couple. This was known as the ``Clinton senior citizens tax.''
The additional money this tax raises doesn't even go into helping
Social Security solvency; instead, it goes into a Medicare Part A
program.
I was a Member of the House of Representatives in 1993, and I opposed
this tax then and I oppose this tax today, 14 years later.
Some people think this tax only affects ``rich'' seniors, but that is
not the case. In fact, the income thresholds both for the 50-percent
tax and the 85-percent tax haven't changed since they were first
enacted back in 1983 and 1993. This means more and more seniors are
paying these taxes every year.
In fact, it is estimated that of the 40 million Social Security
beneficiaries, about 15 million--or 39 percent--of seniors pay taxes on
their Social Security benefits. Of these, it is estimated that over 9.5
million pay taxes on up to 85 percent of their Social Security benefit.
On one hand, we tell seniors to plan and save for retirement and, on
the other hand, we tax them for doing that.
In the past, there have been efforts by Members of Congress,
including myself, to remove this unfair tax. During debate on the
Senate 2006 budget resolution, I offered an amendment that provided
Congress with the budget resources to remove this unfair tax on
benefits. My amendment passed 55 to 45. Unfortunately, the tax
reconciliation instructions were scaled back during conference.
Today, I am offering another amendment to finally repeal the 1993 tax
on Social Security benefits. This means the 85-percent tax tier would
be eliminated and the maximum amount of Social Security benefits that
could be taxed would be 50 percent. Millions of seniors would be able
to keep more of their Social Security benefits, and Congress gets an
opportunity to end this unfair tax on seniors.
It is also important to point out that the Medicare Program is not
harmed by my amendment. As I already said, this tax funds the Medicare
program. Therefore, my amendment transfers to Medicare any amount it
would have received due to this tax from the general fund.
This was an unfair tax on our seniors, and it is time we repeal it. I
urge my colleagues to support this amendment. I thank the Chair for the
time. We will look for a time later to bring up the amendment again.
The PRESIDING OFFICER. The Senator from Vermont is recognized.
Mr. SANDERS. Madam President, I rise today in strong support of the
Fair Minimum Wage Act of 2007. I commend Senator Kennedy for his
leadership on this issue. This important legislation would increase the
Federal minimum wage from the abysmally low $5.15 an hour to $7.25 an
hour over a 2-year period.
Let us make no mistake about it, this bill will benefit millions of
workers and their families. It is very long overdue. Anyone who works
40 hours a week in the United States of America should not be living in
abject poverty. It is a moral disgrace that Congress has not increased
the minimum wage since 1997. Yes, Congress has provided hundreds of
billions of dollars in tax breaks to people who don't need it, but
somehow, over a 10-year period, Congress has not reached out to
millions of workers making the minimum wage and raised that wage.
Today's minimum wage workers have less buying power than minimum wage
workers did back in 1955, when Dwight Eisenhower was President. Simply
put, a job should keep you out of poverty, not keep you in poverty.
At the current Federal minimum wage of $5.15 an hour, a person
working full time makes less than $11,000 per year before taxes, which
is approximately $6,000 below the Federal poverty line for a family of
three.
Moreover, while the cost of living has skyrocketed, the value of the
minimum wage has eroded by over 20 percent since the last increase.
Today, nearly 13 million workers, 10 percent of the United States
workforce, would directly or indirectly benefit from a raise in the
minimum wage to $7.25 an hour; 5.5 million workers would benefit
directly, 7.4 million workers would benefit indirectly, and more than
60 percent of those who would benefit are women.
In addition to workers, millions of American families would benefit
from a raise in the minimum wage, including nearly 6 million children
who would see their parents' earnings increase.
But some will argue that an increase in the minimum wage will
primarily benefit teenagers. I think the evidence is quite strong that
that is not the case. Further, recently, over 650 economists, including
Nobel Prize winners and past presidents of the American Economics
Association, released a statement calling for a raise in the minimum
wage. They confirm that ``a modest increase in the minimum wage would
improve the well-being of low-wage workers and would not have the
adverse effects that critics have claimed. . . . The weight of the
evidence suggests that modest increases in the minimum wage have very
little or no effect on employment.''
Moreover, and interestingly, a recent Gallup Poll revealed that 86
percent of small business owners today do not believe that an increase
in the minimum wage would hurt their business. Three-fourths of small
business owners thought a 10-percent increase would have no effect on
them. In fact, nearly half of those polled thought the minimum wage
should be increased.
While I believe it is important to raise the minimum wage to $7.25 an
hour, it is clear to me that much more needs to be done. We should see
this increase--long overdue--in the minimum wage as simply a start to
address the disgraceful reality that more and more of our fellow
Americans are living in poverty, and it is an outrage that today in the
United States of America we have, by far, the highest rate of childhood
poverty in the industrialized world.
In the last 10 years, what we have seen in our country is a
proliferation of millionaires and billionaires. We have seen the
wealthiest people become ever wealthier. But what we have also seen,
since President Bush has been in office, is that over 5 million more
Americans have slipped into poverty. The rich become richer, the poor
become poorer, and the middle class continues to shrink. In my view,
raising the minimum wage is an important start in attempting to address
the crisis of poverty in America, but it is clear to me that we have to
do much more. Among many other things we have to do, we must address
the reality in America today that we are losing millions of good-paying
manufacturing jobs and good-paying white-collar information technology
jobs because of our disastrous trade agreements.
The time is now to begin to fundamentally rethink our trade
agreements so we can begin to create good-paying jobs here in the
United States, so our young people will be able to make it to the
middle class rather than to continue to struggle year after year in
poverty.
We have to take a hard look at the National Labor Relations Act and
the National Labor Relations Board, which today make it increasingly
hard for workers to form unions. If workers are able to collectively
negotiate a contract, very often the wages they get will be
substantially higher than if they did not have a union. So in raising
the minimum wage, what we are doing today is saying to millions of
workers who are struggling desperately to keep
[[Page S897]]
their heads above water, we understand what you are going through. We
understand it is an outrage that for a 10-year period this Congress has
not raised the minimum wage, and the purchasing value of the minimum
wage has declined. But I hope that what we are doing this week is
simply a start to address the very serious economic problems facing not
only low-income Americans but the middle class as well.
I hope that this Senate, this Congress, will begin focusing its
attention on the decline of the middle class, the increase of poverty,
and come up with economic and fiscal policies that benefit all
Americans and not just the wealthy and large multinational
corporations.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.
Mr. GRAHAM. Madam President, I ask unanimous consent to speak for 5
minutes as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
New Strategy in Iraq
Mr. GRAHAM. Madam President, the reason I rise to take the floor is
this afternoon--I think the Presiding Officer was present in the Armed
Services Committee hearing when General Petraeus testified about the
new strategy in Iraq. I hope that over time more Americans will be
familiar with him and his view of what we can do to go forward.
In his testimony, General Petraeus clearly indicated we have made a
lot of mistakes in Iraq. We never had enough troops to secure the
country, and the debaathification program basically was a mistake.
Other agencies involved in nationbuilding have not done their part.
Militias have grown. The biggest event in the sectarian violence was
the bombing of the Shia Golden Dome Mosque, and since that event, which
was al-Qaida-inspired, we have been going backward instead of forward
and the sectarian violence in Baghdad has gotten worse.
But General Petraeus believes this new strategy is not more people
doing the same thing. It is a fundamentally different shift in policy.
I agree with him and hope the country will listen closely to what he
says. I have a lot of confidence in General Petraeus. I intend to
support him.
I will not vote for any resolution that declares a strategy of
failure before he has a chance to implement it because if we do that,
it is going to be a very bad sendoff for our troops going into battle.
It will embolden the enemy and weaken the moderates we eventually have
to rely on in the Mideast to help us in the war on terror.
The strategy will be similar to this: We will be increasing
reinforcements on all fronts. We have had enough military people in
Iraq to clear territory but never hold it. We never lost a battle with
insurgents. We can clear out a town or sector of Baghdad, but once we
leave, we turn it over to an immature Iraqi Army or corrupt police
force.
What we are doing by having 21,500 more troops is it doubles the
combat capability of American forces in Baghdad to 17,500, and that
will allow some soldiers to stay behind with the Iraqis to hold
territory. Hold for what purpose? To give the political leadership in
Iraq a chance to reconcile their differences through the political
process.
Ask General Petraeus: Do you believe Iraq is part of the overall
global war on terror?
I do.
If you believe it is a Vietnam which is a lost cause and not worth
fighting for and we need to get out, don't pass a resolution condemning
the action. Cut off funding. If you believe it is part of the global
war on terror, as I do, we need to fight to win. I think that is
exactly what we are trying to do. We are going to reinforce the
military so we can hold, to give the Iraqi leadership a chance to
reconcile the problems politically. I don't believe any political group
could find democracy or common ground in this much violence. It is hard
enough for us to find a solution to immigration and none of us being
shot at. Can you imagine trying to reconcile a country oppressed by
dictators for over 30 years with this level of violence?
If we can control the violence, I think it will lead to a better
political result. They have to share the oil revenues with the Sunnis.
The Sunnis have to have something to fight for, not against. That has
to happen. At the end of the day, a million troops won't change Baghdad
or Iraq if the Iraqi people are not willing to make the accommodations
they need to make. They are under siege. They need reinforcements.
On the economic front, 70 percent of our casualties come from
improvised explosive devices, somebody planting a bomb along the side
of the road. Some people are planting those bombs because they don't
have a job. They don't have any way to support their family, so they
are taking money from the insurgents. Let's create an economy to give
them an option other than planting bombs.
Secondly, some people are planting bombs because there is no
downside. Once you get caught, you get released. We need a robust rule
of law. If you want to change the way our troops are treated in Iraq,
put people in jail for a very long time for attacking our troops. That
will be a deterrent.
Finally, more military presence will put pressure on those making
these explosive devices. This is a surge on all fronts. He is confident
this plan will work. He understands the Iraqi political leadership has
to do their part. The Iraqi military has to do their part. But the
sectarian violence has come about because al-Qaida hit the motherload
when they blew up the Golden Mosque. We cannot let al-Qaida win in
destabilizing Iraq. They went to Iraq behind us because they understand
that the consequences of success in Iraq are not confined to Iraq. If
you can have a stable, functioning democracy that is tolerant, then it
will spread to other areas of the Mideast and will be a mighty blow to
the al-Qaida agenda.
We need to understand that a failed state in Iraq creates chaos for
not just us but the world. Iran becomes a big winner. The south of Iraq
becomes a puppet state of Iran. We could have a war between Turkey and
the Kurds in the north. And if there is a bloodbath in Bagdad, which
there surely will be if we leave, then Sunni Arab nations are going to
get involved, and the whole region becomes much more unstable.
I urge my colleagues to listen to General Petraeus and ask the
question: Do you have confidence in this man to do what he says he can
do? And if the answer is yes, don't undermine him before he leaves.
Give him the resources he needs. If you don't have confidence in him
and our military and our leadership to change policy and strategy and
be successful, don't let one more person go to Iraq to get killed or
wounded in a lost cause. You should have the courage of your
convictions to cut off funding. A middle-ground solution is the worst
of all worlds.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Amendments Nos. 152, 153, and 154 En Bloc
Mr. ENZI. Madam President, on behalf of Senator Ensign, I call up
amendments Nos. 152, 153, and 154.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will report.
The legislative clerk read as follows:
The Senator from Wyoming [Mr. Enzi], for Mr. Ensign,
proposes amendments numbered No. 152, 153, and 154 en bloc.
Mr. ENZI. Madam President, I ask unanimous consent that the reading
of the amendments be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendments are as follows:
AMENDMENT NO. 152
(Purpose: To reduce document fraud, prevent identity theft, and
preserve the integrity of the Social Security system)
At the appropriate place, insert the following:
SEC. __. PRECLUSION OF SOCIAL SECURITY CREDITS PRIOR TO
ENUMERATION.
(a) Insured Status.--Section 214 of the Social Security Act
(42 U.S.C. 414) is amended by adding at the end, the
following new subsection:
``(d)(1) Except as provided in paragraph (2), no quarter of
coverage shall be credited for purposes of this section if,
with respect to any individual who is assigned a social
security account number on or after the date of enactment of
the Fair Minimum Wage Act of 2007, such quarter of coverage
is earned prior to the year in which such social security
account number is assigned.
``(2) Paragraph (1) shall not apply with respect to any
quarter of coverage earned by an individual who, at such time
such quarter of coverage is earned, satisfies the criterion
specified in subsection (c)(2).''.
(b) Benefit Computation.--Section 215(e) of such Act (42
U.S.C. 415(e)) is amended--
(1) by striking ``and'' at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2) and
inserting ``; and''; and
[[Page S898]]
(3) by adding at the end the following new paragraph:
``(3) in computing the average indexed monthly earnings of
an individual who is assigned a social security account
number on or after the date of enactment of the Fair Minimum
Wage Act of 2007, there shall not be counted any wages or
self-employment income for which no quarter of coverage may
be credited to such individual as a result of the application
of section 214(d).''.
AMENDMENT NO. 153
(Purpose: To preserve and protect Social Security benefits of American
workers, including those making minimum wage, and to help ensure
greater congressional oversight of the Social Security system by
requiring that both Houses of Congress approve a totalization agreement
before the agreement, giving foreign workers Social Security benefits,
can go into effect)
At the appropriate place, insert the following:
SEC. __. TRANSMITTAL AND APPROVAL OF TOTALIZATION AGREEMENTS.
(a) In General.--Section 233(e) of the Social Security Act
(42 U.S.C. 433(e)) is amended to read as follows:
``(e)(1) Any agreement to establish a totalization
arrangement which is entered into with another country under
this section shall enter into force with respect to the
United States if (and only if)--
``(A) the President, at least 90 calendar days before the
date on which the President enters into the agreement,
notifies each House of Congress of the President's intention
to enter into the agreement, and promptly thereafter
publishes notice of such intention in the Federal Register,
``(B) the President transmits the text of such agreement to
each House of Congress as provided in paragraph (2), and
``(C) an approval resolution regarding such agreement has
passed both Houses of Congress and has been enacted into law.
``(2)(A) Whenever an agreement referred to in paragraph (1)
is entered into, the President shall transmit to each House
of Congress a document setting forth the final legal text of
such agreement and including a report by the President in
support of such agreement. The President's report shall
include the following:
``(i) An estimate by the Chief Actuary of the Social
Security Administration of the effect of the agreement, in
the short term and in the long term, on the receipts and
disbursements under the social security system established by
this title.
``(ii) A statement of any administrative action proposed to
implement the agreement and how such action will change or
affect existing law.
``(iii) A statement describing whether and how the
agreement changes provisions of an agreement previously
negotiated.
``(iv) A statement describing how and to what extent the
agreement makes progress in achieving the purposes, policies,
and objectives of this title.
``(v) An estimate by the Chief Actuary of the Social
Security Administration, working in consultation with the
Comptroller General of the United States, of the number of
individuals who may become eligible for any benefits under
this title or who may otherwise be affected by the agreement.
``(vi) An assessment of the integrity of the retirement
data and records (including birth, death, and marriage
records) of the other country that is the subject of the
agreement.
``(vii) An assessment of the ability of such country to
track and monitor recipients of benefits under such
agreement.
``(B) If any separate agreement or other understanding with
another country (whether oral or in writing) relating to an
agreement to establish a totalization arrangement under this
section is not disclosed to Congress in the transmittal to
Congress under this paragraph of the agreement to establish a
totalization arrangement, then such separate agreement or
understanding shall not be considered to be part of the
agreement approved by Congress under this section and shall
have no force and effect under United States law.
``(3) For purposes of this subsection, the term `approval
resolution' means a joint resolution, the matter after the
resolving clause of which is as follows: `That the proposed
agreement entered into pursuant to section 233 of the Social
Security Act between the United States and _______
establishing totalization arrangements between the social
security system established by title II of such Act and the
social security system of _______, transmitted to Congress by
the President on ______, is hereby approved.', the first two
blanks therein being filled with the name of the country with
which the United States entered into the agreement, and the
third blank therein being filled with the date of the
transmittal of the agreement to Congress.
``(4) Whenever a document setting forth an agreement
entered into under this section and the President's report in
support of the agreement is transmitted to Congress pursuant
to paragraph (2), copies of such document shall be delivered
to both Houses of Congress on the same day and shall be
delivered to the Clerk of the House of Representatives if the
House is not in session and to the Secretary of the Senate if
the Senate is not in session.
``(5) On the day on which a document setting forth the
agreement is transmitted to the House of Representatives and
the Senate pursuant to paragraph (1), an approval resolution
with respect to such agreement shall be introduced (by
request) in the House by the majority leader of the House,
for himself or herself and the minority leader of the House,
or by Members of the House designated by the majority leader
and minority leader of the House; and shall be introduced (by
request) in the Senate by the majority leader of the Senate,
for himself or herself and the minority leader of the Senate,
or by Members of the Senate designated by the majority leader
and minority leader of the Senate. If either House is not in
session on the day on which such an agreement is transmitted,
the approval resolution with respect to such agreement shall
be introduced in that House, as provided in the preceding
sentence, on the first day thereafter on which that House is
in session. The resolution introduced in the House of
Representatives shall be referred to the Committee on Ways
and Means and the resolution introduced in the Senate shall
be referred to the Committee on Finance.''.
(b) Additional Reports and Evaluations.--Section 233 of the
Social Security Act (42 U.S.C. 433) is amended by adding at
the end the following new subsections:
``(f) Biennial SSA Report on Impact of Totalization
Agreements.--
``(1) Report.--For any totalization agreement transmitted
to Congress on or after January 1, 2007, the Commissioner of
Social Security shall submit a report to Congress and the
Comptroller General that--
``(A) compares the estimates contained in the report
submitted to Congress under clauses (i) and (v) of subsection
(e)(2)(A) with respect to that agreement with the actual
number of individuals affected by the agreement and the
actual effect of the agreement on social security system
receipts and disbursements; and
``(B) contains recommendations for adjusting the methods
used to make the estimates.
``(2) Dates for submission.--The report required under this
subsection shall be provided not later than 2 years after the
effective date of the totalization agreement that is the
subject of the report and biennially thereafter.
``(g) GAO Evaluation and Report.--
``(1) Evaluation of initial report on impact of
totalization agreements.--With respect to each initial report
regarding a totalization agreement submitted under subsection
(f), the Comptroller General of the United States shall
conduct an evaluation of the report that includes--
``(A) an evaluation of the procedures used for making the
estimates required by subsection (e)(2)(A);
``(B) an evaluation of the procedures used for determining
the actual number of individuals affected by the agreement
and the effects of the totalization agreement on receipts and
disbursements under the social security system; and
``(C) such recommendations as the Comptroller General
determines appropriate.
``(2) Report.--Not later than 1 year after the date of
submission of an initial report regarding a totalization
agreement under subsection (f), the Comptroller General shall
submit to Congress a report setting forth the results of the
evaluation conducted under paragraph (1).
``(3) Data collection.--The Commissioner of Social Security
shall collect and maintain the data necessary for the
Comptroller General of the United States to conduct the
evaluation required by paragraph (1).''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to agreements establishing
totalization arrangements entered into under section 233 of
the Social Security Act which are transmitted to Congress on
or after January 1, 2007.
AMENDMENT NO. 154
(Purpose: To improve access to affordable health care)
At the appropriate place, insert the following:
SEC. __. NON-GROUP HIGH DEDUCTIBLE HEALTH PLAN PREMIUMS
OPTIONS.
(a) In General.--Section 223(d)(2)(C) of the Internal
Revenue Code of 1986 (relating to exceptions) is amended by
striking ``or'' at the end of clause (iii), by striking the
period at the end of clause (iv) and inserting ``, or'', and
by adding at the end the following new clause:
``(v) a high deductible health plan, other than a group
health plan (as defined in section 5000(b)(1)).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
Amendment No. 106, as Modified
Mr. ENZI. Madam President, in a while, we will take some action on
Senator Sessions' amendment. I would like to make a couple comments on
that amendment before we get to that point. This might be an
appropriate time.
Last year, Congress undertook the most sweeping changes to pension
law since the enactment of ERISA. It was a major milestone and resulted
in the most comprehensive change to workers' and their families'
pension and retirement savings in the past 32 years.
The Pension Protection Act could not have been enacted without
bipartisan cooperation, but it took more than Republicans and Democrats
working together. The Pension Protection
[[Page S899]]
Act resulted from a deep commitment toward cooperation between the
Finance Committee, which oversaw the tax provisions of the bill, and
the Health, Education, Labor, and Pensions Committee, which oversaw the
pensions provisions.
On the Health, Education, Labor, and Pensions Committee, we had
previously taken a strong bipartisan look at retirement issues and
retirement savings as part of our pension oversight duties. The new
chairman of the committee has stated he will continue the committee's
strong pension oversight responsibilities in order to protect and
strengthen the retirement savings so that workers and their families
may prosper long into their retirement years.
The sense-of-the-Senate resolution before us expresses the sentiment
that saving for retirement is important. We all agree with that point.
The fact is that savings opportunities are available almost everywhere,
but many workers do not take advantage of it. By this sense-of-the-
Senate resolution, we are not advocating any particular retirement
programs or initiatives over others on the books already or proposed to
be introduced. We are simply saying that people ought to save enough to
maintain their standard of living during their golden years, and they
ought to invest prudently so that their savings will be safe when they
do retire.
Better financial education and investment advice is needed. Automatic
enrollment rules that were enacted in the Pension Protection Act will
help people learn to save. New default investment regulations, when
finalized, will help too.
In that respect, progress has been made in saving for retirement, but
much needs to be done.
I am happy to join with my colleagues in reiterating the commitment
by supporting the sense-of-the-Senate resolution.
I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Madam President, I expect we will vote at a quarter to 5
or so on the Sessions amendment. I will vote in favor and urge my
colleagues to vote in favor.
Americans who have worked hard and played by the rules for a lifetime
deserve a secure retirement. They deserve to be able to enjoy their
golden years, spend time with their families, and rest after a lifetime
of hard work. We need to be sure they have the income they need for
gasoline, prescription drugs, and other needs of daily living.
As my friend and colleague, Senator Enzi, pointed out, we passed a
comprehensive bill last year. It was the result of years of work by the
HELP and Finance Committees. That work took steps to strengthen our
pension system and increase retirement savings, but we still have a
long way to go. Half of Americans have no type of pension plan at all
in their workplace. And today, Americans have negative savings rates
for the first time since the Great Depression.
In order to guarantee a secure retirement for Americans, we need to
ensure that the three legs of retirement security are all there: Social
Security, private pensions, and personal savings. Each one of these
legs plays a vital role, and we need to strengthen all three--Social
Security, private pensions, and personal savings.
I know the Senator from Alabama has proposed ideas for creating and
expanding personal savings. Our staff has been talking about these
ideas and many proposals are being developed by Senator Baucus, Senator
Bingaman, Senator Conrad, and others. I look forward to continuing to
work with Senator Enzi, Senator Mikulski, and Senator Byrd on our
Retirement Security Subcommittee.
This is an area of enormous concern for working families in this
country--what is going to happen during their golden years. They look
forward to Social Security, and we are going to have to address that
issue. We are going to have to address the Medicare issue, which will
begin to run out of funds in, I believe, 2018.
We know that defined benefit programs have been collapsing over the
years, and 401(k)s that have tried to fill in have not played the role
that defined benefit plans played in terms of giving answers to
workers, and we have seen that the personal savings accounts brought
out during the discussions by Senator Enzi and Senator Sessions have
been in rapid decline.
The indicators are all moving in the wrong direction, in terms of a
firm, secure, dependable, and reliable retirement program for working
families in this country. We should find ways to work to encourage a
change in that policy.
At the appropriate time, when the Senator comes back, we will dispose
of the Senator's amendment. We are at an appropriate time.
Madam President, I ask unanimous consent that at 4:45 p.m. today, the
Senate proceed to a vote on or in relation to the Session's amendment
No. 106, as modified; that there be 2 minutes of debate equally divided
and controlled between Senator Kennedy and Senator Sessions prior to
the vote; and that no second-degree amendment be in order to the
amendment prior to the vote.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KENNEDY. Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. ENZI. Madam President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ENZI. Madam President, too often when we debate the issue of
minimum wage, we focus on abstract ideas and proposals and fail to
consider the impact of our actions on the small business community that
lives and breathes in the real world. I appreciate the cooperation with
Senator Reid and others, focused around Senator Baucus and Senator
Grassley, working in a very bipartisan way to put together a package
that would help to relieve some of the impact of the minimum wage
increase. I hope everyone has noticed that in the minimum wage debate
we have been having, the debate has not been over whether to raise the
minimum wage. The debate has been on what we can do to alleviate some
of the impact on small business. I hope that is the way we can continue
the discussion on this, too.
I mentioned earlier today that you need to meet some of these small
businessmen. They are in your neighborhood. You can meet them easily.
They run the laundry, corner grocery, little retail stores. For the
most part they are families who are eking out a living while they are
taking on a lot of risk. They do have these moments that they wonder
why they undertook that risk and how they are going to continue to fund
that risk. Sometimes they are paying employees when they can't even
afford to pay themselves, and their families are relying on the
business to support them as a family, too, particularly considering all
the risks they are taking.
Sometimes they are forced to come up with additional funds to pay
their workers on what we will be mandating. Those funds do not come
from a money tree or some pot of gold at the end of the rainbow. They
come out of the pockets of the Nation's small businessmen. It is the
penalty they pay for taking the risks associated with running a small
business.
The first hearing I held in Wyoming was as part of the Small Business
Committee. We had a hearing on some of the problems of small business.
When it was over, one of the reporters came up and said: You only had
about 100 small businessmen attend this. Why do you suppose it was such
a poor turnout?
I said: That wasn't a poor turnout from small business. If small
business had an extra employee to send to a day's conference, they
would fire him. They can't afford extra people.
With that realization, it was a good turnout and there were a lot of
good suggestions. I always like to go back to Wyoming and meet with the
people and actually talk to the guy on the end of the shovel because he
usually has the best suggestions for changing the shovel. I found that
to be true of the small businessmen.
This afternoon we agreed to an amendment that will provide for easier
compliance with Federal rules and regulations, and I appreciate the
bipartisan action that was taken. That will make a huge difference to
small businessmen.
[[Page S900]]
We could consider that the action we are about to take will be making
it bad business for people to hire people who need some help and
support in developing their skills by that method, making them higher
wage workers. That cannot help but cost some people their jobs. In
other instances, the hours they need will be cut back, hours that they
need to get a good paycheck.
We cannot leave the floor today feeling better about having helped
ease the income strain for many of the workers of our States but having
left the employers wondering how to pay for the increases we have
mandated. Once again, we have the best of intentions, but, once again,
we have to remember one simple rule: It is not our money. We are, once
again, reaching into the pockets of the small businessmen in our
community and taking their money and telling them the amount of wages
they will pay their employees without regard to the talents and
abilities of the employees they can hire.
We have this huge job training corps out there. It is called small
businesses. They take people who don't have the skills that are
necessary for the small business they are operating and they teach them
how to run a cash register, how to count change, how to interact with a
customer, how to dress appropriately.
You might think these are all things that might be covered in school
classes, and they are, if you take the right classes. But there are a
lot of people who not only don't take the right classes, they drop out
of school. They need to earn a living and they have to start somewhere
earning a living. To earn that living they have to have some training,
some basic job training. A lot of these small businesses are where they
get that basic business training, and they kind of get it for free. The
businessmen provide that information, and most of the people in the
minimum wage level move up rather quickly. As they learn those skills,
they get paid more. I know a lot of businesses where they have the
minimum wage situation that lasts about 3 weeks if the people learn
enough to advance so they can actually wait on the customer.
What we are talking about is a blanket increase that will warm the
hearts of those who lack the skills for higher wage jobs as it leaves
the employers out in the cold, unless we do the Reid package. Any
increase in the minimum wage must be offset by a small business tax
incentive package.
As a former small business owner of mom-and-pop shoe stores, let me
walk through the realities of how business owners may address a
mandated Federal minimum wage hike. Raising the minimum wage to $7.50
imposes a 41-percent increase in labor costs for a small employer with
minimum wage workers. Every employer must face the very real issue of
how he or she will deal with this increase in the costs and still meet
the payroll week after week.
These are very real and difficult questions that impact our smallest
employers most heavily. These increases must be paid for by employers
and, as I said before, the money doesn't grow on trees. An employer
must make hard decisions about how to meet these increased payroll
obligations.
When costs go up, most businesses first look to cut expenses. The
choices they have can be difficult and have often already been used. To
meet higher mandated payroll costs, a small employer may be forced to
consider cutting back on benefits such as health insurance, retirement,
or leave plans--although a lot of small businesses can't afford to
provide those in the first place.
It is simply too easy to forget that fringe benefits have a
significant cost. Most employees don't realize the benefit they are
getting when they get those. If a small employer has to reduce expenses
to meet payroll, those are often the costs that go.
I know of a video store--I was talking to a young man who works in
the Senate now, and he used to work in the Senate and part-time in a
video store. When the minimum wage went up last time, what the video
store did was instead of having two people at the store at the close of
business, they only had one, and only having one isn't nearly as safe
as having two. But that was the choice that the owner had to make in
order to be able to meet the payroll.
We have seen some charts where, in States where there has been a
raise in minimum wage, there has been an increase in number of jobs as
well. I appreciate those charts and believe those charts to be
accurate. What those charts are doing, though, is aggregating for the
entire State. What we are doing is imposing this on one business at a
time, one employee at a time. It really gets down to as local as
politics ever gets. Those small businessmen believe that individuals
matter, that people matter, and they are forced into some of these
choices. There are not a whole lot of ways they can compensate for the
change.
I have a chart that shows how to cut costs when there are none to
cut. This came from the Washington Post. It says:
We're at the bottom. If the minimum wage went up, I don't
know how we would make the cuts to cover it . . . the
employee said.
The lone salaried employee, she works 80 hours a week to make up for
the lack of workers. ``I have mixed feelings,'' she continued. ``I know
that people can't afford to live on $5.15 an hour. But on the business
side, small businesses can't afford to pay it.''
There are examples like that that are real-life situations that do
make it difficult. That is the lone employee in a store.
Beyond cutting fringe benefits, small businesses may need to consider
cutting back work hours, eliminating overtime, or laying off workers.
Such actions are traditional and often necessary responses to meeting
increased costs--not just the increased costs of the minimum wage.
Unfortunately, these actions ultimately hurt the very workers the
minimum wage increase is designed to help.
Some would say raise the prices. That is not always possible in the
short run. In the long run there may be some flexibility because this
is going to be imposed on everybody and will drive up prices. Of
course, when it drives up prices, it kind of eliminates the benefit of
the increase in the minimum wage. In the real world, small employers
have to consider these types of options to cope with mandated increases
in wages. Small business owners who themselves favor a minimum wage
increase nonetheless recognize that any increase may result in having
to make these tough choices.
In a recent front-page Washington Post article, the owner of a
discount store in Kansas noted that, while he felt a wage of $7.25
seemed fair, he also noted that his profit margin was thin and that
wages are his biggest controllable expense. He said: If wages go up,
hours will have to come down. And the question will become: Whose, his
stockman who works 6 hours a day and takes care of a wife who is blind
and arthritic or should it be another worker who is ill and is on a
waiting list for an organ transplant and needs more hours rather than
fewer or yet another employee who is 22 years old and pregnant? These
are hard realities that are faced by many small employers and those who
work with them.
I ask unanimous consent that an article from the Washington Post that
came out recently--I congratulate the writer of that article--be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Post, Jan. 10, 2007]
Life at $7.25 an Hour
(By David Finkel)
Atchison, KS.--It was payday. Money, at last. Twenty-two-
year-old Robert Iles wanted to celebrate. ``Tonight,
chimichangas!'' he announced.
He was on his way out of the store where his full-time job
pays him $7.25 an hour--the rate that is likely to become the
nation's new minimum wage. Life at $7.25; This is the life of
Robert Iles and with $70 in a wallet that had been empty that
morning, he headed to a grocery store where for $4.98 he
bought not only 10 chimichangas but two burritos as well.
From there he stopped at a convenience store, where for
$16.70 he filled the gas tank of the car he purchased when he
got his raise to $7.25; then he went to another grocery
stores where he got a $21.78 money order to pay down some
bills, including $8,000 in medical bills from the day he
accidentally sliced open several fingers with a knife while
trying to cut a tomato; and then he headed toward the family
trailer 19 miles away, where his parents were waiting for
dinner.
Today in Washington, the House is scheduled to vote on
whether to increase the federal minimum wage from $5.15 to
$7.25. Passage is expected, with Senate approval soon to
follow, and if President Bush signs the resulting bill into
law, as he indicated he
[[Page S901]]
would, the U.S. minimum wage would rise for the first time
since 1997, ending a debate about whether such a raise would
be good or bad for the economy.
But even if the matter is settled in Congress, it isn't
settled at all in Atchison, and Robert Iles's drive home is
proof. Every stop he made on his ride home revealed a
different facet of how complicated the minimum wage can be in
the parts of America where, instead of a debatable issue, it
is a way of life.
At the store where Iles works, for instance, the owner
thinks the minimum wage should be increased as a moral issue
but worries about which employees' hours he will have to cut
to compensate.
At the store where he bought the chimichangas, the cashier
who makes $6.25 worries that a raise will force her out of
her subsidized apartment and onto the street.
At the convenience store where he bought gas, the owner
worries that he will have to either raise prices, angering
his customers, or make less money, ``and why would I want to
make less money?''
At the store where he got the money order, the worries are
about Wal-Mart, which not only supports an increase but also
built a Supercenter on the edge of town that has been sucking
up customers since it opened three years ago.
As for Iles--who keeps $70 out of every paycheck to cover
two weeks' worth of food and gas and in a matter of minutes
was already down to $26.54--his worry was as basic as how
fast to drive home.
Drive too fast and he'd be wasting gas. But his family was
waiting. And his chimichangas, best cooked frozen, were
starting to thaw.
The Meaning of a Dollar
The debate about the minimum wage usually comes down to
jobs. If Congress approves the increase it will result in
raises for an estimated 13 million Americans, or about 9
percent of the total workforce. That's a percentage that most
economists agree would cause a modest increase in national
unemployment. In Kansas, however, ``it would have a fairly
significant impact,'' said Beth Martino, a spokeswoman for
the state Department of Labor. According to one independent
analysis, 16 percent of the workforce, or 237,000 workers,
would be affected--and that doesn't include the 20,000 whose
wages aren't governed by the federal Fair Labor Standards Act
and earn the state minimum wage of $2.65. That rate, the
lowest in the nation and unchanged since 1988, hints at the
prevailing wisdom in Kansas about the minimum wage, which is
that the only way low-wage earners will make more is through
congressional action.
This holds true from Topeka, where the powerful Kansas
Chamber of Commerce has long opposed any raise, to rural
Mulvane, home of Republican state legislator Ted Powers, who
says his futile effort three year's ago to raise the state
minimum wage resulted in his being branded a ``dirty dog,''
to Atchison, a working-class city of 11,000 where the stores
that depend on low-wage workers include one called ``Wow Only
$1.00!'' This is the store where Robert Iles has worked for
five years.
``Robert, would you help me a second?'' Jack Bower, the
owner, called to Iles soon after opening, as the line at the
cash register grew. A onetime Wal-Mart vice president, Bower
moved back to Atchison several years ago to teach and ended
up buying the old J.C. Penney store, and now runs a business
where the meaning of a dollar is displayed on shelf after
shelf. The jar of Peter Piper's Hot Dog Relish? That's what a
dollar is worth. The Wolfgang Puck Odor Eliminator that a
customer was looking at as she said to a friend, ``I just
don't know how I'm ever going to make it. My ex-husband's not
paying his child support''? That's a dollar, too, as is the
home pregnancy test, the most shoplifted item in the store.
``This is not a wealthy community,'' Bower explained. ``The
thing is, a lot of people depend on this store.''
Robert Iles has his own version of a dollar's meaning,
learned last February when Bower took him aside and said he
would be getting a pay raise to $7.25. ``Okay,'' Iles
remembers replying, wanting to seem businesslike. ``But
inside I was doing the cha-cha-cha,'' he said. ``It was like
going from lower class to lower middle class.''
Soon after, he bought his car, a used 2005 Dodge Neon, and
just about every workday since then he has spent his lunch
break in the driver's seat, eating a bologna sandwich with
the engine off to save gas, even in winter. An hour later, he
was back behind the cash register, telling customers ``Thank
you and have a nice day'' again and again.
And meanwhile, Jack Bower wondered whose hours he will cut
if he has to give his employees a raise.
It's not that he's against raising the minimum wage--``I
don't think $5.15 is adequate,'' he said, adding that $7.25
seems fair--but his profit margin is thin, and wages are his
biggest controllable expense. So if wages go up, he said,
hours will have to come down, and the question will become:
Whose?
Will it be Neil Simpson, 66, who works six hours a day as a
stockman, and then five more hours somewhere else cleaning
floors, and takes care of a wife who is blind and arthritic?
Will it be Susan Irons 57, who was infected with hepatitis
C from a blood transfusion, is on a waiting list for a liver
transplant and needs more hours rather than fewer?
Will it be Christina Lux, who is 22 years old and 13 weeks
pregnant?
Will it be Iles?
``Attention, all shoppers,'' he said into the microphone.
``We will be closing in 10 minutes. Please begin making your
final selections.'' Ten minutes later, he was clocked out and
back in his Neon. ``My brand new car,'' he called it proudly,
and he explained how he was able to afford it on $7.25 an
hour: a no-money-down loan for which he will pay $313.13 a
month until 2012.
Small Business ``at Bottom''
Seven dollars and twenty-five cents an hour equals $15,080
per year, and out of that comes $313 for the car loan and
$100 for car insurance, Iles said, going over his monthly
bills. An additional $90 for the 1995 car with 135,000 miles
on it that he is buying from a friend for his mother, $150
for the family phone bills, $35 on his credit card, $100 for
gas $100 toward the mortgage on the trailer. ``That's about
it. Oh yeah, $20 in doctors' bills,'' he said, and totaled it
up on fingers scarred by surgical stitches. Nine hundred and
eight dollars. ``I bring home 900 a month,'' he said. ``So I
very rarely have any money for myself.''
He parked in front of a store called Always Low Prices,
which has the cheapest chimichangas in town.
Once it was a full-service grocery store with 28 employees.
Then came word that Wal-Mart was looking for land for a
Supercenter, and now it has become a bare-bones operation
where the starting pay for its few employees is $5.50, and
the manager wonders how the store will survive if wages
increase.
``We're at the bottom. If the minimum wage went up, I don't
know how we would make the cuts to cover it,'' Michelle Henry
said. The lone salaried employee, she works 80 hours a week
to make up for the lack of workers. ``I have mixed
feelings,'' she continued. ``I know that people can't afford
to live on $5.15 an hour. But on the business side, small
businesses can't afford to pay it.''
At the register, meanwhile, Shannon Wilk, 33, who makes
$6.25 an hour, said that of course she would like to earn
more money. It would help her. It would help her 18-month-old
daughter. ``It would be good,'' she said, ``but also, for me,
I live in income-based housing, and if I get a raise, my rent
would go up, and I would lose my assistance.'' Even the
tiniest raise would affect her, she said, and with nowhere to
go, the last thing she can afford is a raise to $7.25.
In such an equation, the fact that she was working in
Kansas was to her benefit. Atchison sits on the Kansas-
Missouri border, and if Wilk worked a few hundred yards to
the east, she would already be in jeopardy: In November
Missouri voters supported a ballot initiative increasing the
state's minimum wage to $6.50, with an annual adjustment for
inflation. Five other states had similar votes, with similar
results, bringing to 29 the number that now require an hourly
wage above the federal minimum, In the District the minimum
is $7, in Maryland it's $6.15, and in Virginia it's $5.15.
Such is the arbitrariness of state-by-state minimum wage
laws that Wilk feels lucky to be in Kansas making $6.25 an
hour while inside at the first grocery store across the
Missouri state line, the cashier was ecstatic that she was in
a place where her pay was going from $6.20 to $6.50,
explaining, ``That's 30 cents more I ain't got.''
Iles handed over a $10 bill for his 10 chimichangas and two
burritos. He stuffed the change deep in his pocket, and
headed next to a convenience store owned by a man named Bill
Murphy, who said that if he had the chance to talk to new
House Speaker Nancy Pelosi, he would ask one question.
``Where does she think the money will come from? And that is
the question,'' he said. ``My wages are going to go up 10
percent.''
Unlike Jack Bower who would compensate by cutting hours.
Murphy said that in his two convenience stores there are no
hours to cut. ``I'm going to have to raise my prices,'' he
said--not only because his workers who make less than the new
minimum wage would get raises but also because those who earn
more would insist on raises as well. Employees at $7.25 will
want $8.25. Those at $8.25 will want $9.25.
Economists classify such workers as the ones who would be
indirectly affected by a minimum-wage increase. Of the
estimated 13 million workers expected to get raises, 7.4
million are in that category. ``You've created this
entitlement,'' Murphy said he would tell Pelosi.
And yet he will pay it, he said, and compensate with price
increases, which he worries will be inflationary, even though
most economists say that won't happen. He will raise prices
he continued, because the only other option would be to earn
less money, which he doesn't want to do because he owes $1.5
million on his businesses and wouldn't want to default.
``Now that might be a stretch in some people's minds, from
giving a guy a raise to not being able to pay the bank, but
that's the path I'm talking about,'' he said. Against such a
dire backdrop, Iles put $17 worth of gas in his car.
``That'll be $16.70,'' the clerk said to him, and instead
of correcting this. Iles gladly took the change.
Thirty cents, suddenly got.
The Wal-Mart Factor
Iles drove past the Atchison Inn, where starting pay i$
$5.15, past Movie Gallery, where it's also $5.15, and stopped
in front of
[[Page S902]]
Country Mart, the fanciest grocery store in town, where high
school students start at $5.15 and, according to owner Dennis
Garrett, ``some of them aren't worth that.''
A few days earlier, Garrett had gotten a letter from a
lobbying consortium called the Coalition for Job
Opportunities, urging him to write Congress to protest the
minimum-wage increase. It came in the form of a letter
already written, to which he merely had to add his
congressman's name and send it off to Washington. ``We are
very concerned,'' the letter began. and it was signed by 25
organizations.
The most conspicuous signature, though, was the one that
wasn't there, that of Wal-Mart, the nation's largest private
employer, with 1.3 million workers. Wal-Mart won't say how
many of those workers earn less than what the new minimum
wage would be, but if the Atchison store is an example,
starting pay is $6 an hour.
Nonetheless, in October 2005, Wal-Mart chief executive H.
Lee Scott Jr. said in a speech that the ``U.S. minimum wage
of $5.15 an hour has not been raised in nearly a decade, and
we believe it is out of date with the times,'' He went on to
say, ``Our customers simply don't have the money to buy basic
necessities between paychecks.''
When it comes to Wal-Mart, however, just about any
announcement that affects public policy is greeted with
suspicion, and that has been the case with the minimum wage.
Some have said that Wal-Mart, in need of good publicity, is
supporting an increase for public relations reasons; others
have declared it an attempt to drive small, independently
owned stores out of business.
These suspicions exist in Atchison as well. As in many
small communities, Wal-Mart defines local retail, and just as
Always Low Prices had to retool itself, Country Mart was
significantly affected by Wal-Mart's new food-stocked
Supercenter several miles away.
What is Wal-Mart up to? What are its true motives? Like
many others, Dennis Garrett wonders. He imagines public
relations is part of it, but he didn't want to speculate on
whether this was an attempt to put him out of business,
except to say that raising some wages wouldn't do that. He'd
reduce some hours, he said. He'd manage.
Yes, Atchison businesses would be hurt initially, but in
the long run, if unemployment increases, those hurt the most
would be the very ones Wal-Mart insists would be helped--the
customers, especially the younger ones, ``the people who
don't advance their education and need a job between the ages
of 16 and 21, 22, 23.''
In other words, many of the workers in Atchison, one of
whom was now at Garrett's service counter buying a money
order so he could pay bills. Even though Iles has a checking
account, this is the method he prefers because if he were to
pay by check, and the check were to bounce because of
insufficient funds, the penalty would be devastating. A $25
fee would require more than three hours of work.
And where would those hours come from?
``It's Tough for Me''
So go the calculations of a $7.25 worker, now headed home.
``It's an old trailer,'' he explained earlier in the day.
The heat doesn't work, he said, and the water heater works
sporadically.
One of the bedroom ceilings is caving in. He sleeps in the
other bedroom, and his parents sleep in the living room
because his father, who has diabetes and had to have several
inches of one of his feet amputated, can't really get around.
Also, his father has leukemia. And is legally blind. And
his mother, who once made $6.50 an hour as an aide at a
nursing home, quit to take care of her husband.
``We're pretty much living off my money,'' Iles said, and
in he went to cook them dinner, bring payday to an end and,
the next morning, start the cycle again.
Life at $7.25. Should that be the minimum wage?
``Yes,'' Iles said.
Even if it hurts job opportunities for people like him, as
Dennis Garrett had suggested?
``Yes.''
Or causes price increases, as Bill Murphy had suggested?
``Yes.''
Or damages businesses such as Always Low Prices?
``I mean, it's tough for me, and I'm already making $7.25
an hour.''
Or causes Jack Bower to reduce hours for one of his
employees? Perhaps for Iles himself?
``It's just so hard for people. I mean it's hard,'' Iles
said, and then he went to work.
``I think it'll be bad today,'' one of the workers
suggested as the line at the Wow Only $1.00! cash register
began to form.
``Well, it depends on your perspective,'' Iles said.
Mr. ENZI. The author of the article is really a master at showing how
all of these things are intertwined. It is very revealing and makes a
good case for the increase in the minimum wage. But it does show some
of the decisions that will have to be made and how that will affect
other people, some of whom will be in a similar situation.
In a similar vein, when confronted by higher labor costs, employers
will naturally gravitate toward filling positions with their most
highly skilled, experienced, and productive workers available. Once
again, this phenomenon of replacing low-skilled with high-skilled
workers in the face of rising labor costs winds up harming the very
workers an increase in the minimum wage seeks to help. The minimum wage
positions are very often the entryway into the world of work for those
who lack skills and experience. I can't say that enough. I am hoping
the Workforce Investment Act will kind of come out of this whole
process, too, and provide some additional training so people with less
skills can have more skills and get some of the choice jobs that this
country has to offer. But mandated increases in the minimum wage run
the risk of closing that entryway to many.
Another option, of course, for employers that has to be considered is
automation as an alternative to a paid employee. Does this sound
farfetched? Consider how the automated teller machines, the ATMs, have
replaced tellers, how the self-checkout lane at many establishments has
replaced the clerk, and the drive-through has replaced the waiter, and
in toll booths the EZ Pass has replaced the toll collector--not all of
them, but a lot of them who use the EZ Pass eliminate toll collectors.
We have seen some charts on how productivity goes up when the minimum
wage goes up. Sometimes productivity goes up when machines are
instituted in place of people. They can work 24 hours a day, 7 days a
week, 365 days a year. We don't pay them any health benefits. We may
have a little bit of maintenance done on them. They don't get any
vacation.
Employees are still necessary. I keep telling people that you can't
outsource the fact when your toilet is plugged and you need some help
or when your electric switch doesn't work, there are a lot of hands-on
things that absolutely require people. But they are figuring out ways
to automate a lot of these things. In Gillette, WY, where I am from, we
have this huge worker shortage, and as I have said a number of times, I
keep encouraging people to go west and find the new frontier and get
some good jobs. But when they are pinched, they come up with some other
ways of doing things. The drive-up for our McDonald's is actually
handled out of California. When you drive up to the little window and
you order your Big Mac, you are actually talking to someone in
California who uses the Internet to send the order back to the people
who are putting it all together to give to you when you get in your
car. They have been able to increase the number of drive-throughs
substantially using lower paid--this kind of amazes me--out of
California. So automation is one of the answers.
Beyond these cost-cutting measures of eliminating benefits, reducing
hours, downsizing, laying off employees, reducing low-skill and entry-
level employment, and automating, employers may also have to face up to
the prospect of increasing the price of their goods and services. Price
increases caused by mandated cost increases bring their own catalog of
ills. Such increases drive inflation and cause all consumers to
ultimately pay the price of these mandates. The irony is that as the
cost of these labor increases is passed to the consumers, it affects
everyone, including the minimum wage worker, whose recently increased
wages are suddenly devalued by the increased price for goods and
services that impact them as well. So on this ladder of success, we
have kind of removed the lower rung of it. So it is a little bigger
step to get up there, and some of them aren't going to be able to make
the step because of some of the ways that it has to be adjusted.
In the same Washington Post article I mentioned earlier, another
small employer who owns two convenience stores noted that he simply
does not have the option of cutting hours to meet his increased payroll
burden. Instead, he noted: I am going to have to raise my prices. He
indicated if he had the chance to talk with Speaker Pelosi about the
minimum wage, he would ask one question, and that is: Where does she
think the money will come from? Of course, it can be argued that his
customers, if he raises the price for the candy bar or the cup of
coffee, will go somewhere where it is cheaper, and that is a good
possibility. That means that in order to maintain
[[Page S903]]
the business, if he is going to raise those prices, he has to have
employees who give better service, quicker service, and that goes back
to the on-the-job training I was mentioning that a lot of these small
businesses do. They have to have the good service in order to keep
their loyal customers. Sometimes that doesn't just hinge on the price
of the candy bar or a cup of coffee.
I believe almost all of us recognize these economic realities and
that none of us want them to come about. It is for those precise
reasons that the substitute amendment contains provisions designed to
enable our smallest employers to meet the obligations imposed by a
minimum wage increase without resorting to the difficult personnel
choices, the consumer price increases or all of the other things I
mentioned.
Yesterday, I spoke briefly about the fact that in legislating, it is
often important to find a third way. In this instance, the third way is
one that will provide an increase in the minimum wage but also provide
relief to the most affected small businesses so that they don't
experience employee dislocation, a reduction in employment
opportunities for low-skilled and entry-level workers or an increase in
consumer prices that takes away the real value of any wage increase.
The third way is represented by the real value of any wage increase.
The third way is represented by the substitute amendment that was the
product of extensive bipartisan support, Democrats and Republicans
working together, acknowledging the fact that mandated cost increases
can have negative economic effects. So together we developed a means of
addressing those concerns in the form of a bipartisan substitute
amendment. I can't emphasize enough how pleased I am with the
cooperation I saw as people worked out different alternatives. There
were certainly a wide variety of them that were done and I think with
some concentration particularly on how they would affect small
business. I would reiterate the bipartisan support of that small
business tax incentive package. There are key Democratic leaders who
have acknowledged the need for the package to offset any wage increase
in order to not disenfranchise the employers and their workers.
So I hope we won't make this partisan now. As I mentioned yesterday,
the Senator from Massachusetts, Mr. Kennedy, and I have gone head to
head on raising the minimum wage three times in the past several years.
Each time, the votes were set up for each side to fail. This time
around, we worked to come up with a third way in order to get the job
done. I hope that all efforts to try and unravel this third way that
will most likely result in a minimum wage increase isn't abandoned for
the sake of making partisan messages. I urge my colleagues to continue
to support the small business incentive package as a much-needed offset
to the increased Federal wage.
I think this is a tremendous opportunity for us to do the right thing
in all aspects, and I hope there will be good bipartisan support. I
understand the desire to have a clean minimum wage, but that is what we
have been going through for a couple of years now, and we are finally
talking bipartisan. I think that was something that came out of the
elections. I am pleased to see it is operating, and we will see how
long it continues. I hope it continues through the entire session.
Amendment No. 108, as Modified
Mr. ENZI. Madam President, I ask unanimous consent that the Sessions
amendment No. 108 be modified with the changes at the desk, and I urge
its adoption, as modified.
The PRESIDING OFFICER. Without objection, it is so ordered. The
amendment is so modified.
The amendment (No. 108), as modified, is as follows:
At the appropriate place insert the following:
SEC. __. STUDY OF UNIVERSAL USE OF ADVANCE PAYMENT OF EARNED
INCOME CREDIT.
Not later than 180 days after the date of the enactment of
this Act, the Secretary of the Treasury shall report to
Congress on a study of the benefits, costs, risks, and
barriers to workers and to businesses (with a special
emphasis on small businesses) if the advance earned income
tax credit program (under section 3507 of the Internal
Revenue Code of 1986) included all recipients of the earned
income tax credit (under section 32 of such Code) and what
steps would be necessary to implement such inclusion.
The PRESIDING OFFICER. The question is on agreeing to the amendment,
as modified.
The amendment (No. 108), as modified, was agreed to.
Mr. ENZI. Madam President, I move to reconsider the vote.
Mr. KENNEDY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 107 Withdrawn
Mr. ENZI. Madam President, I ask unanimous consent that the Sessions
amendment No. 107 be withdrawn.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ENZI. Madam President, I yield the floor.
Mr. KENNEDY. Madam President, in about 6 or 7 minutes, we will be
having a vote, and then I would expect the President's State of the
Union Address will place demands on the Members, so that will mean we
will probably move over until tomorrow. As I mentioned earlier, I hope
our colleagues will vote in support of the Sessions amendment for the
reasons I have outlined.
I think an important message ought to go out to families and to
workers all over this country and many others who have worked long and
hard to try and urge the Senate of the United States to move on the
minimum wage issue and raise the minimum wage, as it has been stuck for
the last 10 years at $5.15. There are people who have knocked on doors,
there are people who have stuffed envelopes and there are people who
have phoned into radio stations and people who have written letters to
the editors and people who have met with Members of Congress all over
this country. People have marched, attended parades, and demonstrated.
They have spoken out for fairness and justice for workers. Tomorrow we
will have a real opportunity to respond to that.
I am very hopeful, as a result of the votes tomorrow, we will be well
on the way toward this body supporting action that has taken place in
the House of Representatives and a vote for an increase in the minimum
wage. There will be those who will go to bed tonight who have been
working long and hard for $5.15 an hour. They may work one job, and
many of them, 300,000 Americans, work two full-time jobs. They probably
keep saying a prayer, and they are keeping their fingers crossed that
in the Senate, tomorrow will provide at least some additional breath of
hope to them and to their families, to their loved ones, that can make
a difference in terms of their lives and what a difference this can
make.
As we have mentioned, it may be more than a year's worth of groceries
to some families or it may be the tuition for a community college. It
could be 20 months of child care for some workers. It could be heating
and electric bills for 19 months, all measured in a few months, for
things that so many of us, certainly in this body, take for granted.
But out there in so many communities across the country, people fight
and struggle to try and achieve those goals.
So this is a very important vote. We have important votes and some
not so important votes in this body, but tomorrow will be one of great
importance and consequence. I think it will be a defining issue about
what kind of society we are; what is the measure of our decency and the
measure of our humanity in this body. So I am very hopeful as to the
outcome, and we urge our colleagues to give us their support. We will
have an opportunity to make comments tomorrow morning briefly before we
vote on these measures. We thank all of our Members for all of their
cooperation and their help to Senator Enzi and myself over the last
several days. So with that I would indicate to our colleagues that in
approximately 2 minutes or so we will begin the vote on the Sessions
amendment, an amendment which both I and Senator Enzi support.
Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. ENZI. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
[[Page S904]]
The PRESIDING OFFICER (Mr. Salazar). Without objection, it is so
ordered.
Mr. ENZI. I yield back, with the consent of both sides, the 2 minutes
that was to be available on both sides. I yield back that time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ENZI. I request the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to amendment No. 106, as modified.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
I further announce that, if present and voting, the Senator from
Delaware (Mr. Biden) would vote ``yea.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 98, nays 0, as follows:
[Rollcall Vote No. 21 Leg.]
YEAS--98
Akaka
Alexander
Allard
Baucus
Bayh
Bennett
Bingaman
Bond
Boxer
Brown
Brownback
Bunning
Burr
Byrd
Cantwell
Cardin
Carper
Casey
Chambliss
Clinton
Coburn
Cochran
Coleman
Collins
Conrad
Corker
Cornyn
Craig
Crapo
DeMint
Dodd
Dole
Domenici
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Graham
Grassley
Gregg
Hagel
Harkin
Hatch
Hutchison
Inhofe
Inouye
Isakson
Kennedy
Kerry
Klobuchar
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lott
Lugar
Martinez
McCain
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Roberts
Rockefeller
Salazar
Sanders
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Tester
Thomas
Thune
Vitter
Voinovich
Warner
Webb
Whitehouse
Wyden
NOT VOTING--2
Biden
Johnson
The amendment (No. 106), as modified, was agreed to
Mr. DURBIN. I move to reconsider the vote.
Mr. LEVIN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
____________________