[Congressional Record Volume 153, Number 186 (Thursday, December 6, 2007)]
[Senate]
[Pages S14809-S14814]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TEMPORARY TAX RELIEF ACT OF 2007--MOTION TO PROCEED
The ACTING PRESIDENT pro tempore. Under the previous order, there
will be 1 hour of debate, prior to a vote on the motion to invoke
cloture on the motion to proceed to H.R. 3996, with the time equally
divided between the two leaders or their designees, with the 20 minutes
immediately prior to the vote to be divided 10 minutes each for the
leaders, with the majority leader controlling the final 10 minutes.
The Senator from New Hampshire is recognized.
Mr. GREGG. What is the order of recognition? Is it the Democratic
side or Republican side?
The ACTING PRESIDENT pro tempore. There is no order of recognition.
Mr. GREGG. Does the Senator wish to proceed?
Mr. BAUCUS. You go ahead.
Mr. GREGG. I will be happy to allow you.
Mr. BAUCUS. Mr. President, I yield myself such time as I consume.
The ACTING PRESIDENT pro tempore. The Senator from Montana is
recognized.
Mr. BAUCUS. Mr. President, in the 1931 film classic,
``Frankenstein,'' the character Dr. Waldman tells Dr. Frankenstein:
You have created a monster, and it will destroy you.
That is how the AMT looks to the Tax Code. That is what it looks
like. It is a monster. It is a thing of dread for many Americans.
Unless we act, it will destroy the entire tax system. If we don't act
pretty soon, the AMT tax will be greater than the individual Federal
income tax. This tax is a problem for taxpayers in all 50 States. I
must give a few numbers as to what will happen if we don't extend the
AMT patch.
Let's take Texas. The number of Texans subject to the alternative
minimum tax, if we do not act this year, would increase from roughly
150,000 taxpayers in Texas to 870,000 taxpayers. That is about a
sixfold increase in 1 year.
The number of Nevadans subject to AMT would increase from about
15,000 to about 100,000--again, a little over a sixfold increase.
The number of South Carolinians would increase from 30,000 to
190,000, again a large increase, about 6 times.
That is about average across the country, six times more Americans
will pay more taxes under the AMT if we don't act, compared to what
they were otherwise paying.
Even taxpayers who do not pay the AMT tax are hurt. Why? Because
taxpayers have to calculate not only the regular tax, but taxpayers
then have to calculate the alternative minimum tax. That is the law.
You have to do both.
First, you have to calculate all your regular taxes. Then you have to
calculate what taxes you may pay under a whole separate system of AMT.
So even though you may not pay more under the alternative minimum tax,
you have still got to go through a second calculation. That is not a
lot of fun. Then, if the second calculation shows you pay more under
the alternative minimum tax, guess what. You have to pay more. You
cannot choose to pay the lesser of the two; you have to pay the greater
of the two. That is the law.
Again, the monster created by the Congress years ago, unintended
consequences, but a monster we can eliminate, if not destroy, if we
take action today.
Calculating taxes once is scary enough. Calculating taxes twice is
almost enough to destroy a person. It may also cause significant
financial hardship. Why? Because in today's economy, families depend on
that refund check. It is getting close to Christmas. People are buying
presents. Sometimes they run up their credit cards a little bit. They
are depending upon that refund check to pay off their credit card
balances. A lot of Americans do that. A lot of Americans do that.
Think of the taxpayers who think they are going to get a refund from
the Federal Government. But then, if we do not fix this AMT problem,
what happens? They get the letter in the mail telling them they have to
pay more taxes because of the AMT. Talk about your horror story.
Here is an example of how AMT hits working families. Let us take a
married couple, four young children. What is their household income? A
whopping $75,000 a year. Their regular income taxes should be about
$1,800. That is probably what they pay. This is after the standard
deduction and after the child tax credit.
Again, a family with a $75,000 income, family of four, pays about
almost $2,000. Not quite, because they are able to take a standard
deduction for the child tax credit.
Well, let's see what happens when we calculate the alternative
minimum tax. Same family. Same income. The amount more than doubles
this family's tax liability. It raises their tax from $1,800 to $3,800.
More than twice. More than twice.
That is a family earning $75,000. Not a huge, big-income family. That
is a $75,000 family. The AMT hits this family not because they are
rich, because they are not. Why? Because they have four kids. That is
kind of how it works. It is perverse. If you have more children, you
pay more taxes. That is kind of nutty, but that is what it is today.
The AMT will cost taxpayers because it costs the Federal Government.
A delay will create delayed tax return filings, and last minute
legislation will delay the issuance of Federal refunds. With each extra
day we delay, the greater the cost. The greater the cost to taxpayers,
the greater the cost to the IRS. The cost mounts up.
Let's look at some of the costs of delay. If the IRS has to postpone
accepting returns to the early part of the filing season, say January
28, this would delay the receipt of more than 6.5 million returns,
delay the issuing of more than 5.5 million refunds, totaling more than
$17 billion, delay about $17 billion worth.
A delay in fixing the alternative minimum tax affects States. We are
not just talking about the Federal income tax, we are talking also
about State taxes. Why? Because most State taxes are tied to the
Federal tax system.
A delay in the Senate will mean not only a delay in the Federal tax
receipts but also a delay in the State tax refunds, Federal and State.
A delay will also mean States that are already financially strapped
could have a cash crunch. Think of the States' coffers. Their normal
flow of tax revenues will not be coming in. Many States are very
tightly budgeted. I know that is true in the State represented by the
officer in the chair. I hear many times about the tight fiscal
situation in that State.
That is true for most States. If tax agencies cannot reprogram their
computer systems in time, States and the IRS are concerned taxpayers
will turn back to paper returns. What is the consequence of paper
returns? It leads to an increase in processing times and costs as well
as more errors.
Let's take the State of Montana. In Montana, it costs $2 to process
an electronic return, $2. But it costs $9 to process a paper return. I
daresay that disparity is probably true in most States.
At a time when families are experiencing hardship, I must say the
other side of the aisle is playing politics. They are not letting us
fix this problem. They, in effect, consequently want to increase taxes.
They are increasing taxes. How? By causing the alternative minimum tax
to be imposed upon Americans, by not letting us fix the alternative
minimum tax.
You watch that vote that is coming up. We are not going to get 60
votes. You watch how, when the leader is going to request we take up
the House-passed bill, and the substitute measure where we fix the AMT
patch, unpaid for, they will object to that. They do not want to fix
this problem. They say they do, but their actions are louder than the
rhetoric. They are raising taxes. They are raising taxes by not
allowing us to fix the alternative minimum tax patch for 2007.
In the 1945 B movie ``House of Dracula,'' the character, Dr. Edelman,
says of Frankenstein's monster:
He's indestructible. Frankenstein's creation is man's
challenge to the laws of life and death.
Let's prevent that from being said about the AMT. Let's prove the AMT
is
[[Page S14810]]
not indestructible. Let's move to proceed to the House bill and stop
this tax monster.
We are going to do this. Let's do it now. We know we are going to fix
this one way or another. So I say: Stop playing politics. I say that to
the other side of the aisle because they are going to block this next
cloture vote. They are going to object to the motion asking consent to
pass the alternative minimum tax, unpaid for.
I say: Stop the games. Let's get on with it. Let's help do something
for the American people. Let's move to proceed to the House bill, stop
this tax monster.
The ACTING PRESIDENT pro tempore. The Senator from New Hampshire.
Mr. GREGG. Mr. President, I appreciate the chairman of the Finance
Committee outlining the problems with the AMT. I agree 100 percent with
his statement relative to the problems with the AMT. He is absolutely
accurate. It was a concept passed with the consequences being--with the
known consequences being--to make sure people who had high incomes
would pay a fair share of taxes.
It turns out it was drafted poorly, it was not indexed for inflation.
As a result, we have literally millions of people who are paying this
tax who should not have to pay this tax, and therefore it should be
repealed. Actually, it should be repealed permanently. There is no
reason for us to even go 1 year. We should do the whole thing, get it
done.
But this bill which is being brought forward on which cloture is
being filed in order to proceed to it is a very bad approach. Because
basically what this bill is saying is a tax which was never intended to
be in place, people who were never supposed to pay this tax and,
therefore, to correct it is not giving them a tax cut, it is simply
saying: You are going to be taxed the way we expected you to be taxed.
Or to put it another way: If the alternative minimum tax goes forward,
people are going to pay a tax they should not have to pay because it
was never perceived they would have to pay it.
A bill which should accomplish that, which should give those people
relief, is being coupled with tax increases on people who should not
have to pay new taxes to correct the alternative minimum tax problem.
It is also being coupled with a bill which has some bad policy in it.
For example, this bill will stop, stop the IRS from proceeding with
investigations and action, potential action, against people who are
using the Virgin Islands as a tax shelter. There are 279 investigations
going forward right now relative to Americans who have basically
created a shell lifestyle in the Virgin Islands so they can avoid taxes
in the United States, which they probably owe.
It is estimated there may be as much as $370 million of taxes owed to
the United States by those high-income individuals. What does this bill
do that came to us from the House? It says: We are going to stop that.
We can no longer investigate those people. The IRS can no longer
continue to proceed with an action against those people who are
basically trying to escape American tax law.
It also, this bill, includes in it a tax deduction for State
legislators during periods when they are not in session. How about a
little gift to our friends in the State legislature maybe in New York.
So that if the New York legislator does not even go to Albany, they are
still able to deduct their per-diem expense.
That is called porkbarrel tax policy, I suspect. Those are terrible
policies. But the larger policy which is bad, which is in the bill
before us, is we are essentially going to hit partnerships and
individuals with something called a carried interest tax, the practical
effect of which will be that people who are involved in the financial
business of this world--in the United States, not the world, people who
are involved in the financial business in this country--and I know
there is not a lot of sympathy for those folks because they make a lot
of money. We would all like to make a lot of money like that. But these
folks are essentially the engine of a large part of our economy. They
are the ones who are creating the capital which is then invested in the
businesses. They are the entrepreneurs who then create jobs. Jobs do
not appear from thin air. They do not. They appear because someone out
there is a creative individual who says: I have an idea. I am going to
start this little company. I am going to start this little restaurant.
I am going to start this little business.
They build it, and then they get to a certain point where they need
more money in order to expand it to create more jobs. Where do they get
the more money? It does not appear from thin air. It appears from the
fact that we have financial markets, the most viable capital markets in
the world where people can raise money. They go into the market, and
they say to the people who are the professionals: We need X amount of
dollars in order to expand our business so we can create more jobs in
New Jersey or in New Hampshire or in Montana or in Texas. We are coming
to you to help us raise capital.
Those folks go out and they raise the capital. They invest it in
those businesses and those businesses create jobs, those entrepreneurs
create jobs. What this bill says is: Those people who are in those
financial markets will receive a brandnew tax on what they consider to
be the way they raise money and create wealth for Americans by creating
jobs, in what they consider to be a fair way to do it, which under the
tax law today they are not taxed for it. It is a brandnew tax. What is
the practical implication of putting this new tax in place in order to
pay for the elimination of a 1-year kicking down the road of the
alternative minimum tax expansion? Which should be done.
The practical implication of doing it by raising taxes in this way is
that, first, people who should have not paid taxes under the AMT will
not have to pay their taxes. That is good. We should not have counted
that revenue anyway.
But, second, you are going to put in place a new tax system which
would drive those people who create that financial incentive, which
creates jobs, which gives business people and small entrepreneurs in
this country the revenue and capital they need to create jobs, you will
drive them overseas. We will be exporting jobs again because we are in
global competition in the area of capital.
One of our biggest problems in this country today is a lot of the
capital that is being formed in this world today, which used to be done
in New York, where if you wanted to raise capital in this world, you
used to come to New York. Unfortunately, it is a world competition, and
now places such as London are competing with us, and they are being
very effective in their competition.
One of the reasons they are able to compete with us effectively is we
have put a lot of restrictions on our people which have been maybe a
little bit over the top and, more importantly, we have a tax policy
which has not been constructive, which has not encouraged people to
stay here. It encourages them to go overseas.
The effect of this proposal will be to even aggravate that further.
We will be exporting more jobs. More importantly, not only will we be
exporting the job of the person in the financial market, we will be
exporting the creation of the capital. That is serious. Because that
capital is the feed corn for the expansion of our economy.
You should not be raising taxes at this time. That is another point
that should be made--this alternative minimum tax proposal which comes
to us from the House raises taxes. That is pure and simple. We are
headed into potentially an economic slowdown. That is the way it looks.
Because of the subprime crisis, because of the capital market crisis,
we are heading into some sort of a slowdown. Hopefully, it will not be
severe, but it could be difficult. There is no question about that.
To raise taxes in the face of that type of a slowdown is the absolute
opposite of what any reasonable person who has experienced any economic
slowdown would do. In fact, recently I was interested to read what
Robert Reich, who was Secretary of Labor under the Clinton
administration and who is readily acknowledged as being a liberal
economist, and a very talented one by the way, he went to Dartmouth, so
I know he is talented.
Robert Reich said: A tax increase at this time would be foolish. What
we should be talking about is a tax cut.
[[Page S14811]]
Actually, what we should be talking about, and what we on our side
would like to do, quite honestly, is put in place an alternative
minimum tax fix which is permanent. That has been proposed by a number
of us on our side.
Let's correct this problem so we do not have to deal with it this
year, next year, or the year after. That is the first thing we should
do. Short of that, we should put one in that is a little bit longer, at
least, so there is some predictability in the tax law.
But under no circumstances should we put in place an AMT fix which is
coupled with a tax increase or which is coupled with terrible policies
such as this Virgin Island loophole and this State legislator loophole
that was put in this bill. That is why we resist this approach.
The Republican leader came to the floor a couple days ago and
suggested three or four different avenues where we could correct this
problem. They were all fairly reasonable. I don't know why they were
rejected by the other side of the aisle. My sense is that we should be
able to work this out because I honestly believe, when I listen to the
chairman of the committee, that there is not that much difference
between where he wants to go and where our side would like to end up,
which is let's straighten out the AMT. Let's put all this additional
tax policy and these tax increases which have come from the House
aside. Let's say: The House got off on the wrong track. Let's just take
this approach of doing AMT and do AMT and fix that, and then, if the
House wants to come back with a tax increase bill, we will fight that
out on a separate agenda.
We can't on our side support a bill and vote for cloture on a bill
which would mean we would be shut off from a lot of our amendments,
vote in a way which would basically put us in a position which would
potentially lead to a tax increase in order to correct what is an
underlying important problem. Obviously, this is a motion to proceed,
so we might not be shut off from amendments, but I suspect the motion
to proceed will be followed very closely by the filing of cloture on
the underlying bill.
I am not too concerned about the fact that we would not be allowed
our approach. If the position of the other side of the aisle is, we are
willing to give you your votes, let's set that up right now. Let's take
the Republican leader's position, set up three or four votes in tandem,
make them all 60-vote hurdles, if that is what it requires--and that is
what it will require because pay-go is going to get waived on every one
of them--and vote on them--bang, bang, bang, bang, bang. Let's not go
through this exercise on cloture. We want to correct the AMT problem.
We think it should be corrected. We don't think the way to correct it
is to raise taxes on the productive side of the American agenda and
potentially throw us into a further slowdown of the economy or force
people to go overseas in order to raise capital or, alternatively, put
in place policies which basically make the Virgin Islands a safe haven
for people who want to avoid American taxes or give State legislators
the opportunity to claim a per diem deduction when they are not even
going to work.
I yield the floor.
The PRESIDING OFFICER (Mr. Brown). The Senator from Montana.
Mr. BAUCUS. Mr. President, I listened carefully to the Senator from
New Hampshire. I say to my friend, frankly, I would not have written
the House bill in the way it was written. I don't agree with everything
in the House bill. In fact, I think there are some measures there that
probably should be addressed and amended. I also think, though, that we
need to get to the House-passed bill so we can fix the AMT. We can't
fix the AMT until we get to that bill. Once we get to that bill, any
Senator, irrespective of whether cloture has been filed, can always
file a motion to strike. So if there are measures in the House bill
that the Senator does not like or the Senator from Texas doesn't like
or anybody doesn't like, that motion to strike is available.
If we get to the House bill, I am going to offer a compromise which I
think the vast majority of the Members of this body will accept. We
need to get to the bill. We need to vote cloture and get to the bill so
we can cure this AMT problem, offer amendments that Senators might find
objectionable to the House bill. At the same time, I am going to offer
a compromise proposal which I believe will dispose of it. I urge my
friends on the other side to let us get on the bill. Then we can vote
to strike. We can vote on this compromise proposal I will offer.
I mentioned that there are various versions we could vote on. One is
just straight AMT unpaid for, period. That is an option. To get there,
we need to get to the bill.
The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
Mr. GREGG. Mr. President, because I don't think this is inconsistent
with what the Senator from Montana, chairman of the Finance Committee,
has asked for, I renew the Republican leader's request from yesterday.
I ask unanimous consent that at a time determined by the majority
leader, after consultation with the Republican leader, the Senate
proceed to consideration of H.R. 3996, the House-passed AMT bill, and
it be considered under the following limitations: there be 1 hour of
debate on the bill equally divided between the two leaders or their
designees, followed by a vote on the motion to invoke cloture on the
bill; provided further that if cloture is not invoked, then the only
amendments in order to the bill be the following offered in the
following order: a substitute amendment to be offered by Senator
McConnell or his designee which is to be an offset AMT extension and an
unoffset extenders package, a Baucus or designee first-degree amendment
to the McConnell substitute which is to be a set of offsets for the
extender package, a Sessions amendment related to AMT and exemptions,
an Ensign amendment which is an AMT repeal and extends other expiring
provisions, and a DeMint amendment which relates to the AMT and flat
tax; provided further that there be an additional 2 hours of debate on
the bill equally divided between the two leaders or their designees;
that there be a time limitation of 2 hours for debate on each amendment
equally divided in the usual form; provided that each amendment require
60 votes in the affirmative for adoption and that each amendment that
does not receive 60 votes then be withdrawn.
I further ask that notwithstanding the adoption of any substitute
amendment, the other amendments be in order; and finally, that
following consideration of the above amendments, 60 votes be required
for passage of the bill, as amended, if amended.
This outlines a procedure to accomplish what I believe the Senator
from Montana requested because it does have his first degree. There are
three other amendments in there, but they are all subject to 60 votes--
the Sessions, Ensign, and DeMint. If they fail, they fail. One presumes
that, depending on the position of the Senator from Montana, since he
controls more than 40 votes on his side, that would happen and that we
would then proceed in this way.
The PRESIDING OFFICER. Is there objection?
Mr. BAUCUS. Reserving the right to object, I remind all of us, we are
here to solve a very imminent problem; that is, the alternative minimum
tax. The IRS is having fits, frankly, because they are unable to send
out the right returns, programs, and so forth, to help the American
public avoid this AMT for 2007. The other provisions listed in that
consent have nothing to do with the alternative minimum tax. One is the
Bush tax cuts. They don't expire until 2010. We are talking about 2007,
right now, this month. Then there is the flat tax. That has nothing to
do with the alternative minimum tax. That is a whole other issue that
has nothing to do with what we are trying to accomplish today. I urge
Senators to keep their eye on the ball. Let's get the AMT patch passed.
That is what we are talking about.
I must, on behalf of the majority leader, object. I can't agree to a
procedure on the floor without the presence of the majority leader. I
just point out the pitfalls of that request which prevent us from
getting to a real problem, and that is solving the AMT for the tax year
2007.
The PRESIDING OFFICER. Objection is heard.
Mr. GREGG. Mr. President, I appreciate the objection of the Senator
from
[[Page S14812]]
Montana. I understand he believes the suggestion he is proposing is the
right way to proceed. I would note that this subjects everything to a
time limit. Yes, the flat tax is going to be debated for 2 hours, and,
no, it is not going to get 60 votes, so it will not be in the final
package. Yes, the Ensign proposal, which is essentially a repeal of the
AMT and also extends the cap gains dividend rates--I believe that is
the proposal--would be brought forward. It would be debated for 2
hours, and then we would move on. I actually hope that one might pass.
In any event, this sets out a pretty tight timeframe. If you take all
the factors here, we could finish this by sometime around 7 o'clock
tonight, assuming everybody wants to talk for 2 hours, which they
probably wouldn't, and be done. We would get it done, get the AMT
straightened out, and have done some good work around here. I suspect--
though I won't guarantee this--the final resolution of this proposal,
which Senator McConnell made yesterday, would be closer to what the
Senator from Montana wants than the bill he is suggesting we vote
cloture on relative to proceeding.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mr. CORNYN. Mr. President, may I inquire of the Chair how much time
remains on this side of the aisle?
The PRESIDING OFFICER. Four minutes 25 seconds, and for Senator
Baucus, 8 minutes 12 seconds.
Mr. CORNYN. Mr. President, I ask unanimous consent for 2 minutes for
myself and then the remainder of our time to the Senator from Utah, Mr.
Hatch.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Texas is recognized.
Mr. CORNYN. Mr. President, I am not without sympathy for the position
argued by the distinguished chairman of the Finance Committee. I think
the list of horribles he has recounted by the fact that the AMT is not
indexed and will cover up to roughly, I believe the figure is now, 23
million taxpayers unless we act--I am not without sympathy for what he
is trying to do here. But the problem is, we are not going to agree on
this side to raise taxes against the American people in order to pay
for a tax cut for others. It is simply that clear. We are not going to
agree to raising taxes, particularly at a fragile time for the economy,
by what some have estimated would be $80 billion a year.
I believe three simple principles will help us find a solution. One
is that we ought to protect the middle class from the rise of the AMT
which President Clinton vetoed a full repeal of in 1999. I wish he had
not done that then. That would have protected us from where we are
today. We ought to pass the expiring tax provisions, the so-called tax
extenders for capital gains and dividend rates and other tax relief
which have contributed to 50 months of continuous and uninterrupted job
growth since tax extenders relief was passed in 2003. We ought to do
both without raising taxes on the American people.
Unfortunately, we know a tax increase is like throwing a wet blanket
on the American economy. The AMT, if we don't act, will hit about
870,000 of my constituents, up from 150,000 now. It sounds to me as if
the distinguished chairman of the Finance Committee is sympathetic to
the direction we would like to move that this bill, unfortunately, does
not represent. But as long as we are presented with a choice of cutting
the AMT by raising taxes, I don't believe we are going to see any
progress.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, the AMT was initially designed to catch
about 155 people who were not paying taxes but were immensely wealthy
and getting all kinds of income every year. Today, there are 4 million
people who are paying the AMT. If we don't do something about it, there
will be 25 million tomorrow. To be honest with you, because we have
delayed so long, we are going to be in a bind as far as even getting
the software done, the paperwork done, the IRS work done to be able to
give people their refunds this next year because of the delay we have
had. I respect the distinguished chairman of the committee. It has been
a very difficult committee to manage, and he has done as well as
anybody I can imagine.
We need to fix the alternative minimum tax, the AMT. There is no
argument in this chamber about that. If we fail to act, 25 million
Americans might have to write checks to Uncle Sam for thousands of
dollars.
So we agree on fixing the AMT.
But the devil is in the details, and I cannot support a plan that
prevents a tax increase on millions of Americans by raising taxes on
others.
Congress never anticipated having anywhere near this level of AMT
revenues to begin with, so we should not be raising taxes permanently
to make up for that phantom lost revenue.
We are well past time for serious action on the AMT.
Almost 3 weeks ago, I came to the floor to discuss the financial and
political ramifications of Congress' failure to fix the AMT.
We had a crisis then.
It is worsening by the day.
Even if we were to patch the AMT today, the American people will
suffer from our inaction.
We have known that the AMT train was coming down the tracks all year.
This failure to act is setting new standards for ineptitude.
Three weeks ago, the failure to patch the AMT was merely creating
uncertainty for millions of Americans who would be subject to it if we
dropped the ball.
Three weeks later, these poor folks are barely the half of it.
Now billions of dollars in tax refunds risk being delayed because of
inaction.
On November 26--11 days ago the chairman of the IRS Oversight Board
sent a letter to the chairman and ranking member of the Senate Finance
Committee.
His grim assessment of the situation is worth our review.
The filing season is expected to start on January 14, but that date
is now in jeopardy.
IRS computer programs are set to process tax returns under current
law.
The IRS cannot flip a switch and process millions of tax returns in
January, when Congress changes the law on Christmas Eve.
According to the IRS Oversight Board, the IRS would be able to start
processing tax returns within 7 weeks of the enactment of an AMT patch.
So if we were to enact an AMT patch today, tax filing season would
start almost 2 weeks late.
That delay would lead to 6.7 million delayed tax returns and $17
billion in delayed refunds.
What if we delayed the start of tax season 1 more week?
Then we are looking at 15.5 million delayed tax returns and $39
billion in delayed refunds.
Push it back another 2 weeks--37.7 million delayed tax returns and
$87 billion in refunds delayed.
Many Americans actually look forward to getting their W-2 in the
mail. Their employer withholds too much money from their paycheck every
year, and the W-2 allows them to file a return and get that money back.
And now with electronic filing, Americans are able to get those
refunds even more quickly.
Utahns depend on their refunds.
They count on their refunds.
Undermining that confidence is much worse than a lump of coal in a
stocking.
We are now in the Christmas season.
I am sure that the movie ``Christmas Vacation'' will be on television
soon.
That movie contains a lesson that we should all heed.
In that movie, Clark Griswold, assumes he is going to get his annual
Christmas bonus.
That Christmas bonus is as reliable as a weekly paycheck.
And when that bonus did not come, he--flat--out--went--nuts.
The political philosophy of Clark Griswold is one that I would
commend to my colleagues.
It is one shared by the American people. If you mess with my family's
financial security, you better watch out.
The Senate's failure to patch the AMT in a timely fashion is going to
delay millions of tax refunds, and we should not be surprised when the
American people--like Clark Griswold--go nuts.
Right now, Americans are likely making decisions about the Christmas
[[Page S14813]]
gifts they are going to buy, at least partially, based on their tax
refund.
They assume they are getting that tax refund.
And they assume they are getting it on time.
Further delay is no longer acceptable.
Yesterday on the floor, Republicans were blamed for holding up
passage of an AMT patch.
That is funny.
When Republicans were in the majority, we managed to pass an AMT
patch early in the year, no later than May 11.
We did it without permanent tax hikes to pay for 1-year AMT fixes.
We did it without including special interest giveaways, and we did it
without delaying tax refunds.
Democrats did tell us yesterday on the floor that they are the party
of change.
On the AMT at least, they seem to be succeeding.
To fix the AMT they propose raising taxes.
To pass important tax extenders they are raising taxes.
And their efforts have now jeopardized the tax filing season and
refunds for the hard working Americans who depend on them.
When times change, they sure do change.
We are about to have a vote on the AMT.
I support AMT relief. I support AMT repeal.
But I will not support this fake tax relief.
I am not the only one. The Democrats' plan to fix the AMT with
permanent tax increases ought to fail.
And for good reason.
We should not be paying for temporary tax cuts with permanent tax
increases, nor should we be putting the economy at risk by passing
unnecessary tax hikes.
When this episode is over, we need to get down to the real business
of fixing this AMT so we can get Americans the tax refunds they expect
and the tax relief they deserve.
The PRESIDING OFFICER. The senior Senator from Montana is recognized.
Mr. BAUCUS. Mr. President, I just want to make the fundamental point
that if we don't act, we will be raising taxes on 19 million Americans.
We have to act to prevent a tax increase from going into place. We on
our side ask to vote for cloture so as to get to the bill which
accomplishes that result of preventing 19 million Americans from paying
greater income taxes. We have to get to the bill so we can pass that
legislation. It can always be amended by any Senator who has a problem
with other provisions that might be in this bill. I respect that. In
fact, I would agree with some of those amendments, I am quite certain,
and motions to strike are always available.
We need to get to the bill so we can prevent a tax increase on 19
million Americans, called the alternative minimum tax, from going into
effect. To the degree to which the other side prevents us from getting
to the bill, that indicates to me they want to increase taxes on those
19 million Americans. I hope that is not true, but their actions
indicate that it is true. Unless they totally change and say, yes, we
should get to the bill to fix this AMT problem, I have to conclude they
want to increase taxes on those 19 million Americans.
I see no other Senators who wish to speak, so I note the absence of a
quorum, and I ask unanimous consent that the time be equally divided on
both sides.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. McCONNELL. 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. McCONNELL. Mr. President, before we cast our votes this morning,
Americans should know exactly what we are voting on. This is not a vote
on fixing the AMT; this is a vote to raise taxes. Every year for the
last 4 years, Republicans in Congress have found a way, usually by May
of the year in question, to correct a glitch in the Tax Code that
threatens to affect more and more families each year.
This is a middle-class tax that was never meant to be. It was created
to make sure 155 super-rich individuals couldn't avoid paying taxes.
But because the people who wrote it didn't account for inflation, it
now threatens 25 million middle-class families.
Republicans have always found a way to deal with this problem with
the tax laws, and we did it without raising taxes. But the majority
that now controls Congress has a different view. They don't want to
protect the 25 million Americans who get hit by this glitch over the
next few months, unless Republicans agree to raise taxes on other
Americans in the process.
Let me say that again. What we are talking about here is extending
current tax law, which normally we have done, and adding a new
condition to that, saying we are only going to extend this tax break if
we raise taxes on a whole lot of other Americans. Now, Republicans will
respond to this proposal in the same way we have responded to it
publicly and privately all year: No deal. No tax hike.
Democrats thought they could force us into accepting this proposal by
waiting until the last days of the session to call a vote, but they
were wrong. What they have forced instead is a crisis. Unless they fix
this glitch, millions of Americans--including more than 3 million in
New York, 98,000 in Nevada, and 819,000 in Illinois--will get a big
surprise when they sit down to do their taxes over the next few months.
Millions more will face delays in getting the tax refund checks they
count on every year.
The majority needs to find a way to fix this problem before it gets
even worse. We have been warning them about it all year long. The
senior Republican on the Finance Committee reminded us yesterday that
he has spoken on the Senate floor on this issue no fewer than 12 times
since last January. Senator Grassley has spoken on this issue no fewer
than 12 times since last January. The Treasury Secretary sent us urgent
letters. The IRS sent us urgent letters. There is really no excuse for
the delay.
This is a problem we can solve. We have shown the Democrats how. We
don't need the majority leader to do a backflip off the Secretary's
chair, as he suggested yesterday. We want him to give us a fix that
does not raise taxes, that is fair, that is simple. This will work, and
this will not put the majority leader or anyone else at risk of any
physical harm.
So far, the majority has refused our offer. So here we are, about to
vote on a massive tax hike that we know would not pass the Senate--and
which we know the President wouldn't even sign if it did pass the
Senate--instead of doing our job and fixing this middle-class tax hike.
With all due respect, this is no way to legislate. Let me be very
clear to my colleagues across the aisle: Republicans will not raise
taxes--will not raise taxes--in exchange for blocking a tax that was
never meant to be. Our position has never been a secret. The Democrats
have known it all year.
I will vote against this massive tax hike, and I urge all of our
colleagues to do the same.
I yield the floor.
The PRESIDING OFFICER. The majority leader is recognized.
Mr. REID. Mr. President, during the Clinton years we did some good
things for this country, and when the history books are written, one of
the things that will be paramount in those accounts will be what
President Clinton did, with his allies in Congress, to turn the country
around economically. During the Clinton years, we were paying down the
debt by half a trillion dollars. We were spending less money than we
were taking in. We can all look back to those days when Alan Greenspan
told us in committees assembled that we should cut back. We were paying
down the debt too quickly.
When President Bush took office, there was a $7 trillion surplus over
10 years. With all of the things that he has done to bankrupt this
country, we are now in debt of some $10 trillion.
The bill we have before us is a bill that says this tax needs to be
patched, but it should be paid for.
That is what we did in the Clinton years. That is what we did in our
budget that we passed here. Mr. President, we passed the first budget
in this Senate in 3 years--our modest majority--by one vote, because
Tim Johnson was
[[Page S14814]]
sick. We passed again, following the Clinton example, a balanced budget
where we said we believed if we are going to have new programs, they
should be paid for. It is called pay-go. We said if there are going to
be cuts in taxes, they should be paid for.
The Speaker followed this, and we now have a bill from the House that
takes care of the patch, but it pays for it. Isn't that what the
American people want? Isn't that the example we should set for them--
that if we spend some money, we have to make provisions to pay for it?
If you have a home and you suddenly decide you need something, such as
a new refrigerator, and your credit card is at its maximum, then you
cannot buy that refrigerator. There has to be some ability in this
Congress to treat this body just as a family treats its own budget.
The wailing and crying we are hearing here is that they ``find it
offensive''--those were the words of my distinguished Republican
colleague, Senator McConnell, yesterday--to have to pay for these tax
cuts. Well, I hope everyone understands that we are trying to do what
is right, that we are trying to have the Government of the United
States not be one that is buried in red ink all of the time.
This is a $50 billion patch. Should it not be paid for? The answer
is, obviously, yes. I hope everybody votes for cloture on this most
important piece of legislation.
cloture motion
The PRESIDING OFFICER. Under the previous order, pursuant to rule
XXII, the clerk will report the motion to invoke cloture.
The legislative clerk read as follows:
Cloture Motion
We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on the motion to
proceed to Calendar No. 487, H.R. 3996, the AMT tax bill.
Harry Reid, Dick Durbin, Patty Murray, Max Baucus, Jay
Rockefeller, Patrick Leahy, Daniel K. Inouye, Herb
Kohl, Benjamin L. Cardin, Jeff Bingaman, Ted Kennedy,
Carl Levin, B.A. Mikulski, Barbara Boxer, Debbie
Stabenow, Maria Cantwell, Bill Nelson.
The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call is waived.
The question is, Is it the sense of the Senate that debate on the
motion to proceed to H.R. 3996, a bill to amend the Internal Revenue
Code of 1986 to extend certain expiring provisions, and for other
purposes, shall be brought to a close?
The yeas and nays are mandatory under the rule.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden),
the Senator from New York (Mrs. Clinton), the Senator from Connecticut
(Mr. Dodd), and the Senator from Illinois (Mr. Obama) are necessarily
absent.
I further announce that if present and voting, the Senator from
Delaware (Mr. Biden) would vote ``yea.''
Mr. LOTT. The following Senators are necessarily absent: the Senator
from Arizona (Mr. McCain) and the Senator from Ohio (Mr. Voinovich).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 46, nays 48, as follows:
[Rollcall Vote No. 414 Leg.]
YEAS--46
Akaka
Baucus
Bayh
Bingaman
Boxer
Brown
Byrd
Cantwell
Cardin
Carper
Casey
Conrad
Dorgan
Durbin
Feingold
Feinstein
Harkin
Inouye
Johnson
Kennedy
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
McCaskill
Menendez
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Pryor
Reed
Rockefeller
Salazar
Sanders
Schumer
Stabenow
Tester
Webb
Whitehouse
Wyden
NAYS--48
Alexander
Allard
Barrasso
Bennett
Bond
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Coleman
Collins
Corker
Cornyn
Craig
Crapo
DeMint
Dole
Domenici
Ensign
Enzi
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McConnell
Murkowski
Reid
Roberts
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Thune
Vitter
Warner
NOT VOTING--6
Biden
Clinton
Dodd
McCain
Obama
Voinovich
The PRESIDING OFFICER (Mr. Cardin). On this vote, the yeas are 46,
the nays are 48. Three-fifths of the Senators duly chosen and sworn not
having voted in the affirmative, the motion is rejected.
Mr. REID. Mr. President, I enter a motion to reconsider the cloture
vote.
The PRESIDING OFFICER. The motion to reconsider is entered.
____________________