[Congressional Record Volume 155, Number 48 (Thursday, March 19, 2009)]
[Senate]
[Pages S3533-S3536]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               The Budget

  Mr. BENNETT. Mr. President, President Obama's budget is sending mixed 
messages to the American people. I know he faces a very difficult time, 
as do we all. I know he is trying to get the best counsel he can, and I 
applaud him for that. I do not have a degree in macroeconomics and I 
know some of the finest macroeconomists in the country are on President 
Obama's team. I do not know anybody, however, on President Obama's team 
who has ever run a small business. So, if I may be so presumptuous, I 
would like to share some of the realities of running a small business 
with the President's team and see if we can't understand why many of 
the things that are in the President's budget, in fact, will have 
directly the opposite effect than he wants.
  It is the goal of the administration to increase job creation and 
spur economic growth. That is a legitimate goal. However, we must 
understand this about how you increase job creation: You must be sure 
small businesses are properly taken care of because small businesses 
provide more than half the jobs Americans hold and small businesses 
create the new jobs. When large businesses start downsizing, buying 
people out and laying people off, where do they go? In many instances, 
those who do not go on unemployment end up in small businesses.
  If I may offer my own credentials, I have run businesses that were as 
small as two people--myself and my secretary. I was recruited to be the 
CEO--a very high-powered title--of a business that had only four 
employees. I made number five. We grew that business to the point that 
there were thousands of employees and the business was ultimately 
listed on the New York Stock Exchange. So I offer that to the 
macroeconomists on President Obama's team, to say that if you want to 
increase jobs and if you want to increase economic growth and thereby 
increase tax revenue to the Federal Government, you should pay 
attention to small business.
  One of the worst things that can happen to you when you are trying to 
grow a small business is to make money. That sounds counterintuitive, 
but it is true. Why? Because you need that money to finance your 
growth, but the Government shows up and says we want ours in taxes. So 
you want the tax rate to be as low as possible. The business that I 
described, that went from four employees to the New York Stock 
Exchange, was built during what the New York Times and other critics 
called the decade of greed because the top tax rate was 28 percent, and 
they thought that was terrible. It was only 28 percent, the top 
marginal tax rate? That is awful. That only goes for the greedy 
Americans.
  That meant that for every dollar we earned in that business, we got 
to keep 72 cents of it, which we could use to finance the growth of the 
business. That business was grown with internally generated funds. Yes, 
we had a bank line and yes we drew on the bank line, but it was the 
internally generated funds that made it possible for us to create those 
thousands of jobs.
  Because there were a small number of us in that business, we took the

[[Page S3534]]

business income onto our personal tax returns. That is allowed under 
the Tax Code, under what is known as Chapter S, under the Tax Code. We 
were an S corporation. So while my tax return showed the amount I was 
paid while I was the CEO of that company, it also showed my share of 
the profits of the company. None of that came to me. All of that was 
reinvested in the company. But for tax purposes, it showed up on my tax 
return. So I, very quickly, for tax purposes, was an American earning 
more than $250,000 a year. I was not, but my tax returns showed that I 
was.
  Now, the top tax rate was 28 percent. This was while Ronald Reagan 
was President. If we were to start that business today and the 
President's budget were to pass and the President's Tax Code were to be 
enforced, we would now be paying not 28 percent but 42 percent because 
you would go to 39.5 percent and then you would have the other add-ons 
connected with Medicare and the other things that have been changed. I 
do not believe the business would have survived. I think that tax 
burden would have been so heavy that we would not be able to make it.
  Let me give you the numbers from my own State, to show how important 
this is. In the State of Utah, we have 68,758 small businesses that 
employ less than 500 people; we have 65,693 small businesses that 
employ less than 50 people, and we have 61,057 small businesses that 
employ less than 20 people.
  So the number of people employed by small businesses in Utah--this 
rules out the farmers, this is not agriculture--is 760,096 in 
businesses with less than 500 people each. That is 61 percent of Utah's 
entire employment population.
  Now, if you increase the taxes on all of those people on the 
assumption that they are rich, you increase the taxes on every one of 
those businesses because they are rich. Look, the owners of the 
businesses are filing tax returns to show over $250,000 so they must 
all be Wall Street brokers and traders. Right.
  Now, they are people who are struggling to make the business grow, 
struggling to provide the jobs. Make no mistake, the tax increases 
proposed by President Obama's budget will hurt Utah's small businesses, 
hundreds of thousands of our employees, our State's economy, and that 
means, at large, our national economy. So it is a mixed message. The 
goal is job creation, but the budget will hurt the greatest engine of 
job creation which is small businesses.
  Second, the administration's goal is to increase service in America 
and invest in the nonprofit sector. That sounds wonderful. Then they 
turn around and say: If you invest in the nonprofit sector, you, 
American citizens, we are going to take away a portion of your tax 
deduction for the gift you give to charity. This is a double hit.
  If I am running my small business I have just described, the tax man 
shows up and gives me less than I can give to charity, and then if I do 
give some to charity, the tax man shows up and takes more of that away 
from me by eliminating part of my tax deduction for charity. That is a 
mixed message. We want you to do this, but we are creating an economic 
incentive that makes it difficult for you and will penalize you.
  Now, finally, the administration has the goal to protect the majority 
of Americans from tax increases. The President has said over and over 
that he will not increase taxes for 95 percent of Americans. That 
sounds wonderful until you turn around and recognize that he is 
proposing a new energy tax at the gas pump and on your utility bill 
that will hit 100 percent of Americans.
  So on one side: Well, we are not going to hit you on the income tax 
side. But we are going to take it away from you on the gas pump and 
utility side. This is because he wants to create a cap-and-trade 
program. Other countries have cap-and-trade programs. I was in the 
United Kingdom. I talked to the people about theirs. As they were 
outlining how it works, I said to them: Do your ratepayers understand 
they are paying this? This is not money that is created in Heaven.
  The answer I got was: Well, they are beginning to. We all saw the 
reaction of Americans when gas was $4 a gallon at the pump, and we all 
felt the heat as our constituents came us to and said: You have got to 
do something about this; this is far too much for us to pay for 
gasoline.
  Then when the prices came down, that political outrage began to 
disappear. However, if you do cap and trade in the way the President 
wants, those prices will start to creep up again. It will be at the gas 
pump, it will be at the utility. So it is another mixed message.
  We have three mixed messages. We want to create jobs, but we are 
going to tax the greatest engine of creating jobs. We want people to 
get involved in national service, but we are going to tax them and 
penalize them if they do. We want Americans, ordinary Americans, to go 
without tax increases, but we are going to increase their taxes on 
energy and hit them with a fund that will amount to approximately $650 
billion, by virtue of the carbon tax that will come through the cap-
and-trade program.
  What is the consequence of all of this? My colleagues have talked 
about the fact that the record spending is going to double the national 
debt in 5 years, triple it in 10 years. How is the administration going 
to pay for that? In the ways I have described. They are going to do it 
through increased taxes.
  There is one last thought I want to leave everyone. We can determine 
here in the Congress how much we spend. We cannot determine here in the 
Congress how much we take in. We can pass a tax law that will project a 
certain amount that will come in, but that projection will not come to 
pass if the economy is not strong. Money does not come from the budget. 
Money comes from the economy. If the economy is weakened, if the 
generations of economic growth are weakened in the ways I have 
described, we will not have the money with which to pay the debt.
  So we come back to that which the distinguished Republican leader has 
said at the beginning of this debate: If you take the President's 
budget all in all, it spends too much, it taxes too much. And when the 
taxes do not cover what is being spent, it borrows too much.
  I may not be a macroeconomist, but I have a long history of running a 
business and knowing how devastating the tax man's arrival can be to 
that business. I have a history of creating jobs, jobs that pay taxes 
as the employees are compensated. I know this aspect of our economy is 
one that the Obama administration would be well advised to pay 
attention to.
  I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. REID. Mr. President, I ask unanimous consent that at 5 p.m. 
today, the Senate proceed to vote on confirmation of the nomination of 
Elena Kagan, and that all debate time on the nomination be yielded 
back, except that the chairman and ranking member or their designees 
have 2 minutes each immediately prior to the vote; further, that all 
provisions of the previous order governing the nomination continue to 
be effective.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LEAHY. 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. LEAHY. Mr. President, I have heard a lot of debate here today. I 
remind Senators of one thing: The Kagan nomination is not 
controversial. Every Solicitor General who served from 1985 has 
endorsed her nomination. That is every Democratic one, every Republican 
one, across the political spectrum.
  Let me read some of the names who have endorsed this woman Charles 
Fried, Ken Starr, Drew Days, Walter Dellinger, Seth Waxman, Ted Olson, 
Paul Clement, Greg Garre. Here is what they wrote in their letter of 
support:

       We who have had the honor of serving as Solicitor General 
     over the past quarter century in the administrations of 
     Presidents Ronald Reagan, George H.W. Bush, William Clinton 
     and George W. Bush, write to endorse the nomination of Dean 
     Elena Kagan to be the next Solicitor General of the United 
     States. We are confident that Dean

[[Page S3535]]

     Kagan will bring distinction to the office, continue its 
     highest traditions, and be a forceful advocate for the United 
     States before the Supreme Court.

  One of the conservative professors whom Dean Kagan helped bring to 
Harvard Law School was Professor Jack Goldsmith. You may remember, he 
took charge of the Office of Legal Counsel after the disastrous tenures 
of Jay Bybee and John Yoo.
  Professor Goldsmith, a conservative, praised Dean Kagan as someone 
who takes to the Solicitor General's Office a better understanding of 
the Congress and the executive branch that she will represent before 
the Court than perhaps any prior Solicitor General.
  I ask unanimous consent that a list of these and the dozens of other 
supporters be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Letters of Support for the Nomination of Elena Kagan To Be Solicitor 
                      General of the United States


                  Current and Former Public Officials

       David A. Strauss; Gerald Ratner Distinguished Service 
     Professor of Law, The University of Chicago; former Attorney-
     Adviser in the Office of Legal Counsel of the U.S. Department 
     of Justice and former Assistant to the Solicitor General of 
     the United States.
       Charles Fried; Beneficial Professor of Law, Harvard Law 
     School; former Solicitor General.
       Clifford M. Sloan; Skadden, Arps, Slate, Meagher & Flom, 
     LLP; former Assistant to the Solicitor General of the United 
     States.
       Jack Goldsmith; Professor, Harvard Law School; former 
     Assistant Attorney General, Office of Legal Counsel.
       Joint Letter from Former Department of Justice Officials; 
     Janet Reno, former Attorney General;
       Jamie S. Gorelick, former Deputy Attorney General; Patricia 
     Wald, former Assistant Attorney General for Legislative 
     Affairs; Eleanor D. Acheson, former Assistant Attorney 
     General for the Office of Policy Development; Loretta C. 
     Argrett, former Assistant Attorney General for the Tax 
     Division; Jo Ann Harris, former Assistant Attorney General 
     for the Criminal Division; Lois Schiffer, former Assistant 
     Attorney General for the Environment and Natural Resources 
     Division.
       Joint Letter from Former Solicitors General; Walter 
     Dellinger, Theodore B. Olson, on behalf of: Charles Fried, 
     Kenneth W. Starr, Drew S. Days III, Seth P. Waxman, Paul 
     Clement, Gregory G. Garre.
       Judith A. Miller; former General Counsel, Department of 
     Defense.
       Miguel A. Estrada; Gibson, Dunn & Crutcher, LLP; former 
     Assistant to the Solicitor General.
       Paul T. Cappuccio; Executive Vice President and General 
     Counsel of Time Warner; former Associate Deputy Attorney 
     General.
       Peter Kiesler; former Assistant Attorney General for the 
     Civil Division.
       Roberta Cooper Ramo; former President, American Bar 
     Association.


          Law Enforcement and Criminal Justice Organizations.

       Women in Federal Law Enforcement.


                       Civil Rights Organizations

       John Payton; President and Director-Counsel, NAACP Legal 
     Defense Fund, Inc.
       National Association of Women Lawyers.
       National Women's Law Center.


                            Other Supporters

       Brackett B. Denniston, III; Senior Vice President and 
     General Counsel, General Electric.
       Bradford A. Berenson; Sidley Austin, LLP.
       Jeffrey B. Kindler; Chairman of the Board, Chief Executive 
     Officer, Pfizer, Inc.
       John F. Manning; Bruce Bromley Professor of Law, Harvard 
     Law School.
       Joint Letter from former Harvard Law Students; Katie Biber 
     Chen, Class of 2004; Anjan Choudhury, Class of 2004; Justin 
     Driver, Class of 2004; Isaac J. Lidsky, Class of 2004; 
     Meaghan McLaine, Class of 2004; Carrie A. Jablonski, Class of 
     2004; Jeffrey A. Pojanowski, Class of 2004; Beth A. Williams, 
     Class of 2004; John S. Williams, Class of 2004; David W. 
     Foster, Class of 2005; Courtney Gregoire, Class of 2005; 
     Rebecca Ingber, Class of 2005; Lauren Sudeall Lucas, Class of 
     2005; Kathryn Grzenczyk Mantoan, Class of 2005; Anton 
     Metlitsky, Class of 2005; Chris Murray, Class of 2005; 
     Rebecca L. O'Brien, Class of 2005; Beth A. Stewart, Class of 
     2005; Ryan L. VanGrack, Class of 2005; David S. Burd, Class 
     of 2006; Eun Young Choi, Class of 2006; Matt Cooper, Class of 
     2006; Brian Fletcher, Class of 2006; David S. Flugman, Class 
     of 2006; Adam D. Harber, Class of 2006; Jeffrey E. Jamison, 
     Class of 2006; Nathan P. Kitchens, Class of 2006; Tracy Dodds 
     Larson, Class of 2006; Benjamin S. Litman, Class of 2006; 
     Dana Mulhauser, Class of 2006; Meredith Osborn, Class of 
     2006; Matthew Price, Class of 2006; John M. Rappaport, Class 
     of 2006; Kimberly J. Ravener, Class of 2006; Rachel Rebouche, 
     Class of 2006; Zoe Segal-Reichlin, Class of 2006; Jeremiah L. 
     Williams, Class of 2006; Tally Zingher, Class of 2006; 
     L. Ashley Aull, Class of 2007; Daniel F. Benavides, Class 
     of 2007; Robert P. Boxie, III, Class of 2007; Damaris M. 
     Diaz, Class of 2007; Gabriel Kuris, Class of 2007; Adam R. 
     Lawton, Class of 2007; John A. Mathews II, Class of 2007; 
     Michele A. Murphy, Class of 2007; Michael A. Negron, Class 
     of 2007; Alexi Nunn, Class of 2007; Josh Paul Riley, Class 
     of 2007; Jasmin Sethi, Class of 2007; Jane Shvets, Class 
     of 2007; Jason M. Spitalnick, Class of 2007; James 
     Weingarten, Class of 2007; Amy C. Barker, Class of 2008; 
     Kathryn Baugher, Class of 2008; Margaux Hall, Class of 
     2008; Rochelle Lee, Class of 2008; Daniel P. Pierce, Class 
     of 2008; Elizabeth Russo, Class of 2008; Megan Ryan, Class 
     of 2008; Andrew M. Woods, Class of 2008.
       Joint Letter from Former Lawyers in the Solicitor General's 
     Office; Andrew L. Frey, Assistant to the Solicitor General, 
     Deputy Solicitor General; Kenneth S. Geller, Assistant to the 
     Solicitor General, Deputy Solicitor General; Philip Allen 
     Lacovara, Assistant to the Solicitor General, Deputy 
     Solicitor General; Andrew J. Pincus, Assistant to the 
     Solicitor General; Charles A. Rothfeld, Assistant to the 
     Solicitor General; Stephen M. Shapiro, Assistant to the 
     Solicitor General, Deputy Solicitor General.
       Joint Letter from Iraq War Veterans and Harvard Law 
     Students; Geoff Orazem, Hagan Scotten, and Erik Swabb.
       Joint Letter from Law School Deans; Larry D. Kramer, Dean 
     and Richard E. Lang Professor of Law, Stanford Law School; T. 
     Alexander Aleinikoff, Dean, Georgetown University Law Center; 
     Evan H. Caminker, Dean, The University of Michigan Law 
     School; Michael A. Fitts, Dean, University of Pennsylvania 
     Law School; Harold H. Koh, Dean and Gerard C. and Bernice 
     Latrobe Smith Professor of International Law, Yale Law 
     School; David F. Levi, Dean, Duke University School of Law; 
     Saul Levmore, Dean and William B. Graham Professor of Law, 
     The University of Chicago Law School; Paul G. Mahoney, Dean, 
     University of Virginia School of Law; Richard L. Revesz, Dean 
     and Lawrence King Professor of Law, New York University 
     School of Law; David M. Schizer, Dean, Columbia University 
     School of Law; David van Zandt, Dean, Northwestern University 
     School of Law.
       Joseph H. Flom; Skadden, Arps, Slate, Meagher & Flom, LLP.
       Judith Lichtman; Senior Advisor, National Partnership for 
     Women & Families.
       Laurence H. Tribe; Carl M. Loeb University Professor, 
     Harvard University.
       Martin Lipton; Wachtell, Lipton, Rosen & Katz.
       Robert D. Joffe; Cravath, Swaine & Moore, LLP.
       Robert Katz; The Goldman Sachs Group, Inc.
       William F. Lee; Co-Managing Partner, Wilmer-Hale; former 
     Member, Board of Overseers of Harvard College and the 
     Visiting Committee to Harvard Law School.

  Mr. LEAHY. It is time for our daughters and granddaughters to see a 
woman serving as the chief legal advocate on behalf of the United 
States. I urge all Senators, just as the Republican and Democratic 
former Solicitors have supported her, to support President Obama's 
nomination.
  Vote to confirm Elena Kagan to be Solicitor General of the United 
States.
  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. LEAHY. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER (Mr. Whitehouse). Without objection, it is so 
ordered.
  Under the previous order, there will now be 4 minutes of debate, 
equally divided, prior to a vote on the Kagan nomination.
  Mr. LEAHY. Parliamentary inquiry: I thought the vote was going to be 
at 5 o'clock.
  The PRESIDING OFFICER. After the 4 minutes of debate.
  Mr. LEAHY. Mr. President, I ask unanimous consent that all time for 
both sides be yielded back.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEAHY. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is, Will the Senate advise and consent to the nomination 
of Elena Kagan, of Massachusetts, to be Solicitor General of the United 
States?
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from California (Mrs. Boxer), 
the Senator from Massachusetts (Mr. Kennedy), the Senator from 
Minnesota (Ms. Klobuchar), and the Senator from Washington (Mrs. 
Murray) are necessarily absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Nevada (Mr. Ensign), the Senator from South Carolina (Mr. Graham), 
and the

[[Page S3536]]

Senator from Mississippi (Mr. Cochran).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 61, nays 31, as follows:

                      [Rollcall Vote No. 107 Ex.]

                                YEAS--61

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Coburn
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Gregg
     Hagan
     Harkin
     Hatch
     Inouye
     Johnson
     Kaufman
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Merkley
     Mikulski
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Snowe
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--31

     Alexander
     Barrasso
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Corker
     Cornyn
     Crapo
     DeMint
     Enzi
     Grassley
     Hutchison
     Inhofe
     Isakson
     Johanns
     Martinez
     McCain
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Specter
     Thune
     Vitter
     Voinovich
     Wicker

                             NOT VOTING--7

     Boxer
     Cochran
     Ensign
     Graham
     Kennedy
     Klobuchar
     Murray
  The nomination was confirmed.
  The PRESIDING OFFICER. Under the previous order, the motion to 
reconsider is considered made and laid upon the table.
  The President will be immediately notified of the Senate's action.
  Mr. McCAIN. The President nominated Elena Kagan, currently dean of 
Harvard Law School, for Solicitor-General of the United States. While I 
do not share many of Dean Kagan's views, I especially disagree with 
Dean Kagan on the constitutionality of the Solomon amendment.
  In 2005, Dean Kagan and 53 other law school faculty members filed an 
amicus brief to declare the Solomon amendment unconstitutional. The 
Solomon amendment, named for former Congressman Jerry Solomon, alloys 
military recruiters to meet with students on college campuses and 
allows the Reserve Officers' Training Corps, ROTC, to train on college 
campuses. The Supreme Court found Dean Kagan's arguments to be 
unpersuasive and declared the Solomon Amendment to be constitutional. I 
believe the Supreme Court was absolutely correct in its decision.
  It is my hope that as Solicitor General, Dean Kagan will not allow 
her personal viewpoint on this important issue to prohibit the 
implementation of the Solomon amendment and that our military 
recruiters continue to recruit the best and brightest at our Nation's 
colleges to serve in our military.

                          ____________________