[Congressional Record Volume 156, Number 35 (Thursday, March 11, 2010)]
[Senate]
[Pages S1453-S1454]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TAX EXTENDERS ACT

  Mr. KYL. Mr. President, the economic downturn has continued for a 
year-and-a-half now and has affected most Americans in some way.
  Congress has approved a number of measures, which I supported, aimed 
at helping those Americans. It recently extended unemployment benefits 
for those who do not have a job. It also expanded the eligibility 
requirements and duration for COBRA health benefits for those between 
jobs, and provided a subsidy for those premiums.
  I could not, however, support the so-called jobs bill put forward by 
the majority leader and recently passed by the Senate.
  A jobs bill should create jobs. Beyond some of the tax extenders, 
there is little in this bill that provides a foundation for jobs 
creation.
  The bill is essentially a large spending package that extends, 
through 2010, aspects of current law. The provisions it contains, such 
as long-term extensions of unemployment insurance, COBRA, and FMAP 
State aid, do not promote jobs growth, and, in fact, anticipate that 
unemployment will still be a serious problem for the remainder of the 
year.
  A negative correlation exists between unemployment benefits and work 
incentives. As President Obama's chief economist Larry Summers has 
written:

       Government-assistance programs contribute to long-term 
     unemployment by providing an incentive, and the means, not to 
     work. Each unemployed person has a 'reservation wage'--the 
     minimum wage he or she insists on getting before accepting a 
     job. Unemployment insurance and other social-assistance 
     programs increase that reservation wage, causing an 
     unemployed person to remain unemployed longer.

  He further concludes:

       Unemployment insurance also extends the time a person stays 
     off the job.

  That analysis underscores my point. While I do not disavow the need 
for unemployment benefits and have supported every short-term 
extension, I do believe that long-term extensions of those benefits do 
not lead to job creation and should not be touted as part of a jobs 
bill.
  The cost of this bill is also a problem. When President Obama signed 
the pay-go Act 4 weeks ago, he said:

       Now, Congress will have to pay for what it spends, just 
     like everybody else.

  This bill waives those brand new pay-go requirements and adds more 
than $100 billion to the already-exploding deficit.
  Good jobs legislation would address the underlying problem of 
unemployment, rather than treating the symptoms of a weak economy. Good 
jobs provide far more security to American families than temporary 
government benefits do.
  There are a number of steps Congress can take that will actually put 
Americans back to work.
  One is ending the constant cycle of spending billions of dollars the 
Treasury does not have. When the government borrows money--it borrowed 
$1.4

[[Page S1454]]

trillion last year--it's more difficult for the private sector to 
borrow and invest. When businesses can't grow their operations, they 
can't afford to hire new employees.
  Congress can also ameliorate the uncertainty that is preventing new 
hiring by not raising taxes and costs on employers. Unless they are 
extended, the lower tax rates that have been in place since 2001 are 
set to expire at the end of this year, triggering a $2 trillion tax 
increase over the next decade. Businesses will remain timid about 
hiring if they think new taxes will add to the cost of their business 
and consume the capital that could be used to pay new employees.
  There are other steps Congress can take--promoting our Nation's 
exports by passing free-trade agreements with Colombia, Panama, and 
South Korea, and increasing production of domestic energy resources, 
for example.
  Passing bills that increase our Nation's debt and create 
disincentives to work will not encourage investment in the economy. If 
we want business owners and entrepreneurs to start creating jobs, 
Congress should act so that it does not become harder and more 
expensive to do business.

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