[Congressional Record Volume 156, Number 99 (Tuesday, June 29, 2010)]
[Senate]
[Pages S5514-S5524]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  SMALL BUSINESS LENDING FUND ACT OF 2010--MOTION TO PROCEED--Resumed


                             Cloture Motion

  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant editor of the Daily Digest read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the motion to 
     proceed to Calendar No. 435, H.R. 5297, the Small Business 
     Lending Fund Act of 2010.
         Harry Reid, Debbie Stabenow, Dianne Feinstein, Mark 
           Begich, Jeff Merkley, Bernard Sanders, Carl Levin, 
           Edward E. Kaufman, Mark L. Pryor, Richard J.

[[Page S5515]]

           Durbin, Frank R. Lautenberg, Jeanne Shaheen, Daniel K. 
           Inouye, Barbara Boxer, Roland W. Burris, Sherrod Brown, 
           Mary L. Landrieu.

  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. 5297, the Small Business Lending Fund Act of 
2010, 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.
  The yeas and nays resulted--yeas 66, nays 33, as follows:

                      [Rollcall Vote No. 202 Leg.]

                                YEAS--66

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Bond
     Boxer
     Brown (MA)
     Brown (OH)
     Burris
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Franken
     Gillibrand
     Grassley
     Hagan
     Harkin
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     LeMieux
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (NE)
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Snowe
     Specter
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--33

     Alexander
     Barrasso
     Bennett
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Gregg
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johanns
     Kyl
     McCain
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Thune
     Vitter
     Wicker
  The PRESIDING OFFICER. On this vote, the yeas are 66, the nays are 
33. Three-fifths of the Senators duly chosen and sworn having voted in 
the affirmative, the motion is agreed to.
  All time is yielded back. The clerk will report the bill.
  The legislative clerk read as follows:

       A bill (H.R. 5297) to create the Small Business Lending 
     Fund Program to direct the Secretary of the Treasury to make 
     capital investments in eligible institutions in order to 
     increase the availability of credit for small businesses, to 
     amend the Internal Revenue Code of 1986 to provide tax 
     incentives for small business job creation, and for other 
     purposes.

  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Ms. MIKULSKI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. MIKULSKI. Mr. President, I ask unanimous consent to speak as in 
morning business for no more than 5 minutes on the occasion of the 
passing of Senator Byrd.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Ms. Mikulski are printed in today's Record under 
``Morning Business.'')
  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. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER (Mr. Burris). Without objection, it is so 
ordered.
  Mr. REID. Mr. President, it is my understanding the matter before the 
Senate is the bill that was just announced a few minutes ago; is that 
correct, the small business jobs bill?
  The PRESIDING OFFICER. H.R. 5297 is the pending bill.


                           Amendment No. 4402

                (Purpose: In the nature of a substitute)

  Mr. REID. On behalf of Senators Baucus and Landrieu, I call up their 
substitute amendment which is at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Baucus and Ms. 
     Landrieu, proposes an amendment numbered 4402.

  Mr. REID. I ask unanimous consent that reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')
  Mr. REID. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.


                Amendment No. 4403 to Amendment No. 4402

               (Purpose: In the nature of a substitute.)

  Mr. REID. I have a first-degree amendment at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] proposes an amendment 
     numbered 4403 to amendment No. 4402.

  Mr. REID. I ask unanimous consent that reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')
  Mr. REID. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.


                Amendment No. 4404 to Amendment No. 4403

  Mr. REID. I have a second-degree amendment at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] proposes an amendment 
     numbered 4404 to amendment No. 4403.

  Mr. REID. 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:

       On page 236, line 24:
       Strike ``one'' and insert ``five''.


                           Amendment No. 4405

  Mr. REID. I have an amendment to the bill at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] proposes an amendment 
     numbered 4405 to the language proposed to be stricken by 
     amendment No. 4402.

  Mr. REID. 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:

       At the end, insert the following:
       ``The provisions of this Act shall become effective three 
     days after enactment.''

  Mr. REID. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.


                Amendment No. 4406 to Amendment No. 4405

  Mr. REID. I have a second-degree amendment at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] proposes an amendment 
     numbered 4406 to amendment No. 4405.

  Mr. REID. 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:

       In the amendment, strike ``three days'' and insert ``10 
     days''.


                Motion to Commit With Amendment No. 4407

                (Purpose: In the nature of a substitute)

  Mr. REID. I have a motion to commit with instructions at the desk.
  The PRESIDING OFFICER. The clerk will report the motion.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] moves to commit H.R. 
     5297 to the Committee on Finance with instructions to report 
     back forthwith with amendment No. 4407.

  Mr. REID. I ask unanimous consent that reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page S5516]]

  The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')
  Mr. REID. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.


                Amendment No. 4408 to Amendment No. 4407

  Mr. REID. I have an amendment to the instructions at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] proposes an amendment 
     numbered 4408 to the instructions of amendment No. 4407.

  Mr. REID. I ask that reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of the amendment, insert the following:
       The provisions of this Act shall become effective two days 
     after enactment.

  Mr. REID. I ask for the yeas and nays on the amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.


                Amendment No. 4409 to Amendment No. 4408

  Mr. REID. I have a second-degree amendment to the instructions at the 
desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid] proposes an amendment 
     numbered 4409 to amendment No. 4408.

  The amendment is as follows:

       In the amendment, strike ``two days'' and insert 
     ``immediately''.

  Mr. REID. Mr. President, in jest, I said to my Republican friends 
that I had kind of practiced this because we hadn't filled up the tree 
much at all. I say that seriously. We have had an open process here. 
You can compare it to what went on in the previous Congress, and it has 
been very open. I hope we can get into an amendment process. We will go 
back and forth. We will try to have some amendments that will 
strengthen this bill. This is a bipartisan bill, as indicated by the 
vote that took place to get us to this. The Republicans were given this 
amendment last night. They have had ample opportunity to look it over. 
If they have things they want to do to try to improve it, we on this 
side of the aisle want to approach this on a bipartisan basis. This is 
a jobs bill to create jobs where most jobs are created, by small 
businesses, as 85 percent of all jobs are created by small business. 
That is why we are here focused on this today. I hope this doesn't 
become a partisan exercise. It should not. The Small Business Committee 
has operated for a long time on a bipartisan basis. Snowe was chairman, 
Landrieu was the ranking member. Now it is just the opposite. Senator 
Baucus and Senator Grassley have always worked on a bipartisan basis. I 
hope we can move forward on this matter.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, Winston Churchill once said:

       A pessimist sees the difficulty in every opportunity; an 
     optimist sees the opportunity in every difficulty.

  The great recession has been a difficulty, to say the least.
  Today we are looking for the opportunity.
  One opportunity--and our first priority--is to create new jobs.
  This is no easy task. Over the course of the great recession, more 
than 8 million jobs have been lost. But we must not shy away from this 
opportunity.
  The first step Congress took to create jobs was to pass the Recovery 
Act in February of 2009. In their latest report on the Recovery Act, 
the nonpartisan Congressional Budget Office reports that the Recovery 
Act has added 1.2 to 2.8 million people to America's payrolls.
  And in March, Congress passed the HIRE Act. The HIRE Act includes a 
payroll tax exemption for new hires. That act will help to bolster job 
creation in the coming months.
  These actions are working. In April, we learned that the economy 
added 290,000 jobs. And while we added fewer jobs than expected last 
month, May marked the fifth consecutive month of job growth. Since the 
beginning of 2010, the American economy has created more than half a 
million jobs.
  We are also beginning to see economic growth. Just a year ago, in the 
first quarter of 2009, the economy was shrinking at a rate of 6.4 
percent. In the first quarter of this year, however, the economy grew 
at a rate of 3.2 percent.
  This was the third consecutive quarter of growth after four straight 
quarters of decline.
  In just 1 year, the economy went from freefall to sustained growth.
  These signs are encouraging. But we still have work to do.
  Mr. President, 15 million Americans remain unemployed. The national 
unemployment rate is still near 10 percent. The Congressional Budget 
Office does not expect unemployment to reach its ``natural state'' of 5 
percent until 2016.
  Plainly, we must act. We must work to create jobs.
  In America, the private sector is the backbone of innovation and job 
creation. And within the private sector, small businesses are the 
principal engine of job creation.
  Over the past 15 years, small businesses have generated two-thirds of 
all new jobs. That is about 12 million new jobs.
  But the great recession hit small business especially hard. Over the 
course of the recession, small firms have accounted for 64 percent of 
net job losses.
  We need to focus on small business, as we seek to create jobs. When 
we help small businesses, we help to get Americans back to work.
  The first way that we can help small business is by promoting access 
to capital.
  Today, only half of small businesses seeking a loan are able to get 
the credit that they need, and nearly a quarter receive no credit at 
all.
  Compare this to 2005, when 90 percent of small employers had their 
credit needs met, and only 8 percent were unable to receive credit at 
all.
  It is clear that small businesses are facing major obstacles to 
getting capital.
  That is why our small business bill includes a provision to 
completely eliminate the tax on the sale of certain small business 
stock purchased this year. This proposal would provide a powerful 
incentive to invest in small, entrepreneurial firms, right now.
  We have also included a provision that would allow small businesses 
to carry back for 5 years their unused general business tax credits 
from this year. That is quite a bit. Current law is 1 year.
  And we have included another provision that would allow certain small 
businesses to use these general business credits against the 
alternative minimum tax. These provisions would free up business 
capital for expansion and job growth.
  And another provision would temporarily shorten the holding period of 
assets after a C corporation converts to an S corporation. This 
provision would allow small businesses to increase liquidity by selling 
assets that would otherwise be subject to an additional layer of tax.
  We can also help small businesses by stimulating investment. Small 
businesses need to make capital investments to improve and expand.
  One way to boost investment in equipment is by increasing the amount 
and types of property that small businesses can write off immediately, 
rather than expense over time. In this weak economy, the ability to 
deduct the costs of assets in the year that they are incurred provides 
an immediate benefit for small businesses.
  Our bill also includes an extension of bonus depreciation. This 
provision would help small businesses that purchase equipment to write 
off those purchases more quickly. The proposal would also help the 
businesses that sell the equipment. Bonus depreciation sparks 
investment, increases cash flows, and creates jobs.
  Our small business bill also includes two provisions to promote 
fairness and protect small businesses from costs that could slow 
business growth and development.
  First, the act modifies the penalties for small businesses that 
unknowingly

[[Page S5517]]

invest in something that the IRS considers to be a tax shelter. 
Businesses can be subject to penalties of up to $300,000 for investing 
in a tax shelter. A penalty that large can severely jeopardize the 
success of a small business. Our bill would limit the penalty in 
relation to size of the investment.
  Our bill also promotes fairness by allowing business owners to deduct 
against self-employment tax the cost of health insurance in 2010 for 
themselves and their family members. Current law does not permit the 
self-employed to deduct the cost of health insurance for themselves and 
their family members in calculating self-employment tax. But health 
care for employees receiving coverage through an employer is generally 
tax free. So our bill would put the self-employed on a more equal 
footing.

  Our small business bill includes provisions aimed at promoting 
entrepreneurship. According to a recent report, from 1980 to 2005, 
nearly all net job creation occurred in firms less than 5 years old. In 
fact, without startups, net job creation would have been negative 
almost every year for the past three decades.
  As our economy emerges from the great recession, we need to ensure 
that American entrepreneurs have the resources, the financing, and the 
opportunities they need to create jobs and realize their dreams. Our 
bill would help promote entrepreneurship by temporarily increasing the 
amount of startup costs that could be deducted. This would free capital 
that could be used to invest in other aspects of business.
  Our bill would devote more than $5 million to the U.S. Trade 
Representative to expand opportunities for U.S. small businesses in 
foreign markets. This would help American goods and services to reach 
new customers around the world, this would create jobs right here at 
home, and this would help the USTR to enforce our trade agreements to 
ensure American startups can compete on a level playing field.
  Our bill is all paid for. No deficit spending here--all paid for. Our 
bill would reduce the tax gap, promote retirement preparation, and 
close tax loopholes.
  Today, we must find opportunity in a difficulty. The great recession 
has been a major difficulty for American workers and small businesses, 
but we can seize a major opportunity by helping small businesses and 
getting Americans back to work.
  I urge my colleagues to support this important small business jobs 
bill.


                    National Flood Insurance Program

  Mrs. HUTCHISON. Mr. President, I would like to speak in morning 
business about the National Flood Insurance Program and talk about the 
importance of extending the National Flood Insurance Program as a 
tropical storm--that could be a hurricane--is growing in the Gulf of 
Mexico and moving toward my home State of Texas.
  We all know the Gulf of Mexico has had a lot of trauma, and the 
people who live all along the gulf have suffered quite enough. Now we 
have a situation in which tropical storm Alex is gaining strength off 
the coast of south Texas. Winds are gusting upwards of 70 miles per 
hour, and it could reach hurricane strength at any point. Texas 
communities from Padre Island to Matagorda Bay are under a hurricane 
warning. The National Weather Service is calling for up to 20 inches of 
rain in some parts of our State and is warning communities to brace for 
life-threatening flash floods and mud slides.
  However, at this very time, thousands of Texas homeowners are left 
vulnerable to the damage this storm could wreak on their homes and 
property. Why? The National Flood Insurance Program lapsed at the end 
of May, which means homeowners are currently unable to take out new 
policies. Allowing a lapse in federally backed flood insurance is 
unacceptable at any time, but the failure to extend it at the outset of 
hurricane season is unthinkable.
  The very purpose of the National Flood Insurance Program is to make 
sure coastal residents and other flood-prone communities can purchase 
reliable, federally backed flood insurance. The program allows 
homeowners to purchase flood insurance policies in areas where private 
insurance is hard--and in some cases impossible--to get.
  Since residents in some areas are required to have it in order to 
close on home purchases, many gulf coast families cannot close on 
mortgage contracts. My Houston office received 200 calls yesterday from 
people who were in the process of closing on homes which required flood 
insurance protection to be shown before they could close, and they 
cannot get the flood insurance because it is not available out of the 
private sector and this program has lapsed. Today, it is the Federal 
Government that is standing in the way of these people being able to 
close on a contract.
  Because of previous devastating storms, including Hurricanes Katrina 
and Rita, the National Flood Insurance Program has incurred billions of 
dollars in claims and is in an economically tenuous position. I have 
supported legislation to revise and update this program. It needs to 
meet the demands of today while still providing access to flood 
insurance coverage to Americans living in floodplains--Americans who 
are trying to do the responsible thing. They are trying to purchase 
insurance. It is not available in the private market, and we need to 
have that kind of opportunity for people to be able to purchase their 
own insurance for them to be able to close on homes, of course, and to 
be able to protect themselves from damages. These are people who do not 
want to have to file claims against the Federal Government. They want 
to be able to purchase their own insurance and know they have it.
  In 2008, I, along with an overwhelming majority of my colleagues in 
the Senate, supported the Flood Insurance Reform and Modernization Act 
of 2007. Unfortunately, despite big support in the Senate and in the 
House, our two Chambers failed to resolve our differences. Therefore, 
it has operated in limbo ever since, surviving only in short-term 
extensions.
  Now there is a bill to extend the National Flood Insurance Program 
through September 30. It has been approved in the House and was sent to 
the Senate. It is currently being held up.
  My colleague from Louisiana, Senator Vitter, offered a unanimous 
consent request this morning to bring up this House bill, pass it in 
the Senate, and send it to the President. It would have extended the 
flood insurance program until September 30 so that people could buy 
insurance, know they would be covered, be able to close on their homes, 
and be able to get coverage while we continue to hammer out the 
differences in a long-term extension of the program.
  Unfortunately, there was an objection raised to the House bill going 
through the Senate. It is so important that we do this. I asked the 
reason for the objection. I asked one of my colleagues on the other 
side: Why was this objected to?
  The answer was: Is it more important than the tax extenders bill?
  I cannot say it is more important because we do need to extend 
unemployment insurance, but they are not mutually exclusive. We can do 
one or the other; we can do both. There is no objection to the 
substance of the bill. No one on the other side of the aisle objects to 
the bill. They just want to pass the extenders package. We want to pass 
the extenders package too. We want it to be paid for.
  We can do this. It is so important and so timely. It is timely 
because people are not able to close on contracts. Mortgage companies 
are saying: Our hands are tied. You have to show that you have this 
flood insurance to close, and there is no flood insurance available on 
the private market. The National Flood Insurance Program has not been 
extended.
  This is one that Congress can resolve. We are going to be here for a 
few more days this week. We can do this. I implore my colleagues: 
Please, let's unanimously consent to letting this bill go through. The 
House has passed it unanimously.
  A hurricane is headed right now for the Gulf of Mexico. It is time to 
allow our responsible citizens who want to purchase flood insurance to 
be able to do so in a responsible way.
  We certainly need to modernize the National Flood Insurance Program, 
and I will work tirelessly to make that happen. But with a storm 
approaching right now, we need to extend this program until the end of 
the hurricane season. We do not want people to have

[[Page S5518]]

to flood into the government after the fact when they are desperate, 
not knowing if they are going to get coverage. We do not want them to 
have to come to the Federal Government and ask for claims to be 
processed. Let them cover themselves so they can deal with the issue, 
knowing exactly what their coverage is. That is not too much to ask for 
the residents of the gulf coast.
  I hope the majority leader and the majority will work with us to 
begin to address this issue in a timely way. The House has passed this 
bill unanimously. I urge my colleagues in the next 2 days to please 
allow the National Flood Insurance Program to be extended until 
September 30, a bill that has unanimously passed the House and surely 
should be able to go through the Senate since there is no substantive 
objection to this bill.
  Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Ms. STABENOW. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. STABENOW. Mr. President, when I think of Senator Byrd and all of 
our great memories of him, it reminds me of how important it was to him 
to understand what people are going through in their lives--in this 
economy, certainly. I know if he were here, he would be on the floor, 
speaking about the importance of helping people who have lost their 
jobs--people who, through no fault of their own, have gotten caught in 
this economic tsunami, who find themselves maybe one step away from 
losing their house after they lost their job, probably lost their 
health insurance. Maybe they are in the midst of foreclosure right now 
because they lost their job and cannot pay their house payment.
  These are families who are counting on us to understand, as Senator 
Byrd always did, what it is like to be a middle-class family, a working 
family, where the breadwinner has lost their job or the breadwinner can 
no longer bring home the bread--the food, gas for the car, pay the 
electric bill--because they have lost a job.
  We know there are five people today looking for every one job that is 
available. That used to be worse. It used to be six people looking for 
every one job. We are beginning to see things turn. When President 
Obama took office, as we know, we were losing about 750,000 jobs every 
month. By focusing on the recovery, by investing in people, by 
investing in making things in this country, by focusing on job training 
as well as helping people without jobs, we have been able to turn that 
around. There were zero jobs lost at the end of the year and now we are 
gaining jobs.
  But even though it is turning around, we are still in a situation 
where we have five people, five Americans who are looking for every one 
available job. The e-mails and the phone calls I get truly are 
heartbreaking. They are from people who have worked all their lives. 
These are not people who, as some have said, are lazy. These are people 
who have worked hard all their lives and they have done nothing but 
play by the rules--take care of their families, followed the law, put a 
little bit aside to send their kids to college. They want to have a 
good American life, what they have worked hard for as their American 
dream.
  Unfortunately, because of a lot of factors in the global economy--too 
much, in the last decade, of folks paying attention to cheap prices and 
not American jobs and losing jobs overseas, not enforcing our trade 
laws or not focusing on making things here in this country--we have a 
situation where people have lost their jobs. Then, when you add to that 
what happened on Wall Street--where people lost savings, pensions, 
401(k)s, and maybe their job; when credit dried up and small businesses 
could not get loans or manufacturers couldn't get the help they 
needed--people found themselves in a disastrous situation through no 
fault of their own.
  They did not create the Wall Street crisis. They were not the ones 
who decided whether to enforce our trade laws. They weren't the ones to 
decide whether we as a country were going to invest in American 
manufacturing. But they are taking the brunt of it.
  We have talked for 8 weeks now, 8 weeks to pass a bill that is a jobs 
bill, to invest in jobs in the economy and to continue help for people 
who are out of work through no fault of their own. Boy, they hope it is 
temporary. They surely hope it is temporary and we hope it is 
temporary.
  Despite 8 weeks and a tremendous amount of negotiation, we have not 
been able to get the votes to stop a filibuster. We have come up short 
every time. I am hopeful this week we will be able to get beyond that. 
The people in Michigan are desperately hopeful. They are also 
desperate. They are also angry that we have not been able to get beyond 
this partisan wrangling to be able to actually help them keep a roof 
over their head and keep food on the table for their families. We will 
have another opportunity, I hope this week, to change that. It is 
absolutely critical that we do.
  There are a lot of people who are not down in the weeds about what is 
going on legislatively; are not following closely what is happening 
here--but they know this: They know they need help. They want to know 
who is on their side and who is willing to understand and come forward 
and appreciate what families across this country are going through. I 
hope this week we are going to be able to say to them that finally this 
Senate gets what is happening to families and we are going to extend 
the temporary assistance that has been needed for so many families 
through unemployment insurance.
  Mr. ENSIGN. Mr. President, I rise to talk about an amendment Senator 
Kerry and I will be offering as an amendment to the small business jobs 
bill. This amendment is to correct something we do not want the IRS 
enforcing right now. Senator Kerry and I have 72 Members who have 
cosponsored our bill that we will be offering as an amendment. There is 
overwhelming bipartisan support for this. I thank Chairman Baucus and 
Ranking Member Grassley for committing to work with Senator Kerry and 
myself to get this issue addressed.
  The need for the amendment is based on a little-noticed provision 
that was added in 1989. It has to do with cell phones and similar 
devices that are treated as what the IRS has known as ``listed 
property,'' along with computers and automobiles. As a result, 
employees and employers must keep detailed records of all calls made on 
their employer-issued cell phones, indicating whether they are personal 
or business related, or have the value of the phone included as taxable 
income. This law is a good example of the Government attempting to 
micromanage the economy and why they shouldn't. Government is not good 
at keeping up with the private sector.
  Twenty years ago, cell phones were bulky, they were cumbersome and 
expensive, they were the size of a brick and weighed almost as much. 
When given by businesses to employees, they were considered to be an 
executive perk or a luxury item and were often hardwired to the floor 
of a car.
  During the past 20 years, of course, cell phones and mobile 
communications devices have become incredibly small and cheap, and 
their use has skyrocketed. Cell phones and other mobile communications 
devices are now part of daily business practices at all levels. As a 
matter of fact, they are part of almost every American's daily life. 
They are an extension of the office for many employees and everyone 
recognizes the real motivation of employers is being able to call their 
employees at any time and at any place. The cost of providing coffee 
per employee today is likely higher than the per-employee cost of a 
cell phone or personal device. The mobile cell phone amendment updates 
the tax treatment of cell phones and mobile communications devices by 
repealing the requirement that employers maintain these overly 
burdensome, detailed usage logs. Outdated tax laws such as this must be 
updated to reflect 21st century realities, and this bipartisan 
amendment would do exactly that.

  This is a small but important measure that we should be able to enact 
today to help small businesses, nonprofits, colleges, and employees use 
today's technology for business without interference from yesterday's 
regulation. This proposal was included in the President's budget, and 
if you need

[[Page S5519]]

more reasons to vote for this bill, talk to the Internal Revenue 
Commissioner, Doug Shulman, who released a statement that supports 
repeal of the current IRS cell phones reporting rules.
  In his statement Commissioner Shulman states that:

       The current law, which has been on the books for many 
     years, is burdensome, poorly understood by taxpayers, and 
     difficult for the IRS to administer consistently.

  Let me quickly summarize what we are doing. Basically, everybody who 
gets a cell phone from their employer, we don't want them to pay tax on 
that cell phone as some kind of a perk. If you think about how bills 
are paid today with cell phones, you have a monthly usage charge. You 
don't get charged per cell phone call as it used to be in the old days 
when cell phones were very expensive. People buy plans per month, so 
many minutes you get with those plans. For virtually everybody who gets 
a cell phone from a company, that is the way those plans are purchased 
today. We need to simplify the Tax Code. This is a very minor provision 
but an important provision because you don't want, all of a sudden, 
when you are going back through an IRS audit, to have to go back years 
and years and go through every one of your cell phone records and 
determine whether that was a personal phone call, was this a business 
phone call, and what percentage now, and having to figure all that out.
  This is a simplification of the Tax Code. It is the right thing to 
do. It is a very simple thing to do. As soon as the amendment process 
is figured out, we will be offering this as one of the first amendments 
to the small business tax bill.
  Once again, it has been a pleasure working with my colleague Senator 
Kerry on this bill.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Kaufman). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BAUCUS. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. Mr. President, the Senator from Nevada, Mr. Ensign, spoke 
a few moments ago about the amendment we hope we can consider shortly, 
the Kerry-Ensign amendment on cell phones. That amendment deals with 
when an employer gives a cell phone to an employee. The question is, Is 
that compensation to the employee or is that an investment by the 
employer? Under current law, the IRS expects taxpayers to document how 
much they use the company's cell phone for business and how much they 
use it for personal use. I think most people don't keep these records. 
Frankly, most of my colleagues don't believe they should have to. This 
amendment says businesses should not have to bear this onerous 
recordkeeping burden anymore. It is a commonsense amendment. It has 
broad bipartisan support. I urge colleagues to support it at the 
appropriate time.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  (The remarks of Mr. Conrad are printed in today's Record under 
``Morning Business.'')
  Mr. CONRAD. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Hagan). The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. GRASSLEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Madam President, I wish to address my colleagues for a 
few minutes about the pending legislation that was recently introduced 
by my chairman and friend, Senator Baucus of Montana. This bill is 
targeted at creating jobs by providing targeted relief to our Nation's 
job engine, and that happens to be small businesses.
  Our Nation is currently facing challenging economic times, as we have 
now for about 20 months. While there have been some signs of 
improvement, such as the recent growth of our gross domestic product, 
job losses continue to mount and many hard-working Americans are 
struggling to make ends meet. According to our Bureau of Labor 
Statistics, around 8 million jobs have been lost since our economy 
officially slipped into recession in December of 2007. The unemployment 
rate is currently 9.7 percent, which is simply an unacceptable level.
  Small businesses in particular have been hit hard, with most job 
losses being attributed to businesses with fewer than 500 employees. 
According to the ADP national employment data, from December of 2007 
through May of this year, small businesses with fewer than 500 
employees saw employment decline by 6.4 million, while businesses with 
500 or more employees saw employment decline by 1.66 million. According 
to this data, small businesses--those with fewer than 500 employees--
accounted, then, for nearly 80 percent of the decline in employment 
during that period of December 2007 through May 2010.
  The lack of job creation continues despite aggressive actions taken 
at the Federal level to stabilize the economy. This includes the 
enactment of the TARP bill, also the $800 billion stimulus bill, and 
more recently a bill we termed the ``HIRE Act.'' However, these bills 
were all missing a critical ingredient for spurring job creation; that 
is, substantial tax relief targeted at small businesses. The reason for 
that is most small businesses hire or do not hire according to what 
their cash flow is. When taxes are high, there is less cash flow or 
when tax policy is in a state of flux, as right now--what is it going 
to be this year because of sunsets this year--that uncertainty causes 
businesses not to be as aggressive as they normally might be in hiring.
  While President Obama and my Democratic colleagues agree that small 
businesses create 70 percent of the jobs in our economy, less than one-
half of 1 percent of the stimulus bill was tax relief for small 
businesses--in other words, not putting the money where it would do the 
most good.
  The HIRE Act, which the Democratic leadership sold as a so-called 
jobs bill, did not fare much better in providing tax relief to our 
Nation's job engine. There was only one provision directed solely to 
small business tax relief. That was a provision I supported that 
increased expensing equipment purchased by small businesses. But it is 
a very small provision, and it only gave small businesses what they 
have already been getting for the last couple of years. That provision 
was only $35 million out of a $21 billion bill.
  With the recent introduction of the small business tax relief bill, 
it looks as if this body is finally starting to get serious about 
tackling unemployment through a true jobs bill, compared to previous 
stimulus or jobs bills promoted by the majority.
  This small business bill has a rather modest cost of about $12 
billion to $15 billion. It is targeted at job creation by providing 
small businesses incentives to invest in new equipment, expand their 
operations, and ultimately hire new employees.
  The bill includes provisions that would encourage businesses to 
invest in new equipment and real property by increasing the amount of 
capital expenditures small businesses can expense. For equipment, the 
amount that can be expensed is increased to $500,000, and for real 
property it is $250,000.
  Moreover, it encourages investment by providing additional first-year 
bonus depreciation. It promotes entrepreneurship by increasing the 
amount allowed as a deduction for startup expenditures. It would 
increase access to capital by allowing 100 percent of gain from 
investment and qualified small business stock to be excluded from 
income and taking the general business tax credit out of the 
alternative minimum tax for sole proprietorships, for flowthroughs and 
nonpublicly traded C corporations with $50 million or less of annual 
gross receipts. It also increases access to capital by extending the 1-
year carryback for general business credits to a 5-year carryback for 
small businesses.

  Finally, the bill promotes small business fairness by limiting harsh 
penalties that have been imposed on small businesses by the IRS and 
equalizing the tax benefits for health insurance that self-employed 
individuals may receive to those received by employees.
  While this small business bill would go a long way in informing small 
businesses Congress is very serious about

[[Page S5520]]

reducing the burdens imposed on them, many businesses continue to 
struggle and will not hire new employees simply because it is the 
stated policy goals of Congress.
  According to the most recent survey from the National Federation of 
Independent Businesses--and we refer to that organization around here 
as the NFIB--when businesses are asked what the single most important 
problem facing their business is, the No. 1 answer is lack of sales, 
but this is closely followed by taxes and then by government regulation 
and redtape.
  I have a chart here from the most recent NFIB survey listing the top 
problems facing small businesses, and you can see there, as I said, 
that first is poor sales; secondly, taxes; and then government 
regulation and redtape being the hindrances to small businesses 
expanding to create the jobs small businesses can create. Consequently, 
you can see tax policy is very important because, as I said, small 
businesses tend to operate out of cash flow to a greater extent than 
companies with equity and stock.
  The small business community is currently being strangled by a 
climate of uncertainty. Whether we are speaking about cap and trade--
some people refer to that as cap and tax--that will drastically 
increase energy costs or about health care reform that will require 
small businesses to offer health benefits that will increase the cost 
of labor or about the call for tax increases on so-called wealthy 
taxpayers earning over $200,000, that will largely fall on the backs of 
small businesses. Whether you are talking about any of these three--or 
more that I could mention--there is a great deal out there that causes 
small businesses to stop and think of whether now is the time to expand 
and hire new workers.
  Taxpayers earning above $200,000 are frequently identified as coupon 
clippers by many of my friends on the other side of the aisle. A 
disproportionate level of business activity is attributable to small 
businesses owned by that group, and we have a chart here that shows 
evidence of this linkage. This chart is based upon Gallup survey data 
showing that over half of the larger small businesses--the ones with 
the good share of the workforce--are controlled by taxpayers who are 
targeted by the other side's marginal rate hikes. Twenty-seven percent 
of the medium-sized small businesses are controlled by taxpayers 
targeted by as much as a 17-percent marginal rate hike.
  The owners of the smallest of the small business community are also 
affected. You see from the chart that it provides an example of how a 
fairly typical small business owner would be impacted by the increase 
in just the two marginal tax rates, which is the proposal of the 
President and I assume something we are going to be dealing with 
between now and the end of the year because everything sunsets on 
December 31. And I can tell you that nobody wants to be out there 
campaigning this fall with the largest tax increase in the history of 
the country happening without even a vote of the people and 
particularly as it is going to hit middle-income taxpayers.
  So you have this possibility whether it is Congress legislating, in 
the higher tax brackets, higher taxes or whether it is just the tax 
increase going into effect without a vote of Congress. You can see here 
in the charts that a small business owner who is married and has two 
children, who has $500,000 in taxable income could see a $19,600 tax 
hike. That is a 13-percent increase in taxes.
  One way Congress can try to put some certainty back into the lives of 
small businesses and entrepreneurs is by dealing with the unfinished 
tax legislation business. As this chart shows--and I think I brought 
this chart to the floor at least four times in the last 3 weeks I have 
been addressing this issue of taxes--there are four major pieces of 
legislation dealing with expired or expiring tax provisions that have 
yet to be addressed by this Congress, meaning between now and 
adjournment this December.
  I have talked about this unfinished tax legislation business several 
times over the past few weeks, but I cannot stress enough how important 
dealing with these time-sensitive matters is for the business community 
because one of the reasons they are not hiring is because of the 
uncertainty that is out there--what is Congress going to do and when 
are they going to do it? Without certainty in tax policy, businesses 
are unable to plan for the future, and many businesses are in a holding 
pattern waiting to see what Congress will do. So it is quite obvious 
this is very bad for the economy and it will not be an environment for 
job creation. The list of unfinished tax legislative business includes 
everything we have here, but I will mention them: the tax extenders, 
which are overdue by over a half year; it also includes the alternative 
minimum tax patch; another area is the death tax; and the final area is 
the 2001 and 2003 tax rate cuts.
  I am going to discuss that policy today and its implication for small 
businesses because until we get small businesses confident of the 
future and willing to spend money and invest, we are not going to 
create jobs. And that is a big void that is out there--not that this 
Senator is the only one saying so. Many Senators on the other side, 
including the leader of the Senate, have said that 70 percent of new 
jobs are created by small businesses.
  As important as the AMT patch and the death tax are, they are dwarfed 
by the impact of this fourth package of expiring tax provisions--the 
2001 and 2003 rate cuts. This was a bipartisan tax relief package. I 
get so tired of people talking about the Bush tax cuts from the 
standpoint that it was an entirely Republican-driven effort with no 
support from the other side of the aisle. There were a large number of 
Senators in the then-Democratic minority--which soon became a majority 
because of the switching of one Senator from a Republican to a 
Democrat--who helped push through this bipartisan tax relief enacted in 
2001.
  Under statutory pay-as-you-go, the amount permitted in this area by 
the budget of last year is about $1.4 trillion. It covers about 80 
percent of extending all the marginal tax rates and family tax relief 
from the 2001 and 2003 bipartisan plans. That number makes sense 
because the bipartisan tax relief plan cuts taxes for virtually every 
American family who pays income tax.
  How significant and how widespread is that tax relief, you may ask. 
This chart, drawn not by Republicans or Democrats but by the 
Congressional Budget Office data, sheds some light on that very point I 
bring up. In other words, the significant and widespread tax relief is 
very dramatic for most Americans.
  The line above measures the effective tax rate paid by the top 5 
percent of taxpayers. What is significant about that 5 percent is this 
is where the small business owner tax hit occurs. This group roughly 
represents those taxpaying families with incomes over $250,000. Under 
the Democratic leadership's budget, this line will go back up to where 
it was in the year 2000. So you can see where the white vertical line 
goes is where we were in the year 2000. And this is also where the 
President's budget and the statutory pay-as-you-go regime would take 
the raise.
  People on my side of the aisle--Republicans--believe this significant 
tax increase will be a mistake. We hope we will be able to debate this 
policy in the House and Senate, in committees and on the floor. That 
was, after all, the process we followed when the bipartisan tax relief 
plans were passed in 2001, 2003, and 2005. We will point out, as we did 
then, that the tax increase falls primarily on the backs of small 
businesses.
  Data from the Joint Committee on Taxation--and these are the 
nonpartisan official congressional scorekeepers on tax issues the way 
the CBO is on spending issues--shows that 44 percent of the flowthrough 
business income will be hit with the increase in the top two tax rates 
proposed by the President and the Democratic congressional leadership. 
A lot of this income is concentrated in the larger small businesses I 
have referred to here earlier, particularly those of up to 500 
employees.
  This hits small businesses particularly hard since most small 
businesses are organized, as I have said, as flowthrough entities. So 
it will increase taxes on a single small business owner who makes more 
than $200,000 per year even if they plow all their income back into 
their small business to keep paying their workers or hire additional 
workers.

[[Page S5521]]

  The top marginal rate on small business owners will rise by almost 17 
percent. Democrats and Republicans agree that small businesses are the 
key job creators of the past and the future. President Obama correctly 
pointed out that small businesses create 70 percent of the new jobs.
  The rest will also hit investment hard. The top capital gains rate 
will rise by 33 percent. The top dividend rate could nearly triple. All 
of this is set to occur, not at some far distant future point, it 
occurs about a half year from right now.

  We all hope the economy is on a path to recovery, but does this heavy 
tax increase on small business owners and investment ever make sense? 
Even the most liberal Members on the other side might wonder whether it 
makes sense. Do we think the private sector will grow if we hit small 
business investors this hard 6 months from now? And think of the 
uncertainty between now and then. They are not going to do anything.
  I remember that this President, between his election and January 20 
when he was sworn in, decided that going into a recession--or by then 
in a recession--even though he campaigned on a promise of increasing 
taxes on higher income people, it was not the right thing to do at that 
time of a recession.
  Last December the President had some of us down to talk about jobs, 
helping turn the economy around, getting people hired. When he called 
upon me I offered him that same advice that he decided by himself 12 
months before, that being in a recession was no time to increase taxes. 
We were in a recession still in December of 2009, as we were in 
December of 2008, and we still have 9.7 percent unemployment. The 
President could help the economy if he would announce, as he did before 
being sworn in, that even though I campaigned on a platform of 
increasing taxes on higher income people, now is not the time to do it. 
But he seems inclined to increase taxes, even though it is detrimental 
to job creation, particularly job creation by small business.
  You can see, then, that the bipartisan tax relief brought, at the 
time we passed it, the effective rate down with respect to the bottom 
95 percent of the taxpayers as well. That is the bottom line of my 
chart right here. So it was a tax cut across the board for almost every 
American. I stress this because some of my colleagues on the other side 
of the aisle may be thinking to themselves: Sure, this is true for 
income taxes. But what about other Federal taxes, such as Social 
Security, which make up a large percentage of taxes paid by lower and 
middle-income individuals? This chart is not just a depiction of 
Federal income taxes; this includes all Federal taxes. This includes 
Social Security, other payroll taxes and excise taxes frequently 
referred to by my colleagues on the other side as ``regressive taxes.''
  Even including all Federal taxes over the last 30 years, the top 5 
percent of income earners have paid a lot higher effective tax rate 
than the bottom 95 percent. It has been that way no matter which party 
has controlled the White House, Congress, or both the White House and 
Congress. It shows something that you would never know if you listen to 
the rhetoric of the majority Members of this body or even listen to the 
punditry on the left and some in the media.
  Here is what it shows: A progressive income tax system is deeply 
embedded in our culture. The bipartisan tax relief plans of 2001 and 
2003 made the system yet more progressive. These plans brought the 
rates down for the bottom 95 percent of the taxpayers, as you can see 
here on the bottom line. The 2001 and 2003 tax relief plans dropped the 
effective tax rates for tax-paying families under $250,000 to their 
lowest levels in a generation. This is the current law, the current 
level of taxation.
  In about a half year these rates will pop back up for all of these 
taxpayers. That is the checkered line going across there. That is where 
they are going to return to. The President, as powerful as he is, 
cannot unilaterally hike or cut taxes. He needs a bill from Congress to 
do that.
  On our side, we want all the tax relief made permanent. We want the 
opportunity to debate and to amend a bill that deals with this basic 
level of taxation, the basic level of taxation where the solid lines 
take us both for high-income people and low-income people; otherwise, 
they go back up to the checkered line there. This is unfinished 
business that affects virtually every American taxpayer.
  It is clear that over the last 3\1/2\ years, Republicans do not 
control this Congress. We cannot decide the fate of the marginal rate 
cuts. It will have a fiscal consequence. There are pretty significant 
fiscal consequences, but if the Democratic leadership wants to keep 
these levels of taxation low, then they have to deal with the fiscal 
consequences.
  Alternately, the Democratic leadership can raise taxes and claim the 
revenue. Not changing the law by failing to act is the same as raising 
rates on virtually every American taxpayer. But they will have to 
explain to those taxpayers why they raised taxes by almost 10 percent 
on average.
  In the 2006 election almost 4 years ago, the American people provided 
the Democratic leadership with control of this Congress. In the 
election 18 months ago, the American people provided the Democratic 
leadership the largest majorities that any one party has had in this 
body in more than a generation. They also provided the Democratic 
leadership with a President of their party. The Democratic leadership 
spent the period of 2001 to 2006 thwarting efforts to make the 
bipartisan tax relief of 2001 and 2003 permanent--which, if they had 
not fought it, would be permanent law and we would not have this 
uncertainty that keeps small business from hiring and expanding.
  Upon assuming control, the majority has spent 3\1/2\ years with no 
legislation to make permanent or even extend the marginal rate cuts and 
family tax relief packages. My friends in the Democratic leadership 
need to step to the plate. We have had budget and statutory pay-as-you-
go, we have debated and voted on the breadth and composition of the 
marginal rate cuts and family tax relief in those contexts. No 
legislative action whatsoever. No House committee or floor action. No 
Senate committee or floor action--as you can see by my ``to do'' list.
  The Democratic leadership needs to step to the plate. Blaming former 
President George W. Bush and the Republican Congresses of many sessions 
ago is no substitute for running this time-sensitive tax legislative 
business through the legislative process. Put forward some proposals. 
Let's debate those proposals. Let's allow for amendments. Do the 
people's business. It is time to fill in each of these boxes with a 
checkmark instead of an X.
  Fiscal history shows us that raising these marginal rates on small 
businesses by as much as 17 percent will not necessarily improve the 
fiscal picture. The relationship between higher rates and higher 
revenue is tenuous at best.
  I have a chart that tracks this history for over 50 years, I believe. 
Yes, for 55 years and, who knows, maybe farther back than that. 
Taxpayers are not automatons. Small business taxpayers will respond 
dramatically to higher rates. I am afraid the response will not help 
the economy. It will not mean expansion. It could mean contraction. 
This is not the right signal to send if we want businesses to create 
more jobs.
  I want to emphasize this chart. You can see, over a period of 55 
years, the red line is the revenue coming into the Federal Treasury 
from all Federal taxes as a percentage of gross domestic product. Then 
you can see over that 55 years we have had varying years of high 
marginal tax rates and lower marginal tax rates. It was 93 percent 
under Eisenhower, down to a low of 28 percent under Ronald Reagan, back 
up to 35 percent for several years as a result of the Bush tax 
increase, continued by the Clinton tax increase. Then with the 2001 
bill you see it go down, the marginal tax rates, to 35 percent from 39 
percent.
  What that ought to tell you is that the people of this country are 
smarter than we are here in the Senate. We can think we are going to 
increase marginal tax rates and bring in a lot of revenue. But the 
people of this country who have the capability of deciding whether they 
are going to invest and create jobs and invest so they can make more 
money have decided that they are only going to send so much money to 
Washington, DC, for those of us in the Congress to decide how the 
resources of this Nation are divided.

[[Page S5522]]

  You can have 93-percent tax rates or you can have a low of 28-percent 
tax rates, but you still get about the same amount coming in. So we 
ought not fool ourselves that we can direct to this country that we are 
going to force you to pay more taxes with higher marginal tax rates, 
because the people in this country have the ability to decide that they 
are going to work and produce or is it worth working and producing if 
you have high marginal tax rates and then maybe decide not to work and 
invest so hard and maybe take a life of leisure--more so. But you find 
when you reduce marginal tax rates you get more economic activity from 
it. You get more economic activity from it because, quite frankly, we 
in this Congress, 535 of us, when we decide what to do with the 
resources of this country it does not do as much economic good as when 
you leave the money in the pockets of 137 million taxpayers and they 
decide whether to spend or whether to save or to spend and save and how 
to save it and what to spend it on. It creates more jobs.
  I hope we look at helping small business. The bill before us is a 
good bill with solid initiatives for small business. I compliment my 
friend Chairman Baucus for diligently pressing these issues. They would 
be even more effective if we could address the uncertainty a small 
business faces on the tax front.
  When it comes to whether small business can do a better job of 
creating employment or whether government can do it, I wanted to ask 
the question: How many jobs did the stimulus bill create?
  Here we were, February of 2009, passing an $800-some billion stimulus 
bill supposedly to keep employment under 8 percent, and it has not been 
under 9\1/2\ percent for well over a year. That is government, through 
stimulus, trying to create jobs--and not enough in the private sector, 
by the way.
  So in recent weeks, a number of my colleagues have come to the floor 
to proclaim the success of this massive, now I guess it adds up to a 
$862 billion stimulus bill that Congress enacted in February of 2009. 
Similar statements were made earlier this very day.
  Although the number of private sector jobs has increased by only half 
a million since 2009, my friends on the other side continue to insist 
the stimulus bill has created millions of new jobs. So I would like to 
see how they justify those claims. The stimulus bill requires certain 
recipients of stimulus funds to report the number of jobs they have 
created or saved or, more accurately, they report the number of jobs 
funded with stimulus dollars. The stimulus bill also requires the 
Congressional Budget Office, CBO, to issue a quarterly report on those 
numbers.
  CBO is careful to point out that the number of jobs being reported by 
stimulus recipients is not a comprehensive estimate of the economic 
impact of the stimulus bill. CBO says the actual numbers could be 
higher or lower. According to CBO:

       Estimating the law's overall effect on employment requires 
     a more comprehensive analysis than the recipients' reports 
     provide.

  For this analysis, CBO relies upon computer models. In other words, 
CBO does not look at the actual jobs data; instead, it looks at a model 
of the economy. CBO is very upfront about this to all of us.
  CBO used a computer model to predict how many jobs the stimulus bill 
would create before it was enacted into law. Now that the stimulus bill 
is law, CBO is using a computer model to tell us it did just what they 
said the model would do, create jobs. Why would CBO rely upon a model 
instead of actual data?
  According to CBO:

       Data on actual output and employment . . . are not as 
     helpful in determining [the stimulus bill's] economic effects 
     . . . because isolating those effects would require knowing 
     what path the economy would have taken in the absence of the 
     law. Because that path cannot be observed, there is no way to 
     be certain about how the economy would have performed if the 
     legislation had not been enacted.

  In other words, CBO does not know how much better or worse the 
economy would have been if the stimulus bill had not been enacted. That 
means CBO does not know how much better or worse the economy is now as 
a result of the stimulus bill.
  So, basically, CBO is saying: Trust us--or more specifically, trust 
our model. But if the model was wrong to begin with, then it is still 
wrong. According to CBO, their model relies on historical relationships 
to determine estimated ``multipliers'' for each category of taxes and 
spending in the stimulus bill. The problem is, there is no way to know 
whether these historical relationships remain constant over time or 
whether they change under different economic circumstances. In short, 
the jobs numbers attributed to the stimulus bill are based on 
assumptions that may or may not have any basis in reality.
  The bottom line is this: CBO cannot be cited as an authority for the 
proposition that the stimulus bill actually created jobs. All CBO has 
done is confirm that its model, and I repeat, CBO's model, projected 
jobs would be created from the stimulus bill.
  CBO has not confirmed that the stimulus bill actually created jobs. 
What we do know is that in 18 months, since the $862-plus billion 
stimulus bill went into effect, the private sector has added a 
relatively small number of new jobs, about half a million. This is a 
small portion of the number of new jobs asserted by my friends on the 
other side of the aisle.
  I want to make the Record very clear on this very important point.
  I yield the floor, and 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.
  Mrs. SHAHEEN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. SHAHEEN. Madam President, I am here to speak to the bill that is 
pending before us. Small businesses are the cornerstone of New 
Hampshire's economy, just as they are the cornerstone of the economies 
of so many of our States.
  Over 96 percent of employers in New Hampshire are small businesses 
with fewer than 500 employees, 96 percent. The economic recovery of New 
Hampshire depends on the ability of those small businesses to invest in 
their future, to grow their businesses, and to hire new workers.
  But right now many of these small businesses are hurting and they 
continue to have trouble accessing credit, the credit they need to help 
turn our economy around. While community banks in New Hampshire have 
increased their lending, I consistently hear from small businesses that 
they still need additional working capital.
  Last year my office organized a financing fair to bring together 
lenders and small businesses who need financing. Over 500 people showed 
up. That is a crowd in New Hampshire. Wherever I go in the State, small 
business owners tell me they have run out of financing options. In some 
cases their only choice is to turn to credit cards, their personal 
credit cards where they pay exorbitant interest rates to get the 
working capital they need to keep their businesses growing.
  That is why we need to quickly pass the Small Business Jobs Act. This 
legislation will help small businesses in New Hampshire and across the 
country access the credit they need to create jobs and to weather this 
economic storm. I am very proud of the work of my committee. As the 
President knows, the Small Business Committee does great work. It is 
led by Chairman Landrieu and Ranking Member Snowe.
  They have worked and we have worked on this committee to fashion 
bipartisan measures to strengthen critical SBA programs for small 
businesses. This afternoon I want to talk about two of those provisions 
in particular that I think will provide tangible credit solutions for 
small businesses in New Hampshire.
  Many creditworthy small businesses have mortgages on their property 
that are coming due in the next year. In normal times these businesses 
would simply refinance those mortgages at reasonable rates. But with 
commercial real estate lending so tight, and real estate values 
falling, the only option for many businesses is to refinancing at very 
high rates. This drains them of the cash they need to pay for their 
workers and buy new inventory.
  For small businesses that cannot refinance at all, they face 
foreclosure even though they may have never missed a payment on their 
loan. The

[[Page S5523]]

Small Business Jobs Act will change an existing SBA program in a way 
that makes sense. It will change the 504 program to help small 
businesses refinance these mortgages at low rates. This will free up 
capital for these small businesses to hire workers and to make other 
investments to grow their operations, and we can do this in this bill 
at no cost to the taxpayer.
  In New Hampshire, this will help small businesses of all kinds: 
manufacturers, hotels and restaurants, doctors offices, and many 
others. This will help them retain hundreds of jobs that would 
otherwise be lost due to a lack of credit availability. In some cases, 
it will stop businesses from having to close their doors altogether.
  This bill will also increase the maximum loan limit of the Express 
Loan Program. This is another important provision of this bill that 
will help small businesses in New Hampshire get the working capital 
they need. The Express Program is popular with small business lenders 
in New Hampshire because it cuts redtape and provides a streamlined 
process for approving loans.
  Unlike traditional 7(a) loans, lenders can use their own paperwork 
for SBA Express Loans, making it easier for them to quickly get capital 
into the hands of small businesses. Currently, however, Express Loans 
are capped at $350,000. The Small Business Jobs Act will increase the 
loan limit to $1 million, making additional working capital available 
to small businesses.
  I thank Senators Landrieu and Snowe for working with me to include 
this important provision. I am also pleased that the bill includes 
President Obama's initiative to provide over $30 billion for two new 
lending funds for small business owners.
  I am hopeful the small business lending fund and the State small 
business credit initiative will provide community banks with the 
capital cushion they need to expand lending to small businesses.
  This bill also lowers taxes on small firms, providing over $12 
billion in tax cuts to help free up capital so small companies can 
invest in their future. These tax cuts are fully paid for, and they 
will not add to the deficit. The Small Business Jobs Act will help 
provide the boost that small businesses in New Hampshire and across the 
country need so desperately so they can create jobs and help continue 
to grow our economy.
  I urge my colleagues to join me in supporting this critical piece of 
legislation.
  I yield the floor, and 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. UDALL of New Mexico. Madam President, I ask unanimous consent 
that the order for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (The remarks of Mr. Udall of New Mexico are printed in today's Record 
under ``Morning Business.'')
  Mr. UDALL of New Mexico. I yield the floor and I note the absence of 
a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. NELSON of Florida. Madam President, I ask unanimous consent that 
the order for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (The remarks of Mr. Nelson of Florida are printed in today's Record 
under ``Morning Business.'')
  Mr. NELSON of Florida. I yield the floor. I suggest the absence of a 
quorum.
  The PRESIDING OFFICER (Mr. Udall of Colorado). The clerk will call 
the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CASEY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


            Honoring Our Armed Forces Sergeant Joseph Caskey

  Mr. CASEY. Mr. President, I rise tonight to talk about the war in 
Afghanistan, and, unfortunately tonight, as I begin my remarks, I have 
to report on yet another death of a soldier killed in action in 
Afghanistan. Yesterday, in Pennsylvania, we lost another marine. This 
time the marine was from West View, PA, Allegheny County, the county in 
which most people know the city of Pittsburgh is. SGT Joseph Caskey, 24 
years old, was on his second tour and was killed in action.
  If the counting is right in terms of the number killed in action from 
Pennsylvania, he is likely the fiftieth killed in action from 
Pennsylvania. We have about 260 who have been wounded. That number may 
be higher, but that is the most recent number I have seen. Sergeant 
Caskey gave us, as Abraham Lincoln said so eloquently so many years 
ago, the last full measure of devotion to his country. And like so many 
others--hundreds and hundreds who have died in the conflict in 
Afghanistan, and those who died in Iraq and so many other conflicts--we 
mourn his loss and we commend his service, but I think we also, at the 
same time, must recommit ourselves to making sure we are putting this 
conflict on the floor of the Senate; that we debate it more; that we 
talk about it more, so that we get the policy right. I am going to 
speak a little while tonight about that.
  In terms of the lethality or the focus we have on those who have lost 
their lives, June is the deadliest month on record for coalition 
forces. I wish we didn't have to report on that. I wish those of us who 
come to the floor periodically to talk about the war and to talk about 
individuals from our States who have perished--who have either been 
killed or who are suffering from grievous injuries--could come and talk 
about some other milestone in the life of that person--a soldier such 
as 24-year-old Sergeant Caskey. I wish I could come and report about 
some other milestone in his life instead of the news about his death.
  But we have to talk more about this war. We have to make sure we are 
debating it more. One of the things that we know has just transpired is 
a change in command. Today, the Senate Armed Services Committee--and 
the Presiding Officer is a member of that committee--voted in favor, 
thank goodness, of General Petraeus's nomination to be the Commander of 
the ISAF forces in Afghanistan. I think to say this is bipartisan is an 
understatement. We know that President Obama has chosen a man worthy of 
this job, and we are fortunate that he has once again accepted the call 
to action and accepted this new responsibility.
  I spoke today by telephone with General Petraeus and covered a number 
of issues dealing with a whole range of foreign policy and security 
issues, including some of those pertinent to the conflict in 
Afghanistan. I have full confidence, as I know so many others in this 
Chamber and across the country do, in his leadership. I have full 
confidence that he will be able to implement a strategy that 
contributes to the overall security of Afghanistan and also a strategy 
that will train the Afghan security forces and create the kind of 
political space the Afghan Government needs to provide security and 
services to its people.
  This new command by General Petraeus, upon confirmation--it has not 
been voted on in the Senate, but I will be voting for him, and I know 
he will receive a great vote--will bring a new opportunity to assess 
where we are in the fight, and it is good that we do that. The news, 
unfortunately, is not all that encouraging lately. We continue to face 
a host of challenges in Afghanistan.
  A Washington Post newspaper report this week cited allegations of 
blatant and rampant corruption within the senior ranks of the Afghan 
Government. The report detailed examples where government officials 
blocked corruption investigations and ordered investigators to remove 
names from case files. That is just one problem. Secondly, there were 
allegations of individuals preventing the arrest of senior officials 
and not acknowledging evidence against businessmen accused of helping 
Afghan elites to move millions of dollars out of the country.
  This was a published report. These are allegations, and we hope they 
are not true, but if they are, we have much deeper problems than we 
thought maybe even a couple of days ago. These

[[Page S5524]]

are serious allegations that require a serious and thorough 
investigation and scrutiny. Those who are accused of these crimes 
should be prosecuted upon the review of the evidence.
  As I have said in the past about this conflict, our success will be 
determined by a belief among Afghans that justice can be delivered by 
its government. The people of Afghanistan have a right to expect honest 
government officials working on behalf of the public good, working on 
behalf of the people, not to enrich themselves, not to provide 
advantages for the elite in Afghanistan, not just to provide advantages 
for the wealthy but to make sure that the people are the beneficiaries 
of a clean, honest government and the kind of effective services that 
the people should have a right to expect.
  The people also have a right to expect a police force capable of 
protecting the population against criminals. They do have that right. 
They also have a right to a fair and efficient system of justice in 
Afghanistan, capable of delivering verdicts based upon the rule of law 
and not according to the barbaric code embraced by the Taliban. 
Unfortunately, today, we don't yet see a government in Afghanistan that 
is fully capable of providing this kind of justice. So we have to 
monitor what is happening there. We have to make sure we see results 
and not just rhetoric. We have to see the reality of progress on 
security, on justice, on the delivery of services--not just the 
aspiration but the delivery of results.
  As we consider the nomination of General Petraeus--and as I mentioned 
before, a nomination I fully support--I hope this nomination will be 
one of the reasons we will have a more substantial discussion or debate 
about the policy here in the Senate. That is where that debate should 
take place, as it takes place in the House and outside of the Capitol 
and across America. We should have in the Senate a debate or a 
reengagement of the debate about this policy. We owe it to our fighting 
men and women to do nothing less than that, to be committed to 
examining every aspect of the conflict in the weeks and months ahead. 
We must continue to ask and get answers to the tough questions on 
security, on governance, and on the delivery of services, to mention 
three broad areas of review, analysis, and, of course, inquiry.
  As allegations of Afghan Government corruption emerge, oversight is 
essential when we hear these allegations. If the Afghan national police 
and army are not hitting their recruitment and training targets, for 
example, we need to know why. The American people and the Afghan people 
have a right to expect that we and the Afghanistan leadership, starting 
with President Karzai, get answers to those tough questions about the 
security, and especially about the army and the police.
  I spoke yesterday of my commitment, and the commitment of so many 
others in this Chamber, to helping stem the flow of ammonium nitrate 
into Afghanistan from its neighbors, particularly Pakistan and the 
countries of central Asia. This deadly ingredient is used in most of 
the IEDs found in Afghanistan--bombs which have grown more powerful in 
recent months. We are now getting reports of the destructive power of 
IEDs not only to kill and to maim our troops who happen to walk near 
one of these explosive devices but to literally lift up an MRAP--this 
great vehicle we have been able to produce that lessens the chances 
that an explosion under the vehicle will kill someone. The explosions 
are now so great that they have been lifting up the MRAP and flipping 
it on its head and killing or gravely injuring troops not because the 
bottom technology and the engineering wonder that has saved so many 
lives is giving out, but because the vehicle itself is being lifted up 
and then smashed down in a way we couldn't even imagine maybe even a 
year ago or months ago.
  As I mention the impact of ammonium nitrate as the destructive 
ingredient in the IEDs, it so happens that Sergeant Caskey, the marine 
I spoke of earlier from Pennsylvania, who we believe is the fiftieth 
soldier killed in action in Afghanistan, was killed by an IED, as so 
many others--hundreds and hundreds--have been killed in that manner.
  This concern about ammonium nitrate is just one of a series of 
regional concerns that we have with respect to the conflict in 
Afghanistan. Pakistan has recognized the severity of the threat posed 
by the Afghan and Pakistani Taliban. The Pakistani forces have suffered 
heavy losses within their own borders, and I respect the commitment 
they have shown as the struggle continues. While the battle has been 
tough and difficult, we will need more help from the Pakistani people 
and their security forces in the weeks and months and years ahead.
  We have no better military leader to take on this challenge at this 
time than General Petraeus. As we confront this enormous challenge, our 
country has called upon him again and he has answered affirmatively to 
that call. I believe General Petraeus has the experience, the 
knowledge, the insight, and of course the respect of not only leaders 
in the military but also leaders in the region and, of course, he has 
the respect and support of the American people. So we should be happy 
and affirmative about that part of the story even as we confront 
allegations of corruption, even as we confront more and more troops 
wounded and killed in action, even as we confront the challenge of this 
policy.
  The minimum we must do in the Senate is to make sure that the 
oversight we provide, the debates we engage in, and all of the work 
that we do in the Senate that relates to this policy, at a minimum 
attempts to justify and to be equal to the commitment of our troops. 
Their job is so much more difficult than our job. We don't have to put 
our lives on the line. We debate and we learn and we try to move the 
policy forward, but the least we should do is to have a debate that 
matches or at least attempts to be equivalent to the sacrifice that 
they display every day.
  When we think of our troops, we mourn, of course, those who have been 
killed in action, and we also remember and salute and celebrate the 
contributions of those who have served and who come home with an 
injury, sometimes grievously wounded.
  Of course, we remember and salute those who serve and, fortunately, 
with the blessing of God, are not killed or not wounded and they can 
come home and be reunited with their families, with their communities.
  We remember all those, as Abraham Lincoln said a long time ago: ``Him 
who has borne the battle.'' Of course in 2010 we are talking about him 
and her, those who have borne this battle.
  We have a long way to go as it relates to this policy but, as we are 
thinking tonight of the hope we have in General Petraeus's leadership, 
the confidence we have in his ability and his commitment--he is a 
patriot like few others--even as we are hopeful about that we remember 
those who lost their lives, such as Sergeant Caskey, of West View, PA, 
and so many others who have served, and their families, who have loved 
and lost.
  I yield the floor and 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. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________