[Congressional Record Volume 156, Number 124 (Wednesday, September 15, 2010)]
[Senate]
[Pages S7103-S7119]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                SMALL BUSINESS LENDING FUND ACT OF 2010

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of H.R. 5297, which the clerk will report.
  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.

  Pending:

       Reid (for Baucus-Landrieu) amendment No. 4594, in the 
     nature of a substitute.
       Reid (for Nelson (FL)) modified amendment No. 4595 (to 
     amendment No. 4594), to exempt certain amounts subject to 
     other information reporting from the information reporting 
     provisions of the Patient Protection and Affordable Care Act.
       Reid (for Johanns) modified amendment No. 4596 (to 
     amendment No. 4595), to repeal the expansion of information 
     reporting requirements for payments of $600 or more to 
     corporations.
       Reid amendment No. 4597 (to the language proposed to be 
     stricken by amendment No. 4594), to change the enactment 
     date.
       Reid amendment No. 4598 (to amendment No. 4597), of a 
     perfecting nature.

  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, the Book of Ecclesiastes says: ``A 
worker's sleep is sweet.'' Because of the great recession that started 
in 2008, millions of Americans have lost sleep. Why? Because they lost 
their work. That is why, throughout this Congress, we have been working 
to create jobs. That is why today, with this small business jobs bill, 
we are continuing to work to create jobs.
  One of the first things this Congress did was to pass the Recovery 
Act in February of 2009. The Recovery Act cut taxes for Americans by 
$326 billion. That is right. The Recovery Act cut taxes for Americans 
by $326 billion. In their latest report on the Recovery Act, the 
nonpartisan Congressional Budget Office once again reports that the 
Recovery Act is working.
  That office, CBO, says in the second quarter of this calendar year; 
that is, in 2010, the Recovery Act ``raised real . . . gross domestic 
product by between 1.7 percent and 4.5 percent''--raised gross domestic 
product by between those amounts. CBO also says--and I am quoting from 
them--the Recovery

[[Page S7104]]

Act ``lowered the unemployment rate by between 0.7 percentage points 
and 1.8 percentage points.'' That is right: The Recovery Act lowered 
the unemployment rate. CBO also says the Recovery Act ``increased the 
number of people employed by between 1.4 million and 3.3 million'' 
people. Continuing, CBO says the Recovery Act ``increased the number of 
full-time-equivalent jobs by 2.0 million to 4.8 million compared with 
what would have occurred.''
  Just think of that. That is CBO's estimates of the effect of the 
Recovery Act--all positive in all those respects.
  In March, Congress passed the HIRE Act; that is, the Recovery Act 
last year, the HIRE Act this year. The HIRE Act includes a payroll tax 
exemption for new hires. The HIRE Act cut taxes by a further $15.5 
billion. That law has also helped to bolster job creation.

  I might add that this summer the Treasury Department found:

       From February to May of 2010, an estimated 4.5 million 
     workers who had been unemployed for eight weeks or longer 
     were hired by employers who are eligible for the HIRE Act 
     payroll tax exemption.

  These actions that Congress has taken, therefore, are working.
  August was the eighth consecutive month of private sector job 
growth--the eighth consecutive month. Coming out of the 2001 recession, 
it took 28 months before we had 8 straight months of private job 
growth.
  Since last December, the American private sector has created 763,000 
net new jobs. Contrast that with the previous 8 years under the 
previous administration. During that 8 years, America's private sector 
lost 673,000 jobs.
  This chart I have in the Chamber shows that. If you look at the 
chart, beginning in January of 2008, the red bars show the job loss. 
The job loss got greater from January of 2008, April 2008, July 2008. 
As you see the longer red bars, that shows the greater job loss.
  Then, beginning with the Recovery Act in 2009, what happened? Look at 
this chart. This chart shows it. The black bars show action since the 
Recovery Act. The red bars to the left are job loss before the Recovery 
Act. Once the Recovery Act passed, according to the black bars on the 
chart, job loss decreased, steadily decreased in April 2009, July 2009, 
and October 2009. Then, guess what. We start getting positive numbers 
where job creation exceeded job loss. Those are the blue bars in 
January 2010, April 2010, and July 2010.
  So just to repeat broadly, beginning in January 2008, job loss grew 
dramatically, unfortunately, for all those folks. The Recovery Act 
passed in the beginning of 2009, and then job loss got less and less 
and less and less until about October, January of this year, and now we 
have a net increase of private jobs. The Recovery Act and the HIRE Act 
worked.
  We still have more to do. We still need to do more to help create new 
jobs, and we will not rest until every American who wants to work can 
find it.
  We are doing more today. The small business jobs bill we are working 
on right now is about helping Americans get back to work. This bill 
helps by helping small businesses especially hire more workers.
  Small businesses are the backbone of America's economy. We say that 
many times because it is true. They are the principal engine of job 
growth. Over the past 15 years, small businesses have created two-
thirds of all new jobs. It is not big business that creates most of the 
new jobs. Two-thirds of new jobs are created by small businesses. That 
has been the case for a long time, and I daresay it will continue to 
be.
  But the great recession hit small businesses especially hard. Since 
December 2007, small businesses lost more than 6 million jobs.
  This small business jobs bill would help create the right economic 
conditions for job growth. This small business jobs bill on the floor 
now could help small businesses create as many as 500,000 new jobs.
  The great recession's credit crunch starved America's small 
businesses' access to the capital they need. We hear that all the time. 
I say to the Presiding Officer, I know you do back home in your State. 
In response, this small business jobs bill will provide small 
businesses with access to capital, robust incentives for investment, 
and support for innovation and entrepreneurship.
  How? Well, this small business jobs bill would give small businesses 
$12 billion in tax cuts--$12 billion in tax cuts aimed at small 
businesses. It would increase small business lending. It would help 
small business owners get private capital to finance expansion and hire 
new workers. It would reward entrepreneurs for investing in new small 
businesses. It would help Main Street businesses compete with large 
corporations, and all these things would help small businesses create 
as many as half a million new jobs.
  Creating jobs is what people want us to do. I might say, I have a 
hard time understanding why some on the other side of the aisle have 
been holding this bill up for weeks and weeks. That is their business. 
I do not understand it, but that is their business. This is the kind of 
commonsense legislation we have before us today that Americans sent us 
here to do.
  At last, the end is in sight, thanks to the courageous votes of 
Senator George Voinovich and Senator George LeMieux. I thank them. I 
thank Senator Voinovich and I thank Senator LeMieux on behalf of 
Americans and on behalf of all the folks, especially small businesses, 
who want to find jobs.
  I thank, as well, every other Senator on this side of the aisle for 
their votes. I thank those two Republican Senators and the Democratic 
Senators who voted for this bill. Because of all of you, we are finally 
bringing this debate to a close, and it is certainly time to.
  It is time to pass this bill. It time to help small businesses. It is 
time to help create up to half a million new jobs. So let us bring this 
debate to a close. Let us send this targeted tax relief to small 
businesses without further delay, and let us pass this commonsense 
legislation.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, while we are talking about taxes, I wish 
bring up something that is significant to about 26 million Americans. 
It doesn't deal only with small businesses, but obviously a lot of 
small businesses are affected by the issue I bring to my colleagues' 
attention. I do this several times a year. It deals with the 
alternative minimum tax, a tax that I am sure that out of the 26 
million people who might be hit this year if we don't do something, a 
lot those are small businesspeople.
  The AMT was first enacted by Congress in 1969. The alternative 
minimum tax was created in reaction to some very wealthy and very high 
income individuals paying no income tax. These high-income individuals 
were able to do this because they were able to claim a huge amount of 
tax credits and deductions legally.
  Probably the sensible way to have dealt with this problem would have 
been to curtail the proliferation of those tax credits, tax deductions, 
and tax expenditures at that time. Unfortunately, that was not the 
course Congress took when the alternative minimum tax was set up, now 
40 years ago. Instead, Congress created this alternative tax system 
that we call the alternative minimum tax. With the alternative minimum 
tax, an individual must first calculate his regular income tax, and 
then he must calculate his alternative minimum tax. The taxpayer 
compares the two numbers and pays the highest figure of tax owed. I 
know this is complicated, figuring one's taxes twice--as if the regular 
income tax all by itself isn't complicated enough--but it has gotten 
much worse over the decades.
  The alternative minimum tax has not merely added complexity; it has 
ensnared tens of millions of Americans in its clutches. What was 
originally intended for fewer than 200 very wealthy taxpayers back in 
1969 because they didn't pay any income tax--legally didn't pay any 
income tax--now has grown to ensnare tens of millions of middle-class 
Americans.
  What is really worse is that it was supposed to get everybody to pay 
some income tax under the theory that if you live in America, even if 
you take legal advantage of everything the Tax Code allows you to do 
and still pay no tax, you ought to pay something, so the alternative 
minimum tax. But now the IRS tells us that there are a large

[[Page S7105]]

number of people--not tens of thousands but thousands--who don't pay 
either the regular income tax or there are ways they don't legally have 
to pay the alternative minimum tax. So it isn't even accomplishing its 
original purpose of making sure everybody pays some income tax.
  The reason it has grown to include many middle-income Americans is 
because the exemption amount has not been indexed for inflation. 
Congress has increased the exemption amount so it would be targeted 
toward those people it was meant to hit--very wealthy people.
  We keep talking around here about patching the AMT. We have done it 
every year since 2001. Congress has passed the AMT so that only 4 
million taxpayers have been subject to it in the past few years. At 
this point, however, the AMT is not patched for 2010. So unless 
Congress acts to patch the AMT, rather than only about 4 million 
Americans being subject to the AMT, more than 26 million will be.
  The chart I have here shows my colleagues a breakdown of the number 
of families and individuals State by State subject to the alternative 
minimum tax. These families and individuals should be paying the 
alternative minimum tax right now because Congress hasn't acted so far 
this year, after 9 months, to do the patch. That means that about 22 
million families and individuals are currently scheduled for quite a 
surprise come April 15, 2011. Roughly 4 million Americans are 
presumably used to paying the AMT, but the additional 22 million 
families and individuals currently subject to it may not have realized 
they are standing in a hole dug by this Congress. Until Congress 
patches the AMT in 2010, these individuals should either have their 
wages withheld at a higher rate and/or pay estimated taxes to take into 
consideration the fact that the AMT has not been patched. But we would 
have to figure that very few of these 22 million Americans are, in 
fact, paying the higher estimated taxes in anticipation of Congress not 
acting on the AMT. They probably do not know.
  The third quarterly estimated tax payment is due today. Literally 
right now, taxpayers across the country are under the legal requirement 
to pay their estimated tax. They should be using the form depicted on 
this chart, the form 1040-ES. I hope I am not here in January when the 
final estimated payment is due.
  It is disappointing that Congress has created a situation where law-
abiding citizens who still trust in Congress to look out for them are 
at odds with the law, even if only temporarily. The betting money is 
that Congress will get this job done before the end of 2010, but in the 
meantime, confusion reigns.
  In many ways, people simply do not know what to do about this. As I 
said, taxpayers don't know how much estimated tax to pay. The IRS 
doesn't know what forms to be preparing for publication. Tax software 
firms don't know how they should program their software. Tax 
professionals are not sure what to advise their clients. Government 
revenue estimators don't know whether to count the AMT patch in or out. 
And most important, our fellow Americans don't know how to plan their 
financial affairs. Can they afford that vacation or can they afford a 
new car? Can they afford some additional gift to charity? Should they 
contribute more or less to their 401(k)? The answers to these questions 
turn in part on whether Congress patches the alternative minimum tax.
  So what is to be done? The 2005 bipartisan tax reform panel had two 
different tax reform options: the simplified income tax and the growth 
and investment tax. But under either option, the bipartisan tax reform 
panel said that Congress should simply repeal the AMT. I think that is 
what has to be done.
  Don't forget the philosophy behind it 40 years ago, not indexed. That 
is why we have to patch, is because 200 people, maybe only 150 at that 
time, were not paying any income tax. Progressives thought: Well, 
everybody living in this free country, even if they legally don't have 
to pay any income tax, ought to pay ``some tax.'' So that is the 
philosophy behind it. We have not argued so much with that philosophy 
over the last 40 years. But we are in a situation where the IRS says 
there are some people in America who legally don't have to pay income 
tax or the alternative minimum tax. Does that make sense? Why would we 
have that law on the books if it is not fitting its original intention?
  That is what I would favor--complete repeal of the AMT. If that isn't 
to be done, I would favor then a permanent patch of the AMT. Given 
Congress's actions in this area, it seems likely we will patch it year 
after year after year, so wouldn't it help with everyone's plans to 
simply do that once and for all? That is the question. That would be 
the way to do it. It is predictable.
  But allow me to address the AMT in the context of statutory pay-as-
you-go. The statutory pay-as-you-go was enacted earlier this year as 
part of the majority party's debt limit increase. Some on the other 
side of the aisle have described statutory pay-as-you-go as a fiscally 
responsible way in which to address the 2001 and 2003 tax relief 
extensions.
  Statutory pay-go provides that all the regular tax relief for 
taxpayers under $250,000 is permanent. Statutory pay-go, however, only 
provides for a patch to the AMT just for 2 years: 2010 and 2011. So 
what is going to happen in the next year, come 2012? There are at least 
four possible options.
  Option 1 would be: In 2012 and after, AMT will not be patched. But I 
do not really think that is an option Congress would seriously 
entertain--then or now--to add another 20 some million people paying 
this tax that middle-income taxpayers were never supposed to pay in the 
first place.
  Option 2: In 2012 and after, AMT will be patched and paid for with 
new taxes. That would be consistent with what we call statutory pay as 
you go, but does anyone think that would make sense, pay for tax relief 
with new tax burdens?
  Option 3: In 2012 and after, AMT will be patched and paid for with 
spending cuts. In general, I believe that we need to use spending cuts 
to tackle our deficits and debt. But we know our friends in the 
Democratic leadership are allergic to spending cuts. So, as much as we 
would like to reign in the record spending spree of the last 18 months, 
I don't see my friends on the other side agreeing to cure their allergy 
to spending restraints. They've rejected roughly $270 billion in 
spending restraints since adopting the much ballyhooed statutory pay-go 
regime.
  But then there is option 4: In 2012 and after, AMT will be patched 
and not paid for. That certainly is an option I am very open to and 
quite possibly what Congress will ultimately do and has done in the 
past. Money that wasn't supposed to be collected in the first place 
shouldn't be relied on as revenue and so doesn't need to be offset.
  However, if the AMT is patched and not paid for, then there is a 
hidden $1 trillion revenue loss in the package. This means the deficit 
impact of the so-called fiscally responsible package is understated by 
$1 trillion. The so-called fiscally prudent statutory pay-as-you-go 
legislation likely has a $1 trillion understatement of the deficit 
impact.
  If fiscally responsible is understating an increase to the deficit by 
$1 trillion, I wonder then what fiscal irresponsibility would be. The 
AMT is a serious problem and needs to be addressed in a comprehensive, 
permanent, prompt, fiscally prudent fashion.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, first, I thank the chairman of the Senate 
Finance Committee, Senator Baucus of Montana, who just spoke about the 
bill before us. If you go to any State in America and ask those who own 
small businesses what their challenges are today, I will guarantee you 
that in the top one, two or three items, it is access to credit.
  This bill, this small business jobs bill, will give access to credit 
to thousands of businesses across America so they will have money to 
expand inventory, to expand their business, to expand their employment.
  Many of us believe, as Senator Baucus has said, small businesses are 
key to job growth in America. I cannot explain--I cannot explain--why 
the Republican Party decided to filibuster this to try to stop us from 
even bringing this bill to the floor over and over and over. We should 
have passed this bill months ago. It should have been

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passed on a bipartisan basis. The Small Business Committee is one of 
the most bipartisan committees in the Senate. Yet they have resisted 
it.
  I wish to join Senator Baucus in thanking two Republican colleagues 
who had the courage--and it took political courage--to step up and say: 
Put an end to this filibuster. We have to help small business. Senator 
George Voinovich of Ohio and Senator George LeMieux of Florida both 
stepped up, and because of their courage, we passed this bill yesterday 
with 61 votes--at least moved it forward, I should say, toward passage, 
and that is dramatic, positive progress for us when it comes to dealing 
with this recession.
  I also wish to say there was a statement made yesterday. I listened 
to it in my office. It was the stakeout of the Republican leaders after 
their luncheon, and I listened carefully as Senator McConnell, the 
Senate Republican minority leader, as well as Senator Kyl of Arizona, 
and others in their leadership, came to the microphones right outside 
this Chamber and said there should be no tax cuts in America--pardon 
me--there should be no tax increases in America. They came and said 
there should be no tax increases in America for anyone. They were 
focusing on the Bush economic policies that gave tax cuts to the 
wealthiest Americans, and these Republican leaders said: There should 
be no tax increases in America.

  I wish to say that from my point of view, yesterday the Senate 
Republican leadership, in front of microphones right outside this 
Chamber, filed for bankruptcy for the United States of America. If we 
cannot, in the midst of this recession and with our Nation's deficit, 
ask for a sacrifice from the wealthiest people in America, then I am 
afraid we have lost our way.
  Let me quote someone who knows a little bit about policy in 
Washington. His name is David Stockman. I remember David Stockman when 
I first came to Congress because David Stockman was the budget adviser 
to President Ronald Reagan. He was the man who guided the President in 
his thinking about budgets. So, certainly, he has a Republican resume 
that is pretty strong.
  What did David Stockman say about the current state of the Republican 
Party when it came to these issues of deficits and tax cuts? Here is 
what he said:

       If there were such a thing as Chapter 11 for politicians, 
     the Republican push to extend unaffordable Bush tax cuts 
     would amount to a bankruptcy filing. The nation's public debt 
     . . . will soon reach $18 trillion.

  Stockman said it screams ``out for austerity and sacrifice.'' But, 
instead, the GOP insists ``that the Nation's wealthiest taxpayers be 
spared even a three-percentage-point rate increase.''
  Well, I know what the Republicans are likely to say in response. They 
are likely to argue what they have argued for 10 years; that is, if we 
give a tax break to the wealthiest people in America, then this economy 
is going to prosper. These wealthy people will spend their money and 
invest their money in a way that will create jobs, which leads to one 
very basic question. After 10 years of tax cuts for the wealthiest 
people in America, where are the jobs? After 10 years of tax cuts for 
millionaires and those at the highest levels of income, where are the 
jobs? Eight million Americans are out of work. Another 6 million have 
basically given up looking for work. We have 14 million unemployed in 
the worst recession we have ever faced because of Bush economic 
policies--we have to go back to the Great Depression to see anything 
worse--and it was based on 10 years of tax cuts for wealthy people. 
This did not create jobs; it created the biggest debt in the history of 
the United States.
  Let me digress for 60 seconds or so for history. President William 
Jefferson Clinton left office, turning over the keys to the White House 
to George W. Bush. What was the state of the economy in America? Well, 
we had created some 22 million jobs in the previous 8 years. We had a 
national debt that had been accumulated--a national debt from George 
Washington through President Clinton of $5 trillion--$5 trillion--and 
the President said--President Clinton said to President Bush: Welcome 
to Washington. Good luck in your administration. Let me give you as a 
starting gift from my administration a $120 billion surplus--surplus in 
the Treasury--not a deficit but a surplus.
  Now, fast-forward 8 years. Now President George W. Bush has had his 
chance to use his economic policies, and where are we? Well, the 
national debt has risen from $5 trillion over an 8-year period of time 
to $12 trillion--more than double during that period of time. How does 
one more than double the national debt of America in 8 years? Well, let 
me count the ways.
  First, wage two wars and don't pay for them--wars in Iraq and 
Afghanistan. Secondly, do something no President has ever done in 
American history: give tax cuts in the midst of a war. We have all the 
ordinary expenses of our government, and then we have the added expense 
of war, and President Bush and his Republicans in Congress said: Well, 
the answer to that is to cut people's taxes.
  Guess what. When you cut taxes, you take money out of the Treasury 
that otherwise would come in and add to the national debt. Then add a 
few major programs that President Bush passed and didn't pay for. 
Medicare prescription Part D is a classic example. Though we in health 
care reform were required by President Obama to pay for it, the 
Republicans, facing a change in Medicare, did it without paying for it. 
They added to the national debt.
  So President George W. Bush left office. The $5 trillion debt under 
President Clinton is now $12 trillion, and he said to President Obama: 
I won't be able to hand you that surplus that I was given when I took 
office. Instead, I am handing you a $1.2 trillion debt in the next 
year. Ten times more than the surplus offered him, he offered to 
President Obama. President Obama took his hand off the Bible being 
sworn in as President, and in the first month faced 750,000 Americans 
newly out of work. Welcome to Washington, President Obama; a little 
gift from the previous administration. That is what we have.
  So now come Senate Republicans, and they say: Well, to get out of 
this recession, clearly what we need to do is do everything over again 
that got us into the recession, and the first thing we need to do is 
cut taxes on the wealthiest people in America. As David Stockman says: 
If you can't ask a millionaire to give up a 3-percent tax cut in the 
midst of what we are facing in this Nation--a millionaire--if you can't 
ask for a sacrifice from those who are most well off in our country, 
how can you possibly govern in a responsible way?
  Senator McConnell introduced a bill this week which spells out 
exactly what he thinks about the deficit. His bill--a tax cut bill--
will add $4 trillion to the national debt. That is $4 trillion unpaid 
for. Did he raise taxes to give tax cuts to others? No. Did he cut 
spending to give tax cuts to others? No. He just said $4 trillion of 
debt, here it is, unpaid for. This is the party of fiscal conservatism? 
These are the deficit hawks? These deficit hawks have had their wings 
clipped--clipped by the richest people in America, and that is their 
position.
  If I can transition to another question of debt, it isn't just the 
debt of our national government, as large as it is, that ought to 
concern us. There are other debts across America. Americans have $826 
billion in credit card debt. Naturally, people are struggling to make 
ends meet, and they are going to put more debt on their credit cards. 
They are going to owe more. So $826 billion in credit card debt.
  The debt I want to focus on is even larger. The Federal Reserve 
recently revealed that we passed a milestone in American economic 
history in June of this year. For the first time in history, American 
consumers owe more on their student loans than on their credit cards. 
We have $826 billion in credit card debt and $850 billion in student 
loan debt. The total national student loan debt is increasing at the 
rate of $3,000 per second. The average college student in 2008 
graduated with over $23,000 in student loans. By the time the students 
start college this fall, when they graduate, they could easily owe more 
than $30,000 at graduation.
  Growing student loan debt creates a tremendous burden on recent 
college graduates. Recent graduates have a hard enough time finding a 
job in today's economy, but they need a job that pays enough to cover 
their monthly student loan payments. Young adults delay decisions to 
pursue advanced degrees, buy a home, start a

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family, because of student loan debt. We want young Americans to be an 
active engine for our economy, but too many graduates trapped in debt 
have to worry about the first paycheck and making the first payment on 
their student loans.
  This week, Education Secretary Arne Duncan announced the 2008 student 
loan cohort default rates. Default rates on student loans across 
America were 7 percent--up from 6.7 percent last year. The cohort 
default rate is a snapshot of one group of students, those whose first 
loan repayments came due between October 1, 2007, and September 30, 
2008, and who defaulted on their loans before September 30, 2009. 
During that time, over 200,000 borrowers defaulted on their student 
loans within 2 years of leaving college.
  I was the beneficiary of a student loan when I went to school. It was 
called the National Defense Education Act. I couldn't have gone to 
college and law school without it. My understanding was--at least I 
felt an obligation to pay off that loan so that future generations 
could borrow that money and other students would get a chance to go to 
college. Now we find in this cohort 200,000 students already defaulting 
within 2 years of leaving college. This shows difficult economic times 
and the trouble young people are having finding jobs after school.

  But a closer look at the data reveals another growing problem. 
Default rates at for-profit colleges are already far too high and 
rising. The 2-year default rate at for-profit colleges was 11.6 percent 
in 2009, up from 11 percent the year before. In comparison, public 
colleges had an average default rate of 6 percent; nonprofit colleges, 
4 percent.
  So let's put the numbers in perspective. The default on student loan 
payments from those graduating from nonprofit colleges nationwide, 4 
percent; public colleges, 6 percent; and the default rate at for-profit 
colleges, 11.6 percent in 2009.
  More than one out of every nine students who take out a student loan 
to attend a for-profit college will default on that loan within 2 years 
of leaving school, and the results are even worse after 2 years. Since 
1995, two out of every five--40 percent of students who attended 2-
year, for-profit colleges--defaulted on their student loans. Students 
at for-profit schools represent less than 10 percent of postsecondary 
students in America but one-quarter of student loan borrowers and 43 
percent of all student loan defaults. Defaulting on a student loan is 
not just a bad economic experience; it can be a disaster.
  For-profit recruitment officials, however, take it very lightly when 
they explain to young people what the consequences are of default on a 
student loan. The Government Accountability Office investigated 15 for-
profit colleges and found that all 15 colleges misled students, 
including making false statements about student loans and defaults. One 
recruiter told a potential applicant:

       I owe $85,000 to the University of Florida. Will I pay it 
     back? Probably not . . . I look at life as tomorrow's never 
     promised. Education is an investment. You're going to get 
     paid back tenfold no matter what.

  Another recruiter taped by a government investigator said, when the 
student asked about student loans:

       But it's, workable, you know, it's really workable. And the 
     . . . a lot of people have student loans . . . but the best 
     thing about it, it's not like a car note, where if you don't 
     pay they're gonna come after you.

  That is a lie, and it is that kind of lie that is leading students 
into debt that they cannot repay.
  Defaulting on a Federal student loan can have dire consequences for 
these students for the rest of their lives.
  Here is what happens if students don't pay back their student loans. 
First, the loan will be turned over to a collection agency and they 
will be charged collection costs over and above the loan up to 25 
percent. Their wages can be garnished, their tax refund intercepted, 
and their Social Security benefits withheld. Their defaulted student 
loan will be reported to a credit bureau and remain on their credit 
history for 7 years after they pay it off. That means they may not be 
able to buy a car or a house or take out a credit card. It might even 
mean they don't get a job if an employer looks at their credit history. 
They can't take out any more student loans or receive Pell grants to go 
back to school. They are no longer eligible for HUD and VA loans. They 
can be barred from the Armed Forces and they might be denied some jobs 
in the Federal Government.
  That recruiter was right about one thing, though: a student loan is 
not like a car loan. Car loans can be discharged in bankruptcy but not 
student loans. A borrower can never escape a student loan, whether it 
is federally guaranteed or a simple private loan for school.
  I had a hearing in Chicago about 3 weeks ago on these for-profit 
schools. I never saw such a crowd in my life. Do you want to know why? 
This is a big, profitable business. These schools are dragging in 
billions of dollars in Federal money that is then being loaned to 
students so they can go to school online or at these so-called for-
profit schools. They end up with a worthless degree, if they graduate, 
deep in debt. They default on the loans and the government loses.
  So I went to this hearing with 450 people showing up at this hearing 
on for-profit colleges.
  I didn't expect an amazing turnout. There were picketers on the 
sidewalk outside the Federal court building. Lo and behold, they were 
there for me. I went up to the students and said to them: Hi, I am Dick 
Durbin. I am going up to the hearing. What are you kids doing here? 
They said: We are students at the Illinois Institute of Art, which is a 
school in Schaumburg, a suburb of Chicago. They were dressed similar to 
the people you see on ``Top Chef.'' I don't know the name of the white 
tunic they wear. I said to them: So you are at this for-profit college. 
What are you studying? They said: Culinary arts. One said: I want to be 
a cook and own a restaurant. I said: How much does it cost you in 
tuition to go to this school?
  Well, it is a 2-year course in culinary arts, and the tuition is 
$54,000. Do you know what the starting pay is for people in a 
restaurant, a cook? It is about $10 an hour. So I said: Are you 
concerned about paying back this student loan? The answer was: Yes, but 
someday I may own a restaurant. Well, they may. These students were 
misled into believing they were going to get a job to pay them enough 
to pay back that student loan, but very few will be able to do so. 
There just isn't that much money in that line of work. I wish we could 
suspend all the ``Top Chef'' shows on the cable networks for a couple 
years so kids will stop signing up for $50,000 training courses and 
borrowing student loans they can never pay back to become the ``top 
chef.''
  For some, I wish them the best, but it is going to be impossible--
difficult at least--for them to pay their loan back. For another school 
that was upstairs, it was $41,000 for the culinary arts degree.
  I say to the Presiding Officer, who is also from Illinois, we have 
something called the City College of Chicago. Do you know what the same 
culinary arts course, over a 2-year period of time, which is just as 
good, same course, same training--what it costs in tuition for 2 years? 
It is $12,000. It is $12,000 to go to a city college, a community 
college, for culinary arts. But it is $54,000 to go to the Illinois 
Institute of Art--whatever that is--out in Schaumburg. You may say to 
yourself that these students are dragging themselves deeply into debt 
that they may never get out of, and the default rate at for-profit 
colleges is outrageous. It is double what it is for many other schools 
across America.
  The growing levels of student loan debt and the increase in defaults 
are undermining our economic recovery. Instead of contributing to the 
economy, many graduates and former students are doing all they can to 
dig out of debt.
  While high tuition levels and student debts are a problem across 
higher education, I am particularly troubled by these for-profit 
colleges. Low-income students come to these colleges in droves, lured 
by promises of high-paying careers and flexible courses. Did you see 
that ad on cable TV saying you can get a college degree in your 
pajamas? It shows this beautiful young girl in her pajamas saying: I am 
going to college in my pajamas.
  Here is an alert to young people across America: You are not going to 
earn a college degree in your pajamas. You have to dress up and be part 
of the world and go to school. I understand that you can go online, and 
for many

[[Page S7108]]

people that is a great way to go to school, but it takes more than 
lounging around the house and going online and ending up with a 
worthless degree. One of the persons who testified in our hearing was a 
young girl who is a graduate in law enforcement from the Westwood 
College. Ever heard of it? I haven't. She went to school there in 
Chicago; it took her 5 years. She got a bachelor's degree in law 
enforcement because she wanted to work for the Chicago Police 
Department or the Sheriff's Department. She wanted to be a professional 
there and she would have a bachelor's degree. They laughed at her when 
she showed them that degree. Westwood College? They didn't even accept 
or recognize it. There she sat, after 5 years of education, with a 
worthless degree. Do you know what it cost her? It cost $86,000 in 
student loans. That is how much she owed for that worthless degree. Now 
she cannot get a Federal student loan to go to a community college. She 
cannot get a Pell grant. She is paying $600 a month and living in her 
parents' basement.
  That is the reality of life for these young people who are lured into 
these for-profit colleges. What are the biggest recipients of Federal 
loans in America today when it comes to those colleges? No. 1, 
University of Phoenix, the Apollo Group. How many undergraduate 
students do they have? They have 480,000 undergraduate students--more 
than the combined undergraduate enrollment of the entire Big Ten 
schools. No. 2, Kaplan; No. 3, DeVry; No. 4, Penn State University, 
which offers online courses. They are taking out the lion's share--25 
percent--of all Federal student loans for education help to for-profit 
colleges and have 43 percent of the student loan defaults. It tells the 
story.
  Low-income students don't know any better. They are signing up for 
courses with promises that can't be kept. I went to the Web site of 
Roosevelt University, an established college in Chicago, to look up 
some information, and I was bombarded with ads from these for-profit 
schools. I called the President of the school and said: Chuck, have you 
looked at your own Web site? You can't find Roosevelt on there. There's 
Argosy and Corinthian and all these things thrown at you. Imagine a 
young person who is trying to decide where to go to school.
  It is time to look at risk sharing when it comes to student loans. 
These for-profit colleges ought to be on the hook. If they are going to 
lure young people into debts they can't pay, they ought to have some 
skin in the game and say: If there is going to be a default, we are 
going to pay a price too. Secondly, I am sick and tired of these 
schools that are not accredited and are being given money for Federal 
student loans. If your school is not accredited and if your hours 
cannot transfer to another school, you should not receive Federal 
loans. Students should not have to go through a research investigation 
to decide whether a school is accredited. That is not their job and 
should not be. It ought to be our job as a requirement. We ought to say 
that if you want to qualify for Federal aid for education, you have to 
be an accredited school. If it is a phony school, you don't get Federal 
money. That ought to be the basics.
  Today, school officials are working with incentives, incidentally, 
that push companies to bring in the highest volume of financial aid, 
which means they will sign up anybody who can qualify. They don't care 
if you can read or write. Literally, they will put you on as one of 
their students earning a baccalaureate degree, and they will get the 
money from the Federal Government. Incidentally, they complained 
recently because we capped how much Federal money a for-profit college 
can receive of their revenues at 90 percent--and they complained. 
Colleges that have burdened students with this debt, without giving 
them the skills and credentials, should share a piece of this default 
risk. Maybe then the colleges would focus less on bringing in as many 
students as possible, at the highest tuition as possible, and focus 
more on preparing students to succeed. We need to seriously consider 
this risk sharing, as well as other ideas to bring student loan debt 
defaults under control. I look forward to working with my colleagues.
  Look at your own States. For those of us who have voted reflexively 
for Federal student loan increases and Pell grants, the party is over. 
I will not stand by and watch billions in taxpayers' money funneled 
into for-profit schools that heap debt on the students and fail to give 
them the training and degree they need to succeed in life. It is time 
to bring this to an end.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from South Dakota is recognized.
  Mr. THUNE. Mr. President, the legislation before us is the small 
business bill, which includes a number of provisions. I have stated 
before in comments on the floor that there are a number of concerns I 
have about the $30 billion lending fund that is included in what is now 
the Baucus-Landrieu substitute amendment to the small business bill.
  I simply say, in reaction to the comments of the Senator from 
Illinois, because a suggestion was made that somehow Republicans were 
trying to block this bill, I think everybody should know this is being 
debated under a procedure that is very unique. The Democratic leader 
filled the tree, which blocks Republicans from offering amendments. So 
it should come as no surprise that the minority party would react 
negatively to not being able to have any of their amendments considered 
or voted on in a debate about legislation such as a small business 
bill, which we happen to think is very important.
  The suggestion was made by the Senator from Illinois that, again, 
somehow Republicans are being resistant to or blocking this, I think, 
misses the broader point, which is that there are a number of us who 
have amendments we would like to offer to try to improve the bill and 
make it better. But the majority party has filled the tree, and that 
means, in layman's terms, that they are not going to allow any 
amendments. This is being considered under a procedure that doesn't 
allow us to offer amendments, and I have a couple that are filed at the 
desk. If I were permitted to do so, I would offer them. I think they 
address what are some of the fundamental shortcomings in this 
underlying legislation.
  I don't think we ought to be using taxpayer dollars to establish this 
new fund--this $30 billion lending fund or what I like to refer to as 
``TARP III''--and there is a section 103 of the substitute amendment 
that creates this small business lending fund. Part of that section 
allows a bank that received TARP funds to refinance into the newly 
created small business lending fund. Obviously, there are advantages to 
this refinancing because this new lending fund was created specifically 
to avoid the negative association with TARP.
  While I have serious concerns with allowing these banks to refinance 
into this new program, at least the legislation prevents those banks 
that are behind in dividend payments from refinancing into this new 
fund. I would give the underlying legislation credit in that regard. 
What the legislation fails to do, however, is provide a similar 
prohibition on those banks that are behind in their TARP payments from 
applying to receive even more capital from the Treasury to this new 
fund. They can't refinance, but they can get more funds from the 
Treasury, even though they are delinquent in their payments already to 
the TARP fund.
  According to the most recent report, on July 21, 2010, there were 105 
TARP recipients who took funds through the Capital Purchase Program 
that missed their scheduled dividend payment. That is $157.7 million in 
outstanding obligations to the Treasury through TARP.
  Keep in mind, there were over 70 banks under $10 billion in assets 
that have received TARP funds through the Capital Purchase Program. Of 
the six largest banks over $10 billion, all but one have paid back 
their obligation. Of the 701 banks under $10 billion in assets, there 
are 625 banks with outstanding investments.
  If you are a bank that took money from TARP and are behind in what 
you owe the taxpayers, you should not be allowed to take more money 
from the Treasury. This is a major loophole in this legislation.
  My amendment, No. 4614, would make sure those banks that are 
nonpaying TARP recipients would not have access to more capital through 
this fund.
  A bank would not extend a second loan to a customer who is behind in

[[Page S7109]]

their first loan. Why wouldn't we, as the American taxpayers, provide 
the same restrictions when it comes to a loan through the Treasury? It 
seems to me that is a fairly straightforward understanding that we 
ought to have. If you are delinquent on your first loan, you should not 
be able to get a second one. As I said before, that is a shortcoming in 
this legislation.
  My amendment would correct that. I think this is an important 
safeguard that ought to be included. Having said that, that is not 
enough to make this legislation stronger and better.
  At the end of the day, I still believe the small business lending 
fund will be a reincarnation of TARP. This is not something I can 
support.
  While I am opposed to the inclusion of this fund in this small 
business bill, I am particularly concerned that we are not adequately 
measuring the cost of this provision. When I say that, I point out that 
the CBO, Congressional Budget Office, scored the small business lending 
fund, and when they did that, the analysts produced two estimates, 
which is a rare departure from their standard procedure.
  One cost estimate was based on a cash-basis method of cost 
accounting. The other was based on fair market value. The former 
estimated that the small business lending fund would save taxpayers 
$1.1 billion over 10 years. That is using the cash-basis accounting 
method that I mentioned earlier. The fair market value estimate 
suggested this fund would result in a $6.2 billion net loss in taxpayer 
money over that same period.
  You have a $7.3 billion difference on a $30 billion fund, and I think 
that is due to the inadequacies in the cash-basis method of accounting, 
which does not include adjustments for market risk. That is why I think 
the CBO submitted two different cost estimates, which, as I said, is a 
sort of departure from their common practice.
  To quote the Congressional Budget Office--and this is important:

     . . . cost estimates made under the Federal Credit Reform Act 
     [which is what we use in terms of making estimates of what 
     things will cost] do not provide a comprehensive measure of 
     the cost to taxpayers primarily because the Federal Credit 
     Reform Act methodology does not include costs that stem from 
     certain risks in lending--risks that private investors would 
     require compensation to bear.

  CBO goes on to say:

       In particular . . . it does not recognize a cost for the 
     risk that losses from defaults will be higher during periods 
     of market stress when resources are scarce and most valuable.

  That is from the Congressional Budget Office pointing out the flaws 
in the traditional way in which the cost of a program such as this 
would be accounted for.
  Phrased differently, with this fund taxpayers are assuming an 
uncompensated level of risk as lenders of last resort, and this risk is 
not accounted for in the cash-basis cost estimate.
  While I believe the movement of the Federal Government to ownership 
of private companies in and of itself is a disturbing trend and is one 
that needs to be stopped and rolled back rather than promoted in 
advance, it is critically important that these programs include a 
proper accounting of their costs--something that is lacking in this 
small business bill.
  What my amendment No. 4610 would do is require the Congressional 
Budget Office to score Federal Government purchases of equity purchases 
or capital investments on a fair-value basis that considers market 
risk. In other words, it would use the convention that was used in the 
original TARP bill that was passed back in 2008. This change would be 
consistent with what private companies are doing in terms of moving 
toward a fair-value method of accounting because of its superiority to 
a cash-basis method of accounting.
  This is not the first time this more accurate method of scoring would 
have been used by the Congressional Budget Office. As I said, when the 
original TARP program first moved through Congress, it included an 
important provision that the cost of the bill be calculated using a 
discount rate adjusted for market risk. Yet, despite all the 
similarities between this bill we are debating today and TARP, this 
bill does not have any such provision. Because of this, many Senators 
and Members of Congress believe this bill will save money for the 
taxpayers, when, in fact, the opposite is true. If you use the fair-
value method of accounting, as I said earlier, according to the 
Congressional Budget Office, this provision--this $30 billion mini-TARP 
program--has a net cost of $6.2 billion as opposed to a savings of $1.1 
billion if you use the cash method of accounting. The most 
comprehensive estimate we have from the CBO is that the $6.2 billion 
will be more reflective of the actual cost, but because the cash-basis 
method of accounting is used, this cost is not going to be added to the 
pay-go scorecard.
  One of the most important duties we have as Senators and Members of 
Congress is to be vigilant in watching the taxpayers' money and how it 
gets spent. This duty has taken on increased importance as the Federal 
Government and Federal spending has exploded and our national debt has 
now surpassed $13 trillion.
  A quick point on that point. Before I got up to speak, the Senator 
from Illinois was talking about the Federal debt. Of course, as is 
typically the case around here, when one of my Democratic colleagues 
gets up, they think that all that happened is all Bush's fault. 
Anything bad in America today, it is Bush's fault. What he did not 
mention, of course, is the fact that on January 2007, the Democrats 
took control of both the Senate and the House of Representatives. Since 
that time, they have been writing the budgets. We all know that under 
the Constitution, the President cannot appropriate a single dime. It is 
Congress that appropriates money. Since January of 2007, it has been 
the Democrats who have been writing the budgets around here.
  Even if you give them the benefit of the doubt and say when the 
President came to office in January 2009 and you measure it from that 
point forward to where we are today, we have added almost $3 trillion 
to the Federal debt--almost $3 trillion since January of 2009 when this 
President took office. If you were breaking that down into terms people 
can understand, if you are a child under the age of 18 in America 
today, when the President took office in January of 2009, the debt for 
a young person under the age of 18 was $85,000. Today, it is $114,000. 
Since this President has taken office, the share of the Federal debt 
for an average American under the age of 18 has increased by $29,000. 
By the year 2016, that number will be $196,000. Mr. President, do you 
want to know why? Because the debt is projected to explode over this 
next decade. In fact, it took 232 years and 43 Presidents to rack up 
the first $5.8 trillion in debt. In the next 5 years, we are going to 
double that and triple it under the President's budget.
  I will be the first to admit that Republicans are not perfect, and 
when we were in charge of the Congress, there were certainly things we 
should have done better in terms of getting our fiscal house in order 
in Washington. But to say for a moment, as the Senator from Illinois 
tried to imply when he was on the floor, that somehow this was a 
function or a problem that was created by the Republicans or somehow by 
Bush is just absolutely inconsistent with the facts. As I said, 
Democrats took control of this Chamber in January 2007. The President 
became President of the United States in January 2009. Since January 
2009, the Federal debt has grown $3 trillion.
  There is a whole lot of spending going on around here that is being 
routinely ignored by Members on the other side when they get up to 
speak, such as a $1 trillion stimulus bill that was designed to keep 
unemployment under 8 percent. We all know unemployment today is well 
north of 9 percent. In fact, with no end in sight, the amount of 
spending and borrowing that continues today, in my view, puts in 
jeopardy the opportunity for this economy to recover and begin to 
create jobs, which is what all of us want to see happen.
  But when you spend $1 trillion and borrow it and you hand the bill to 
your children and grandchildren, when you create a massive new 
expansion of health care which, when fully implemented, will cost the 
taxpayers $3.2 trillion and at every turn continue to spend more and 
more, at some point you have to say, when you are in a hole, you ought 
to quit digging. That is precisely where we are. We are in a deep, deep 
hole.
  The first rule should be: do no harm. When it comes to spending and 
the

[[Page S7110]]

debt, the administration and the current leadership of this Congress 
have taken that to a whole new level. That is a comment about this debt 
and one of the reasons this legislation is so important and why it is 
important that we get it right in terms of accounting for the true 
costs of the underlying bill.
  It is my belief that the fair-value method of accounting provides a 
much more accurate, much more transparent, and much more comprehensive 
way of accounting for the costs and benefits of these programs. To 
ignore the risks these programs pose to the hard-earned money of 
American taxpayers is simply to stick our heads in the sand and hope. 
This is not a responsible strategy for governing, and I hope my 
colleagues will work with me to update this outdated method of scoring 
with regard to this $30 billion mini-TARP that is included in the small 
business bill.
  While I have many concerns with this bill, some of which I just 
outlined, we are debating what I think was a well-intended bill with a 
lot of good provisions and many I support. There are a number of 
provisions in this bill which, left to themselves, I think will be 
good. I am a member of the Small Business Committee. We made 
adjustments in the small business lending program, increasing loan 
sizes and guarantees for SBA 7(a) and 504 loans and temporarily 
reducing the fees for some of those loans. It updates SBA's very 
outdated size standards and provides much needed tax relief through 
bonus depreciation, section 179 expensing, and allowing business 
credits against the alternative minimum tax.
  There are provisions in this bill that I think do get at providing 
assistance to small businesses, but I cannot support a new program that 
puts more taxpayer dollars at risk. The American taxpayer is expected 
today--this is with the most recent estimate--to lose $66 billion 
thanks to the original Troubled Asset Relief Program, the TARP, and 
this current legislation reincarnates that TARP through a $30 billion 
Treasury fund that will be used to inject capital into banks that are 
then directed to lend to small businesses.
  Treasury and the administration have tried various programs through 
TARP to increase small business lending without any success, mostly 
because of a lack of interest on the part of the banks. Again, this 
lack of interest is likely attributed to the fact that many banks 
recognize the negative stigma that accompanies accepting TARP money, 
and that is why I think the Democrats and the administration are trying 
to create a new fund and call it something other than TARP. The actual 
language in this amendment provides assurance to banks that by 
accepting this money, they would not be TARP recipients. That is 
actually specified in here because they want to get rid of the original 
stigma that comes with the original TARP. In their talking points, even 
the White House admits the ``program would be separate and distinct 
from TARP to encourage participation.'' Essentially, what they are 
saying is, We are not going to call it TARP. We are going to call it 
something different. If we call it TARP, banks will not participate, 
and we want to encourage banks to participate.
  The administration goes on to say that ``the administration's 
proposal would encourage broader participation by banks, as they would 
not face TARP restrictions.'' These ``restrictions'' the White House is 
referring to include limits on executive compensation and warrant 
requirements--many of the restrictions included in the original TARP 
program.
  I wish to point out for the benefit of my colleagues that Elizabeth 
Warren, who serves as the chairwoman of the Congressional Oversight 
Panel, has criticized the manner in which TARP funds have been provided 
to smaller banks--15 percent of which cannot even make payments to the 
Treasury regarding TARP funding they received. The new fund relies on 
the same problematic lending structure that has been deemed a failure 
under TARP.
  I wish to quote what this Congressional Oversight Panel said about 
the Small Business Lending Fund.

       The small business lending fund prospects are far from 
     certain.
       The small business lending fund also raises questions about 
     whether, in light of the Capital Purchase Program's--

  That was the program under the main TARP--

     poor performance in improving credit access, any capital 
     infusion program can successfully jump-start small business 
     lending.

  It goes on to say:

       Banks are subject to a stigma for accepting government 
     money no matter the name of the program.
       The small business lending fund looks uncomfortably similar 
     to the TARP.
       Like the Capital Purchase Program--

  In the original TARP--I continue to quote from the Congressional 
Oversight Panel's report--

     the small business lending fund injects capital into banks, 
     assuming that an improved capital position will increase 
     lending--despite the lack of evidence that the Capital 
     Purchase Program--

  Again, the original TARP--

     did so.

  This lending fund does not affect the capital issues affecting banks 
``nor any of the issues affecting small business credit demand.'' It 
goes on to say that such a fund ``runs the risk of creating moral 
hazard by encouraging banks to make loans to borrowers who are not 
creditworthy.''
  That is all from the Congressional Oversight Panel's report about the 
very Small Business Lending Fund--the concept we are debating as part 
of the small business bill.
  I am ready to close, but the point I am trying to underscore with 
this amendment is that the same flawed structure for repayment that is 
not working for small banks under the current TARP is included in the 
legislation before the Senate. Knowing this, we are purposefully 
removing some of the safeguards created through the original TARP, 
allowing TARP recipients who are behind in their payments--people who 
are delinquent in their payments--to participate in the new program and 
get even more funding under this new mini-TARP program.
  I believe there are more responsible methods to support our small 
businesses than through a $30 billion Treasury line of credit for 
banks. Let's focus on the programs we know work. As I said, some of 
them are included in this bill, such as the SBA 7(a) and 504 loan 
programs. Let's not create a new Treasury fund and hope somehow in the 
end it is going to pay off. History has proven otherwise.
  We all know small businesses are the economic growth engine in our 
economy. They are what keeps this economy growing. Two-thirds or three-
quarters of the jobs in our economy are created by small businesses. 
Despite spending hundreds of billions of dollars on a stimulus bill, 
the Nation's unemployment rate is still at 9.5 percent. How many more 
billions are we going to have to spend before we realize that might not 
be the correct solution to this problem?
  Let's pass a good bill that helps small businesses grow and prosper, 
not another version of a failed TARP program. I think we, as Members, 
ought to be able, in the context of this legislation, to offer 
amendments. These two amendments I have spoken to this morning are 
examples of amendments that would make this bill stronger and that we 
are being blocked from offering because of the procedure under which 
the leader has determined this bill ought to be considered.
  That is unfortunate. It goes against the very nature of the Senate, 
which is a place that tends to be free-flowing and open to debate and 
where all Members have an opportunity to speak to legislation and to 
get their amendments voted on. That has not been the case here. And I 
regret that, but we are where we are. We are going to have a vote 
later, and I hope my colleagues will vote to defeat this bill.

  I thank the Presiding Officer.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. FRANKEN. Mr. President, I want to say one thing to my esteemed 
colleague from South Dakota. I went all around the State of Minnesota 
during this recess. I had 118 meetings. Many of them were economic 
development meetings all around the State. Over and over and over I 
heard from small businesses that they can't get access to capital, and 
I heard from commercial bankers that they can't lend capital because 
their regulators are saying: Well, we are going to have to write that 
all off.

[[Page S7111]]

  Small businesses want this. This is not toxic asset relief, as TARP 
was. This is small business lending. Small businesses create 70 percent 
of new jobs, and this is something that Minnesota's small businesses 
want and the Small Business Administration in Minnesota wants.
  Mr. President, I ask unanimous consent to speak for 15 minutes as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                   FDA Food Safety Modernization Act

  Mr. FRANKEN. I rise today, Mr. President, to speak in support of food 
safety legislation. Food safety is a topic that affects every single 
American. Food safety is something we all care about because we all 
eat. American consumers spend more than $1 trillion on food each year, 
and each year there are an estimated 76 million cases of foodborne 
illness, including at least 5,000 deaths a year in our country. That is 
why it is time that this important piece of bipartisan legislation be 
brought to the floor. We have waited far too long to do our job and to 
complete our work on the issue. We have waited too long to pass a bill 
that will save lives.
  In November, we unanimously voted S. 510, the bipartisan FDA Food 
Safety Modernization Act, out of the HELP Committee--unanimously. At 
the time, we were talking about the recent outbreaks of E. coli in 
spinach and salmonella in peppers and peanut butter. But months have 
passed and we have still not brought the bill to the floor. In the 
months since we have passed the bill out of committee, we have already 
had more outbreaks of salmonella--from black and red peppers in 44 
States and frozen tuna in 6 States. Seven states have been affected by 
raw milk outbreaks, including my home State of Minnesota. Eighteen 
states have been affected by salmonella in frozen dinners. And this 
summer, we have seen one of the worst outbreaks in recent history. From 
May to September of this year, 1,519 illnesses were reported that are 
likely to be associated with contaminated eggs. That includes at least 
14 Minnesotans. And we may still see more cases before this awful 
situation has been resolved.
  With all these cases of illnesses and the recalls taking place, I 
think we all understand the serious threat contamination poses to our 
food supply. We have heard repeatedly, and correctly, that our current 
food safety system is broken. The system relies too heavily on reacting 
to outbreaks after they have occurred instead of preventing their 
occurrence in the first place. This is why we need to pass Federal 
legislation now. We must stop more Americans from getting sick and 
bring our country's food safety system into the 21st century.
  S. 510 will provide FDA with the resources and authorities it needs 
to properly oversee that safe food comes to our table. There are a lot 
of great provisions in this bill, and I want to highlight a few that 
are most important to us in Minnesota.
  First, the bill would give FDA the authority to require certification 
of imported food and verify that the food coming from foreign suppliers 
is safe. Our food safety system was set up in the early 1900s, and a 
lot has changed since then. The key difference is that we have a lot 
more imported food than ever before. The truth is that even if we do 
everything right with our food products here in the United States, 
about 15 percent of our food comes from other countries. S. 510 gives 
the FDA new authority so we can avoid situations such as the 2007 
melamine contamination in the infant formula and pet food coming from 
China.
  Secondly, S. 510 would get the FDA out and inspecting food producers 
more often and require them to keep better records. Right now, FDA 
visits a given food facility every 10 years, on average. A lot can 
change in 10 years. Ten years is not frequent enough to assure safety.
  The issue is primarily one of lack of resources. As the number of 
food producers has increased, FDA's capacity has remained stagnant. 
This bill would provide FDA with the resources to inspect more 
frequently and target the facilities with the greatest risk for 
outbreaks. FDA would also have the authority to require better 
recordkeeping and access records if there is a reasonable probability 
that a problem is occurring.
  Lastly, S. 510 would also make sure the FDA is equipped to trace and 
recall food quickly when it needs to. Right now, there are a lot of 
processed foods with a lot of different ingredients and there are no 
requirements for anyone to track where they come from, and when there 
is a problem, FDA can't force a company to recall its product, even 
when there is overwhelming evidence to do so.
  Let me give an example of why these traceback and recall provisions 
are particularly important. In late 2008, the Minnesota Department of 
Health noticed an elevated number of salmonella cases. My State has one 
of the best surveillance systems in the country, and after 
comprehensive investigations, the Minnesota scientists identified the 
King Nut brand of peanut butter as the culprit, produced by the Peanut 
Corporation of America, or PCA.
  Minnesota folks worked with the FDA and the CDC, and in January 
companies began to voluntarily recall products with potentially 
contaminated products. But it was difficult for the company to know 
exactly where the contaminated peanut butter had ended up. So the 
recall was expanded three different times to try to get hold of the 
outbreak.
  Most companies complied. But on March 23, 2009, the FDA asked the 
Westco Fruit and Nut Company to voluntarily recall all of its products 
containing peanuts from PCA because of the contamination threat. Westco 
refused. This company willingly put American lives in danger. And since 
the FDA doesn't have mandatory recall authority--now--it wasn't until 
April 27, 2009--36 days later--at the request of the FDA, that U.S. 
Marshals seized about $35,000 worth of PCA peanuts and products 
containing PCA peanuts at Westco because of possible salmonella 
contamination. So even after the tainted products were identified, it 
took almost 5 weeks to get the salmonella-laced peanut products off the 
shelves and away from where they could harm people.
  This contamination and the subsequent investigation led to weeks of 
multiple company recalls of more than 2,000 different products from the 
shelves. But if the FDA had been able to immediately trace foods back 
to their producers and demand they be recalled, it could have withdrawn 
the contaminated foods much more quickly, saved lives, and prevented 
illness. Because so much tainted peanut butter got into our markets, 
the whole debacle was estimated to have cost the industry nearly $1 
billion and led to the loss of innumerable jobs.
  But the greatest cost was to American families. Because of the 
tainted products that PCA sent to market, over 700 Americans became 
ill, half of them children. Nine people died, three of them from my 
home State of Minnesota.

  One of those who died was Shirley Almer, a Minnesota mother of three 
sons and two daughters. She had survived brain cancer and was in good 
health at the time of the outbreak. There was Clifford Tousignant of 
Duluth, a Korean war veteran, father of six, grandfather of 15, and 
great-grandfather of 14, who died. And Doris Flatgard of Bergen, MN, 
who had been married to her husband John for 65 years before she died 
from eating peanut butter on her morning toast.
  I wanted to recount this outbreak because there are lives that were 
lost because we failed to protect the American people.
  The bill we referred out of the HELP Committee takes some steps to 
improve the traceback infrastructure, but I think we can do more. I 
decided to work on this issue when Shirley Almer's three sons came and 
met with me and told me about how their lives had changed since they 
lost their mother; how their family would never be the same. They told 
me about the contaminated peanut butter, about how it had been included 
in countless products across the country, but we couldn't track the 
problem down fast enough since we don't require companies to keep track 
of where ingredients come from.
  That is why I have been working closely with my colleague Senator 
Brown of Ohio to strengthen the traceability provisions in S. 510. I 
think we have made some good progress and I am hopeful the bill will be 
even better because of our efforts.

[[Page S7112]]

  S. 510 includes a lot of other great provisions too and there is not 
enough time to talk about them all. But I do know that many elements of 
the bill were inspired by the great food safety work we do in 
Minnesota. We are a national leader, especially in early detection of 
foodborne disease. I am pleased that my colleague from Minnesota, 
Senator Klobuchar, has a great provision we hope will be in the final 
bill to enhance our Nation's foodborne illness surveillance.
  Mandatory recall authority, traceability, more frequent inspections, 
better recordkeeping, and safer imported foods--these are just a few of 
the reasons why we need to get the food safety bill to the President's 
desk, and we need to get it there now. Not later, but now.
  This is legislation that every member on the HELP Committee, on both 
sides of the aisle, voted to favorably report. Every Member of this 
body recognizes the importance of food safety to the American people. 
The FDA Food Safety Modernization Act will finally give the FDA the 
tools it needs to do its job and keep Americans safe. So I urge the 
majority leader to bring this critical legislation up before we head 
home in October. We can't afford to wait any longer.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. LeMIEUX. Mr. President, I come to the floor today to talk about 
job creation and what this Congress needs to do in order to make sure 
that our businesses have the best chance of succeeding in what is a 
very difficult business climate.
  I have the privilege of representing the great State of Florida--
18\1/2\ million people. The economic difficulties we are having now are 
as difficult as anybody can remember. We are No. 1 in being behind on 
our mortgage payments; No. 1 on mortgage foreclosures for the first 
half of the year, and unemployment is at record highs--near 12 percent. 
No one can remember a recession as difficult as the one we are 
experiencing.
  I think it is our job, as Members of Congress, to do what we can 
where we can be helpful to try to get people back to work. In Florida, 
our small businesses are struggling. When I drive down the State roads 
of Florida, down Federal Highway in southeast Florida, or I am in 
Tallahassee on Monroe or I am over in Pensacola or in Jacksonville or 
wherever I am in the State--and I spent a lot of time in the State 
during our work period in August visiting with business owners--I see 
more and more doors that are shut, small businesses that have been 
closed.
  I talked to a woman today who owns a small strip shopping center. She 
said in the past 3 years they have gone from being 95 percent occupied 
to 55 percent occupied. Businesses are struggling. That is why I was 
proud to work with Senator Landrieu and others to fashion a small 
business bill, a bill I believe is going to help our small businesses 
get back to work.
  The small business bill does three things, principally, that I think 
are going to help small businesses. First, it is going to cut taxes on 
small businesses by $12 billion--a tax cut for small businesses. Among 
those tax cuts is a 100 percent exclusion of capital gains tax for 
those who invest in a small business. There is a provision to allow 
firms to immediately write off 50 percent of the cost of new equipment, 
and there is a doubling of the tax deduction for expenses for start-up 
businesses to $100,000. These will allow businesses to pay less taxes, 
to buy new equipment, hopefully hire new people, and get Floridians and 
Americans back to work.
  The bill also has a lending facility, a $30 billion lending facility 
that is going to bring money to small community banks to get loans to 
them--not Goldman Sachs, not Citibank, not Wall Street but the banker 
down the street, the banker who knows the small dry cleaners, the local 
paint shop, those small businesses that employ our friends and 
neighbors. If these banks do not loan the money, they will have to pay 
a higher interest rate back. They cannot just keep the money on their 
books to make their balance sheets look better. If they want to 
participate in this program--and it is voluntary, by the way--if they 
want to participate and get these dollars out to small businesses, they 
have to lend them out.
  All over Florida small businesses tell me they cannot get a loan, 
that their credit line has been frozen. If they are some of the few 
businesses that have a chance to expand, they cannot do so because they 
cannot get the needed capital.
  I visited one of those businesses this past week in Florida, a 
business by the name of UniQueso. They are a family business, two 
brothers, and they make dairy products, principally focused on the 
growing Hispanic community in Florida. They have had great success 
because this is a market that wants more of these wonderful products. 
They are moving their business from Cocoa to Orlando, FL. They are 
building a new plant. I had a chance to tour it. They are going to open 
in about a month, and they are growing their business. They are 
doubling the number of their employees. They are going to produce 10 
times more product than they did at their previous location--just the 
kind of story we want to hear.
  But even though they have a good business plan, even though they are 
making money, 10 banks denied them loans. What did they do? This 
family-owned business had to sell off a majority share in their company 
to get an investor so they could expand. At least they were able to 
find a private investor, but they should not have had to give up 
control of their family business just to succeed in the marketplace 
when no bank would give them a loan.
  I believe this small business bill, while it will not cure every 
problem, is a good start. It is not going to cure all the troubles we 
have in this economy. That is why I am proud to support it. Frankly, 
there are not a lot of folks on my side of the aisle who support this 
bill. But I have to look at this bill for what it means for Florida and 
the country. It does not increase the debt, it does not increase the 
deficit, it does not increase taxes--it cuts taxes--and it is going to 
help small businesses with tax cuts and the credit they need to build 
their small business and, hopefully, put people back to work. That 
sounds good for Florida. It sounds good for America.
  But we need to do more. Where I do differ with my colleagues on the 
other side of the aisle is that we have taken steps in this Congress in 
the past year and a half that have been chilling to business and job 
creation. When I talk to business folks in Florida, they tell me this 
new health care law is keeping them from hiring new employees. They do 
not understand it, it is complicated, it is thousands of pages. They 
understand if maybe they hire that next employee, they will come within 
the confines of the bill and will be fined if they do not offer the 
type of health care the Federal Government has mandated.
  The financial regulation bill we passed in this Congress has caused 
confusion and anxiety among businesses in Florida, some of which have 
told me they are going to move a portion of their business to the 
Bahamas so they will not fall under these regulations. That is jobs 
that will leave Florida.
  Small business in Florida is frozen in its tracks because of an 
uncertain regulatory burden from Washington and now the specter of new 
taxes. At the end of this year, the tax cuts that were put in place 
nearly a decade ago are set to expire. If those tax cuts expire, we are 
going to raise taxes during a recession, and we are going to raise 
taxes on small businesses. As many as three-quarters of a million small 
businesses in America will be impacted by higher taxes at the end of 
the year if Congress does not act.
  Look, I walked across the aisle to work with my colleagues from the 
other side on something that made sense for job creation. I know now 
that there are four or five or six of my colleagues on the other side 
who are saying let's not raise taxes on anybody during recession. We 
need to work together. We need to work together to be problem solvers. 
It does not make any sense to raise taxes during a recession. It 
doesn't make any sense to raise capital gains taxes, which will stop 
investment. It doesn't make any sense to raise the taxes on dividends, 
which will hurt seniors, which will hurt people who invest in 
companies, which will chill business. It doesn't make any sense to 
raise taxes on small businesspeople who, we know, create two out of 
every three jobs in this country--more than that in my home State.

[[Page S7113]]

  I hope we will work together to extend the current policy for 
everyone and not raise taxes in the middle of a recession.
  Let me say there is one more thing this Congress can do right now to 
help job creation. We have three pending trade agreements--with Panama, 
with Colombia, and with South Korea. The President of the United States 
said in his last State of the Union Address that he wants to pass these 
free-trade agreements. He wants to promote trade and exports with 
foreign countries.
  Why haven't we taken them up? Why haven't we passed them? Colombia 
and Panama are huge trading partners of my home State of Florida. If we 
pass these free-trade agreements, we will create jobs in Florida almost 
immediately. Let's get out of the business of pulling huge levers on 
this economy, imposing new restrictions, and burdens and taxes on 
businesses. Let's promote trade. Where we act, let's act judiciously, 
with the surgeon's knife and not the bureaucrat's bludgeon.
  Business is hurting in this country, small business especially, 
hurting very much in my home State of Florida. I think there is a way 
for us to work together to do these things which will put Americans 
back to work.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KAUFMAN. 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. KAUFMAN. Mr. President, I ask unanimous consent that I be allowed 
to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Federal Employees

  Mr. KAUFMAN. Mr. President, I rise today to express my concerns about 
the continued disparagement of our Federal workforce. I also want to 
speak about the opportunity we have for long-term investment in making 
our government work better for all Americans.
  Earlier this month, people across the country took time to mark Labor 
Day. It is a moment to celebrate one of the chief American values that 
has helped make this country so great, that is, hard work. Employees in 
every industry tirelessly each day not only realize their own share of 
the American dream, but also because it is part of our culture to 
strive for success in every task we undertake.
  I have seen the same quality every day throughout my career, 
exemplified in all the outstanding government employees with whom I 
have met and worked. That is why I have been coming to the floor each 
week to honor a great Federal employee. All of those I have so honored 
work extremely hard and serve with dedication.
  In June, I spoke from this desk about how efforts to scapegoat 
government workers with threats to freeze their pay or cut hiring are 
counterproductive and how proponents of such measures use flawed 
analysis of compensation data to make their argument.
  I was dismayed and upset to see once again an article in USA Today 
making the claim that Federal employees earn more than double that of 
private sector employees. USA Today based their article on the newly 
released data from the Bureau of Economic Analysis, and, quite frankly, 
they did a very poor job of it.
  Unfortunately, their findings have been circulated to other papers 
and on television and are being used as fodder for political attacks 
directly against those who work in government jobs. The article's lead 
statistic is based on 2009 BEA data that shows the average amount spent 
by the Federal Government--not the average salary, the average amount 
spent by the Federal Government--on salary and benefits for each 
worker, is $123,049. For the average private sector employee in this 
country, they figure $61,051. This statistic would truly be shocking if 
it were true.
  The newspaper also points to a trend, a growing pay gap, between 
Federal employees and those in private companies. That trend is also 
based on a flawed reading of statistical data.
  In my remarks of June 17, I went through their early analysis of 
Federal compensation data from 2008 and explained the flaws in their 
methodology and how they drew spurious conclusions. This latest study 
simply repeats the mistakes they made last time.
  Let me list several common analytical errors. No. 1, the analysis did 
not consider differences in experience and education. The data does not 
measure similar populations sometimes, even USA Today concedes. The 
article says that with regard to the gap in pay between Federal and 
private sectors: ``The analysis did not consider differences in 
experience and education.''
  The analysis does not take into account the statistically significant 
fact that the private sector workforce is 52 times larger than the 
Federal workforce. There are 101.3 million private sector workers. 
Simply put, there are far more people proportionally in the private 
sector earning low wages than the Federal sector, only 1.9 Federal 
civilian employees, because the government has outsourced so many of 
its low-paying jobs.
  This is like matching apples and oranges. Our Federal workforce has 
also become far better educated in the last 20 years, which translates 
into greater earning power. The most egregious mistake made by USA 
Today in its last analysis, which I spoke about in June, was trying to 
compare data from two different Bureau of Labor Statistics studies. The 
numbers the paper used for private sector salaries comes from the BLS's 
National Compensation Survey, while the numbers used for its Federal 
employee salaries are from another data set, the Occupational 
Employment Statistics Program.
  Even the BLS has warned against comparing data from these sets 
against one another. On its Web site it says:

       Occupational wages in different ownership groups (the 
     private sector, and state, local, and federal governments) 
     are influenced by many factors that the [Occupational 
     Employment Statistics] measure cannot take into account. It 
     goes to list examples, such as ``level of work performed,'' 
     ``age and experience,'' and ``cost of living'' adjustments 
     for large urban areas.

  For many of the occupations being compared, the total number of 
Federal employees in a given category is miniscule compared to the 
total employed in the private sector; therefore, leaving the 
statistical analysis in the lurch.
  For others, the job categories in the private and public sectors are 
simply not comparable. One great example is broadcast technicians. 
According to USA Today, broadcast technicians in the Federal Government 
earn an average of $132,000 a year, while those in the private sector 
earn only a little more than $88,000.
  However, what USA Today does not tell its readers is that according 
to the very same data set they use, there are only 110 broadcast 
technicians working in the entire Federal Government. In the entire 
national workforce, according to the same data, there are 33,550 
broadcast technicians. This means the broadcast technicians in the 
Federal Government represent three-tenths of 1 percent, three-tenths of 
1 percent of the total.
  One can hardly compare them, especially since, according to the OPM, 
99 percent of broadcast technicians in the Federal Government work for 
the Broadcasting Board of Governors here in Washington and are 
broadcasting throughout the world.
  I know very well from personal experience that BBG technicians 
require much more experience and education than the average private 
sector broadcast technician working at radio and television stations 
across the country, many of which are very small.
  The same is true for clergy. Most of the 810 clergy in our Federal 
workforce are employed by the Veterans Health Administration. I think 
it is reasonable to take a guess at what clergy might be doing at the 
VA--working as chaplains and counseling our wounded warriors. There are 
42,040 clergy employed in this country, many of them with small 
congregations that cannot afford to pay much salary. It is impossible 
to draw conclusions by comparing 800 Federal clergy to over 42,000 
clergy based on compensation alone.
  Let's take a look at another one. Highway maintenance workers are 
said to make an average of $11,344 more each year in the Federal 
Government than in the private sector. However, if we look at the data, 
we find there are only 50 highway maintenance workers

[[Page S7114]]

in the entire Federal workforce. When USA Today compares this to the 
total number in the private sector, how many highway maintenance 
workers are they looking at for an average? The answer is 5,190. That 
is 104 times more.
  But this brings us to the other problem. Some of these jobs, like 
highway maintenance worker, do not have truly comparable positions in 
the Federal Government. When searching through the Office of Personnel 
Management's human resources data, one cannot even find such a 
category. The 50 who work in the Federal Government, who were listed in 
the BLS survey under this category, are likely performing very 
different, and quite possibly more highly specialized work, than most 
of the highway maintenance workers in the private sector.
  The Federal Government is not like any private industry. Federal 
employees perform functions directly relating to public health, 
national security, and financial stability. Jobs in the Federal 
Government routinely involve decisionmaking that affects millions of 
lives.
  Over the past 20 years, after calls in the 1980s and early 1990s to 
streamline government, many Federal jobs not directly related to 
``inherently governmental functions'' have been outsourced. This is a 
good thing. As a result, the demographics of the Federal workforce have 
been transformed perhaps even more dramatically than most realize. That 
is the subtext behind the data chosen by USA Today.
  By far, most of the jobs now performed for the government by private 
sector contractors are entry level and low wage. This includes 
maintenance workers, customer-service agents, security guards, and 
other jobs that typically receive smaller salaries.
  Correspondingly, a larger share of the jobs still held by Federal 
employees is higher wage, supervisory, and professional--such as 
physicists, doctors, and highly specialized IT experts.
  At the same time, the size of the Federal Government is virtually 
unchanged since the 1960s, even though our Nation has grown by 40 
percent in the same period. According to the OPM, in 1960 there were 
1.8 million Federal employees. Today, there are 1.9 million. Looking at 
this chart, one can see that the Federal workforce has shrunk 
drastically compared to the number of Americans its serves on a per 
capita basis. The total population of the United States was 180 million 
in 1960, and it has risen to over 300 million today.
  These days, Federal employees are working harder than ever. In fact, 
and I have said this before, the USA Today is right about one thing. 
There is a public-private pay gap, but it goes the other way.
  The Federal Salary Council reported last October that civilian 
Federal employees are making, on average, over 26 percent less than 
private sector workers in comparable jobs. This gap continues to widen.
  I am thrilled that there are so many outstanding individuals who have 
chosen to work in public service knowing that they could probably make 
more money in the private sector. But the pay gap has certainly 
continued to discourage many talented Americans from making that 
choice.
  Like all important decisions we make about government, our mission to 
recruit and maintain the best possible workforce must feature a 
strategic approach.
  I think Linda Bilmes, of Harvard's Kennedy School, and Max Stier, the 
President and CEO of the Partnership for Public Service, put it best 
when they wrote:

       The fundamental mistake . . . is to think of the federal 
     workforce as a cost rather than as a resource that delivers 
     specific benefits to the nation.

  That was from an op-ed in the Boston Globe in February.
  The great Federal employees I have honored from this desk over the 
past 16 months are just a few examples of government workers who are an 
asset and make great contributions to the government but, more 
importantly, to the country.
  As Director of the Office of Public Housing Programs at HUD, Nicole 
Faison inherited a rental assistance program rated as ``high-risk'' by 
the GAO for 13 years due to rampant waste, fraud, and abuse. She 
quickly turned it around, eliminating over $2 billion--that's billion 
with a ``B''--in fraudulent payments what is that worth?
  Eileen Harrington and the Federal Trade Commission's ``Do Not Call 
Team'' brought peace of mind to dinner tables around the country when 
they designed and implemented the national registry to stop 
telemarketing calls. Tens of millions have benefited.
  Dr. Gareth Parry, who retired last year after a long career at the 
Nuclear Regulatory Commission, worked to create risk assessment models 
for our Nation's nuclear facilities. His efforts significantly improved 
the safety of communities near nuclear plants and those who work there.
  I could go on and on and on.
  But the example of Dr. Parry leads me to an important point we here 
in Congress must consider. There is a lot of data on the demographics 
of our Federal workforce. While some choose to point to compensation, 
the statistic I think is most pressing and needs the most attention is 
that of retirement eligibility.
  Currently, there are two retirement systems for civilian Federal 
employees. Those who began work before 1984 fall under the old civil 
service retirement system, or CSRS. All employees hired after 1984 
participate in the Federal employees retirement system, or FERS. In 
1997, the number of employees eligible to retire under CSRS was 12 
percent. In 2006 it had climbed to 37 percent. That is over a third of 
the workforce. That is over a third of the Federal workforce. For those 
eligible to retire under FERS, the number climbed from 7 percent to 13 
percent.
  As I said in June, the OPM today estimates that a fifth of the 
Federal employees will leave the workforce by 2014. That is almost 
400,000 people. Many have already been postponing retirement for years 
because they know we need their talents and experience.
  Today our civil service finds itself at a crossroads.
  We could choose to listen to those who continue to disparage public 
employees and cut salaries or cap hiring. We would, however, 
undoubtedly see more failures to regulate Wall Street because we didn't 
have regulators or those who drill offshore, failures to secure our 
borders and keep our communities safe, failures to ensure that all 
citizens have fair access to resources they need to pursue the American 
dream.
  We can do that, but there is an alternative. Actually, I would say, 
it is a necessity.
  We can choose--now at this critical moment--to renew our investment 
in a strong, vibrant, and successful Federal workforce. The return on 
such investment promises to be high--indeed, if we fail to devote 
ourselves now to building a top-notch civil service, the next 
generation of Americans will have to spend even more to fix the 
problems that will result.
  In his book, ``Excellence,'' former Health, Education, and Welfare 
Secretary John Gardner--who founded the public interest group Common 
Cause--wrote that:

       The society which scorns excellence in plumbing as a humble 
     activity and tolerates shoddiness in philosophy because it is 
     an exalted activity will have neither good plumbing nor good 
     philosophy: neither its pipes nor its theories will hold 
     water.

  In the same way, if we don't value our government workers and the 
jobs they perform, we're going to end up with a Federal workforce--and 
a government--that isn't the best it could be for all of us. I have 
never known Americans to settle for second-rate.
  What does a sound investment in our Federal workforce look like? 
First, we will need to redouble our efforts to recruit new hires, and I 
hope many will be young graduates. We have so many young people right 
now who are eager to give back to this country and make a difference.
  According to the Partnership for Public Service, the Federal 
Government will need to fill 273,000 full-time, mission-critical jobs 
over the next 3 fiscal years. By mission-critical, they mean jobs 
considered essential for agencies to fulfill their obligations to the 
American people: doctors and nurses at the VA, counterterror analysts, 
lawyers, high-tech specialists, contract administrators. These are very 
special jobs. We have high unemployment now, but the kind of jobs we 
need are not readily available.
  So how can we attract the best and brightest of the new generation 
into

[[Page S7115]]

public service? We need to pursue policies and enact legislation that 
will enable a work-life balance competitive with the private sector. 
This includes programs like parental leave, loan repayment, and 
telework. I am glad that some departments are already making strides on 
work-life balance, and I commend Chairman Akaka of the Subcommittee on 
Oversight of Government Management, the Federal Workforce, and the 
District of Columbia for being a leader on these issues.
  We should also be launching programs to help train managers and 
supervisors, since more and more Federal employees are taking on these 
roles. With so many lower wage jobs outsourced to contractors, we need 
to ensure that those managing contracts remain Federal employees and 
that they have the skills and experience to make sure contract work is 
being performed according to the public interest. Just think how much 
it has cost us because people were not monitoring contracts. Think 
about the problems we have had monitoring contracts.
  Now some of my colleagues are probably starting to shake their heads 
and say: Wait a minute; Americans do not want bigger government.
  Indeed, these recent charges that Federal employees are somehow 
overpaid evoke the perpetual claim that the most desired government is 
always the smallest. That cuts and outsourcing are ends in themselves. 
We hear it every day, that government is too big. However, it was 
precisely this ideology of reduction that left our key regulatory 
agencies unable to prevent disasters like the financial crisis and the 
gulf oilspill and so many other things over the last 8 to 10 years 
where agencies did not follow up--whether it was FDA, the Consumer 
Protection Agency.
  I think they have it wrong. It is not that Americans want smaller 
government. They want better government. They want government that 
works.
  Let me share some interesting findings from a survey conducted in May 
by the Center for American Progress and Hart Research Associates. The 
study found that 62 percent of Americans have an unfavorable view of 
Federal Government, a 22-percent rise since 2000.
  However, it also found that Americans would rather improve the 
efficiency and effectiveness of government than reduce its size. The 
same number--62 percent--preferred better government to just smaller 
government. Among those who identified as political moderates, the 
figure was even higher, at 69 percent.
  Furthermore, when asked about specific aspects of government 
involvement, a majority of Americans believe the Federal Government 
should be more involved in solving problems. 60 percent want the 
government to do more to improve schools; the same number want Federal 
help to make college more affordable; and 57 percent would like the 
government to do more to reduce poverty.

  Investing now in building and developing the next generation of 
Federal employees will go a long way in making sure that government 
works better for everyone. It will help us tackle problems such as 
these--developing clean energy, expanding educational opportunities, 
reducing poverty--and avoid the next financial crisis or major oil 
spill.
  It is time to ask ourselves what kind of government we want for the 
next century. We can not afford to let this important debate about our 
Federal workforce and its future be hijacked by those who prefer to 
scapegoat and distort the facts. We have all seen what happens when we 
make important policy decisions based on incorrect information.
  I am encouraged that the OPM has joined with the Office of Management 
and Budget and the Labor Department to study the actual pay gap, in 
order to determine how best to compare Federal and private-sector jobs. 
Once we have that data, then we will be better able to figure out how 
to make Federal jobs competitive with their private-sector counterparts 
and attract the very best talent into government.
  Again, I want to stress, everybody cares about money. Most Federal 
employees I meet are here because they want to make the world a better 
place and they are concerned about making the world a better place, and 
they want to make a difference for their lives. That is one of the 
things we do not talk about nearly enough; that is, how great it is 
when you get to my age to see that you actually tried to make the world 
a better place, and you worked on making the world a better place.
  That is important, and that is the kind of people we have in the 
Federal Government. They are willing to make the financial sacrifices 
because they care about and make the special extra effort to give of 
themselves in order to make this country the great country we know it 
is.
  By looking forward, by ceasing the ``blame game,'' and by making a 
commitment now to building the best Federal workforce possible, we can 
ensure that the next generation is well poised to tackle its greatest 
challenges.
  Lincoln called on his fellow Americans to cherish and safeguard our 
greatest strength: ``government of the people, by the people, and for 
the people.'' We must also strive to maintain a civil service of the 
same kind for the long term. Our children and grandchildren deserve the 
same type of great Federal employees we have today.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Hagan). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. VITTER. 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. VITTER. I ask unanimous consent to speak as in morning business 
for up to 12 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                               DREAM Act

  Mr. VITTER. Madam President, I was very disappointed to learn 
recently that Senator Reid intends to bring up a very significant 
amnesty proposal next week known as the DREAM Act. It is disguised as 
an education initiative, but it will provide a powerful incentive for 
more illegal immigration by allowing States to grant in-state tuition 
to illegal alien students. This is a bad idea at any time, but this is 
a bad idea right now, at the worst possible time.
  Unfortunately, this announcement isn't shocking given Senator Reid's 
and this administration's record of pushing policies on the American 
people that the people oppose. In these difficult economic times, it is 
really an insult to legal, taxpaying citizens that the President and 
Senator Reid would want to use their hard-earned money to pay for in-
state college tuition for illegal aliens.
  This horrible economy has increased the demand for enrollment and 
help at public universities. As a growing number of families are unable 
to afford an education at a private university, they turn to public 
universities in increasing numbers, and they turn to that help, 
including in State tuition, in increasing numbers. At a time when many 
Americans cannot afford to send their children to college at all, this 
bill would allow States to provide in-State tuition to illegal aliens 
who would displace legal residents competing for those taxpayer 
subsidies.
  I am opposed to this proposal because of that--because it would 
unfairly place American citizens in direct competition with illegal 
aliens for very scarce slots in classes at State colleges and 
universities. The number of those coveted seats is fixed, so every 
illegal alien who would be admitted because of this through the DREAM 
Act would take the place of an American citizen or legal immigrant. It 
makes no sense to authorize Federal and State subsidies for education 
of illegal aliens, when our State schools are suffering, as higher 
education budgets are slashed, admissions are curtailed, and tuition is 
increased.
  Enactment of the DREAM Act would do just that, and it would be bad 
policy under any circumstances, but in the current economic climate it 
would be a catastrophe.
  Again, the DREAM Act would grant amnesty to millions of illegal 
aliens who entered the United States as minors and who meet loosely 
defined so-called educational requirements.
  Specifically, the bill grants immediate legal status to illegals who 
have merely enrolled in an institution of higher education or received 
a high

[[Page S7116]]

school degree or diploma. The bill's sponsors described the 
beneficiaries of this legislation as ``kids,'' boys and girls. In 
reality, the DREAM Act is far broader than that. It would allow 
illegals up to the age of 35 to be eligible to receive this amnesty and 
qualify for Federal student loans.
  The American people have made it very clear that they want to see the 
government fulfill its responsibility to enforce the laws on the books, 
take steps to control illegal immigration, not to reward bad behavior 
with tuition breaks.
  Amnesty and economic incentives, such as taxpayer-subsidized tuition, 
only encourage more illegal immigration. This is certainly not the 
answer to our current immigration crisis and will only worsen our 
current economic crisis.
  If Senator Reid does move forward with this proposal, I plan to file 
a second-degree amendment to strike the provision that allows States to 
grant in-State tuition for illegal aliens. It will be a very clear 
choice: Do you want these limited resources, this limited help, to go 
to U.S. citizens and legal immigrants or do you want illegals to 
compete for those and take some of those slots away from U.S. citizens 
and legal immigrants?
  As chairman of the border security caucus, I will be fighting this 
overall measure tooth and nail and also advancing this second degree 
proposal. This is common sense. This is certainly the sentiment and the 
will of the American people.
  I encourage all of my colleagues--Democrats and Republicans--to talk 
to Senator Reid to dissuade him from the bill overall and, if it comes 
to the floor, to support this second-degree amendment so that American 
citizens and legal aliens are not having slots taken away from them by 
illegals in this matter.
  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. REED. 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. REED. Madam President, we have been debating for weeks now a 
needed solution to our economic recovery in the United States. We have 
seen some progress, but it is a long and difficult journey for American 
families. The depth of the crisis that materialized in the last few 
years of the Bush administration can't be overcome in just 18 months, 
although I believe we are headed in the right direction. The 
legislation we are considering will help us in that journey to 
recovery.
  We have seen, in fact, over the last several months, an increase in 
private sector jobs. We didn't see that in the last several years of 
the Bush administration. When President Obama took office, we were 
losing 750,000 jobs a month and we had 22 straight months of job 
losses. Now we need to turn that dynamic around by creating private 
sector jobs, but we have to do much more.
  The great engine of private job creation is small business in 
America. These provisions are aimed to aid small businesses throughout 
the country. Small business is an engine of growth. It is the place 
where people will, I think, find employment as we go forward. Our small 
business community has been hit very hard by the economic crisis, the 
financial crisis, and the collapse of the credit bubble. Small 
businesses have lost more than 6 million jobs since December 2007, and 
we have to start restoring those jobs.
  The legislation we are considering--the Small Business Jobs Act--will 
provide $12 billion in fully paid-for tax breaks for small businesses 
to bolster confidence in the economy by unlocking frozen credit 
markets, spurring job creation, and fostering our Nation's burgeoning 
recovery. These tax incentives will allow small businesses to make 
investments to help with job growth, purchases, and expansion. I 
emphasize that these are fully paid for because we have multiple 
challenges.
  I have served long enough to recall in 2000, when we were looking at 
strong employment growth and a Federal budget surplus, and, in 2009, 
when President Obama took office, we were looking at a job collapse in 
many parts of the country and a huge deficit, which is still going on. 
So we have to consider both as we move forward.
  The particulars of this legislation are important to note because 
they will contribute, I believe, very significantly--and one would hope 
very quickly--to increased job opportunities throughout the country. 
The legislation will incentivize investors by giving 100 percent 
exclusion from capital gains taxes on small business investments. It 
will create a targeted $30 billion small business lending fund to 
provide small community banks with the capital to increase their 
ability to lend to small businesses. This is particularly notable. I 
must commend Senator Landrieu for her tenacious advocacy of this 
position, along with Senator Merkley and others. In fact, this is a 
bipartisan effort. This proposal will put money in the hands of small 
community banks that want to lend, that have clients, and that do it 
the old-fashioned way. They look at the books, they know the borrower, 
they have faith and confidence in that individual, and they are 
constrained now because they do not have sufficient capital to expand 
their lending. With this capital, they will be able to expand lending 
and go right out to the heart of small businesses throughout the 
country. Madam President, just as in North Carolina, in Rhode Island I 
have numerous businesses that will come in and say they are very 
successful, they want to expand, they can hire a few people, but they 
just can't get the loan from the bank. This will help.
  Another provision reduces the tax burden of small businesses by 
allowing them to carry back general business tax credits to offset 
their tax burdens from the previous 5 years. Small businesses will also 
be able to count the general business credits against the Alternative 
Minimum Tax. That will free up capital for expansion and job growth.
  The legislation also increases Section 179 expensing--permitting up 
to $500,000 in capital investments that businesses can expense to 
immediately get some tax credit for it. It also extends bonus 
depreciation, allowing taxpayers to immediately write off 50 percent of 
the cost of new equipment. We hope that this will have the small 
businessman or woman buying a piece of equipment which will require, we 
hope, a manufacturer or assembler somewhere in the United States to 
call people back to work to meet this new demand.
  This is going to increase demand for goods and services, and that is 
one of the key deficiencies in this current economy. We have a lot of 
money locked up. It is said, quite authoritatively, that there is about 
$2 trillion on the balance sheets of corporations throughout the United 
States that they are not spending. We hope these incentives will 
produce increased demand which will get them to start spending and 
provide the kind of private capital investment and momentum that will 
carry us forward.
  As I mentioned before, this Small Business Jobs Act has a $30 billion 
lending fund that is so critical. More than 10 community banks in Rhode 
Island, for example, are eligible to receive these funds. I have spoken 
to many of the bank leaders and they are ready to lend right now. They 
have customers whom they have great faith in, who have a good business 
plan and are profitable. In fact, many times business owners are 
willing to guarantee or to put up even personal collateral to get the 
loan. Yet the bank says: We can't do that because we have reached the 
limit based on our capital of what we can lend to small business. This 
raises those limits, and it is absolutely necessary to do that.
  One other important aspect is that this legislation will raise the 
limits on loans that the Small Business Administration can make and 
guarantee. Again, another source of tremendous and important funding is 
being capped now because they can't make big enough loans because there 
are certain loan limits. It will also extend the elimination of the 
fees borrowers pay to the SBA. Now we have businesses that may be ready 
to hire, but they just can't generate the cash to pay the fees. Now 
they will be able to get the loan, hire the workers, and move forward.
  The legislation also supports States because there are many State 
initiatives. There is $1.5 billion in grants to

[[Page S7117]]

States that will help in their efforts. There are many States that have 
programs very much like our Small Business Administration at the 
Federal level--innovative programs that will be supported.
  This legislation has bipartisan support, and that is absolutely 
necessary. Again, I wish to thank particularly my colleagues who were 
supportive of the cloture motion that has us now on a path to 
passage. I thank them very much for their efforts. They made a decision 
that will benefit American business across the country, small 
businesses in particular.

  We need to move forward. We need to get this legislation done--I hope 
this week--as soon as we can. Then we have other legislation we can and 
should consider. For example, we have a tax extenders bill that will 
hopefully provide R&D tax credits and other provisions that will help 
businesses, both large and small but particularly small business.
  I urge all my colleagues, now that we feel confident we have the 
votes, let's move to final passage. Let's give American businesses, 
particularly small businesses, the help they need to move the economy 
forward.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.


                       POLYCYSTIC KIDNEY DISEASE

  Mr. BENNETT. Madam President, I am rising today because this is PKD 
Awareness Week. People say: What is PKD and why do we need to be aware 
of it? PKD is the acronym that stands for polycystic kidney disease. 
Polycystic kidney disease is the leading cause of kidney failure from a 
genetic disease in America. Every year, we have PKD Awareness Week, as 
we try to bring people a better understanding of it.
  Let me outline how serious it might be and how it affects the Federal 
Government. For those who do not know, it is a silent killer that 
stalks more than 600,000 Americans. That is greater than the number of 
Americans who are afflicted with cystic fibrosis, Huntington's disease, 
sickle cell anemia, hemophilia, muscular dystrophy, or Down syndrome. 
That works out to be about 12,000 PKD sufferers in each State. Every 
one of them is at risk for kidney failure and the ravages that come 
with that.
  I became aware of it particularly when my daughter was diagnosed with 
it. It is a disease that is carried as a genetic disease. We had no 
idea it was anywhere in the family until she was diagnosed with it. We 
have now tried to go back to find out who may or may not have had it. 
But this means that not only is she at risk and is losing kidney 
function, but so are her children and perhaps so are others in our 
family. So it becomes a very significant personal thing for me, but I 
wish to reach out and express my gratitude to my colleagues in the 
Senate, who do not have the same kind of personal connection, who have 
joined in cosponsoring the resolutions on PKD Awareness Week--Senator 
Hatch, Senator Kohl, Senator Specter, and Senator Harkin. Over the 
years, they have cosponsored the annual PKD Awareness Week resolution. 
They have joined in securing PKD-specific appropriations report 
language, and they have helped pass the Genetic Information 
Nondiscrimination Act, which has been very important with respect to 
this disease and others where, for a variety of reasons, they have not 
had the kind of attention they have needed.
  This has an impact on the Federal Government because the annual cost 
of PKD exceeds $2 billion for kidney dialysis, kidney transplants, 
antirejection drugs, and related therapies. That, of course, affects 
those who have government money going into their health care support. 
End-stage renal disease is the fastest growing expense of Medicare. 
This causes a huge financial, emotional, and physical burden on the 
Americans who are affected by it.
  The good news is that the field of PKD research is robust, the 
therapy is ripe, and I ask my colleagues to look favorably on a 
forthcoming public-private partnership initiative that is known as the 
Regional PKD Diagnostic and Clinical Treatment Center, designed to 
increase application of new diagnostic methods and therapeutic regimens 
for PKD patients, conduct pilot studies and clinical trials, and, 
finally, coordinate data and streamline the appropriate clinical 
application of effective treatments.
  I am pleased to have the opportunity to once again call attention to 
the disease of polycystic kidney disease and the ravages and challenges 
it has. I thank my colleagues for their continued support over a 20-
year period of PKD Awareness Week and the work they have done in the 
Senate and hope that all of us can continue to support an activity to 
keep the research going forward. The consequence will be, if it is 
successful, tremendous benefit for those families who suffer from PKD 
and financial benefit for the government as a whole through reduced 
Medicare costs.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Udall of New Mexico). Without objection, 
it is so ordered.
  Mr. KYL. Mr. President, I would like to speak to the bill pending 
before us briefly, first to respond to a criticism that Republicans had 
been filibustering this bill, and, therefore, that somehow revealed an 
antagonism on the part of Republicans toward small business.
  The charge is so ludicrous that one would think it does not even need 
to be responded to. Republicans have been the champions of small 
business in this debate about taxes. I will have more to say about that 
in a moment.
  Why was it that the majority of Republicans did not want to proceed 
with the proposal that the majority leader put before the Senate? A 
very simple reason. The majority leader, once again, precluded 
Republicans from offering any amendments. The entire history of the 
Senate is a history of tradition and comity and the opportunity for the 
minority to be able to offer amendments and debate.
  When repeatedly the majority leader does what they call, in the 
Senate parlance, filling the parliamentary tree, which means he 
precludes the minority from offering any amendments, naturally 
Republicans are going to object to that.
  We said repeatedly we would be delighted to debate this bill, just 
let us offer some amendments. No, was the answer; you cannot do that. 
Well, we are on the bill now, and I think it is pretty clear that what 
this debate boils down to is what is the best way to help the small 
businesses who are the job creators. In fact, about one-quarter of all 
of the jobs in this country are created by small business, and what we 
know is that especially the small business folks are the first ones to 
hire in bad economic times, hoping to bring the economy out of a 
recession.
  Why are they not hiring today? Well, on Monday I came to the floor 
and I pointed out one of the reasons. One of the entrepreneurs in our 
country wrote an op-ed in the Wall Street Journal in which he totaled 
up all of the expenses that he has every time he hires someone. I 
believe, if memory serves me correctly, it cost him about $78,000 every 
time he hired somebody who had a $44,000 salary. That is in the extra 
taxes that he would have to pay and the cost of regulations just to 
comply with Federal law for hiring one additional person. It is no 
wonder that small businesses do not hire at this point.
  So what is the Democratic response? Let's raise their taxes. Let's 
make it even more difficult for small businesses to hire people. We 
believe that is the wrong solution, and rather than looking at the kind 
of bill that is on the Senate floor today that creates yet another kind 
of TARP bank lending authority, something the American people are a 
little bit fed up with, we believe we should leave tax rates where they 
are so that businesses have some certainty that they are not going to 
be raised. At least do not make it worse.
  I noted that the distinguished assistant majority leader earlier this 
morning inadvertently confused tax cuts with tax increases. I have done 
the same thing many times. But the reason I wanted to point that out is 
because I think there has been so much talk on the Democratic side 
about tax cuts for the rich that the Members on the other side have 
almost gotten to believe that. The truth is, nobody is proposing

[[Page S7118]]

tax cuts for the rich. Nobody is proposing tax cuts for anyone.
  My colleague from Illinois corrected himself and said: No, I mean tax 
increases. That, of course, is what the question is. Should there be 
tax increases on anyone? The Republican position is no. At least in 
times of recession or bad economic times, do not raise taxes on anyone. 
Do not raise taxes on families who are struggling to make ends meet, 
and do not raise taxes on businesses, especially the small businesses 
that are the best job creators.
  So our view is, do not raise taxes. But the Democratic view is, well, 
let's raise taxes on some but not on others. That is this class warfare 
concept that I was critical of Monday. In America we do not believe in 
class warfare. We think everyone ought to have a chance to succeed, and 
if someone succeeds, we applaud it and we hope we are in the position 
the next week or the next year. But, instead, there seems to be a view 
that, well, rich people can afford it, so let's raise their taxes.
  Again, economists generally--including Peter Orszag, the immediate 
past Director of OMB under President Obama--have made it clear that 
raising taxes on anyone, including the entrepreneurs, those people who 
pay in the higher tax brackets, is a bad thing for job creation 
especially in bad economic times.
  So why would we do it? Well, the concern is we have to be worrying 
about the deficit. Well, this is a fine time to be worrying about the 
deficit and a fine way to do it. We spend $1 trillion on a new health 
care bill, we spend $1 trillion on a stimulus bill, we spend all of 
this other money bailing out this and that in our economy, and now 
another new TARP lending program spending trillions of dollars, a 
budget that doubles the national debt in just 5 years, doubles all of 
the debt accumulated from George Washington through George Bush, we are 
going to double that in 5 years under the Obama budget.
  I would suggest that we ought to start worrying about the spending. 
If we are worried about the deficit, let's stop the spending spree. 
Let's do not try to make up a little bit of that by deciding to tax a 
bunch of people who are the very folks who are going to hire the 
employees that are going to help bring us out of the recession.
  Am I just sort of fancifying this or do real small businesspeople 
have this view? Well, let me just read about--I think there are three, 
maybe four folks here. These are some of the folks, some of the 750,000 
small business owners in the United States whom we are counting on to 
create jobs and who would see an increase in their marginal income tax 
rate under the Democratic proposals.
  I just want to quote from what a few of these folks say. Here is the 
chief operating officer of a company called Logical Advantage in North 
Carolina. His name is John Fread. He says marginal tax rates will mean 
his company will not be able to hire the new sales representative it 
needs, and it may force layoffs. He says:

       We founded Logical Advantage in 2003 with a couple of card 
     tables and laptops and a staff of three. We've been 
     successful and have since expanded our business. One of the 
     keys to our growth has been our determination to reinvest our 
     profits in our firm. We're organized as a pass-through 
     business, (meaning the company's taxes are paid at the 
     individual income tax rate),--

  That is why this marginal rate is so important--

     and if our marginal income tax rates go up, we'll be left 
     with less money to put back into our company. This would mean 
     we would not be able to hire an additional sales 
     representative.

  Then he also closes with this:

       Also, since our employees bill their services hourly, we 
     use profits to keep our employees employed between projects 
     and avoid layoffs. Without this additional cash, we'll have 
     no choice but to do layoffs. My advice to Congress would be 
     to keep the current tax rates in place and do all they can to 
     avoid raising our taxes because that will lead to fewer jobs.

  So here is an entrepreneur, a small business owner, who says he wants 
to create jobs, save the jobs he has. He wants to expand, but an 
increased tax burden will prevent him from doing so. No, we are not 
talking about tax cuts for the rich. Nobody is talking about tax cuts. 
We are talking about keeping his taxes from going up. That is what we 
want to prevent.
  Kevin Linehan of Bravadas Fairfax, LLC, a small clothing and 
accessories business, says--and I hope I am pronouncing that correct--
Bravadas is the way I see it here. Anyway, he says the shaky economy 
has forced him to cut his staff and payroll by 40 percent and slice his 
inventory by 30 percent, not an uncommon situation in this economic 
downturn. He wants Congress to know that if the top two marginal rates 
increase, he will not be able to hire the new employees he needs, 
increase his inventory, or take the risks that would lead to innovation 
in his business. I am going to quote him.

       If Congress goes through with the plan to increase the 
     marginal income tax rates for the top two brackets, my 
     business will be hurt. We've already been battered by the 
     recession and had to cut staff and payroll by 40 percent. I 
     have also cut both my advertising and inventory by 30 percent 
     each, and have had to downsize and change locations to save 
     on rent.
       If Congress raises my taxes, it will be more of the same 
     rather than being able to grow my business, attract new 
     customers and hire new staff. In fact, in this economy I have 
     had to cut back on essentially all new business activity, 
     meaning I've stopped trying to innovate and instead have been 
     forced to focus on only those activities that are the most 
     profitable because I cannot afford to take risks. The more 
     and more the government takes, the more difficult it is for 
     small businesses like mine to be successful and do the things 
     they want us to do, which is to create jobs.

  Here is a third small businessperson, Ray Pinard. He owns a printing 
business in Boston. He says if tax rates go up, he would not have the 
resources to expand his business operation to new areas, and, 
therefore, to create new jobs. Here is what he wants Members of 
Congress to know:

       Keeping the tax burden low is so critical to our business, 
     48HourPrint.Com. . . . With the economy where it is, now 
     certainly isn't the time to play games by extending tax 
     relief for some but not others.
       For example, if Congress fails to keep all of the current 
     income tax rates in place and we take a hit, then that will 
     mean we have left capital to grow our team and our 
     operations, not only in the Boston area but at our other 
     facilities in Ohio, Arizona, and New Hampshire, as well. 
     There are thousands of other small businesses out there that 
     will react similarly if their tax burdens increase. I am 
     worried that it will take much longer to get our economic 
     ship righted if our elected officeholders in Congress fail to 
     show leadership on this issue. [Raising taxes] is a job 
     killer. Leave the money in the private sector where it will 
     be put to good use.

  Despite what the President says, these tax increases will have a very 
negative impact on job creation, especially for the small businesses, 
the entrepreneurs I have quoted. These are the people who are on the 
ground, running businesses, trying to weather the bad economy, hoping 
to hire new workers. They are telling us that their businesses cannot 
tolerate new taxes.
  As this debate continues, I will share more stories from small 
businesses and other folks who are opposed to the tax increases.
  It is critical that we appreciate the fact that even the talk about 
this, even the potential for an increase in taxes, has created a kind 
of uncertainty that has caused businesses to lock up and not want to 
make any kind of big decisions because of what they think could happen. 
I remind my colleagues that this money is not the government's money. 
It doesn't belong to the Congress or the President. When we talk about 
taxing people, we are talking about taking their money. It is not the 
government's money. It is their money.
  The question is, Will the government do more good spending it or will 
the private sector, the people who have that money, who earned that 
money? Will they do more good with it? I think it is obvious that these 
small business folks I have talked about will put that money to good 
use for their families and their employees. They will create more jobs 
with it. That will help more folks.
  The irony is that will eventually help the economy and will even help 
the U.S. Treasury, because we have more people paying more taxes at the 
existing rates, and that means more revenue for the Federal Government.
  This is a very aspirational country. Almost everybody here looks at 
opportunity. We all think we can do better. If we work hard, we have a 
system that will reward hard work. These successful small business 
folks never cease to amaze me. They come up with an idea, a service, or 
a product to sell. They go through all the difficulties of doing so,

[[Page S7119]]

sometimes mortgaging their home, borrowing money. They are the 
lifeblood of the economy. They are not some bunch of fat cats. They are 
the people who make the economy work.
  It bothers me when folks on the other side of the aisle denigrate 
them as if they are somehow evil people because they end up making 
enough money to pay taxes in the top tax brackets when, as we pointed 
out, the reason for that is that as business people who are not 
corporations, they are subchapter S or other partnership or small 
business legal entities, they pay taxes as individuals. And because of 
the income of their businesses, therefore, they are put in the top 
bracket and somehow, therefore, they deserve to be punished--they can 
afford it; they are the rich.
  They are not the rich. They are folks like all of us, struggling to 
make ends meet, who will hire more people and who don't deserve to be 
punished for their success. We are supposed to be creating incentives 
for people to do exactly this. Ironically, the bill we are debating now 
is a bill that is supposed to help small business folks. We will give 
these TARP-like funds to the banks and make them lend a certain amount 
of it to small businesses, and everybody will be better. My guess is, 
if we let the small businesses keep their money and not raise their 
taxes, they would be perfectly happy and be able to get along, and they 
would have the ability to borrow money from the banks without the 
effect of the legislation before us.
  I hope we both begin to change our rhetoric, not to attack those 
people who are the backbone of the economy, people who cannot afford 
another tax increase, who want to help the economy recover and like to 
hire more people, and that we would also recognize the most productive 
way to help them is to simply not raise their taxes. We are not talking 
about a tax break. I would argue that this TARP-like lending thing is 
an idea that may be well motivated, but it is not the way to help most 
of the businesses we are talking about. Just don't raise their taxes.
  I will return to where I started. Some of us get a little confused. 
Sometimes we say tax cut when we are talking about tax increases. It 
may be that we have gotten so used to this rhetoric that somehow 
somebody is asking for a tax cut for the rich when, in fact, I don't 
know of anybody who is asking for a tax cut for the rich. Not a single 
Republican is asking for a tax cut for the rich. All we are asking is 
don't raise taxes on anybody; it is usually not a good idea, and it is 
certainly not a good idea in this time of economic downturn.
  I hope as time goes on, I will have the opportunity to reflect on 
what more small business folks have written to us, and we will take 
their pleas to heart. The three people I have talked about today all 
say: Don't raise my taxes. I am having a hard enough time as it is. If 
you leave me alone, I might be able to begin hiring more people.
  Let's take those stories to heart and listen to our constituents and 
not take the attitude that Washington knows best. It reminds me a 
little of what the President and one of our colleagues said in a 
townhall meeting in August when somebody asked about the health care 
bill. One of our colleagues said: Well, you may not like it now but 
over time I think you will get to appreciate it.
  It is the attitude that we know best here; we will make the 
decisions; you may not like them now, but you will come to think they 
are okay over time. I think Americans have understood what it takes to 
make a successful business. They understand what taxation is all about. 
They understand this isn't the time to raise taxes on anybody, and we 
ought to get away from this idea that Washington knows best. Let's 
listen to our constituents. Let's listen to what they are telling us. 
Don't raise our taxes.
  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. KYL. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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