[Congressional Record Volume 156, Number 150 (Wednesday, November 17, 2010)]
[House]
[Pages H7528-H7534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           MAKE IT IN AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from California (Mr. Garamendi) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GARAMENDI. Mr. Speaker, I thank you for this opportunity.
  Coming off the elections, everyone wants to know what the voters had 
on their minds. I'll share with you a few things that I heard from my 
voters in my district and throughout California--perhaps experiences 
similar from around America.
  They want jobs. They want to work.
  I think all of us in one way or another understands and feels within 
us the need to work. It's part of our lives. There are a few, 
undoubtedly, around who don't ever want to work--and okay for them--but 
for most Americans, they want a job. They want the opportunity to bring 
home a paycheck, to support their families--to provide for their food, 
their shelter, their opportunities for education, and to go on a 
vacation every now and then. That basic instinct--that basic desire to 
care for your family, to help build a community--I think is part of 
America. Americans want jobs. If there were ever a message from this 
year's elections, it's that.
  Now, this isn't new to those of us who are here in the Chamber. It's 
not

[[Page H7529]]

new to the Democrats, and I'm sure it's not new to my Republican 
colleagues also; but who actually over the last 2 years amongst all of 
us in this Chamber and in government have actually been working to 
create those jobs? I think it's the Democrats. We are going to make 
that point here today, not only about the past actions that have been 
taken over the last 2 years, but about what's coming in the future.
  Early in 2010, many of us on the Democratic side began to formalize 
and to formulate a strategy, and we call that ``Make It In America.'' 
If America is going to make it, then we must, once again, make it in 
America. We must rebuild our manufacturing industry, which is where we 
make things.
  As a child, I remember looking at the pictures of America, of the 
great poetry of America's birth of industry, when the robust strength 
of this Nation was seen in the manufacturing sector. It was heavy 
industry at the time. It was the steel industry and the auto industry. 
That enormous strength of America carried us through World War II when 
we literally built the armaments to take on Nazi Germany and Japan. It 
was done here in the industries of America. The manufacturing base of 
this Nation needs to be rebuilt, and it is the Democratic Party and the 
programs that my colleagues and I will be talking about today which 
will cause that to happen. America will make it when we make it in 
America.
  Joining me tonight are two of my fellow colleagues--Paul Tonko, from 
the once and future great industrial part of New York, and Mr. Ellison, 
from the great Midwest.
  So I would like to turn to them for a few moments for introductory 
comments, and then we'll turn back, and we'll begin to hit not only 
what was done over the last 2 years but, also, where we are going in 
the future.
  Mr. Tonko.
  Mr. TONKO. Thank you, Representative Garamendi, and thank you for 
bringing us together on a very important topic. ``Make it in America'' 
manufacturing matters, absolutely. I think what has been promoted also 
as a subtheme here has been the investment in basic research, R&D, and 
in scientific research, making certain that we can move forward with 
cutting-edge, ahead-of-the-curve sort of technology that enables us to 
create jobs on the radar screen that simply are not there today, and it 
allows us to advance, I think, an energy agenda and an environmental 
agenda that allow for us to grow jobs.
  Now, as you were making your introductory comments, I was thinking 
about America COMPETES, which is the legislation we did on this House 
floor several months ago. I think 98 percent of our Republican 
colleagues voted against the measure. We got just about no support. Yet 
it was supported by the United States Chamber of Commerce. They 
understood the wisdom of investing in R&D and basic research and in 
providing for the modernization of our manufacturing sector.
  I am convinced, like you, Representative Ellison and others, that we 
can make it smarter in America, which will allow us to be very sharp, 
competitively speaking, on the global market scene. I think that we can 
do it in a way that allows us to advance jobs in this country simply by 
embracing the intellectual capacity of this great country.
  In my home district of the 21st Congressional District in New York--
the upstate region, the capital region--we are home to GE Corporate. I 
just witnessed their moving forward with plans to do advanced battery 
manufacturing, which will be the linchpin to all sorts of energy 
innovation. As we do that, we can grow jobs here in America by 
investing in R&D, by coming up with new product lines, and by making 
certain we're ahead of the curve on science and technology 
opportunities that are available to this Nation.
  In the construct of the 21st Congressional District, I represent the 
old passageway--the Erie Canal, the route of freight-hauling--that 
really built America and inspired the westward movement. In so doing, 
in building that canal, we also gave birth to a necklace of communities 
called ``mill towns,'' and they became the epicenter of invention and 
innovation. So it is within our DNA, that pioneer spirit, here in 
America to continue to do that, and I think we need those incentives 
that we talked about.
  This leadership and this House during the 111th Congress gave birth 
to a number of ideas, including America COMPETES, closing tax loopholes 
for investments taking jobs offshore, taking them into other locations. 
We want to close those loopholes and absolutely promote the Small 
Business Jobs Act. Those were great cornerstones of development that 
will allow us to grow jobs, and as we know, we've had 10 consecutive 
months of private sector job growth.

                              {time}  2000

  We've now surpassed the million mark for private-sector jobs, and 
that's a great accomplishment in light of the 8.2 million that were 
lost during the Bush recession. And speaking of President Bush's track 
record, they were losing jobs. They were losing a net--we had a net 
zero gain of private-sector jobs during that administration. This 1 
million is a great mark as we move forward in this calendar year to 
turn this country around, and we need to just continue along that road 
of progress.
  So it's great that you have brought us together, and I'm happy to 
join you during this hour.
  Mr. GARAMENDI. Thank you very much, Mr. Tonko, and I know that you 
are going to have to leave us in a few moments, but you just reminded 
me of one of those little charts that I often have here, and this one 
really does show what you just talked about. It displays that the gold 
here are the Bush years. You can see the enormous number of losses of 
jobs, and right down here, right here at the bottom, that's the start 
of the Obama administration in January of 2009, and each month 
thereafter, each quarter, we saw an improvement. We didn't see the jobs 
really coming back in the private sector until the last several months, 
but clearly, in the last several months, those jobs are there. 
Interestingly, the unemployment rate has not dropped because it is the 
government jobs that are now being lost but, nonetheless, a net gain in 
the jobs in the private sector.
  Mr. TONKO. That's absolutely the progress we wanted to witness, and 
was it fast enough? It's never fast enough for us after we've lost 8.2 
million jobs, after the American households in the last 18 months of 
the Bush presidency lost $18.5 trillion. That was pain that was very 
deep, deep and dark, and it's never fast enough, but it is certainly a 
rise in the right direction and a movement that needs to continue along 
that road of progress.
  Mr. GARAMENDI. You also raised the very, very important part is that 
the industrial strength of America has almost always occurred as a 
result of the research and innovation that has been the hallmark of 
America. You mentioned the COMPETES Act which deals with energy 
research in the United States. It deals with scientific research. It's 
an extremely important one, and unfortunately, our Republican 
colleagues refused to support that bill when it was here on the House 
floor. We had enough Democrats at that time to move the bill out.
  Also, as I recall, I wasn't here and my two colleagues were here at 
the time--it was the American Recovery and Reinvestment Act, otherwise 
known as the stimulus bill, that created the largest increase in 
scientific research ever in America's history. Now, the public may not 
appreciate that, but that research is finding its way into every part 
of our industrial future, and from that, the billions of additional 
dollars that were spent, two things happened: scientists, technicians, 
lab techs, engineers were employed. They had jobs, and they were 
developing the future industries of America.
  Enough from me. Let me turn to my compatriot from the Midwest. Mr. 
Ellison, you have a very, very important part of the country. It wasn't 
particularly friendly to us Democrats but friendly to you because of 
your outstanding leadership. So please share with us your experience 
there in the upper Midwest.
  Mr. ELLISON. Well, Congressman, let me just thank you for holding 
down this Special Order and congratulations to you and Congressman 
Tonko. In California, you-all conveyed the message, and I want to 
congratulate your whole State for your success from our side of the 
aisle.
  But unfortunately I'm going to have to be here for a short while 
tonight,

[[Page H7530]]

but I just wanted to come down and share a few moments with you and the 
Speaker and the American people, talk about the importance of 
maintaining and holding on to that vision of making it in America 
because we did it before, we can do it again, but it will not happen by 
magic. It's going to take some things.
  It's going to take, first of all, some investment in education. It's 
going to take some investment in our Nation's infrastructure. It's 
going to take some real investment in our small businesses so that they 
can get it moving, and it's going to take some real investment in our 
belief in ourselves to reclaim this mantle of manufacturer for the 
world.
  This can happen. We've done it before. America still is the leading 
manufacturing Nation in the world, but we've seen other nations 
creeping up on us. We can do it but these investments are going to have 
to happen.
  In this Congress, we made tremendous investments in, as you already 
pointed out, the American Recovery and Reinvestment Act. Important. We 
call it the stimulus for shorthand, but the fact is it was 
reinvestment. Reinvestment is one of the R's in that American Recovery 
and Reinvestment Act, and Mr. Speaker, I want the American people to 
bear in mind that investment is what we need at this time so that we 
can continue our upward trajectory for jobs.

  I hope that our friends on the other side of the aisle who are going 
to get the gavels after they assume leadership continue this effort to 
try to reinvest in America for the sake of manufacturing. We will see. 
They will have the chance. But the fact is that this Democratic 
Congress put this country on a platform and a foundation for future 
growth in jobs and manufacturing.
  There was mention a moment ago of the investment act. Not only did we 
invest in scientific research, we invested in infrastructure. We not 
only invested in infrastructure, but in our health care bill we 
invested in making sure that we have the educational wherewithal to 
take care of our people into the future. Tremendous investments in 
education, for medical education, so that we can take care of our 
people. That, again, will fuel manufacturing because part of 
manufacturing is medical device manufacturing so that we have the 
educational talent to make those instruments that are life saving in 
this world.
  So you put the health care bill, together with the Recovery Act, what 
you're talking about is a recipe for making things that will help life-
saving research take place through American innovation and 
manufacturing.
  So I just want to commend you for being down here week after week. 
Whether you have a bunch of people helping you or whether you're by 
yourself, you have an enduring commitment to making sure the American 
people know that manufacturing is not declining--well, it has been but 
it doesn't have to be declining--in America. It can be ascending in 
America if we make the investments in education and research and the 
things that we talked about earlier.
  I want to say that being from the Midwest, and I'm so proud to be 
from the State of Minnesota, wonderful State. We already had a little 
bit of snow there. I know you all don't know what that is in 
California. It's white, fluffy stuff. The fact is we even in the State 
of Minnesota are investing in wind. We are investing in biofuels. We 
are investing in all sorts of green energy producing methods that also 
require that we're going to be manufacturing new technology but also 
transmission lines to transfer the energy that we make based on our 
innovation.
  In the course of the time between August and now, we've been home a 
lot, working hard but back in our districts, and I had the opportunity 
to go to a number of manufacturing companies in my district. 10K Solar, 
they know who they are. They're in Minnesota. They are a cutting-edge 
solar innovation manufacturing company. Other companies are making new 
fascinating things with wind technology. And this is the kind of thing 
we want to stimulate. This is what is going to continue to make America 
the great economic power that it has been, and I just hope that we can 
get some real bipartisan cooperation to continue this drive so that we 
can continue to make America that country that is the envy of the 
world.
  And so unfortunately, Congressman, I'm going to have to leave you to 
carry the weight tonight, but again, I just want to thank you for your 
commitment and just say that I draw inspiration from the pictures that 
you're about to explain right now.
  Mr. GARAMENDI. Well, Mr. Ellison, thank you so very, very much, and 
it's a busy night for all of us. We've just come back to reorganize 
ourselves and to go forward.
  Earlier today we selected a minority leader for the next year. It is 
our current Speaker, Nancy Pelosi, and as she left the caucus today she 
very clearly laid out an agenda for the Democratic Party. That agenda 
was Make It in America: Manufacturing Matters, and Take Care of the 
Middle Class. These two things go together. If we are going to have a 
robust economy, if we are going to be able to move up the employment 
and reduce the unemployment in America, then we must make it in 
America. As we do that, we will recreate those very, very important, 
critical, middle class jobs. There's a whole strategy that's underway 
here.

                              {time}  2010

  I used to play football when I was back at the University of 
California a few years back and did fairly well at it. But there is an 
analogy that I think we need to keep in mind here to the current 
economic situation in America.
  Let's envision for a moment that the first quarter was the 8 years of 
the Bush administration. What happened? Well, I had a little chart up 
here a few moments ago, and maybe I ought to put it back up. The first 
8 years of the Bush administration--be with me for a moment here--were 
the years of the first quarter. What happened? It was a wipe-out. It 
was horrible. The American team was decimated. We were on our backs. We 
were losing 800,000 jobs a month in the last year of the Bush 
administration. It was 8 million jobs lost.
  The second quarter, we brought in the Obama team. It didn't start off 
too good. The first few minutes of that quarter were rough, but it was 
an improvement. Each minute that went by, each quarter that went by, we 
saw an improvement; and by the end of that second quarter, we were 
building jobs. We were building jobs in the private sector.
  Now, we're into the second half of the Obama administration. What's 
going to happen? The Obama team is still on the field. The President's 
in place. We have a strong minority position going forward in the 
Democratic Caucus. Our Republican colleagues will take over the 
management of the House, and we'll see how that goes. On the Senate 
side, the Democrats are still there. So let's continue the second half 
as the Democratic half.
  Here's our plan: we are going to develop strategies--many of them are 
already in place--to make it in America so that America can make it, 
and it is based on this: manufacturing matters. That was the Speaker's 
message. The minority message going forward in this House next year 
will be ``make it in America so that Americans can make it.'' It's 
important to be able to take that paycheck home.
  My oldest daughter, now a little bit older--well, I should say more 
than a little. I'll never forget the day she came back from her first 
summer job. She came back, and she showed us her check. She held it up 
like that; and she said, Dad, I've got my first paycheck. She was 
proud. She was so proud that she was a working American.
  And I know for those millions of Americans out there today that can't 
find a job, they want to be able to come back to their home with that 
check in hand and tell their children, I'm back at work. I'm working 
again. I can take care of you. I can provide for your education. I can 
put the food on the table. That's what they want. And we have a 
strategy in mind on the Democratic side that will do that.
  This first quarter that I was talking about, the strategy was 
basically to increase the wealth of the wealthy, to start two wars and 
never pay for them, and to take the referees off the playing field and 
just let it rip. And we were ripped to a fare thee well. Wall Street 
just went crazy with ultimate greed. And the result--we should have 
expected it--you take the referees off the field, take the rule book, 
throw it off into the shower; and what do you think's going to happen 
in an NFL

[[Page H7531]]

football game? Well, that's what happened when Wall Street was allowed 
to run amok during the George W. Bush years.
  It was the Democrats in this House, in the Senate that laid out a 
structure to stabilize the financial industry. We got most of that 
money back, and we'll probably get it all back in the years ahead. It 
was stabilized, not as good as we would want; but it was stabilized.
  And then the next piece was brought forward, which was the American 
Recovery and Reinvestment Act. By all accounts, by learned economists, 
3 million jobs were created or saved as a result of that. And that 
wasn't the only piece of legislation. There was in that piece of 
legislation reinvestment in science and technology and research, 
reinvestment in our roads and streets and bridges, building the 
foundation for the future of America.
  Followed up later in this session by Democrats with legislation 
called the HIRE Act, to put people back to work, to give businesses the 
financial incentive to hire people, to bring people back onto the 
payroll, subsidizing those rehires so that people can take that 
paycheck home and say, Dear, I'm back at work. I've got a job again. 
That's what Americans want. And the Democrats were delivering that.
  The last piece of legislation before we went into the election was a 
piece of legislation to help the governments of America, the cities, 
the counties, the States, keep people employed in the essential jobs 
that are the public sector jobs: police, fire, teachers. In California 
alone, 16,000 teachers are in the classroom this year as a result of 
that piece of legislation. We want people to work. We put those bills 
on the floor. Some were actually passed by the Senate, much to our 
delight; but many, many were not. There were many pieces of legislation 
that passed here without Republican support, but nonetheless were an 
effort on our part to put people back to work. We're going to take this 
thing further in the year ahead and up through the next session of 
Congress.
  Let me put this up here for you to see. My colleague, Mr. Ellison, 
was talking about wind turbines and photovoltaic. Interesting, but not 
many of these are made in America nowadays. Most of these are imported: 
wind turbines from Europe and China; photovoltaic cells now mostly from 
China; buses from Europe and other places. We can make these things in 
America. We can make these things in America because we once made them 
in America. In my own district, in the Fairfield/Solano Counties area 
of California, we used to make a lot of solar panels. And in the Bay 
Area, there still is a bus manufacturer, one of the few left in America 
that actually produces buses, the GILLIG Corporation.
  I will never forget the day that I went out to visit the wind farm in 
Solano County and talked to the companies that were putting those wind 
turbines up. I asked them, Boy, that's quite a tower. It's 400 feet 
high, a lot of steel. Oh, yeah, yeah. We bring that in from Korea. 
That's interesting. And those blades stretching out the length of a 
football field, 300 feet? Oh, yeah, those are brought in from Europe 
right now, but maybe we can begin to manufacture those once again in 
Colorado. And all the gear boxes and all of the electronics, all of it 
is imported.
  And I told them, I said, You want me to continue to support American 
tax money, subsidizing your wind turbines and your business, and you 
want those things made overseas? Well, they don't make it in America 
anymore. And I said, Well, let me put it to you this way: if you want 
my help, if you want American taxpayer money for subsidies, then you 
damn well better make it in America; otherwise, our tax money ought not 
be used to support industries overseas. If it's private money, do what 
you want to do. If you want to buy a turbine from Europe, fine. If you 
want to buy a turbine from Japan or China, fine. But use your own 
money. Don't you use American taxpayer money. But unfortunately, far 
too much of that has gone on in the years of the past.
  I have introduced legislation and others are following along so that 
our tax money is going no longer overseas for buses, for bridge steel, 
for photovoltaic systems, for wind turbines. Our tax money, when these 
Democratic bills pass this House and the Senate and signed by President 
Obama, our tax money will be used to support American industry.

                              {time}  2020

  Think of what that means. We spend $4 billion a year buying buses 
with our tax money, our gas tax money. Where is it going now? A lot of 
it is going overseas for foreign-made buses and trains and equipment. 
We don't want that anymore.
  In the American Recovery and Reinvestment Act, some $12 billion was 
set aside for a high-speed rail, and a sentence was added to that 
particular piece of the bill that said that when high-speed rail is 
built in America, it will be built in America by American 
manufacturers.
  There are some companies overseas that build these high-speed rail 
systems. Some of them whined, and others of them--Siemens, in 
particular--said, Well, if that is where the money is and that is the 
requirement, then we will build the Siemens high-speed rail system in 
America.
  It makes a difference in how you write laws, and the laws that we 
should write that use our gasoline and our diesel tax money to buy 
buses, trains, other kinds of rolling stock, and to build bridges and 
to build highways, that is our gas tax money, that is our diesel tax 
money, then spend that money on American-made equipment, whether it is 
a bus, a high-speed rail, a train, or whatever. Again, if you want to 
use your private money, if you want to buy a Mercedes-Benz, go for it, 
but not with our tax money.
  It also applies in the area of energy policy, the same thing. In the 
American Recovery and Reinvestment Act, there were substantial 
subsidies for wind and solar and green technologies of all kinds, 
nuclear and the rest. Good. We need to change our energy policy. We 
have to move away from our dependence on coal and oil into new, 
renewable technologies that do not contaminate our atmosphere with 
carbon dioxide.
  Are we going to do that successfully? If we allow our tax money, our 
subsidies to be spent on equipment made overseas, I don't think so. I 
don't think so at all. That is our money. We should spend it in the 
future on American-made equipment of all kinds. That should be our 
policy. That is legislation that I have introduced. That is legislation 
that is strongly supported. And, I dare say, it is legislation that 
will be a major part of Make It In America, the Democratic agenda to 
rebuild the manufacturing sector of this Nation.
  There is another piece of this puzzle that we need to keep in mind, 
and that is tax policy. There was a lot of discussion during the 
campaigns, and a lot of Democrats lost their jobs on this issue. It is 
the big ``D.'' It is the deficit. A lot of our Republican colleagues, 
rightfully, said the deficit is a problem.
  Well, you can go into economics. You can talk about Keynesian 
countercyclical economic policy and all the rest. And I happen to 
believe that when the economy is going in the tank, countercyclical 
measures, Keynesian, using the government purchasing to encourage the 
growth of the economy, to stabilize the economy, unemployment insurance 
and other benefits that provide a foundation are extremely important. 
And, we will soon, on this floor and over in the Senate, take up the 
extension of the unemployment insurance.
  I know our Republican colleagues are opposed to this. They think that 
by ending the unemployment insurance, people will go out and find a 
job. I think not. And even a few Republicans lost their jobs in this 
election, and we will see if they get unemployment insurance. They may 
very well apply for it, and maybe some of my Democratic colleagues will 
also. But that unemployment insurance keeps food on the table, keeps 
families together, and provides the shelter that is necessary, because 
the jobs are not yet there, because these policies are just now going 
into legislation and eventually into the law and into place.
  The deficit, what are we going to do about the deficit? We are going 
to have to get the economy going. That, all economists say, is the most 
critical part of dealing with the deficit. If the economy doesn't grow, 
the deficit cannot be dealt with. So we grow the economy. Policies such 
as we have talked about here are a way of doing it.

[[Page H7532]]

  There is another thing about the deficit that needs to be taken into 
account, and that is: Where did it come from? Here is a fact. The day 
that George W. Bush took office in January of 2001, he was handed a 
$230 billion surplus. The day that President Barack Obama took office, 
he was handed a $1.3 trillion deficit. Why did it occur? Collapse of 
the economy, clearly a big piece of it. And the policies of the 
government just letting Wall Street run amuck, the housing industry run 
amuck without any rules, all of that was part of it. But there was more 
to it.
  The Bush tax cuts in 2001 and 2003 added billions and, over time, 
trillions to the deficit. And the Iraq war and the Afghanistan war, two 
wars that were financed by borrowing money from China, added to the 
deficit.
  Those are the realities. The deficit is part of the economy now; it 
is part of our fiscal situation. It started, grew, and manifested 
itself during the George W. Bush years, and now we need to work our way 
out of it.
  So how are we going to do that? How do we work our way out of this 
deficit? Well, with policies like Make It In America, clearly 
important. The countercyclical measures, providing unemployment 
insurance, using the power of government to bring jobs into reality, 
all of those are important. Tax policy, also.
  A big debate will occur in this Chamber in the days ahead. Before 
December 31, a debate will occur as to what will be the tax policy of 
the United States. The George W. Bush tax cuts, which I talked about a 
moment ago that created a large part of that deficit, are up for debate 
because they expire on December 31, 2010. The expiration of those tax 
cuts, most of which went to the wealthy, are going to be up for debate.
  Our Republican colleagues want to extend all of the tax breaks. The 
Democrats, President Obama and the rest of us, have a different idea. 
We think the deficit is really important. We believe that we have to 
address the deficit. The extension of all of the Bush tax cuts will 
significantly increase the deficit.
  Now, on the Democratic side, we believe that the tax cuts to the 
middle class are extremely important, because they give the middle 
class the opportunity to have a larger paycheck, less taxes taken out, 
so that homeowners can pay the mortgage, put food on the table, provide 
for their families, give kids the books, the backpack, the things they 
need to go to school. That is our view. The tax cuts should be extended 
for the middle class.
  Let's look at what happens in a very, very important policy 
discussion between the Democrats and the Republicans about taxes. There 
are a lot of bubbles on this page, but these bubbles represent real 
money. The George W. Bush tax cuts, if extended, have this effect:
  For those people that are earning $10,000 or more, they will get $52 
in reduced taxes. And so it goes. Let's say a person is earning $75,000 
a year. They will get $1,800 of tax cuts. And then it continues to 
grow. The more income you have, the more wealth you have, the greater 
the break, the greater the tax cut for you, so that by the time you are 
a millionaire, your average tax reduction is $17,000.
  Under the George W. Bush, that is average. That is between $500,000 
and $1 million. But if you are a millionaire and you have $1 million 
adjustable tax, you will receive an enormous benefit. And then, if you 
get up to the gazillionaires, here is where you are.

                              {time}  2030

  The Democrats have a different idea. Our idea is that every taxpayer, 
every taxpayer, the very wealthy and those who are making just $10,000 
a year, should receive a tax break on the first $200,000 that an 
individual makes and $250,000 for a couple filing joint tax returns. 
Let me make that clear: Every taxpayer gets a tax break, up to $200,000 
for an individual and $250,000 for a couple filing a joint tax return.
  What is wrong with that? Millionaires get a tax reduction, 
billionaires get a tax reduction, every taxpayer gets a tax reduction. 
And this is our plan. But for those who are very, very wealthy, those 
who are making over $250,000, $500,000, $1 million, $1 billion a year, 
we think they have an obligation to America, and they should not 
receive a continuation of the tax break that they have had for the last 
several years, this kind of a tax break.
  So we would suggest that their tax break go back to what it was 
before 2001. In the case of those earning up to $1 million, it would go 
from 33 percent to 36 percent. Oh, my goodness, a 3 percent increase. 
How horrible.
  I think not. What does that amount to for somebody making $1 million 
a year? Three percent, $30,000. That is not going to bust their 
checking account. But it is certainly going to be important if you are 
concerned about the deficit. If you care one iota about the deficit, 
you better be caring about this, because here is where the real money 
is, right here.
  For the tax breaks to continue, for those above $250,000 we are 
talking about over $700 billion of increased deficit. You can't have it 
both ways here. You cannot have it both ways. If you are concerned 
about the deficit, then why in the world would you want those people 
who are not hungry, who are not homeless, who are not working in our 
manufacturing plants, why would you want them to be responsible for 
increasing the deficit? Well, perhaps because that is your 
constituency.
  That is not our constituency. The Democratic constituency is the 
hard-working middle class that will get a tax break, a continuation of 
what they have had for the last 7 years.
  This is important. This is about the deficit. Remember, every 
taxpayer in America gets a tax break up to $200,000 or $250,000. They 
get a break. But you get more money above that, and your adjusted gross 
income is greater than $250,000, then for that amount, up to $1 
million, you are going to pay 3 percent more. For a millionaire, 
$30,000. For a billionaire, okay, it will be more dollars, but the 
increase is only going to be 4-plus percent. This is not going to bust 
their bank, and it is not going to hurt small business.
  Let's be clear about this: Small business is not impacted, except for 
just 3 percent of the small businesses in America, meaning this 
proposal that the Democrats are going to put forward will provide a tax 
break for 97 percent of small businesses. It will not increase their 
taxes for 97 percent of small businesses.
  For 3 percent, and here is the definition of small businesses, the 
world's largest construction company, Bechtel, in California, is by the 
definition that the Republicans use a small business. Billions of 
dollars of annual income. It is a small business. I think not, but that 
is the Republican definition.
  Now, one of my colleagues earlier tonight did a little thing that I 
just have to do again, because it is very illuminating, so let me do 
that. I will take down our principal message for the two years ahead: 
Make it in America. Manufacturing matters. If America is going to make 
it, we must make it in America.
  I was talking a moment ago about the Bush tax cut. Here is what it 
means. The Republican plan, if the Bush tax cuts are extended, will cut 
taxes for the rich an average of $83,347 a year. $83,347 a year is the 
average tax reduction for the 1 percent wealthiest Americans, the 1 
percent wealthiest Americans.
  Well, what does that mean? Well, it means that for the next decade, 
they will be able to buy an $83,000 Mercedes Benz E-class every year 
for the next decade. Or maybe they want to buy their wife, girlfriend, 
whatever, a modest purse, a Hermes, just a handbag, $64,000, every 
year. That is a lot of purses for the next 10 years.
  Now, if that is not sufficient, we like to characterize some of these 
fat cats with their cigar. Well, they won't have trouble buying cigars. 
These are top-line cigars. They can buy 800 cigars every year. And that 
is not all. They can light those cigars with a $100 bill. Every single 
cigar, that is 800 a year, and 800 $100 bills used to light them.
  I could go on and on, but I see my colleague Paul Tonko has returned.
  Here is the alternative, Americans. Here is the alternative to the 
Republican plan. Instead of giving $83,000 a year to the wealthiest 1 
percent of Americans, you can take that same amount of money and give a 
$30,000-a-year job to 3 million Americans.
  Our work is about choices, our work is about values, and, frankly, 
our work is about morality. Tell me what is the morality of allowing 
the richest 1 percent of Americans to buy 800 cigars a

[[Page H7533]]

year and light those cigars with $100 bills, $83,347 in tax reductions, 
versus 3 million Americans, 3 million unemployed Americans who have a 
family, who are losing their home, who cannot provide food if the 
Republicans are able to block the extension of the unemployment 
insurance.
  This is a moral question. This is a question of what is right and 
wrong in America. This tax cut shows the dividing line about where you 
stand in America.
  Where do you stand? Are you with the richest 1 percent, so they can 
go out and buy a Mercedes E class $80,000 vehicle every year for the 
next decade, or do you stand with families and want to put a paycheck 
on the table? I think it is pretty clear.
  Mr. Tonko, thank you for rejoining us.
  Mr. TONKO. Thank you, Representative Garamendi, for an enlightening 
discussion on job creation, making it in America, and tax policy that 
can empower our middle class. The strengthening of the middle class, 
enabling them to have more purchasing power, has got to be the guiding 
force as we continue to do work in the closing stages of the 111th 
Congress and move into the next session of Congress. It is absolutely 
essential. I think it is what everyone heard out on the campaign field 
this past fall and summer. People were concerned about the economy.
  Again, we have surpassed that 1 million count for new jobs in the 
private-sector realm, but after 8.2 million jobs lost, it simply isn't 
getting us there quickly enough.

                              {time}  2040

  I understand the impatience. I understand the fear. Obviously, people 
need to have a job. The dignity of work enables them to dream the 
American Dream of house ownership and allowing them to encourage their 
children and help their children pursue their careers through perhaps 
higher education. So it's important that we respond to that dynamic of 
empowering the middle class.
  I think there's some telling statistics that are really highlighting 
the concern that people are expressing these days. Some 83 percent of 
all United States stocks are in the hands of 1 percent of the public. 
Now that is a very lopsided statistic. We're also told that some 61 
percent of Americans always or usually live paycheck to paycheck. That 
is up from 49 percent just a year ago and then 43 percent just 2 years 
ago. So that climb from 43 to 49 to 61 percent of those who usually or 
always live paycheck to paycheck is a concern or at least ought to be a 
concern to the Members of this body.
  And so it is important for us to make certain that we break some of 
those barriers and we allow for some of the benefit to flow to the 
middle class. Sixty-six percent of the income growth, for instance, 
between 2001 and 2007 went to the top 1 percent of all Americans. And 
when we look at the difference between the Obama tax cut and the Bush 
tax cut, the Bush tax cut borrowed money from China to enable us to 
give as a government the top percent of wealth--top 1 or 2 percent of 
wealth of America--to receive their tax cut. We borrowed. It was off-
budget, as you indicated earlier. So we borrowed to pay for a tax cut; 
to spend for a tax cut for the wealthiest of Americans. Now when we 
look at the Obama tax cut, it was the largest historic tax cut for 
middle-income America.
  Mr. GARAMENDI. That was in the American Recovery and Reinvestment 
Act, wasn't it?
  Mr. TONKO. Absolutely--and oftentimes a fact missed on many out 
there. It was the largest such tax cut for middle-income America, a 
historic statement. You compare that Obama tax cut to the Bush tax cut 
that borrowed to spend for the tax cut for the wealthiest of Americans. 
And so now we shouldn't be surprised when we see these stats that show 
more purchasing power there for the wealthiest, who are now usurping 
all of the purchasing of stocks out there. One percent reflecting the 
83 percent of all United States stock, for instance.
  So we need to do better than that. And I would suggest that all 
income strata fare better when we have a strong middle class. You need 
someone to purchase your products. You need someone to build your 
products, to manufacture your products. We need a strong middle class. 
We need to invest in that opportunity. And I think all of that recovery 
that we're hoping for becomes all the more expedited.
  It was shown to us in the Clinton years. By creating economic 
recovery, by producing jobs, you solve the Nation's deficit. President 
Clinton inherited a deficit from the first Bush administration, and he 
handed over a $5.6 billion surplus to the next administration. And then 
what did we inherit but a record deficit that was then passed on to the 
Obama administration at their beginnings in 2009 with, again, a 
recession that was more painful than any economic consequences in the 
past 70 years.
  So the track record is such that you have seen Democrats working with 
the Democratic administration to build us out of deficit situations, 
create a surplus, and then have it spent down again and giving priority 
to those engines--economic engines that simply don't work. When the 
Obama tax cut--again, historically large for the middle class--was 
implemented, we saw that what the economists, from far-right thinking 
to far-left thinking, as a team had suggested would happen. We actually 
saw that happen. And these economists were right on. As soon as the 
middle class was given its tax cut, that tax cut was brought back. It 
was spent back in the regional economies. And we saw the beginning of 
the end of that bleeding of the recession. It ended the bleeding simply 
by creating that recovery, having those dollars recirculate in regional 
and State economies across the country, the telltale indicators then 
proved that the bleeding of that recession had stopped. And it was that 
empowerment of the middle class that enabled, I think, the economics of 
it all to work.
  So we should take lessons from history, and we can take that Obama 
tax cut and contrast it with the Bush tax cut and see what really 
happened. And your whole statement about those thresholds, those 
households of $250,000 or less, with that as a threshold we can see the 
empowerment that comes when we concentrate on that portion of the tax 
cut that I believe will have a trickle-down value. The $700 billion 
price tag on the upper income strata in terms of spending on a tax cut 
for that strata is a hefty one and we need to understand, analytically 
understand, what the payback would be. What is the dividend; is there a 
lucrative dividend by spending such money on that given strata of tax 
cut.

  Mr. GARAMENDI. Thank you, Mr. Tonko. If you or anyone really cares 
about the deficit, you need to really pay very close attention to this 
debate that is going to happen here in this chamber and here in 
Washington, D.C., in the days and weeks ahead. And that is, do we give 
an enormous tax break to the wealthiest of America, and in doing so 
increase the deficit by over $700 billion, or do we limit that tax 
break to all taxpayers up to $200,000 or $250,000? An extremely 
important debate that will take place.
  For me, it is time to think about the deficit. It's time to get real 
about the deficit. And if you really care about the deficit, if you 
really care about growing the economy, the point that you just made, 
then limit the tax reduction so that all Americans receive a tax 
deduction up to $200,000 or $250,000 of adjusted gross income. And keep 
in mind it's adjusted gross income, not gross income. Adjusted gross 
income. That's after all the deductions.
  Mr. TONKO. And I would suggest to you also that we need to accompany 
that sort of analytical thinking and that sort of dividend associated 
with the spending that would be done on a tax cut so that we maximize 
the benefit for the economy. But we also have to think of the 
stewardship, the sound management that was part and parcel to the 
Clinton years when we contrast that with the management post-Clinton or 
pre-Clinton. It is absolutely essential to incorporate concepts like 
PAYGO so that you pay as you go. You are forced then to come up with 
the ideas that will produce the revenues in order to initiate the new 
spending.
  Mr. GARAMENDI. By PAYGO, you mean that the Congress and the Senate in 
enacting tax cuts balance those tax cuts off against reductions of 
program or vice versa. If you have a new program, the way you get the 
revenue to pay for it.

[[Page H7534]]

  Mr. TONKO. Absolutely.
  Mr. GARAMENDI. The PAYGO, meaning as applied to us in the Congress.
  Mr. TONKO. Exactly. And it creates that sort of stewardship over the 
budget that doesn't find us in situations where we paid for two wars, 
we initiated a part D Medicare doughnut hole which impacted our senior 
population with their pharmaceutical needs and gave a tax cut to the 
wealthiest of Americans and did it all off-budget. And so that when 
this President assumed office, one of the first tasks assigned the 
administration or embraced by the administration so as to truth in 
budgeting and honesty in budgeting is to bring it online, which grew 
the deficit, but it was a truthful budget. You can't continue to have 
an off-budget, borrow from China or whatever, in order to pay for 
programs and say, Okay, we'll pay for it into the future. The PAYGO 
concept requiring us to find the revenue sources in order to do these 
orders of programing or tax cuts will be accompanied by the mindset, 
the logic of just how do you pay for it. And PAYGO means being fiscally 
responsible.
  Mr. GARAMENDI. Excuse me for interrupting. That was the policy during 
the Clinton period, and it led to the surplus because it put fiscal 
discipline into this building and over on the other side in the Senate. 
Similarly, it has now been reinstituted by the Democrats a year and a 
half ago.

                              {time}  2050

  I want to just wrap up here. I want to go back to ``Make It In 
America'' and wrap with this. Our time has almost expired here.
  Mr. TONKO. Sure.
  Mr. GARAMENDI. With this ``Make It In America'' agenda, as Speaker 
Pelosi and soon to be Minority Leader Pelosi said as she exited the 
Organizational Caucus of the Democratic Party today, there are two 
principles that the Democratic Caucus will follow: One, we will make it 
in America so that America can make it. Two, we will do this on behalf 
of the middle class so that those jobs are there.
  Interestingly, while the President hasn't used this term very often 
of ``make it in America,'' President Obama has nonetheless proposed 
policies that are directly in line with this--specifically, that every 
business in America be given the opportunity to immediately write off 
any capital investments they make. Now, it's already in the law. In the 
American Recovery and Reinvestment Act, there is in the law an 
automatic write-off of a capital investment made by a small business. 
That was increased in a subsequent bill that we voted out, without any 
Republican support, that allows small businesses to write off 
immediately.
  The President would go further. I've introduced a bill that would do 
that--other members of the Democratic Caucus have also--so that 
businesses would be incentivized to invest now in the capital equipment 
that will provide the foundation for future jobs. Invest now.
  This is part of our strategy. It is an overarching Democratic 
strategy, one that we have been working on for some time, beginning 
with, among the first bills passed by Congress and signed by the 
President way back in 2009, the American Recovery and Reinvestment Act.
  Would you like to wrap this up here?
  Mr. TONKO. Let me just state this, that the landmark Small Business 
Act, which is intended to create jobs--we're anticipating 500,000 
jobs--allows for investment in exporting, which I believe is critically 
important; it allows for investment in our modernization of 
manufacturing and small businesses, and it allows for the unleashing of 
some $300 billion worth of loan opportunities to our small businesses.
  We profess small business to be the economic engine, to be the 
springboard to the economic recovery. To the credit of Speaker Pelosi, 
whose leadership has led this House through the 111th Congress, we have 
made that our focus. We came out of a deep, deep recession, and, 
unfortunately, there wasn't enough time for us to feel the effects of 
the progress made by such legislation. I just think we need to pursue 
that path to progress.
  Thank you very much, Representative Garamendi.
  Mr. GARAMENDI. Mr. Speaker, I yield back the balance of my time.

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