[Congressional Record Volume 156, Number 156 (Thursday, December 2, 2010)]
[Senate]
[Pages S8383-S8390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
REVISIONIST FISCAL HISTORY
Mr. GRASSLEY. Madam President, since yesterday, we have witnessed in
this Chamber the resumption of a set of tired and worn out taking
points that the Democratic side drags out whenever they are forced to
finally get around to discussing tax policy.
Well, once again beating the same dead horse, the other side has
attempted to go back in time again and talk about fiscal history.
Earlier this week, there has been a lot of revision or perhaps editing
of recent budget history. I expect more of it in the future days.
The revisionist history basically boils down to two conclusions.
First, that all of the ``good'' fiscal history of the 1990s was derived
from a partisan tax increase bill in 1993, and, two, that all the bad
fiscal history of this decade to date is attributable to bipartisan tax
relief plans.
Not surprisingly, nearly all of the revisionists who spoke generally
oppose tax relief and support spending increases. The same crew
generally supports spending increases and opposes spending cuts.
For this debate, it is important to be aware of some key facts. The
stimulus bill passed by the Senate, with interest included, increased
the deficit by over $1 trillion. The stimulus bill was a heavy stew of
spending increases and refundable tax credits seasoned with small
pieces of tax relief.
The bill passed by the Senate had new temporary spending that, if
made permanent, will burden future budget deficits by over $2.5
trillion. Now, that is not this Senate Republican speaking; it is the
official congressional scorekeeper, the Congressional Budget Office. In
fact, the deficit effects of the stimulus bill passed within a short
time after the Democrats assumed full control of the Federal Government
roughly exceeded the deficit impact of 8 years of bipartisan tax
relief. You can see that very clearly right here.
The tax relief over here, and the stimulus bill here--all of this
occurred in an environment where the automatic economic stabilizers,
thankfully, kicked in to help the most unfortunate in America with
unemployment insurance, increased amounts of food stamps, and other
benefits.
That antirecessionary spending, together with lower tax receipts and
the bailout activities, set a fiscal table of a deficit of $1.4
trillion. That was the highest deficit as a percentage of the economy
in post-World War II history. You can see that right here.
From the perspective of those on the Republican side, this debate
seems to be a strategy to divert, through a twisted blame game, from
the facts before us. How is the history a history of revision? I would
like to take each conclusion one by one.
The first conclusion is that all of the good fiscal history was
derived from the 1993 tax increases. To test that assertion, all you
have to do is take a look at data from the Clinton administration. The
much ballyhooed 1993 partisan tax increase accounts for 13 percent of
the deficit reduction in the 1990s, 13 percent. That 13-percent figure
was calculated by the Clinton administration Office of Management and
Budget.
The biggest source of deficit reduction, 35 percent, came from a
reduction in defense spending. Of course, that fiscal benefit
originated from President Reagan's stare-down of the Communist regime
in Russia. The same folks on that side who opposed President Reagan's
defense build-up somehow seem to take credit for the fiscal benefit of
the peace dividend.
The next biggest source of the deficit reduction, 32 percent, came
from other revenue. Basically this was the fiscal benefit from the pro-
growth policies such as the bipartisan capital gains tax cuts of 1997
and the free trade agreements that President Clinton, with Republican
votes, got passed.
The savings from the policies I pointed out translated to interest
savings. Interest savings account for 15 percent of the deficit
reduction. Now, for all of the chest thumping about the 1990s, the
chest thumpers who pushed for big social spending, did not bring much
to the deficit reduction tables in the 1990s. Their contribution was
this, 5 percent.
What is more, the fiscal revision historians in this body tend to
forget who the players were. They are correct that there was a
Democratic President in
[[Page S8384]]
the White House, but they conveniently forget that Republicans
controlled the Congress for the period where the deficit came down and
eventually turned into a surplus.
They tend to forget they fought the principle of a balanced budget
that was the centerpiece of Republican fiscal policy.
Remember, the government shutdowns of late 1995? Remember what that
was all about? It was about a plan to balance the budget.
We are consistently reminded of the political price paid by the other
side for the record tax increases they put into law in 1993.
Republicans played a political price for forcing the balanced budget
issue in 1996. But as we found out in 1997, President Clinton agreed.
Recall as well all through the 1990s what the year-end battles were
about.
On one side, congressional Democrats and the Clinton administration
pushed for more spending. On the other side, congressional Republicans
were pushing for tax relief. In the end, both sides compromised. That
is the real fiscal history of the 1990s.
Now, let's turn to the other conclusion of the revision by fiscal
historians. That conclusion is that in this decade all fiscal problems
are attributable to the widespread tax relief enacted in the years
2001, 2003, 2004, and 2006.
In 2001, President Bush came into office. He inherited an economy
that was careening downhill. Investments started to go flat in 2000.
The tech-fueled stock market bubble was bursting. After that came the
economic shocks of the 9/11 terrorist attacks. Add in the corporate
scandals to that economic environment, and it is true that in the
fiscal year 2001, as it came to a close, the projected surpluses turned
to a deficit.
But it is wrong to attribute the entire deficit occurring during this
period to the bipartisan tax relief. Because, according to the CBO, the
bipartisan tax relief is responsible for only 25 percent of the deficit
change, while 44 percent is attributable to higher spending and 31
percent to economic and technical changes.
In just the right time, the 2001 tax relief plan kicked in. As the
tax relief hits its full force in 2003, the deficits grew smaller. This
pattern continued for 4 more years through 2007. If my comments were
meant to be partisan shots, I could say this favorable fiscal path from
2003 to 2007 was the only period, aside from 6 months in 2001, where
Republicans controlled the White House and the Congress.
But unlike the fiscal history revisionists, I am not trying to make a
partisan point; I am just trying to point out a few fiscal facts. There
is also data that compares the tax receipts for 4 years after the much
ballyhooed 1993 tax increase and the 4-year period after the 2003 tax
cuts.
I have a chart here that will track those trends. In 1993, the
Clinton tax increases, the blue line, brought in more revenue as
compared to the 2003 tax cuts. That trend reversed as both policies
moved along in years. Over the first few years, the extra revenue went
up over time relative to the flat line of the 1993 tax increases.
So let's get the fiscal history right. The pro-growth tax and trade
policies of the 1990s, along with the peace dividend, had a lot more to
do with the deficit reduction in the 1990s than the 1993 tax increases.
In this decade, deficits went down after the tax relief plans were
put in full effect. No economist I am aware of would link the technical
bursting of the housing bubble with the bipartisan tax relief plans of
2001 and 2003. Likewise, I know of no economic research that concludes
that the bipartisan tax relief of 2001 and 2003 caused the financial
meltdown of September and October 2008.
I have another chart that shows what the President inherited from the
Democratic Congress and a Republican President. As I said, from the
period 2003 through 2007, after the bipartisan tax relief program was
in full effect, the general pattern was this: revenues went up,
deficits went down.
One major point that needs to be said right here is to state where
the government gets the money it spends. Basically I am asking, from
where do taxes come? I would have thought this would have been
perfectly obvious to most people, but I may have been wrong. Taxes come
from taxpayers. I say this because we have heard tax relief for certain
individuals referred to as the word ``bonus.'' A search of the
Congressional Record for the Senate on December 1, 2010, shows that the
word ``bonus'' was said nearly 50 times, the implication being that by
extending tax relief for all Americans we are giving some people a
bonus that other people are paying for.
Let me try to simplify this for my colleagues who are having trouble
understanding. There is no proposal to cut taxes for anyone before this
body. The question is, Instead, are we going to allow taxes to go up or
are we going to prevent a tax increase? If we prevent taxes for
everyone from going up, we are letting taxpayers keep more of their own
money that they have earned and worked hard for. No one is proposing a
bonus or a gift to anyone. The question is, Do we want taxpayers to
have more or less of their own money?
My colleagues on the other side have been especially incensed by what
they consistently refer to as ``tax cuts for the rich'' and seem to
believe tax relief for everyone is responsible for our disastrous
budget situation. However, I think nearly everyone serving in the
Chamber and certainly the President and House and Senate leadership
support extending around 80 percent of that tax relief. If those on the
other side are serious in their pleas that taxes must be increased in
the name of fiscal responsibility, how can they claim 80 percent of the
tax relief is absolutely necessary and that 20 percent of the tax
relief is absolutely wrong? This chart, drawn up from Congressional
Budget Office data, should give more insight into the two groups the
other side is talking about. The orange line measures the effective tax
rate paid by the top 5 percent of taxpayers. By the way, this is where
the small business owners' tax hit occurs. This group represents those
tax-paying families with incomes over $250,000. Under the Democratic
leadership's preferred tax policy, this line will go back up to where
it was in the year 2000. Republicans would prefer to prevent this tax
increase, and we have shown it falls primarily on the backs of small
business.
The main point this chart shows, though, is that tax relief
undertaken during the last administration benefited all taxpayers, and
characterizing it as tax cuts for the rich is simply not accurate. Of
course, I wish to put our country on a path to fiscal responsibility,
but I do not believe higher taxes will lead us to that path. Rather, we
need to carefully examine how we spend the money we already collect.
This debate is about one fundamental question. Who does the money
you, the taxpayer, have worked hard to get belong to? Does it belong to
the citizens who earn it or does it belong to the government? Is
whatever the taxpayer is left with an allowance, with the balance to be
spent by a government that knows best? I think most people would answer
my last two questions with a strong resounding no. As we continue to
discuss pressing tax matters in Congress, we need to keep these
fundamental and simple truths in mind. We need to stop taxes from
increasing for all Americans. It is fundamental, after all the years I
have served in the Senate, that increasing taxes $1 does not go to the
bottom line and bring the deficit down.
Through three or four different occasions during the years I have
served in the Senate, we have had propositions, some of them even
bipartisan, that we increase taxes by $1 and somehow we will decrease
expenditures by $3 and, in the process, we are all going to win and the
deficit is going to go down. But what we forget is how the mechanics of
legislative bodies work. You increase taxes for a long period of time,
but each year expenditures are reviewed, and somehow that 3-for-1 rule
does not seem to hold on the expenditure side. They don't go down. They
creep up, creep up, and creep up. So in the final analysis, it is kind
of averaged out that for every $1 we bring in in increased taxes, it is
a license to spend $1.15.
Some studies would say it is even much higher than that and not just
one proposition like that but several propositions like that. That is
how it has ended up. I don't like to increase taxes, but if there was
ever a time I could increase taxes and knew that went to the bottom
line and brought the deficit down $1, it might be a proposition I
[[Page S8385]]
could buy into. But the practice of legislative bodies, particularly
the Congress of the United States, increasing taxes $1 is a license to
spend more. It is a ratchet effect. I am very suspicious of those
propositions. I think my colleagues see that raising taxes has not done
anything to bring the budget deficit down.
I ask our colleagues, in these last few weeks of this Congress, to
keep those historical facts in mind so we don't get hoodwinked into
doing things that don't end up reducing the deficit. Even at a time
when it sounds like it will reduce the deficit and makes sense, the
common sense we ought to remind each other of is it doesn't work.
I yield the floor.
The PRESIDING OFFICER (Mr. Manchin). The Senator from New York.
Mr. SCHUMER. Mr. President, I rise to speak on the upcoming
amendments and debate we will have on the tax issue. Let me say a few
things. First, we are in a very tough economic situation. We have a
large number of unemployed people, and even people who have been
employed over the last decade, for the middle class, their incomes have
not gone up. Their buying power has not gone up. This is the first
decade that middle-class incomes have not increased.
Second, the economy, if we look at statistics from 2000 to 2010, even
with the recession, has done pretty well. But almost all the income and
all the wealth has agglomerated to the top 1 percent and top 10
percent. That means the people at the highest end did very well, while
everybody else did not. I have nothing against them. In fact, I think
they are great. They are part of the American dream. To say they have
gotten most of the wealth, some of my colleagues bring up the false
issue of class warfare. It is not class warfare. It is a fact we have
to deal with, just like saying middle-class incomes have not gone up
enough. That is not class warfare either. Those are just facts.
Then there is the third issue; that when we began the decade in 2001
there was a surplus of $300 billion left by Bill Clinton. Now, of
course, we have a huge deficit. We did when Barack Obama took office,
and because of the stimulus it is greater. But the No. 1 reason was the
tax cuts, mainly agglomerated to the wealthy, passed by President
George Bush and a Senate and House led by Republicans.
Issue 4, when the tax rates were higher--Bill Clinton had raised
them--we all know job growth in the 1990s far exceeded job growth in
this decade.
So put all that together, and it makes a pretty strong point that the
middle class needs relief, No. 1; that the country must overcome the
deficit problems we face, No. 2; and No. 3, that the highest income
people are doing great.
So what would be the proper solution to that when we have a tax bill
coming before us? It is pretty logical. It is pretty obvious. We should
actually make sure the middle class keeps their taxes low. They are the
ones whose incomes have suffered. They are the ones who spend it when
they get a check because they don't have much money. They are the ones
who need the relief both for themselves and in their personal and
family situations and for the economy. But to give huge amounts of tax
breaks to the very wealthy doesn't make any sense. Why? Because, first,
they are doing great. God bless them; second, because they don't spend
it. They are not going to go out to the supermarket or the department
store Christmas shopping because they know they are getting a little
bit of a tax break; they have plenty of money. And third, because even
most of them would probably admit they did fine when the rate was a
little higher on them. It is not going to affect their business and
spending decisions very much, if at all.
The logical solution is to give the middle class the tax break and
say to the upper income: Your money should go to deficit reduction.
That is what we will vote on in the next few days on the floor. Some
would prefer that the level be 250, that the tax cuts should go to all
those below 250. I know my colleague from Iowa feels that way. He will
speak after me. I have been willing to have the rates go up to 1
million. I think having a rate for the very highest income people,
which we always used to have, restoring that makes a great deal of
sense because that is where the wealth is agglomerating. It is no
longer people in the top 10 percent who do the best. It is people in
the top 1 percent who do the best, far and away. On that vote, we will
see where people stand.
Our colleagues on the other side of the aisle like to make it seem as
if a tax cut for someone making $50,000 is the same as a tax cut for
someone making $5 million. They say: Tax cuts for everybody. Don't
raise taxes on anybody. But it is not the truth. What we are here to do
is actually pull away the veil. It seems the No. 1 motivation of too
many of my colleagues on the other side of the aisle is to give a tax
break to the wealthiest among us, which may make political sense. I
don't know. It may for them. It sure doesn't make economic sense. It
doesn't make fairness sense. It doesn't make sense from the point of
view of getting the economy going.
I want the American public, over the next few days, as we debate
taxes, to listen. Ask yourself: Do you think someone making $10 million
should get a huge tax break? Do you think Warren Buffett or Bill Gates
should get a tax break that is more than the income of thousands and
thousands and thousands of middle-class people? If you believe no, tell
your Senator.
Do you believe the deficit is a serious problem and giving $300
billion to $400 billion to people who make over $1 million instead of
putting that money into the deficit makes sense? If you do not, call
your Senator and tell him no. Do you think it is at all fair to say
that to extend unemployment benefits for hard-working people who are
looking every day for jobs, that that has to be paid for but tax breaks
to the wealthiest among us do not have to be? If you think that does
not make any sense, tell your Senator, tell him or her no.
I know we have a very powerful media group on the hard right, and
they are going to try to get on the radio and get on the television and
convince the average middle-class person that Democrats want to take
away their tax cut and Republicans want to give it to them. But nothing
could be further from the truth. We have been the ones focused on the
middle class, and they have been the ones focused on the wealthy.
We are not willing to hold middle-class tax cuts hostage until there
is a tax cut for the wealthiest among us. It is time for some clarity.
If all my colleagues on the other side of the aisle vote for a tax
break for those whose annual income is above $1 million, unpaid for, I
do not want to hear about deficit reduction when it comes to programs
for transportation or education or health or the military from them
ever again.
They may believe lowering taxes on everybody is a good thing. That is
an ideology I do not agree with at this point in time. But they cannot
claim deficit reduction is a goal when they will increase the deficit
by hundreds of billions of dollars without it being paid for to give
tax breaks to the very few wealthy families here in America.
As for the argument that those tax breaks are important to create
jobs, no economist believes that. We are talking about the personal
income tax rate, not the corporate rate. We are talking about people
who, when they had a higher rate, did very well. We are talking about
job growth in the last decade among the slowest we have had in a very
long time under those low tax rates, whether they were times of
economic growth or economic decline. There is virtually no good
argument to give huge tax breaks to the very wealthy at a time when our
deficit is as large as it is. There is a very good argument to give
those same tax breaks, on a percentage basis, of course, to the middle
class.
So to the American people, please watch the floor tonight, tomorrow,
over the next several days. Figure out who is on your side. Figure out
who is being fiscally responsible. Figure out who wants to help the
average middle-class person and at the same time get a hold on our
deficit.
Again, I repeat, I respect and salute those who have made a lot of
money on their own and are very wealthy. God bless them. They are part
of the American dream. But the American dream does not say that at a
time of need, at a time when deficits are severe, that because you have
made all that money you should get a more huge tax break than everybody
else.
[[Page S8386]]
So this debate is going to be an interesting one. I think it is going
to set the tone for what we do over the next 2 years. Believe me, we
will be talking about the millionaires' tax break--who voted for it and
who voted against it--not just today and not just tomorrow but over the
next 2 years. It is a very important issue and one we cannot let rest
for the good of the middle class, for the good of deficit reduction,
for the good of the country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Mr. President, I listened with great attention to the
speech just given by my friend from New York. Senator Schumer is right
on target when he is talking about: Whom are we fighting for? What are
we in the Senate for? What are we here to do? Whom are we fighting for?
I have often said the one thing about the very wealthy in our
country, they are pretty good at taking care of themselves. Obviously,
they would not be rich if they were not. But what about the people who
do not have much? Who is fighting for them? This is what I wish to
spend some time talking about; that is, the unemployed in this country.
Last week we went home for Thanksgiving. I hope everyone had a good
time with their families. Now we are looking at the upcoming holidays
with anticipation, as we do every year, to be with our families, go out
and buy some presents and exchange presents--kids, grandkids, a festive
time.
But what about all those people who are out of work and have no
money, who right now are being cut off from the only lifeline they
have, unemployment insurance benefits--losing them day after day
because they ended 2 days ago. By the time Christmas rolls around,
somewhere close to 2 million Americans not only will be out of a job
but will have no source of income whatsoever, facing another winter
season celebrating the holidays with nothing.
I had a newspaper headline I showed the other day that said: ``Luxury
spending is back in fashion''--about how much money was being spent on
jewels and fancy wristwatches and high-end types of things. Then, right
under, in small print, it said: However, for millions of Americans they
are not shopping anywhere because they are out of work.
The two faces of America--is that what we want this country to be, a
few who can spend on lavish, jewel-encrusted watches, buying $2,500
cashmere scarves, as I just read about the other day, and everybody
else sort of getting in the soup line? We are a better country than
that.
That is what I wanted to talk about: reauthorizing the emergency
unemployment insurance program. But I, first of all, listened to my
friend and colleague from Iowa, Senator Grassley, talk about taxes. I
did not hear the whole speech, but I heard him say raising taxes never
reduces the deficit or reduces the debt. I do not know which he said--
either the debt or the deficit.
Well, I hate to disagree with my friend, but in 1993, when we enacted
the Clinton economic proposal, it included increasing taxes in 1993.
Oh, I remember the Senator from Texas, Mr. Phil Gramm, an economist,
got up and said: Oh, this is going to cause a depression. This will be
the worst thing that ever happened to this country. We are going to rue
the day we ever did this. Well, we passed it. Of course, it did not get
one Republican vote, and we did raise some taxes in 1993.
What happened, then, for the next 7, 8 years? We had unprecedented
growth in this country. Quite frankly, we did balance the budget by
2000. Not only did we balance it, we had a surplus, and we had a
surplus going into 2001. That is when George Bush came to the
Presidency and said: Oh, we have this big surplus. Alan Greenspan was
warning us we had too much of a surplus and it might not be wise to pay
down the debt. We were on course to pay down the national debt. Then
the Bush administration pushed through some tax cuts, for which they
said: Oh, we are just going to do it temporarily, you see, just until
2010. We will keep them until 2010, and then we will have to revisit it
or we will go back to what we had before in 2001.
They made that deal. I did not vote for it. I did not think we should
cut taxes that time. I thought we should pay off the national debt.
That would have strengthened our economy more than anything. But, no,
the Bush administration, the Republicans who controlled the House and
the Senate, said they wanted to cut the taxes. Most of the taxes that
were cut, as my friend from New York said, were for the very wealthy.
What happened? Did we have a lot of job growth? Not a bit. Not a bit.
Not only did we not get job growth, the deficit skyrocketed. So I do
not want to hear any exhortations from that side of the aisle about how
raising taxes has never reduced the deficit or the debt. We did under
Bill Clinton. The proof is there. We had a surplus. But they wanted the
tax breaks to give to the wealthy.
Lastly, my friend from New York talked about being held hostage.
There has been a lot of talk about middle-income Americans getting a
tax break. But I ask--and I keep asking--who are middle-income
Americans? Who are they? Well, I keep hearing it is those earning
$250,000 a year or below. Mr. President, $250,000 a year? My friends,
if you are making $250,000 a year, you are in the top 5 percent of the
income earners in America. That is right. If you make $250,000 a year,
95 percent of the American people make less than you do. So is that
middle class? I do not think so.
To me, in the middle class are people who are making $30,000,
$40,000, $50,000, $60,000, $70,000, $80,000, $90,000 a year. That is
the broad middle class of America. A lot of people in America are
living on $40,000 a year. It might be hard for some people to think
about that, but that is true. They do not take fancy trips. They do not
have fancy cars. They do not go to fancy restaurants. They do not wear
suits and ties every day. But they are working, and a lot of them are
working at jobs that are important to our society.
They may be nurses aides. They may be taking care of our elderly in a
nursing home or in assisted living. They may be our childcare workers
taking care of our children. They could be working in fast food places.
They are making $35,000, $40,000, $50,000 a year, and that is it. That
is the middle class of America. What are we doing for them? What are we
doing for that middle class?
So every time I hear about that $250,000 is the middle class, I am
thinking: Wait a second. You are talking about the top 5 percent in
America. If you want to talk about the broad middle class, you have to
start talking about people making less than $100,000 a year. What are
we doing for them?
Well, it seems to me, if we are going to have some tax breaks and
stuff, we have to think about this group. In that group--in that
group--of the broad middle class is the army of the unemployed. That is
where the unemployed are. The unemployed are not on Wall Street. They
got their bailouts. They are getting million-dollar bonuses this year,
and my friends on the Republican side want to extend the tax breaks so
not only do they get their million-dollar bonuses, they will not have
to pay their fair share of taxes on them either, not to mention, for
some of them, the way they are getting their money, they are being
charged at the least possible tax rate--not as regular income but as
capital gains. But I am not going to get into that right now.
So what are the Republicans doing? They are saying we cannot extend
the unemployment benefits for the millions of Americans who are
unemployed until and unless we have tax breaks for the wealthiest
Americans. For those making over $250,000, $500,000, over $1 million--
they do not care; no matter what, no matter who you are, how much money
you make--we have to give them tax breaks or we cannot extend
unemployment benefits to the unemployed. You want to talk about
hostages? The Republicans in this Congress are holding hostage the
unemployed workers in America because they want to get the tax breaks
for the wealthiest. That is what is happening here. I don't know that
many of the American people know about that. Oh, they see us debate
this stuff and back and forth about who is going to get these tax
breaks, but right now unemployment benefits have run out. We have asked
I think three or four times, if I am not mistaken, on the Senate floor
for unanimous consent to extend
[[Page S8387]]
the unemployment benefits, and the Republicans have objected every
single time. Why?
They wrote a letter. Yesterday, the Republican leader had a letter
signed by every single Republican in the Senate that said they will not
allow any bill to pass the Senate unless and until we pass a bill
giving tax breaks to the wealthiest Americans. It almost begs
credulity. You wonder, is this real? Do they really mean that? Well,
they signed their names to it. That means we can't extend unemployment
benefits until we give in, until we give in to the Republicans and give
tax breaks to the wealthiest Americans. What a deal. What a deal--
holding people who are at the end of their ropes--the most vulnerable
in our society--holding them hostage for their Wall Street friends.
I have heard this said by some on the other side: Well, unemployment
benefits make people lazy. If you give them unemployment benefits, they
won't look for work.
Well, let me talk for a minute about what the labor market looks like
right now, and we will see if these people are really lazy. Right now,
there are 15 million people who want a job and can't find one but 9
million people forced to work part time because they can't get a full-
time job. There are a number of other people who have looked for a job,
and they have given up. They have been out of work for 2 years. As the
Presiding Officer knows, after 99 weeks, you don't get any unemployment
benefits whatsoever, and a lot of people have been out of work for over
99 weeks. They have nothing. That means our unemployment rate is not
around 9 percent; it is actually about 17 to 18 percent. And these
unemployed workers are looking for work.
What people have to understand is that before you can get
unemployment benefits, you have to be actively looking for work. It is
a requirement in order to get it. But what is happening out there?
Workers can't find jobs because there aren't any. There is one job for
every five workers. Well, it says here: 14.8 million workers
unemployed. That is not really true. It is actually about 26 million.
That is 14.8 million unemployed, but when you include those who have
given up because they have gone beyond 99 weeks, when you take into
account those who work part time because they were working full time
but now they can only get a part-time job, it adds up to almost 26
million.
Let's just take the Bureau of Labor Statistics as they are: 14.8
million workers, 2.9 million jobs, 1 for about every 5. Actually, it is
fewer than that. If you really look at the overall picture, it is
really more like 1 in 8 to 1 in 10. So, in other words, for about every
8 to 10 workers, there is 1 job out there someplace. So most workers
will lose on this kind of game of musical chairs. When you run around
and the music stops, one person gets a job and six or seven people
don't have one. So I challenge my Republican friends: How can six or
seven or eight people find a job when there is only one available? That
is why we have so many people facing long-term unemployment.
Over 6 million people have been out of work for more than half a
year. I saw a lot of them who were here in Washington yesterday. Four
in 10 workers, what we call the long-term unemployed, have been
unemployed and looking for a job for at least 6 months. This is higher
than during any previous recession.
There are extensions going back to 1950. In terms of the share of the
total unemployed--you can see the graph here--in terms of who has been
unemployed for more than 6 months--and as we can see, as we go from the
1950s to here, look at where this line now goes in 2010: more than we
have ever had going clear back to the 1950s. Long-term unemployed,
higher than any previous recession. It is the highest in 60 years. They
are being held hostage by the Republicans.
Long-term unemployment is especially common among older workers over
aged 50. These are people who have worked all their lives, they have
saved for retirement, they have lost their jobs, and they are having a
very difficult time finding new work. A year, year and a half, 2
years--I have met people out of work for well over 2 years. Again, they
can't find work because it is not there, through no fault of their own.
So, as I said, our economy needs at least 11 million jobs--at least.
To say that people who are unemployed are lazy and shouldn't get
benefits--if you say that, you are obviously out of touch. You are out
of touch with the real world and what is happening out there and the
difficult circumstances that face our hard-working American families.
I get a lot of letters--and I am sure the occupant of the chair does
too from his home State--from people who are just at their wit's end,
and they just tear your heart out.
A 50-year-old woman from Altoona has been unemployed since November
2009, a year and a month. She wrote me: ``I can't even get a job at
McDonald's right now, and believe me, I have tried everywhere.''
Unemployment insurance is helping her get by, but she is worried about
running out of benefits, which just happened 2 days ago. I got this
letter before 2 days ago. Her unemployment benefits are out.
An unemployed schoolteacher from Estherville wrote me. She said:
I have not felt so humiliated in 20 years. I have been a
productive and hard-working woman since I was 13, but now I
feel insignificant.
She wrote me that this summer. This month, she wrote me again. She
said:
I have tried to find employment in other States, all over
Iowa, in every form of employment you can imagine:
convenience stores, fast food, factories. I am a high school
math teacher with three college degrees and I can't find a
job. If it weren't for unemployment, I would be on food
stamps.
But without unemployment insurance, she doesn't know what she is
going to do. She just lost hers a couple of days ago too.
These are just two examples, but there are millions. In this holiday
season, from now until the new year, 2 million people will be cut off
if we don't continue these programs. In Iowa, my home State, more than
10,000 people will be cut off from their benefits during this holiday
season. And if we don't do anything, we will face 6 million by April
left without any source of income, hanging by a thread. Their savings
are exhausted. Their unemployment benefits are the thin lifeline
keeping them afloat.
Congress has never cut back emergency unemployment benefits when the
unemployment rate was as high as it is now, and this is no time to
start. Here it is again. Going back to 1959, when we had high rates of
unemployment, every single time, Congress passed emergency funding to
keep unemployment benefits going--that is, until now.
Republicans have said, oh, they will extend it, but they want to pay
for it. It is about $56 billion to extend it for 1 year. They have to
pay for it, and how they want to pay for it is to take money out of the
Recovery Act. There is still some unexpended money there that is going
out for things such as roads and bridges and infrastructure projects
that put people to work. So they want to take money from that, which is
giving people some jobs and helping build our infrastructure, to put
into unemployment benefits, when, going back to 1959, through
Republican and Democratic administrations, we have always said this is
an emergency, and that is the way we fund it.
Well, the Republicans say, we have a huge deficit. We can't do that
anymore. Then why are they so intent on passing a tax cut bill,
extending a tax cut for the wealthiest Americans and they don't pay for
it? They put it on the deficit--not for $56 billion but for $700
billion. Oh, they are willing to do that. They are willing to do that
for the wealthiest but not for people at the end of their rope, the
unemployed.
So I guess we have entered a new era in this country. We don't help
the unemployed: we just help the wealthy. That is all we do. That is
why we are here, I guess. Look at that. We ought to be ashamed of
ourselves. I ask, have my Republican friends lost all sense of
fairness? Have my Republican friends on the other side of the aisle
lost all sense of justice? Have they lost all sense of what is right
and what is wrong? Where is the moral outrage? Where is the moral
outrage that we are going to let people stand in the soup lines for
Christmas but we are going to give tax breaks to the wealthiest? We are
going to give million-dollar bonuses to the people on Wall Street who,
by the way, caused a lot of these problems, and we won't even make them
[[Page S8388]]
pay their fair share of taxes. Where is the outrage? Well, I will tell
you. It is out there. The American people are seeing this. They are
saying: Wait a minute, Congress wants to pass this big tax break and
they won't help the unemployed? They get it. They get it.
I can't believe Congress is doing this. I can't believe my friends on
the other side of the aisle are so hard-hearted that they would hold
hostage--that they would not let us move a bill to extend the
unemployment benefits until we pass their bill to extend the tax breaks
to the wealthiest Americans. Where is our sense of moral outrage at
this?
Just one other thing. Unemployment benefits that we give out to
people is not money that is thrown down a rathole. Quite frankly, one
of the best economic stimuli we have is unemployment benefits, believe
it or not. Why is that? Well, because people who get unemployment
benefits--and right now, in my State it averages about $300 a week.
That is about a national average. It is right about there. It is about
$300 a week. That is about $15,000 a year. That is lower than the
poverty wage, by the way. If you think unemployment benefits are some
big deal, it is lower than the poverty wage. So when they get that
money, what do they do? They go out and they buy groceries. They buy
some clothes for the kids. They buy the necessities of life. And that
money acts as a multiplier to our economy.
This is Mark Zandi, Moody's economy.com, about how the GDP increase
is generated by $1 of stimulus going to these various things. Food
stamps is the best. For every dollar we put into food stamps, we get an
increase in GDP of $1.74, again because people spend that money to buy
food, most of which is grown, produced, processed, packaged, shipped,
and bought in America. Unemployment benefits are right next to food
stamps--$1.61 increase in GDP for every dollar we put out, again for
the same reason. People using unemployment benefits are not using them
to buy a Mercedes. They are not using the benefits to buy a new, high-
definition, 3D flat screen TV made in Japan. They are not using the
benefits to buy a gold-encrusted, diamond-studded Rolex watch made in
Switzerland. They are using these benefits to buy the necessities of
life, most of which are made here in America. Extending the Bush tax
cuts--for every dollar we put in, we get back 32 cents in GDP growth.
That is what the Republicans want. Why, when trying to stimulate the
economy, would we put $1 into something that returns us only 32 cents,
when we can put $1 in and get back $1.61? How about infrastructure
investments. We get back $1.57 for every $1. It is very close to
unemployment benefits. Yet Republicans want to take money out of this
and put it here. Why don't we take money out of here--the tax cuts--and
put it here? That is a better deal for our economy. It creates jobs,
and we get an increase in economic activity in our country.
As I said earlier, here it is. The average UI benefit is about
$15,600 and the poverty level is $21,756 for a family of four. It is a
powerful benefit that provides food, clothes, housing, utilities--all
of the things needed just to keep life going. That is what these
unemployment benefits are spent on.
With the holidays coming, our economy needs the money and people need
the benefits. Cutting off that revenue would be counterproductive for
jobs. It is counterproductive for the people who need these benefits.
It makes no sense economically to cut off unemployment benefits. But
more importantly, it makes no sense morally. There is such a thing as
right and wrong. There is such a thing as fair and unfair and just and
unjust. It is not just, it is not fair, and it is not right that,
through no fault of their own, we are saying to these people, the
unemployed in America, the millions--whether it is 14.9 million or
closer to 26 million or anywhere in between--it is just not right to
say: Well, maybe we will extend your unemployment benefits after we
extend the Bush tax cuts for the wealthiest in our society. That is
totally irresponsible. But that is where we find ourselves.
I say to the President of the United States: Mr. President, you made
a lot of promises when you were campaigning in my State of Iowa, and
one of the most important you made was that you were going to hold the
line--and you said this time and time again--at $250,000. You would
extend the tax breaks to middle-income people below $250,000. You ought
to hold to that, Mr. President. You ought to hold to that.
We will see if the Republicans want to shut down the government. Do
they want to shut the government down? That is what they are saying. We
are going to have to have a resolution on the Senate floor--because it
will run out--to keep the government going. They are saying they will
not pass that unless and until we extend the Bush tax cuts for the
wealthy.
I dare the Republicans to shut the government down just because they
want to give tax breaks to the wealthy. I say if that is what they want
to do, let the American people see the extent to which the Republicans
will go in order to help their wealthy friends.
Mr. President, hold to your guns, hold to your guns on $250,000 and
below. Don't give in. Don't give up. The American people are behind you
on this one, Mr. President. Tell them you want unemployment benefits
extended, you want middle-class tax breaks extended, and we want to
fund the government. We don't want to go into default. We want that
first. Don't give up, Mr. President. The American people will be behind
you, and this Congress will be behind you too.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mrs. HUTCHISON. Mr. President, today the House passed legislation
that would extend the tax cuts for those middle-class taxpayers who
make under $200,000 a year. That is a good thing, and I support that.
But why on Earth would we extend the tax cuts for a certain segment of
the population and not extend the tax cuts for everyone? Why would we
do that? Who are the job creators in our country? What is the problem
our country has right now? It is jobs. We have an unemployment rate
that is hovering around 10 percent. So what should we be doing in
Congress to try to alleviate that situation? We should be doing
everything in our power to create jobs in the private sector. The
private sector is where jobs will be a created, where it will be
something that will support a family.
Of course, we are going to support tax cuts for everyone in this
country because we are in an economic recession. The idea of increasing
taxes on the people who would create jobs is something that could only
come out of Washington. All of us have been home for the last few
weeks. Last week was Thanksgiving, and we were in grocery stores
talking to our constituents. Time and time again I heard people in the
real world, people who are creating jobs, saying: Why don't you all
address the issues of this country? Don't you know what is happening?
Well, do you know something? They have a point. They have a point
because, of course, many of us have been saying this for a long time.
But here we are in December, the last month of the year. The IRS can't
even print the tax forms because they don't know what the tax rates are
going to be because Congress left in September and didn't finish its
job. Now here we are in December and we are going to have a train
wreck.
That is why those on our side signed a letter saying that we are not
going to address any issue until we settle the tax issue and the issue
of funding government. After that, there are many things that could be
on the agenda. But those are two things that are essential. So knowing
the way things work around here, and knowing that we could end up
talking for 2 more weeks before we do anything, we are going to set the
priority to say that it is tax cuts and it is funding the government,
and if we can do other things, fine, but if we can't, then we go home.
I think the START Treaty is very important, and we are all looking at
that. But we have to make sure the small businesspeople of our country
know what to expect. And if they can hire people on even in this
holiday season, it will make a difference.
President Reagan and President Kennedy and President Bush 43 all did
something that had the same effect on our revenue in this country; they
cut taxes and revenue increased. Cutting taxes is what increases and
spurs the
[[Page S8389]]
economy, and it works every time. So now we are talking about deciding
who is going to get their tax cuts and who isn't.
We should be saying clearly and simply to the American people--and
especially the small businesspeople who are waiting to see what their
budgets are going to be next year--we are not going to raise taxes on
anybody because we want you to hire; we want you to give jobs to the
people of this country. If we can extend unemployment for those who
have been out of work and can't find something, and they are really
trying, and we can do it in a responsible way and pay for it,
hopefully--I believe if we cut taxes, that will spur the economy and
pay for it.
Tomorrow, apparently, in the Senate we are going to get the House
bill that passed today that cuts taxes for some but not all. So what
will happen if we do what the House has suggested? Households will
lose, on average, $20,000 in total disposable personal income between
2011 and 2020. Total individual income taxes will increase by $37
million between 2011 and 2020. Jobs will be lost and small businesses
are not going to hire. I can tell you that anecdotally because I have
been talking to the small business owners in my State. I was a small
business owner, and I know what it takes to increase employment.
Without action by us, the death tax will return with a vengeance. A
lot of people think: Oh, a death tax, that is just going to affect the
heirs of rich people. I think we have to remember that estates over $1
million will be taxed at the 55-percent rate. So many small businesses
in this country are either farms or ranches, where the valuation at
death on the property is going to be so much higher than the
productivity on that land, and the heirs are going to be faced with
selling the property to pay the taxes, which means it will no longer
have any capacity for hiring people or productivity.
The same is true for small manufacturing companies. I was a small
manufacturer. I can tell you my equipment was worth a whole lot more
than the productivity of that equipment. You can pay for it over time,
so you own the equipment. But then if you die and your heirs have to
pay a huge estate tax on the value of equipment, then they are going to
have to sell the equipment and, therefore, you have lost the business.
The statistics in this country of family businesses that are passed
to the second generation and the third generation are abysmal. It is
about 50 percent that goes to the second generation. To the third
generation, it is 20 to 30 percent. Who does that hurt? Of course, it
hurts the families. It also hurts the employees of those family-owned
businesses. They are the ones who will be put out of work. So the
estate tax going to 55 percent over $1 million is not good public
policy. It would be outrageous for us to leave this year and go into
that kind of estate tax, which is confiscatory.
I have to tell you, I think it walks away from the American dream.
The American dream is that you can start from nothing in this country
and you can build something and you can give the fruits of your labor
to your children. That is the American dream. That is what people come
here and work for 7 days a week in restaurants, to try to build
something to give to their children. Who are we to take that away? That
is the American dream. But it will be gone at the end of this year if
we don't address that issue in Congress.
Capital gains and dividends: How many of our seniors are living on
capital gains and dividends? I guarantee you, anybody who has a bank
account knows you are not earning anything from that. You are not
earning from cash because the interest rates are so low that many of
our seniors are struggling. If they have a nest egg of stocks that is
paying some dividends, then that is what many of them are living on. So
we are going to raise the tax on dividends from 15 percent to 20
percent at a time when so many seniors are struggling. That is what is
going to happen if we don't address the tax cuts by the end of this
year.
The marriage penalty: That is my bill. I introduced relief from the
marriage penalty. Why should two people working get married and go into
a higher tax bracket in this country? We addressed that issue. For most
people, we have eliminated the marriage penalty, but not at the end of
this year, if we don't act, the marriage penalty comes back. So a
policeman and a schoolteacher who marry are going to have to pay about
$1,400 more in taxes just because they want to get married--a
schoolteacher and a policeman. It is an absolute fact. Is that what we
want in this country?
Small business owners pay at the individual rates--a subchapter S
small business. Many small businesses are created to be able to pay at
the individual tax rate. Over 50 percent of the small businesses in our
country pay at the individual tax rate. So now we are going to say
individuals' tax rates are going to go up if they make over $250,000,
which is many of the small businesses in our country, so they are going
to be paying at the higher rate. These are the things that are going to
happen if we don't act.
The House passed legislation that is going to be devastating for the
people who are unemployed in this country. How could we even think of
doing something so drastic? I hope tomorrow when the Senate takes up
the House bill that we send it back to the House and say: This is not
going to go.
I will say to the President of the United States: I thought, Mr.
President, that you said you were open to working on extending the
taxes for everyone, and yet here we are, with the leadership of the
House who just talked to the President this week, and we have the same
thing they have been talking about for all these months--no give,
nothing has changed.
So here we are, it is December, and the people of America expect the
leaders of Congress to address the issues that are on people's minds.
We are 3 weeks from Christmas, we are 4 weeks from the end of the year.
How could we leave without taking responsible action to let everyone in
this country who is paying taxes know how to plan for--I would hope for
2 or 3 or 4 or 5 years?
Lastly, Mr. President, I want to say the one thing that seems to be
missing in the Halls of Congress is the importance--to a family, but
also to a small business especially that is thinking of expanding and
hiring people--of stability and predictability. You can't say we are
going to extend the tax cuts for 1 year or 2 years and do the right
thing for the economy of our country. We ought to do it permanently, to
be honest. But if you are not going to do it permanently, at least do
it for 5 years, or, at a minimum, 2 or 3 years.
It is not going to cost the government to give these tax cuts. We are
keeping it the way it is now. We are trying to spur jobs being created
in our country. So when people talk about this is going to cost the
government X billion dollars to let people keep the money they have
earned, they are going right over the heads of the American people.
So predictability is the most important thing we can do for small
businesses so they can plan, so they can say we are going to expand our
product line, we are going to expand our service area. These are the
things they can do if they know what their tax commitments are going to
be, and if they know what their health care costs are going to be. That
is what is freezing the economy right now because people don't know
what to expect.
So I hope the President is listening. I hope the leadership of the
Senate is listening. Most certainly, I hope the House of
Representatives will come to the table and see we can do better than
this, and we ought to do it before we leave this week or next week so
people know what to expect; so small businesses can sit down at the end
of the year and plan their businesses and create jobs in this country.
That is the Christmas present people would like. They want jobs. They
want to work to support their families. They do not want to live on
unemployment. They do not want to live on food stamps. That is not a
life. It is not a future. It is not hope. That is what they want--a
future and hope for their families.
So I hope, myself, that we, the leaders of America, will give the
American people what they deserve and what clearly is in the long-term
best interests of their families.
Mr. President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
[[Page S8390]]
The legislative clerk proceeded to call the roll.
Mr. LeMIEUX. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________