[Congressional Record Volume 156, Number 159 (Monday, December 6, 2010)]
[Senate]
[Pages S8540-S8542]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FISCAL RESPONSIBILITY
Mr. WARNER. Mr. President, just 3 days ago, a bipartisan majority of
the members of the National Commission on Fiscal Responsibility and
Reform endorsed a package of proposals to reposition our Nation on a
more responsible fiscal course.
I wish to commend my good friend, the Senator from Illinois, who was
a member of that Commission and took what I thought was an
extraordinarily courageous vote on a package of proposals. Honestly, I
know he didn't agree with every one of them, but he did understand how
serious this issue is. I thank him and all my other colleagues from
both sides of the aisle, along with the economists and policymakers and
others who invested the time and effort and courageously grappled with
these difficult choices.
On Friday, 11 of the 18 members of the Commission voted to support a
tough, bipartisan prescription for fiscal health. I regret that the 11
``yes'' votes fell short of the 14 votes required to forward this plan
to Congress for our consideration.
In the hours leading up to Friday's vote, I was proud to work with 13
of my Senate colleagues, including the Presiding Officer, to draft a
joint letter to the White House and to the bipartisan congressional
leadership.
This letter, signed by 14 Senators and distributed before the
Commission's final vote on Friday, requested that the panel's
recommendation come to Congress for our consideration regardless of the
outcome of the Commission's final vote.
Mr. President, I ask unanimous consent to have a copy of this joint
letter printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate,
Washington, DC, December 3, 2010.
President Barack Obama,
The White House,
Washington, DC.
Speaker Nancy Pelosi,
Office of the Speaker,
Washington, DC.
Majority Leader Harry Reid,
Washington, DC.
Minority Leader John Boehner,
Washington, DC.
Minority Leader Mitch McConnell,
Washington, DC.
Our growing national debt poses a dire threat to this
nation's future. Ever since the economic downturn, Americans
have had to make tough choices about how to make ends meet.
Now it's time for leaders in Washington to do the same.
The report issued Wednesday by the National Commission on
Fiscal Responsibility and Reform is a courageous first step
in tackling our national debt. The report shows in stark
terms that solving the debt problem will require difficult
choices. There is no easy way out, and Washington must lead
the way. The strong bipartisan support its recommendations
have already received demonstrates we can, and must, come
together to solve this impending fiscal crisis. Every day
that we fail to act the choices become more difficult.
We believe that now is the time to act. The situations in
Ireland and Greece demonstrate that rising debt levels, left
unchecked, can quickly and unpredictably force a country to
take drastic austerity measures. If we don't choose to act
now, we will be forced to act later with fewer and more
painful options available to us.
While there are plenty of provisions in the Commission plan
we do not support, our nation would be far better off with a
comprehensive deficit reduction plan than without one. The
report shows that we can stabilize our debt over the long
term, while fostering our economic recovery now, improving
our country's global competitiveness, and maintaining our
commitment to protect the most vulnerable in our society.
Specifically, we commend the Commission's efforts to:
Protect our economic recovery by gradually phasing in
deficit reduction and still allowing for critical
investments;
Fundamentally reform and simplify the tax code in a way
that lowers rates for all taxpayers, increases progressivity,
and improves the ability of businesses to compete in the
global marketplace;
Ensure that Social Security will be there to support
seniors for at least 75 more years, while adding a new
minimum benefit and further support for our oldest seniors
and long-term disabled;
Preserve and better target tax benefits that support home
ownership and charitable giving; and,
Further control the costs of health care.
Prompt action is needed to bring the country's deficit into
balance and stabilize our debt over the long term. Regardless
of whether the Commission's report receives the support of at
least 14 of its 18 members, we urge legislative action to
address these problems. The American people deserve--and
demand--that we pull together to avert this looming crisis.
Your leadership on this issue will be crucial to our success.
Sincerely,
Mark R. Warner, Claire McCaskill, Mark Begich, Thomas R.
Carper, Jon Tester, Jeanne Shaheen, Joseph I.
Lieberman, Mark Udall, Michael F. Bennet, Dianne
Feinstein, Mary L. Landrieu, Amy Klobuchar, Kay R.
Hagan, Evan Bayh.
Mr. WARNER. Mr. President, I have a reason for coming to the floor
and drawing attention to our letter and this issue again.
The seriousness of our Nation's fiscal challenges--the compelling
need to address these issues in a responsible and bipartisan way--did
not suddenly dissipate or magically disappear over the course of the
weekend that just ended.
In fact, since the Commission's final meeting ended on Friday
afternoon, the national debt--the running tally of what the U.S.
Government owes--has increased by an estimated $15 billion. Our total
national debt is a staggering $13.8 trillion. I will repeat that. Our
national debt is approaching $14 trillion.
Every day you can listen to a lot of talk from people in this town
about deficit reduction. But as I said, when the Commission first
unveiled its proposals 1 week ago, while I would have made some
different choices, we were being presented with a unique opportunity to
finally get real about the deficits and debt.
Actually, when the Commission came out, I was a little more blunt
than that. I said that after all the campaign rhetoric about deficit
reduction, the time had come to put up or shut up. I believe this
Commission earned credibility by describing our fiscal challenges in
stark and honest terms. They
[[Page S8541]]
deserve our respect for crafting a clear roadmap to help steer our
Nation back to a more responsible fiscal path.
The Commission's leaders and its members made difficult decisions,
and they didn't shy away from examining expenditures and revenues.
They concluded, correctly, that our Nation's fiscal challenges are
too serious, and the fiscal hole we have dug ourselves into is too deep
to be solved by simply looking at only one side of the ledger. To say
we can tax our way out of this or cut spending alone will not get us
there.
To be sure, there is something for everyone to dislike in these
recommendations, but that is simply a reflection of how large the
problem is.
Whether you look at this report and are concerned about the viability
of Social Security or tax rates, levels of Defense spending or any
other specific government program or service, failing to act makes
those choices and decisions even tougher with every day that goes by.
The fiscal commission came forward with a framework for improving our
country's global economic competitiveness while still maintaining our
shared commitment to protect our most vulnerable citizens. One of the
things that got lost in the headlines was that while this took a
positive step toward deficit reduction, this Commission did two other
things we talk about. One is that they would lower business tax rates
and also dramatically simplify the individual Tax Code and get rid of a
lot of clutter.
This Commission also deserves enormous credit for recognizing that
the hard work of getting our Nation's fiscal house in order is also an
urgent matter of national security because it is clear America cannot
be a leader in the world, projecting strength and promoting democracy,
if we are weakened at home by our deficits and debt.
Ever since this economic downturn began, individual Americans and
their families have been required to make tough choices of their own
about how to make ends meet. It is time we did the same here in
Washington.
Many of you know I came to public service after a relatively
successful career in business. In the business world, investors and
shareholders have a reasonable expectation that at the end of each
fiscal year, we would end up balancing our company's books. Similar to
the Presiding Officer, who was a mayor of a great city, I had the honor
of serving as the Governor of Virginia, where there was a 2-to-1
Republican legislature. We worked in a bipartisan way to make the tough
choices required to balance our State's budget during tough economic
times. Proudly, Virginia has been named as the best-managed State and
the best State for business.
I have only been in this body, as has the Presiding Officer, for
about 2 years. One thing I have already learned is that if Washington
can find an excuse to punt on a difficult decision, it almost always
will.
Most days, it is easier to retreat to our partisan corners and
default to the political gamesmanship you see every day on cable TV.
As the current economic upheaval in Europe so clearly demonstrates,
we cannot simply ignore this challenge because it is inconvenient or
because the choices are too tough. Maybe 20 years ago our country had
the luxury of having the rest of the world have to wait until we got
our act together before they could move forward. But anybody who
surveys the other economies around the world realizes China, India, and
even Brazil are not waiting for us to get our financial house in order
or get our act together.
Now is the time to make these tough choices--not when the bond
markets lose their patience and confidence in our long-term economic
viability, which is what recently happened in Greece and now Ireland
and who knows who is next.
The fact is that if interest rates were not at historic lows today,
we would already be in a world of hurt at this point. As it is, if we
don't take action soon to stabilize our debt, we could be spending
upward of $1 trillion a year just on debt service by 2020. Think about
how many taxes would have to be raised and programs that would have to
be cut just to meet basic debt service.
So now it is time for us to agree that we will not allow the perfect
to be the enemy of the good. Our own political discomfort should not be
used as an excuse to delay holding an honest and long overdue
discussion about the complicated fiscal choices confronting us today.
Every day, every week, every month that we put off that discussion, our
options become more limited and the choices become tougher.
Resolving America's fiscal problems must be one of our top
priorities. Yes, it will require difficult decisions. There is no easy
fix or easy way out. But those of us who were hired by folks across the
country should expect nothing less.
I appreciate the chance to address this issue. Again, I compliment my
good friend, the Senator from Illinois, for his courage and leadership
on this issue and for his vote on what I know had to be a very
difficult decision. He and some other Members on the other side said
that even though this was not a perfect plan, it was more important to
bring this discussion forward. I compliment them on their action, and I
thank the Presiding Officer for joining me and a number of other
colleagues. We will be back to continue to bring this issue before our
fellow colleagues and the people of the country.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois is recognized.
Mr. DURBIN. Mr. President, I thank my colleague from Virginia--
originally from Illinois--for those kind words. It was not an easy vote
to vote in favor of the deficit commission report, but I felt it was
the right vote.
To explain my vote, 40 cents out of every $1 we spend, whether it is
for a new missile system at the Pentagon or food stamps for the poorest
among us--40 cents out of every $1 is borrowed. We primarily borrow it
from countries such as China and the OPEC nations.
The fact that we are indebted to them for generations to come will
not allow those of us on the progressive side to see a more fair and
just America. We are an America that is mortgaged, and those who hold
our mortgage have power over us economically and politically. That is
why I voted for this.
There are parts of this report I don't like at all. One of the things
it does that I commend to my colleagues is something I have never seen
in the time I have served in the House and Senate. It takes a look at
the Tax Code, tax expenditures. The Senator talked about the day coming
soon when we will spend $1 trillion a year on interest on the debt.
Each year, now we spend or through taxes forgive $1.1 trillion. That is
money that doesn't go into the Treasury that otherwise would. It
doesn't go in because it is a deduction, a credit, an exclusion or a
tax earmark. So $1.1 trillion a year through the Tax Code is added to
our debt.
You have to ask yourself: What are those provisions? Some of them are
very important and some are controversial. The No. 1 tax deduction in
America is for health insurance. We have it as Members of Congress, and
everybody wants that. If we are going to continue this deduction, we
need to ask hard questions: Do we go too far? Are there things we can
reasonably do to contain the growth in that particular deduction? How
about the mortgage deduction? Currently, mortgage interest can be
deducted from your income tax. I use it. Most people do who itemize,
but 70 percent of Americans don't itemize. In other words, they don't
get the advantage of any of these because they do a simple form and
take a standard deduction. For 70 percent of Americans, even the
mortgage interest deduction has no value to them.
We currently put a limit on the value of a home, where you can apply
a mortgage interest deduction of $1 million. Is that the right number?
Should that be lowered today? Should we focus more on working families?
How about the charitable deduction? Should we take adjusted gross
income--one idea of the Commission was that any charitable deduction
over 2 percent of adjusted gross income would be deductible, but the
first 2 percent would not be. You will hear from churches, charities,
and universities saying we should not do this because they want people
to give more. Each of these ideas carries controversy with it.
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If you eliminated all the deductions, credits, exclusions in the Tax
Code, basically closed it up and set it aside, you could dedicate each
year almost $200 billion to deficit reduction, and with the remainder
of $900 billion reduce tax rates across the board in our economy. The
lowest tax rate would go from 15 percent to 9 percent.
The next tax rate--I am trying to remember--would go from about 24
percent to 16 percent. The top tax rate in America would go from 36
percent down to 26 percent. So you say to Americans: Do you want to
deduct your mortgage interest costs--because it is a value to you and
your family--and measure that against a reduction in your Federal
income tax rate of one-third? Under which scenario do you come out
ahead?
Those tax deductions--tax expenditures, as they call them, the $1.1
trillion a year--are greater than either all the personal income taxes
collected in America--in other words, all the personal income taxes we
pay in go in to cover the tax deductions--or greater than the
discretionary spending side of the budget, defense and nondefense. It
is huge. In 28 years, we have never opened that door and looked inside.
We have to now. Deficit reform should include tax reform.
I brought this up to our friend and colleague, Max Baucus, chairman
of the Finance Committee. He agrees. I think we ought to pursue this.
We had a bipartisan group saying: Let's get into this. Let's make this
part of the conversation. It isn't just entitlement programs, such as
Medicare and Social Security, and it isn't just spending--both domestic
and defense spending--it is also tax expenditures. Put it all together.
I think we have an honest conversation.
Yes, there will be honest sacrifice for all of us, and I thank the
Senator from Virginia for raising this whole issue. As we discuss more
tax cuts for America, we are proposing making the deficit hole deeper.
Each of these tax cuts takes money out of the Treasury. I would argue
we should not hit the deficit brake on tax cuts for working families in
the middle of a recession. They need spending power to get through.
Give them a helping hand now until the recession is behind us. But how
can we rationalize tax cuts for the most wealthy Americans when we are
facing this kind of deficit? We should be more sensible. We should be
able to make these judgments.
Last Saturday, we had a vote which suggested we have no support on
the other side of the aisle for restraining tax cuts. They want them
all. While they give their speeches about deficits, they turn around
then and vote for tax cuts, which make the deficits worse. So that is
the dilemma we face.
The last point I will make: The good news is that of the 18 members
of the deficit commission, there were some 12 elected officials, and 6
of us--3 Democrats and 3 Republicans--voted for the Commission's
report. It was good. It was a breakthrough. It might have been
historic.
I would thank the Senator from Virginia for his remarks and his
concerns about this issue. He has been working on this with Senator
Conrad and others for a long time, as has Senator Begich, and I thank
him for that.
Mr. WARNER. Mr. President, will the Senator from Illinois yield for a
question?
Mr. DURBIN. I would be happy to yield.
Mr. WARNER. I thank the Senator from Illinois for laying out the
facts, but there is one additional fact--again, vis-a-vis the Bush tax
cuts--that I think has been absent from some of this debate.
The efforts of the Senator from Illinois--Herculean as it was--to try
to get 11 out of 18 votes, and all the painful choices the Senator made
in terms of spending cuts, raising revenues, opening, as I think the
Senator appropriately said, the whole question of tax expenditures, if
my memory is correct, over the next decade-plus, the commission's
plan--as dramatic as it was and as controversial as it was--basically
took out about $4 trillion.
Mr. DURBIN. Four trillion; that is right.
Mr. WARNER. If we were to make permanent--as some on the other side
of the aisle have stated--all the Bush tax cuts, that adds another $4
trillion to our deficit; is that not correct?
Mr. DURBIN. The Senator from Virginia is exactly right. The point I
am trying to make is--and he made it so well--that 10 months' work to
find $4 trillion that we could reduce from the deficit would be wiped
out by the insistence on the other side of continuing these Bush tax
cuts indefinitely.
I argued, and continue to argue, do what we have to do now to get out
of this recession, but as soon as we see a positive, solid footing for
this economy, let's start stepping forward and be very serious about
this deficit reduction. I think the Commission gives us a roadmap.
I thank the Senator from Virginia.
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