[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.

[[Page S8542]]

  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.

                          ____________________