[Congressional Record Volume 156, Number 167 (Thursday, December 16, 2010)]
[Senate]
[Pages S10401-S10404]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TRUCK WEIGHTS ON MAINE INTERSTATE HIGHWAYS
Ms. SNOWE. Mr. President, I have an amendment to the continuing
resolution, H.R. 3082.
My amendment will rectify an impediment to international commerce
flowing through Maine, and protect Maine drivers and pedestrians. For
the past year, Maine truckers have operated under a pilot program that
allows trucks over 80,000 pounds to move from local roads to safer
interstate routes, far from schools and homes. The pilot project has
been a great success, and I seek to make it permanent.
Unless we take action before December 17, trucks over 80,000 pounds
traveling to or from the Canadian border or within upstate Maine will
be forced onto secondary roads, many of them two-lane roads, which run
through towns and villages. Trucks traveling between Houlton and
Hampden, ME, on these local roads will pass more than three thousand
homes, several schools, and hundreds of intersections. Tanker trucks
carrying fuel will again be traveling past elementary schools and
libraries, and competing with local traffic. Not only is this an
inefficient method of moving goods, but it also unnecessarily increases
risks on narrow local roads.
What is the result of such truck traffic on local roads? According to
a study conducted by the Maine Department of Transportation, traffic
fatalities involving trucks weighing 100,000 pounds are 10 times
greater on secondary roads in Maine than on exempted interstates.
Serious injuries are seven times more likely. The past year's pilot
program has proved that Maine's rural interstate is a safer place for
large trucks.
Maine Department of Transportation officials strongly support this
program. Extensive studies and infrastructure inspections have left
State DOT officials confident that heavier trucks carrying interstate
and international loads belong on the interstate.
I urge my colleagues to support this straightforward amendment.
Ms. SNOWE. Mr. President, I rise to express my strong support for the
tax legislation that will not only enable millions of American families
to keep more of their paychecks, but will also provide a stable and
predictable economic platform upon which American businesses can
operate, and pull our economy from the economic morass of the past 2
years.
This legislation certainly cannot remedy all of our economic
struggles, but it is essential that we provide necessary certainty in
Federal tax policy, which is the foundation upon which our Nation's
entrepreneurs make decisions about taking risks, investing in the
future, and creating jobs. As the end-of-the-year deadline looms for
the biggest tax increase in history, American employers have been
retrenching and bracing for the possibility of Washington taking a
larger share of taxes out of their businesses--and that is inhibiting
our economic potential at a time when we can least afford to fetter the
forces of our private sector.
Frankly, the debate over whether extending these tax provisions is
the right thing to do is now past. What we are experiencing right now
is a jobless recovery, which isn't a true recovery at all if you cannot
find a job or earn a paycheck. For 2 years of debating and legislating
in Washington about how to fix the economy, our economy should be in
more than just the ``holding pattern'' Harvard Economics Professor,
Martin Feldstein, has described. I am afraid that at this historic
juncture--with the unemployment rate of 9.8 percent, or roughly 15
million people out of work, poverty in America is at its highest in
over a generation, and we are experiencing historically low investor
and consumer confidence--we do not have the luxury to take the gamble
and increase taxes.
A consensus has developed among economists and policymakers that
extending these tax provisions will benefit the economy. Indeed,
according to the White House, extending these tax provisions will
result in more than 1.5 million jobs. Back in September, Mark Zandi
released data indicating that increasing taxes from 33 and 35 percent
up to 36 and 39.6 percent on small business and high-income taxpayers
would reduce gross domestic product by 0.4 percent in 2011 and would
reduce payroll employment by 770,000 jobs by mid-2012, precipitating a
double-dip recession in the first half of 2011. Mr. Zandi is now
estimating that this legislation will create 1.6 million jobs. Further,
even the Center for American Progress estimates job growth at 2.2
million jobs as a result of this legislation.
The Congressional Budget Office has been stating since September that
extending the tax rates through 2012, as this legislation would do,
would add between 600,000 and 1.4 million jobs in 2011 and between
900,000 and 2.7 million jobs in 2012. Further, CBO estimates that this
legislation would enhance the gross national product by 1.1 percent.
Also back in September, a group of 300 economists recognized this
reality and sent a letter to Congress imploring an extension of the
current rules. Perhaps the phrase ``better late than never'' is most
applicable to the impending passage of this legislation that will avert
the tax increases that loom a mere 3 weeks away and would lead to a
double-dip recession, and drive our unemployment rate even higher.
It is simply long past time that we extend the 2001/2003 tax relief
and expiring provisions such as the R&D tax credit and the child
credit. It is incumbent upon this Congress to enact stable tax rules
that will help Americans to get back to work and plan their lives--our
political Hippocratic Oath of ``First Do No Harm'' should apply at this
moment, just as there are glimmers that our national economy is past
its low ebb. At this juncture we cannot veer onto a dangerous path and
increase taxes, which is exactly what would happen if this legislation
does not become law. Indeed, the tax increases scheduled to take effect
in a matter of 3 weeks would be the biggest tax increase in history--an
$800 billion tax increase that will be averted by this legislation.
And the agreement on which this legislation is based is something
that has been rare in Washington in the last 2 years--a hard fought
consensus among the leaders of both parties. Both sides of the
negotiating table were required to make concessions to reach this point
and, as a result, a significant majority of 83 to 15 voted to move this
legislation forward.
Undeniably, one of the key components of this legislation is the 10-
percent tax rate that was a hallmark of the original 2001 legislation.
While other tax rates have been the object of more heated--and highly
polarizing--debate, it is undeniable that this 10 percent rate is the
most significant. If this legislation is not enacted into law, roughly
27 million tax returns will witness a 50 percent increase in taxes,
from 10 percent to 15 percent. With consumer spending representing 70
percent of gross national product, we must be cognizant of how this tax
increase would eradicate any sign of economic recovery. This is not
even an issue of individuals bracing for a higher tax bill--on January
1 employers would withhold more taxes from paychecks leaving less for
the rent, grocery bills, a tank of gas or utilities.
Of course, all taxpayers benefit from the initial 10-percent tax
rate, but for these low-income individuals and families, having the 10-
percent rate revert to a 15-percent rate would be particularly
burdensome. For individuals making less than $8,000 per year and
couples making under $16,000, this 10-percent rate is a lifeline. For
taxpayers slightly higher up the income stream, having this initial
portion of their income taxed at only a 10-percent rate can
significantly help reduce their effective tax rate.
Another hallmark of the 2001 tax legislation that would be extended
is marriage penalty relief. The initial two tax rates, those at 10
percent and 15 percent rates, allow for twice the amount of income for
a married couple than is taxed for an individual, so individuals
earning up to $34,000 are taxed at 15 percent and couples can earn up
to $68,000 and still remain in the 15-percent bracket. This was
certainly not
[[Page S10402]]
the case before the 2001 law, and thus an extension of this provision
is nothing short of an imperative for low income and middle income
married couples today.
Indeed, if this legislation is not enacted, rather than having up to
$68,000 taxed at a 15-percent rate, couples would face a 28-percent
rate on family incomes over $58,200. For families where both the
husband and wife are working, at a 28-percent rate rather than a 15-
percent rate, that second income starts to face diminishing returns all
too quickly--especially if the second income involves placing children
in expensive day care.
And speaking of children and daycare, there are two more significant
provisions in this bill that are being extended--the child tax credit
and the dependent care tax credit. In 2008, the most recent year for
which data is available, there were 25,287,874 children claimed for
child tax credits. As the primary sponsor of the child credit in 2001,
I am particularly proud of the fact that American families received an
economic boost of $1,000 for 25 million children. The child tax credit
benefits working parents and their dependent children and it is
essential to note that the Maine Children's Alliance of my home State
reports that, in Maine, 21.8 percent of young children are poor and
16.5 percent of all children are poor. Currently, these families are
eligible for a refundable credit--15 percent of earned income capped at
a maximum of $1,000 per child--once they have earned at least $3,000.
The legislation we are debating will maintain the threshold--set in
2009--at $3,000 rather than allowing it to triple to roughly $13,000,
which would nationally result in millions of low-income working parents
being excluded from receiving the refundable portion of the tax credit
altogether, or having their benefit significantly reduced.
In Maine, for example, the Maine Children's Alliance reports that
34,651 children who were members of 21,346 families in Maine benefitted
from this expansion in 2009. This $3,000 threshold is an extraordinary
one, which was not and is not envisioned to be permanent. Senator
Lincoln and I have supported bringing the $13,000 threshold down to a
more sustainable $8,500 level and then indexing that for inflation. In
the next Congress, when we address tax reform and enter into a full
negotiation about income tax burdens, I will be attentively working to
ensure that tax policies for working families with children are
progressive and mindful of these families' needs.
The dependent care tax credit is also extended in this legislation.
This year, the provision allows a taxpayer a 35-percent credit, rather
than just 30 percent, of child care expenses for children under 13 and
disabled dependents. The 2001 tax bill increased the amount of eligible
expenses from $2,400 to $3,000 for one child and from $4,800 to $6,000
for two or more children.
Under this legislation, these policies on dependent care will be
extended for an additional 2 years, through 2012. Again, with Senator
Lincoln, we have introduced legislation that would have improved rather
than just maintained the dependent care credit. The most significant of
these changes would be to increase the thresholds so that up to $5,000
per child or $10,000 for two or more children would be creditable. The
legislation would also amend the flexible spending account rules for
dependent care to increase the amount of pre-tax income that can be set
aside for dependent care so that it is $7,500 for one dependent and
$10,000 for two or more.
Another major component of the legislation before us is relief from
the alternative minimum tax--or AMT. In fact, the AMT relief in this
legislation makes up roughly one quarter of all the relief--roughly
$137 billion for just the 2-year ``patch''--that effectively holds
harmless taxpayers from the unintended consequences of this alternative
tax system. This is not taking into account the additional relief that
holds harmless taxpayers who would otherwise have their child credits
reduced as a result of the AMT.
The onerous AMT is tax policy run amok--and I can find no
policymakers who defend the manner in which it would be imposed on at
least an additional 21 million taxpayers. AMT is essentially a flat tax
at 26 and 28 percent tax rates for couples with combined incomes as low
as $45,000 per year. Perhaps this is the understatement of the year,
but these are not the super wealthy who were the intended targets of
this tax. When the 112th Congress addresses the question of fundamental
tax reform, this reckless component of tax policy must be our top
single priority to be repealed and rationalized so that the tax rate is
the tax rate, and we cease to have a parallel tax system that is simply
out of control.
As the former chair and now ranking member of the Senate Small
Business Committee and a senior member of the Senate Finance Committee,
the issue of how individual tax rates affect small business is of
profound concern to me. Whether it is on Main Street tours or from
other constituent contacts with businesses large and small, the
uncertainty of the Tax Code is the primary issue on the minds of
business owners and managers. At that December 2 hearing on tax reform
in the Finance Committee, we were presented data regarding the growth
in the number of ``flow through'' businesses--those businesses that pay
tax at the individual tax rates rather than at the corporate rate.
Since the Tax Reform Act of 1986, but particularly since 2001, the
growth in this form of ownership has been expanding. Further, we
learned that S Corporations have supplanted C Corporations as the
preferred form of business other than sole proprietorships.
The Joint Committee on Taxation has reported that 50 percent of all
income in the top two individual income tax brackets is attributable to
flow-through businesses. These are the entrepreneurial firms that are
generating the jobs necessary to pull us out of this recession, and it
is imperative that we not increase taxes on these businesses from 33
and 35 percent up to 36 and 39.6 percent. According to the National
Association of Manufacturers, over 70 percent of U.S. manufacturers
file as S Corporations or other pass-through entities and NAM reports
that most would be significantly and adversely impacted by increasing
tax rates to 39.6 percent. Moreover, this legislation will reduce tax
rates on capital gains and dividends that will boost capital investment
and economic growth.
According to the Small Business Administration, small businesses
employ half of all private sector employees, and generated 65 percent
of net new jobs over the past 17 years. These flow-through small
businesses employ 20 million Americans and it is these business owners
who must reinvest the profits of their businesses to continue serving
as the economic engines of this Nation. The reinvested profits from a
business are the lifeblood of these entrepreneurs and, at a time when
access to capital from lending institutions is still difficult, current
earnings must be available to business owners rather than sending those
funds to Washington. Indeed, in the National Small Business
Association's 2009 Year-End Economic Report, 38 percent of respondents
to their survey noted Federal taxes as one of the most significant
challenges to the future growth and survival of their businesses--a
category trumped only by the ongoing economic uncertainty pervading our
Nation. Small business owners across America can better deploy this
capital than can policymakers in Washington.
Although I believe that this package will demonstrably enhance GDP
growth and critically lower unemployment, regrettably this package also
unnecessarily adds to our Federal debt by retaining energy tax policies
that are quite simply an ineffective use of taxpayers' money.
Specifically, instead of considering the effectiveness of individual
energy tax policies scheduled to expire this year, the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of 2010
simply extends all policies that had Congress extended previously. By
that standard the legislation conveniently continues subsidies at their
current levels for ethanol, biodiesel, refined coal, natural gas and
oil production--all at a cost of more than $11 billion in lost revenue
for the Federal Government at a time of record deficits.
These tax policies were enacted years ago, are extremely costly to
U.S. taxpayers, and the merits of their extension have not been
demonstrated to the Senate Finance Committee. In fact, according to a
July 2010 study by the Congressional Budget Office, the ethanol tax
credits cost taxpayers $1.78 for each gallon of gasoline consumption
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reduced, and $750 for each metric ton of carbon dioxide equivalent
emissions avoided. The continuation of this tax credit is an
ineffective method at reducing our consumption of foreign oil and will
unfortunately cost taxpayers nearly $5 billion.
In addition, the legislation extends the 1603 grant program for
qualified renewable energy projects. While I support renewable energy,
this program is far from standard tax policy and was developed to be
timely, targeted and temporary in the American Recovery and
Reinvestment Act as a direct result of the paralysis of the tax equity
markets in 2009. Unfortunately, the Finance Committee has not reviewed
the effectiveness of this policy and, as a result, I am not supportive
of providing an additional $2.9 billion without government analysis
demonstrating that this program's extension is an effective use of
taxpayers' money.
Again, the decision to include these costly energy provisions was
made without Finance Committee hearings, mark-ups, discussions, or
analysis. Energy markets are dynamic and technology develops rapidly--
Congress must demonstrate our capacity to end obsolete energy tax
policies, and develop effective policies that will improve America's
energy security.
It is regrettable that the Middle Class Tax Relief Act includes these
costly and misguided policies and hope that next year Chairman Baucus
and Ranking Member Hatch hold Finance hearings to assess the best use
of tax policy to reduce energy prices in a fiscally responsible manner.
Finally, I have been an ardent supporter of extended unemployment
benefits during this economic calamity. At a time when the official
national unemployment rate is 9.8 percent and 7.4 percent in Maine, and
many industries and States clearly are experiencing rates that are
alarmingly higher, it is imperative that we provide a safety net for
these individuals. Rather than the halting, short term and month to
month extensions that we have managed this year, the legislation before
us would provide extended unemployment benefits through 2011--
recognizing that these unemployment numbers are not expected to rebound
as quickly as any of us would hope.
I support this legislation to extend current tax relief for two
additional years. But it is critical to understand that this is merely
a short term patch and that our Tax Code is woefully outdated,
mercilessly complicated, and wildly out of control. While the extension
of these tax rates is a step in the right direction, let us not forget
that it is only a first step in a long journey to overhaul our broken
Tax Code as our corporate tax rate is the highest in the world--Japan
is reforming their tax system--and the Tax Code is so horribly complex
that, according to the August 2010 report from the President's Economic
Recovery Advisory Board, that taxpayers spend 7.6 billion hours and
shell out about $140 billion trying to comply with tax filing
requirements in 2008, which is roughly equivalent to 1 percent of the
GDP. Further, the Treasury Department testified at the recent Finance
Committee tax reform hearing that the instruction book for the primary
individual income tax form has grown from 52 pages for 1980 to 174
pages for 2009. The income tax regulations have doubled, from less than
7,500 pages in 1980 to nearly 15,000 pages today. Between 1980 and
2008, tax returns filled out using paid preparers have increased from
38 percent of returns to 58 percent of returns. When software users are
added in, about 85 percent of individual income tax returns rely on
some form of assistance, either software used by the taxpayer or a
practitioner.
That, my colleagues, is what awaits us in the 112th Congress. I urge
you to pass this legislation now so that we can focus on the big
picture in the new year and the new Congress. Indeed, this legislation
will provide the much needed building blocks for our future efforts.
The legislation we will pass today gives us a brief but realistic
window to address the multitude of flaws in the current Tax Code, and I
have stated that my guiding principles for reform are as follows--
First, we should establish a progrowth Tax Code with the fewest
number of economic distortions that raises sufficient revenue to
finance our Nation's spending priorities.
Second, our Tax Code should be simplified to reduce the burden of
compliance.
Third, we must end the fiscal ``shell game'' where we extend tax cuts
for only a year or two at a time or make them temporary to mask their
true long-term costs.
Fourth, the Tax Code should promote savings and investment, the
drivers of long-term growth.
Fifth, the Tax Code must not be a barrier to American business
competitiveness in the global economy. We have the second highest
corporate tax burden in the industrialized world today.
Finally, our Tax Code must remain progressive and distribute the tax
burden fairly.
With that, I urge my colleagues to extend existing tax relief--and
plan to move expeditiously to enact a sustainable tax system very soon.
Mr. DORGAN. Mr. President, yesterday the Senate voted on the tax bill
compromise that was fashioned by the President and Republican leaders
in the Congress.
I voted against the compromise.
I recognize that the Republicans in Congress put the President in the
position of having to agree to things in the compromise that he
strongly objected to. And I also realize that compromise is essential
to move forward and to try to fix what is wrong with our economy.
But here is the dilemma. We have two very serious problems that can
undermine America's economic future. First is the crushing debt in our
fiscal policy. Our debt is currently over $13 trillion with a yearly
deficit of over $1 trillion. This proposal will substantially increase
that debt which I believe will continue to undermine the confidence
people have in this country's future.
The estimate that this agreement will increase the debt by over $1
trillion is far short of what will actually happen. The tax cut
extensions are for 2 years and I am certain that in 2 years, in the
middle of an election campaign, the tax cuts will be further extended.
The total cost of those tax cuts for a decade will be to add $4
trillion to the Federal debt. Again, I think that will undermine any
confidence the American people or, for that matter, others in the world
will have about our ability to rein in a fiscal policy that has us
borrowing 40 percent of everything we spend in the Federal Government.
The second serious problem that we face is the slow rate of economic
growth that is unlikely to create jobs at a pace that we need. I
understand that in order to address this problem we would want to have
a further economic stimulus to extend the growth of the economy.
However, this economy has been about as stimulated as any economy in
history. Adding more stimulus through borrowing seems to me is not the
way to promote confidence or economic growth.
Earlier in the week I voted for cloture because I did not want to
block a compromise on these matters. However, the specific compromise
which we voted on yesterday I believe falls short of what the country
needs, especially in dealing with what I believe is the controlling
issue of a crushing Federal debt and therefore an erosion of confidence
in our economy.
The fact that this agreement was flawed was not the President's
fault. Rather, it was due to the position of the Republicans insisting
on the extension of tax cuts for the wealthiest Americans. Without that
concession, the Republicans made it clear they were going to block any
compromise.
If our country is going to remain a world economic power we need to
make good decisions and courageous decisions to fix the things we know
are wrong. In order to do that, the President is going to need help. It
requires more willingness to compromise on the part of the Republicans
than they have shown recently.
Mr. CORNYN. Mr. President, this week, the U.S. Senate took an
important vote to prevent the largest tax increase in American
history--and help get America's job creators off the sidelines.
I voted for this bill for one simple reason: raising taxes during a
recession on anyone is not a good idea.
This bill prevents tax increases on every American who pays income
taxes, because it keeps the lowest
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bracket at 10 percent; keeps the highest bracket 35 percent; preserves
relief from the marriage penalty--as well as the $1,000 per child tax
credit; blocks higher taxes on capital gains and dividends; protects at
least 21 million families from the alternative minimum tax; and reduces
the ``death tax'' by 20 percent from what it would have been on January
1.
Some of my fellow conservatives have reservations about this bill,
and I share them. This bill certainly falls far short of what I think
we would see if Republicans controlled both Chambers of Congress and
the White House. I think we would see a permanent extension of all the
2001 and 2003 tax relief; a much lower estate tax; and zero new
spending or tax breaks for special interests.
But given that President Obama will hold the veto pen for at least 2
more years--and given all the class-warfare rhetoric that the President
and the majority have indulged in over the last few years--I consider
an extension of tax relief for every American taxpayer to be a
remarkable legislative achievement for Republicans. One pundit summed
up the agreement this way: ``If someone had told me, the day after
Election Day 2008, that tax rates on income and capital would not
increase for the next four years, I would have laughed at them. Now
it's about to come true, and Presidents Obama and Clinton are helping
make it happen.''
The only thing I would add to that statement is that several of my
colleagues deserve credit for making this agreement happen--especially
Senator McConnell, Senator Kyl, and Senator Grassley.
Some of my colleagues on the other side of the aisle have also raised
objections to this legislation--and I would like to respond to just one
of those objections: the claim that it is hypocritical to say you are
concerned about the deficit but then vote to keep taxes low on American
families and small businesses.
Let me set the record straight on what actually happened to the
deficit once the tax relief Congress originally passed in 2001 and 2003
began to kick in to our economy. As our colleagues remind us
constantly, deficits did go up during the first years of the Bush
administration--in part due to the collapse of the dot-com bubble, the
recession, and 9/11. In fact, by fiscal year 2004, the deficit was up
to $413 billion, or 3.5 percent of GDP.
But then, just as the 2001 and 2003 tax relief started to kick in, a
strange thing happened to the deficit: It went down to $318 billion in
fiscal year 2005, then down again to $248 billion in fiscal year 2006,
and then down to $161 billion in fiscal year 2007. By then our deficit
was only 1.2 percent of GDP.
Now why did the deficit go down in those years? One big reason is
that tax relief helped grow the economy; got about 8 million more
people on the payroll between 2003 and 2007; and therefore generated
more tax revenue.
I think the person who said it best was Austin Goolsbee, the chairman
of the President's Council of Economic Advisers. On ``Meet the Press''
Sunday, he had this to say: ``You cannot reduce the deficit if the
economy is not growing, period.'' I agree.
Now I also agree that preventing a massive tax increase is not the
only thing we must do to get our national debt under control. We must
cut government spending--and that means killing the $1.3 trillion
omnibus spending bill the majority introduced yesterday. We must study
the proposals of the President's Debt Commission--and take action to
prevent the looming fiscal catastrophe that they described. We must
address head-on the need for reform in our entitlement programs like
Social Security and Medicare--and put them on a sustainable path. And
we must pass a balanced budget amendment to the U.S. Constitution.
We can begin addressing all of these tough decisions in just a few
weeks--once the new Congress elected by the American people is sworn
in. Today, our urgent decision is whether we want taxes to go up on
January 1, or rather extend the tax relief and remove a huge element of
uncertainty among our job creators.
I believe the choice is clear, and so do the American people. 69
percent of the American people support this legislation, according to a
poll released yesterday by the Washington Post and ABC News.
As usual, the American people have got it right.
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