[Congressional Record Volume 157, Number 96 (Thursday, June 30, 2011)]
[Senate]
[Pages S4245-S4246]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             FISCAL POLICY

  Mr. MERKLEY. Mr. President, we are involved in a very important 
national debate about our finances, our deficits, our debt, investments 
in our economy, including the creation of jobs, and how we take on 
those problems in the most effective manner to build a strong financial 
foundation for our Nation going ahead and a strong set of opportunities 
for families to thrive. In the course of this debate, there has been a 
very interesting development that merits our attention, and that 
development is this: Some of my colleagues across the aisle have, over 
time, chosen to put key programs for the wealthy and well connected not 
in an appropriations bill but in tax legislation. There are advantages 
to doing so. With appropriations, programs have to be defended year 
after year. It has to be reviewed in committee. It may have to go 
through an authorization process as well as an appropriations process. 
But if a program for the wealthy and well connected is placed in the 
Tax Code, then, unless a sunset clause has been instituted, that 
program is a gift that keeps on giving, unexamined in the course of the 
standard appropriating process.
  By putting these programs for the wealthy and well connected into the 
Tax Code, some of my colleagues across the aisle have said that as a 
result, there is an additional advantage. We can claim these programs 
are off-limits, and we can claim that if anyone seeks to examine these 
programs for the wealthy and well connected, they are seeking to 
``raise taxes,'' and we will scare the American citizens into revolt 
against that effort to examine these sacred cows.
  I think this attitude, quite frankly, underestimates American 
citizens. American citizens understand very well what is up. They 
understand there is an effort to put programs for working Americans in 
legislation where it has to be authorized regularly, where it has to go 
through the appropriations process annually, but the programs for the 
most wealthy and well connected are put over here behind the fence 
where they don't have to go through that process, and then they say 
those are sacred cows and we can't touch them.
  There is a big difference between fighting for fairness for working 
Americans and fighting to defend the benefits for the best off in our 
society. This is a debate that must be on the floor of the Senate.
  It was in 1976 that I came here as an intern to Senator Hatfield. As 
it turned out, I was assigned to the Tax Reform Act of 1976. In that 
assignment, I was reading all the mail from Oregon. Then, as the debate 
came to this Chamber, I would meet Senator Hatfield at the elevator 
doors, just outside these double doors to the Chamber. Of course, in 
those days we didn't have a television camera in the Chamber, and in 
those days we didn't have e-mail to communicate. So staff members would 
line up and meet their Senators coming off the elevator and brief them 
about the debate: What were the ups and downs, what were people back 
home saying, what type of vote it was, whether it was an up-or-down 
vote, a motion to table, and so on and so forth. Then I would run up to 
the seats for the staff to observe the debate, and then I would come 
back down when the next vote on an amendment came up.
  That review in 1976 was a tough discussion, because anytime we talk 
about cutting a program, anyone who benefits from that program is very 
upset. But there was an understanding on both sides of the aisle that 
we owed it to the American taxpayer to spend every dollar in the best 
possible fashion, and, therefore, there could be no fence walling off 
programs for some for consideration, while the programs for

[[Page S4246]]

others merit full examination. Everything needed to be talked about. 
Everything needed to be weighed as to the value it provided.
  Again in 1986, a decade later, an even larger effort--a major 
effort--was undertaken to examine every tax program, whether it was one 
that benefited people here or people there, to weigh it in the context 
of our fiscal responsibility to the Nation. It was Senator Hatfield 
from Oregon who was head of the Finance Committee and who led that 
debate on the floor of the Senate. I emphasize that Senator Hatfield 
was a Republican. Republicans back then believed in fiscal 
responsibility. They didn't believe in setting off one part of the Tax 
Code for the wealthy and well connected that would never be examined 
again, while the programs for working Americans were on the table. No. 
They looked at everything across the entire spectrum.
  So here we are not in 1976, not in 1986 but in 2011. It has been a 
quarter century since we have had a serious review of the programs 
embedded in the Tax Code. I must say we have every reason to examine 
every program funded, whether through the appropriations code or the 
Tax Code, because we face serious financial circumstances. It is in 
this context that I would have expected to hear the echoes of 1986--
that every program is up for examination and every program is going to 
be tested against a rigorous set of circumstances to say it is the best 
use of our dollars. But, instead, my colleagues across the aisle take 
the position of putting up a very high fence around the tax provisions 
for the wealthy and well connected, saying their No. 1 goal is to 
protect those provisions. Programs for seniors are on the table. 
Dismantling Medicare is a Republican plan. Programs for those who don't 
have enough food to eat are on the table. Unemployment has been on the 
table. Funding for the infrastructure we need to rebuild our country is 
on the table, but this set of sacred cows is not, this set of sacred 
programs for the wealthy and well connected.
  Quite frankly, that is wrong. That must change. We must bring that 
debate to the floor of the Senate as our colleagues did a quarter 
century ago, as our colleagues did 35 years ago.
  So when it comes to these programs, there must be no sacred cows and 
there must be no sacred horses. This chart says ``running away with our 
tax dollars.'' One of the tax programs my colleagues across the aisle 
are insisting be walled off from examination is a special writeoff for 
thoroughbred racehorses. Yes, racehorses. This is the bluegrass 
boondoggle which allows millionaire and billionaire racehorse owners to 
write off the cost of their horses in an accelerated manner, reducing 
the normal 7-year period to just 3 years. This bluegrass boondoggle 
will cost U.S. taxpayers, over the course of the coming 10 years, $126 
million, according to CBO estimates, after modeling the impact of this 
tax provision. This is equivalent to us writing a check over this 
coming decade for $126 million. This is equivalent to a grant program. 
This is equivalent to subsidizing a loan program. No program, simply 
because it is in one bill--the tax bill--rather than in another bill--
an appropriations bill--should be off-limits. Horseracing may have been 
called the sport of kings----
  The PRESIDING OFFICER (Mr. Udall of Colorado). The Senator will 
suspend.
  The Senator has used 10 minutes.
  Mr. MERKLEY. Thank you, Mr. President. Is there a 10-minute rule in 
effect?
  The PRESIDING OFFICER. There is.
  Mr. Schumer addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. SCHUMER. I believe I am the next speaker. I ask unanimous consent 
to cede the Senator from Oregon 3 minutes of my 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MERKLEY. I thank my colleague from New York, and I appreciate 
those 3 minutes.
  So horseracing may have been called the sport of kings, but that 
doesn't mean owners of horses--those millionaires and billionaires 
supporting those horses--need royal tax treatment. As long as these tax 
subsidies are preserved, the richest and best off will remain in the 
winner's circle, while working families don't even get a chance to 
compete.
  There is no doubt that closing this loophole alone isn't going to 
solve our deficit problem, but it is a good place to start because, 
otherwise, we are going to cut $126 million from Head Start or $126 
million from Medicare for our seniors or programs that help retrain 
laid-off workers. Giving ``triple crown'' treatment to millionaires, 
while workers are put out to pasture is not right, and it is not the 
American way.
  I have proposed searching through the Tax Code to find wasteful tax 
subsidies and eliminate unnecessary giveaways. This year is the right 
time to start. No one program should be singled out. We should set a 
series of standards and test each tax program against those standards 
on whether they create jobs, whether they make a stronger economy, 
whether they take America forward, and whether that $126 million spent 
in this category or that is more important to the Nation than other 
cuts we might be entertaining. Those are the tests that need to be 
applied in a thoughtful and thorough manner. It is time to stop walling 
off the programs for the wealthy and well connected while attacking 
programs that make working America go forward in a stronger fashion.

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