[Congressional Record Volume 157, Number 96 (Thursday, June 30, 2011)]
[Senate]
[Pages S4281-S4286]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE DEBT CEILING
Mr. LEVIN. Mr. President, we must raise the debt ceiling, period.
This is not an opinion, it is a fact. The consequences of failing to
act are simply too catastrophic to consider any other course.
Negotiations are underway now to seek an agreement to raise the debt
ceiling as part of a larger agreement on deficit reduction. But there
is a major obstacle to agreement: a refusal on the part of the
Republican leadership to compromise, a refusal to understand that
sacrifice must be shared.
The sacrifice, they say, must come from middle America--those
struggling to pay for a college education or for health care for their
kids or for long-term care for their parents. The Republican leader
demands that this sacrifice be made by the middle class in order to
protect the Bush tax cuts and other tax breaks for the wealthiest among
us--despite the huge and growing gap in the distribution of income in
our country between the wealthy and the middle class.
One example of the kind of tax breaks and tax loopholes that we
Democrats seek to change is the unconscionable tax break given to hedge
fund managers. Hedge fund managers generally make their money by
charging their clients two fees. First, the manager receives a
management fee, typically equal to 2 percent of the assets invested.
Second, the manager typically receives 20 percent of the income from
those investments above a certain level. This 20-percent share of the
investment returns from hedge funds is known as ``carried interest.''
Under current law, most hedge fund managers claim that this carried
interest qualifies as a long-term capital gain, currently subject to a
maximum tax rate of 15 percent, rather than being taxed as ordinary
income, currently subject to a maximum tax rate of 35 percent.
But a moment's analysis shows that this money is ordinary income by
any fair definition and should be treated that way. The 20-percent fee
is not capital gains, because it applies not to capital that the hedge
fund manager
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has invested, but to the payment he receives for investing capital that
other people provide. Pretending that the 20-percent fee is capital
gains when, in fact, it is payment for a service is an ``Alice in
Wonderland'' argument that elevates fiction over fact.
We Democrats seek to end this fiction. We are ready to call carried
interest what it is--ordinary taxable income. Recognizing carried
interest for what it is would increase tax fairness for working
Americans who pay their fair share of taxes. They have the right to
expect that the wealthy do the same. It would reduce the deficit--if we
did this--by an estimated $21 billion over the next 10 years.
Republicans seek to protect this loophole. They say the income of
investment managers is at risk from year to year and, therefore,
deserving of a lower tax rate. Well, ask the factory worker, who just
saw his or her job move overseas; ask the store clerk, who saw his
employer close because of the damage from the financial crisis; ask the
part-time worker, whose hours and earnings go up and down from week to
week--ask all of them just how much risk working Americans face right
now.
Republicans say taxing this income as ordinary income would
discourage investment in job creation, and that is absurd. The people
who are actually risking their capital--investors in these funds--will
continue to see their profits taxed at the lower capital gains rate.
The issue in this case is income that these managers receive for
serving their clients. If you are a hedge fund manager, your job is to
manage a hedge fund. The income you receive for that job is no
different than the income a waitress receives for waiting tables, or a
janitor receives for scrubbing floors. The idea that the income of
millionaire fund managers should be taxed at a lower rate than that of
their staff or other workers is an absurdity.
This nonsensical loophole is deeply unfair at a time when working
families are struggling, while the wealthiest among us continue to
prosper greatly. Recent decades have seen a massive and growing
prosperity gap between ordinary Americans and the wealthy. How wide has
that gap become? In 1980, the top 1 percent of American earners took
home about 10 percent of our Nation's total income. A few decades
later, that figure had increased to 24 percent of our Nation's total
income. That is just the wealthiest 1 percent that now have over 20
percent of our total income. It is hard to argue that properly taxing
their income will impose great hardship on investment fund managers,
who have done awfully well in recent years.
How well have those investment fund managers done? According to a
survey by a magazine covering the hedge fund industry, the top 25 hedge
fund managers earned $22.7 billion last year. The two managers who
topped the list earned $80 billion each--that is billion with a ``B.''
The typical American household earned perhaps $60,000 or $62,000 in
2008. Those hedge fund managers earned in about 4 minutes what it took
a typical working family a year to earn. Yet they paid drastically
lower rates on those massive incomes than the low-wage worker who
cleaned their office. The Republicans would protect these
unconscionable tax breaks while, at the same time, wanting to cut
programs that provide an education for our kids and provide health care
for our seniors.
It gets worse. Adding insult to injury, Republicans are protecting
another tax loophole--one that many of these hedge fund managers, by
the way, use to avoid taxes entirely. This loophole allows corporations
and wealthy individuals to take income earned here in the United States
and shift it to overseas tax havens, dodging U.S. taxes that they
rightly owe.
I have long sought to end this abuse, because these offshore tax
havens increase the tax burden on those who pay the taxes they owe. In
the last Congress, I introduced the Stop Tax Haven Abuse Act, which
would seek to recover tax revenue now lost to offshore tax dodging.
Ending this loophole is significant if we seek to properly tax the
income of hedge fund managers. At one hearing of the Permanent
Subcommittee on Investigations, which I chair, three well-known hedge
funds that claim to be based in the Cayman Islands admitted under
questioning that they did not have a single employee in the Cayman
Islands. Closing the offshore loophole would make our effort to
equitably tax carried interest all the more effective, by shutting off
a major avenue that hedge funds and other investment funds use to dodge
taxes.
Democrats have rightly proposed addressing the carried interest
loophole and offshore tax havens and other unfair tax loopholes as part
of a balanced deficit reduction strategy. We believe it is grossly
unfair to cut programs that help young Americans get a college
education or help train working Americans for new jobs in order to
protect tax loopholes that benefit the wealthiest Americans.
The Republican response? To walk out of negotiations and say they
will not accept any deficit reduction package if it includes revenue
measures.
Mr. President, what is the time situation?
The PRESIDING OFFICER (Mr. Franken). The Senator has 30 seconds
remaining.
Mr. LEVIN. If there is no other Senator waiting, I ask unanimous
consent to be permitted to continue for 3 additional minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LEVIN. I thank the Presiding Officer.
What the Republicans have done is to walk out of negotiations and say
they will not accept any deficit reduction package if it includes
revenue measures. So let's call this what it is. If Republicans refuse
to consider compromise solutions, they are threatening all of us, the
whole country, with economic catastrophe in order to protect the sky-
high income of millionaire hedge fund managers and offshore tax
avoiders. Those are two of the loopholes--two of many loopholes--we
have identified that should be closed that Republicans refuse to
consider closing. So what they are doing--and we should make no mistake
about this--is holding the well-being of all Americans hostage to the
tax breaks of a wealthy few.
We all agree we must act to reduce the deficit. We have acknowledged,
as Democrats, the need for spending cuts, even painful cuts to programs
we support. That is why I am so troubled by the utter refusal of the
Republicans to consider even modest compromises in the direction of new
revenue.
There is an overwhelming consensus among budget experts that we
cannot achieve serious deficit reduction with spending cuts alone.
There is an overwhelming consensus among economists that drastic cuts
in Federal outlays will threaten our economic recovery--just as such
cuts have throttled recovery in other nations. And despite the
fantasies of some in Congress, it is abundantly clear a failure to
raise the debt ceiling would do incalculable harm to the recovery and
to our standing in the world. Drawing lines in the sand, as the
Republicans have done, and refusing to compromise by walking out, has
no place in the situation we face.
I urge the Republican leadership to abandon their uncompromising
positions, to embrace solutions to the deficit and recognize that we
all must sacrifice to address the deficit problem. The well-being of
all of us, of all Americans, should not be held captive in the service
of the most fortunate few.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DURBIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DURBIN. Mr. President, if people have been following the debate
on the Senate floor this afternoon, they understand it is focused
almost exclusively on the Federal budget deficit and what we are going
to do about it. It is a legitimate and timely question, because we are
now in negotiations at the highest levels--between the President and
the leaders in the House and Senate--to try to find some way through
our impasse.
The challenge is to find a way to reduce America's deficit and, at
the end of the day, to extend our debt ceiling. The debt ceiling has a
deadline of August 2. We have never in our history
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failed to extend our debt ceiling. To fail to do so would be the
equivalent of defaulting on a mortgage payment. And, of course, we all
know the consequences to any homeowner or family if that occurs. You
understand your credit rating is not going to be the best after you
have defaulted. The same thing would be true with America. You also may
find the next time you need a mortgage that particular bank may not
want to lend to you again. The same thing is true with America. It has
a negative impact on your lifestyle. All of a sudden you are in a
suspect class and it isn't as easy to borrow money to buy a car or to
make some other purchase.
That is the risk we are running at the highest possible level when it
comes to this debt ceiling vote on August 2. We have never--underline
the word never--defaulted on a debt ceiling extension in the history of
the United States of America. That is the reason why the securities and
bonds and stocks that are sold in this country enjoy a financial
reputation better than most of the world. The United States is
powerful, big, and trustworthy. We are going to lose that last word--
trustworthy--if we default on the debt ceiling. That is what we face on
August 2.
There is a group in town here called the Bipartisan Policy Center,
and they have kind of spelled out in specific terms what it would mean
if we end up in default, and it is pretty grim. I have some charts here
that talk about what we would face if we defaulted on the debt ceiling
extension on August 2.
The revenues for the month of August if we default will be $12
billion in the United States, and the bills due on August 3 will be $32
billion. The first day we will be $20 billion in the red, which means
choices will have to be made if we fail to extend the debt ceiling. And
they are hard choices. Let's take a look at some of those choices we
would have to face if we didn't have enough money to pay our bills.
Which of these don't get paid if Congress doesn't raise the debt
ceiling? Social Security? Medicare/Medicaid? Veterans' benefits? Those
firms that are supporting our war in Iraq and Afghanistan? IRS refunds
to individuals and businesses? All of these would have to be brought
into question, because we cannot pay them all if we fail to extend the
debt ceiling.
This bipartisan policy center said, Let's consider one of the
options. Let's protect the biggest programs. Let's pay interest on
America's debt so we don't have any further default. Let's of course
pay Social Security; elderly folks, many of them, have no other source
of income. We had better pay Medicare and Medicaid, because hospitals
and doctors across America are taking care of sick people who are
elderly and poor. We had better pay those defense firms, because if
they withdraw their services it can endanger our troops. And we had
better pay unemployment compensation, because for these families there
is no other source of income. So if we pay those, the ones I just
listed, we would be unable to pay the salaries of those in active
military service. We would be unable to pay veterans' benefits. We
would be unable to keep the courts open or pay the FBI. We couldn't
provide the money for education--that would be Pell grants, college
student loans--and virtually everything else in government. What would
everything else include? Air traffic controllers, the guards at Federal
prisons.
If you think what I am describing here is just a scare tactic, it is
not. It is the reality of what happens when you default, and it is a
reality that is being ignored by many on the other side of the aisle.
In fact, a fringe publication called the Washington Examiner, which
is a very conservative Republican publication, today said: Don't worry
about it. Default on the debt ceiling. We can figure out a way through
this.
Well, I am sorry, but the reality of the choices facing us is that if
we choose not to extend the debt ceiling, then we are going to have
nothing but terrible choices.
Here is another scenario, if you thought the first one was stark.
Let's assume that we want to protect the most vulnerable in America
where, in the month of August, we have $170 billion in income and $300
billion in bills. So we pay interest on the debt, Social Security,
Medicare/Medicaid, veterans, food stamps, housing for people who are
poor, unemployment benefits, and education for the kids. Unpaid would
be the defense firms again, those men and women serving in our
military, even those in combat, the FBI, the courts, and everything
else in government. The options are grim and real.
I have heard my colleagues on the Republican side come to the floor
today, and they are upset. They are upset at a speech given by the
President yesterday. Well, the President understands the gravity of the
decision that is before us. The President has urged Members of Congress
to get busy and help to solve the problem. I think he has a right to be
upset, to some extent, and impatient.
It was 2 weeks ago that we had a negotiation underway with Vice
President Biden, a bipartisan negotiation, Democrats and Republicans
from the House and Senate. It fell apart when Congressman Cantor, Eric
Cantor, the House Republican leader, walked out and announced publicly,
I am no longer part of this conversation. I think we have to stop this
negotiation, this bipartisan negotiation. I am handing it over to the
Speaker of the House John Boehner. He can talk to the President.
That, to me, was the height of irresponsibility. If you are given a
responsibility to sit in those sessions to try to spare the United
States from this terrible outcome, picking up your marbles and going
home is not a good option, even if you hand it over to your boss, the
Speaker of the House. What it did was to break down those bipartisan
negotiations. What we thought might lead to a solution has fallen apart
when the House Republican leader walked out. Now the President is
trying to pick up the pieces and put it back together and move us
toward a solution, and if he was impatient about it yesterday, he has a
right to be.
One of the very serious problems we face is if we want to deal with
this deficit in real terms, make a real impact on it, we have got to
have more bipartisan cooperation. That is a cliche around here, but it
is a fact.
I was on the President's Deficit Commission, the Bowles-Simpson
Commission. I sat there for almost 10 months, and I listened to
everything. I tried to learn as best I could what we were facing, and
at the end of the day I voted for the Commission report. Eleven out of
18 of us did, a bipartisan report. It was tough and it wasn't easy, and
there were parts of it that I hated as a Democrat. Yet I knew that if
we were going to solve this problem, there was no other way to do it.
We had to say to those on the Republican side of the aisle, you have to
step up with us and find ways to bring revenue to our government.
Today we are bringing in 14 percent of our gross domestic product in
Federal revenue, Federal tax receipts. Gross domestic product is the
sum total of our economy, all the production of goods and services; 14
percent of it comes in in Federal revenue, 24 percent goes out in
Federal payments, spending. That 10-percent difference equals the
annual deficit.
Ten years ago, we were in balance. When President William Jefferson
Clinton left office, the Federal budget was balanced, 10 years ago. At
that moment in time, the net national debt of the United States of
America, from George Washington through William Jefferson Clinton's 8
years, was $5 trillion.
Eight years later, when President George W. Bush left office, the
national debt had grown from $5 trillion to $11 trillion, more than
doubled in an 8-year period of time. You ask yourself, how could that
happen in 8 years that we would fall so deeply into debt? There are
three basic reasons it happened:
We fought two wars and we didn't pay for them. So the expense of
those wars was added directly to our national debt. The President's
economic theory was: The best way to move the economy was for us to
give tax breaks to the wealthiest people in America, and he did it in
the midst of a war, something no President had ever done, which
directly added to the debt, and he signed into law programs that
weren't paid for, expensive programs. So we ended up with an $11
trillion debt facing the new President, then President Obama, being
sworn in and a failed economic policy with hundreds of thousands of
Americans out of work
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and losing jobs by the day. That is what the President inherited.
He has tried to right the ship and move us forward, and it has been
hard and it has been slow and it has been frustrating. I think he has
done his best, and I think he has done a good job at it.
First, he put in a stimulus package of about $800 billion. As the
Presiding Officer here knows, 40 percent of that was tax cuts, tax cuts
to the families across America to help them out of the recession.
Another 25 percent of it went to building roads and bridges and
highways and high-speed rail, infrastructure that will serve America
for generations. The remainder of that went into helping State and
local governments get through difficult times. We sent extra money to
States because we knew a lot of people were out of work. They would
need unemployment checks, they would need help to pay their hospital
bills. We put that money into a stimulus package to stop what was a
hemorrhaging in this economy, and I think it worked to slow down the
decline. It did not turn it around as quickly as we liked.
Then last December the President said, on a bipartisan basis I will
agree with the Republicans to extend all tax cuts for everybody,
highest income to lowest income, and extend unemployment benefit
payments. We passed that as well.
The President has tried, and we are coming forward out of the
recession ever so slowly. Now we run the very risk of not extending the
debt ceiling and plunging ourselves back into a recession even worse
than where we started. So is the President impatient? You bet he is.
Impatient to the point where he invited Congress to maybe come to work
next week.
Many of us had felt we could spend a few days back home. I was going
to spend the time after the 4th of July traveling around my State. It
is a big State; but I guess it is clear now that my job is to be here,
and I will be, along with other Members.
The House will be in session. We are in a strange period of time here
where the House of Representatives comes and goes even when the Senate
is in session, so we kind of see each other in passing. Well, we will
both be together next week, and I hope we will stay here and get this
job done. The House is scheduled to go into another recess July 17 to
23, and I certainly hope they don't do that. They had better stay in
town. Let's get this done before August 2.
We have a serious problem facing us with job creation in this
country. There is no question about it. I think we can move forward as
long as we understand some basics.
The key to creating jobs in America is an expanding positive economy.
It is a feeling by people in this country and around the world that we
are moving forward. And, sadly, people are not going to get that
feeling unless we get our act together in Washington. It means
Democrats and Republicans working together.
I have tried for about 5 or 6 months now with a bipartisan group of
Senators to come up with a way to do this; and, unfortunately, one of
the Republican Senators from Oklahoma walked away from that
conversation as well. But we still have a job ahead of us, and it is
one that we ought to face.
I sincerely believe that the Bowles-Simpson Commission is the right
paradigm, the right direction for us in terms of where our Nation and
our budget should go. It calls for some changes many Democrats will
find painful and changes Republicans will have to struggle to accept as
well, but those are the changes that will be needed.
If we fail to include revenue in this discussion about reducing the
debt, if it is just spending cuts, it can only go so far. If we include
revenue, we can talk about a much bigger package of deficit reduction,
much more credible, with a more positive impact.
During the course of the last 2 days, we have tried to identify on
the floor some parts of the Tax Code that can be changed to save money
for our economy. Each year, our Tax Code, that body of laws relating to
taxes in America, provides deductions and credits and exclusions and
special treatment that spares individuals and companies from paying
$1.1 trillion in taxes each year. It includes such things as the
employers exclusion of health insurance premiums, mortgage interest
deductions, charitable deductions, State and local tax payments. All of
these things and many others are included in that Tax Code. It is rare
that we open that Tax Code and ask the question, Is this needed?
In the last few days we have come to the floor and talked to the tax
subsidies and tax breaks that aren't needed that, frankly, have to be
sacrificed in order to get this economy back on its feet. We talked
about one that is incredible. In the first quarter of this year,
ExxonMobil declared profits of $10 billion, one of the most profitable
quarters in the history of American business, and we as taxpayers
continue to subsidize ExxonMobil. Why? They are doing quite well. And
remember the last time you filled your tank with gas? It doesn't look
as though they are sparing us when it comes to raising the price of a
gallon of gas. So I think that subsidy should go. Subsidies to the oil
and gas companies at this moment in history are unacceptable. We have a
thriving profitable industry that does not need a Federal tax crutch.
Take a look at some of the others we have talked about as well. Do
you know we provide tax subsidies for American businesses that want to
ship their jobs overseas? We call it deferral of income. It is one of
the most expensive parts of the Tax Code. It says if you want to move
your business overseas and produce overseas and generate a profit, you
can hang on to that money. You don't have to pay taxes on it. We defer
the payment of taxes. There is a tax break for a company that has
decided to pick up and leave America and go someplace else. Why? Why
would we create a tax incentive to do that? If a company decides that
is the way to make a profit, so be it. I am sorry they would be leaving
America, but for goodness sake, they shouldn't expect us and we
shouldn't volunteer to subsidize that decision that costs good-paying
jobs in our country.
There are a variety of other smaller tax subsidies, those we have to
raise questions about. That is for sure. Tax subsidies for people who
are lucky enough to own a yacht? We want to give them a tax subsidy? Or
people who are lucky enough to own a jet plane? People who are lucky
enough to have thoroughbred horses? Most of the winners who stand at
the winner's circle of these race don't look like regular working
stiffs. They look like folks who are doing pretty well in life. Why is
the Tax Code subsidizing that particular industry? I think it is a
valuable and important question.
Why don't we put these things on the table? Why don't we ask
ourselves whether, at a time of deficit, when we need to not only
reduce spending but come up with revenue, that there are some things we
can no longer afford under our Tax Code?
Bowles-Simpson went a step further and said, If you start making
substantial changes and reducing the tax expenditures, deductions, and
credits, you can actually reduce marginal income tax rates for
individuals and businesses. I think that is a valuable thing to look
at. We don't have to eliminate everything in the Tax Code, but making
substantial changes could result in a fairer, more comprehensive tax
system.
Let me say one other thing that I think is guiding me in this debate
and I think you as well. I think about an America, a nation of values
that has always said we have got to care for the most vulnerable people
in our country. Some of these people, through no fault of their own,
were born with physical and mental shortcomings and limitations. Some
of them are dealing with illnesses that we wouldn't wish on anyone.
Many come from an impoverished background and are struggling to make do
with the basics in life. I feel, at the end of the day, we can make
this economy move forward, and we can do it in a sensible and humane
way. We can protect the basic safety net. One of the elements in that
safety net is Medicaid.
Yesterday, I had a meeting with some people I respect very much. They
came in to see me. They represented the heads of children's hospitals
from all over the United States, even from your State. My family has
relied on those children's hospitals in Washington, DC, and in Chicago
and other places, and thank goodness they are
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there. I do not know of a more caring, competent profession in America.
More than most hospitals, children's hospitals bring in patients on
Medicaid. These are patients who are not from families who are wealthy,
they are not from families who have private health insurance policies--
no, by and large, they are the poorest families.
One-third of the children in America are covered by Medicaid. That is
where they get their health care. If we talk about cutting back on
Medicaid, this program for low-income and disabled people, those
children will be unfortunate victims in that budget discussion. Also, a
large part of Medicaid goes for elderly people who have spent their
life savings and are living their last years in nursing homes and
convalescent centers. Medicaid pays that. Cutbacks in Medicaid run the
real risk of pushing those people out of quality care into lower
quality care or the streets.
Is that what America is all about? Would we preserve a tax break for
a person who owns thoroughbred horses and then say that unfortunately
that elderly lady has to leave the nursing home she has been in? Would
we preserve a tax break for someone who owns a yacht and say that
unfortunately we will not be able to cover the cost of a needed surgery
for a poor child at a children's hospital in Chicago.
If that sounds like an exaggeration, it is not. That is what this
debate comes to--whether we want to defend tax breaks for the well-off
people in America at the expense of the most vulnerable. We are better
than that, and most well-off people whom I know--and I have friends who
are doing very well in life--would not be afraid to pay a little bit
more in taxes to make sure America continues to move forward. They feel
blessed to be part of this country and blessed to be successful in this
country, and they do not resent the suggestion that they need to pay a
little more when times are difficult. They are certainly prepared to
sacrifice.
Some come to the floor here and think it is an outrage to ask oil
companies not to take a subsidy in their most profitable year. They
think it is an outrage to ask the most wealthy people in America to
give up a tax break on a jet they happen to own and use for personal
purposes or business purposes. I don't think that is what America is
about, and I don't think that is what we should be about.
Let's come together in a bipartisan fashion and make the spending
cuts which need to be made, both on the defense side and the nondefense
side, and then deal with revenue sources, either making certain that
those in the highest income categories are paying their fair share of
taxes or at least do not receive the current tax subsidies that are
going their way, and let's deal with the reality of this budget
deficit.
Time is a-wasting. If we wait until August 1 to get this done, it may
be too late. At some point, if we are not careful, 30 bond dealers
somewhere in the United States or some other country may start this
ball rolling before we do. If they do, questioning the credit
reputation of the United States of America, interest rates will start
moving up and we will not be able to move fast enough to stop it. That
is why the President was impatient yesterday. That is why we should be
in session this next week. And that is why we need to start rolling up
our sleeves and stop walking out of meetings on budget negotiations and
stay in the room until we get the job done.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LAUTENBERG. Mr. President, I want to be sure where we are now.
Are we in morning business at this point in time?
The PRESIDING OFFICER. Yes.
Mr. LAUTENBERG. Mr. President, I ask that only so I have some
recognition of what the time availability is. I do not plan to take too
long.
The PRESIDING OFFICER. There are 10-minute grants.
Mr. LAUTENBERG. Mr. President, I wonder what the American public
thinks about when they see an empty Chamber, hear mutterings about
class warfare. What puzzles me is, which class is making war against
which class and where are the casualties? As we look around, I ask the
question, Are we picking on the poor rich folk, those with abundant
wealth, those who earn over $1 million a year, those who have been
fortunate enough to have been able to bring their talent, their
ability, to the world's most important stage? Are they immune from
taking a bit part on the stage of human concerns once in a while
because they are being asked to make an extra contribution to the well-
being of our country? I don't think so. I don't think so. I am one of
those who are fortunate and feel lucky enough to succeed because of a
government action. Few of us--certainly not me--who served in the
military achieved the status of a hero like our friend, Dan Inouye, who
sacrificed so greatly for his country and has the highest medal awarded
for bravery America can give. But because I did my duty, I was serious
about it, and I served overseas, I was rewarded with the GI bill to pay
my college education and even given a little stipend with that. It
turned my life around. It enabled me to be one of three founders of a
company called ADP, a company employing 45,000 people.
Our parents were poor. We worried about meals on the table. We
couldn't afford the right kind of clothing. We couldn't afford a
bicycle that my mother bought me for my birthday. My father argued
about whether it had to be taken back because it was $1 a week and we
couldn't afford it.
Mr. President, 45,000 people. ADP is one of America's most successful
companies. I don't want to dwell on this, but it's one of the companies
with the longest growth record in profits, 10 percent each and every
year, for 42 years in a row--42 years in a row. A kid from the back of
the candy store.
So I look at our country, and I look at what it is we are trying to
do, and it is hard to figure out. What happened? Why are we looking at
these drastic cuts in programs that can help people? Why are we not
engaged in ways to help people, to continue to provide help and
assistance to help them get along in life and to be prepared to take
over the leadership of the future.
Are our friends on the Republican side willing to end Medicare as we
know it, decimating one of the most successful programs in the history
of our country? They are willing to unravel the very fabric of our
Nation and critical services that helped families struggling to give
their kids a decent education, good health, a future, a job
opportunity? What is it they want to take away with these cuts?
I can tell you, as a businessman for a long time--30 years before I
got here--I am accustomed to looking at business sheets and financial
statements. And one doesn't have to be an accountant or executive to
understand that on a financial statement there are two parts, two
significant parts: one is expenses, costs; the other is revenues.
Revenues is the income you have to get in order to be able to afford to
pay the expenses. If all you want to do is just cut expenses, then you
are cutting the sinew and the flesh and there is not much left.
Here is what ought to happen--we should be saying to those who are
the wealthiest: living with wealth is a pleasure, but that doesn't mean
you don't have an obligation to the country and to have to do something
a little different. Instead, they are making the wealthy wealthier, the
most privileged more privileged than they have been, and that is true.
When you look at the big oil companies pocketing $4 billion a year
each and every year, those are tax breaks that are unconscionable. But
when you look at this--and I think about a period of time when I was
growing up, and I look at a time during the war, World War II, and we
had a program called the Excess Profits Tax. We said those companies
are making so much money, they have to do their share and be helpful to
the country at large and to make certain they pay some share of what
the country is going through.
I just checked because I wanted to be sure. To date we have lost
4,400 Americans to the war in Iraq. We have lost over 1,600 to the war
in Afghanistan. Those are homes that are without a son, a daughter, a
brother, a father at
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home. Where is the sacrifice on the part of the others here? No, no. We
have to take care of the rich. We have to make sure they are more
comfortable than they are. Whether it is a bigger yacht or a bigger
airplane or a bigger house, we have to protect those people. They don't
need any protection. What they need to do is share in the pain America
is going through, and this is a reminder for me.
Make no mistake, greed is the fuel that drives Big Oil, and it is
time we end their free ride on the taxpayers' dime. The big five oil
companies have made almost $1 trillion in profit in the past decade.
That is quite a reward for these folks. BP, $7.1 billion in the first 3
months of 2011 as they ground out the environment in the Gulf of
Mexico. Imagine, $7.1 billion. ExxonMobil, $10 billion in a quarter.
Shell, $8 billion. These are rounding numbers in a quarter. They don't
need help. What they need is to help their country work its way through
the crisis that we are in now.
But then we see what is being asked by those on the other side: They
want us to have sympathy, have sensitivity toward the wealthiest among
us because they cannot afford extra money. They cannot afford it--no,
they cannot afford it because the other people are doing the
sacrificial work and they don't want to help those kids get an
education. They don't want to help those families to be able to provide
a future for their children. They don't want to be able to help the
families who need health care for the job market. That is not what they
are about. So why should we use some of the money to invest in America,
take down our debt, prepare young people for responsibilities for the
future.
Big Oil's greed is helping to inflate our deficit and every day
Americans are footing the bill, going up to the gas station. When
somebody has to spend $40 to $50 to fill up a tank of gas, very often
it is at a sacrifice for other things in their lives. It is terrible.
And you see this all over.
We have a Republican Governor in the State of New Jersey right now,
who is doing major cutting, and the result is that a family who makes
$24,000 a year now, family income, will have to spend over $1,000 a
year more for their health services. Mr. President, $1,000 to a family
making $24,000 gross. A family who earns $60,000 will have to spend
over $3,000 to pay for their health care.
Why wouldn't my colleagues on the other side--there are a lot of
intelligent people, and I am sure they are sympathetic people--want to
put a stop to this madness? Why wouldn't they say: Time to run up the
flag, and we are all proud to be Americans, and we are grateful for
what has happened to us? Instead they are saying: You have to have
more. If you make $10 million a year, you have to have more. If you
make $20 million or more--whatever it is--you need more. It is an
outrage.
Big Oil is doing everything in its power to protect its subsidies,
and the Republicans are doing everything in their power to help them.
Last month 45 Republican Senators voted against ending these wasteful
subsidies and using the money to reduce the deficit. Last week they
chose to walk out on deficit-reduction negotiations rather than even
considering putting a stop to Big Oil giveaways.
Making oil companies pay their fair share in taxes is not going to
hurt the industry. It just means Big Oil executives might have to do
with a smaller swimming pool or wait a little while longer to buy a
bigger yacht. It is clearly offensive, and they are not helping. They
are not helping lift the spirit of America. People are discouraged.
They are worried about losing their homes. They are worried about their
kids not be being able to get an education that they are emotionally,
intellectually qualified for because they don't have the money because
it is not available to them.
When we look at what has happened here--and you have to be fair. When
this poor guy, the CEO of Exxon, is earning only $29 million a year,
come on. Give him a break. He has to have a chance to preserve more of
that income. Why should he pay to help this country weather the storm,
weather the wars, weather the recession?
ConocoPhillips, he is not doing as good as the first guy. He only
made $18 million in 2010. The third one, Chevron, their CEO only made
$16 million. You know how the money gets to them? Through nickels,
dimes, quarters, and dollars at the gasoline pump. That is how the
money gets to them. How else can this CEO pay be afforded except from
those who pull up to the gas station and say they have to buy 10
gallons of gas. Mr. President, 10 gallons of gas around here is about
$45. It is a lot of money.
But instead of being fiscally responsible by ending the Big Oil big
windfall, Republicans have another idea. They want to cut the deficit
by ending Medicare as we know it, the most successful program in
American history, perhaps, next to Social Security.
Seniors are struggling, Big Oil certainly is not. I don't think these
fellows are struggling. I don't think they are doing without anything.
I wish the other side would listen a little more closely to what the
American people want. Almost three-quarters of the Americans want us to
stop giving billions of tax breaks to big oil companies each year. The
American people know these subsidies are unnecessary, ineffective, and
basically immoral.
We should take the $4 billion we give away to Big Oil each year and
use that money to pay down our deficit. That is a good idea. If we can
do that, then it starts to make things a lot easier to continue to
provide the services that are critical, essential to the average
family.
We cannot restore fiscal sanity here until we start paying more
attention to the revenue column in our ledger. As I said before, I was
a CEO for many years, 30 years before I got here, and I know you cannot
run a company or a country without a good, strong revenue flow. So I
call on my colleagues, please, listen to what your country needs. See
what you can do to make the country stronger. If our middle class, our
modest-income class starts to fail along the way, we will not be able
to conduct business as usual. It is for your own protection. Get with
it. Make sure they understand that you cannot just get more of what is
coming out; that you have to give something back to this great country
of ours.
I call on my colleagues: Get Big Oil off the Federal welfare roll.
Let's invest in our country's future and not have larger windfalls for
oil industry lobbyists and lawyers. We have to make sure our children
and our grandchildren inherit a country that is fiscally sound, morally
responsible, able to provide health care, able to provide an education,
able to guarantee that a child can prepare to be a leader in the
future. We have to make sure that everybody sees a chance for
themselves to succeed, to not be dependent on government programs, but
at least be able to have those programs to get them started in life.
Mr. President, I yield the floor.
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