[Congressional Record Volume 157, Number 112 (Monday, July 25, 2011)]
[Senate]
[Pages S4857-S4859]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEBT CEILING
Mr. KYL. Mr. President, I also thought it interesting that, regarding
the issues we are debating that so deeply divide us, a Wall Street
Journal op-ed today appeared, which is one of those rare times when the
author puts into a much larger perspective, a more cosmic perspective,
what we are talking about and puts it in moral terms--long-term moral
terms--rather than just Democrats versus Republicans and the fight of
the day.
Mr. President, I ask unanimous consent that this article be printed
in the Record after my remarks. It is written by Arthur C. Brooks and
is called ``The Debt Ceiling and the Pursuit of Happiness.''
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(See exhibit 1.)
Mr. KYL. Arthur Brooks is the head of AEI, American Enterprise
Institute, and he has written on the subject of happiness in our
country and how we get there. His most recent book is called ``The
Battle: How the Fight Between Free Enterprise and Big Government Will
Shape America's Future.''
His theme in this article was similar to the one in the book, which
is that
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we have the system we have because Americans have found that it is a
system which most leads us to the pursuit of happiness, the achievement
of success, and things that are important in our lives. He talks about
the fight we are engaged in now about extending the debt ceiling as
being a fight against 50-year trends toward statism, which he
identifies as a state that would be very disappointing to Americans,
where we would not have the ability to pursue our dreams or the same
opportunity we have today to be successful if we take risks and to
utilize the full potential of the free market system.
He says, ``Consider a few facts,'' and this is the one thing I will
quote from his article:
The Bureau of Economic Analysis tells us that total
government spending at all levels has risen to 37 percent of
the gross domestic product today from 27 percent in 1960--and
is set to reach 50 percent by 2038. The Tax Foundation
reports that between 1986 and 2008, the share of Federal
income taxes paid by the top 5 percent of earners has risen
to 59 percent from 43 percent. Between 1986 and 2009, the
percentage of Americans who paid zero or negative Federal
income taxes has increased to 51 percent from 18.5 percent.
And all this is accompanied by an increase in our national
debt to 100 percent of gross domestic product today from 42
percent in 1980.
All of these, obviously, portend a trend toward statism, toward the
funding of the state through increased taxation by fewer and fewer
people but at a greater and greater amount of money. In his view and in
mine, it will ultimately reduce the kinds of incentives that the free
market system provides for Americans to be able to earn and hire others
and to assist our economy to grow and, in the process, to increase our
standard of living.
This is one of the reasons why Republicans have been so focused on
reducing spending as the solution to the problem we face in Washington
today. Our problem is not that we don't tax Americans enough; our
problem is that we spend too much here in Washington. That is
manifested by the statistic that now we are spending almost 25 percent
of the GDP. We were up to 25, and we are headed back up there. Yet just
3 short years ago, we were at the average level of spending in our
country of about 20 percent of GDP. So spending has skyrocketed in the
last 3 years.
If a physician is wanting to treat a patient's condition, the
physician diagnoses the patient for what is wrong and then treats that
illness. What is wrong with us today is that Washington spending is out
of control. That is the diagnosis. What is the treatment? The treatment
is not to pile more taxes onto an already sick economy. The treatment
is to reduce the amount of government spending.
That is what Republicans have urged us to do. The American people,
fortunately, are in the same place.
I will cite three surveys that make the point. One of them is a
Rasmussen survey, just reported July 22, of likely voters in the
country. It asks the question: Would you fear that the debt deal would
raise taxes too much or too little? Would you fear that the debt deal
will cut spending too little or cut spending too much?
The answer was interesting. Among likely voters, the answer is this:
62 percent of voters believe the deal will raise taxes too much. Only
26 percent think we will raise taxes too little.
On the spending side, 56 percent are afraid it will cut spending too
little. Only 25 percent think it will cut spending too much.
We can see the American people are with us here. They understand our
problem is spending, not taxes. They are worried we are not going to
reduce spending enough and that, in fact, we are going to increase
taxes too much. Rasmussen had already done a survey a week before of
likely voters. It asked: Do you favor including a tax hike in the deal?
This was interesting. Fifty-five percent of voters said no. Only 34
percent of likely voters said yes. So the majority, by far, is saying
don't include a tax hike in the deal. Again, they understand what the
problem is: It is not taxes, it is spending.
CNN had a poll a few days before that, and the question--there were
several questions in the poll, but the one that struck my eye asked
about raising the debt ceiling only if we also cut spending, cap it at
certain levels, and pass a balanced budget amendment. That is the so-
called cut, cap, and balance proposal that passed the House of
Representatives but was tabled by our Democratic colleagues here in the
Senate last week. CNN reports that by a 2-to-1 margin the American
people thought we should cut, cap, and balance--66 percent favored,
only 33 percent opposed.
It is interesting to me the American people have internalized the
same thing as we Republicans; and probably the reason Republicans are
expressing this is because we have been listening to our constituents
who have been telling us this. Our concern is not that we should raise
taxes; our concern is that we should cut spending. That is why we have
been saying what we have been saying here.
I find it interesting even the President himself--in an earlier
time--shared the same sentiment. In August of 2009 he made a similar
point. In December of last year, when the tax rates that have been in
existence for decades were extended for another 2 years, he said: You
don't raise taxes in a recession. He is exactly right. And, by the way,
at the time he said that, growth in the quarter was at about 6 percent
of GDP. Today, growth is less than 2 percent of GDP. So our economic
situation has gotten worse since then. We are up to 9.2 percent
unemployment. Obviously, you don't raise taxes in a recession. When you
have a bad economic condition, the worst medicine is to raise taxes.
Another point Republicans have been trying to make with regard to
this difference between raising taxes or reducing spending is that
usually a couple of things happen when Congress sets out to do this.
You get the permanent increases in taxes, but you never get the same
dollar for dollar or $2 or $3 for $1 that you are promised in
reductions in spending. Moreover, when you aim at hitting the
millionaires and billionaires--which is usually the excuse for raising
taxes--you end up hitting a lot of other folks.
One of the things we are concerned about is exactly what happened
with the alternative minimum tax. We tried to make sure 128 specific
millionaires didn't get out of paying taxes because of deductions and
credits they could take, and so we put into effect the alternative
minimum tax. Today, the alternative minimum tax affects 25 million
Americans. So when you aim at the millionaires, you hit everybody else.
In fact, that is exactly what would happen under the proposal of the
President today.
The President says we need to hit the millionaires and billionaires.
Well, there are 319,000 American households that report incomes of over
$1 million a year, but there are 3.6 million other households that
would be affected in the same way by the President's tax increase
because they are also in the top two income tax brackets. So when you
raise the top two brackets, you are not just going to hit the
millionaires and billionaires, you are also going to hit a lot of other
Americans who don't report incomes of over $1 million a year.
Probably the primary reason Republicans have argued we should not be
raising taxes in this bad economic time is that it is a job killer.
This is illustrated by many things, one of which is the President's own
Small Business Administration. One of the taxes the President has
proposed hiking would hit small businesses especially hard. According
to the Office of Advocacy of the Obama Small Business Administration,
this tax ``could ultimately force many small businesses to close.'' Why
would you impose a tax on small businesses that could ultimately force
many of them to close? It is the wrong medicine for a sick economy.
In addition to the fact we always end up hitting a lot more than the
millionaires and billionaires, and that taxes are forever but the
savings never quite seem to materialize, the most important point here
is that raising taxes is a job killer. Two-thirds of all the jobs
coming out of a recession are in the small business sector. Fifty-four
percent of all jobs in the country are created by small business.
Republicans are going to continue to push for reductions in spending
as the way forward here, and I hope during this next week we will be
able to get together with our House colleagues, and Republicans and
Democrats alike will be able to at least rally around one thing we can
all agree on: spending has to be reduced. If later on we need to have
discussions about tax reform, that
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is a debate I think all of us wish to have. Our Tax Code needs
reforming. But let's do that not in the context of raising revenues but
rather in the context of making it a Tax Code that would enable us to
grow more. At the end of the day, that is what we should all be for.
Because a growing pie means there is more for everyone--rich and poor
alike--the families of America as well as the governments. I hope my
colleagues will focus on what the American people are telling us
through these surveys: Let's reduce spending, not increase taxes.
Exhibit 1
[From the Wall Street Journal, July 25, 2011]
The Debt Ceiling and the Pursuit of Happiness
(By Arthur C. Brooks)
The battle over the debt ceiling is only the latest
skirmish in what promises to be an ongoing, exhausting war
over budget issues. Americans can be forgiven for seeing the
whole business as petty, selfish and tiresome. Conservatives
in particular are beginning to worry that public patience
will wear thin over their insistence that our nation's
government-spending problem must be remedied through spending
cuts, not by raising more revenues.
But before they succumb to too much caution, budget
reformers need to remember three things. First, this is not a
political fight between Republicans and Democrats; it is a
fight against 50-year trends toward statism. Second, it is a
moral fight, not an economic one. Third, this is not a fight
that anyone can win in the 15 months from now to the
presidential election. It will take hard work for at least a
decade.
Consider a few facts. The Bureau of Economic Analysis tells
us that total government spending at all levels has risen to
37% of gross domestic product today from 27% in 1960--and is
set to reach 50% by 2038. The Tax Foundation reports that
between 1986 and 2008, the share of federal income taxes paid
by the top 5% of earners has risen to 59% from 43%. Between
1986 and 2009, the percentage of Americans who pay zero or
negative federal income taxes has increased to 51% from
18.5%. And all this is accompanied by an increase in our
national debt to 100% of GDP today from 42% in 1980.
Where will it all lead? Some despairing souls have
concluded there are really only two scenarios. In one, we
finally hit a tipping point where so few people actually pay
for their share of the growing government that a majority
become completely invested in the social welfare state, which
stabilizes at some very high level of taxation and government
social spending. (Think Sweden.)
In the other scenario, our welfare state slowly collapses
under its weight, and we get some kind of permanent austerity
after the rest of the world finally comprehends the depth of
our national spending disorder and stops lending us money at
low interest rates. (Think Greece.)
In other words: Heads, the statists win; tails, we all
lose.
Anyone who seeks to provide serious national political
leadership today--those elected in 2010 or who seek national
office in 2012--owe Americans a plan to escape having to make
this choice. We need tectonic changes, not minor fiddling.
Rep. Paul Ryan's (R., Wis.) budget plan is the kind of
model necessary. But structural change will only succeed if
it's accompanied by a moral argument--an unabashed cultural
defense of the free enterprise system that helps Americans
remember why they love their country and its exceptional
culture.
America's Founders knew the importance of moral language,
which is why they asserted our unalienable right to the
pursuit of happiness, not to the possession of property.
Similarly, Adam Smith, the father of free-market economics,
had a philosophy that transcended the mere wealth of nations.
His greatest book was ``The Theory of Moral Sentiments,'' a
defense of a culture that could support true freedom and
provide the greatest life satisfaction.
Yet today, it is progressives, not free marketeers, who use
the language of morality. President Obama was not elected
because of his plans about the taxation of repatriated
profits, or even his ambition to reform health care. He was
elected largely on the basis of language about hope and
change, and a ``fairer'' America.
The irony is that statists have a more materialistic
philosophy than free-enterprise advocates. Progressive
solutions to cultural problems always involve the tools of
income redistribution, and call it ``social justice.''
Free-enterprise advocates, on the other hand, speak
privately about freedom and opportunity for everybody--
including the poor. Most support a limited safety net, but
also believe that succeeding on our merits, doing something
meaningful, and having responsibility for our own affairs are
what give us the best life. Sadly, in public, they always
seem stuck in the language of economic efficiency.
The result is that year after year we slip further down the
redistributionist road, dissatisfied with the growing welfare
state, but with no morally satisfying arguments to make a
change that entails any personal sacrifice.
Examples are all around us. It is hard to find anyone who
likes our nation's current health-care policies. But do you
seriously expect grandma to sit idly by and let Republicans
experiment with her Medicare coverage so her great-
grandchildren can get better treatment for carried interest?
Not a chance.
If reformers want Americans to embrace real change, every
policy proposal must be framed in terms of self-realization,
meritocratic fairness and the promise of a better future. Why
do we want to lower taxes for entrepreneurs? Because we
believe in earned success. Why do we care about economic
growth? To make individual opportunity possible, not simply
to increase wealth. Why do we need entitlement reform?
Because it is wrong to steal from our children.
History shows that big moral struggles can be won, but only
when they are seen as decade-long fights and not just as a
way to prevail in the next election. Welfare reform was first
proposed in 1984 and regarded popularly as a nonstarter.
Twelve years of hard work by scholars at my own institution
and others helped make it a mainstream idea (signed into law
by a Democratic president) and perhaps the best policy for
helping the poor to escape poverty in our nation's history.
Political consultants would have abandoned welfare reform as
unworkably audacious and politically suicidal. Real leaders
understood that its moral importance transcended short-term
politics.
No one deserves our political support today unless he or
she is willing to work for as long as it takes to win the
moral fight to steer our nation back toward enterprise and
self-governance. This fight will not be easy or politically
safe. But it will be a happy one: to share the values that
make us proud to be Americans.
Mr. KYL. Mr. President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
The ACTING PRESIDENT pro tempore. The Senator from Oregon.
Mr. MERKLEY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
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