[Congressional Record Volume 157, Number 116 (Friday, July 29, 2011)]
[Senate]
[Pages S5057-S5062]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE DEBT CEILING
Mr. HATCH. Mr. President, according to President Obama and Treasury
Secretary Geithner, the Federal government will default on its
obligations in 5 days, on August 2, 2011.
It is clear that some Democrats, including President Obama, want to
use this fiscal crisis to raise taxes.
Under the guise of closing loopholes, the administration wants to set
the stage for tax increases to finance historic levels of government
spending.
When this President came into office, he saw himself as the second
coming of Franklin Roosevelt. He was going to finish the work that LBJ
was unable to complete. And a fawning media was happy to encourage his
grandiose vision for national economic reordering.
I get a big kick out of this ``Time'' magazine article entitled ``The
New New Deal.''
Using the financial crisis of 2008 and 2009, he was going to
transform the United States into a European-style social democracy.
Businesses, and the individuals who start them, would no longer be
free entities with property rights. They would be arms of the state
that exist for the purpose of funding ever expanding welfare programs.
Taxation would no longer be a necessary evil, with citizens and
businesses recognizing a legal duty to pay what was owed, but
understanding that they were ceding their property rights to the
government to provide for certain public goods.
Instead, businesses and taxpaying citizens would be obligated to
share their wealth with the state.
Because the progressives running the administration do not believe in
natural rights to liberty and property because they think everything a
family or business makes is in fact due only to the largesse of the
state paying taxes is no longer something that must be done, but
something that people should want to do.
They owe it to the government to pay taxes, since that money is not
really theirs anyway. In this new progressive political community that
the President hopes to create, taxation becomes shared sacrifice, and
taxpayers become gleeful participants in ``spreading the wealth
around,'' as the President once put it.
But the President and his party have hit a brick wall. The spending
part was easy. The taxing part is hard.
For all of the talk about how Republicans are divided on the issue of
raising the debt ceiling, you only have to scratch the surface to see
the deep divisions among Democrats.
The reason that the President has offered up no plan to reduce
spending, and the reason Democrats have not passed a budget in over 800
days, is because they are badly divided.
They all want the massive levels of new spending that the President
pushed through in his stimulus and ObamaCare. But not all want to pay
for it.
They all want to maintain existing levels of entitlement spending.
But not all want to raise the taxes necessary to pay for it.
They know that some of their constituents like all this spending, but
they know that the vast majority of Americans reject the President's
funding of his leviathan state through higher taxes.
So they do nothing.
The President has no plan.
I want to repeat that again.
The President has no plan.
Maybe if we shout it from the rooftops, the media will start to take
notice.
The President has no plan. And Senate Democrats don't either;
certainly not one that addresses our current fiscal crisis.
The critical issue we face is more than imminent default on our
obligations. That is unlikely to happen. It certainly should not
happen. In my opinion, it will only happen if the President wants it to
happen. On Wednesday, I asked the Financial Stability Oversight
Council, which is chaired by Secretary Geithner, to provide me and the
rest of this institution with an assessment of the cash position of the
United States. As Congress considers options for raising the debt
ceiling, it needs to know precisely how Treasury plans to pay its
bills, and when it is going to fall short of cash to do so.
I asked that the Secretary respond to this reasonable request by
yesterday afternoon. The Secretary chose not to respond. I want to be
clear that this unresponsiveness by his Treasury Secretary is
unacceptable. President Obama needs to understand that this failure to
provide the Senate with critical information is not tolerable and will
not be forgotten.
Still, I am confident that the Nation will get through this immediate
crisis, and there will be no default. But that is only part of the
problem. The real issue remains. The United States cannot support the
level of spending President Obama has given us and that Democrats from
the New Deal onward have bequeathed to the Nation in the form of ever
expanding entitlement spending programs.
That is the real issue. And the majority leader's proposal does not
address this, any more than the President's White House bromides about
a balanced solution address it.
The real threat to this Nation is not the threat of a downgrade due
to default.
The real long-term threat is a downgrade of the Nation's credit
rating because President Obama has written checks that this country
can't cash.
[[Page S5058]]
The real threat is that interest rates will go up for businesses,
families, students, homeowners and anyone who has to borrow money. The
economic ramifications of a downgrade threaten to bowl over our fragile
economy. Job creation remains weak. Annualized growth in real
inflation-adjusted GDP was only 1.3 percent in the second quarter. This
follows on the heels of .4 percent growth in the first quarter.
Along with many others, I have said that if we do not get our
spending under control, we are on a glide path to Greece and other
Eurozone countries whose credit ratings are destroyed and whose bonds
have junk status. Those countries would not have solved their problems
by allowing the government to borrow more. Their only way out was to
reduce the size of their welfare states.
Yet this is what the President, and the Treasury Secretary, and
congressional Democrats are suggesting as a solution. They would have
you believe that everything will be set right if only we give the
President the legal authority to borrow an additional $2.7 trillion.
Americans are not buying this snake oil. I know that Utahns are not
buying it. They understand that our nation's fiscal problem is
spending. Giving the President more power to borrow more money is not
going to fix that problem. Reducing spending is going to fix that
problem.
The numbers could not be more clear.
As we can see, here are the Federal taxes and spending as a
percentage of GDP. The red line is the spending line. We can see it is
out of control in the 2012 Obama budget. The blue line is the average
of what it has been in the past. We can see it is tremendously below
where the President's budget is taking us.
Federal spending, as a share of our economy is trending at a pace 15
to 20 percent greater than its historical average of 20.6 percent of
GDP. If we leave in place this year's level of taxation, including the
marginal rate relief of the 2001 and 2003 tax cuts, and patch the
alternative minimum tax--or AMT--the Federal tax take will equal or
exceed its historic share of the economy.
Liberals suggest that the deficit and debt must be addressed through
tax increases.
This is either deliberately misleading or sadly delusional.
Maybe we have found the truly shovel-ready policies of my friends on
the other side, and they smell like a freshly fertilized farmer's
field. Or maybe my friends on the other side simply refuse to come to
grips with reality. But sticking their heads in the sand is not an
option here. The markets, and the American people, understand the
nature of our crisis.
Non-defense discretionary spending is at historic levels. And our
entitlement programs are headed for bankruptcy. This fiscal year we
have a projected budget deficit of $1.5 trillion.
We have a debt of over $14.3 trillion.
President Obama's budget assumes $13 trillion in new debts. This
spending needs to be brought to heel. But the proposal of the majority
leader does not get the job done.
It allows for the largest debt ceiling increase in history.
This makes sense. President Obama has given us the largest deficits
in our history, and his borrowing needs are historic as well.
To pay for his political science experiment to turn the United States
into Sweden, he earlier required a $1.9 trillion debt limit increase.
That was the largest in the Nation's history.
But now he is coming back for another $2.7 trillion.
Conservatives understand that this is not sustainable. It is one
thing to raise the debt limit. It is another thing to do so without
reforms that would keep us from getting into a fiscal crisis of this
magnitude again. That is why I, and many others in Congress, pledged to
vote against a debt ceiling increase prior to the institution of
immediate spending cuts and spending caps, and sending a strong
balanced budget amendment with taxpayer protections to the States for
ratification.
To be clear, that commitment to cut, cap, balance passed the House
with bipartisan support. The Senate could have taken up that bill last
week, but Democrats chose to table it rather than debate it. And the
President chose to tell us what he did not support rather than what he
does support.
Any increase in the debt limit needs to be accompanied by serious
spending reductions, but the bill of the majority leader does not get
us there. All it does is provide President Obama with an opportunity to
borrow more money to pay for more spending.
The President would get a $2.7 trillion debt limit increase but less
than $1 trillion in cuts.
And most of those cuts are gimmicks. They assume savings from war
spending that the President has not requested and that is unlikely to
materialize.
It does not include a balanced budget amendment. And most importantly
from my perspective, it assumes a massive tax increase in 2013 by
allowing the 2001 and 2003 tax relief to expire, allowing the AMT to
hit middle-class taxpayers, and allowing for increases in estate taxes
that are a small business and job killer.
You won't see that though in the talking points. They bury the
breadth of that tax hit in their baseline assumptions.
But we know that President Obama and his liberal allies are planning
massive tax increases on the middle class. While their rhetoric
suggests that we can fix out debt crisis just by raising taxes on the
rich and closing loopholes, the reality is that they are setting the
stage to roll back tax expenditures.
And cutting back tax expenditures will be a tax increase on middle
income itemizers.
When Democrats talk about tax expenditures, they are talking about
your ability to purchase a home, or save for retirement, or give to
your church, or put away money for your children's education.
That is where the money is. It is not in bonus depreciation for
corporate jets. And it is not in tax benefits for energy companies. It
is not in changing the treatment of carried interest for private equity
companies. It is not in repealing the deduction for mortgage interest
related to yachts used as second homes.
This issue of tax expenditures is confusing and demands greater
clarity. As ranking member of the Finance Committee, it is my
responsibility to correct the record on what the curtailment or
elimination of tax expenditures would really mean for taxpayers and
families.
I have spoken about tax expenditures a number of times in the last
few weeks, but given the failure of the President and his congressional
allies to take on our spending crisis, I want to reemphasize the
essential point--if Democrats are allowed to balance the budget their
way, it will result in new tax burdens for the middle class.
Tax expenditures are not ``spending through the tax code.'' They are
an opportunity for you to keep more of your own money.
And they are not, by and large, special interest benefits that
disproportionately benefit wealthy taxpayers. The Democrats' rhetoric
on expenditures does not jibe with the reality of our Tax Code. The
data are clear. Tax expenditures tend to skew towards taxpayers below
the President's definition of the rich.
Let's work through some examples of what concrete proposals to
cutback tax expenditures would yield in revenue and what they will mean
to middle income Americans.
I am going to take a look at the budget outline presented by our
friend and colleague, the distinguished chairman of the Senate Budget
Committee. The Senate Democratic Caucus outline was discussed among the
larger Democratic Caucus. Republican members, including long-standing
Budget Committee members, were briefed by reading the details of the
outline in the Washington Post. The Senate Democratic budget called for
$2.38 trillion in tax increases when measured against the current
policy baseline. The current policy baseline represents the level of
taxation Americans are currently paying.
According to materials released by Senate Budget Committee Democrats,
they are looking at three categories of tax increases.
The first category would raise marginal rates on single taxpayers
with $500,000 and over in income and married couples with $1,000,000
and over in income. For those taxpayers, including many small business
owners, the marginal rates would rise by 17 percent.
[[Page S5059]]
According to the Tax Policy Center, the TPC, a think tank often cited
by our friends on the other side--certainly not a conservative think
tank--at least 38 percent of flowthrough income, much of it small
business income, would be subject to the marginal rate hike.
The marginal rate on capital gains and dividend income would rise by
33 percent. Keep in mind the IRS Statistics of Income group reports
that 65 percent of capital gains income would be hit by this tax hike.
Add in the tax increases from ObamaCare, and in less than 18 months the
marginal rates on capital gains and dividends will rise by 59 percent.
Is that a positive signal for investors to move capital into projects?
That tax hike represents $380 billion of tax increases in the
Democratic budget.
Now, look at this chart, the Senate Democratic budget tax increases.
The total tax increases needed are $2.380 trillion. They suggest, No.
1, raise the marginal rates on singles over $500,000 and married
couples over $1,000,000. That would be $380 billion. No. 2, closing
corporate loopholes and curtailing offshore tax evasion is $262
billion. After that, the remaining tax increases needed from tax
expenditures would be $1.738 trillion.
So, again, we would take the total tax increases needed--$2.380
trillion--reduce that by the $380 billion gained from raising the
marginal rates on singles earning over $500,000 and married couples
over $1,000,000 and closing corporate loopholes and curtailing offshore
tax evasion with $262 billion, and the remaining tax increases needed
from the tax expenditures alone would be $1.738 trillion.
The second category of tax increases in the Democratic budget is a
set of concepts we have heard about for years in Senate floor speeches.
President Obama frequently refers to them as well. We also see these
concepts mentioned in the vast left-of-center DNC think tank
establishment and by liberal pundits. They fall into two groups of
proposals: The first group is closing corporate loopholes, and the
second group is curtailing offshore tax avoidance or evasion.
Again, as you can see, they want to increase taxes by $2.380 trillion
by raising the marginal rates on singles earning over $500,000 and
married couples earning over $1,000,000, which is $380 billion. Then
they want to close corporate loopholes and curtail offshore tax
evasion, and they think they can save $262 billion on that. That still
leaves $1.738 trillion.
The Finance Committee Republican staff compiled all known, specified,
and scored proposals in these two groups. Staff calculated the
proposals as summing $642 billion over 10 years. The numbers are Joint
Committee on Taxation scores.
Mr. President, I ask unanimous consent to have printed in the Record
a summary of the staff calculations.
There being no objection, the material was ordered to be printed in
the Record, as follows:
------------------------------------------------------------------------
Treasury estimates
JCT Estimates (in billions)
------------------------------------------------------------------------
Other revenue changes and $ 262 $ 336
loophole closers..............
Eliminate fossil-fuel 40.7 46.2
preferences...................
Increase unemployment taxes.... 47.4 61.0
Simplify the tax code.......... (10.7) 0.4
Reduce the tax gap and make (10.1) 1.4
reforms.......................
Modify estate and gift tax..... 3.1 $ 19.50
Sum........................ $ 332 $ 464
----------------------------------------
Total tax expenditures $ 2,380 $2,380
from Conrad budget....
Substract estimates from 380 19.50%
raising marginal rates....
Subtract other revenue 262 ....................
changes and loophole
closers...................
----------------------------------------
Amount needed from tax $ 1,738 ....................
expenditures..........
------------------------------------------------------------------------
Mr. HATCH. To President Obama's credit, he put his money where his
rhetoric is. Most of the loophole closures and offshore measures were
contained in his budget.
If we subtract the two categories of tax increases, there remains
$1.73 trillion in tax increases the Senate Democratic budget must find
by cutting back tax expenditures.
Here we go again. This is a very important chart. I will remind
everyone of something I mentioned in my first discussion of tax
expenditures. The Joint Committee on Taxation warns us that tax
expenditure figures are not the same as revenue estimates for policy
changes.
In March 2011, the CBO released a set of budget options for deficit
reduction. On the revenue options, CBO and Joint Committee on Taxation
estimated the proposals. There are a number of them that deal with
cutbacks on tax expenditures.
If we start with the Senate Democratic budget's target of $1.73
trillion, we can see an illustration of some policy options that tax
writers would have to consider. I have a chart that lists the revenue
raised from some of these options.
Let's look at this chart. It may be difficult to read on a television
monitor, so I will go through these. These are tax expenditure policy
options from the Congressional Budget Office to raise revenue. In other
words, we have a tax to take away these tax expenditures.
No. 1 would be eliminate the deduction for State and local taxes. I
don't think many people are going to want that to happen.
No. 2, they will tax Social Security benefits similar to the defined-
benefit distributions. That is $438 billion right there in increased
taxes.
No. 3 is tax investment income from life insurance and annuities.
That is $260 billion.
No. 4, curtail the deductions for charitable giving. Can you believe
that? That is $219 billion.
No. 5, gradually eliminate the mortgage interest deduction. Take that
away from people who buy homes?
That is $215 billion.
No. 6, eliminate the child tax credit. That is $117 billion.
No. 7, raise tax rates on capital gains. That is $49 billion.
No. 8, eliminate education tax benefits, which is $48 billion.
No. 9, reduce 401(k) contribution limits, which is $46 billion.
And No. 10, tax carried interest as ordinary income, which is $21
billion.
Well, the first one should cause some concern to my friends on the
other side. It would eliminate the State and local income and sales tax
deduction. The so-called blue States generally have very high local and
State tax burdens. Eliminating that deduction would mean the
constituents of my friends representing those States will find
themselves with an effective tax increase of up to 35 percent. That is
what they are doing to themselves. Eliminating this deduction would
yield revenue of $862 billion over 10 years.
The second one would reduce the aftertax value of Social Security
benefits received by seniors. This CBO option would tax Social Security
benefits like we do employer-provided defined benefit retirement plans.
Funny how much fur has flown over Social Security reform. Yet this
cutback on Social Security benefits has flown under the radar. It
appears not all tax expenditures are about corporate jets and yachts.
That proposal would raise $438 billion over 10 years. I mean, come on,
hit Social Security for something like that?
Well, let's look at the third tax expenditure cutback option. That
would tax the inside buildup in life insurance. Here is an example.
Under current law, if a father and mother buy a $100,000 life insurance
policy and make the surviving spouse or children beneficiaries, death
will trigger a tax-free benefit of $100,000. Under this option, this
tax expenditure--if they get rid of that--the difference between the
face amount of
[[Page S5060]]
the policy and premium payments would be taxable. According to the CBO
option book, that new tax would raise $260 billion over 10 years. Who
wants to do that?
The fourth on the list is a tax benefit near and dear to many of my
fellow Utah families. It is the itemized deduction for charitable
donations. Under this option, only those deductions that exceed 2
percent of adjusted gross income would be deductible. For many Utahns
who tithe--and I am one of them--10 percent of our gross income, this
would mean an automatic cut of 20 percent of our deduction. This would
affect not just Utahns but charitable givers all over the country. This
proposal would reduce the tax benefit of charitable giving by $219
billion over 10 years.
Now, the fifth one is well-known to tens of millions of our
constituents. It is the home mortgage interest deduction. If a taxpayer
saves up a down payment and borrows for a home, they can take the
interest paid on the mortgage as an itemized deduction. This proposal
would gradually eliminate the home mortgage interest deduction. In 10
years, the deduction would be gone. This proposal would raise $215
billion over 10 years.
The sixth tax expenditure cutback option involves the current $1,000-
per-child tax credit. That credit drops to $500 per child in 18 months
if the 2001-2003 tax relief plans are not extended. It is, by
definition, limited to low- and middle-income taxpaying families. CBO
tells us if we were to eliminate it, there would be $117 billion raised
over 10 years.
The seventh tax expenditure cutback would partially eliminate the tax
expenditure for the lower rate on capital gains and dividends. It
would, in effect, eliminate 25 percent of that tax expenditure and
significantly drive up capital gains and dividends rates. As I
indicated earlier, the top marginal rate on capital gains and dividends
is set to rise by 59 percent in less than 18 months if the President
and my friends on the other side get their way. This option--though
described as a cutback on a tax expenditure--would drive that rate up
higher.
The marginal rate on two-thirds of capital gains income would be
driven up 72 percent. It would raise $49 billion, though, over 10
years, for our tax-seeking friends.
The eighth tax expenditure cutback option would sharply curtail tax
benefits for families who send their kids to college. It would
eliminate the Hope Scholarship and lifetime learning credits and phase
out the student loan interest deduction. For that half of the
population that pays the freight in society, the 49 percent who pay
income tax, our friends on the other side are telling them their load
is just going to get much heavier. That would be their message to
middle-income American families who want to send their kids to college.
This option would raise $48 billion over 10 years.
The ninth tax expenditure cutback option would reduce limits on
contributions to retirement plans. About 50 percent of American workers
participate in retirement plans. They save for their own retirement.
They do not look to rely only on Social Security. There is bipartisan
consensus that for America to remain prosperous, families and
individuals must save more during their working lives. Yet this option
would go in the other direction. It would mean less in retirement
savings. CBO says it would raise $46 billion over 10 years if we take
that one away.
Now, the tenth tax expenditure cutback option is one we have heard
much about from my friends on the other side. It would tax partnership
interests--known as carried interest--like ordinary income rather than
capital gain. Interestingly enough, with a solidly Democratic Senate
last year, this revenue raiser did not pass. There is a lot of
speculation about that. I will not join it, but it is curious that when
constituencies that favor Democrats decisively raised legitimate
concerns about the possible negative effects on private equity and
enterprise value, this proposal didn't quite make it past the finish
line. That proposal would raise $21 billion over 10 years.
If you assume no interactive effects, the list of options I walked
through adds up to $2.27 trillion in tax hikes. That is a lot more than
called for by the Senate Democratic budget outline. Recall that outline
produced by Senate Democrats boiled down to $1.73 trillion in cutbacks
on tax expenditures. But look at how broad these tax hikes are. They
hit big chunks of the 49 percent of American households who pay income
taxes.
Take a look at the chart again. This is a chart that confirms what
many of us have suspected. Although they might not come clean about it,
when you look at the code and you look at our deficits, there is only
one place for Democrats to go if they are going to close the deficit
their way, with no meaningful spending reductions. They are going to
have to hit tax expenditures, and specifically those that benefit
middle-class itemizers.
They hit residents of blue States. They hit seniors. They hit
everyone who owns a life insurance policy. They hit everyone who takes
an itemized deduction for giving to their church, local food kitchen,
or other charities. They hit everyone with a mortgage, everyone who
receives a child tax credit, and anyone with capital gains. They hit
middle-income families and students who benefit from education tax
benefits. They hit those who save for retirement. They hit those folks
who start up businesses and take a future profits interest in the form
of a capital gain. But to hear the President talk, you would think we
could get there by taxing corporate jets and yachts.
I am accustomed to the media carrying the water of liberal
politicians, but there has been a real dereliction of duty in allowing
President Obama to get away with this. Even at this late date, he is
still getting away with it. He has no plan. Tell me. He has no plan.
Show it to me. He talks about his plan, but we have yet to see it in
writing. In fact, there is no plan.
The press ridiculed Richard Nixon for his secret plan to end the war
in Vietnam. But here we are in a catastrophic crisis, and President
Obama gets a pass when it comes to his secret plan to balance the
budget.
To suggest that a debt crisis triggered by $14.3 trillion in debt can
be fixed by taxing the luxuries of evil rich people is so childish and
lacking in seriousness that the President should have been called out
on it immediately. But he wasn't. He was allowed to get away with it.
President Obama's balanced approach--he talks about a balanced
approach all the time--one that includes meaningful reductions to his
historic levels of spending, is a plan for economic stagnation and
national ruin, and it is a plan to bankrupt seniors.
He wants shared sacrifice. From whom? We were shown that the middle
class is going to get hit the hardest. I want shared prosperity by
cutting back on spending and getting the Federal Government out of most
of our lives in ways that are intrusive and costly, to being able to
get jobs and raise jobs and do what has to be done in this country.
It is a plan to bankrupt our seniors. The President knows this, as do
his colleagues in Congress. He knows his supposed plan does nothing to
fix the long-term trajectory of his deficit spending. So the question
folks need to ask is, what is he hiding? How does the left plan on
closing the gap and balancing the budget their way? The answer is the
elimination or reduction of tax expenditures. And that means middle-
class tax increases. To hear my friends on the other side, you would
think the only folks hit by Democratic tax increases will be corporate
jet owners, yachtsmen, and millionaires. But when you peek behind the
rhetorical curtain, you find that does not pan out. Most of the tax
base is in the middle and upper middle income families who make up that
49 percent of Americans who are the only ones who shoulder the burden
of the income tax.
We know that the recent numbers are the bottom 51 percent of all
households do not pay income taxes. No, it is the 49 percent of
Americans who shoulder the burden of the income tax; that is where the
money is. As I have shown with the CBO and Joint Committee on Taxation
options, that is where you have to go. Without a counterbalancing rate
cut, this version of tax reform means fewer resources for home
ownership, retirement savings, and charitable giving.
But don't say I did not warn you. Those who want to treat tax
expenditures as some abstract budgetary honey pot risk having the folks
who
[[Page S5061]]
make the honey, the taxpaying bees, to rightfully sting you. As one who
hails from the Beehive State, I can tell you, you will feel the sting.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Merkley). The Senator from Rhode Island.
Mr. WHITEHOUSE. Mr. President, I am here this afternoon to discuss
our work toward addressing the national debt and staving off a
collision with our debt ceiling or a default on our financial
obligations.
First, I wish to commend Majority Leader Reid for putting forward a
proposal which would make a very serious $2.4 trillion downpayment on
deficit reduction and, most importantly, end the impasse over the debt
ceiling. I encourage my Republican colleagues to support it or offer
some reasonable changes that would allow them to support it.
But let me also address some developments on the other side of the
Capitol, where an extremist group of House Republicans is continuing
their ``my way or the highway,'' what President Lincoln called ``rule
or ruin,'' approach to these negotiations.
Amazingly, news reports indicate that Pell grants--Pell grants--may
be put on the chopping block in Speaker Boehner's latest effort to
appease the most extreme members of his party. This is getting
ridiculous. Rhode Island's great Senator Claiborne Pell first proposed
the grants that now bear his name. He envisioned a grant that would
enable low-income students to attend our country's wonderful colleges
and universities so they too could share in the American dream. Why do
these far-right extremists in the House want to snuff that out?
In 1976, the first year Pell grants were fully funded, a full Pell
grant paid 72 percent of the cost of attendance at a typical 4-year
public college. Today, a full Pell grant covers 34 percent of those
costs, and even that they are willing to attack. This vital assistance
from Pell grants can often mean the difference between being able to
attend college or not. With many families in Rhode Island and across
America still struggling in this struggling economy, we should be
looking for ways to strengthen Pell grants, not weaken them. America
needs more college graduates, not fewer.
During my time in the Senate, we have taken steps to improve the Pell
grant program. After 4 years of level funding under President Bush, we
began to increase the maximum grant from $4,050 in academic year 2006-
2007 to $5,050 for this coming academic year. We also increased the
minimum family income that automatically qualifies a student for the
maximum Pell grant, a change which better reflects today's economic
realities.
Despite the clear need for continued investment in our future through
Pell grants, a need that has long had bipartisan support and backing, a
group of House Republicans this year began an outright assault on Pell
grant funding. These grants are needed more than ever, as the economic
downturn has led more people to seek higher education in an effort to
find a job. But not to this band of extremists. The House Republican
budget would have slashed Pell grants, reducing the average award by
$1,775, and cutting off more than 1.3 million Americans, including
nearly 5,800 students in Rhode Island.
I understand the need to find savings in the Federal budget and to
make difficult choices, and Leader Reid's proposal offers up $2.4
trillion worth. But we could also make bad choices in going about this,
and of all the bad choices we could make, cutting Pell grants is among
the worst. America needs a highly trained workforce, and Pell grants
help make the promise of a college education a reality.
After America spoke out and the Senate defeated the extreme House
Republican budget, I hoped the assault on the Pell grant was behind us,
at least for a while. Yesterday, however, The Hill, a newspaper here in
Washington, reported that some Republican House Members are opposing
Speaker Boehner's debt ceiling increase bill over funding if it
provides for Pell grants. In this article, someone called Pell grants
welfare. Some welfare, helping kids afford college and pursue their
dreams. Today there is talk that cuts to Pell grants are being
discussed as the pound of flesh required by the most far-right Members
of the Speaker's caucus as the price of supporting his bill. Remember
that these House Republicans continue to protect every tax giveaway to
special interests, every one, while they want to cut off access to
college for regular kids.
The simple fact is Pell grants help lower income people achieve
dreams of college and improve those young people's prospects for
careers and employment. It is good for them and it is good for America.
The Pell grant program doesn't give a free ride, but it does give a
boost and is a wise investment in the future of our country, a future
where the fates of nations will depend on the education of their
people.
Earlier this week, student and education advocacy organizations,
including the Education Trust, Campus Progress, the National Council of
LaRaza, and the United States Student Association, joined together to
``Save Pell.'' I applaud their advocacy and commitment in fighting for
Pell grants, and I am proud to join their effort. I strongly urge the
far-right extremists who are pulling their party and the House of
Representatives and this country over the cliff to end their reckless
attack on the American middle class, take the victory you have been
offered, and stop the damage.
Ronald Reagan in 8 years I believe raised the debt ceiling 18 times.
The Tea Party has been here 6 months and has put the country on the
brink of default days away. Instead, I ask my colleagues to work with
Democrats on a bipartisan solution that does not attack the fundamental
underpinnings of a successful middle class, such as Medicare, Social
Security, Pell grants. Avert the looming debt ceiling collision and
reduce our deficits.
I yield the floor.
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. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
Mr. THUNE. I object.
The PRESIDING OFFICER (Mr. Bennet). Objection is heard.
The clerk will continue with the call of the roll.
The legislative clerk continued with the call of the roll, and the
following Senators entered the Chamber and answered to their names:
[Quorum No. 4]
Begich
Bennet
Blumenthal
Brown (OH)
Cantwell
Cardin
Casey
Conrad
Coons
Durbin
Johanns
Lautenberg
McConnell
Merkley
Murray
Pryor
Reid (NV)
Sanders
Schumer
Thune
Whitehouse
The PRESIDING OFFICER. A quorum is not present.
Mr. REID. Thank you, Mr. President. I move to instruct the Sergeant
at Arms to request the attendance of absent Senators, and I ask for the
yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There appears to
be a sufficient second.
The question is on agreeing to the motion.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. KYL. The following Senator is necessarily absent: the Senator
from Mississippi (Mr. Wicker).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 76, nays 23, as follows:
[Rollcall Vote No. 119 Leg.]
YEAS--76
Akaka
Baucus
Begich
Bennet
Bingaman
Blumenthal
Blunt
Boozman
Boxer
Brown (MA)
Brown (OH)
Burr
Cantwell
Cardin
Carper
Casey
Chambliss
Coats
Cochran
Collins
Conrad
Coons
Corker
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Hatch
Hutchison
Inouye
Isakson
Johanns
Johnson (SD)
Kerry
Kirk
Klobuchar
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lugar
Manchin
McCaskill
Menendez
Merkley
Mikulski
Moran
Murkowski
Murray
Nelson (NE)
Nelson (FL)
Portman
Pryor
Reed
Reid
Rockefeller
Rubio
Sanders
Schumer
Shaheen
Shelby
Snowe
Stabenow
Tester
Thune
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden
[[Page S5062]]
NAYS--23
Alexander
Ayotte
Barrasso
Coburn
Cornyn
Crapo
DeMint
Enzi
Graham
Grassley
Heller
Hoeven
Inhofe
Johnson (WI)
Lee
McCain
McConnell
Paul
Risch
Roberts
Sessions
Toomey
Vitter
NOT VOTING--1
Wicker
The motion was agreed to.
The PRESIDING OFFICER. A quorum is present.
The majority leader is recognized.
Mr. REID. Mr. President, may we have order.
The PRESIDING OFFICER. The Senate will be in order.
Mr. REID. I thank the Chair.
____________________