[Congressional Record Volume 157, Number 151 (Tuesday, October 11, 2011)]
[Senate]
[Pages S6362-S6365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UPCOMING VOTES
Mr. LIEBERMAN. Mr. President, I come to the floor to speak about two
of the votes we will be casting at approximately 5:30 this afternoon,
and to explain how I am going to vote and why. On the first, the
legislation regarding China's currency policy, I am going to vote no,
and I want to explain why.
Managing our economic, military, and diplomatic relations with China
is going to be one of the great challenges of this century. China is
obviously a rising power today, though not one without problems, as I
will get to in a moment. We have come to a point--China and the United
States--where we not only interact and sometimes bump up against each
other militarily, diplomatically, and economically, we also, in many
ways, have become dependent on one another. What each of us does has an
effect on the other, and often a significant effect. That is why I say
one of the great challenges of this century will be to manage our
relations with China in a way that is certainly beneficial and
protective to the United States but, hopefully, to China, from its
perspective, as well.
I say this as background to what I want to say about China's currency
policy. I am troubled by China's currency policy. China has obviously
kept its currency too low. It is undervalued, and that has resulted in
products being made in China selling elsewhere at a price that is lower
than other manufacturers can compete with, including American
manufacturers that are directly in conflict with China. So we are right
to be upset about that policy. Our government has been expressing its
frustration, its anger, to the Chinese
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Government. We have been negotiating, cajoling. I must say, in
acknowledgment of reality, that the Chinese have slowly allowed their
currency to rise approximately 30 percent in value over the last 6
years, but it should be allowed to rise more.
On the other hand, I do want to say, in fairness, that China's
currency policy does have effects that are not all bad for everybody in
the United States. The fact its currency is undervalued means some of
the products it brings into our country sell at a lower cost, and that
is obviously particularly important to middle-income and lower income
families who are out buying products that otherwise would cost more. So
I understand this legislation to be an expression of anger at the
Chinese Government and an attempt to pressure the Chinese Government to
more rapidly allow its currency to rise.
I would say, as I understand it, the legislation before us is
intended as a warning shot across China's bow, as it were. But China
may, from its perspective, see this as an attempt to make a direct
attack, a direct hit on its bow, and it may be tempted to retaliate
economically. And of course the worst result would be that we would end
up in a mutually damaging trade war.
In some sense, it is no surprise we are considering legislation such
as this now--though I think at any time we would be concerned about
China's currency policy--because throughout history, during times of
economic recession, such as the one we are in now--a recession that we
are fighting to come out of and another recession we worry we are about
to go into--nations have repeatedly become protectionist in their
economic and trade policies. But history also shows most of the time
that protectionist policy makes the economic problems worse, not
better.
Today--and here I get back to what I said about China being a rising
power but not one without problems--China's economy, in its way, is
also fragile. It is dealing with a bubble in real estate values that is
growing. As the papers today indicate, its banks are losing their
credibility, inflation is rising, and unemployment is rising. So it
would be foolish for China to get into a trade war with us in response
to legislation such as this. China, in fact, may be more vulnerable in
a trade war than we are. But China's vulnerability economically today
carries great risk for the United States and the world. If a trade war
sends China's economy into a recession or worse, the resultant economic
instability would seriously hamper prospects for the global economic
recovery that everybody hopes for, and of course it would greatly
dampen our hopes for an American economic recovery and creation of more
jobs here at home.
Bottom line: I think the risks this proposal will aggravate the
current global and American economic problems which concern us most are
greater than the rewards of again trying to force China to allow its
currency to rise more rapidly, and that is why I will vote against the
China currency legislation when it comes before us later this
afternoon.
I also want to speak about the American Jobs Act, which will come
before us for a cloture vote. We are, obviously, hearing of Americans--
related to what I have just talked about--going through what I think is
the most difficult economic period in our history since the Great
Depression of the 1930s. Unemployment hovers at around 9 percent, which
translates into millions and millions of people out of work, and
millions more who are worried they are going to be next to lose their
jobs. Confidence in our future among the American people, among
critical decisionmakers and businesses, is at a real low. Confidence in
our national government is low and falling. Anger at our rising
national debt is high and rising. The American people are demanding we
do something, particularly to protect the jobs they have and create new
jobs if they have already lost them.
It is in that context the President proposed the American Jobs Act--a
series of interesting ideas aimed at creating jobs that will cost
almost $\1/2\ trillion. So what am I going to do on this one? On this
one, I am going to vote against the filibuster of the American Jobs
Act, because I believe our country and our constituents need and
deserve a debate here in the Senate on what each of us, all of us,
think we should do to get our economy moving again. It should be an
open debate, without an effective limit on amendments, with many ideas
being offered as to what we should do, and hopefully that will lead us
to some consensus. So I am going to vote against filibuster in the hope
we will bring about such a debate.
But I must say, if cloture is granted and the filibuster is ended, I
will seek to amend the American Jobs Act down to a very few of its
constituent parts that I think are worth their cost. If a vote were
called on the American Jobs Act as it is now--in other words, if the
tree were filled and that is what happened--I would vote against the
American Jobs Act, and I want to explain why.
The bottom line here is I don't believe the potential in this act for
creating jobs justifies adding another $\1/2\ trillion to our almost
$15 trillion national debt. In fact, I think the most important thing
we can do to improve our economy, reduce unemployment, and create jobs
is to bring our national debt under control. The best way to do that is
to adopt a tough, comprehensive, balanced debt reduction plan, such as
the one recommended by the bipartisan Simpson-Bowles commission.
The Budget Control Act, which we adopted over the summer to deal with
the debt ceiling, created a so-called supercommittee, the Joint Special
Committee, and that committee of 12 now gives us another chance to deal
with our debt in a constructive and bipartisan way.
We all know it is not going to be easy, but the American Jobs Act
would make the task of the Joint Special Committee even more difficult
because it spends almost $\1/2\ trillion we don't have, $\1/2\ trillion
the act now proposes to raise with a surtax on people making more than
$1 million a year.
I don't have any objection to a tax increase of that kind. But if we
use it for the American Jobs Act, it is not going to be there to be
used by the Joint Special Committee as part of an overall bipartisan
debt reduction plan. We desperately need to have some sources of
revenue, along with spending cuts, to adopt the kinds of reductions in
our debt that the country's future urgently needs.
Let me come back to what I said a moment ago and try to explain
briefly why I believe these two great problems we have, our limping
economy, our persistent level of high unemployment and our national
debt, come together and, more explicitly, why I believe that reducing
our debt is actually the best thing we can do to create jobs.
The jobs we need are going to come from the private sector.
Government in our system economically never has created the jobs
itself. It shouldn't. It can't, anymore, because we don't have the
money to do so. The jobs always will come where most people have been
employed in our country, and that is in the private sector.
If you chart corporate investment on the same graph as job creation,
you will see the two lines follow each other almost exactly. This is a
chart prepared by the Bureau of Economic Analysis at the Bureau of
Labor Statistics of the Federal Government. Over the last 50 years,
beginning in 1961 and going to 2011, it charts two things. The gray
line is investment in real equipment and software spending, and the
purple line is private employment numbers.
When I saw this, I thought it was a stunning chart and very
compelling, because you can see that corporate and private business
investment is almost exactly along the same line. There is a little bit
of a digression here because jobs fell more than investment, but
investment was falling and jobs fell at the same time for 50 years.
I think the single most significant predictor of job growth in our
country is business investment. So we have to ask ourselves, how could
we stimulate that kind of business investment today. Because that is
what we need, we need these jobs. I regret to say I don't believe we
can do it with the mix that is in the American Jobs Act. It seems to me
like a kind of ministimulus. The stimulus of $800 billion that was
adopted a few years ago, which I supported, I think made the economy
better than it otherwise would have been, but it didn't give the
economy what the President said he hoped and we all hoped it would
give,
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which was a jolt. This American Jobs Act, which is kind of a
ministimulus that will cost $\1/2\ trillion, is less likely, for
obvious mathematical reasons, to give the economy the jolt. But it will
cost $\1/2\ trillion we won't have and will have to find somewhere to
raise.
To me, what we have got to do is restore confidence in people in the
business sector to invest. That is what is missing today in our
economy. They don't have confidence in our economic future. They don't
have confidence in our government--us. They don't have confidence that
we will work together to reduce our debt, to create some predictability
for them in the years ahead.
That is why I say the best thing we can do to restore the confidence
of the business community necessary for them to begin investing again--
they have got the money; they are just not spending it because they are
nervous about the future--is for us to come together, hopefully led by
the Joint Special Committee, in a bipartisan debt reduction program. It
is not this American Jobs Act. I know it has been put forward with good
intentions, but I don't think it does the job we need it to do for
America, and I know it will cost another $\1/2\ trillion we desperately
need to reduce our debt which will do the job we need it to do to
create new jobs for our fellow Americans.
I thank the Chair, and I yield the floor.
The PRESIDING OFFICER (Mr. Franken). The Senator from Virginia.
Mr. WEBB. Mr. President, first, let me say there is a great deal the
Senator from Connecticut just said that we are in nearly full agreement
on. I find it ironic that we are probably going to cancel ourselves out
on these two votes later in the day, for essentially the same reasons
that the Senator just gave. I thank the Senator for his comments, and
particularly on this second piece of legislation which I have been
struggling with and in exactly the same way the Senator from
Connecticut has.
I wish to begin my comments today by expressing my strong support for
the majority leader in terms of how he handled a very difficult
discussion on Thursday night.
I think we can all agree that the Senate at times has become quite
dysfunctional over the past couple of years. I was very interested to
hear Senator Corker's comments. He and I arrived at the Senate at the
same time, and I empathize with a lot of the comments he was making,
although I guess looking for accountability depends on which end of the
telescope you are looking through.
For me, looking at the situation we faced on Thursday night, we have
to start with the reality that these were not serious amendments that
were being offered at the end of the debate of this piece of
legislation. They in many ways epitomize the paralysis of serious
debate here in this body and how it affects all of our ability to get
serious things done. Only one of those nine proposals was germane, and
that was the proposal from my good friend Senator Hatch. They were not
relevant. This is what the majority leader is being faced with time and
again. We are talking about one amendment on the bill with respect to
China currency that wanted to talk about the regulation of nuisance
dust. We had another one that wanted to talk about the use of
pesticides in navigable waters, and another one that wanted to talk
about EPA regulation on cement manufacturing. There may be a time and a
place for that kind of discussion; but if you look at the impact of
this type of--and I have to agree with the majority leader's
characterization--this type of dilatory conduct, it prevents
responsible, germane legislation from moving forward.
I will give you one example from my own attempt to amend this bill,
and that was the amendment I offered last week that would have
prohibited American companies from transferring intellectual property
and technologies that were developed with the assistance of the
American taxpayer to such countries as China that require technology
transfer as a matter of doing business there. That amendment is not
going to get a vote. I believe that amendment is something that most
people in this body and most Americans would want to see passed. But
because we have been in this state of paralysis, these types of issues
have been deflected off the screen, off the debate on the Senate floor,
and now we are moving forward with a bill that doesn't have these sorts
of issues in it. I am going to vote for this bill, by the way.
With respect to the jobs bill, I wish to make a couple of comments
here, first associating with some of the comments that Senator
Lieberman made. But also, there is an issue here with respect to
economic fairness and the disparity in this country between top and
bottom that I don't think is being properly debated in the context of
this bill.
In the end, as Senator Lieberman pointed out, I strongly believe the
way to bring good jobs back is to improve our economy in the private
sector, and that means more capital investment.
Winston Churchill once said something to the effect that, You can't
tax your way out of an economic downturn any more than you can pick up
a bucket if you are standing in it.
There is a lot of money out there. The Senator from Connecticut
mentioned that. We can't control whether that money is going to be
invested, but we can work to incentivize conduct that might encourage
investment. I think people on both sides need to set aside the partisan
debate that is going on looking into next year's election and work
toward that end.
At the same time, there are two difficulties I have with this
legislation. The first is the timing. Senator Lieberman was very
eloquent in his concerns about the timing of this bill, with the
supercommittee working on these issues in a larger context, getting
ready to report out within the next month or so. Senator Corker made a
very valid point that I hadn't thought about, and that is that we have
worked--and I have been one of those who has worked--to bring these
free-trade agreements to fruition. We have a very short window with the
President of South Korea arriving this week and hopefully having a
free-trade agreement passed by the time he makes his presentation to a
joint session of the Congress.
But there is another issue, and that is the pay-for. We are talking
about this millionaire surcharge, this 5.6 percent that would be put on
top of these other tax increases for the ``millionaires.'' But in many
cases, this isn't even a tax on the wealthiest Americans it is designed
to reach.
Let me preface what I am going to point out here by saying I believe
I have been one of the loudest and most consistent voices on the issue
of economic fairness and executive compensation in this body. I raised
it in every speech during my Senate campaign. I put it on the table
nationally when I responded to President Bush's State of the Union
Address in 2007. I put the issue of the disparity in executive
compensation from when I graduated from college when a CEO was making
20 times what the average worker makes, to today, when it is about 400
times. I introduced a windfall profits tax after it became clear that
the money we put into TARP was going to be used to unjustly reward
executives from the companies that had been bailed out by our
taxpayers. This was a very narrowly focused bill that said, If your
company got $5 billion or more, you could get your compensation, you
could get a $400,000 bonus, and anything after that you had to share
with the people who bailed you out because they were bailing out the
economy. I couldn't get a vote.
Let's be fair. I couldn't get a vote because neither side wanted a
vote. People don't want to take a vote on something that is that
directly related to how they finance their campaigns. That is the
honest truth. I didn't get a vote on it, but I think my record on this
issue is absolutely clear.
One thing I have stated from the first moment I ran for office is
that I do not believe we should raise taxes on ordinary earned income.
When this proposal was first put in front of the American people, there
was a part of it in the pay-for that was called the Warren Buffet rule.
But what I just said is the Warren Buffett rule--and it has been
misrepresented in this debate. Warren Buffett has the same position.
My understanding of his position, and I have read it very carefully,
is that we should not tax ordinary earned income. In fact, he made a
clarification about a week ago. This is Warren Buffett on the Warren
Buffett rule:
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My program would be on the very high incomes that are taxed
very low. Not just high incomes. Somebody making $50 million
a year playing baseball, his taxes won't change. If they make
a lot of money and they pay a very low tax rate, like me, it
would be changed by a minimum tax.
How do we do that, and does it matter? It matters a whole lot because
we are not talking about this distinction when we are addressing issues
of fairness in society, the true nature of what has happened at the
very top in this country.
The proposal of the President looks good at first glance; it sounds
good on a TV bite. But in all respect to the people who put it forward,
I do not believe it is smart policy, and it does not go where the real
economic division lies in our country. This is what Warren Buffett is
talking about.
If we look at the top .1 percent of our taxpayers, the very top, two-
thirds of the money they take in is from capital gains and dividends.
Only one-third is from wages.
What does that mean with respect to this surcharge we are going to
put down? This is what the surcharge on earned income for millionaires
will do: It will bring the tax on ordinary earned income from 35
percent--first, under the assumption of 39 percent, which is the
failure to renew the Bush tax cuts--and then to 45.2 percent, someone
making wages.
Who is in this category? Very few people. Let's say someone is an
athlete, as Warren Buffett mentioned, and they have 3 or 4 years in
their career where they can make the money. They are going to get their
income, because it is ordinary earned income, taxed at 45 percent of
everything they make, just for the Federal taxation, at the same time
that capital gains tax, which is where two-thirds of the top .1 percent
of our earners make their money, is going to stay at 15 percent. That
is what Warren Buffett is talking about.
He is sitting here saying: I make my money off of stock sales, basic
transactions where I get capital gains, and I am at 15 percent. My
secretary is paying double what I am. The people who have ordinary
earned income are going to pay three times the rate of what somebody is
making on capital gains, and that is two-thirds of what the people at
the very top make.
If we went after capital gains--let's just say, notionally, let's say
we allow the Bush tax cuts to expire on capital gains but keep them on
ordinary earned income. This margin would be 35 percent of ordinary
income versus 20 percent. What would that do? According to the Joint
Committee on Taxation, over 5 years they could recoup $402 billion.
That is almost as much as this other surcharge could make over 10 years
in order to pay for this legislation.
Most important, we are going into issues of fairness that we have
been trying to bring to the table; that is, to truly focus on those at
the very top who have benefitted the most from what has happened in
what is frequently becoming a fractured economic society.
I am going to vote the exact opposite way the Senator from
Connecticut is going to vote, but I think he and I share many of the
same concerns. It is just how we get there. If people are ready to
discuss capital gains, moving it back up to what it was, from 15 to 20
percent--if we are willing to discuss capital gains, I will know we are
serious. If we are not willing to discuss capital gains, I think we
have seen this movie before.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Ms. AYOTTE. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. AYOTTE. I ask unanimous consent to engage in a colloquy with
Senator John McCain.
The PRESIDING OFFICER. Without objection, it is so ordered.
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