[Congressional Record Volume 157, Number 188 (Thursday, December 8, 2011)]
[Senate]
[Pages S8429-S8445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
LEGISLATIVE SESSION
______
MIDDLE CLASS TAX CUT ACT OF 2011--MOTION TO PROCEED
The PRESIDING OFFICER (Mr. Bingaman). Under the previous order, the
Senate will resume legislative session and the motion to proceed to S.
1944, which the clerk will report.
The legislative clerk read as follows:
Motion to proceed to the bill (S. 1944) to create jobs by
providing payroll tax relief for middle-class families and
businesses, and for other purposes.
The PRESIDING OFFICER. The Senator from Utah is recognized.
Mr. LEE. I ask unanimous consent to enter into a colloquy with my
Republican colleagues for up to 30 minutes.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. LEE. Mr. President, I stand today to urge my colleagues to
support efforts to bring forward a balanced budget amendment, one that
can be passed out of both Houses of Congress and submitted to the
States for ratification.
Article V of the Constitution gives us the power to change the
Constitution from time to time, to modify our laws, that 224-year-old
document that has fostered the development of the greatest civilization
the world has ever known.
We have done this 27 times. We have done it at times in order to
protect and preserve the Nation our ancestors fought so valiantly to
create and later again to defend. We have to modify our government, the
manner in which we do business, in order to preserve that system, in
order to make it strong, in order to ensure that it will continue to be
strong for future generations.
We made it stronger when, for example, we added the Bill of Rights
shortly after the ratification of the Constitution. We made it stronger
again when, for example, we added the so-called Civil War amendments,
amendments XIII, XIV, and XV, ending slavery and the badges and
incidents thereof. We made it stronger when we made clear that women
must always be given the right to vote. We have made it stronger a
number of times. And the time to make it stronger has come yet again.
It is time to modify the Constitution to limit--to restrict--
Congress's current power granted by article I, section 8, clause 2 of
the Constitution to borrow money on credit of the United States. The
reason we need to do this is because this power has been so severely
abused over such a prolonged period of time that it is causing
devastating consequences for our economy and for our ability to fund
the operations of the government.
We have now accumulated over $15 trillion in debt as a country. That
works out to about $50,000 for every man, woman, and child in America.
It works out, arguably, to about $120,000 to $150,000 for every
taxpayer in America. This is lot of money. It also represents between
90 and 100 percent of our gross domestic product annually, depending on
whose statistics you follow. This is troubling, given that there is an
abundant amount of research indicating that once a country's sovereign
debt-to-GDP ratio crosses the significant 90-percent threshold--which
we have now done--economic growth tends to slow, tends to slow to a
point that an economy as large as ours can expect to lose as many as 1
million jobs a year. We can't afford to lose jobs, especially when we
know one of the major causes is our national debt. It is time we change
the way we do business. It is time to change the manner in which
Congress acquires new debt.
This is no longer an issue that is either Republican or Democrat,
that is either liberal or conservative. It is simply American. I remind
my colleagues, whether you are concerned on the one hand about
preserving America's leading edge, its ability to fund its national
defense program or, on the other hand, if you are most concerned about
funding our entitlement programs, you should want a balanced budget
amendment because this is what we need to do, this is what we have to
do in order to protect our ability to fund both of those things and
everything else we do, you see, because by the end of this decade,
according to the White House's own numbers, we will be paying close to
$1 trillion every year to pay the interest on our national debt. Just
the interest alone. We are currently spending a little over $200
billion a year on interest--still a lot of money but about $800 billion
lower than what we are likely to be spending by the end of this decade.
Where will that additional $800 billion every single year come from?
This isn't a discretionary sum. This is money we have to pay. It is the
first thing we have to pay. Where will that $800 billion difference be
made up? At that point, we can't expect simply to raise taxes to make
up that difference. I am not aware of any tax increase plan that could
bring in that much additional revenue every year, without stagnating
our economy to the point that we might, within 1 year or 2 years, bring
in less revenue rather than more--certainly not $800 billion more. Nor
am I aware of any plan whereby we could simply borrow an additional
$800 billion to pay that interest, because doing so, of course, would
cause our interest rates to skyrocket, grow out of control, and our
interest payments would be even more significant at that point, thus
further impairing our ability to fund everything from defense to
entitlements. So at that point, the only option on the table would be
dramatic, severe, abrupt, even Draconian cuts to everything from
defense to entitlements and everything in between. We don't want this.
There is a better way. And the better way forward consists of a severe
permanent structural spending reform that can be achieved only through
a balanced budget amendment.
Let me explain what I mean by that. And, more importantly, let me
explain what I don't mean by that.
We have to be aware of things that masquerade as balanced budget
amendments, things that will actually do the job instead of purporting
to do the job, distracting the public's attention away from the need to
do this while in effect doing nothing. We need to be aware of what I
sometimes call the Trojan horse balanced budget amendment proposal.
There are a few hallmarks of what a real, effective balanced budget
amendment would accomplish. First and foremost, it has to apply to all
spending in requiring Congress to provide a supermajority vote for any
borrowing authority. There are some who have suggested we should have a
balanced budget amendment that exempts certain categories of
entitlement spending. But, of course, as we all know, it is entitlement
spending that continues to
[[Page S8430]]
consume a larger and larger share of our national budget each and every
year. It is entitlement spending that is anticipated to have shortfalls
for sums that will have to be expended for Americans alive today. It
could range anywhere from $50- to $60- to $110 trillion in unfunded
entitlement liabilities. So simply exempting entire categories of
entitlements is one of these hallmarks of a Trojan horse balanced
budget amendment. We can't do that. We need it to apply to all Federal
outlays, all Federal spending.
Second, an effective balanced budget amendment must cap spending at
the average historic level of Federal revenue. Over the last 40 years,
our average take, our average income as a percentage of GDP, has been
about 18 to 18.5 percent of our gross domestic product. We need to make
sure we are not spending more than that; that Congress can't, without a
supermajority vote, spend more than 18 percent of GDP in any given
year. Otherwise, we run the risk that Congress will find a way through
tricky accounting schemes to circumvent the restrictions to make sure
it is not spending more than it takes in.
Third, the supermajority requirement must apply to the folks in both
Houses of Congress every time Congress wants to spend more than it
takes in. Any balanced budget amendment proposal that allows for a
simple majority to bring about an exception to these spending
limitations is one that Congress can and will use to circumvent the
amendment entirely. Let me explain what I mean.
We have had in the past certain statutory legislative limitations on
Congress's spending and borrowing power. Some of these have been known
as the Graham-Rudman-Hollings legislation, and also the pay-go rules.
But because Congress makes those laws and because they haven't been
reduced to a constitutional amendment, just as Congress giveth,
Congress taketh away, and Congress has seen fit to exempt itself of
those rules. A balanced budget amendment, even while enshrined in our
Constitution, becomes no more effective than those statutory or
internal rules unless every time Congress wants to get around those
limitations Congress is required to cast a supermajority vote to
justify that excess.
Finally, an effective balanced budget amendment must require that
Congress cast a supermajority vote anytime we raise the debt limit.
This will give us an additional guarantee that tricky accounting
mechanisms will not be used to circumvent some of these most important
restrictions. Without these restrictions, Congress will continue to
spend out of control, because Members of Congress tend to be rewarded
when they spend and they tend to be criticized when they cut, and
political pressures are such that I fear this spending will continue
out of control in perpetuity until that moment in which we reach our
natural mathematical borrowing limit--not our statutory debt limit, our
natural mathematical borrowing limit. It is at that point when the most
abrupt, the most painful, the most Draconian cuts will have to be made.
We can do this in a way that makes sense. We can do this in a way that
is sensitive to the needs of the most vulnerable Americans, those who
have become the most dependent upon our entitlement State, most
dependent for their day-to-day existence on these very programs. Those
programs will have to be cut abruptly and in a most painful manner
unless we take the necessary steps right now and start moving onto a
smooth glidepath toward a balanced budget amendment.
We may not be able to balance our budget overnight, but we can do it
over the course of a few years. That is exactly what this would allow
us to do.
I have worked closely with a number of my Republican colleagues in
supporting S.J. Res. 10, a balanced budget amendment proposal that has
the support of all 47 Republicans. One of my close allies in this
endeavor has been my friend and colleague, the junior Senator from
Kentucky. I would like to ask him to share his perspective on why this
is necessary.
So I ask Senator Paul why does he think this is so important for us
to have this amendment right now.
Mr. PAUL. I think Congress has failed. We have not passed a budget in
2 years, much less a balanced budget. We cannot even pass a budget
under the normal procedures, and we are showing no signs of being able
to balance our own budget.
They say the American public, when we ask them are they for a
balanced budget, 70 to 75 percent of the people are for it--
Republicans, Democrats, and Independents. Congress currently has about
a 10-percent approval rating. My thought is maybe our approval rating
is so low because we are not listening to what the people want. The
people want us to balance our budget. They want us to do the
responsible thing. But they also do not want to say: Oh, Social
Security, we are going to put that off to the side. They want the
Social Security fund to be sound too.
What are we doing right now? We are reducing the funding to Social
Security. We are doing exactly the things we should not be doing. So it
is important, as my colleague said, that the balanced budget amendment
include all spending, and we need to balance our budget.
Mr. LEE. If the Congress is consisting of a Senate and House, and the
Members of the Senate and House are elected representatives of the
people who stand for reelection at regular intervals, and if the
American voting public overwhelmingly supports a balanced budget
amendment, why haven't we then passed it and given the States an
opportunity to ratify such an amendment?
Mr. PAUL. The big driving force here is the entitlements. If we look
at the revenue coming into the government, it is all being spent on
entitlements and interest. Forty percent of every dollar is borrowed,
but that means we have to borrow all the money for national defense,
for our roads, all the rest of government. Forty percent of every
dollar, $40,000 a second, is being borrowed. Why don't we come to an
agreement?
I have been asking many people on the other side that, and they say
we will not fix entitlements until we have a $1 trillion tax increase.
If that is the starting point, we are never going to fix entitlements
because many of us think raising taxes is a mistake, in the middle of a
recession, and we think more money left in the private sector would be
better spent for jobs.
We have the balanced budget debate as part of this debate on how to
reduce spending on the entitlement programs because they consume 60
percent of the budget. But there is this unwillingness up here. I think
people would like us to find solutions. When I go home to my State, it
doesn't matter whether they are a Republican or Democrat or
Independent; they want us to fix the entitlement programs. They don't
want it to be dependent on increasing taxes on everyone also.
Mr. LEE. What is my colleague's sense as to how the various State
legislatures are likely to respond to a constitutional amendment
proposed by both Houses of Congress? Does he think they would likely
ratify such an amendment by the necessary three-fourths margin?
Mr. PAUL. In the last year, I spoke before my State legislature to a
joint session of the House and Senate, and there was overwhelming
support for a balanced budget amendment. I think there is actually a
movement out there to do it if we do not do it. There is so much
feeling among the public that this enormous debt is hurting us.
When I go home and talk to people, I say: Look, the people the debt
hurts the worst are those on fixed incomes, senior citizens, and those
in the working class. Those are the people who are being hurt by this
debt because it causes rising prices. As we print the new money, those
people are hurt every time they go buy gas at the pump, every time they
go to the grocery store. The rising prices are hurting senior citizens
and the working class. The only way we are going to fix it is to have
rules that must be obeyed.
Mr. LEE. So they are paying for Washington's fiscal irresponsibility
in the form of job losses and in the form of increased prices for goods
and services and in the form of inflation.
It is likewise my experience with my State legislature that they seem
to be very supportive of it. In fact, I have a document here signed by
the legislative leaders of my State: by Governor Gary Herbert, by Utah
house of representatives speaker Rebecca
[[Page S8431]]
Lockhart, and by Utah State senate president Michael Waddoups. It
concludes essentially as follows:
We urge the United States Senate and House of
Representatives to pass a balanced budget amendment and send
it to the states for ratification. Additionally, we urge
Congress to make Utah's current resolution part of the
Congressional Record.
They also proceed to explain why they feel so strongly about this.
They say:
Not only for our own sake, but for future generations as
well, the states must now combine in an unwavering resolve
with convincing action to put the nation's financial house in
order. Passage of your own state's resolution urging the
support for a balanced budget amendment can help make this
happen. Please join with Utah to call upon Congress to
immediately pass a balanced budget amendment. We respectfully
encourage you to urge your congressional delegation to act in
your behalf.
They are calling not only on Congress but also their fellow State
legislators throughout the country to urge this same action from
Congress. In the same breath, they also adopt it, and they supported
wholeheartedly the specific balanced budget amendment proposal that is
found in S.J. Res. 10.
I thank them for doing that. I think they reflect the views of so
many of our State legislatures which balance their budgets every single
year. Most of them do. It is not news when they do it. It is not news
because it is what is expected. It is expected because that is what
they do.
I look forward to the day and age when it is no longer news when
Congress balances its budget.
I would like to ask Senator Paul another question. Why is it that so
many are fond of saying, as our President has recently said, ``We don't
need a balanced budget amendment; what we need is for Congress to just
do its job''? Why isn't that enough to carry the day?
Mr. PAUL. The problem is, in the past we have had rules--as the
Senator mentioned, Gramm-Rudman-Hollings, pay as you go. I think pay as
you go, which was passed in the late 1990s, was broken 700 times. There
doesn't seem to be the spine or will power here to say no. Everybody
wants something from government, but they do not realize that by
getting things from government we do not pay for has ramifications.
Admiral Mullens said last year that the biggest threat to our
national security right now is our debt. Erskine Bowles, head of the
Debt Commission, said the most predictable crisis in our history is
going to be a debt crisis.
For those on the other side who will oppose a balanced budget, they
will need to explain to the American people when chaotic situations
come and we are having trouble paying for those things that come from
government, when the value of the money is destroyed and when prices
are rising dramatically, they will have to explain to the American
people why they thought it was not necessary to balance the budget.
I have seen no willpower to attack entitlements. There are simple
ways. We could gradually raise the age of the entitlement eligibility
and means test the benefits. We could fix Social Security tomorrow. We
could fix Medicare tomorrow. But the other side is unwilling to talk
about entitlement reform unless--they believe they are owed some
obligation of raising taxes by $1 trillion. That would be a disaster
for the economy, and it is beyond me why the other side will not say
let's fix Social Security.
What would it take to fix Social Security? What would it take to fix
Medicare? I think we could fix all of these problems, but I do not
think the dialog is there. I have been trying to ask questions to the
other side for months now, and we are not getting anywhere.
Mr. LEE. I think most Members of Congress would acknowledge that
their constituents want the Federal budget balanced. Why is it not
enough for us just to tell Members of Congress: Please balance it. We
don't want to have to restrict your authority. We don't want to have to
take the keys away from the irresponsible driver. We just want you to
be responsible. Why doesn't that work?
Mr. PAUL. I think because so much of government spending is
considered to be mandatory, so it just keeps enlarging and expanding.
Also, because people have great big hearts and they want to help
everyone, but they do not realize the ramifications of accumulating
such a massive debt. As we accumulate this debt there are
ramifications. There are higher prices and the threat of an economic
collapse.
Greece is going under. Italy is behind them. Portugal, Spain--they
are struggling under this burden of debt. They say when a country's
debt equals its economy, when it is about 100 percent of its gross
domestic product, it is losing 1 million jobs a year.
Our debt is stealing American jobs, it is making us weaker as a
country, making us vulnerable, making our national security vulnerable.
But we have to do something. There is no evidence in this body we can
even pass a budget, much less a balanced budget.
I think everything about this body shows a failure to be fiscally
responsible and we need stronger rules.
Mr. LEE. Perhaps it is inherent in the institution itself, in the
forces at play, that have made Congress uniquely vulnerable to this
kind of massive deficit spending. Whatever the reason, we know Congress
is not willing, is not able, or at least in recent years has not been
inclined except in rare, unusual circumstances to balance its own
budget.
That being the case, we cannot assume that Congress will all of a
sudden start doing its job, as those who have used this argument have
insisted. Part of Congress's job, as Congress has come to perceive it,
is to engage in deficit spending. One of Congress's powers, as Members
of Congress who read the Constitution will point out, is to borrow
money on the credit of the United States. So it is not enough to simply
tell Congress to do its job because it has regarded this kind of
massive deficit as consistent with that mandate, consistent with that
injunction.
Meanwhile, Congress is continuing to occupy a larger and larger share
of the American economy. We have to remember that for the first 150
years or so of our Republic's existence, we were spending between 1
percent and 4 percent of gross domestic product at the Federal national
level, with only two brief exceptions--once during the Civil War and
once during and then the immediate aftermath of World War I. But that
all started to change in the 1930s when we broke into double digits for
the first time ever during peacetime. We have never really gone back.
Now the Federal Government is spending about 25 percent of GDP
annually. Roughly a quarter out of every dollar that moves through the
American economy every year is taken out of the real economy by
Washington. It is absorbed within the Federal morass that is our
government. That is a problem. That needs to change.
I fear, I suspect, I firmly believe that it will not change until we
take this power away, until we at least impose severe restrictions on
Congress's borrowing power because it has become part of Congress's
nature to engage in this kind of out-of-control deficit spending.
I would like to ask Senator Paul another question. How does he think
it would impact the lives of Americans, of Kentuckians, on a day-to-day
basis, if we were to pass a amendment such as this and have it ratified
by the States?
Mr. PAUL. People maintain that they are for jobs, for getting the
economy growing again. If we were to pass a balanced budget amendment
and send it to the States this year, it would create more jobs and
create a better psychology than we have had in this country in decades.
I think we would see a rise in the stock market like we have never seen
before if we said to Wall Street and said to investors worldwide: We
are going to balance our budget; we are not going to spend more than we
take in.
I think we would see an economic recovery begin as we have never seen
in this country. I think we would see millions of jobs created. That is
why we have to do this. That is what the American people want.
What amazes me about this debate is we are going to have this debate
and have this vote and the vast majority of the other side said they
will not vote for a balanced budget amendment.
I say take that home. Tell your people at home that you are opposed
to balancing the budget, and let's run on that. Let's see who wins the
elections in the future because our country's future depends on
balancing our budget
[[Page S8432]]
and controlling the debt. I hope we do not wake up when it is too late.
Mr. LEE. I could not agree more with that assessment. It is important
for us to remind our colleagues of that because according to a recent
CNN poll, the American people overwhelmingly support this by a margin
of about 75 percent. Those who oppose it, those who are Members of this
body, those who are Members of our sister body--the House of
Representatives--who choose not to support it, will cast their ``no''
vote at their own political peril because the American people are
standing and they are demanding more. They understand that, in the
words of Benjamin Franklin: ``He'll cheat without scruple who can
without fear.''
When Congress is free to spend more than it takes in every single
year without political consequence, bad things happen. When Congress
starts to manipulate more and more of the economy, that is something
the American people understand is hurtful rather than helpful to them,
to the people on the ground, to the person who is unemployed and
looking for a job, to the person who is underemployed or underpaid for
the work he does, to the single mother who is just worried about taking
care of her children, to the grandparents who are worried about the
future of their grandchildren, worried about the fact that for the
first time in American history, Americans fear their posterity will
enjoy a lower standard of living than what they have enjoyed.
All this is due to the fact that Congress has no real boundaries to
its authority and recognizes no real limits on its ability to spend our
hard-earned money. This has real consequences. We can forestall those
negative consequences right now if we will act to restrict, on a
permanent and structural basis, Congress's ability to engage in deficit
spending.
Accept no imitations, beware of the Trojan horse balanced budget
amendment, the one that can be circumvented easily by a simple majority
vote. Beware of the balanced budget amendment that limits, as a
percentage of GDP, Congress's ability to spend money. Look out for
these principles. If we get this balanced budget amendment passed,
submit it to the States for ratification. They will ratify it, and we
will find our best days, as Americans, are yet ahead of us.
I urge my colleagues to cast a vote in favor of S.J. Res. 10.
I thank the Chair.
I yield the floor.
The PRESIDING OFFICER (Mr. Brown of Ohio). The Senior Senator from
Iowa.
Health Care Litigation
Mr. GRASSLEY. Mr. President, in a few minutes, the Supreme Court will
be addressing four issues in connection with the constitutionality of
the Obama health care law. Previously, I spoke about the
unconstitutionality of the individual mandate. Today, I wish to discuss
the second issue of four: how much of the law must be struck down if
the Court finds the individual mandate to be unconstitutional. This
legal question is called severability.
When a court rules a law is unconstitutional, it can strike down only
those parts it considers unconstitutional. It can strike down the parts
that are intertwined with the unconstitutional provision or it can
strike down the whole law. Its action will depend upon whether the
remainder of the law can function as Congress intended when it passed
it.
There are rules governing severability. Normally, when only parts of
a law are held to be unconstitutional, only those parts of the law are
struck down by the Court. But when a statute's unconstitutional
provisions are severed, the whole law falls when Congress would not
have passed the constitutional provisions without the unconstitutional
ones being in it as well.
It is not enough that some of the remaining provisions are
constitutional. The Supreme Court has asked whether the remaining
provisions ``would function in a manner consistent with . . . the
original legislative bargain.''
The lower courts have reached four different conclusions concerning
the health care reform law; first, that the individual mandate can be
severed from the rest of the bill; second, that the individual mandate
can be severed but only if the law's related provisions that require
mandatory issue and community ratings are also severed; third, the
opposite position, that the mandate and the related provisions are not
severable; and, finally, that the mandate is not severable and that the
whole law must fall.
One of my Judiciary Committee colleagues has stated, for the
Democrats, ``worst-case scenario, the mandate falls.'' But even the
Obama administration does not take that view. The administration argues
that if the mandate falls, the guaranteed issue and community rating
provisions must also be struck down. The President's administration
says health insurance markets will not function if all Americans are
not forced to buy health insurance and insurance companies must,
nonetheless, insure everyone who seeks coverage at prices that do not
reflect their health risk.
If the mandate falls, keeping any of this law would violate the
original legislative bargain. I would like to remind my colleagues of
that original legislative bargain. The health care law passed because
the majority party--in its own partisan way--was going to pass this
bill by any means necessary. The individual mandate was very critical
to the ability to pass this law and to particularly pass it only by
partisan considerations.
We considered an amendment in the Finance Committee that would have
granted exemptions from the individual mandate to everybody who asked
for that exemption. My good friend, the chairman--and that is Senator
Baucus, as we all know--correctly stated: ``The system won't work if
this amendment passes.'' He further called it ``an amendment which guts
and kills health reform.'' He commented that ``if we are serious about
making sure that the Americans have health insurance, we all have to
participate. . . .'' So the bill's sponsors knew the whole operation of
the law depended upon this very important provision that the Court is
now considering on the individual mandate and whether that issue was
constitutional.
Let me repeat that. The people promoting this legislation that passed
on a partisan vote knew the whole operation of the law depended upon
the compulsion of the individual mandate. The legislative bargain also
showed this law would not have passed if a single comma had been
changed. Congress could not have enacted any part of this law without
the individual mandate or any other provision. That situation comes
about from the fact that the bill passed the Senate by one vote and
individual Senators were able to extract specific provisions that
benefited their State in return for agreeing to provide their deciding
vote for the bill. I think we all know the outrage that came from the
grassroots of America over some of those very special provisions. We
also know the American people were disgusted by these deals. But
without those arrangements and deals, none of the law would have
passed.
Those deals were one of the reasons why the Democrats lost their 60-
vote majority in the last election. So when the other body could pass a
bill only by accepting the Senate bill, they blocked any amendments
that would have changed so much as a comma. Had anything changed, the
new 59-vote Senate majority would have prevented passage. The bill was
offered on a take-it-or-leave-it basis, all or nothing. If the
individual mandate is struck down, then the whole law must fall.
Although it is not conclusive, it is certainly relevant that the law
does not contain a severability clause. This is one more indication
Congress thought the law was a unified whole.
It is simply not reasonable to argue that the law should survive
without the mandate. The most important political accomplishment of the
law is the additional coverage, not the lower costs we were promised.
Without the mandate, coverage under the law evaporates.
Does anyone believe that without the coverage in the law, Congress
could have passed the massive Medicaid expansion? Does anyone believe
that without the coverage in the law, Congress could have passed the
Draconian cuts in Medicare? Does anyone believe that without the
coverage in the law, Congress could have passed hundreds of billions of
dollars in new taxes? Of course not. It is simply not a legitimate
argument that the rest of the bill could have ever stood on its own
without the individual mandate enabling additional coverage.
[[Page S8433]]
I am pleased the Supreme Court has granted oral arguments devoted to
the severability question all by itself. In the past, the Supreme Court
has issued very activist severability rulings in which it rewrote a
statute in a way Congress never would have passed it.
For instance, it completely rewrote the campaign finance laws in the
1976 Buckley v. Valeo decision in a way that produced an unworkable
system that no Member of Congress would have ever voted for. In the
Booker case, the Supreme Court rewrote the sentencing laws in a way
that produced a very unworkable system that no Member of Congress would
have voted for. This time, the Supreme Court should not use the
severability doctrine to rewrite the health care law into something
Congress never would have passed in the first place. It should strike
down the entirety of the law in keeping with the law on this subject.
Such a ruling would give us the chance to do what we did not do before:
work in a truly bipartisan way to address these issues.
I yield the floor.
The PRESIDING OFFICER. The majority leader is recognized.
Las Vegas Helicopter Crash
Mr. REID. Mr. President, I am saddened to have learned this morning
that five people were killed late yesterday in the terrible helicopter
crash just a few miles outside Las Vegas. My sympathy is with the
families of those who died, including pilot Landon Nield and four
passengers. My thoughts are with them as the recovery efforts continue
this morning and as they lay their lost loved ones to rest.
Reports indicate the aircraft was on a tour of Hoover Dam. It crashed
into a remote and rocky terrain in the River Mountains between Lake
Mead and Henderson, NV, a few miles from Las Vegas.
I have taken those helicopter tours. It is an exciting trip. People
don't realize this, but we are just a few miles from the Grand Canyon
there in Las Vegas. It takes just a short time to travel to that
beautiful canyon to see where millions of people go every year to see
the Grand Canyon. Hundreds of thousands of tourists come from Las Vegas
to see it.
I am truly grateful for the efforts of the National Park Service
rangers, the metropolitan police department, the search-and-rescue
team, and the Henderson fire departments that responded rapidly to the
scene of the accident.
The Federal Aviation Administration and the National Transportation
Safety Board are investigating this accident as we speak. I will
continue to monitor the investigation as well as the recovery efforts
that are in progress.
Hundreds of thousands of tourists, I repeat, enjoy these helicopter
tours each year. I am sorry innocent people lost their lives in such a
rare tragedy. Nevada puts great stock in protecting the safety of its
tourists, whether flying over the Grand Canyon or walking down the Las
Vegas strip. I hope the inquiry into the cause of this crash will help
us better protect helicopter pilots and passengers in the future.
Again, my heart goes out to the families as they mourn this awful
tragedy.
I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. 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. GRASSLEY. If the Democrats aren't going to take their time, I
would like to take 5 or 6 minutes on another subject, and I ask
unanimous consent to do so.
The PRESIDING OFFICER. Without objection, it is so ordered.
Broken Accounting System
Mr. GRASSLEY. Mr. President, I come to the floor today to commend
Secretary of Defense Leon Panetta for personally focusing top-level
attention to what has been a festering problem, and I think it is fair
for me to say a festering problem for decades. I am talking about the
Defense Department's broken accounting system and lack of financial
accountability.
Secretary Panetta has grabbed the bull by the horns and told the
military services to get on the stick and move out smartly. He wants
them to fix the problem now, not later. Secretary Panetta's bold
initiative is laid out in a Department-wide memorandum dated October 11
this year. In this document, he calls for an all-hands-on-deck priority
effort to accelerate plans to create a modern, fully integrated finance
and accounting system. Such a system, if it ever comes to be, would be
designed to generate reliable, accurate, and complete financial
information. Such a system should be capable of producing credible
financial statements that can earn clean opinions from independent
auditors. If that happens, the Department will achieve what is called
full audit readiness. But now I want to warn Secretary Panetta about
what has happened to so many well-intentioned Secretaries of Defense.
That could be a big ``if.''
Under the Chief Financial Officers Act of 1990, all government
agencies were supposed to reach full audit readiness 15 years ago. As I
understand it, the Defense Department is now the only delinquent
agency. After the passage of so much time, how is it, then, that the
Pentagon cannot provide an accurate accounting of all the money it
spends? Doing it is a constitutional responsibility. Not doing it is
unacceptable. Why are the military services dragging their feet as they
are? What is the problem? Are all of the petty fiefdoms entrenched in
Pentagon bureaucracy causing the problem? Is it because they do not
want to surrender control of the money to a centralized financial
authority?
This is a festering problem Secretary Panetta has tackled. As a
former chairman of the House Budget Committee and Director of the
Office of Management and Budget, he has the necessary knowledge and the
necessary experience to get this job done.
The magic date for achieving full audit readiness at Defense was set
in concrete 2 years ago. Unfortunately, this goal has a long and
elusive history, and that long and elusive history is best
characterized by relentless slippage. It is a rolling target date, and
most experts believe the 2017 deadline is unattainable.
I am sure our tax-paying public doesn't understand why the Federal
Government wouldn't have the best accounting system in the world, but
they don't, particularly in the Defense Department.
Under Secretary Panetta's leadership, I hope all the slippage comes
to a screeching halt and all the bureaucratic roadblocks are torn down.
He has definitely turned up the heat and turned up the pressure. He has
drawn a line in the sand. He wants to see results and see results now.
He is calling for a revised plan for achieving audit readiness. It is
due on his desk December 13. So Army, Navy, Air Force, Marines, Coast
Guard, and everybody else--well, the Coast Guard is not involved but
everybody else--get on the stick because that is next week. He has set
a near-term goal. He wants the Department to produce partial financial
statements by 2014.
As a first step, Secretary Panetta has called for the production of
statements of budgetary resources by 2014. A statement of budgetary
resources is just one component of a financial statement, but it
represents a big important chunk of the whole. If credible statements
of budgetary resources can be produced 3 years ahead of schedule, then
maybe the full audit readiness by 2017 is, indeed, possible.
I also understand that Secretary Panetta's near-term goal is being
incorporated in legislation working its way through Congress right now.
That should help to move the ball further down the field.
Secretary Panetta's decision to set a preliminary goal of 2014 will
be a good gauge--a good test--of what is and is not possible. Can the
Defense Department achieve full audit readiness by 2017? We won't have
to wait 6 years to find that out under the process Secretary Panetta is
instituting. If problems surface early on, we in Congress can help the
Department take corrective action to keep this effort on track and
moving in the right direction.
A willingness and a commitment on the part of the Secretary of
Defense to take on this problem goes way beyond the production of
credible financial statements required by the Chief Financial Officers
Act of the late 1970s. It
[[Page S8434]]
goes right to the heart of a much larger constitutional issue; that is,
whether the Department of Defense is going to be held accountable.
The Department must be able to provide a full and accurate accounting
of all the money it spends. Under article I, section 9 of the
Constitution, such an accounting must be published from time to time.
The taxpayers expect and deserve nothing less than that. Today, DOD
can't do that. The status quo is unacceptable.
While I began conducting oversight of the Defense Department
financial management issues more than 20 years ago, I did not come to
fully appreciate the true understanding of the root cause issue until 3
years ago.
After receiving a series of anonymous letters alleging misconduct and
mismanagement within the inspector general's audit office, I initiated
an in-depth oversight review of audit reporting. Early on in the
review, there was a startling revelation: One all-important, central
element was adversely affecting every facet of the inspector general's
audit effort, and that was the Department's broken accounting system.
This dysfunctional system is driving the audit freight train. The
success or failure of an audit turns on the quality of the financial
data available for audit by competent examiners. The record clearly
shows the quality of financial data presented for audit by the
Department should be rated poor--or maybe I ought to say even worse
than poor. This is what I call the ``no audit trail'' scenario. It is
frequently encountered by auditors trying to examine Department of
Defense books of account. That is the exact problem Secretary Panetta
is attempting to address.
All my audit oversight work tells me that fixing the accounting
machinery is the first step to audit readiness. Once a modern, fully
integrated system is up and running, it should be a simple matter of
punching the right computer buttons and credible financial statements
will roll off of the printer. Doing routine oversight audits should be
a piece of cake. Today's labor-intensive and time-consuming audit trail
reconstruction work which auditors now endure in the absence of
reliable accounting records will be a thing of the past. Most
importantly, effective internal controls will be in place to protect
the taxpayers' money against fraud, theft, and waste.
What I am saying to my colleagues is this: Secretary Panetta is on
the right track. He is trying to take us to a place where we need to go
and go soon. I want to help him lead us there, so I am here today to
encourage and support this courageous effort to clean up the books. I
admire and respect his personal commitment to such a noble cause.
I am also here to reinforce the words of encouragement contained in a
letter that my friend from Oklahoma, Dr. Coburn, and I penned to
Secretary Panetta on November 17. We, being Senator Coburn and I, want
to work with him to achieve this most worthy goal. And in the process
of these remarks to the Senate, I hope other Members of the Senate,
particularly those who are on the Armed Services Committee, will also
give Secretary Panetta encouraging words of support and thanks.
I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois.
Order of Procedure
Mr. DURBIN. Mr. President, on behalf of the majority leader, I ask
unanimous consent that the time until 2:30 p.m. be equally divided
between the two leaders or their designees for debate on the Reid
motion to proceed to Calendar No. 251, S. 1944; that at 2:30 p.m., the
Senate vote on the motion to proceed to S. 1944; that upon disposition
of the Reid motion to proceed, it be in order for the Republican leader
or his designee to move to proceed to Calendar No. 244, S. 1931; that
there be 2 minutes of debate equally divided between the two leaders or
their designees prior to the vote; that both motions to proceed be
subject to a 60-vote threshold; finally, that the cloture motion
relative to the motion to proceed to S. 1944 be vitiated.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Balanced Budget Amendment
Mr. DURBIN. Mr. President, a little earlier today the junior Senator
from Utah, Mr. Lee, came to the floor to discuss the balanced budget
amendment. Under the budget agreement agreed to in Congress in August,
both the House and Senate were required to vote on a constitutional
amendment to balance the budget before the end of this calendar year.
The House has already taken the vote. The measure failed. The Senate
still has a responsibility to take it up, which we will do in the
closing hours of the session this calendar year.
There are at least two proposals before us for a constitutional
amendment, and my subcommittee, the Subcommittee on the Constitution,
Civil Rights and Human Rights of the Committee on the Judiciary, held a
hearing last week asking questions about these approaches to the
Constitution.
The leading approach on the Republican side comes from both Senators
Hatch and McConnell. I am not certain which they will offer or whether
the language might change at the last minute, but it would enshrine in
our Constitution a disciplinary mechanism to reduce the budget deficit.
This has been brought before the Senate and the House before many
times. This particular proposed constitutional amendment would:
Require that in each fiscal year Federal outlays shall not exceed
receipts unless two-thirds of each House votes to waive.
It caps outlays at 18 percent of gross domestic product each year
unless two-thirds of each House votes to waive.
It requires a two-thirds vote in each House for any tax or revenue-
raising measure.
It requires a three-fifths vote in each House for raising the debt
limit.
It allows for waiver of the amendment in times of declared war or
serious military conflict.
It prohibits courts from ordering any increase in revenue to enforce
the amendment.
It directs Congress to enforce the amendment through appropriate
legislation.
It takes effect 5 years after ratification.
This is far more extreme than the clean House balanced budget
amendment, which failed to pass in that Chamber on November 18.
The testimony before our subcommittee from experts in the field said
that this amendment, proposed by Senators Hatch and McConnell, will
require Draconian cuts in Social Security, Medicare, Medicaid, our
military retirement system, and many programs important to working
families.
It will make Republican fiscal policies the constitutional law of the
land, giving protection to those in higher income categories from any
tax increase forever, without an extraordinary vote in either House.
It would delegate the task of resolving budget disputes to our court
system.
It would make recessions worse by requiring cuts in countercyclical
safety-net programs such as food stamps and unemployment just at the
time when those expenditures are most needed.
It would increase the likelihood of debt limit standoffs each year.
It would lead to increased burdens on our States.
During the course of the hearings, several people came forward to
testify. I recommend to my colleagues that they carefully read these
testimonies, which are available on the Senate Judiciary Committee
website.
The first was Robert Greenstein, president of the Center on Budget
and Policy Priorities. Mr. Greenstein, who is well recognized and
respected on Capitol Hill, spoke about the countercyclical aspect and
said that if you cut spending in the midst of a recession, you will not
have the resources you need to provide unemployment benefits, food
stamps, and the things that save families when they are out of work or
making very little money.
I ask unanimous consent that Mr. Greenstein's statement be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Testimony of Robert Greenstein, Before the Subcommittee on the
Constitution, Civil Rights and Human Rights Hearing Entitled, ``A
Balanced Budget Amendment: The Perils of Constitutionalizing the Budget
Debate,'' November 30, 2011
Thank you for the invitation to testify today. I am Robert
Greenstein, president of
[[Page S8435]]
the Center on Budget and Policy Priorities, a policy
institute that focuses both on fiscal policy and on policies
affecting low- and moderate-income Americans. We, like most
others who analyze fiscal policy developments and trends,
believe that the nation's fiscal policy is on an
unsustainable course. As part of our work, we have been
analyzing proposed changes in budget procedures for more than
20 years. We have conducted extensive analyses of proposals
to write a balanced-budget requirement into the Constitution,
among other proposals.
The purpose of changing our fiscal policy course is to
strengthen our economy over the long term and to prevent the
serious economic damage that would likely occur if the debt
explodes in future decades as a share of the economy. But we
need to choose our fiscal policy instruments carefully. We
want to avoid ``destroying the village in order to save it.''
The goal of a constitutional balanced budget amendment is
to address our long-term fiscal imbalance. Unfortunately, a
constitutional balanced budget amendment would be a highly
ill-advised way to try to do that and likely would cause
serious economic damage. It would require a balanced budget
every year regardless of the state of the economy, unless a
supermajority of both houses overrode that requirement. This
is an unwise stricture that large numbers of mainstream
economists have long counseled against, because it would
require the largest budget cuts or tax increases precisely
when the economy is weakest. It holds substantial risk of
tipping faltering economies into recessions and making
recessions longer and deeper. The additional job losses would
likely be very large.
When the economy weakens, revenue growth drops and revenues
may even contract. And as unemployment rises, expenditures
for programs like unemployment insurance--and to a lesser
degree, food stamps and Medicaid--increase. These revenue
declines and expenditure increases are temporary; they
largely disappear as the economy recovers. But they are
critical for helping to keep struggling economies from
falling into a recession and for moderating the depth and
length of recessions that do occur.
When the economy weakens, consumers and businesses spend
less, which in turn causes further job loss. The drop in tax
collections and increases in unemployment and other benefits
that now occur automatically when the economy weakens
cushions the blow, by keeping purchases of goods and services
from falling more. That is why economists use the term
``automatic stabilizers'' to describe the automatic declines
in revenues and automatic increases in UI and other benefits
that occur when the economy turns down; these actions help
stabilize the economy.
A constitutional balanced budget amendment, however,
effectively suspends the automatic stabilizers. It requires
that federal expenditures be cut or taxes increased to offset
the effects of the automatic stabilizers and prevent a
deficit from occurring--the opposite course from what sound
economic policy calls for.
Over the years, leading economists have warned of the
adverse effects of a constitutional balanced budget
amendment. In Congressional testimony in 1992, Robert
Reischauer--then director of the Congressional Budget Office
and one of the nation's most respected experts on fiscal
policy--explained: ``[I]f it worked [a constitutional
balanced budget amendment] would undermine the stabilizing
role of the federal government.'' Reischauer noted that the
automatic stabilizing that occurs when the economy is weak
``temporarily lowers revenues and increases spending on
unemployment insurance and welfare programs. This automatic
stabilizing occurs quickly and is self-limiting--it goes away
as the economy revives--but it temporarily increases the
deficit. It is an important factor that dampens the amplitude
of our economic cycles.'' Under the constitutional amendment,
he explained, these stabilizers would no longer operate
automatically.
Similarly, when a constitutional balanced budget amendment
was under consideration in 1997, more than 1,000 economists
including 11 Nobel laureates issued a joint statement that
said, ``We condemn the proposed `balanced-budget' amendment
to the federal Constitution. It is unsound and unnecessary.
The proposed amendment mandates perverse actions in the face
of recessions. In economic downturns, tax revenues fall and
some outlays, such as unemployment benefits, rise. These so-
called `built-in stabilizers' limit declines of after-tax
income and purchasing power. To keep the budget balanced
every year would aggravate recessions.'' This summer, five
Nobel laureates in economics issued a new statement opposing
a constitutional balanced budget amendment for this reason.
Earlier this year, the current CBO director, Douglas
Elmendorf, sounded a similar warning when asked about a
constitutional balanced budget amendment at a Senate Budget
Committee hearing. Elmendorf observed:
``Amending the Constitution to require this sort of balance
raises risks . . . [t]he fact that taxes fall when the
economy weakens and spending and benefit programs increase
when the economy weakens, in an automatic way, under existing
law, is an important stabilizing force for the aggregate
economy. The fact that state governments need to work . . .
against these effects in their own budgets--need to take
action to raise taxes or cut spending in recessions--undoes
the automatic stabilizers, essentially, at the state level.
Taking those away at the federal level risks making the
economy less stable, risks exacerbating the swings in
business cycles.''
Finally, a month ago, Macroeconomic Advisers (MA) analyzed
the economic impacts of a constitutional balanced budget
amendment. One of the nation's preeminent private economic
forecasting firms, Macroeconomic Advisers provides analysis
to major corporations and government entities, such as the
President's Council of Economic Advisors under Presidents of
both parties, including Presidents Reagan and George W. Bush.
MA concluded that if a constitutional balanced budget
amendment had already been ratified and were now being
enforced for fiscal year 2012, ``the effect on the economy
would be catastrophic.'' If the 2012 budget were balanced
through spending cuts, MA found, those cuts would total about
$1.5 trillion in 2012 alone--and would throw about 15 million
more people out of work, double the unemployment rate from 9
percent to approximately 18 percent, and cause the economy to
shrink by about 17 percent instead of growing by an expected
2 percent.
Even if a BBA were implemented when the budget was already
in balance, MA concluded, it would still put ``new and
powerful uncertainties in play. The economy's `automatic
stabilizers' would be eviscerated [and] discretionary
counter-cyclical fiscal policy would be unconstitutional . .
. . Recessions would be deeper and longer.''
MA also warned that ``The pall of uncertainty cast over the
economy if it appeared a BBA could be ratified and enforced
in the middle of recession or when the deficit was still
large would have a chilling effect on near-term economic
growth.'' MA concluded that a BBA would have detrimental
effects on economic growth in both good times and bad.
Proponents of a constitutional amendment often respond to
these admonitions by noting that the proposed constitutional
amendment would allow the balanced-budget requirement to be
waived by a vote of three-fifths of the House and the Senate,
so the BBA would be set to the side in recessions. But this
response is too facile, and the three-fifths waiver provision
does not solve the problem. It is difficult to secure three-
fifths votes for anything; consider the paralysis that marks
much of the work of the Senate. Moreover, it may take months
after a downturn begins before sufficient data are available
to convince three-fifths of the members of both houses of
Congress that a recession is underway. Furthermore, it is all
too likely that even after the evidence for a downturn is
clear, a minority in the House or Senate would hold a wavier
vote hostage to demands for concessions on other matters
(such as new, permanent tax cuts). By the time that a
recession were recognized to be underway and three-fifths
votes were secured in both chambers, if such support could be
obtained at all, extensive economic damage could have been
done and hundreds of thousands or millions of additional jobs
unnecessarily lost.
The bottom line is that the automatic stabilizers need to
continue to be able to work automatically to protect American
businesses and workers. The balanced budget amendment
precludes that.
Nor is a recession the only concern. Consider the savings
and loan crisis of the 1980s, or the financial meltdown of
the fall of 2008. A constitutional balanced budget amendment
would have hindered swift federal action to rescue the
savings and loan industry or to rapidly put the Troubled
Assets Relief Program in place. In both cases, history
indicates that federal action helped save the economy from
what otherwise likely would have been far more dire
problems.
Moreover, the federal government provides deposit insurance
for accounts of up to $250,000; this insurance--and the
confidence it engenders among depositors--is critical to the
sound functioning of our financial system so that we avoid
panics involving a run on financial institutions, as occurred
in the early 1930s. A constitutional prohibition of any
deficit spending (unless and until a supermajority of both
houses of Congress voted to authorize it) could seriously
weaken the guarantee that federal deposit insurance provides.
That is a risk we should not take.
These are illustrations of why fiscal policy should not be
written into the Constitution.
A parallel problem is that the proposed constitutional
amendment would make it even harder than it already is to
raise the debt limit, by requiring a three-fifths vote of
both the House and Senate to raise the limit. This is playing
with fire. It would heighten the risk of a federal government
default. A default would raise our interest costs and could
damage the U.S. economy for years to come.
Mistaken Analogies to States and Families
Proponents of a constitutional amendment sometimes argue
that states and families must balance their budgets every
year and the federal government should do so, too. But
statements that the constitutional amendment would align
federal budgeting practices with those of states and families
are mistaken.
While states must balance their operating budgets, they can
borrow to finance their capital budgets--to finance roads,
schools, and other projects. Most states do so. States also
can build reserves during good times
[[Page S8436]]
and draw on them in bad times without counting the drawdown
from reserves as new spending that unbalances a budget.
Families follow similar practices. They borrow--they take
out mortgages to buy a home or student loans to send a child
to college. They also draw down savings when times are tight,
with the result that their expenditures in those periods
exceed their current incomes.
But the proposed constitutional amendment would bar such
practices at the federal level. The total federal budget--
including capital investments--would have to be balanced
every year, with no borrowing allowed for infrastructure or
other investments that can boost future economic growth. And
if the federal government ran a surplus one year, it could
not draw it down the next year to help balance the budget.
I would also note that the fact that states must balance
their operating budgets even in recessions makes it all the
more important from the standpoint of economic policy that
the federal government not be subject to the same stricture.
American Enterprise Institute analyst Norman Ornstein
addressed this matter in an article earlier this year, where
he wrote: ``Few ideas are more seductive on the surface and
more destructive in reality than a balanced budget amendment.
Here is why: Nearly all our states have balanced budget
requirements. That means when the economy slows, states are
forced to raise taxes or slash spending at just the wrong
time, providing a fiscal drag when what is needed is
countercyclical policy to stimulate the economy. In fact, the
fiscal drag from the states in 2009-2010 was barely countered
by the federal stimulus plan. That meant the federal stimulus
provided was nowhere near what was needed but far better than
doing nothing. Now imagine that scenario with a federal drag
instead.''
S.J. Res. 10 and S.J. Res. 23 Raise Additional Issues
The foregoing concerns apply to all versions of the
balanced budget amendment that have been introduced. Some
versions of the balanced budget amendment, such as S.J. Res.
10 and S.J. Res. 23, which are identical, raise additional
concerns, because they would write into the Constitution new
barriers to raising any revenues--including closing wasteful
tax loopholes--to help balance the budget and also would
prohibit federal expenditures in any year from exceeding a
figure such as 18 percent of the Gross Domestic Product in
the previous calendar year. These constitutional requirements
could be overridden only by supermajority votes in both the
House and the Senate.
This requirement for a supermajority to raise taxes would
be extremely unwise. It would protect what President Reagan's
former chief economic advisor, Harvard economist Martin
Feldstein, has called the biggest area of wasteful government
spending in the federal budget--what economists call ``tax
expenditures'' and Alan Greenspan has called ``tax
entitlements.''
In 2010, tax expenditures amounted to $1.1 trillion, more
than the cost of Medicare and Medicaid combined (which was
$719 billion), Social Security ($701 billion), defense ($689
billion, including expenditures in Iraq and Afghanistan), or
non-defense discretionary spending ($658 billion, including
expenditures from the Recovery Act). Many of these tax
expenditures are fully the equivalent of government spending.
Let me use child care as an example.
If you are low- or moderate-income, you may get a federal
subsidy to help cover your child care costs, and the subsidy
is provided through a spending program. If you are higher on
the income scale, you still get a government subsidy that
reduces your child care costs, but it is delivered through
the tax code, as a tax credit. (Moreover, if you are a low-
or moderate-income parent with child care costs, you likely
will miss out because the spending programs that provide
child care subsidies are not open ended and can only serve as
many people as their capped funding allows. By contrast, if
you are a higher income household--and there is no limit on
how high your income can be--your child care subsidy is
guaranteed, because the tax subsidy that you get operates as
an open-ended entitlement.) It is difficult to justify making
the tax-code subsidy sacrosanct and the program subsidy a
deficit-reduction target merely because one is delivered
through a ``spending'' program and the other is delivered
through the code.
And as the child care example illustrates, sharply
distinguishing between subsidies delivered through the tax
code and those delivered through programs on the spending
side of the budget also has a ``reverse Robin Hood'' aspect.
Low- and moderate-income households receive most of their
government assistance through spending programs; affluent
households receive most of their federal subsidies through
tax expenditures. Effectively barring reductions in tax
expenditures from contributing to deficit reduction is a
prescription for placing the greatest burden of deficit
reduction on those who can least afford to bear it.
The problems do not stop there. If it requires a
supermajority to raise any revenue, another likely outcome is
a proliferation of tax loopholes. New loopholes--including
loopholes that Congress did not intend but that high-priced
tax lawyers and accountants have found ways to create--could
become untouchable once they appeared, because it would
require a supermajority of the House and Senate to raise any
revenue. It would become more difficult to close tax
loopholes that opened up, since (under S.J. Res. 10 and S.J.
Res. 23) special-interest lobbyists could block such action
simply by securing the votes of one-third plus one member in
one chamber.
Finally, as noted, S.J. Res. 10 and S.J. Res. 23 would bar
federal spending from exceeding 18 percent of GDP in the
prior calendar year, which translates into a limit of about
16.6 percent of the current fiscal year's GDP. To hit that
level would require cuts of a truly draconian nature.
Consider the austere budget that the House of Representatives
passed on April 15, sometimes referred to as the Ryan budget.
Under that budget, Medicare would be converted to a voucher
system under which, the Congressional Budget Office has said,
beneficiaries' out-of-pocket health-care costs would nearly
triple by 2030 (relative to what those costs would be that
year under the current Medicare program). CBO also has
written that under the Ryan budget, federal Medicaid funding
in 2030 would be 49 percent lower than it would be if the
Affordable Care Act's Medicaid expansion were repealed but
Medicaid otherwise was unchanged. And funding for non-
security discretionary programs would be cut more than one-
third below its real 2010 level. Yet CBO says that under this
budget, total federal spending would be 20\3/4\ percent of
GDP in 2030, so it would breach the allowable limit under
S.J. Res. 10 and S.J. Res. 23 by four percentage points of
GDP. This illustrates the draconian nature of the proposed
16.6 percent-of-current-GDP requirement.
Another way to look at this stricture is to examine federal
expenditures under Ronald Reagan. Under President Reagan, who
secured deep budget cuts at the start of his term, federal
expenditures averaged 22 percent of GDP. And that was at a
time before any members of the baby boom generation had
retired and when health care expenditures throughout the U.S.
health care system (including the private sector) were one-
third lower as a share of GDP than they are today. It also
was before the September 11 terrorist attacks led
policymakers to create a new category of homeland security
spending, and before the wars in Iraq and Afghanistan led to
increases in veterans' health-care costs that will endure for
a number of decades.
Estimating the Effects of Spending Cap in S.J. Res. 10 and S.J. Res. 23
To provide a more precise and detailed analysis of the
impact that the spending cap in S.J. Res. 10 and S.J. Res. 23
would have, we recently conducted an analysis of its effects,
using the latest Congressional Budget Office ten-year budget
projections. We considered the impact if the balanced budget
requirement would take effect in fiscal year 2018, as would
occur if Congress approved it now and the requisite number of
states ratified it by September 30, 2013. Here are the
results.
--Congress would have to cut all programs (except interest
on the debt) by an average of 24.9 percent in 2018. It would
have to cut programs by $1.1 trillion in 2018 alone, and by
$6.1 trillion through 2021.
--If all programs were cut by the same percentage, Social
Security would be cut $265 billion in 2018 alone and $1.7
trillion through 2021; Medicare would be cut $168 billion in
2018 and $1.1 trillion through 2021; and Medicaid and the
Children's Health Insurance Program (CHIP) would be cut $115
billion in 2018 and $724 billion through 2021.
--Veterans disability payments, compensation, and other
such benefits would be cut $19 billion in 2018 and $122
billion through 2021.
--Defense spending would be cut $141 billion in 2018 and
$879 billion through 2021, on top of the reductions made to
comply with the discretionary spending caps that the Budget
Control Act establishes and the reductions made under the
sequestration order that is expected to be issued in January
2013, pursuant to that act.
Congress would not, of course, have to cut all programs by
the same percentage and likely would not do so. But if
Congress chose to spare certain programs, others would have
to be cut even more deeply. For example, if Social Security
were spared, the average cut to all other programs would rise
by more than one third, from 24.9 percent in 2018 to 34.2
percent. Similarly, if the defense budget were increased by
placing it at 4 percent of GDP (exclusive of war costs) and
maintaining it at that level, as presidential candidate Mitt
Romney has proposed, then all other programs--including
Social Security--would have to be cut an average of 38.2
percent in 2018 under S.J. Res. 10 and S.J. Res. 23.
Even if the so-called ``plain vanilla'' version of the BBA
is pursued, rather than S.J. Res. 10 and S.J. Res. 23, the
required level of budget cuts would be massive, assuming
taxes are not raised to help balance the budget. Congress
would have to cut everything an average of 17.3 percent in
2018, an average of 23.8 percent if Social Security were
protected, and an average of 29.4 percent if the defense
budget were set at 4 percent of GDP and Social Security were
not protected.
Conclusion
Policymakers need to begin to change our fiscal trajectory.
As various recent commissions have indicated, we need to
stabilize the debt as a share of GDP in the coming decade and
to keep it stable after that (allowing for some fluctuation
over the business cycle). But establishing a balanced budget
amendment in the Constitution would be exceedingly unwise. It
would likely exact a heavy toll on the economy and on
American businesses and workers in the years and decades
[[Page S8437]]
ahead. It is not the course that the nation should follow.
Mr. DURBIN. Mr. President, another testimony that I thought was
extremely compelling came from Alan Morrison. Alan Morrison is an
accomplished attorney and has argued many cases before the U.S. Supreme
Court. He is the Lerner Family Associate Dean for Public Interest &
Public Service Law at George Washington University Law School.
Professor Morrison really asked us to think through what we are
doing. In fact, he asked us the most important question: If you put an
amendment to the Constitution that requires a balanced budget, who will
enforce it? Who will make it work? Who will decide if you have lived up
to its terms? He concluded, based on his background in constitutional
law and arguing before the Supreme Court, not the President. The
President is not in that position to do it. The President, of course,
with his budget, has his own favorites when it comes to spending and
revenue.
Professor Morrison said this case ultimately has to find its way to
our court system. But he made it clear that any constitutional balanced
budget amendment must expressly give to the Federal courts the standing
to decide the question. He raised a question that without that
expressed language, he really was doubtful that the courts would take
it up. They might view it as just a political question to be resolved
by Congress itself.
Now, Senator Lee, who spoke on the floor earlier, has a version of
the balanced budget amendment that expressly gives standing to Members
of Congress, if I am not mistaken. But the point made by Professor
Morrison is that any balanced budget amendment has to expressly give to
our Federal court system the power of judicial review. In other words,
who is going to call the fouls, the balls, the strikes, and the outs?
It is going to have to be the court system when it comes to whether the
balanced budget amendment is being complied with.
That is the first question but certainly not the last question.
Professor Morrison then went on to say: Now, put this in the real
world. In the real world, where Congress has passed a budget,
appropriations bills, and now someone is arguing that what Congress did
does not comply with the new provision of the Constitution requiring a
balanced budget--arguing that, in fact, Congress is overspending the
amount it is allowed to spend, for example--then, of course, that case
has to find its way from the Capitol Building to the President, who
signed the bill, and then over to the court system.
Keep in mind, while we are in doubt about the outcome on
appropriations bills and the budget, there is a serious question about
how we will continue to fund our government, whether we can continue to
make important payments to military retirees, Social Security
recipients, Medicare recipients. All of it is in doubt while there is a
question raised as to whether the budget passed by the Congress is
unconstitutional.
This is the thicket we are being led into by those who very glibly
say: All we need to do is mandate in the Constitution a balanced
budget, and it will just flow naturally from that mandate.
Well, listen to what Professor Morrison said:
The federal courts will (rightly) be extremely reluctant to
wade into these budget battles and thus will want to be sure
that there is likely to be a violation before agreeing to
decide the merits. But budgets are inherently uncertain in
their impact, depending on such factors as whether revenue
targets are met, whether the demand for entitlements is
higher or lower than anticipated, whether discretionary
spending is fully realized, and whether an existing war winds
down or a new one starts, each with great uncertainties
accompanying them. Thus, it will be far from clear on October
1st of a given fiscal year whether a duly enacted budget will
or will not be in balance, assuming that the question is
reasonably close, as it is likely to be in at least some
years. Unless Congress makes it clear, either in the
[constitutional] amendment or perhaps by subsequent
legislation, that the courts should resolve all doubts in
favor of finding claims ripe, the courts are likely to be
very reluctant to reach the merits even for those persons who
are expressly given standing in the amendment.
Then, of course, is the question of a remedy. What if Congress passes
a budget and appropriations bills, the President signs them, and they
are challenged in court, and the court says: Yes, in fact, Congress has
overspent beyond the requirements of the Constitution. What is next?
What remedy would the courts order? What can the court do?
Can they order the recipients (of salaries, social security
benefits, Medicare payments, payments under Government
contracts etc) to ``pay back'' [a certain percentage]? Or can
it order Congress to rectify the balance in the next year's
budget, which would almost certainly trigger a new lawsuit?
To be sure, the courts will not dismiss as moot claims that
are capable of repetition, yet evade review because the
duration of the violation is so limited that the courts
cannot decide its legality before it has ceased.
Professor Morrison asks us to get beyond the bumper stickers and to
think twice before we amend our Constitution.
In the 220 years since the enactment of the Bill of Rights, we have
amended this Constitution precious few times. We have done it for
compelling national reasons. We have done it to extend the right to
vote to women. We have done it to make it clear that African Americans
treated as slaves will be treated as citizens in the United States. We
have done it to deal with questions of Presidential disability and
succession. These are things which were compelling, major, national
issues which could be resolved in a clear, definitive way by our
Congress, working with the States for ratification.
Now comes the flavor of the day. In the midst of the deficit crisis
debate, there are those who are arguing that we should not accept our
responsibility in the Senate and the House to balance the budget. No,
we should just put in the Constitution that we are required to do it.
And then they go further. If we are going to address it, they say, we
are going to draw certain lines that future Congresses, forever, as
long as this constitutional amendment applies, will be bound by--to
make it more difficult to raise taxes on anyone in the United States;
to make it imperative, if not mandatory, that cuts be made in programs
such as Social Security and Medicare. These are questions that should
be decided by Congress and the President on a timely basis.
I have been involved in the past 2 years with a lot of debate about
our national budget deficit, both on the Bowles-Simpson Commission and
with the voluntary effort by six Democratic and Republican Senators. It
is not easy. It is very hard. But it can be done if the political will
is there.
I think we need to summon the courage, the political courage and the
will to do it. But we should reject--summarily reject these efforts to
amend our Constitution. They are not well thought out. The Constitution
is too important a document, a historical guidepost for our Nation, and
an inspiration for nations around the world to put in a fatally flawed
constitutional balanced budget amendment in the heat of the moment.
This is a significant vote. Those of us--and that includes every
single Member of the Senate--who have sworn to uphold and defend the
Constitution need to take that document very, very seriously. Those who
want to amend it in quick fashion, changing their amendment language by
the day, should be dismissed. If they do not show the reverence for
this document that it deserves, if they do not take the time to make
certain their proposals are consistent with the sanctity and importance
of this document, they should not be taken seriously.
I do not believe any of my colleagues can go home having voted for
that amendment and expect wild applause from audiences across America.
They will understand that this was just a political reaction to a very
important issue. Let's not amend the Constitution with a balanced
budget amendment.
(Mrs. HAGAN assumed the chair.)
Mr. DURBIN. Madam President, I would like to make one additional
brief statement. I see the Senator from Ohio in the Chamber.
The holiday season is upon us, and a lot of us are thinking about our
families, and we are thinking about being with them as quickly as we
can. It is a time of year that has a special significance for so many
of us. But what was made clear by President Obama yesterday--and my
colleagues should take note--we are not going home for
[[Page S8438]]
Christmas, Hanukkah, or any holiday season until we have done our job
for the people of this country.
Millions of people in Illinois and across America are counting on
Congress to extend the payroll tax cut. What does it mean in my State?
With an average income of $50,000 a year, it is worth more than $1,000
a year to those families. It is worth about $125 to $150 a month to
have a payroll tax cut--money that working families, struggling from
paycheck to paycheck, desperately need to fill the gas tank, to pay the
utility bills, to provide clothing for their kids, to make sure they
can stay in their home. These are the basics.
No Member of Congress is going to be allowed to go home and ignore
the imposition of such a new payroll tax on America. President Obama
met with the Democratic leaders of the Senate yesterday, and he said
point-blank--he has told the First Lady, Michelle, and his girls that,
if necessary, they can have their Christmas vacation in Hawaii, which
they go to each year, by themselves, and he will wait here until this
job is done. I hope that does not happen for the sake of his family or
for the sake of any family of any Member of Congress, but in order to
avoid that, we have to do the right and responsible thing.
This afternoon, there will be a vote on the payroll tax cut offered
by Senator Casey of Pennsylvania. It is a payroll tax cut that would
help millions of America's working families have more to spend and help
the economy to recover. And he pays for it. He does not add to the
deficit. He pays for it by imposing a surtax--listen closely--on the
second million dollars earned by a person in a year, not the first
million. You do not pay a penny on the first million you earn. On the
second million, you will pay a surtax, and I think it is 2 percent,
maybe less.
The Republicans have said: Absolutely unacceptable. We will not allow
you to impose this onerous tax on these people.
People who are already making $20,000 a week, we cannot ask them to
pay 2 percent more on the next dollar they make? I do not think it is
unreasonable. And if it leads to a payroll tax cut that helps families
across this country, if the economy continues to recover even at a
faster pace, if we see more business activity and business life and
more people working, do you know what is going to happen? Those same
wealthy people will prosper again, as they always do. It is in their
best interests for this economy to get well. For our Republican friends
to fold their arms and say: We are just not going to let you touch the
wealthiest people in America, is an irresponsible position.
Senator Casey has led this effort. It is the second effort we have
made. We had one last week. The Republicans offered their alternative
last week. It had 20 votes on the floor of the Senate--20 out of 47
Republican Senators. Twenty voted for it. They want to bring it up
again today. They will probably get more than 20 votes this time, but
it is pretty clear that the Republican Senators are halfhearted in
their support of this Republican alternative.
One Republican Senator from Maine had the courage to step across the
aisle last week and join us. We salute Senator Collins for doing that.
We hope others will do it today.
We can bring this challenge to a close the right way by extending the
payroll tax cut, paying for it with a tax on the wealthiest people in
America. We can do our job and go home and be with our families. If
Republicans will not come to the table to work with us on a reasonable
compromise, I am afraid the American people will know very clearly who
is to blame for continuing a tax on working families across America.
The facts are that we want working Americans to have a good year, get
through a difficult time, and the economy to recover.
We should be doing this on a bipartisan basis. The President said:
Roll out your Christmas trees and blankets here in the Senate because
you are going to stay here, even through the holidays if necessary. We
are not going to go home to celebrate until we can celebrate with
American families who are counting on us across America.
I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. BROWN of Ohio. Madam President, I go home every weekend, back to
northeast Ohio where I live in a town called Avon in Lorain County. I
want to go home at Christmas. I want to be with my 3-year-old grandson
and my three daughters and son. But I also think our obligation, as
Senator Durbin said, the assistant majority leader, is to stay here and
get our work done. And ``get our work done'' means extend the payroll
tax cut and extend unemployment benefits.
If we do not do that, frankly, we are ruining the holiday season for
tens of thousands and dozens of tens of thousands, if you will, of
Ohioans and Illinoisans and North Carolinians. If we do not do that, we
do not deserve to be able to go home and be with our families. I am not
trying to be a martyr, but I think it is shameful a group of people, in
order to protect the highest income taxpayers in this country--those
making over $1 million a year--continue to block an extension, a
continuation, if you will, of this tax cut for working families.
In my State the average tax cut that we will vote for today, and
continue until it happens is about $100, $110, $120 per family per
month. It is absolutely unconscionable not to do that.
Senator Durbin also talked about the constitutional amendment to
balance the budget. I want to recount something I heard earlier today
on the Senate floor. Two of my conservative colleagues--one from
Kentucky, one from Utah--spoke about the importance of a balanced
budget amendment. I supported a balance budget amendment in the past
when I was in the House of Representatives. In here I have actually
voted--it was part of an effort to get us to a balanced budget in
reality in the 1990s. When President Bush took office we had the
largest budget surplus. We balanced the budget and then some. We had
the largest budget surplus in American history.
I was part of that. I was proud of that. We accomplished what we set
out to do. We accomplished what we said we would, and we accomplished
something very important for our country. It was then in the first
years of the last decade--in 2001, 2002, and 2003--that we went to war,
two wars, Afghanistan and Iraq, and we did not pay for them.
President Bush, in those days, pushed through two tax cuts--one in
2001, one in 2003--that went overwhelmingly to the wealthiest
Americans, without paying for it, without offsets, cuts, or other
taxes. Then President Bush also pushed through--at a very close,
middle-of-the-night vote in the House of Representatives, by, I
believe, one vote or two votes--a Medicare privatization bill that
basically was a bailout for the drug companies and the insurance
companies and did not pay for that. That is why we got to this
situation, unfortunately, where we have had this terrible budget
problem.
What I wanted to address is what the solution of a couple of my
colleagues seems to be. To their minds, there seems to be sort of a
moral equivalent of, on the one hand, asking millionaires, people
making a million dollars and up, to pay their fair share and making
Medicare beneficiaries and Social Security beneficiaries take big cuts.
So I heard my two colleagues basically say this: that if the
Democrats were serious about moving toward a balanced budget--and,
again, 15 years ago we did it. We absolutely did it with President
Clinton, got to a balanced budget, got to a surplus.
They said if the Democrats are serious about that, they will raise
the retirement age for Social Security, and they will raise the
eligibility age of Medicare. Let me tell you why that is a bad thing. I
was in Youngstown not too long ago at a townhall meeting. A 63-year-old
woman stood up and said--62, 63 years old.
She said: I just need to stay healthy and stay alive until I am 65 so
I have health insurance. I need to be able to stay alive for another
couple of years so I can get on Medicare and have health insurance.
Imagine living your life that way, when you are thinking: I just have
to stay alive until I am 65. Then I will have good government Medicare
health insurance. So some people here say: Well, tough luck. We are
going to have to raise the eligibility age of Medicare to 66, 67, 68,
whatever my very conservative colleagues are proposing--from
[[Page S8439]]
Utah and Kentucky--raise the eligibility age for Medicare as if that is
going to make them better.
When you think about it--I want 62-year-olds--one reason we passed
the health care reform, I want 62-year-olds to have health insurance.
One, it is good for them. Second, it is way better for the country,
including taxpayers, that they get health care before they get sicker
and sicker and end up in the emergency room or end up with cobbled-
together health care that is much more expensive, let alone what it
does to this lady and her family.
Second, they proposed to raise the eligibility age for Social
Security. Now, it is easy for people around here to dress like this
who, for all intents and purposes, talk for a living--work hard at what
we do but talk for a living and work in offices and, you know, do not
do heavy lifting and are not exposed to the elements and all of that.
It is easy for us to say: Let's raise the Social Security age to 70
because, God willing, we will still be here if the voters vote us in
and we can keep doing this. Most of us are pretty healthy and do not
work around asbestos and are not doing heavy lifting, are not working
in the snow, in the rain, in the heat.
Well, when I think about raising the retirement age to 70, here is
who I think about. I think about construction workers. I think about
women who cut hair. I think about a waitress who works at a diner. I
think about someone who works at a factory in Brunswick, OH. I think
about people who walk the floors in retail. We are going to tell them
that--we who dress like this, we who have jobs like this are going to
tell those constituents--and there are millions in my State and tens
and tens and tens of millions around the country, working-class
citizens of this country who simply cannot work until they are 70.
If you are cutting hair, if you are changing sheets in a hotel,
cleaning out bathrooms in a hotel, if you are working as a carpenter or
a laborer or sheet metal worker, if you are working as an auto worker,
a steel worker or nonunion in a tool-and-die or machine shop, you
probably cannot work until you are 70. Your body probably will not be
able to function in the workplace, with the physical and mental demands
now to work in the workplace until 70. Yet people here think it is OK
to do that.
The people here, I would add, can retire if they have 20 or 25 years
in the House and Senate. They can retire at 60 or 62 or whatever and
get a full pension. That is why I have introduced legislation--not
opposed to their balanced budget amendment. I think it has all kinds of
mechanisms in it that lock in low tax rates for the richest people in
this country. I will not get into that. Senator Durbin talked about
that.
But I have introduced the legislation that simply says if we raise
the retirement age to 70, then Members of Congress cannot retire with a
pension until 70. Why should Members of Congress be able to get a
pension at 62 or 58 if they served enough years, but a Social Security
beneficiary should not until a decade or so later?
So it is important, as we talk about balancing the budget, as we talk
about our fiscal situation, not to make a moral equivalence between the
richest people, the richest 1 percent in this country paying their fair
share in taxes, making that a moral equivalence to Social Security and
Medicare beneficiaries having to endure significant cuts.
Some people around here call Medicare and Social Security
entitlements. They can be dismissive: We have to fix entitlements.
Well, talk to a 72-year-old in Dayton or a 68-year-old in Zanesville or
an 81-year-old woman in Xenia or Springfield, OH, and they will tell
you oftentimes this is not really an entitlement, this is an
investment. They paid into Social Security. They paid into Medicare.
They want to make sure the government fulfills the covenant that we
made over the last 75 years in the case of Social Security, 45 years in
the case of Medicare, the covenant that we made between our government
and the citizens of this country. That is the importance of that. We
need to think twice.
That is why my legislation was introduced, in part, that Congressmen
and Congresswomen cannot receive a pension before the same retirement
age as Social Security beneficiaries. We need to think twice before we
are going to tell a carpenter or a barber or a retail worker or a steel
worker that we are going to raise the retirement age and make them work
until 70 so they can receive Social Security benefits.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. COBURN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COBURN. I ask unanimous consent that I be allowed to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Making Tough Choices
Mr. COBURN. I am coming to the floor now because we will not have an
opportunity to debate on the payroll tax cuts because the vote is going
to be at 2:30 and that time is taken.
I think it is important for the American public to look at what is
happening in Washington right now. There is not a disagreement in
Washington about whether we want people to continue to receive this tax
cut. The disagreement is, should it come out of Social Security? Should
we continue to undermine Social Security or should we do it a different
way? That is No. 1.
No. 2 is, if we are going to borrow $117 billion against our children
knowing that we have significant waste, fraud, abuse, and duplication
in the Federal Government of in excess of $350 billion a year, should
we not eliminate some of that, pay for this rather than borrow the
money?
So we have the posturing between the two parties based on the
election that is coming to create a predicate that some people only
care for the rich and some people only care for those who are less
fortunate, which is all smoke and mirrors. There is unanimity that we
want this to continue. So what the American people are not hearing is
the real debate.
The real debate is, should we eliminate some of the waste, some of
the stupidity, some of the duplication in the Federal Government and
actually do that to be able to pay for this so that as we do this thing
that we all want to do--in other words, keep this $1,000 to $2,000 per
family in the economy now--that we do not do that by crippling the
children of the very people who are in the economy.
You know it is a zero-sum game. Somebody is going to pay the bill
sometime. If it is us who refuse to do the hard work of ferreting out
waste, duplication, fraud, then our service will have been in vain
because what we are really doing is transferring to our children the
responsibility for us today. Actually, it is going to come doublefold
because the way this bill is lined out is we are going to borrow the
money in the market to pay for this continued decrease in Social
Security taxes.
We have already stolen $2.6 trillion from Social Security, Congresses
have the last 20 years. When we borrow that money and put it back in,
there is no reduction in what is owed, so our kids are actually going
to get to pay for it twice. They are going to pay for it now with the
new debt that we are taking, and the fact that new payment was not
recognized as a reduction, they are going to get to pay it again.
So it is going to cost our children a quarter of a trillion dollars.
There is a lack of honesty in talking plainly with the American people.
They know we are in trouble. The question is, Will we be honest with
them, treat them as adults in terms of how we go about solving the
problem? We hear the mess. The press takes advantage of that. There is
not a lot of difference between the Senator from Ohio who just spoke,
in terms of what we want to do in terms of protecting seniors. But the
politics surrounding it and the game playing poorly serves our country.
So for all the press that is watching, we are going to get this done.
I know it is the game Blood Sport that is happening right now, with the
press saying: Will they or will they not? It is going to happen. We are
going to fix unemployment so that we have a continuation of that. The
real question is, Will we fix the real things that the
[[Page S8440]]
country needs fixed or are we just going to kick the can down the road?
What we are doing is kicking the can down the road because we won't
make the tough choices to pay for it. We won't pay for the unemployment
benefits. The first 26 weeks is what is earned; that is what people
contributed to. We are up to 99 weeks, and that comes directly from the
American taxpayer--it actually comes from the future American taxpayer.
Some real questions ought to be asked. What is the game being played
in Washington by both sides--trying to get advantage in the next
election? As our country drowns in debt, we continue to further
mortgage our children's future, and we continue to treat the American
people like children rather than the adults they are. Everybody knows
we are all going to have to sacrifice. Does that mean we are going to
abandon the social safety net? No, it doesn't. Does that mean a 62-
year-old who is trying to get on Social Security is not going to get
there? No; they are. Those are the tactics of fear that something will
not be there. As a fiscal conservative or a constitutional
conservative, I want us to fulfill our obligation to the promises we
have made and to our oath, which is to uphold the Constitution. Thomas
Jefferson said you should never borrow money which you have not laid a
tax to pay for. He is a Founder--one of the Founders of our country. We
would do well to go back and revisit the wise and prudent advice of our
Founders. You don't see that or hear that much anymore in the U.S.
Congress.
These are big problems our country is facing. I am 63--soon to be
64--years old. We have never faced anything close to what we are facing
today. How we react and how we respond is going to make all the
difference in the world--not only for our short-term future but also
for our long-term future.
I hope the American people who are listening right now understand
that we are going to do what is necessary to help get the economic
process of our country running again in a better and viable way. I hope
you will dismiss the partisan rhetoric and the class warfare rhetoric
that is all too commonplace today. If we will focus on what the problem
is rather than the next election, we will have a great deal more
success in coming together and forging solutions the American people
can be proud of and we will actually move our country ahead.
With that, 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. BEGICH. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Cordray Nomination
Mr. BEGICH. Madam President, first, I want to comment on the Cordray
appointment that was attempted a little bit ago, and then I want to
bring up some more good news on the economic front.
First, I was somewhat disappointed in the vote of 54 to 45, garnering
only 1 Republican from the other side--only 1--and on such an important
agency that ensures the protection of consumers in a variety of areas.
It seems illogical to me that we would not find compromise in a vote to
appoint someone to run an agency that this body, in a 60-vote margin,
approved to help protect consumers, particularly considering what has
happened over the last several years and the glaring problems and
challenges consumers have had to endure with the financial institutions
of this country as well as from other entrepreneurs, such as pawnshops
and payroll check cashers. All of these institutions would have firm
regulations and provide the consumer an opportunity to respond, or
those who get abused by those programs.
I am a little disappointed. I wasn't intending to come and speak on
that issue, but I wanted to have my voice on the floor that I was
disappointed that an appointment could not happen, which I believe is
raw politics. It has nothing to do with the individual's ability to
make this agency run properly. They didn't want to appoint him because
they didn't like the agency--the 45 or so who didn't vote for it. And I
think it all boils down to one very simple thing: Consumers are now,
once again, left without someone running an agency that will help
protect them against these people who prey on individuals in the
financial arena.
The Economy
Again, Madam President, I am somewhat disappointed, but let me get to
the real reason I came to the floor. I came down yesterday and had a
lot to say about the economy and where we are and the headlines that
were reported yesterday. And in less than 48 hours--27 hours--there are
more good news headlines.
These are some of the headlines I talked about yesterday: ``Jobless
Rate Dips to Lowest Level in More Than 2 Years.'' New York Times. CNN:
``Dow Closes With the Largest Gain Since March 2009.'' ``Private Sector
Jobs Soar. Payroll Forecasts Rise.'' That is Reuters. The Wall Street
Journal: ``Online Sales Reached Record $1.25 Billion on Cyber Monday.''
On top of that, we had record sales for Thanksgiving weekend--Black
Friday they call it, and Small Business Saturday. Again, an incredible
impact for our economy.
What this tells me--even though we get a lot of criticism from the
other side and others who complain maybe we are not doing our job and
are frustrated that Washington isn't working as well as it could--and I
agree there are a lot of areas where we are not able to move forward,
such as the appointment I mentioned a few minutes ago--is there are
good examples of policies we have worked through over the last 3 years
during this great recession. We have fought kind of a lonely war to get
these policies in place.
Once again, more good news, and let me read off a couple. This week's
Time magazine has a whole article entitled ``How America Started
Selling Cars Again.'' Why is this important? Because this is a
manufacturing base for our country. It employs people not only in jobs
in the automobile industry but it trickles all the way through the
economy of the country. It doesn't matter if they are at a port, for
example.
I remember meeting recently with the folks from the Detroit Port
Authority talking about ships and the movement of product from the
automobile industry across this country, but also manufacturing and
other activities throughout the country that support the automobile
industry. It is moving forward. It is growing.
We took a dramatic step and got a lot of criticism for it. As a
matter of fact, no one wants to even mention the words, because
everyone is so nervous about it. Some call it an auto bailout. And,
yes, we did do that. That result is a healthy, strong, profitable
industry that is bringing jobs to America and creating jobs in America.
As a matter of fact, there was an article in the Wall Street Journal
not long ago talking about how we are importing jobs from Japan and
China back to the United States, to the automobile industry, because it
is successful.
And, oh, by the way, they are paying back all those loans they got
from the Federal Government with interest. So the taxpayers are getting
their money back in full. The net result is, because we helped at the
right time, we have ensured we are still a player in the automobile
industry not only in this country but in the world market. So for those
who want to continue to complain and to demonize that action, the net
result is we are bringing jobs back to the United States in this
industry.
The Cash for Clunkers Program was another piece of legislation that
barely passed. Again, many of us on this side of the aisle took that
lonely road because we thought it was the right thing to help move this
economy forward. Again, the net result is this industry is profiting
more in the last several years. They are producing more jobs not only
in their industry directly but indirectly. And the naysayers on the
other side rarely bring this up anymore, because in less than 3 years--
really, less than 2 years--this industry has turned itself around
because of American ingenuity and with the help and support from the
U.S. Government, and that help and support is being paid back with
interest in the good old American way.
So from my perspective, once again, this is a great story, and I
commend Time magazine for talking about the future.
[[Page S8441]]
Let me also talk about another one. This is from CNBC. I pulled this
off because I like looking at all the business magazines and Web sites
every morning. I glance through quickly to see what is happening, what
the markets are doing, what the industry is doing, who is investing,
what are the new businesses, and what is happening out there. Here is
this one: ``U.S. Mortgage Applications Jumped Last Week.''
This is the industry that fell apart in the beginning of the great
recession--the housing industry. A lot of people say that was the main
reason the economy collapsed. It was a significant portion of it, no
question about it. But let me read this.
The Mortgage Bankers Association said its seasonally
adjusted index of mortgage application activity, which
includes both refinancing and home purchase demand, spiked
12.8 percent in the week December 2. The MBA's seasonally
adjusted index of refinancing applications also jumped,
gaining 15.3 percent, while the gauge of loan requests for
home purchases rose 8.3 percent.
By loan requests, these are people who are now saying, I want to
think about buying a home. I want to purchase today. I want to start
examining what is out there.
Here is what the Mortgage Bankers Association's vice president of
research and economics said. These are his words:
Applications increased significantly as mortgage rates
dropped to their lowest levels in about 2 months.
Actually, overall, it is the lowest level in decades. But we now
measure things by an eighth of a point. So when you are at 4.125 or
4.25, we are now measuring which is lower overall, but it is lower for
the last several decades. Incredible.
Let me read another one. This is from Politico, but it is reporting
on the Bloomberg Global Poll--which they started doing in 2009 to sort
of see where foreign investors will put their money. Where will they
invest? Where will they take the dollars they have accumulated or will
gather through investors and shareholders and so forth? Where are they
going to put their money?
More than . . . 41 percent, said they expect the U.S. will
have one of the strongest performing economies in the world
in the coming year--the highest percentage the country has
seen since the Bloomberg Global Poll began in October 2009.
Here is another one. Today, again MSNBC. ``Jobless claims drop to 9-
month low.''
. . . jobless claims dropped 23,000 to adjusted 381,000--
That is actually below the magical threshold of 400,000, which people
watch. The question is, Will it be consistently under 400,000? We have
received more of these under 400,000 recently than in the last 3 years.
That is a good signal that the economy is moving.
I know some will say it is not enough. Well, when I came here, half a
million people were losing their jobs every single month. So we have
now had 21 consecutive months of job growth in the private sector. That
is a great statement for us as an economy, this 21 consecutive months
of job growth. It is an indication our economy is moving.
Do we want it to move faster? Of course we do. That is what America
is about. We want to see things happen right now--today. But this has
been called a great recession. Yet we are pulling ourselves out of it.
It takes time and it takes good policy. And, yes, it takes some
opportunity and taking a little risk, and we did some of that here. We
made some decisions that were tough and were not necessarily very
popular at times.
I remember many of the calls I received on some of these issues. But
what is the end result? That is what we have to measure by. Leadership
is not about waiting for a poll to tell us what is right or wrong or
waiting for someone to say, here is the right move because your
constituency will vote for you if you do this thing this way. It is
about leadership. Sometimes the leadership role is tough. It means
getting a few trucks running over you a little bit, leaving some tire
tracks on your back, but the end result is what we look for.
Today, where we are, we have job growth--not as significant as we
want but job growth. Where were we? Half a million jobs a month
disappearing.
Let me cite another one. This is a big issue people are concerned
about. As a former mayor, managing a city, you are always looking at
the revenues because the revenues tell you how your local economy or,
if it is State revenue, how your State is doing. If you remember, at
the end of 2008, 2009, and beginning of 2010, there was incredible
concern about local governments collapsing under the debt and deficit
spending and unable to manage.
As a matter of fact, the markets were concerned about municipal and
State debt and what that might mean. Oddly enough--and I wish I had
brought that article--it hasn't panned out as people thought. Local
governments, State governments are doing better than people
anticipated. It is still a tough road, no question about it. We still
have firefighters, police officers, and teachers who have been laid
off. We tried to pass a bill here to help that out, but that didn't
happen because too many on the other side opposed it.
But for State and local governments, here is the latest State revenue
report by the Nelson A. Rockefeller Institute of Government, University
at Albany, NY: ``Overall Tax Revenues Show Strong Growth in Second
Quarter.'' The article speaks to State tax revenues growing by 10.8
percent in the second quarter of 2011.
As a matter of fact, the year ending June 2011--which is the end of a
lot of fiscal years for State and local governments--the period
corresponding to 46 States--almost all of the States' fiscal years--
total State collections increased by $58 billion in that year, or 8.4
percent, from the previous year, the strongest annual gain since 2005.
What does that mean? That means local economies, State governments,
are starting to recover. It is still a rough road but starting to
recover. Good signs. That means there is more economic activity within
their communities. It means businesses are replanting and redesigning
their opportunities in those communities. People are buying homes, as I
mentioned, which means they are paying property taxes, which means
those local governments can hire police and fire and paramedics and
teachers.
Again, I could probably come here every day and give this kind of
good news. Because what we all hear--today, the market is down. I
forget what it is--70, 80 points, maybe 100 today--but the headlines
will be: market crashes or market dips significantly.
Here is the reality. Since March of 2009, the market is up, even with
today's activity, 81 percent. That means my son's 529 account is better
today than it was 3 years ago. That is good because that means my wife
and I can afford to make sure he can go to college someday. But it also
means retirement accounts have more resources in them today than they
did 2\1/2\ or 3 years ago. It means public pension programs and
investment retirement programs that invest in these kinds of markets
also are doing better. But, again, the headline will be that the sky is
falling because that is what people like to do. They like to prey on
fear rather than opportunity.
I think a lot of us on this side believed in the opportunity, in the
future of this great country 3 years ago when we sat here and made some
tough decisions over the first 18 months in my term. Tough decisions.
But we believed in what was possible. We believed that this economy
would turn around with a little help from the people who live here,
work here, and see the future.
We also knew we had to do a little bit. We had to do something
extraordinary to create the opportunities for the future of this great
country. As I mentioned, private sector jobs increased, the automobile
industry better than ever before, home sales doing better than they
were 2\1/2\ years ago, the market is up by 80 percent--all good news.
But we don't hear a lot of those as the front-page, above-the-fold,
big, bold headlines because they are not sexy. They are not
controversial. But that is what is happening. If a lot of us around
here had more belief in the potential, it would be incredible what
could happen.
Let me end on this note; that is, we are in the middle of the debate
on continuing tax relief for the folks who are working every day, the
people I just talked about who are buying homes, buying cars, paying
taxes. We are saying to them: We want to make sure you
[[Page S8442]]
continue to receive the dollars in your pocket.
In my State, that is $300 million--just in my State, $300 million
with the payroll tax deduction that they get to keep for 400,000
Alaskans instead of the IRS taking it. I don't know about you, but I
think that is a good thing.
I know some will say: We have no proof this works. Well, I just gave
proof. I will give proof every day if necessary. Yes, we can't say this
certain industry came back because of this one little item. But I will
tell you, if we put $300 million in my State into the hands of 400,000,
Alaskans, a little over $1,000 per person, the net result is they are
going to spend that money in the economy. They are going to buy that
car, that washing machine, or go on that vacation. They are going to
spend that money in this economy. Yes, there is no fancy report that
said this business succeeded because we gave them this special tax
break--which we shouldn't do. We gave to the people of this country an
incredible opportunity to take their money and put it to work.
Mr. President, 160 million families will benefit--160 million
families will benefit by this action today. People making $50,000 or
less will put back about $1,000 into their pockets again--not in the
IRS's pocket but into the consumers' pockets that they will spend.
Again, I will hear from the other side how bad it is, that there is
no proof, that this may not work. It is working. They can deny it all
they want, but I will continue to lay all the facts down. It is not me
producing this out of some government document. It is mostly some very
conservative publications reporting on the good news.
I hope the folks on the other side--and I know we picked up a
Republican from when we had this before. This is a modified,
compromised version that didn't pass last week to say: OK, we are
trying to compromise. But we are keeping it simple and trying to do it
in a way that ensures that middle-class Americans, and Alaskans whom I
represent, put more money in their pockets, people who are working
every day, making a difference in the economy--not people who are just
on the top end of the cycle. I know that is the great debate, and we
differ and I differ with several people on the other side.
I do believe people who make $1 million or more should pay a little
bit more. I don't have any heartburn over that. It is 235,000 people we
are talking about versus 160 million. That is who I want to put my
investment in because I know those people, who are individuals,
families, and a significant portion of small businesspeople who will
continue to build this economy.
As a matter of fact, the best growth period and growth pattern right
now is small business. They are the ones that are the backbone of this
economy. Those are the ones that we need to help. That is what this
bill does. I hope we find the magical success.
I wish we would have 50 majority votes like the rest of this world
operates under. For some reason, this place has to have special rules
and make it complicated and hard for anything to get done. But maybe
there will be some people who join and want to support the American
people and support giving them tax relief and making sure their lives
are better, especially at this time of year with Christmas around the
corner. I would love to give them a good Christmas gift. I think all of
us would. Let's do it. Let's do it today. Let's do it for the American
people. Let's do it for my constituency in Alaska, for your
constituency, Mr. President, and all the rest in this room.
Mr. President, if there is one thing I look for, if it makes a
difference for Alaska, if it is about Alaska, I am there. This is not
only about Alaska, it is about this country. It is about the middle
class. Not only am I there, I am double there, and I hope we find
opportunity in this Chamber to do the right thing.
Mr. President, I ask unanimous consent that any time spent during a
quorum call between now and 2:30 p.m. be equally divided.
The PRESIDING OFFICER (Mr. Blumenthal). Without objection, it is so
ordered.
The Senator from Nevada.
Mr. HELLER. Mr. President, today the Senate will consider my
legislation again to extend the temporary payroll tax cut.
This week, the Senate has been given another opportunity to do the
right thing and provide much needed relief to the American worker.
It shouldn't be news to anyone that Americans are desperate for
solutions. Millions of Americans are unemployed, underemployed, or have
simply given up looking for a job.
In between looking for a job or higher paying employment, Americans
are busy trying to figure out how to handle high health care costs,
looming bankruptcy, and the threat of foreclosure.
As a Senator from Nevada, I understand how difficult it is, perhaps
more than any of my other colleagues. My State has the unfortunate
distinction of leading the Nation in unemployment, in bankruptcies, and
in foreclosures. I hear from my constituents every day on these issues.
Nevadans--Democrats, Independents, and Republicans--are looking to
Congress for answers, and they are frustrated that they are not getting
them.
Even with the economic difficulty Americans across the country are
experiencing, Congress appears to be prepared to stage a partisan
standoff rather than extending a payroll tax cut for hard-working
Americans. I cannot allow this to happen. Americans deserve solutions.
The plan I have introduced to extend the payroll tax cut is a
workable solution that will provide relief for Americans responsibly.
In fact, the solution I am proposing today borrows a cost-cutting idea
from the bipartisan Simpson-Bowles Commission that can actually pass
Congress and be signed into law.
My proposal allows American taxpayers to hold on to more of their
hard-earned wages while not punishing the Nation's job creators as the
majority proposes. Under my plan, American taxpayers will not see a tax
increase. In fact, my plan prevents a tax increase on those already
receiving a payroll tax credit. Today, Congress can do the right thing
by allowing employers to continue to invest in their businesses so they
can plan for the future and, of course, hire more workers.
I understand that Democrats would prefer to pay for the payroll
extension by raising taxes on employers. But treating tax dollars
responsibly is absolutely necessary if we are going to see long-term
economic growth in this country. In this case, we can extend the
payroll tax cut and still pay for it.
I also understand that not all Republicans support my plan. To be
honest, I disagree with some of my colleagues who claim a payroll tax
holiday is not necessary. I believe that we should allow more Americans
to hold on to their hard-earned wages. For those who are already
struggling to live within their means, this payroll tax cut will
continue some much needed relief.
Today, I am asking my Republican and Democratic colleagues to come
together and join me to help continue the payroll tax holiday without
raising taxes on businesses in America. This will help preserve long-
term job growth in the future.
My proposal is a workable solution containing provisions endorsed by
both the majority and my colleagues in the House of Representatives.
This is the only version of the payroll tax cut that has the potential
to pass Congress and to be signed into law.
My proposal pays for the payroll tax cut by reducing government
spending where it is no longer needed and requires the richest
Americans to pay higher premiums for Medicare. This will allow us to
strengthen and preserve Medicare for those Americans who rely on the
program the most.
This is the same approach endorsed by Democrats who say the richest
Americans should do more. Americans want solutions. They do not want
more partisan bickering.
This week Congress has another opportunity to do the right thing to
help hard-working Americans extend the payroll tax cut holiday.
I make calls back to my home State every week. In those calls, I ask
Nevadans if they think their children will have access to a better,
brighter future than their own. For the first time in history, a
majority of Americans and a majority of Nevadans believe their children
will have less opportunity. By continuing down this path of
partisanship, Congress is robbing the American people of the dream for
their children. This needs to stop.
[[Page S8443]]
We in this body need to seriously consider the high stakes of the
political games that continue to unfold on this Senate floor. American
workers need solutions and they need relief right now. Congress should
come together today, put partisanship aside, and pass meaningful
legislation that will benefit all Americans.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CASEY. 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. CASEY. Mr. President, I also ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CASEY. Mr. President, I rise this afternoon to speak about an
issue we will be voting on today and we have been discussing and
debating now for a number of days. We are into our second week of
debate about a cut in the payroll tax. Just by way of review--and so
many Americans have been following this debate--here is where it
basically stands between what we did last year and what we are trying
to do this year.
Last year, as part of a larger tax bill, we reduced the payroll tax
for employees across the country from 6.2 percent to 4.2. So that 2-
percent reduction meant millions of American families were able to have
about $1,000 in their pocket of take-home pay they wouldn't have had
otherwise absent that action in the tax bill. What we are trying to do
this year--and I should start with what I tried to do last week, and we
got 51 votes for this--is to say we should not only continue or extend
that cut in the payroll tax but we should expand it. So instead of
saying it should go from 6.2 to 4.2, we take it down to 3.1. In
essence, what we tried to do last week was cut in half the payroll
taxes that relate to employees. We wanted to add to that cutting in
half the payroll tax for small businesses, and they would benefit
disproportionately. Thirdly, we wanted to add to that a tax credit so
that if an employer hired or increased wages for employees, if an
employer expands their payroll in one of several ways, they can get a
tax credit equal to an elimination of the payroll tax. So instead of
the usual 6.2, you would be down to zero. So the combination of those
three would mean we would be helping employees by cutting their payroll
tax in half, helping employers by cutting their payroll contribution in
half, and then have this third element as well for employers who
actually hired people or added to their wage base.
Unfortunately, in the Senate, because we needed 60 votes and got 51,
we knew at that point we couldn't get enough support from the other
side of the aisle. So what I did, in working with our leadership and
working with folks in the Senate, was to refashion the legislation so
that we made it smaller. We reduced the cost of the overall proposal by
some $80 billion. We also concentrate on just the element we worked on
together last year, which was the employee side.
Here is where we are in this debate about cutting the employee
payroll taxes. It is down to this question: Should we cut it to 4.2, as
we did last year, or should we cut it further and reduce it in half? I
believe we should, and I think most Americans believe that.
Here is what it means to folks out there. Instead of saying we will
continue what we did last year--which would be about $1,000 per worker,
in essence, per family, on average--if we cut it in half, we can get
that number up to $1,500. So it is not just putting money in people's
pockets and continuing to do that for another year, but it is more
money. It would go from roughly $1,000 to approximately $1,500.
That is where we are. Unfortunately, we are not yet sure we can get
the support we need to do that.
Here is what it means to Americans. It means more money in their
pockets, more take-home pay, but it also means that if we don't, at a
minimum, extend the payroll tax cut from last year--here is what it
means on two issues: GDP--gross domestic product--and jobs. According
to Mark Zandi of Moody's--someone we have quoted often on both sides of
the aisle and relied on his expertise--not extending the payroll tax at
least to the 4.2 level would reduce 2012 growth of real GDP in a State
such as Pennsylvania, by way of example, by 0.52 percentage points.
That means we are talking about gross domestic product or gross State
product, in a sense, in a State such as Pennsylvania, cutting it in
half instead of allowing it to grow. So this has a real adverse
consequence for Pennsylvania and for the country if we don't do what we
did last year.
Of course, if we did more than we did last year, as I think we should
and I think most people do, we could not only not fall behind, but we
could move forward dramatically.
Here is another way to look at it: Jobs. According to Mark Zandi, not
extending the payroll tax cut will cost Pennsylvania 19,700 payroll
jobs in the calendar year 2012. For context, in the State of
Pennsylvania last year, the payroll tax job creation number--or payroll
jobs added last year--was 54,500. So we created last year in a State
such as Pennsylvania almost 55,000 jobs. But if we don't extend the
payroll tax cut this year, we are talking about losing as many as
almost 20,000 jobs. This is a substantial factor in the discussion
about our economy. It would have a substantially adverse impact if we
don't keep the payroll tax cut in place.
As I said before, we should do more than we did last year. We should
cut it in half. It would give people across the country peace of mind
in two time periods: The next couple weeks when they are going out and
shopping and enjoying the holidays. We want people to spend as much as
they feel they can, and if they know they are going to get $1,000 to
$1,500, they can spend more in this upcoming holiday season. But it is
especially important for 2012. Why should taxpayers have to live with a
tax increase because Washington just didn't get along and the same old
political games were played in Washington instead of saying let's come
together in a bipartisan way and extend and expand the payroll tax cut
from last year.
We have lots to do in the next couple days and weeks. But maybe the
most important thing we can do in the next few days is to make sure we
cut the payroll tax again. Because this is about whether we are going
to give people peace of mind as we head into a new year and whether we
are going to put more money in their pockets in order to jump-start the
economy, to give the economy the jolt we got at the end of last year.
Last year, we came together and passed a tax bill and we had average
job growth from February, March, and April 2011--those 3 months--
average private sector job growth of just about 240,000 jobs. We need
another 3-month period similar to that. In fact, we need another 6 or 7
or 8 months similar to that. But the only way to get there is to put in
place this payroll tax cut.
I hope when we vote later today, we will get at least 60 votes for
this effort to make sure we are giving Americans peace of mind and more
money in their pockets.
With that, I yield the floor and note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BLUMENTHAL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Sanders). Without objection, it is so
ordered.
Mr. BLUMENTHAL. Mr. President, I ask unanimous consent to speak
despite the expiration of the majority's time.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. BLUMENTHAL. Thank you, Mr. President.
Mr. President, I begin by thanking my colleagues, many of whom served
in the last Congress. I thank them for extending the payroll tax cut at
that time, providing a payroll tax cut from 6.2 percent to 4.2 percent.
I thank them on behalf of myself. I was not a Member of this body at
that time. I thank them on behalf of the American people. They are due
that thanks and appreciation for that vision and courage in extending
that measure in cutting the
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payroll tax so as to lessen the recession. We have only to listen to
the virtually unanimous opinion of economists to the effect that we
saved the Nation, this body saved the Nation from a deeper recession.
Now I ask my colleagues to undertake a similar mission, to accomplish
the same goal, to once again save the Nation from a deeper recession.
The recovery of this Nation's economy has been fragile and slow. Many
economists--notably, Mark Zandi, who has been quoted by my
distinguished colleague from Pennsylvania--say that a failure to extend
it will mean a new recession. We are talking about average Americans,
ordinary people who are hurting and struggling. They are hurting
economically and struggling to find jobs. They are struggling to stay
in their homes and keep their families together at a time of year when
joy and satisfaction ought to be the quality of their lives. They
deserve this measure of peace of mind, as my colleague from
Pennsylvania, Bob Casey, has referred to it. But all of us--the entire
Nation--deserve the economic security, which is a matter of national
security.
Rescuing this country from continuing debt and deficit means
returning to full employment. Twenty-five percent of our deficit can be
eliminated by going back to lower rates of unemployment.
Economic recovery is a means to countering and curtailing what the
former Chairman of the Joint Chiefs of Staff called a national crisis
and a security threat.
Economic recovery depends on consumer demand. As I go around the
State of Connecticut, businesspeople tell me what they need most is
consumer demand. Their confidence and certainty about the future of the
economy, their willingness to invest, depends on consumer demand. That
kind of factor, that need is what ought to motivate all of my
colleagues--every Member of this body--to vote for this measure, not
only extending that payroll tax cut but also reducing it by 3.1
percent.
We are talking about anywhere from $1,400 to $1,500 or more in the
pockets of people around the country, people around the State of
Connecticut. The average middle-class family in Connecticut earns
$83,797 per year and would save $1,676 in taxes under the current
payroll tax cut. Let me give you those numbers again. The average
middle-class family in Connecticut earns $83,797 per year--back in
their pockets $1,676 in taxes under the current payroll tax cut as
proposed in this measure.
We are talking here about a compromise. Our side of the aisle has
modified this bill to make it about one-third smaller in size and cost.
This legislation will no longer give employers a tax break. We have
pulled back on the magnitude of this measure. But it will still affect
160 million workers who will receive nearly $1,500 in additional take-
home pay.
This bill will be paid for by measures that were coming from the
deficit reduction proposals contained in a number of the
supercommittee's ideas. It is paid for by fees charged by Fannie Mae
and Freddie and by a proposal suggested by my colleague, the Republican
leader. The cost-saving reform suggested by him would make millionaires
ineligible for unemployment compensation and food stamps.
This legislation also levies a surcharge, a temporary 10-year
surcharge, on the highest earners in American society, who can well
afford it when their own interests would be extraordinarily well served
by the consumer demand and economic recovery that would be generated.
I know many of my colleagues, including the Presiding Officer, are
concerned about the effect on Social Security, and so am I. The Social
Security trust fund is a trust, a sacred trust that we are honor bound
to protect. And I would not vote for this measure if I thought it
created a threat, a real threat, to the viability of that fund. But I
believe the assurance we have received from the chief actuary of that
fund--and it is contained in a letter to Secretary Geithner and to
Jacob Lew, it was printed in the Congressional Record yesterday by
Senator Casey, and it assures that the effect would be negligible. In
fact, it says the trust funds would be ``unaffected.'' It uses that
word, and I will quote directly from the letter.
We estimate that the projected level of the OASI and DI
Trust Funds would be unaffected by enactment of this
provision.
That letter comes from the chief actuary of the trust fund, and I am
prepared to rely on that assurance and to say that I believe this kind
of measure is the responsible thing to do at this point in our economic
history to make sure our recovery is continuing.
The effects of failing to do so: The economists differ whether the
rate of growth will suffer by .5 percent, which is Mark Zandi; or .66
percent, Goldman Sachs; or 1 percent, RBC Capital Markets; or 1.5
percent, Michael Pond. Whatever the specific percentage, we know it
will be grave and serious in the damage to our economy if we fail to
extend and enlarge the tax cut.
So I urge my colleagues to heed the voices they are hearing back
home, as I am hearing from ordinary citizens, middle-class families.
We are talking about a middle-class family measure that will benefit
people like Marilyn in Bloomfield, who writes to me:
I believe these cuts need to remain in effect in order to
avoid deepening the recession we are in. I urge you to
support the President's jobs plan and pass as much of it as
you can in upcoming legislative sessions, for the benefit of
struggling families.
She writes and she says ``to urge you to vote in favor of extending
the payroll tax cut for workers beyond Dec 31. . . . ''
Listen to people like Ginny. They are in every one of our States.
Ginny, who is from Southport, CT, writes:
I know you will do the right thing when the payroll tax cut
and increasing the taxes of only the 2nd million and above of
wealthy Americans comes up for a vote. I have faith in you.
With the economy still struggling to recover and millions
of Americans struggling to put food on the table this holiday
season, we cannot afford to raise taxes on working Americans.
Those voices from middle-class families are reaching this body every
day. We have heard them before. This body heeded them last year in
enacting this tax cut. I thank every Member who voted for it. It was a
bipartisan vote. I hope this one will be as well. I will be proud to
join Members from both sides of the aisle, and I hope this measure will
have support--overwhelming support--from both sides of the aisle in
showing the American people we can come together, bridge our
differences, and compromise.
This measure reflects a compromise on both sides. I hope it will be
passed later in the day.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. WHITEHOUSE. 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. WHITEHOUSE. I thank the Chair.
The PRESIDING OFFICER. Under the previous order, the question occurs
on agreeing to the motion to proceed to S. 1944, which is subject to a
60-affirmative-vote threshold.
Mr. WHITEHOUSE. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The clerk will call the roll.
The bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from Massachusetts (Mr.
Kerry) and the Senator from Wisconsin (Mr. Kohl) are necessarily
absent.
The PRESIDING OFFICER (Mrs. McCaskill). Are there any other Senators
in the Chamber desiring to vote?
The result was announced--yeas 50, nays 48, as follows:
[Rollcall Vote No. 224 Leg.]
YEAS--50
Akaka
Baucus
Begich
Bennet
Bingaman
Blumenthal
Boxer
Brown (OH)
Cantwell
Cardin
Carper
Casey
Collins
Conrad
Coons
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Inouye
Johnson (SD)
Klobuchar
Landrieu
Lautenberg
Leahy
Levin
Lieberman
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Schumer
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden
[[Page S8445]]
NAYS--48
Alexander
Ayotte
Barrasso
Blunt
Boozman
Brown (MA)
Burr
Chambliss
Coats
Coburn
Cochran
Corker
Cornyn
Crapo
DeMint
Enzi
Graham
Grassley
Hatch
Heller
Hoeven
Hutchison
Inhofe
Isakson
Johanns
Johnson (WI)
Kirk
Kyl
Lee
Lugar
Manchin
McCain
McConnell
Moran
Murkowski
Paul
Portman
Risch
Roberts
Rubio
Sanders
Sessions
Shelby
Snowe
Thune
Toomey
Vitter
Wicker
NOT VOTING--2
Kerry
Kohl
The PRESIDING OFFICER. On this vote, the yeas are 50, the nays are
48. Under the previous order requiring 60 votes for the adoption of
this motion, the motion is rejected.
The Republican leader.
____________________