[Congressional Record (Bound Edition), Volume 155 (2009), Part 11]
[Senate]
[Pages 14293-14295]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            MIDDLE CLASS TAX

  Mr. JOHANNS. Mr. President, I rise this afternoon to speak about the 
President's announcement a few hours ago relative to pay-go.
  Today, the President said:

       Paying for what you spend is basic common sense. Perhaps 
     that's why, here in Washington, it has been so elusive.

  Well, I could not agree more. But I must ask: Where was that common 
sense when the President proposed to add $10 trillion to the national 
debt in the fiscal year 2010 budget submission? Where was this basic 
common sense when he signed a bill earlier this year that adds $1 
trillion in debt this year alone? Where was this newfound fiscal 
discipline when he proposed a massive universal health care proposal 
that is now turning out to be a government-run proposal with just a 
downpayment of $650 billion?
  The President's announcement undoubtedly was meant to quell rising 
fears about the amount of spending and borrowing his administration has 
undertaken. It was likely intended to calm the fears of those who buy 
our debt who are wondering if it is just paper.
  But do the President's words today in any way address the mountain of 
debt and increased taxes he proposed and supported just a few weeks ago 
with the budget submission? The answer to that is no.
  Today's announcement does absolutely nothing to decrease the rising, 
crushing debt we have accumulated. In fact, this President has 
significantly added to our debt, causing it to rise to an unprecedented 
level, an unsustainable level. Let me repeat that. The President's 
announcement does absolutely nothing to address our record spending and 
borrowing. This is akin to maxing out on the personal credit card and 
then promising not to use it anymore but offering no plan to pay off 
the balance.
  The President rightly pointed out today:

       The debate of the day drowns out those who speak of what we 
     may face tomorrow.

  Maybe it is an appropriate time to thoughtfully consider what we face 
tomorrow because of the unpaid credit card balance.
  It is important to dissect the rhetoric and speak to Americans who 
have been promised something I would suggest the President cannot 
deliver. Remember that those in the so-called middle class--and the 
definition of that has changed--have been told they will be shielded 
from tax increases. Well, I would suggest the evidence is obvious. The 
rug is about to be pulled out from underneath them by the President's 
explosive growth in spending and borrowing.
  If Congress continues to follow the President's unlimited spending 
spree and tries to balance the budget at the same time, the middle 
class will get hammered with tax increases. This, I would suggest, is 
the elephant in the

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room that no one in the Obama administration wants to discuss for fear 
of the consequences.
  But the American people deserve an open discussion about the real-
life consequences of big government and the runaway freight train of 
spending and borrowing that comes with bigger government.
  Supporters of the current budget claim that only individuals earning 
more than $200,000 will see their taxes go up; therefore, there will be 
no tax increase on the middle class. Yet such a tax on higher income 
earners still results in an average annual deficit hovering around $1 
trillion per year for the next 10 years, described by many to be 
unsustainable.
  Our national revenue simply cannot keep up with the bloated spending 
in the budget, and that is resulting in a shortfall.
  Let me illustrate this in an example. This is equivalent to a 
Lincoln, NE, teacher earning $33,000 per year but spending $58,000 per 
year--year after year. It cannot last long. So is the Obama 
administration going to continue this spending increase with only the 
revenue from the so-called rich? How can they continue running annual 
deficits with no end in sight? They cannot. Inevitably, the spending 
spree and exploding deficits will land squarely on the middle class in 
the form of higher taxes, unless we do something.
  The reality is, the Obama administration cannot continue the 
unprecedented level of spending while claiming to hold the middle class 
harmless.
  If you do not believe me, listen to leading economists.
  Martin Sullivan, a former economic aide to President Reagan, 
actually, who backed President Obama last fall, said:

       You just simply can't tax the rich enough to make this all 
     up.

  He went on to say:

       Just for getting the budget to a sustainable level, there 
     needs to be a broad-based tax increase.

  Leonard Burman, director of the liberal Tax Policy Center, said:

       [T]here's no way we're going to be able to pay for 
     government 10, 20 years from now without coming up with a new 
     revenue source.

  Finally, economist Paul Krugman, a New York Times columnist, wrote:

       I, at least, find it hard to see how the federal government 
     can meet its long-term obligations without some tax increases 
     on the middle class.

  All of these experts echo the point I am making: You cannot tax the 
rich enough to cover all the spending. Inevitably, what all of this is 
leading to is that the middle class will fall victim to massive 
taxation.
  I will put this into more tangible terms by examining how much the 
tax rate would need to rise to make up for only this year's projected 
budget deficit--just this year's projected budget deficit. The deficit 
for this year alone is an eye-popping $1.8 trillion. This does not even 
take into consideration the more than $12 trillion public debt we 
currently owe.
  Here is what would have to happen to the tax rate. The rates for the 
top four brackets would skyrocket from the current rates of 35 percent, 
33 percent, 28 percent, and 25 percent to an alarming 90 percent across 
the board. Imagine, people would have to work until Thanksgiving just 
to pay their taxes.
  Some may say: Well, this is great. Tax the rich because they can 
afford to pay more in taxes. Yet those making up the third and fourth 
brackets from the top can hardly be characterized as rich.
  Let's look at who actually falls in those income brackets. Currently, 
for tax year 2008, people who fall under the 25-percent bracket earn 
about $32,000 to $78,000.
  Does anyone want to come to the Senate floor and make the case that 
somebody making $32,000 a year in Nebraska is rich? The average salary 
in Nebraska is $35,000. I do not know anyone who would suggest that 
only wealthy people fall within the bracket.
  The average Nebraskan would have something to say about that in terms 
of whether they are wealthy. Let's look at the next bracket, those 
taxed at 28 percent. The income levels for this bracket are roughly 
$78,000 and $164,000 for singles. For married couples, it is $131,000 
to $200,000. What does that mean? This means that a landscape architect 
in Nebraska making $75,000 a year, hypothetically, married to an 
emergency room nurse making $59,000 a year would fall into a 90-percent 
tax rate. Again, I suggest if you asked this couple, I am quite 
confident they would not describe themselves as wealthy. Taxing the 
middle class to the tune of 90 percent would bring this economy to its 
knees.
  There is some notion in America that we, the people, should be the 
masters of our own economic success. If you tax someone at a 95-percent 
rate, you take away the economic incentive to be innovative, to strive 
for greater success. Eventually you end up with slim or no productivity 
or competitiveness. Yet this administration keeps spending as though it 
is monopoly money. Just this week, more directions: Get that money out 
there. Get that spending going. Their spending binge has an 
unsustainable course. Complying with pay-go alone won't even come close 
to fixing it. Maybe Congress would benefit from being coached by the 
same credit card counselors who help Americans who are drowning in 
debt. I will bet those counselors would have some stern words.
  My point is simple: This is not the right direction for our country. 
We must start to make spending decisions today that paint a realistic 
and candid picture of the impact on the middle class, and if it is the 
purpose of our Nation to hold them harmless, then we have to cut 
spending and we have to smart size our government.
  Working families across our Nation and in my State deserve an honest 
debate. It is time for Washington to take responsibility. The people at 
home I believe are demanding it. I often say Nebraskans have great 
wisdom to convey. I couldn't agree more with a gentleman from North 
Platte, NE, who wrote me a letter recently and he said this:

       It's important to remember that while government consumes 
     wealth, transfers wealth and sets the ground rules for the 
     generation of wealth, it is the private individuals that 
     create it.

  As a final note, the President today rightly acknowledged:

       The reckless fiscal policies of the past have left us in a 
     very deep hole.

  I would add to that: And the present.

       Digging our way out will take time, and patience, and tough 
     choices.

  Again, I could not agree more, other than I would add to that: The 
present.
  However, instituting pay-go does nothing to cut the deficit or the 
debt, it simply attempts to hold the line, which the President's budget 
fails to do. His proposal is actually a more liberal approach than what 
is already in House rules. Right-sizing government and cutting spending 
is far from revolutionary. So while the President is saying when you 
find yourself in a massive hole, stop digging, the more important 
question might be: How are we going to start filling up this gaping 
hole?
  Our country needs leadership, not the empty rhetoric I would suggest 
we heard today. The President's speech today sought to subdue the fears 
of many regarding our country's exploding deficits. I am sure it was 
targeted to those who buy that debt, who are expressing concerns about 
what they are purchasing. Yet people should not be fooled into thinking 
that pay-go is the holy grail for solving all of our spending and 
borrowing woes. I believe that while pay-go is a useful tool, when you 
look at the hard facts, you realize that President Obama's speech 
today, though, is simply too little and it is too late. The horse is 
already out of the barn, and the President is talking to us about 
closing the barn door.
  Thank you, Mr. President.
  Mr. ENZI. Mr. President, I rise today to speak in support of the Burr 
amendment No. 1246. The Burr substitute amendment takes major steps to 
restrict tobacco. It creates a new office within HHS to regulate 
tobacco. It puts in place a realistic, science-based standard for the 
approval of new and reduced risk products. It also requires states to 
do more on tobacco control--something we can all support.

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  As many of you know, I support strong tobacco regulation. I want to 
remind my colleagues that supporting a different approach to tobacco 
regulation doesn't mean being soft on tobacco.
  The Burr amendment is extensive--longer and more detailed even than 
the underlying bill. It makes it more difficult for kids to get tobacco 
and start smoking, and that is the most important thing of all.
  Whether we see the Burr proposal or the Kennedy proposal put in 
place, we still have our work cut out for us when it comes to putting 
out tobacco use. I am going to keep working on this issue, and I am 
going to keep putting forward new ideas to stop smoking. These 
proposals are a first step, but we have a long way to go.
  I urge my colleagues to support the Burr amendment.
  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. DODD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Kaufman). Without objection, it is so 
ordered.
  Mr. DODD. Mr. President, I further ask unanimous consent that I be 
allowed to speak as in morning business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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