[Congressional Record (Bound Edition), Volume 157 (2011), Part 11]
[Senate]
[Pages 15073-15076]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             UPCOMING VOTES

  Mr. LIEBERMAN. Mr. President, I come to the floor to speak about two 
of the votes we will be casting at approximately 5:30 this afternoon, 
and to explain how I am going to vote and why. On the first, the 
legislation regarding China's currency policy, I am going to vote no, 
and I want to explain why.
  Managing our economic, military, and diplomatic relations with China 
is going to be one of the great challenges of this century. China is 
obviously a rising power today, though not one without problems, as I 
will get to in a moment. We have come to a point--China and the United 
States--where we not only interact and sometimes bump up against each 
other militarily, diplomatically, and economically, we also, in many 
ways, have become dependent on one another. What each of us does has an 
effect on the other, and often a significant effect. That is why I say 
one of the great challenges of this century will be to manage our 
relations with China in a way that is certainly beneficial and 
protective to the United States but, hopefully, to China, from its 
perspective, as well.
  I say this as background to what I want to say about China's currency 
policy. I am troubled by China's currency policy. China has obviously 
kept its currency too low. It is undervalued, and that has resulted in 
products being made in China selling elsewhere at a price that is lower 
than other manufacturers can compete with, including American 
manufacturers that are directly in conflict with China. So we are right 
to be upset about that policy. Our government has been expressing its 
frustration, its anger, to the Chinese Government. We have been 
negotiating, cajoling. I must say, in acknowledgment of reality, that 
the Chinese have slowly allowed their currency to rise approximately 30 
percent in value over the last 6 years, but it should be allowed to 
rise more.
  On the other hand, I do want to say, in fairness, that China's 
currency policy does have effects that are not all bad for everybody in 
the United States. The fact its currency is undervalued means some of 
the products it brings into our country sell at a lower cost, and that 
is obviously particularly important to middle-income and lower income 
families who are out buying products that otherwise would cost more. So 
I understand this legislation to be an expression of anger at the 
Chinese Government and an attempt to pressure the Chinese Government to 
more rapidly allow its currency to rise.

[[Page 15074]]

  I would say, as I understand it, the legislation before us is 
intended as a warning shot across China's bow, as it were. But China 
may, from its perspective, see this as an attempt to make a direct 
attack, a direct hit on its bow, and it may be tempted to retaliate 
economically. And of course the worst result would be that we would end 
up in a mutually damaging trade war.
  In some sense, it is no surprise we are considering legislation such 
as this now--though I think at any time we would be concerned about 
China's currency policy--because throughout history, during times of 
economic recession, such as the one we are in now--a recession that we 
are fighting to come out of and another recession we worry we are about 
to go into--nations have repeatedly become protectionist in their 
economic and trade policies. But history also shows most of the time 
that protectionist policy makes the economic problems worse, not 
better.
  Today--and here I get back to what I said about China being a rising 
power but not one without problems--China's economy, in its way, is 
also fragile. It is dealing with a bubble in real estate values that is 
growing. As the papers today indicate, its banks are losing their 
credibility, inflation is rising, and unemployment is rising. So it 
would be foolish for China to get into a trade war with us in response 
to legislation such as this. China, in fact, may be more vulnerable in 
a trade war than we are. But China's vulnerability economically today 
carries great risk for the United States and the world. If a trade war 
sends China's economy into a recession or worse, the resultant economic 
instability would seriously hamper prospects for the global economic 
recovery that everybody hopes for, and of course it would greatly 
dampen our hopes for an American economic recovery and creation of more 
jobs here at home.
  Bottom line: I think the risks this proposal will aggravate the 
current global and American economic problems which concern us most are 
greater than the rewards of again trying to force China to allow its 
currency to rise more rapidly, and that is why I will vote against the 
China currency legislation when it comes before us later this 
afternoon.
  I also want to speak about the American Jobs Act, which will come 
before us for a cloture vote. We are, obviously, hearing of Americans--
related to what I have just talked about--going through what I think is 
the most difficult economic period in our history since the Great 
Depression of the 1930s. Unemployment hovers at around 9 percent, which 
translates into millions and millions of people out of work, and 
millions more who are worried they are going to be next to lose their 
jobs. Confidence in our future among the American people, among 
critical decisionmakers and businesses, is at a real low. Confidence in 
our national government is low and falling. Anger at our rising 
national debt is high and rising. The American people are demanding we 
do something, particularly to protect the jobs they have and create new 
jobs if they have already lost them.
  It is in that context the President proposed the American Jobs Act--a 
series of interesting ideas aimed at creating jobs that will cost 
almost $\1/2\ trillion. So what am I going to do on this one? On this 
one, I am going to vote against the filibuster of the American Jobs 
Act, because I believe our country and our constituents need and 
deserve a debate here in the Senate on what each of us, all of us, 
think we should do to get our economy moving again. It should be an 
open debate, without an effective limit on amendments, with many ideas 
being offered as to what we should do, and hopefully that will lead us 
to some consensus. So I am going to vote against filibuster in the hope 
we will bring about such a debate.
  But I must say, if cloture is granted and the filibuster is ended, I 
will seek to amend the American Jobs Act down to a very few of its 
constituent parts that I think are worth their cost. If a vote were 
called on the American Jobs Act as it is now--in other words, if the 
tree were filled and that is what happened--I would vote against the 
American Jobs Act, and I want to explain why.
  The bottom line here is I don't believe the potential in this act for 
creating jobs justifies adding another $\1/2\ trillion to our almost 
$15 trillion national debt. In fact, I think the most important thing 
we can do to improve our economy, reduce unemployment, and create jobs 
is to bring our national debt under control. The best way to do that is 
to adopt a tough, comprehensive, balanced debt reduction plan, such as 
the one recommended by the bipartisan Simpson-Bowles commission.
  The Budget Control Act, which we adopted over the summer to deal with 
the debt ceiling, created a so-called supercommittee, the Joint Special 
Committee, and that committee of 12 now gives us another chance to deal 
with our debt in a constructive and bipartisan way.
  We all know it is not going to be easy, but the American Jobs Act 
would make the task of the Joint Special Committee even more difficult 
because it spends almost $\1/2\ trillion we don't have, $\1/2\ trillion 
the act now proposes to raise with a surtax on people making more than 
$1 million a year.
  I don't have any objection to a tax increase of that kind. But if we 
use it for the American Jobs Act, it is not going to be there to be 
used by the Joint Special Committee as part of an overall bipartisan 
debt reduction plan. We desperately need to have some sources of 
revenue, along with spending cuts, to adopt the kinds of reductions in 
our debt that the country's future urgently needs.
  Let me come back to what I said a moment ago and try to explain 
briefly why I believe these two great problems we have, our limping 
economy, our persistent level of high unemployment and our national 
debt, come together and, more explicitly, why I believe that reducing 
our debt is actually the best thing we can do to create jobs.
  The jobs we need are going to come from the private sector. 
Government in our system economically never has created the jobs 
itself. It shouldn't. It can't, anymore, because we don't have the 
money to do so. The jobs always will come where most people have been 
employed in our country, and that is in the private sector.
  If you chart corporate investment on the same graph as job creation, 
you will see the two lines follow each other almost exactly. This is a 
chart prepared by the Bureau of Economic Analysis at the Bureau of 
Labor Statistics of the Federal Government. Over the last 50 years, 
beginning in 1961 and going to 2011, it charts two things. The gray 
line is investment in real equipment and software spending, and the 
purple line is private employment numbers.
  When I saw this, I thought it was a stunning chart and very 
compelling, because you can see that corporate and private business 
investment is almost exactly along the same line. There is a little bit 
of a digression here because jobs fell more than investment, but 
investment was falling and jobs fell at the same time for 50 years.
  I think the single most significant predictor of job growth in our 
country is business investment. So we have to ask ourselves, how could 
we stimulate that kind of business investment today. Because that is 
what we need, we need these jobs. I regret to say I don't believe we 
can do it with the mix that is in the American Jobs Act. It seems to me 
like a kind of ministimulus. The stimulus of $800 billion that was 
adopted a few years ago, which I supported, I think made the economy 
better than it otherwise would have been, but it didn't give the 
economy what the President said he hoped and we all hoped it would 
give, which was a jolt. This American Jobs Act, which is kind of a 
ministimulus that will cost $\1/2\ trillion, is less likely, for 
obvious mathematical reasons, to give the economy the jolt. But it will 
cost $\1/2\ trillion we won't have and will have to find somewhere to 
raise.
  To me, what we have got to do is restore confidence in people in the 
business sector to invest. That is what is missing today in our 
economy. They don't have confidence in our economic future. They don't 
have confidence in our government--us. They don't have

[[Page 15075]]

confidence that we will work together to reduce our debt, to create 
some predictability for them in the years ahead.
  That is why I say the best thing we can do to restore the confidence 
of the business community necessary for them to begin investing again--
they have got the money; they are just not spending it because they are 
nervous about the future--is for us to come together, hopefully led by 
the Joint Special Committee, in a bipartisan debt reduction program. It 
is not this American Jobs Act. I know it has been put forward with good 
intentions, but I don't think it does the job we need it to do for 
America, and I know it will cost another $\1/2\ trillion we desperately 
need to reduce our debt which will do the job we need it to do to 
create new jobs for our fellow Americans.
  I thank the Chair, and I yield the floor.
  The PRESIDING OFFICER (Mr. Franken). The Senator from Virginia.
  Mr. WEBB. Mr. President, first, let me say there is a great deal the 
Senator from Connecticut just said that we are in nearly full agreement 
on. I find it ironic that we are probably going to cancel ourselves out 
on these two votes later in the day, for essentially the same reasons 
that the Senator just gave. I thank the Senator for his comments, and 
particularly on this second piece of legislation which I have been 
struggling with and in exactly the same way the Senator from 
Connecticut has.
  I wish to begin my comments today by expressing my strong support for 
the majority leader in terms of how he handled a very difficult 
discussion on Thursday night.
  I think we can all agree that the Senate at times has become quite 
dysfunctional over the past couple of years. I was very interested to 
hear Senator Corker's comments. He and I arrived at the Senate at the 
same time, and I empathize with a lot of the comments he was making, 
although I guess looking for accountability depends on which end of the 
telescope you are looking through.
  For me, looking at the situation we faced on Thursday night, we have 
to start with the reality that these were not serious amendments that 
were being offered at the end of the debate of this piece of 
legislation. They in many ways epitomize the paralysis of serious 
debate here in this body and how it affects all of our ability to get 
serious things done. Only one of those nine proposals was germane, and 
that was the proposal from my good friend Senator Hatch. They were not 
relevant. This is what the majority leader is being faced with time and 
again. We are talking about one amendment on the bill with respect to 
China currency that wanted to talk about the regulation of nuisance 
dust. We had another one that wanted to talk about the use of 
pesticides in navigable waters, and another one that wanted to talk 
about EPA regulation on cement manufacturing. There may be a time and a 
place for that kind of discussion; but if you look at the impact of 
this type of--and I have to agree with the majority leader's 
characterization--this type of dilatory conduct, it prevents 
responsible, germane legislation from moving forward.
  I will give you one example from my own attempt to amend this bill, 
and that was the amendment I offered last week that would have 
prohibited American companies from transferring intellectual property 
and technologies that were developed with the assistance of the 
American taxpayer to such countries as China that require technology 
transfer as a matter of doing business there. That amendment is not 
going to get a vote. I believe that amendment is something that most 
people in this body and most Americans would want to see passed. But 
because we have been in this state of paralysis, these types of issues 
have been deflected off the screen, off the debate on the Senate floor, 
and now we are moving forward with a bill that doesn't have these sorts 
of issues in it. I am going to vote for this bill, by the way.
  With respect to the jobs bill, I wish to make a couple of comments 
here, first associating with some of the comments that Senator 
Lieberman made. But also, there is an issue here with respect to 
economic fairness and the disparity in this country between top and 
bottom that I don't think is being properly debated in the context of 
this bill.
  In the end, as Senator Lieberman pointed out, I strongly believe the 
way to bring good jobs back is to improve our economy in the private 
sector, and that means more capital investment.
  Winston Churchill once said something to the effect that, You can't 
tax your way out of an economic downturn any more than you can pick up 
a bucket if you are standing in it.
  There is a lot of money out there. The Senator from Connecticut 
mentioned that. We can't control whether that money is going to be 
invested, but we can work to incentivize conduct that might encourage 
investment. I think people on both sides need to set aside the partisan 
debate that is going on looking into next year's election and work 
toward that end.
  At the same time, there are two difficulties I have with this 
legislation. The first is the timing. Senator Lieberman was very 
eloquent in his concerns about the timing of this bill, with the 
supercommittee working on these issues in a larger context, getting 
ready to report out within the next month or so. Senator Corker made a 
very valid point that I hadn't thought about, and that is that we have 
worked--and I have been one of those who has worked--to bring these 
free-trade agreements to fruition. We have a very short window with the 
President of South Korea arriving this week and hopefully having a 
free-trade agreement passed by the time he makes his presentation to a 
joint session of the Congress.
  But there is another issue, and that is the pay-for. We are talking 
about this millionaire surcharge, this 5.6 percent that would be put on 
top of these other tax increases for the ``millionaires.'' But in many 
cases, this isn't even a tax on the wealthiest Americans it is designed 
to reach.
  Let me preface what I am going to point out here by saying I believe 
I have been one of the loudest and most consistent voices on the issue 
of economic fairness and executive compensation in this body. I raised 
it in every speech during my Senate campaign. I put it on the table 
nationally when I responded to President Bush's State of the Union 
Address in 2007. I put the issue of the disparity in executive 
compensation from when I graduated from college when a CEO was making 
20 times what the average worker makes, to today, when it is about 400 
times. I introduced a windfall profits tax after it became clear that 
the money we put into TARP was going to be used to unjustly reward 
executives from the companies that had been bailed out by our 
taxpayers. This was a very narrowly focused bill that said, If your 
company got $5 billion or more, you could get your compensation, you 
could get a $400,000 bonus, and anything after that you had to share 
with the people who bailed you out because they were bailing out the 
economy. I couldn't get a vote.
  Let's be fair. I couldn't get a vote because neither side wanted a 
vote. People don't want to take a vote on something that is that 
directly related to how they finance their campaigns. That is the 
honest truth. I didn't get a vote on it, but I think my record on this 
issue is absolutely clear.
  One thing I have stated from the first moment I ran for office is 
that I do not believe we should raise taxes on ordinary earned income. 
When this proposal was first put in front of the American people, there 
was a part of it in the pay-for that was called the Warren Buffet rule. 
But what I just said is the Warren Buffett rule--and it has been 
misrepresented in this debate. Warren Buffett has the same position.
  My understanding of his position, and I have read it very carefully, 
is that we should not tax ordinary earned income. In fact, he made a 
clarification about a week ago. This is Warren Buffett on the Warren 
Buffett rule:

       My program would be on the very high incomes that are taxed 
     very low. Not just high incomes. Somebody making $50 million 
     a year playing baseball, his taxes won't change. If they make 
     a lot of money and

[[Page 15076]]

     they pay a very low tax rate, like me, it would be changed by 
     a minimum tax.

  How do we do that, and does it matter? It matters a whole lot because 
we are not talking about this distinction when we are addressing issues 
of fairness in society, the true nature of what has happened at the 
very top in this country.
  The proposal of the President looks good at first glance; it sounds 
good on a TV bite. But in all respect to the people who put it forward, 
I do not believe it is smart policy, and it does not go where the real 
economic division lies in our country. This is what Warren Buffett is 
talking about.
  If we look at the top .1 percent of our taxpayers, the very top, two-
thirds of the money they take in is from capital gains and dividends. 
Only one-third is from wages.
  What does that mean with respect to this surcharge we are going to 
put down? This is what the surcharge on earned income for millionaires 
will do: It will bring the tax on ordinary earned income from 35 
percent--first, under the assumption of 39 percent, which is the 
failure to renew the Bush tax cuts--and then to 45.2 percent, someone 
making wages.
  Who is in this category? Very few people. Let's say someone is an 
athlete, as Warren Buffett mentioned, and they have 3 or 4 years in 
their career where they can make the money. They are going to get their 
income, because it is ordinary earned income, taxed at 45 percent of 
everything they make, just for the Federal taxation, at the same time 
that capital gains tax, which is where two-thirds of the top .1 percent 
of our earners make their money, is going to stay at 15 percent. That 
is what Warren Buffett is talking about.
  He is sitting here saying: I make my money off of stock sales, basic 
transactions where I get capital gains, and I am at 15 percent. My 
secretary is paying double what I am. The people who have ordinary 
earned income are going to pay three times the rate of what somebody is 
making on capital gains, and that is two-thirds of what the people at 
the very top make.
  If we went after capital gains--let's just say, notionally, let's say 
we allow the Bush tax cuts to expire on capital gains but keep them on 
ordinary earned income. This margin would be 35 percent of ordinary 
income versus 20 percent. What would that do? According to the Joint 
Committee on Taxation, over 5 years they could recoup $402 billion. 
That is almost as much as this other surcharge could make over 10 years 
in order to pay for this legislation.
  Most important, we are going into issues of fairness that we have 
been trying to bring to the table; that is, to truly focus on those at 
the very top who have benefitted the most from what has happened in 
what is frequently becoming a fractured economic society.
  I am going to vote the exact opposite way the Senator from 
Connecticut is going to vote, but I think he and I share many of the 
same concerns. It is just how we get there. If people are ready to 
discuss capital gains, moving it back up to what it was, from 15 to 20 
percent--if we are willing to discuss capital gains, I will know we are 
serious. If we are not willing to discuss capital gains, I think we 
have seen this movie before.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. AYOTTE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. AYOTTE. I ask unanimous consent to engage in a colloquy with 
Senator John McCain.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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