[Congressional Record (Bound Edition), Volume 157 (2011), Part 12]
[Senate]
[Pages 16503-16505]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               TAX REFORM

  Mr. THUNE. Madam President, as we debate here in the Senate how to 
get our economy going again to deal with what is a stagnant economic 
set of circumstances, something that we have been grappling with now 
for a few years, I think it is instructive to look at what is happening 
in Europe. It was interesting to me as we look even at the papers this 
morning, the front page of the Wall Street Journal, ``Fears of 
Political Chaos Tank Global Markets as Europe's Bailout Plan Teeters.'' 
Then much of the paper today, at least in the news reporting, is all 
about what is happening in Europe and the Greek crisis and the 
sovereign debt crisis that is being experienced in that country.
  The business page in the New York Times, ``Aftershocks for Athens and 
Wall Street; European Debt Crisis Tightens Its Chokehold On Global 
Markets.'' There is a whole series of stories again there about the 
same issue.
  The front page of the Washington Post above the fold, ``Europe 
Bailout Again In Doubt, Greece Seeks Referendum.''
  My point is as we have observed now what is happening in Europe, it 
should be a lesson to us and a warning sign about what we need to be 
doing to get our economy back on track in this country. What is really 
saddling Europe right now is the fact that the European governments 
have gotten too big for their economies to support, so they are 
drowning in all of this debt. They have debt-to-GDP ratios that way 
exceed the normal levels that are required for admission into the 
European Union. Yet they continue to struggle with these huge amounts 
of debt, much of which was created over a long period of time. It 
didn't happen overnight. It is, frankly, that many governments made 
promises they could not keep. So now they are dealing with that and 
trying to figure out how they are going to work their way out of it. It 
is becoming increasingly concerning, I think, to people all across the 
globe and certainly to us in the United States.
  If we look at the debt-to-GDP ratios in some of these countries 
around the world, they are pretty staggering. Greece is somewhere in 
the 180 percent debt-to-GDP area; in Portugal, Spain, countries like 
that, in some cases it is in excess of 200 percent debt-to-GDP.
  Where are we in this country? We are already at 100 percent. We are 1 
to 1. Our debt-to-GDP now is at a level we have not seen since the end 
of World War II. Spending as a percentage of our economy, debt as a 
percentage of our economy, deficits as a percentage of our economy--all 
at historic highs relative to anytime in history, at least in recent 
history going back to World War II.
  I think, hopefully, the lesson to take away from all of this is we 
have to get our fiscal house in order. We are in a deep hole. We cannot 
continue to dig that hole deeper. When I hear the discussion about how 
to revive our economy, and I hear it revolve around we need to have 
more government intervention, we need to have more government spending, 
to me, that is literally a warning sign that we are on the wrong path. 
That is exactly what has happened in Europe. Governments have gotten 
too big. Their economies can no longer support them, and they are now 
faced with untenable circumstances; serious, dramatic austerity 
measures, accompanied by contracting economies, all leading to a 
complete mess in Europe. Hopefully, one that will not spill over into 
this country and around the globe. That concern clearly exists today, 
which is why we see so many of these headlines in our American papers 
focusing on that particular issue.
  My point is simply this: I think as we look at how we deal with our 
economy in the United States, it starts with balancing our budget, 
getting our fiscal house in order, trying to get that debt and spending 
as a percentage of our economy down to more normal historic levels. If 
we go back over the past 40 years in American history, our spending as 
a percentage of our GDP has been in the 20-percent to 21-percent range 
on average. That is a 40-year historical average. Incidentally, the 
five times we have balanced the budget since 1969--and there have only 
been five times, regretably, where we actually balanced the budget--the 
spending-to-GDP ratio was 18.7 percent on average. So, clearly, in 
those times when we balanced the budget going back to 1969, those 5 
years, we had an economy, obviously, that was expanding and growing, 
but also we had government spending under control at a reasonable 
level.
  Today we are in the 24-percent to 25-percent range of spending as a 
percentage of our economy. Debt to GDP is now literally at 100 percent. 
That is something we have not seen. It is historic in terms of our 
country's economy and our fiscal situation. I think it suggests that we 
cannot spend our way out of this; we cannot borrow our way out of this. 
All that will do is compound the situation, make it worse rather than 
better. I think we have seen that in the first couple of years of this 
Presidency.
  President Obama, when he came into office, had a very aggressive 
agenda. He wanted to expand the role of government. So we had a 
stimulus program funded with borrowed money that was focused on 
government spending, government stimulating the economy. We had a 
massive new health care bill, $2.5 trillion when it was fully 
implemented. That was a big expansion, the biggest expansion of 
government we have seen, literally, in the last 40 years.
  We have seen excessive regulation to the point that there are now 
61,000 pages of new regulations that have been issued or pushed through 
this year, all of which, again, compounds and makes worse the problem 
we have of growing spending as a percentage of GDP, growing debt as a 
percentage of GDP, and a shrinking private economy, or at least an 
economy that is not growing at the rate we would like to see, and 
continuing to run unemployment rates that are north of 9 percent. So 
these are serious economic circumstances and worsened, I believe, by 
the policies that have been put in place since this President took 
office.
  I believe we need to take a different approach. We need to move in a 
different direction. We cannot continue to double down on what we know 
does not work. Clearly, government spending, government stimulus of the 
economy--if the last stimulus bill was any indication of that, 
certainly it has not worked. So much of what I hear being talked about 
now from my colleagues on the other side and from this administration 
is very similar to that. We are talking about a lot of the same 
prescriptions for our economy: We need to spend more here--which, of 
course, entails more borrowing or higher taxes on the people who create 
jobs.

[[Page 16504]]

  In fact, the more recent iterations of that have entailed a tax 
increase on people who create jobs--a permanent tax increase, I might 
add--to pay for temporary spending programs, temporary spending ideas 
that have already been proven not to work. It seems ironic, in a way, 
that we are having that discussion. It strikes me at least that there 
are lots of other ideas we ought to be thinking about if we are serious 
about getting the American economy back on track and growing and 
expanding.
  Of course, we all talk about the issue of taxes. Taxes are clearly an 
issue when it comes to our competitive place in the world and our 
ability to compete with other countries around the world. We continue 
to see companies move jobs to other places because our tax structure in 
this country is not competitive. We have the second highest tax on 
business in the entire world right now, which I think makes us 
anticompetitive and makes it more difficult for us to attract jobs and 
investment in this country.
  We have, as I said, a regulatory structure that is spinning out of 
control in terms of new regulations, new mandates, new requirements on 
American businesses. Quite simply, we are making it more costly and 
more difficult for American businesses to create jobs when we ought to 
be looking at how we can make it less difficult and less costly, less 
expensive, cheaper, if you will, to create jobs. So that is where we 
ought to be looking.
  Of the things that strike me that fit into that debate, No. 1 is tax 
reform. I think getting tax rates down on businesses and individuals, 
broadening the tax base, is something we ought to be having a debate 
about, and tax reform that would put policies in place that are going 
to be there for a while, that there is some permanence to. We continue 
to change tax law every year or two, and that kind of economic 
uncertainty makes it very difficult for American businesses to invest. 
Who in their right mind is going to make investments based upon a set 
of policies that are going to be in place for at best 2 years, at worst 
maybe a year? That is how we have been setting tax policy of late.
  We need to create economic certainty through more permanent tax 
changes that promote long-term economic growth, not this decisionmaking 
that is designed for people in the near term. Do something that might 
give us a little bit of economic pop in the next 6 to 12 months, but 
something that actually puts in place conditions where businesses will 
make long-term investments, create long-term good-paying jobs right 
here in America.
  I think that is the kind of economic debate we need to have. Frankly, 
instead of talking about redistribution of wealth or redistribution of 
income, which is so often what we hear coming out of the White House, 
we ought to talk about what we can do to promote economic growth. How 
can we get this economy growing and expanding, and what are the 
policies that will make that happen? Tax reform, clearly, in my view, 
is one, and tax reform that is focused on getting rates down and making 
us more competitive with the rest of the world. Then I think we ought 
to have a debate about what we are going to do about these regulations. 
Regulations are out of control.
  There are a series of things that have been passed by the other body, 
by the House of Representatives, which they call the ``forgotten 15.'' 
There are a whole series of things dealing with domestic energy 
production and development, doing away with some of these costly 
regulations. All of these are pieces of legislation, bills that have 
passed in the House of Representatives this year.
  Since January when we came into this new session of Congress, 15 
bills have passed in the House of Representatives that have not been 
acted on in the Senate. Many of us have tried and will continue to try 
to get votes on some of these as amendments, perhaps, to bills that 
might be moving through the Senate. If we are serious about supporting 
policies that will create the right conditions for economic growth, it 
seems to me at least we could start by taking legislation that has 
passed the House with broad bipartisan support. These are policies that 
have come through one body of the Congress that we could put on the 
Senate floor and the agenda in the Senate that would impact the economy 
and the job creators. These are all things we have heard people say 
they want and they need.
  If we look at the number of regulations coming out of Washington, DC, 
and what it would take in terms of our job creators to comply with all 
of that, it is an astonishing 82 million hours. It is 82 million hours 
to comply at a cost of $80 billion. That is what these new regulations 
that are coming out of Washington just in this last year, or since this 
administration has taken office, that is the cost to our economy of all 
of these new requirements that are being imposed upon our businesses. 
We know regulations, excessive redtape kills jobs. It increases our 
dependence on foreign oil, and it imposes costs on our businesses that 
we, frankly, cannot afford.
  If we look at what the Federal regulations cost job creators 
annually, it is somewhere along the order of $1.75 trillion. That is 
the composite of all of the regulations that exist on the books today, 
not just those that have been enacted since this administration came to 
power. They have taken it to a whole new level.
  It is interesting because the chairman of the business roundtable and 
the chairman, president, and CEO of Boeing company, a gentleman named 
Jim McNerney, in a Wall Street Journal op-ed and printed on Monday, 
noted the following:

       A tsunami of new rules and regulations from an alphabet 
     soup of Federal agencies is paralyzing investment and 
     increasing by tens of billions of dollars the compliance cost 
     for small and large businesses.

  He goes on to say:

       What we face is a jobs crisis, and regulators charged with 
     protecting the interest of the people are making worse the 
     problem that is hurting them now. . . . An increasingly 
     skeptical business community needs proof Washington can put 
     America on a sustainable fiscal footing and promote economic 
     growth.

  The recognition that we have to get our fiscal house in order, the 
recognition that this alphabet soup of Federal agencies is paralyzing 
investments, increasing by tens of billions of dollars the compliance 
for large and small businesses is what this particular CEO, who leads a 
large business organization in this country, has put his finger on in 
terms of the things we need to get the economy in this country growing 
again.
  I hope as we continue to have this discussion in the Senate, rather 
than focusing, again, on raising taxes on people who create jobs--and 
that is what these proposals that have been put in front of us would 
do. We had one we voted on the last time we were in, the week before 
last, and we have one we will probably have a vote on sometime this 
week--essentially saying we are going to permanently raise taxes on job 
creators to pay for temporary spending programs that have already been 
proven not to work. That doesn't sound like a jobs plan to me. That 
sounds like another futile attempt to have Washington become relevant 
to this debate, knowing full well it really is the job creators out 
there in this country, it is our private economy where the jobs are 
really going to be created.
  As the American people follow this debate, this is a very real issue 
for them because it affects their jobs. It is something about which 
they care deeply and profoundly. Economic issues, bread-and-butter 
issues, kitchen table issues are what the American people focus on. So 
I think they care deeply about this debate, and they should because 
what we do here impacts them and their children and grandchildren for 
generations to come.
  If we think about the fact that today we have a $15 trillion Federal 
debt and what that translates into per family in this country, it is 
about $126,000 per family. Every family owes their share of the Federal 
debt, $126,000. Now, compound that by adding the total unfunded 
liabilities of our Federal Government, which now total over $60 
trillion, and those are the obligations we have to pay Social Security 
and Medicare benefits for future generations.

[[Page 16505]]

That share of that unfunded liability per family in this country 
exceeds $500,000 per family, and that exceeds the amount they pay for 
their mortgages and for all the other things combined in their daily 
lives. Take their mortgage payments, car payments, the payments they 
are making on their student loans, all those sorts of things are all 
exceeded by that amount--the mortgage, in effect, they have because of 
the unfunded liabilities their government has racked up.
  So we look at where we are, we look at what we are doing to the 
American people with the spending and the borrowing here in Washington, 
DC, and we look at what is happening in Europe, and we can see some 
real parallels there, and it is a path I hope we will not go down. But 
it is clear to me at least that we continue to try to make promises to 
people in this country that we can't keep. When we get to the point--
and I think we are there--where the size of government, the growth in 
our government in this country cannot be supported by our economy, we 
have to make some decisions, and those decisions are not going to be 
easy. We need to get government back into a more normal, historical 
size relative to our economy, and I think that will help unleash the 
job creation we need in this country.
  By the way, as I mentioned, the amount of debt many of these European 
countries have racked up as a percentage of their GDP--we are not far 
behind. We are 1 to 1, about 100 percent. As I said, today Greece is 
about 180 percent.
  But if we look at the studies that have been done and how sovereign 
debt impacts the economy and jobs, there is a clear correlation and 
clear connection. A good body of research done by a couple of 
economists, Carmen Reinhart and Ken Rogoff, suggests that when we get a 
debt-to-GDP level that exceeds 90 percent and we sustain that, it will 
cost about a percentage point of economic growth every single year. In 
this country, when we lose a percentage point of economic growth, it 
costs about 1 million jobs. So these high, sustained, chronic levels of 
debt-to-GDP at the ratios we are at and continue to be at today 
continue to make it more difficult for our economy to create jobs, that 
coupled, as I said, with all of the new requirements we are imposing on 
businesses.
  I want to mention a couple of other things in wrapping up when I talk 
about those requirements because, in those cases, the ``forgotten 15'' 
that have been passed by the House of Representatives do focus on some 
areas that are costing a lot of money in our economy for our job 
creators. Again, these are 15 bills passed by the House of 
Representatives, all with bipartisan support, none of which has been 
taken up and acted on here in the Senate. It seems to me we ought to at 
least have votes on these, and these are things American businesses are 
telling us they need to get the economy growing again.
  The other thing we know that is making it more difficult and costly 
for American businesses to create jobs is the new health care bill.
  The Des Moines Register reports that last week Iowa-based insurer 
American Enterprise Group announced that ``it will exit the individual 
major medical insurance market, making it the 13th company to pull out 
of some portion of Iowa's health insurance business since June of 
2010,'' mere months after ObamaCare passed. As a result, 35,000 
individuals receiving coverage from American Enterprise's individual 
insurance policies will now lose their current coverage. For these 
individuals, the promise that they will not have to change plans, that 
nothing will change under the Obama plan except they will pay less, has 
once again proven to be hollow.
  Another example of an insurance company that is moving out of the 
business--and if we look at the more recent reports about companies 
that are dropping or talking about dropping coverage, we now know there 
is a McKinsey & Company report out there. They surveyed a bunch of 
companies in this country, both large and small, and 30 percent of 
employers and 28 percent of large employers will definitely or probably 
stop offering coverage after 2014.
  So all of those people who derive their health insurance coverage 
from their employer or the individual marketplace are seeing not lower 
costs but higher costs and probably fewer options. That is the trend we 
are seeing. That is the experience so far, after passage of ObamaCare, 
the impact it is having on American businesses and American businesses' 
ability to create jobs in our economy.
  So the health care heavy weight, the anchor that is putting on 
American businesses, coupled with all the other regulations that are 
coming out of Washington, DC, coupled with a tax code that is riddled 
with uncertainty and questions about what is going to happen next in 
terms of raising taxes on job creators in this country, focused more on 
income and wealth redistribution rather than economic growth, which is 
where we ought to be focused, suggests that we are headed in the wrong 
direction fiscally. We are headed in the wrong direction economically. 
We are headed in the wrong direction with regard to tax and regulatory 
policies in this country.
  We still have time to change direction. I hope we start by taking 
these 15 bills passed by the House of Representatives and putting them 
on the floor of the Senate for a vote instead of having yet another 
political vote, which is what we are going to have this week, that 
would permanently raise taxes on the people who create jobs in this 
country--permanently raise taxes--to pay for temporary programs that 
have proven not to work, as is evidenced by the failed stimulus bill 
from 2 years ago. We can do better. We can do better by the American 
people, and we need to. But it has to start here, and it can start by 
picking up things that we know have bipartisan support.
  Madam President, I yield the floor, and I note the absence of a 
quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LEVIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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