[Congressional Record (Bound Edition), Volume 157 (2011), Part 13]
[Senate]
[Pages 18584-18586]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        MIDDLE CLASS TAX CUT ACT

  Mr. CASEY. Mr. President, I rise to speak about the issue of job 
creation and also supporting our small businesses and strengthening our 
economic recovery.
  One of the fundamental questions I have been asked in Pennsylvania--
and I think most Senators on both sides of the aisle have been asked 
repeatedly, not just in the last couple of days or weeks but for many 
months now--is a very fundamental question: What are you doing as a 
Member of the Senate to create jobs or to at least create the 
conditions under which jobs will be created? What are you doing in your

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votes, in your advocacy, in your fight in Washington for jobs? What 
does that mean? Sometimes we have a better answer than other times. 
Today, and certainly in the last couple days--and I think we will be 
debating this for a number of days moving forward and that is a good 
thing--we will have a better answer to that fundamental question: What 
are you doing as a public official to create jobs in America?
  One of the ways we can kick-start the economy and get job creation 
moving in the right direction again is by passing legislation such as 
the legislation that I have introduced, the Middle Class Tax Cut Act. 
It is now before the Senate, as the Presiding Officer knows, and we 
have been talking about it already, but we have more work to do on this 
today and some voting to do today on this legislation.
  The legislation is fully paid for and will accomplish two important 
objectives. No. 1, it will strengthen the economy to support middle-
income families, and specifically the way we do that is by providing 
middle-income families with a cut in the payroll tax, which means take-
home pay that will help make ends meet for that worker and that family, 
but it will also have an impact by boasting demand throughout our 
economy. No. 2, we will cut payroll taxes for small businesses to help 
them grow and create jobs.
  Here is what most people are confronting, and it is not just the big 
numbers. There are more than 14 million people out of work across 
America. In Pennsylvania, the latest number for October was more than 
500,000 people out of work. To be exact, it is 513,000 people out of 
work. That number has fluctuated. Thank goodness it started to go below 
half a million, but then it bumped again to almost 525,000 so it is at 
least is moving away from that number.
  When half a million people are out of work in a State, you can 
imagine the hurt the families are feeling, the lives of struggle and 
sacrifice in our midst, and that is why we have to do something to 
jump-start the economy and create jobs.
  I think the American people also want us to do this in a bipartisan 
way and we can and we should. We came together at the end of 2010 and 
passed a tax bill which was bipartisan. There are elements of that bill 
that one side or the other did not like, and vehemently so, but we came 
together in a bipartisan way to pass a tax bill at the end of last 
year. We need to do the same thing on a payroll tax cut.
  We need to work together, Democrats and Republicans, and get a result 
for the American people. This is something we can do right now--not 6 
months from now, not a year from now but right now--to help our 
families and to create jobs. There is broad agreement that more needs 
to be done to support the economic recovery. We have to create more 
jobs, and we have to kick-start the engine of economic growth.
  While the economy has added nearly 2.8 million private sector jobs in 
the past 20 months, we continue to face significant economic 
challenges. Unemployment across the country, as we all know, is still 
at about 9 percent, and long-term unemployment remains at record 
levels, with 4 out of every 10 unemployed workers having been jobless 
for 6 months or more. We know that gross domestic product--so-called 
GDP--grew at less than 1 percent, the annual rate, for the first half 
of the year. So for the first 6 months of 2011, we had less than 1 
percent growth. The third quarter of gross domestic product growth was 
recently revised downward. Initially 2.5 percent, it was revised 
downward to just a 2 percent annual rate. So it is self-evident that we 
have to do something right now about jobs. With a weak labor market and 
only modest economic growth this year, it is clear we have to act right 
now.
  Payroll tax cuts and credits are powerful tools to increase job 
creation and provide economic relief for middle-income families. The 
current 2 percent payroll tax cut for working Americans that is in 
place now has played an important role in sustaining the economic 
recovery. By the end of this year, 121 million families will have 
received an average tax cut of more than $930 based upon last year's 
action we took to cut the payroll tax. That was a good decision, but, 
if anything, we need to continue that as well as expand it, and I will 
explain that as I go forward.
  The number of families benefiting from this current payroll tax cut 
is very large because anyone who receives a paycheck benefits from a 
cut in payroll tax. Anyone who receives a paycheck gets this cut. 
Cutting payroll taxes immediately increases the take-home pay of 
everyone who gets a paycheck.
  Compared to reducing the tax rates for the top 1 percent of the 
American people, more money goes to middle and lower income Americans, 
who are likely to spend it, if we keep the payroll tax cut in place, 
and, of course, we want to expand it as well. Because take-home pay is 
greater, people have more money in their pockets--as I said, more than 
930 bucks this year. This additional take-home pay will result in more 
spending. When we spend at that level--and a lot of families are 
spending more, especially during the holiday season--that boosts 
demands for goods and services and that leads to job creation. This is 
not theory. This is not some untested theory or hope. We know this 
works. We did it in 2011, and we have to do more of it in 2012.
  The employee side of this--and I will divide this into employee and 
employer for a second--the employee tax cut expires at the end of this 
year, as I mentioned. Without congressional action, employees' share of 
the payroll tax will return to 6.2 percent of earnings, up from the 
current 4.2-percent level. So we have a payroll tax that has been cut 
from 6.2 to 4.2. That is in place. But if we do nothing, if we don't 
act, if we don't pass an extension, that 4.2 percent will go up to 6.2 
percent, and it will be a tax increase for families across the board. 
If we fail to act, these middle-income families will see their payroll 
tax cut disappear at the end of this year. Let me say that again. If we 
don't act by the end of December, middle-income families will lose this 
payroll tax cut that is in place now.
  What does this mean? Well, it means basically losing between 900 
bucks and 1,000 bucks. And this is take-home pay for workers and their 
families.
  This is a very tough time for families, as I mentioned before, with 
high unemployment and so many stresses, economic stresses and pressures 
on their lives. Families who are already facing both declining wages 
and stubbornly high unemployment, families who are struggling to pay 
for housing, make car payments, pay the food bill, pay for college 
tuition, whatever it is in their lives that means making ends meet, are 
still having a terribly difficult time.
  Losing this tax cut would also undermine the recovery by reducing 
consumer spending. Numerous economists and forecasters have highlighted 
the dangers to the economy of allowing this payroll tax cut to expire. 
Independent analysts estimate that letting a 2-percent employee tax cut 
expire would reduce gross domestic product growth by up to two-thirds 
of 1 percent in 2012. Mark Zandi, from Moody's, in an article from 
September 9 of 2011 entitled ``An Analysis of the Obama Jobs Plan,'' 
made that same point. If we don't continue the payroll tax cut, we will 
have an adverse impact on economic growth. Goldman Sachs Global ECS 
Research had a similar conclusion. So this isn't just about individuals 
losing a payroll tax cut that is in place now, this is about harming in 
a very adverse way our economy's ability to grow in a substantial way.
  Let me talk for a moment about the legislation before us, the Middle 
Class Tax Cut Act which I introduced.
  The ACTING PRESIDENT pro tempore. The Senator's time has expired.
  Mr. CASEY. I ask unanimous consent for an additional 5 minutes.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Without objection, it is so ordered.
  Mr. CASEY. I thank the Chair.
  Let me talk for a moment about the legislation. The legislation 
before us, as I said before, would both extend and expand the payroll 
tax cut that is in place right now.
  First of all, for employees, we cut it in half. So instead of paying 
a 6.2-percent payroll tax, the employee, the

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worker, would pay just 3.1 percent. That has a sizable impact on the 
economy when we do that--1,500 bucks in the pockets of the average 
worker in America. Approximately 160 million American workers are 
impacted and as many as 6.7 million in Pennsylvania. So we would not 
only keep in place the payroll tax cut for workers, but we want to 
expand it so it is fully cut in half.
  Secondly, I wish to speak for a moment about the employer side of 
this because that wasn't part of last year's effort. I introduced the 
payroll tax credit in early 2010 to encourage employers to hire and 
accelerate the pace of the recovery. A number of folks on both sides of 
the aisle have worked on this. The ideas of those kinds of tax credits 
in those kinds of bills we introduced form the foundation of what we 
are trying to do today. This legislation incorporates elements of my 
and others' earlier legislation to provide businesses with quarterly 
incentives to increase their payrolls.
  I wish to highlight a couple of elements of the legislation before 
us.
  First, this bill cuts payroll taxes in half for 98 percent of U.S. 
businesses. These businesses have taxable payrolls of $5 million or 
less. They will see their payroll taxes cut in half, as I said before, 
for the worker as well as the business.
  Some people say: OK, that is 98 percent of businesses. That is good 
news. What about the other 2 percent who have higher incomes?
  Those businesses that have taxable income above $5 million will still 
get a payroll tax cut from 6.2 percent to 3.1 percent on the first $5 
million of their taxable payroll. So they get it up to that level. So 
this is a huge benefit to small businesses across the country and even 
some businesses larger than that.
  The Joint Economic Committee, of which I am the chair, recently 
released a report that indicated that small business lending remains 
well below prerecession levels both in the number of loans and the 
dollar value of those loans. So a lot of small businesses still cannot 
get access to credit. This payroll tax cut legislation will help those 
companies substantially to be able to get access to credit.
  Finally, I wish to make a point about the legislation as it relates 
to eliminating the employer's share of the Social Security payroll tax 
on the first $50 million of increased payroll in 2012. This isn't just 
a cut, this is an elimination if they do one of three things: if they 
are hiring more workers; if they increase the hours, which is another 
way to get the benefit; thirdly, if they are boosting pay.
  This legislation is one of the best ways to create jobs, one of the 
best ways to kick-start our economy.
  I will conclude with this. If we look at the real world of 
communities across Pennsylvania or across the country, means that if we 
pass this legislation, for median family income in Pennsylvania, the 
benefit is $1,535, a little more than $1,500. So whether people go to 
small rural counties or big cities or suburban communities, wherever it 
is across a State such as ours, workers will be able to put roughly 
$1,500 in their pockets for this season coming up when people need some 
help, and small businesses will be substantially positively impacted by 
this legislation.
  We need to pass this legislation. We need to do it now to help our 
workers, to help our businesses, and to grow the economy and create 
jobs.
  Thank you, Mr. President.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Missouri.

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