[Congressional Record (Bound Edition), Volume 157 (2011), Part 15]
[Senate]
[Pages 20227-20229]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. GRASSLEY. Mr. President, it seems the President of the United 
States has finally acknowledged that the economy is in a terrible state 
and there is nothing he can do about it. So, rather than offer new 
ideas to grow the economy, the President has now shifted into blame 
mode. I recognize that the slow economic growth and high levels of 
unemployment are having a significant impact on the middle class. But 
rather than listen to political rhetoric and witness finger pointing by 
President Obama, the unemployed would likely prefer ideas, ideas on how 
to turn this economy around.
  I presume President Obama aspired to lead the country because he 
believed he had the vision and the ability to lead to a more prosperous 
nation. But beyond the vision, a President also needs a plan and the 
leadership to put that vision into place. Where is that leadership? 
During the past 3 years, we witnessed President Obama's theory on 
economic stimulus. We saw a massive expansion of government and deficit 
spending. More than $800 billion was spent on a failed economic 
stimulus bill that was supposed to keep unemployment below 8 percent. 
But it did not. Government spending in the process has reached an 
unprecedented level. Today, the size of government, if you combine 
local, State, and Federal, is 40 percent of our gross national product. 
One hundred years ago when Teddy Roosevelt delivered his speech in 
Kansas, it was 8 percent. I refer to Teddy Roosevelt and the speech in 
Kansas because the President of the United States now tried to 
duplicate that speech 100 years later.
  Today, government consumes 40 percent of the entire economy. 
According to economic policies of President Obama, government needs to 
grow even bigger to help our economy, and in the process there is a 
goal to use government to redistribute wealth. If government gets a 
little bit bigger, the argument goes, and if it gets a little more 
involved, and particularly if it gets involved in every facet of our 
economy and our lives, that will surely increase economic prosperity of 
all Americans. Right?
  Of course not. All of this has led to taxes and deficit spending that 
crowd out private investment that could grow the economy and, in the 
process, create jobs. Government doesn't create self-sustaining jobs; 
government only creates government jobs. The private sector creates 
jobs. It is the responsibility of the government to create an 
environment that leads to job growth. It does this by instituting the 
rule of law, property rights, the patent system, among others--and 
there are a lot of others I ought to add to it. Government sets the 
tone.
  Remember, government consumes well, it does not create well. Through 
economic freedom, entrepreneurs are free to innovate and prosper. This 
economic success leads to higher standards of living and a better 
quality of life. Importantly, these gains do not come then at the 
expense of others. Contrary to what some would have you believe, 
business growth does not have to come at the cost of others. In other 
words, it is not a zero sum game. In fact, business success and 
economic growth lifts all boats through employment gains, higher wages, 
and value to consumers, among a lot of other things that could be 
mentioned.
  There are some who believe that individual success cannot be achieved 
without government involvement or intervention. What is more, they 
believe an individual's success must mean that someone else has been 
deprived or they believe if someone else is successful, the success was 
achieved collectively only with the help of government or others in 
society. This line of thinking concludes that government and society 
is, therefore, entitled to some of those achievements.

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  President Obama's recent speech in Kansas provides great insight into 
his economic theory. He clearly believes government should be involved 
at every level of individual and business activity. The President says 
that hard-working Americans should be rewarded for their achievements. 
However, his economic vision demonstrates his belief that individual 
success is due to society, not because of hard work or individual 
effort. This line of thinking is in stark contradiction to our 
country's founding principles that government exists to allow for the 
individual to achieve success and the pursuit of happiness.
  The idea of government intervention runs contrary to our founding 
principles of individual and economic freedom. Government exists to 
serve the needs of people rather than people serving the needs of their 
government. There are some who believe government is the only creator 
of economic prosperity, but if others have achieved success, they must 
be, by default, the cause of other people's hardships. This type of 
class warfare demagoguery is harmful to our country and our country's 
future and our people's future, and it has the end result of dividing 
America. It creates envy, hatred, and resentment toward those who have 
worked hard, played by the rules, and achieved success. This divisive 
rhetoric seeks to put blame on the successful for the hardships of 
those who have been hurt during this recession.
  Most Americans don't support President Obama's divisive vision and 
rhetoric. The American people still believe if you work hard and play 
by the rules, you can be successful and you can flourish. I doubt the 
majority of Americans believe it is the goal of government to intervene 
in this process. In fact, most Americans would be happy to have the 
government get out of the way. Most Americans believe in individual 
responsibility and liberty, including freedom to succeed and freedom to 
fail.
  It appears President Obama's commitment to these fundamental freedoms 
is less sure. Based on his recent speech in Kansas, it seems the 
Federal Government is the answer to all of America's problems. 
According to the President, if we tax the wealthy, ensure they pay 
their fair share, we can get our economy back on the right track. 
President Obama wants the American people to believe higher taxes on 
job creators will lead to economic prosperity and create jobs. This is 
contrary to what Republicans know to be true. It is also contrary to 
the vision President John F. Kennedy knew to be true when in the 1963 
tax bill he reduced the marginal tax rates very dramatically. President 
John F. Kennedy recognized the economic benefits of lowering taxes, so 
in his State of the Union Address on January 14, 1963, President 
Kennedy spoke of the need to increase economic growth and job creation. 
He stated:

       To achieve these greater gains, one step, above all, is 
     essential--the enactment this year of a substantial reduction 
     and revision in the Federal income taxes . . . A net 
     reduction in tax liabilities . . . will increase the 
     purchasing power of American families and business enterprise 
     in every tax bracket.

  He further stated:

       It will, in addition, encourage the addition and risk-
     taking on which our free enterprise system depends--induce 
     more investment, production, and capacity use . . . and 
     reinforce the American principle of additional reward for 
     additional effort.

  It is worth repeating. President Kennedy pushed for lowering Federal 
income taxes to encourage initiative and risk-taking to induce 
investment, production, and economic growth. President Kennedy 
recognized and believed in the American principle of additional reward 
for additional effort.
  It seems to me, from the speeches that have been made recently, that 
our President--meaning President Obama--disagrees. It seems to me that 
he argues innovators and job creators should be subjected to punitive 
tax increases for being successful. He seems to believe economic growth 
will come by confiscating the wealth of job creators and sending that 
money to Washington, and I could not disagree more.
  For Americans to prosper, we must first reduce the size of 
government. This year the Federal Government will spend about 24 
percent of our gross domestic product. This type of spending has led to 
annual deficits above $1 trillion for the past 3 years. The total debt 
stands at over $15 trillion. This is 100 percent of our gross domestic 
product. The size of government, the size of deficits, the size of 
debt, and the size of interest payments are unsustainable over the long 
haul. We must reverse course.
  Second, we must work to reform the Tax Code to provide certainty and 
predictability. Nearly every day our President is on the campaign trail 
talking about tax increases. It is no wonder our job creators, 
particularly small businesses, are reluctant to make business decisions 
or investments in this climate, which decisions we would hope if they 
would make them would obviously lead to a great deal of job creation in 
the private sector. This country doesn't need more taxes, we need more 
taxpayers, and the way to get more taxpayers is to have more people 
working.
  The President's threat of higher taxes is directly inhibiting job 
growth and economic expansion. It is time for President Obama to 
recognize that with 13 million Americans unemployed and anemic economic 
growth, tax increases will harm, not help, economic recovery.
  Finally, we had a recent Gallup poll finding that compliance with 
government regulations is the single biggest issue facing small 
business owners today. You might think we would emphasize the Fortune 
500 big corporations when it comes to creating jobs, but we know that 
70 percent of the new jobs in America are created by small business, so 
we ought to be concentrating on what small business people are telling 
us about the economy not turning around.
  Small business owners, when it comes from the standpoint of 
regulations, need to spend less time and money making sure they comply 
with burdensome and needless Washington regulations. Those valuable 
resources should be spent growing their business, hiring more workers, 
and as a result growing our economy. We must halt the Federal 
Government regulations binge. For many of these new regulations, the 
cost of compliance outweighs the public benefit. They are acting like a 
wet blanket on our economy. There should be a moratorium on new 
regulations.
  I want to give you a perfect example that is now an issue before the 
Congress, the Keystone XL Pipeline. At a time of high unemployment and 
energy costs, the Federal Government should not be standing in the way 
of private investment that will create jobs and increase our energy 
supply. It is unconscionable that the largest private shovel-ready 
construction project is being delayed by President Obama's decision to 
override two different studies by the State Department and that there 
was no negative environmental impact. It seems the only jobs President 
Obama is interested in creating are government jobs or government-
subsidized jobs. The unfounded delay should be ended and the pipeline 
project should move ahead.
  This situation typifies the Obama philosophy that the free market and 
intelligent Americans are incapable of making informed decisions. The 
argument we hear is that Americans are not smart enough to know we need 
solar energy rather than fossil fuels. So our big government caretaker 
uses \1/2\ billion in taxpayer dollars to support a solar company while 
simultaneously blocking an entirely private enterprise from developing 
an oil pipeline that will make us much more energy independent. We have 
seen how the decision by the government elite to support Solyndra has 
worked out. It was a complete failure.
  It is time we got out of the way of the Keystone Pipeline. I hope the 
American people will dismiss the economic theories and visions of our 
President as he seeks to divide our country. I believe we can achieve a 
prosperous future by empowering individuals rather than our Federal 
Government. Americans are smart enough to put their trust in themselves 
and their neighbors, not in bigger government. It is time to end the 
political

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blame game and divisive rhetoric and, instead, work on genuine and real 
policies that will create economic jobs and, more importantly, economic 
growth that is going to help all Americans; in other words, expanding 
the economy because this does not have to be a zero sum gain. We can 
have more for more people, and if we don't have more for more people, 
we are going to have less for more people and everybody is going to 
lose out.
  Mr. MERKLEY. Mr. President, we are in the midst of an important 
debate over whether we will allow all working Americans to be hit with 
a big tax increase next year.
  This is a critical measure of relief for our working families in 
these tough times. During the aftermath of the most severe recession 
since the Great Depression, many middle-class Americans cannot afford 
to lose the $1,000 the average family receives from this tax cut. 
Furthermore, economists across the spectrum believe that extending the 
payroll tax cut is a critical step in building momentum toward a 
stronger recovery and minimizing the chances that our economy could 
slip back into recession.
  While keeping working Americans from being hit with this tax increase 
is our first and most important priority, we must also look to what is 
best for our economy when deciding on offsets for the cost. The offset 
in the bill that we voted on 2 weeks ago made good sense: asking 
millionaires and billionaires to fund a fairer share of our national 
budget. I am concerned, however, about a new offset provision in S. 
1944 that increases the guarantee fee on mortgages backed by Fannie Mae 
and Freddie Mac. I am very wary of placing additional costs on new 
mortgages given the ongoing crisis in the housing and mortgage markets. 
Moreover, if there is such a fee increase, it should be used to 
strengthen our battered housing market.
  I look forward to discussing other offsets with my colleagues as we 
continue this debate. This much is clear: Keeping this tax cut in place 
is a huge factor in the success of our working families and a huge 
factor in the recovery of our economy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.

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