[Congressional Record (Bound Edition), Volume 157 (2011), Part 6]
[Senate]
[Pages 8756-8757]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                MEDICARE

  Mr. WHITEHOUSE. Madam President, we are discussing the Federal budget 
in Washington on a nonstop basis. One point that seems very noteworthy 
is that instead of working to create jobs to help grow the economy out 
of recession, Republicans are still trying to end Medicare as we know 
it, as it has been relied on for generations of Americans, in order to 
pay for tax cuts for millionaires. This is the Wall Street Journal 
describing the Republicans' plan to essentially end Medicare.
  The Republican plan to end Medicare would put insurance company 
officials between seniors and their doctors. You no longer have a claim 
to the individual benefit under their plan. You get a voucher that goes 
to the insurance company, and you are at the mercy of the insurance 
company. First of all, they raise drug costs for seniors from day No. 1 
by repealing the repair we did to the doughnut hole. Then, of course, 
10 years out, you are left at the mercy of private insurance companies.
  The effect of that is that, on average, seniors will pay nearly 
$6,400 more out of pocket every year as a result of this Republican 
plan. Rhode Island has a lot of seniors. I do not know a lot who have 
an additional $6,359 every year to spend on health care costs that 
would no longer be covered.
  It is worth noting that one of the first things that happens when you 
take the $1 that goes to Medicare and give it to private insurance 
companies instead is, the 2-percent or 3-percent administrative costs 
that Medicare takes out--which leaves you, let's say, 97 cents of the 
$1 to pay for health care--that jumps to between 15 percent and 25 
percent, leaving you only 85 cents to 75 cents out of your $1 to pay 
for health care because the private system is so inefficient and eats 
up so much in administrative costs for salaries and for quarreling with 
doctors and hospitals about payment and all that.
  They do not even use this to reduce the deficit in a significant way. 
The savings achieved by ending Medicare and raising seniors' health 
care costs by nearly $6,400 every year out of pocket are being used to 
pay for, guess what. More tax cuts for America's millionaires and 
billionaires. Every 33 seniors who have to pay that extra $6,400 will 
add up to one millionaire's $200,000 bonus tax break.
  The Republican budget makes average cuts of $165 billion per year in 
Medicare between 2022 and 2030. That gives $131 billion in tax cuts for 
millionaires, billionaires, big corporations, and Big Oil--$165 billion 
out of seniors' pockets, $131 billion to millionaires, billionaires, 
big corporations, and Big Oil. We think it is time for our colleagues 
to get serious about creating jobs to grow our economy out of this 
recession and abandon their attempts to ram through a clearly 
ideological agenda against Medicare--indeed, that ends Medicare and 
helps the Nation's very wealthiest at the expense of seniors and the 
middle class.
  Let me talk for just a minute about where we are in the Tax Code with 
our wealthiest versus seniors and the middle class. Clearly, we agree 
we have to bring our finances into balance. Clearly, we have to avoid a 
debt-limit failure that causes a default by our country for the first 
time in its history. Eliminating unnecessary spending should be part of 
the Federal balancing equation. Indeed, through multiple appropriations 
bills this year, we have pared back billions of dollars in Federal 
spending, and we will do more, but bipartisan consensus seems to end 
here when we move to the revenue side of the Federal budget. Just last 
month, Republicans filibustered a measure that would have ended $21 
billion of unnecessary tax breaks for the largest oil and gas companies 
in the world, companies that have been enjoying record multibillion-
dollar profits and do not need continued support from the American 
taxpayer.
  That made the Republican message clear: In balancing the budget, 
closing tax loopholes and repealing corporate subsidies is not on the 
table. The debt and the deficit, they tell us, are the most important 
problems facing the country. But evidently they are less important than 
protecting tax subsidies for Big Oil. That is what their vote proves. 
They will cut education, police protection, health care, job training, 
and environmental protection but will not touch tax subsidies for large 
corporations or for millionaires and billionaires.
  There is a basic question underlying all this; that is, are the 
superrich paying a fair share? Each year, the Internal Revenue Service 
publishes a report that details the taxes paid by the highest earning 
400 Americans. I gave a speech a few weeks ago showing from what was 
then the most recent data, that in 2007, these super high income 
earners, earning nearly one-third of a billion dollars each in just 1 
year, paid a lower tax rate than an average hospital orderly pushing a 
cart down the halls of a hospital in Rhode Island. I showed the 
Helmsley Building in New York, big enough to have its own ZIP Code, 
because we know from IRS information gathered by ZIP Code that the 
wealthy, successful occupants of this building actually paid a 14.7-
percent total Federal tax rate. There is the building. There is the 
Helmsley Building in New York. The people who live there do very well. 
They are very successful, which is wonderful. That is the American way. 
They are very well compensated. That too is the American way.
  But what is different is that they actually paid a 14.7-percent total 
Federal tax rate, which is lower than the average New York janitor or 
doorman or security guard pays. If averages hold, the very successful 
and well-off inhabitants of this building are paying a significantly 
lower tax rate to the Federal Government than the doorman who works for 
them and the security guard who keeps an eye out for their security and 
the janitors who clean up the halls.
  The most recent IRS report is out about the top 400, from 2008. Let's 
take a look at that information. The top 400 incomes in America in 2008 
had an average income each in that 1 year of $270 million. That is a 
pretty good year when you can make more than one-quarter of a billion 
dollars. That is the American dream, big time. But what they actually 
paid in taxes, those 400, on average, was a rate of 18.2 percent. That 
is their total Federal tax rate, all the taxes put in. What did they 
actually pay--not what the nominal rate is but what did they actually 
pay? The IRS calculated this. This is not an estimate, this is the 
IRS's calculation. Although we spend a lot of time debating around here 
whether the top income tax rate for the wealthy should be 35 percent or 
39.6 percent, that is not what they pay. The Tax Code is filled with 
special provisions that tend to either exclusively or 
disproportionately benefit the wealthy so the top 400 income earners in 
the country pay an average tax rate of 18.2 percent.
  Who else pays an 18.2 percent tax rate in this country? If you are a 
single filer, you hit 18.2 percent when your salary gets to $39,350. 
When you are making $39,350 your Federal taxes--income and withholding, 
payroll taxes--combine to 18.2 percent, just like the 400 millionaires 
and billionaires who made actually over one-quarter of a billion 
dollars in the same year that this taxpayer would have made less than 
$40,000.
  What does that equate to in terms of jobs? The Bureau of Labor 
Statistics for the Providence, RI, labor market says, on average, a 
truckdriver will earn about $40,200. At that income point, $40,200, 
that truckdriver is paying the same tax rate as the 400 biggest 
interest earners in the country. They each earned over one-quarter of a 
billion dollars. They paid 18.2 percent. The truckdriver earns $40,000. 
He would be paying 18.2 percent, maybe a little over. If that 
truckdriver gets a raise or if he or she decides they are going to work 
a second job at night and increase their income a little bit, guess 
what. They would then be paying a higher tax rate than those 400 super 
high income earners. In fact, the highest income earners pay a rate far 
below what people who think their average income earners actually pay.
  Of course, tax inequality extends beyond just individuals. At a time 
when household budgets are strained, profitable corporations are paying 
just about

[[Page 8757]]

their lowest share of Federal revenues in 75 years. If you go back to 
1935, you see that regular Americans and corporate America evenly split 
the responsibility to fund our country's obligations, to pay for 
America's expenses. Then, in each of these following years, the ratio 
between what corporations pay in revenues to the government versus what 
individuals pay broke through these ratio levels. By 1948, the 
individuals were paying twice as much in revenues to the Federal 
Government as corporations. By 1971, regular humans, regular Americans 
were paying three times as much of the revenues of the United States of 
America as corporations were. In 1981, it broke through 4 to 1. For 
every $1 an American taxpayer paid to support this country, 
corporations just kicked in one-quarter. In 2009, it broke through 6 to 
1, meaning that the average American, the ordinary taxpayer, the 
individual human being puts in $6 of revenue to support this country 
for every $1 corporate America contributes.
  When people say how overtaxed corporate America is, it is worth 
looking at this record of an ever-diminishing contribution by America's 
corporate community to our Nation's revenue. Of course, the Republican 
filibuster of our efforts to strip Big Oil subsidies that would have 
put $21 billion back into taxpayers' pockets or reduced the debt and 
the deficit by $21 billion is noteworthy in this light.
  Even against this rapid decline in corporate tax support for American 
Government compared to a huge runup in what individual Americans pay, 
our colleagues on the other side of the aisle insist on continuing to 
support tax subsidies for Big Oil, while they are making the biggest 
profits any corporation has ever made.
  We looked at the Helmsley Building a moment ago. Let's look at a 
different building. Let's look at a picture that our Budget Committee 
chairman, Kent Conrad, uses. This was taken in the Cayman Islands. It 
is a relatively nondescript building, not worthy of particular note, 
except that over 18,000 corporations claim this building as the place 
they are doing business out of; 18,000 corporations. Really? Do we 
think 18,000 corporations are doing real business out of that building?
  As Chairman Conrad has pointed out, the only business going on in 
that building is funny business, monkey business with the U.S. Tax 
Code.
  This is estimated to cost us as much as $100 billion every year. For 
every one of those $100 billion lost to the tax cheaters hiding down 
there in the Cayman Islands, honest, tax-paying Americans and honest 
tax-paying American corporations have to pay an extra $1 or more to 
make up the difference.
  We recently voted for a continuing resolution to fund the government 
for the remainder of the fiscal year, and in it I supported, and my 
colleagues supported, belt tightening across many agencies and 
programs, including even cuts in the accounts that fund Senators' 
offices. So we are not against cuts.
  But serious people understand we cannot just cut our way back to a 
balanced budget. There simply is not enough to cut. Not since 1960--
more than half a century ago--have we had a balanced budget at the 
revenue levels as a percent of GDP that the Republican House-passed 
budget proposes.
  When our tax system permits billionaires to pay lower tax rates than 
truckdrivers and allows some of the most profitable corporations in the 
world to pay little or no taxes at all, even if we had no budget 
deficits fairness and equality would demand that we address these 
preposterous discrepancies.
  Our budget crisis, however, brings new urgency to the problem. As we 
continue to debate ways to close the budget gap, I hope my Republican 
colleagues will revisit the potential to significantly cut the deficit 
by addressing tax loopholes, tax gimmicks, tax subsidies, and the daily 
injustice to the ordinary taxpayer when the wealthiest and highest 
income Americans pay tax rates that are the equivalent to an ordinary 
truckdriver in Rhode Island, and the basic lawyer or realtor or doctor 
is paying rates far, far higher than the super, superrich.
  I see other colleagues have come to the floor, so I will yield the 
floor to them and appreciate very much the attention that has been paid 
to these remarks.
  The PRESIDING OFFICER (Mr. Tester). With some reservation, the 
Senator from Illinois.
  Mr. DURBIN. Mr. President, there is a prohibition in the U.S. 
Constitution from cruel and unusual punishment, and the fact that you 
will be presiding in the chair when I am going to be speaking on an 
amendment which you are offering is truly cruel and unusual, but I am 
going to inflict it anyway. I will try to be as gentle as I can in the 
process.
  Very briefly, I want to thank the Senator from Rhode Island for his 
comments on the Tax Code and the need we have in this country to 
address taxes in a responsible, humane, and, I would add, progressive 
way. I think he has made the point over and over again, which I will 
make myself in just a few moments, and I think the Senator from Vermont 
may follow me.

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