[Congressional Record (Bound Edition), Volume 157 (2011), Part 8]
[Senate]
[Pages 10510-10546]
[From the U.S. Government Publishing Office, www.gpo.gov]




  SHARED SACRIFICE IN RESOLVING THE BUDGET DEFICIT--MOTION TO PROCEED

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of the motion to proceed to the 
consideration of S. 1323, which the clerk will report.
  The assistant legislative clerk read as follows:

       Motion to proceed to the bill (S. 1323) to express the 
     sense of the Senate on shared sacrifice in resolving the 
     budget deficit.

  The ACTING PRESIDENT pro tempore. Under the previous order, the time 
until 10 a.m. will be equally divided and controlled between the two 
leaders or their designees, with Senators permitted to speak for up to 
10 minutes each.
  The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, pending is S. 1323, which is the sense-of-
the-Senate resolution. For those who follow the Senate, this is not a 
law. It will not be a law, if passed. It is merely an expression of 
sentiment by the Senate on an issue. It can be summarized very quickly 
with the sense-of-the-Senate clause, which reads:

       It is the sense of the Senate that any agreement to reduce 
     the budget deficit should require that those earning 
     $1,000,000 or more per year make a more meaningful 
     contribution to the deficit reduction effort.

  Why are we even talking about this? Wouldn't everyone in America 
concede that everyone needs to make a sacrifice if we are going to make 
this country stronger? Those who can make a greater sacrifice, those 
who are well-off, with an income of $1 million or more each year, 
should do a little more. Why is that such a bold and controversial 
suggestion? Because, in fact, when we look at the actions taken by 
Congress over the last 10 years, we have found a political sentiment, 
primarily from the other side of the aisle--not exclusively, 
primarily--which says we cannot ask sacrifice of the wealthiest people 
in America.
  I can tell those who are students of American history know when we 
have had a challenge in this Nation, particularly during wars when our 
very existence was being challenged, people stepped up from every 
income level in America and said: I am willing to fight for this 
country. I am willing to die for this country. I am willing to 
sacrifice for this country. So why would this be a matter to be debated 
on the floor of the Senate? Because, in fact, the policies of this 
country over the last 10 years have said that the wealthiest among us 
should be spared, time and again, from sacrifice when it comes to the 
future of our Nation.
  That is just plain wrong. Those who are fortunate enough to be well-
off, to have a strong income, to enjoy the blessings of liberty, to 
live in what I feel is the greatest Nation on Earth should be prepared 
to give back something.
  I have spoken to some in our walk of life here in the Senate. We 
spend time with those who are well-off who finance our campaigns. That 
is a reality I am not happy with, but a reality. So many of them have 
said, for goodness sake, Senator, why do you even hesitate to ask me 
for more taxes? I am prepared to pay those taxes because I feel blessed 
to live in this country.
  So the idea of raising taxes on the wealthiest among us won't change 
their lifestyle a bit but will help to solve some of our problems. If 
we don't change the tax cuts that were put in under President George W. 
Bush, people making $1 million-plus a year will get a $200,000 tax 
break--a $200,000 tax break--every year. In order to pay for that tax 
break, some other Americans

[[Page 10511]]

have to sacrifice. For example, it means about 33 seniors will have to 
pay $600 more a year for Medicare under one proposal in the House 
Republican budget so that we will generate enough money to give a tax 
break to a person who is a millionaire. Thirty-three seniors will pay 
$600 more a year so a millionaire can get a tax break. That is wrong. 
It is just plain wrong.
  I believe we need to ask for shared sacrifice, and that is what this 
resolution says. Senator McConnell, who was here a few moments ago, 
said this week:

       It's about making Washington make tough choices. It's about 
     Washington taking the hit this time.

  Well, the people who are taking the hit in America are not in 
Washington, they are all across this country. It is low and middle-
income Americans who are taking a hit in the current economy. There are 
still almost 14 million Americans out of work and those who are working 
have seen the bulk of income growth go to the highest income 
categories. We have the greatest income disparity in the history of the 
United States since the Great Depression. Over the past 10 years, the 
median family income has declined by more than $2,500. What that means, 
whether it is New Mexico or Illinois, is that people who are working 
hard, going to work every single day, making sacrifices, fall further 
and further behind and live paycheck to paycheck. That is the reality 
of life for hard-working, middle-income Americans.
  So those of us who come to the floor and say spare them--if you are 
going to spare anyone from further taxation, give them a helping hand--
understand the reality of it so they can keep their heads above water, 
barely. So many Americans live paycheck to paycheck. It is the only way 
they survive, and that is the reality.
  My colleague from Kentucky is right. In Washington we need to make 
the tough choices and we need to face them with a sense of consensus 
and compromise. An all-or-nothing approach to the budget isn't going to 
work. In about an hour and 15 minutes, I am going to be honored to 
represent, with Senator Reid, our majority leader, the Senate Democrats 
in a meeting with President Obama. We will sit down in the Cabinet 
Room, as I have before, and we will talk about what we are going to do 
with this deficit crisis. I will say to the President and those 
assembled that we have plenty to work with. It was 6 or 7 months ago 
when the Bowles-Simpson commission, the President's commission on the 
deficit, gave us a blueprint and said: Here is a way to reach $4.5 
trillion of deficit reduction in a fair way: Put everything on the 
table. Democrats, suck it up. Put entitlements on the table. Make sure 
that at the end of the day, these are still programs that serve the 
public, Social Security is still there making its promised payments. 
Make sure Medicare covers the health care of elderly Americans. Do it 
in a fiscally responsible way, but don't run away from it. Don't ignore 
the problems we face.
  Similarly, the Bowles-Simpson commission said to those on the other 
side of the aisle: Be honest about revenue. We are facing the lowest 
Federal revenue against our gross domestic product we have seen in 60 
years. Is it any wonder we are in deficit? Fifteen percent of our gross 
domestic product comes to the Federal Government revenue share and we 
spend 25 percent. So the 10-percent difference is our deficit. It is 
time to bring the spending down and the revenue up.
  Critics will say we can't raise taxes in the midst of a recession. 
Well, we need to be careful, I agree. Raising taxes in the wrong places 
could hurt our recovery. Here are some places where it won't hurt, as 
this resolution says, at the highest income categories. These Americans 
can afford to pay a little more. They certainly don't need a tax break.
  Secondly, take a look at the Tax Code. We have up to $1.2 trillion a 
year in tax spending, tax earmarks, credits and deductions that the 
special interest lobbyists put in the Tax Code. Many of them are 
absolutely indefensible, and we can't afford them anymore. If we are 
asking sacrifice across the board from America, we should ask sacrifice 
from those who are benefiting from these tax loopholes and tax 
benefits. We can do that. In fact, we may be able to do it if we follow 
Bowles-Simpson and at the same time reduce the marginal tax rates for 
all Americans. It can be done.
  Let's take a hard look at the Tax Code and remember that 70 percent 
of Americans do not itemize, which means they do not take advantage of 
the Tax Code, except in a rare situation where they have a refundable 
tax credit. These people are not using the Tax Code. Those who use it 
are in higher income categories. They are using it, they are following 
the law, and they are avoiding their taxes.
  Warren Buffett had a great quote which we should remember while we 
debate this. November 26, 2006:

       There's class warfare, all right, but it's my class, the 
     rich class, that's making war, and we're winning.

  Warren Buffett is a man of few words and is listened to carefully 
because of his wisdom in business and in life, and he hits the nail on 
the head. He said to me and to many others--and publicly--it is 
unconscionable that using our Tax Code today, he, Warren Buffett, pays 
a lower marginal tax rate than the secretaries in his office. That is 
absolutely wrong. Why should a hard-working person in a business, at a 
lower level, pay a higher marginal tax rate than the person owning the 
business, making millions of dollars each year? That is where the Tax 
Code is wrong, and that is where we can change it, save money, use it 
to reduce the deficit and reduce marginal income tax rates.
  That is what this resolution is all about. It is nothing short of 
amazing we are debating the question of whether those who make $1 
million or more each year should pony up and contribute more when it 
comes to deficit reduction.
  The newspapers this morning talk about what may be included in any 
final agreement. I don't know what will be included. I hope there is an 
agreement. There is one thing I wish to make clear. I just left a 
meeting with people who do forecasting--Standard & Poor's, Moody's, 
Fitch, and the like. They talked about what is going to happen if we do 
not extend the debt ceiling. Let me lay my cards on the table. The debt 
ceiling vote every year is a political football. Those who are not in 
the President's party don't want to vote for it. Why should they, and 
go home and get slapped around for having voted to extend America's 
debt. In years gone by, there have been times I didn't vote for it but, 
in all honesty, I knew in the back of my mind it was going to pass.
  Here is the reality: If we reach a stalemate on the debt ceiling now 
because the President's party doesn't control the Congress--certainly 
not the House and barely in the Senate--if we don't extend the debt 
ceiling, what is going to happen is very obvious. The full faith and 
credit of the United States is going to be called into question, and 
that has never happened. We have never in our history failed to extend 
the debt ceiling and to say we stand behind our debts and will make 
good on payments. If there is any question about that, we know what 
happens. It is the same thing that happens when a person defaults on 
their home mortgage. It becomes increasingly difficult to ever get 
another mortgage and if that person does, he or she faces higher 
interest rates than ever. That is what America will face if we don't 
extend the debt ceiling. So these people from these rating agencies 
came to us and said it will be disastrous if you allow the debt ceiling 
not to be extended on August 2. That is the reality of the world we 
live in.
  So I would say, as we go into these important and difficult 
negotiations, as we move toward the moment when we are going to have, I 
hope, an agreement, let's make it very clear to the world that the 
United States understands its obligations, will pay its debts, and that 
we won't face the dire consequences of the opposite being true. That is 
the reality of what we face today.
  I will say one last thing before I yield the floor.
  As we structure this deficit rescue or deficit project, let's 
remember two

[[Page 10512]]

things are essential. There are vulnerable people in the United States 
of America who, through no fault of their own, struggle each day to 
live. Some of them suffer from physical and mental disabilities. Some 
of them have been poor their entire lives and come from poor families 
and have a difficult time and limited education. Some of them are 
elderly and in nursing homes. These people--the most vulnerable among 
us--need a helping hand. We have never failed to do that in modern 
times and we shouldn't in this time of trouble, time of deficit. We can 
keep our word to the poor among us that we are going to stand by them 
because we are caring people. We can do it by making certain the 
Medicaid Program, which provides health insurance for one-third of the 
children in America and which covers the medical costs of birth of more 
than 40 percent of children in America and literally provides for 
millions of seniors to be able to stay in nursing homes and in senior 
settings, these are the things we need to take care of in the midst of 
this deficit reduction.
  I see my colleague from Tennessee on the Republican side has come to 
the floor, and there is time available on his side. I didn't know if 
anyone was coming. I am wrapping up, so I thank my colleague from 
Tennessee.
  I will wrap up by saying we can take care to make sure the safety net 
is protected, and to make sure as well that we address all levels of 
spending in our government--every one of them--to make certain that 
whether it is the defense budget or the budget for programs not related 
to defense or whether it is entitlement programs, all of these need to 
be carefully scrutinized. We can cut spending in a responsible, 
bipartisan way and show we can bring our deficit down, strengthen this 
economy and, I think in the process, if we do it on a bipartisan basis, 
we are going to launch an economic recovery that inures to the benefit 
of all of us. If we don't and this ends up in finger pointing, I don't 
know who will take the fall for it. No one does. But the best thing we 
can do is to ignore the political aspect and deal with the reality of 
the challenge we face.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I appreciate what the Senator from 
Illinois said and I congratulate him not necessarily for the specifics 
of what he said but for his general demeanor and attitude throughout 
this entire discussion about the deficit and the debt. He has been one 
of those Senators--there have been some on both sides of the aisle--who 
have made some difficult choices and some difficult decisions and 
recognizes that at a time when Washington is borrowing 40 cents of 
every dollar we spend, we have a serious problem and we have to look at 
our entire fiscal condition in order to solve the problem. The people 
of this country expect us to do that. So Senator Durbin has, by his 
willingness to make some hard decisions, set a pretty good example for 
all of us in the Senate.
  Today, my hope is the meeting the President has with our 
congressional leaders of both sides succeeds, because if they succeed, 
our country succeeds. The country expects us to do that. I hope they 
think big. I hope they swing for the fences and get a result and bring 
it back to us and let us consider it and hopefully enact it and get on 
to other business. The debt is a major long-term problem, not just for 
our grandchildren but for us today. We have a bigger issue facing us 
which is the fact that we have had persistent unemployment in an 
economy that is not growing, and that is hurting too many people. So 
the sooner we swing for the fences and get a result and get our debt 
under control and deal with it in a bipartisan way, the better for the 
country and the quicker we will be able to get on to the larger 
question of jobs.
  Of course, economists have made clear to us getting the debt under 
control has a lot to do with jobs. When our total debt is as high as it 
is today--nearly 100 percent of our gross domestic product--that 
probably costs us 1 million jobs a year. We can't solve all of that in 
1 day or 1 month, but we can take a big step in the right direction, 
and that is what our countrymen and women want us to do.
  I am glad I was able to be here to hear part of the Senator's speech 
and I am glad I have a chance to commend him for his leadership on this 
vexing and important problem we need to deal with.
  I thank the President, and I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois.
  Mr. DURBIN. Mr. President, if it meets with the approval of the 
Senator from Tennessee in leadership on the Republican side, I suggest 
we yield back all time, and I ask unanimous consent to proceed to the 
vote.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Without objection, it is so ordered.


                             Cloture Motion

  Pursuant to rule XXII, the Chair lays before the Senate the pending 
cloture motion, which the clerk will state.
  The legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the motion to 
     proceed to Calendar No. 93, S. 1323, a bill to express the 
     sense of the Senate on shared sacrifice in resolving the 
     budget deficit.
         Harry Reid, Richard J. Durbin, Charles E. Schumer, Frank 
           R. Lautenberg, Al Franken, John D. Rockefeller IV, Jack 
           Reed, Sheldon Whitehouse, Sherrod Brown, Bernard 
           Sanders, John F. Kerry, Jeff Merkley, Debbie Stabenow, 
           Daniel K. Akaka, Daniel K. Inouye, Patrick J. Leahy, 
           Benjamin L. Cardin.

  The ACTING PRESIDENT pro tempore. By unanimous consent, the mandatory 
quorum call has been waived.
  The question is, Is it the sense of the Senate that debate on the 
motion to proceed to S. 1323, a bill to express the sense of the Senate 
on shared sacrifice in resolving the budget deficit, shall be brought 
to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Iowa (Mr. Harkin), the 
Senator from Vermont (Mr. Leahy), and the Senator from Montana (Mr. 
Tester) are necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from North Carolina (Mr. Burr).
  The ACTING PRESIDENT pro tempore. Are there any other Senators in the 
Chamber desiring to vote?
  The yeas and nays resulted--yeas 74, nays 22, as follows:

                      [Rollcall Vote No. 106 Leg.]

                                YEAS--74

     Akaka
     Alexander
     Baucus
     Begich
     Bennet
     Bingaman
     Blumenthal
     Boxer
     Brown (MA)
     Brown (OH)
     Cantwell
     Cardin
     Carper
     Casey
     Coats
     Cochran
     Collins
     Conrad
     Coons
     Corker
     Cornyn
     Durbin
     Feinstein
     Franken
     Gillibrand
     Graham
     Grassley
     Hagan
     Hoeven
     Hutchison
     Inouye
     Johanns
     Johnson (SD)
     Kerry
     Kirk
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Levin
     Lieberman
     Lugar
     Manchin
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Moran
     Murkowski
     Murray
     Nelson (FL)
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Stabenow
     Thune
     Udall (CO)
     Udall (NM)
     Vitter
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--22

     Ayotte
     Barrasso
     Blunt
     Boozman
     Chambliss
     Coburn
     Crapo
     DeMint
     Enzi
     Hatch
     Heller
     Inhofe
     Isakson
     Johnson (WI)
     Lee
     Nelson (NE)
     Paul
     Portman
     Risch
     Rubio
     Toomey
     Wicker

                             NOT VOTING--4

     Burr
     Harkin
     Leahy
     Tester
  The ACTING PRESIDENT pro tempore. On this vote, the yeas are 74, the 
nays are 22. Three-fifths of the Senators duly chosen and sworn having 
voted in the affirmative, the motion is agreed to.
  The majority leader is recognized.
  Mr. REID. Mr. President, I ask unanimous consent that the time until 
6 p.m. today on the motion to proceed be equally divided between the 
two leaders or there designees; further, that at

[[Page 10513]]

2 p.m., Monday, July 11, the Senate resume consideration of the motion 
to proceed to S. 1323, with the time until 5:30 equally divided between 
the two leaders or their designees; that at 5:30 p.m. the Senate 
proceed to vote on the adoption of the motion to proceed to S. 1323.
  The ACTING PRESIDENT pro tempore. Is there objection? Without 
objection, it is so ordered.
  Mr. REID. There will be no more rollcall votes this week.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  The ACTING PRESIDENT pro tempore. The Senator from Texas is 
recognized.
  Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the 
quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. McCAIN. Will the Senator from Texas yield for a question?
  Mrs. HUTCHISON. I will, Mr. President.
  Mr. McCAIN. The Senator from Texas, I am just wondering if a view 
that she might have might be that we have been terribly overworked this 
week. I understand we cancelled our Fourth of July recess in order to 
get back here and get to work and do the people's business.
  Is it correct that was the second vote that we have taken? One was an 
instruction of the Sergeant at Arms, and this one, another highly 
controversial issue that was taken up.
  I guess my question to the Senator from Texas is, Has this week been 
a worthwhile expenditure of the taxpayers' dollars?
  Mrs. HUTCHISON. Well, I will respond to the distinguished Senator 
from Arizona that the resolution that was just passed was to go to a 
sense-of-the-Senate resolution, which, of course, has no force of law. 
It is, indeed, our second vote this week.
  I will say that there is one thing on the minds of the people today, 
one thing on the minds of the people of America today, and it is, What 
on Earth is Congress doing? What on Earth is the President doing? What 
are they doing to address the looming debt crisis? And we were called 
back in not to recess but so that we could do something meaningful.
  When I saw the Senator from Arizona on the Senate floor, he was ready 
to talk about our international situation and the commitments that we 
are making certainly. Many people said: No, wait a minute. We have a 
debt crisis, and we can't wait until August 2 to fulfill it.
  So I would just respond to the Senator from Arizona and say, when do 
the American people get the answer they deserve, which is that Congress 
and the President are working together, and we are being productive, 
and we have a budget resolution on the floor, and we are debating it 
and we are talking about our differences on taxes and spending? I don't 
think we can tax our way out of a recession. I don't think we can tax 
our way out of the budget deficit.
  I would just ask the Senator from Arizona if he thinks that we can 
make meaningful progress staying in session and debating, and if, in 
fact, that might be an option in the future.
  The ACTING PRESIDENT pro tempore. The Senator from Arizona is 
recognized.
  Mr. McCAIN. I see the distinguished majority leader waiting, so I 
will make my comments brief. I know that his agenda is very busy.
  I would just say to my friend from Texas that I understand a lot of 
the inner mechanisms and hidden workings are going on behind the 
scenes. But when I go back and tell my constituents that we cancelled a 
week of recess and we had two votes--one to instruct the Sergeant at 
Arms and the other on a sense-of-the Senate resolution--I would have 
liked to have taken up other business that was rejected by Members on 
this side because they wanted to focus on the deficit. But if we are 
focusing on that, maybe we should have taken up some issues that 
directly affect the deficit, such as ethanol subsidies, such as some of 
the other tax breaks and loopholes and other issues that surround the 
whole bankruptcy of this country.
  I see the majority leader is waiting, so I will yield to my friend 
from Texas.
  Mrs. HUTCHISON. I would just ask unanimous consent that following the 
majority leader I regain the floor.
  The ACTING PRESIDENT pro tempore. The majority leader is recognized.
  Mr. REID. The Senator from Texas will have the floor. I just have a 
brief comment.
  I have known my friend, the senior Senator from Arizona, since 1982 
when we were both elected to Congress. His record of public service 
speaks for itself. But I would say to him, and to everyone within the 
sound of my voice, we didn't vote on Libya, this important resolution 
that had been worked on so hard by the distinguished Senator from 
Arizona and the chairman of the Foreign Relations Committee, because I 
was told we wouldn't get any votes from the Republicans because they 
wanted to focus on the deficit.
  My friend also recognizes, as he said, that there is work going on 
behind the scenes, and that is true. There has been a lot of work this 
week that took place as a result of our being here that would not have 
taken place but for the fact that we are in session.
  We know a lot of the work we accomplish here is not with votes. One 
reason we have not been having a lot of votes in recent months is 
because we can't get things on the Senate floor. We have been stopped 
by my Republican friends. There are meetings going on with the White 
House and with the Speaker, a multitude of meetings there, meetings 
going on between Members of the Senate and Democrats and Republicans in 
the House of Representatives. So I would say to everyone here it is 
good we were in session this week. I haven't heard a single person who 
is not in Congress complain about our being here. It is important we 
are here. As a result of that, we have been able to move down the road 
much further on the problems we have with the debt than we would have 
had we not been in session because there are all kinds of meetings 
going on around town dealing with how we do this.
  We had a meeting right behind us today that started at 9 where we had 
the head of the Chamber of Commerce in. We had people from Moody's 
Financial Services. They were here to tell us what they are doing to 
focus on Republicans being able to help us get through this problem 
dealing with the debt.
  We have to do something about the staggering debt that faces us, and 
what this resolution we voted on earlier today is all about is making 
sure there is equal sacrifice in our country; that is, we know we are 
going to have to make some cuts. We also recognize that we need to do 
something about equalizing revenue, and that is what is going on.
  While what we do in the Senate every week isn't like solving a math 
problem--there is no perfection--that is the way the Founding Fathers 
set up this great government of ours. So we are going to continue to 
work in the next 4 weeks of this work period to solve some of the 
Nation's problems.
  No. 1 on the list is doing something about our staggering debt.
  The ACTING PRESIDENT pro tempore. The Senator from Texas is 
recognized.
  Mrs. HUTCHISON. Mr. President, I appreciate what the majority leader 
has said.
  There is a lot going on, and there is the beginning, perhaps, of 
coming together, hopefully, with the President and the leadership of 
the House and the Senate. I just hope that we can establish why it is 
that there is such a divide on how we accomplish the issue of raising 
the debt ceiling with real reforms that will assure that we will not 
have to raise the debt ceiling again; that we will cut deficits so the 
debt will also be cut in this country. We cannot sustain the level of 
debt we have now. It is the highest we have ever had in the history of 
this country.
  Mr. President, let's face it. We have two basic problems. We have 
this looming $14 trillion debt that is about to hit

[[Page 10514]]

the ceiling, and we have to raise the ceiling. It would be 
irresponsible to do that without significant reforms that will assure 
that we are not going to hit it again. But the second problem we have 
is 9.1 percent unemployment.
  So it is not like we are in a vacuum and we can just start taxing our 
small businesses, when small business has already had the looming hit 
of the health care plan that was passed that is going to cause every 
business in this country significant increases in their cost of doing 
business.
  So when people are out there saying: Why is unemployment still so 
high? Why is hiring lagging? I think it is because businesses are 
trying to prepare for this big hit they are going to get in 2014 when 
the Obama health care plan takes full effect. They are trying to figure 
out if they are going to pay more for insurance or if they are going to 
take the fine and pay fines for every employee who doesn't have 
insurance, which is going to cause chaos in this country. So they are 
trying to decide.
  On top of that, people on the other side of the aisle in Washington, 
DC, keep talking about increasing taxes, and the President keeps 
talking about increasing taxes. So no wonder our employers are not 
saying: Oh, yes, let's just open the floodgates and bring people back 
to work. They don't know what to expect.
  We must generate economic growth, not stifle it. We need businesses 
to feel confident in the future that they are going to be able to make 
a profit on top of all the added costs of new taxes and health care 
reform that is going to hit businesses the hardest.
  So we don't have a tax problem in this country. We are not being 
taxed too little. This government is spending too much. That is the 
problem we are facing right now. That is why we have a $14 trillion 
debt. We have a $1.6 trillion shortfall between spending and revenue 
this year.
  So I am reminded of what Ronald Reagan once said: We don't have a $1 
trillion debt because we haven't taxed enough. We have a $1 trillion 
debt because we spend too much.
  Let's look at the spending side of the equation. We cannot continue 
business as usual in Washington and fix this problem. When President 
Obama was sworn into office, the national debt was $10.6 trillion. It 
was too much then. I think we all agree. Now it is $14.3 trillion. We 
are weeks away from officially hitting that $14.3 trillion debt 
ceiling.
  We have had a monumental addition to the unprecedented number of 
spending dollars that was the stimulus that passed in February of 2009. 
Today, the President's Council of Economic Advisers said that 2.4 
million jobs were created at a cost of $666 billion. That is about 
three-quarters of the stimulus. That is a cost to taxpayers of $278,000 
per job. That is just not reasonable. This is the kind of spending we 
cannot continue in this country.
  I think they say they want to increase taxes, and I hear the 
President say we must increase taxes on the oil companies, increase 
taxes on corporate jets. I think if we are fair and across-the-board 
and we tax oil companies like we tax every business--sure. Let's even 
the playing field. If we are going to take away the business deductions 
every business gets in this country, then, sure, let's take them from 
every business, including oil. But it is not going to help the deficit 
because it is not enough to help the deficit.
  They say they want to increase taxes in order to reduce the deficit, 
but what they really want is to increase taxes to permanently increase 
spending so the big government we have seen grow in the last 2 years, 
2\1/2\ years will be permanent. That is why they want to increase 
taxes.
  I say there is a way to fix this. First of all, we could pass a 
balanced budget amendment. A balanced budget amendment to the U.S. 
Constitution would put us on a budget that we would have to meet like 
most States in this Nation and every business and every family. We 
would set the limits. I believe the appropriate limit would be that 
total Federal expenditures would be limited to 18 percent of the gross 
domestic product. Then Congress would also have to have caps on 
spending--about the same, 18 percent of gross domestic product. This 
would be a spending reform we could adopt that I believe the States 
would also agree to ratify that would give us a trajectory that would 
eliminate this deficit and the debt in this country, and we would be on 
a fiscally responsible path.
  Second, if we are going to do this, we have to look at entitlements. 
That is the reality. We have a nearly bankrupt entitlement system that 
is ongoing regardless of what the revenue coming in is. The debt limit 
and the ongoing deficit reduction negotiations need to put entitlement 
reform on the table. Until yesterday they had refused to do it, but now 
it seems that perhaps some entitlement reform might be on the table. 
For instance, one that I have introduced a bill to correct is the 
Social Security system. Social Security will account for one-fifth of 
all Federal spending this year. The time for reform is now, and we can 
do it in a reasonable way.
  The amount of Social Security benefits being paid out exceeds the 
revenue the Social Security payroll is collecting, and we are starting 
to draw down on the Social Security reserves. When the reserves run out 
in 2036, Social Security will only be able to pay out 77 percent of the 
benefits to current and future retirees. That is the law today. It 
would force a 23-percent cut in benefits. That is the law today.
  The Social Security Board of Trustees reported earlier this year that 
one way to shore up Social Security's assets is to immediately and 
permanently increase the combined payroll tax on employees and 
employers from 12.4 to 14.5 percent--in other words, increase payroll 
taxes by one-sixth during our jobless economic nonrecovery. I do not 
think that is really feasible.
  The trustees also noted that the shortfall could be eliminated by an 
immediate 13.8 percent cut in core benefits retirees are getting right 
now--an immediate $150-per-month cut in every Social Security benefit 
check right now. That was what the Social Security trustees suggested 
was a possibility. That is something I think we would unanimously, in 
this Senate, reject. No one is going to cut benefits $150 per month 
right now--nobody. Nobody would do it.
  If we are going to address this, I have proposed a plan. Senator Kyl 
and I introduced S. 1213, the Defend and Save Social Security Act. 
First, everyone knows we are living longer than when the Social 
Security Act passed. We have a higher quality of life. People want to 
work longer in most areas. So why not gradually raise the retirement 
age without impacting those who are about to retire?
  Under my bill, anyone who is 58 years of age or older will see no 
change by the gradual increase of the retirement age. For everyone 
else, starting in 2016 the normal and early retirement age would 
increase by 3 months a year, so the normal retirement age would reach 
67 by 2019, 68 by 2023, and 69 at 2027, and it stops there. Early 
retirement would be gradual--3 months a year, increased to 63 by 2019 
and 64 by 2023, and it would stop.
  Currently, Social Security recipients receive an annual cost-of-
living adjustment, a COLA. Under my plan, the COLA would be computed as 
it is in current law but reduced 1 percent. So the average rate of 
inflation and COLA has been 2.2 percent every year of an increase. So 
if we have a 2.2-percent rate of inflation COLA, it would be a 1.2-
percent increase in Social Security benefits. What I am saying is that 
a 1-percent decrease in the COLA is just a 1-percent decrease in the 
increase.
  You would have the gradual raising of the age that would be much more 
in line with our actuarial table and the reality today, where people 
are living much longer, and you would also have a slight decrease in 
the increase in Social Security benefits according to inflation. If we 
have rampant inflation, then you would have the COLA, just 1 percent 
less. So if it is 2.2 percent inflation, then you would get a 1.2-
percent COLA. Doing that saves the Social Security system, and it 
closes the 75-year gap. It does not raise taxes on anyone, and it does 
not cut a core benefit for anyone. That is the way we could fix Social 
Security right now.
  What would that do for our deficit? Here is what it would do. It 
would

[[Page 10515]]

achieve a $416 billion reduction over the next 10 years of our deficit 
and a $7.2 trillion savings by 2085. That means we are on the track. 
That means that over the next 75 years Social Security will be solid 
and secure without a tax increase on anyone and without a cut in core 
benefits to anyone, and no one who is 58 years of age or older will be 
affected by the adjustment in the retirement age.
  We have a chance to do some things. I have gone out and said: Here is 
a proposal. My colleague, Senator Corker, has proposed a limit, a cap 
on spending that is a reasonable limit. Other colleagues--Senator Lee, 
Senator Paul, and Senator Toomey have suggested other ways to cut 
spending across the board, just a level goal. They are not cutting 
specific things, but they are cutting the discretionary spending at 
reasonable levels. Many Republicans are offering ways to cut back on 
spending. My colleague, Senator Cornyn from Texas, has put forward a 
cap on spending and a balanced budget amendment. There are proposals 
out there that are responsible ways to deal with this deficit that 
include entitlements and discretionary spending both.
  It is time for the President of the United States to sit down at the 
table and understand that tax increases for kind of a photo-op PR are 
not going to fill the void. The public relations of cutting back on 
corporate jet benefits, whatever they are--I don't know what they are; 
I don't have one--but I think we would probably all agree, if you can 
afford a corporate jet or a private jet, fine. Whatever the President 
wants to do, we will do it, and it will do nothing to help the deficit. 
So why don't we do the meaningful things, which is make meaningful cuts 
in discretionary spending. Let's attack what everybody knows is the 
case; that is, Social Security is going bankrupt as we speak. If 
Congress and the President will speak responsibly about it, we can put 
that on a glidepath that is within the reasonable actuarial table 
estimate so that people will work longer, and very gradually increase 
it--starting in 2016, ending in 2027 at 69. That is gradual.
  We cannot procrastinate. We cannot wait. We cannot hope the crisis 
will pass. And we cannot delay the inevitable. This is the Senate. We 
were elected to make the tough choices. It is time for us to do it.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Brown of Ohio). The Senator from 
Pennsylvania is recognized.


                         Trade with South Korea

  Mr. CASEY. Mr. President, I rise today to discuss the Senate's 
upcoming trade agenda and its impact on Pennsylvania workers and 
Pennsylvania jobs.
  Like so many of our States, Pennsylvania has always played a 
critically important role in America's manufacturing and commercial 
heritage. The coal and waterways of our State helped make the 
Commonwealth legendary for steelmaking and helped turn the United 
States into an industrial powerhouse. During its heyday, 60 percent of 
the domestic steel production in the United States came from 
Pennsylvania.
  During World War II, almost one-third of the Nation's steel came from 
Pennsylvania, which was a full 20 percent of global production at the 
time. The then-Governor of Pennsylvania, Arthur James, put it this way: 
``Pennsylvania was truly the arsenal of democracy and the arsenal of 
America.''
  Given its dominance in the steel industry, it is no surprise that the 
Commonwealth was sixth in the Nation in total war production during the 
Second World War, leading in shipbuilding and munitions production. 
More money was spent to expand production capacity in Pennsylvania than 
in any other State during the war.
  We know at the time it did not stop there. It did not stop at the end 
of the war. After the war was over, these manufacturing facilities were 
used to make American products and fuel the growth of a thriving middle 
class.
  Today, so many of these plants have gone away, due in part to our 
failed trade policies. Over the last 30 years, we have seen trade 
deficits soar, currency manipulation go unchecked, lavish subsidies by 
foreign governments go ignored, and exploitation of workers in other 
countries overlooked. That is why I am very concerned that today the 
Finance Committee is moving forward the pending agreements with South 
Korea, Colombia, and Panama. For the last several weeks, the Presiding 
Officer, Senator Brown, and I have persistently asked the tough, 
critical questions about the impact of these agreements before they are 
considered. A review of the impact of past trade agreements offers very 
little comfort. In 1994, Congress passed the North American Free Trade 
Agreement. We know it as NAFTA. Since NAFTA's passage, U.S. Trade 
policies have steadily chipped away at Pennsylvania's manufacturing 
base.
  It is a critical sector for our State and so many others. According 
to a recent study--and the chart on my left depicts it--from the 
Industrial Resource Centers, from 1997 to 2010, just 13 years, 
manufacturing went from 16.4 percent of our gross State product to 12.1 
percent, a remarkable drop in just 13 years. What does that mean for 
the total number of jobs? In total, Pennsylvania lost nearly 300,000 
manufacturing jobs. You can see it from the chart, starting in 1997, 
the drop to 12.1 percent in just those 13 years--300,000 jobs in 13 
years.
  Despite these alarming numbers and statistics, advocates for the 
trade deals, including the pending agreement with South Korea, promised 
significant economic benefits from exploding export potential to job 
creation. Proponents argue a significant net positive from these 
agreements every time they are considered. In reality, instead of 
creating opportunities for Pennsylvania, our trade policies did little 
more than offshore good-paying jobs, while giving our trading partners 
unlimited access to our markets.
  So we must take the time now to ask the tough questions. 
Specifically, as a Senator from Pennsylvania, I must ask three basic 
questions about any trade deal. No. 1, will the agreement protect 
current Pennsylvania jobs and create new jobs in Pennsylvania and 
across America? No. 2, will the agreement help create a level playing 
field for American businesses and workers? No. 3, does the agreement 
provide new opportunities for American manufacturers to export?
  I will focus on the South Korean Free Trade Agreement in the context 
of each question. First, will the agreement protect and create jobs in 
Pennsylvania and across the Nation? In these uncertain times, job 
creation must be our top priority. In Pennsylvania, the manufacturing 
sector is critical. Manufacturing remains the Commonwealth's largest 
source of good-paying jobs, with chemical primary metal products, 
fabricated metal products, food products, and machinery making up the 
top five manufacturing sectors supporting Pennsylvania families. These 
benefits extend beyond individual manufacturing businesses in our 
State--in fact, the economic benefits of a strong manufacturing sector 
experienced throughout Pennsylvania's economy. According to research 
commissioned by the Pennsylvania Industrial Resource Centers, every $1 
increase in demand for products manufactured in our State leads to an 
increase in growth value of $2.52 across all industries. So one buck in 
activity can lead to $2.52 in value.
  The manufacturing jobs that are created support middle-income 
families, and the creation of those jobs and the support they provided 
for those families in 2008 meant the following: The average annual 
compensation of a worker in the manufacturing sector was over $65,000. 
The average pay for the rest of the workforce was $10,000 less. Each 
good-paying job in this country allows for more money to flow back into 
the economy. Given the importance of manufacturing jobs in 
Pennsylvania, we must ask ourselves: Will the Korea trade agreement 
create jobs, especially in the manufacturing sector? I believe it will 
not create a substantial number of new jobs in this critical sector.
  Looking back over the last 20 years, trade-related job expansion has 
been an unfulfilled promise for Pennsylvania and the Nation. We need to 
look no further than NAFTA. In 1993, when the

[[Page 10516]]

agreement was signed, NAFTA promised to deliver hundreds of thousands 
of jobs across the United States. Leading economists at the time 
projected NAFTA would bring 170,000 new jobs in the near term alone. 
These gains were not realized. Instead, since NAFTA was signed into law 
through 2002, 525,094 workers were certified as displaced under NAFTA, 
according to the Department of Labor. I am sure that number has grown 
since that 2002 data point. Furthermore, when NAFTA was negotiated, 
leaders suggested that American exports would expand greatly to meet 
the new-found demands of the open Mexican market with all its new 
customers. The opposite has occurred.
  In 1993, the United States had a small trade surplus. We had a 
surplus with Mexico. According to the official Census Bureau 
statistics, by 2010, 17 years later, we were running a trade deficit 
with Mexico of $66.4 billion. So a surplus in trade with Mexico became 
a huge deficit. Trade with Canada also saw a widening trade deficit 
from $10 billion in 1993 to $28 billion in 2010. So there a deficit got 
bigger; whereas, in the case of Mexico, it went from a surplus to a 
massive deficit of $66 billion. The impact of these policies is plainly 
seen in employment data. Pennsylvania has seen a dramatic decline in 
manufacturing employment since NAFTA was implemented, losing a total of 
over 300,000 jobs. With this rosy prediction of NAFTA in mind, a close 
look at the government's projections of the South Korea agreement 
should be viewed with great skepticism. While the International Trade 
Commission predicts our bilateral trade with Korea will improve, the 
total U.S. trade deficit is predicted to get larger. While proponents 
of the agreement argue U.S. exports to Korea will increase, they are 
neglecting to tell the whole truth. Companies will simply shift from 
exporting to Korea, to creating current customers in other places, 
rather than increasing total exports.
  The second question I ask is, Will this agreement help create a level 
playing field after enactment? I believe this agreement, South Korea 
agreement, will fail to create a level playing field for our workers 
and our companies. Modern trade agreements do more than cut tariffs. 
These agreements contain hundreds of provisions that make substantial 
changes to nontrade policies, and the Korea agreement is no exception. 
According to the group Public Citizen, these nontrade provisions limit 
the authority granted to elected representatives of the American people 
over product and food safety, financial regulations, health care and 
energy regulations, patent terms, and even our tax dollars that can be 
spent by the government. The agreement allows Korean exporters to take 
investment disputes out of courts and into unaccountable and secretive 
international tribunals through a process known as investor-to-state 
dispute system that is similar to NAFTA.
  Additionally, the investment chapters were signed prior to the 
current financial crisis back in 2007. These specific chapters include 
rules that prohibit either country from imposing firewalls between the 
sorts of financial services one firm may offer to limit the spread of 
risk, for example. Important protections put in place after the 
financial crisis of 2007 and 2008 could potentially be challenged under 
the pending agreement. Even more troubling is the issue of Korea's 
currency. South Korean currency manipulation remains an unaddressed 
problem. As we have seen in China, an intentionally weakened currency 
leads to a fundamentally unbalanced trade relationship and brutal 
conditions for U.S. companies. In a June 17 report, the Economic Policy 
Institute calculated that if Asian currencies were strengthened to 
appropriate market-determined levels, if that were done, U.S. gross 
domestic product would increase by as much as $285.7 billion or 1.9 
percent, creating up to 2.25 million U.S. jobs; that is, if Asian 
currencies were strengthened to those appropriate levels. 
Unfortunately, as with other NAFTA-style free-trade agreements, this 
South Korea agreement is silent on currency. This is unacceptable 
because South Korea devalued their currency twice, once in 1988, once 
in 1998. Both interventions devalued their currency by 50 percent or 
more. South Korea was one of the first countries cited as a currency 
manipulator by the Treasury Department in 1988. South Korea continues 
their long history of manipulating their currency. In fact, the most 
recent Treasury report to Congress on international economic and 
exchange rate policies, from May 27, 2011, noted that South Korea 
intervened ``heavily'' in its currency market during the financial 
crisis and has continued uninterrupted since. Treasury urged South 
Korea to ``adopt a greater degree of exchange rate flexibility and less 
intervention.'' Currency policy has played a central role in China's 
mercantilist trade policies and has cost the United States thousands of 
jobs. We should not be cutting tariffs for the country, with South 
Korea's heavy history on currency manipulation, without language to 
deal with protecting us in a competitive environment in the 
devaluations that they have undertaken before.
  Additionally, several groups raised the possibility that the 
agreement could be used to weaken U.S. trade laws. The free trade 
agreement creates a bilateral commission on trade laws. While our Trade 
Representative argues that this will not change any existing U.S. trade 
laws, this avenue could be used by advocates of weaker enforcement in 
the future.
  Finally, I turn to the last question. Does the agreement provide new 
opportunities for Pennsylvania manufacturers to export their goods? 
Similar to NAFTA, the benefits of the South Korea deal have been, in my 
judgment, overstated, while the risks have been largely ignored. Rather 
than opening a new market for Pennsylvania farmers and manufacturers, I 
am concerned that the benefits to the United States are minimal, at 
best. There are specific reasons this deal fails to deliver for 
Pennsylvania exporters. First, most of the benefits are based on an 
overly optimistic projection for agriculture. These projections, 
compiled by supporters of the agreement, assume that a cut in tariffs 
will immediately equal a growth in market share.
  We know from past experience that Asian markets, including South 
Korea, have come up with a host of unjustified nontariff restrictions 
to keep U.S. beef out of their country. These barriers to free trade 
are likely to limit export potential and are largely unaddressed in the 
agreement. There are other troubling clauses dealing with the beef 
industry. The South Korea agreement will allow American beef packagers 
to use Canadian or Mexican cattle and then export the packaged Mexican 
or Canadian beef as ``American'' beef. This policy, while great for 
beef packagers, undercuts the U.S. ranchers. Given our difficulties in 
gaining a foothold in these markets, we should rely solely on U.S. 
cattle, which we know are safe.
  Second, one of Pennsylvania's most important sectors--dairy--the 
competing European Union Free Trade Agreement with South Korea could 
inhibit our ability to compete in the South Korean market. The text of 
the European Union agreement specifies that certain types of cheese, 
including mozzarella, must come from specific regions. As a result, 
European exporters could challenge U.S. producers selling cheese in 
South Korea as ``mozzarella'' or ``parmesan.'' In this sense, the 
Europeans have negotiated a better agreement, giving European companies 
an advantage over American companies.
  Another problem with the agreement is which goods qualify for the 
``Made in South Korea'' designation--the sticker, so to speak--and are 
allowed to, therefore, enter the United States duty free. Under the 
rules of origin in annex 6-A of the agreement, 65 percent of the value 
of many goods, including automobiles shipped duty free to the United 
States can come from South Korea and still be considered ``Made in 
South Korea.''
  This standard is lower than the European Union agreement. The 
European Union agreement has a 55-percent content standard where 
content can be foreign and, once again, places our companies at a 
comparative disadvantage in

[[Page 10517]]

international competition. Just as the chart depicts, 35 percent Korea 
plus 65 percent China will equal ``Made in Korea.'' I don't think that 
is what the American people bargain for when they expect us to get 
trade policies right. In a sense, this opens the door--a back door--for 
products primarily made in places such as North Korea or China to enter 
the United States of America duty free. That is wrong. It should be 
changed. We should not broker an agreement that has that in it.
  Let me conclude with the three questions I started with. First, will 
the agreement create a substantial number of new jobs? I am concerned 
it will not. In previous agreements such as NAFTA, if they are any 
indication, the U.S.-Korea agreement will lead to job losses, 
especially in the critical manufacturing sector.
  Second, will the agreement help create a level playing field? It will 
not. The agreement fails to address critical issues such as currency 
manipulation that have already hurt American businesses and cost us 
jobs.
  Third, does the agreement provide new opportunities for American 
manufacturers to export? Proponents have overstated the benefits. 
Certainly industries and firms are likely to benefit, while many others 
will not. What is clear is that in its failure to address nontariff 
barriers to trade, the agreement leaves American firms unprotected and 
on a playing field that is not level.
  Instead of moving ahead with a broken model, we need to focus on the 
bigger picture--formulating a strategy that helps American 
manufacturers, that leads to job creation to help middle-income 
families, helping us create the jobs of the future.
  To make real sustained progress, Washington needs to have a plan, a 
strategy. We must develop and commit ourselves to a national 
manufacturing strategy that includes job-creating trade policies as 
well.
  Recently I convened a roundtable in Pennsylvania with leaders of 
several southwestern Pennsylvania companies at the Universal Electric 
Corporation in Canonsburg, Washington County, to listen to their ideas 
and bring them to Washington, DC, to keep a focus on supporting 
manufacturing. I heard a number of common themes. First of all, we 
should develop a national strategy, as I mentioned, for manufacturing. 
Second, we should make the R&D tax credit permanent. Third, we should 
crack down--really crack down--on China's currency manipulation and 
other unfair trade policies so that Pennsylvania companies and their 
workers have at least a fair shot. Legislation I recently introduced 
gives us those tools to hold countries accountable for manipulating 
currencies.
  We also need to extend trade adjustment assistance to help workers 
who have lost their jobs to overseas unfair foreign competition so they 
can build new skills and find new employment.
  Finally, we need to invest in science, technology, engineering, and 
math, the so-called STEM discipline, which we know will create many 
jobs in the future.
  Manufacturing is the heart and soul of Pennsylvania and our Nation's 
economy. Our future depends on developing policies that help our 
workers and our businesses compete in the global production of goods. 
Our workers and our businesses can outcompete anyone in the world--any 
country in the world. We just need to give them a fair shot. We need to 
give them a strategy. These agreements don't do that.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Mr. President I would observe the current Presiding 
Officer has had the misfortune of being in the chair whenever I am 
coming down to speak, so I appreciate his patience.
  Today, congressional leaders are meeting with the President of the 
United States to discuss what can be done to reduce the Nation's out-
of-control deficit, to deal with our unsustainable debt, to get America 
back to work and help grow our economy. I congratulate the President 
for convening this meeting, which will probably be one of the last 
chances we will have to deal with this deadline of August 2 to deal 
with the debt limit--a situation wherein we have maxed out our Nation's 
credit card. Forty-three cents out of every dollar the Federal 
Government spends today is borrowed money, making the deficit worse and 
not better and making the debt worse and not better. This is the chance 
to kick the habit of out-of-control spending here in Washington.
  I appreciate the fact the President has moved from his initial 
position wherein he advocated for Congress to simply raise the debt 
limit without putting Washington and Congress on a spending diet. I 
appreciate the fact he has moved in his position. I read today in the 
daily newspapers that he is putting a lot of things, including Social 
Security reform, on the table, together with other entitlements. I hope 
this represents a change of position, a change of attitude, and the 
President and our negotiators will seize this opportunity to do the 
kind of grand bargain that will put America back on to a more solid 
fiscal path. Every child born in the United States today--while being 
one of the luckiest people in the world being born in the United States 
of America, but at the same time being burdened--every child born today 
will be burdened with $46,000 for their share of the national debt. 
That is simply wrong and we all know it.
  Unfortunately, there has been a lot of discussion about the White 
House and some of our Democratic colleagues wanting to raise taxes as 
part of this grand bargain. Indeed, I think that is the notion behind 
this sense-of-the-Senate resolution the majority leader has introduced, 
which is targeted at millionaires and billionaires. The sense-of-the-
Senate resolution the majority leader wants us to vote on says it is 
the sense of the Senate that any agreement to reduce the budget deficit 
should require that those earning $1 million or more per year make a 
more meaningful contribution to deficit reduction.
  Unfortunately, this is not real legislation. This won't change 
anything. This is a sense of the Senate. This is a resolution, which I 
think is a missed opportunity to actually deal with the issue rather 
than pretend as though we are treating it seriously.
  When the White House proposes that working families and small 
businesses, among others, suffer a $400 billion tax increase over the 
next 10 years, it strikes me that in one sense this is like a diet 
where a person says, I am going to give up dessert. I am not going to 
eat dessert. But then that person binges on the buffet. In other words, 
it is not real. It is not going to work.
  To put this in perspective, the Federal Government is currently 
borrowing $4 billion every day this year. So actually raising taxes in 
this amount--while this only amounts to 10 days of what Washington 
spends--raising taxes by $400 billion over 10 years, as we can see, 
won't make a serious dent in the deficit and the debt, and they are 
very serious job-killing proposals as well. It strikes me as common 
sense to say if we want more jobs, we make it easier to create jobs. If 
we want less jobs, we make it harder to create jobs by raising taxes, 
by excessive regulation, and other obstacles to job creation. The irony 
is that I am not confident our friends on the other side who propose 
tax increases as part of this grand bargain actually want to use that 
increased revenue to pay down the deficit and the debt. To the 
contrary, I fear what they want to do is continue spending at the 
current levels. So it is kind of a shell game, saying we are going to 
cut $2 trillion but we are going to raise taxes by $2 trillion. What 
does that mean? Unless that $2 trillion in additional revenue is used 
to pay down the debt, it means it is a wash and government and 
Washington continue business as usual. I don't think the American 
people want us to continue doing business as usual. I think they want 
us to listen to them and to mend our ways.
  Let me give a context for how nonserious some of the proposals are, 
including out of the President of the United States. All of a sudden he 
focused last week on this depreciation schedule for corporate jets. 
Depreciation is a normal part of the Tax Code

[[Page 10518]]

which says if one uses something in a business, one can basically write 
it down over time. It won't surprise us to find that if a person did 
that, if a person did what the President said--eliminate depreciation 
of corporate jets--it would generate about $3 billion in revenue to the 
Federal Treasury over 10 years--$3 billion over 10 years. But to get a 
sense of what a minuscule contribution that would make to solving the 
problem, consider what our annual deficit is. This is in 1 year. This 
is what $1.5 trillion looks like. It has 12 zeroes; a 1, a 5, and 11 
zeroes after the 5. That is our annual deficit.
  The President says to solve this annual deficit, we need to raise $3 
billion in additional revenue from corporate jet owners. Obviously, it 
is a drop in the bucket. But it is even worse when we look at the debt. 
The deficit, of course, is the difference between what the Federal 
Government brings in and what it spends. Right now it is spending about 
$1.5 trillion more each year than it brings in, in revenue. That is the 
deficit. But the accumulation of those deficits represents the debt. 
This is how much red ink our Federal Government is spending--or where 
we find ourselves--and that is $14 trillion. This is the number the 
President wants us to raise--$14 trillion. That is like the max on a 
credit card. If a person is spending too much money, that person bumps 
up against the credit card limit. The President, in essence, rather 
than cutting back on spending and making sure we are paying our bills 
we already owe, wants to raise it so the Federal Government can spend 
more money.
  As I mentioned, this $14 trillion in debt boils down to $46,000 for 
every man, woman, and child in the country. So when the President gives 
a press conference--and I can't remember how many times he mentions 
chartered jets--but he talks about $3 billion in revenue over 10 years, 
it is a drop in the bucket when dealing with a 1-year deficit, or a 
deficit each year, currently of $1.5 trillion, or a $14 trillion debt. 
So the fact is we cannot get there from here, even if we did what the 
President said. It is not serious. It is not honest. It is not candid 
in terms of what we need to do to get our country back on a solid 
fiscal pathway.
  So let's talk about Federal tax reform. There has been a lot of 
discussion about that, where we want to take the Tax Code with all of 
its multiple provisions and get it on the table and take a look at it 
to make sure it is, in my view, flatter, fairer, and simpler. But right 
now, the fact of that according to the Committee on Joint Taxation, 51 
percent--that is a majority of American households--paid no income tax 
in 2009. Zero. Zip. Nada. No income tax was paid by 51 percent of the 
households in America in 2009. Actually, to show how out of whack 
things have gotten, 30 percent of American households actually made 
money from the tax system by way of refundable tax credits, the earned 
income tax credit, among others. So 51 percent of American households 
paid no income tax in 2009, but 30 percent actually made money under 
the current system. According to the Internal Revenue Service, the top 
10 percent of wage earners in America paid 70 percent of total income 
taxes. The top 5 percent of income earners in America paid nearly 60 
percent of income taxes, and the top 1 percent paid 38 percent of 
income taxes.
  So what is the President talking about and what is the majority 
leader trying to--what point are they trying to make when they suggest 
we pass a sense-of-the-Senate resolution saying that millionaires 
should ``make a more meaningful contribution to the deficit reduction 
effort''? What is their point? Is their point that we ought to raise 
taxes on people who are already paying taxes? Is their point that we 
should expand the pool of people who do not pay any income tax or 
should we perhaps expand the pool of people who actually benefit from 
cash transfers, payments as a result of a refundable tax credit?
  Well, I think it is pretty obvious we need tax reform. I am skeptical 
that we have time between now and Secretary Geithner's stated deadline 
of August 2 to do what we need to do and to repair and fix our broken 
tax system. But I think this helps put in context the frankly cynical 
suggestion that somehow we could solve the problem if we just go after 
the fat cats and the corporate jet owners. If we just make the 
millionaires and billionaires pay more money, it will all be all right. 
Well, I think the American people are smarter than that. When 
confronted with the facts, I think they can readily conclude and will 
readily conclude that the system is broken and needs to be fixed. We do 
not need a bunch of smoke and mirrors and phony arguments about class 
warfare. That is not going to solve the problem. We need to solve the 
problem.
  Well, let's look at the President's economic record. I know there 
have been some press reports about that the President said we are 
making a comeback. I think he called this summer ``the summer of 
recovery,'' if I am not mistaken. But, in fact, we know the President's 
policies are actually making things worse.
  All you need to do is look at the number of people who are unemployed 
in America. There were 12 million people unemployed on his inauguration 
day. Now it is almost 14 million. Almost 2 million more Americans are 
unemployed. Is that making things better? No. It is making things 
worse. And we know there are a lot of people who are taking minimum-
wage jobs and other jobs not up to their full potential because they 
want to provide for their families, so we call those people 
underemployed. That would make that number even higher. When the 
President was inaugurated in January of 2009, the unemployment rate was 
7.8 percent. Today, it is 9.1 percent. That is a 17-percent increase. 
In other words, unemployment is worse today than it was when the 
President was sworn in.
  Gas prices. We all know what has happened to gas prices. They have 
gone through the roof. People are having to deny themselves other 
discretionary expenditures because they simply have to have the 
gasoline to be able to drive to work, drive the kids to school, or take 
care of their daily business. The fact is, when the President was sworn 
in, gasoline prices were $1.85. Well, wouldn't it be great if gas 
prices were $1.85 today? Instead, they average $3.58. That is almost a 
100-percent increase in gasoline prices since President Obama put his 
hand on the Bible and was sworn in as President of the United States. 
It is a 94-percent increase.
  Then we were talking about the Federal debt. The Federal debt when 
the President was sworn in--some people will tell you: Oh, it is all 
about President Bush and fighting two wars that were not paid for. It 
is about the Bush tax cuts and other things. Well, I agree there is 
bipartisan blame when it comes to our national debt, but we ought to 
link arms and work together to try to solve the problem rather than 
continue to make it worse. The Federal debt when President Obama was 
sworn in was $10.6 trillion. Today, it is $14.3 trillion. It is 35 
percent worse. The debt has gone up by 35 percent since President Obama 
was sworn in.
  I mentioned this factor earlier. As shown on this chart, this is what 
every American citizen owes in terms of their share of the national 
debt. When President Obama was sworn in, it was $34,000. Today, it is 
46,000. So, congratulations, everyone within the sound of my voice owes 
$11,000 more to the national debt since President Obama became 
President of the United States.
  Then there is health insurance. We have had a lot of debate about 
health insurance costs. We were told that if we just passed this giant 
health care bill, health insurance costs would go down, we would fix 
problems, and we would make sure more people had access to health care. 
Well, since President Obama became President, health insurance premiums 
have gone up by 19 percent--19 percent. Did he make it better or did he 
make it worse?
  Well, we need to unburden the economy from higher taxes, excessive 
regulation, and all the sorts of obstacles that get in the way of small 
businesses--the primary job-creating engine in our economy--doing what 
they do best; that is, growing the economy, creating jobs. If our 
friends across the aisle want more tax revenue, well, the best way to 
get more revenue is to get

[[Page 10519]]

more Americans back to work so they pay taxes rather than remain 
unemployed, losing their homes because they cannot pay their mortgages. 
That is how we ought to increase revenue, not by raising rates, not by 
some of these silly class-warfare arguments that seem to target 
unpopular sectors of the economy.
  And, yes, we need to increase exports to create more jobs. We can do 
that by ratifying the outstanding trade agreements without adding 
unnecessary spending to them.
  And, yes, when it comes to energy policy, the high price of 
gasoline--which has gone up 94 percent since President Obama became 
President of the United States--we can open more domestic energy 
reserves, more American natural resources, rather than continue to have 
to import it from places abroad that are not necessarily our friends or 
which may be in political turmoil or even war, such as Libya. So if we 
had a rational national energy policy where the EPA, rather than 
looking for excuses to deny us access to things such as the natural gas 
discoveries we have found in Texas and around the country--if we had a 
way to take advantage of and did, in fact, take advantage of more 
domestic energy production, it could help us put more Americans back to 
work and help us reduce our dependency on energy from abroad and help 
bring down this price to one that does not break the backs of the 
average working families.
  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.
  Mr. CORNYN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CORNYN. Mr. President, I have a correction. My staff told me I 
undercounted $14 trillion. I asked ahead of time, but we actually got 
the number wrong. The number I have on the chart is actually three 
zeros too few. So just to make sure the record is correct, that is 12 
zeros after the ``14.'' That reflects our national debt. I would like 
to say I made the mistake and it was actually lower, but it actually is 
much higher, which I think reinforces my point.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. SESSIONS. Mr. President, while the Senator is still here, I 
recall--Senator Cornyn is a member of the Budget Committee and 
knowledgeable about these issues--that we have had one budget actually 
presented to the Senate, and that was the President's budget. It was 
scored by the Congressional Budget Office, which shows that under the 
President's budget, the debt of the United States would increase by $13 
trillion in 10 years.
  I do not know if the Senator is aware, but I would ask him is he 
aware of how much additional revenue would come to the government if 
the President's proposal on corporate jet taxation were to be imposed, 
and would that make a difference in the $13,000 trillion that would be 
added to the debt in the next 10 years?
  Mr. CORNYN. Well, Mr. President, responding to my friend from 
Alabama, the number, I am advised, is roughly $3 billion in additional 
revenue to the Treasury, and that would be over 10 years. But, as you 
can see, it is a drop in the bucket when it comes to the deficit for 1 
year, which is $1.5 trillion, and the national debt of $14 trillion.
  I apologize, I am not used to dealing with numbers that big, which 
demonstrates that these numbers really have kind of lost their meaning 
here. I remember Everett Dirksen being quoted as saying: A million 
here, a million there, and pretty soon you are talking about real 
money.
  The fact is we are not talking about millions, we are not talking 
about billions, we are talking about trillions. I think most people's 
minds have a very difficult time conceiving of how big a number that 
is.
  Mr. SESSIONS. I thank the Senator.
  Mr. President, I ask unanimous consent that I be permitted to enter 
into a colloquy with my Republican colleagues for up to 30 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. If Senator Cornyn could join us, we would be pleased.
  Mr. President, the debt situation we are in today is the most serious 
our Nation has ever faced. A lot of people do not understand it and do 
not understand how serious it is. Even after World War II, we had 
growth. We had the baby boomers just coming of age, we had more young 
people and fewer older people, and the situation was more positive than 
it is today, even though we had debt after the war. That is just a 
fact.
  I have tried to look at the creation of a budget that would balance 
in 10 years, bring us into balance in 10 years. It is hard to do. It 
absolutely can be done. It takes some real effort, but it can be done. 
We can do it, and we have to do it. But President Obama, during his 
years as President, is on track to have four consecutive trillion-
dollar deficits--the highest deficit we have had previously was the 
$450 billion deficit that President Bush had. We have had $1.2 trillion 
and $1.3 trillion.
  This September 30, when the fiscal year ends, it is estimated to be 
$1.5 trillion for 2011. We take in $2.2 trillion, we are spending $3.7 
trillion, and 40 cents of every dollar we spend this year is borrowed. 
It is an unsustainable course.
  President Obama appointed a deficit commission. He appointed Erskine 
Bowles, a former Chief of Staff of President Clinton, as co-chair. He 
also chose Alan Simpson, a former Republican Senator. They submitted a 
statement to the Budget Committee that this country faces the most 
predictable economic crisis in its history. We have to act, they told 
us.
  They were asked when could this crisis happen. Mr. Bowles said it 
could happen within 2 years--not for our children and grandchildren; he 
said 2 years, maybe a little sooner or maybe a little later. Alan 
Simpson popped up and said he thought it could be 1 year; in other 
words, some sort of economic crisis like we had in 2007 and 2008 or 
something that could put our economy in a tailspin. It is that serious. 
The debt trajectory path we are on is unsustainable.
  Tomorrow, I have to say, will mark the 800th day this Senate has not 
had a budget. We are borrowing 40 cents out of every dollar we spend, 
and we have gone this long without a budget. There is no plan, 
apparently, to present one. The chairman of the Budget Committee, on 
which I am ranking Republican, tells us he has one, and he talked to 
his colleagues and they have agreed on it. But it remains secret.
  The Congressional Budget Act explicitly says we should have a budget 
by April 15. It says the committee should report a budget resolution on 
April 1. Well, we have not had a markup. Apparently, there is no plan 
to have one. We are just going to wait and see if secret negotiations 
can produce something. That is not acceptable at a time in which the 
debt is the primary threat to the health, security, and welfare of our 
Nation, and there is no doubt about it.
  Admiral Mullen, Chairman of the Joint Chiefs of Staff, said the 
greatest threat to our national security is our debt. Secretary of 
State Hillary Clinton made a very similar statement. They are exactly 
right. There is no dispute about it.
  We have had nothing on the floor of the Senate except a resolution 
saying we should tax the rich--a sense of the Senate, that has no 
power, no binding authority, no numbers, not how much we are going to 
attack the rich.
  We are in serious condition. I think the American people, if they 
understood how little has been done in this body this year on the most 
important issue facing this country, would be even more dissatisfied 
with the U.S. Congress than they are--more dissatisfied at least with 
the Senate. I knew the Senator from Missouri before, who is not new to 
Congress. He was a Republican whip in the House of Representatives. The 
House has passed a budget this year--an honest budget that changes the 
debt trajectory of America in a solid way, and it would

[[Page 10520]]

put us on a new path for prosperity. Everybody doesn't have to agree 
with everything in it, but they met their responsibility by April 15.
  It is great to be here with Senator Blunt. We are so pleased to have 
him in the Senate. I ask him if he would share his thoughts at this 
time about this situation.
  Mr. BLUNT. I will. I also asked the Senator about his view of this 
budget situation. The Presiding Officer and I were secretaries of state 
together some time ago and have known each other a long time. I am glad 
to have him in the chair as we have this discussion.
  I don't think the House, until the last Congress, ever failed to pass 
a budget. I am not sure the Senate didn't always pass a budget until 
the last Congress, though there were times when the House and Senate 
could not agree. But at least each side had a plan.
  There is an old adage that when you fail to plan, you plan to fail. 
It sure looks to me that is the trajectory we are on now. Members are 
more and more talking about maybe we will have another continuing 
resolution this year. That will be the appropriations process because 
we have no plan. Of course, as the Senator pointed out, as a person who 
knows as much about the budget process as anybody in Washington, we 
passed the April 1 deadline, then we passed a May 1 date, and then a 
June 1 date, and now we passed the July 1 date. We are up to that 800th 
day since the Senate passed a plan or had a plan of any kind. We are 
waiting for a plan to move forward with the work of just funding the 
government. Clearly, that is not acceptable.
  We see the economy continuing to wait for some signs of certainty 
from the Federal Government, certainty about where our budget is going 
to be, certainty about our tax structure, certainty about regulations 
and utility bills. We are just not seeing that happen. In fact, things 
are getting progressively worse and worse. Gas prices have almost 
doubled now in the last 30 months. Unemployment is up 17 percent. In 
fact, there is no statistic I know of that is better than it was in 
January of 2009.
  Has the Senate, in the past, until the last 3 years--has there ever 
been a time when the Senate didn't even attempt to have a budget?
  Mr. SESSIONS. To my knowledge, at no time since I have been here did 
the Senate not attempt to pass a budget. In the last 2 years, even when 
our Democratic colleagues had 60 votes--the largest majority in recent 
memory in the Senate--they only attempted to bring a budget to the 
floor once. Last year a budget did go to committee. It was marked up by 
Senator Conrad. It came to the floor, but the majority leader decided 
not to bring it up. This year, it seems that Senator Conrad was told 
not to have a markup, not to even produce a budget in committee.
  It seems to me to indicate a lack of willingness to lead because--
would the Senator not agree?--a budget sets the priorities, 
demonstrates the vision for the future of the country and what we 
should spend, what we should tax, and how much debt we can afford to 
run up. Those are fundamental responsibilities. How would he evaluate 
the fact that tomorrow we are 800 days without a budget? What does that 
say about the leadership we have seen in the Senate?
  Mr. BLUNT. It shows we have been 800 days without a budget, and 
basically 800 days without any structure or process of how we spend the 
people's money. It has been 800 days since the last time we could come 
up with an appropriations process, so maybe they will suggest we will 
modify that a little bit and move forward. But that clearly is not good 
enough. In that 800 days, as the Senator pointed out, we have gone to 
where we are--we have added 35 percent in a little over 800 days, in 
2\1/2\ years, to the Federal deficit.
  This is not defending anybody else's effort to make the revenue and 
the expenditures of the Federal Government balance, but we can't 
continue to spend more than we have. If we don't have a plan, a 
blueprint, or if we don't have a budget like families have to have--if 
we don't have a budget at the very least, and we are managing our 
money, we write checks until the money runs out, and we can't do much 
more than that.
  We are at a point now that we are spending $3.7 trillion or $3.8 
trillion and collecting $2.2 trillion. I am like Senator Cornyn on this 
topic--by the way, everybody else is too, including the Secretary of 
the Treasury. Nobody knows how much money this is, but we all know if 
someone is making $22,000 a year and spending $37,000 a year, and they 
have already borrowed more money than anybody should have ever lent 
them, they can't continue to do that.
  There has to be a point where they say: We are going to have to get 
real. We are making $22,000, so we better start spending no more than 
$22,000, and that includes paying off the money that we have already 
borrowed when we were spending $37,000.
  There are so many zeros and numbers that if any of us really 
understood how much money we are talking about and how long it will 
take to pay it back, we would all be more scared than we are. 
Certainly, the people we work for would be more scared than they are 
because we are doing irresponsible things, and as irresponsible as any 
of those things is not having a plan.
  In all those years the Senator spent on the Budget Committee and his 
leadership there now, he knows if we don't have a plan--the 
appropriations process doesn't move forward unless we agree first how 
much money we are going to spend in that process. So, eventually, we 
just go back and say: Let's go back to last year and modify slightly 
the terrible job we did last year, and let's borrow that much more 
money again.
  That is not acceptable.
  Mr. SESSIONS. Before the Senator shares his thoughts about the 
appropriations process from his extensive experience in the leadership 
of the Congress, just briefly, I want to make sure the American people 
and our colleagues know what happened.
  I see our newly elected colleague from Wisconsin, Senator Ron 
Johnson. He won election, you could say, in an upset--a popular, big 
victory. He campaigned all over his State and talked about the issues 
we are talking about today.
  As a new Member of the Senate, I would love to hear Senator Johnson's 
comments about where he thinks we are today.
  Mr. JOHNSON of Wisconsin. First of all, I thank the Senator for his 
leadership. He has been talking loudly and clearly about the fact that 
we should not have recessed this week. I know President Obama tried to 
claim credit for that. It is because of the Senator's leadership and 
the members of the Republican conference in the Senate who said: No, we 
are bankrupting America and we need to stay here and start debating 
this issue.
  Unfortunately, that is not what we have been doing this week. It is 
sad. One word I have used all the time now that I have come to 
Washington is ``unbelievable.'' It is simply unbelievable that tomorrow 
will mark 800 days that we haven't passed a budget.
  My background is in business for the last 34 years. I have had to 
produce budgets on time. I have had people produce budgets for me on 
time. In business--even a small business--it is inconceivable that if 
you tell a colleague to make sure to have the budget on your desk by 
April 15 that it wouldn't be there; 99.9 percent of those accountants 
and controllers would have a budget on time, on April 15.
  We are dealing with the United States of America. We are talking 
about our financial future, the fate of America. The Democrats in the 
Senate have failed to meet that obligation for 2 years in a row. That 
is simply unbelievable, and it is so incredibly irresponsible. Really, 
I think the Senate has been guilty of willful neglect. The phrase I 
have used is that the Senate has been ``fiddling'' while America is 
going broke. That is sad.
  As the Senator pointed out as well, what does the financial future of 
America rest on? Some secret talks--talks between a few individuals 
going out behind closed doors far from the view of the American public 
rather than in an

[[Page 10521]]

orderly process where a plan is presented that can be viewed by the 
American public, that can be debated openly the way our Founders 
envisioned on the floor of this Senate, this historic floor; instead of 
using the process that we should have been using, what is going to 
happen? Are we going to have a result, a negotiated settlement drop in 
our laps a couple days before this deadline date? Is that what is going 
to happen? Is that really how the financial fate of America is going to 
be decided?
  I personally find that process disgusting. That is why I stood last 
Tuesday on the floor of the Senate and said unless we start seriously 
addressing this problem, the bankrupting of America, in the open, in 
the bright light of day, I was going to begin to object. I was going to 
begin to withhold my consent.
  I was heartened by the support I got from my Republican colleagues 
because, let's face it, we understand how urgent the situation is. We 
understand how dire our financial situation is. We are willing to sit 
down and work with anybody who will seriously address the fact that we 
are driving America toward bankruptcy. But we need a willing partner, 
and up to this point in time I haven't seen one.
  The fact that the only plan we have seen is the President's budget, 
4.25 inches thick, 2,400 pages long--how many thousands of manhours did 
that document take to produce? It was so unserious it would have added 
more than $12 trillion to our Nation's debt in the next 10 years. It 
would have continued the bankrupting of America. It would have made us 
go broke. It was so unserious, it failed in the Senate by a vote of 0-
97. Not one Democratic Senator found that bill serious enough to give 
it a vote. That is the only plan I have seen.
  I woke up this morning to a couple of news reports, and there was 
more detail about what the administration might plan to do fed to 
reporters than fed to a Member of Congress.
  I am sorry to be so blunt about this, but that is a disgusting 
process. The American people deserve far better. I guess today what I 
am standing here saying is, I want to see a plan, and I want to see a 
budget, and I want to see it to give us enough time so we can actually 
analyze it and debate it and pass the real structural reforms so that 
we can actually solve this problem. I am calling on the President and I 
am calling on the Democrats in this Senate to produce that plan so we 
can have an open debate on it. That is kind of how I am thinking.
  Mr. BLUNT. I would like to say to both Senator Sessions and Senator 
Johnson, who were primary leaders in this idea that we shouldn't go 
home, that Republicans shouldn't vote to adjourn, that you were going 
to object to things that didn't relate to the business we need to do, 
and, of course, that is right.
  As Senator Johnson was talking, I was thinking the other deadline, 
the other April 15 deadline, every American had better comply with that 
one. It is in the law just like the one that we are supposed to comply 
with.
  What if everybody in America decided they were going to miss their 
legal deadline as well? OK, we are not going to have a budget, and we 
are not going to pay our taxes. Of course, they would be in trouble. 
The Senate is not in trouble, but the country is in trouble because the 
Senate is not doing its job. Neither the House nor the Senate did their 
jobs in the last Congress, for the first time ever. So that is how we 
go now into 3 years of no budget, 3 years since we had a working 
document that we should have to work with. That is important.
  What did we do this week? The disappointment to all three of us is we 
said we wanted to stay this week and deal with these issues, and what 
did we deal with? We started out by trying to deal with a Libya 
resolution that apparently wasn't important enough to deal with last 
Thursday when we were going to take a week to be working in our States, 
but we will debate the Libya resolution. Then when people on the 
Republican side said they thought we ought to be debating the reason we 
were supposed to stay, we still didn't do that. We have this amendment 
that I think was supposed to be a sense of the Senate, and is a sense 
of the Senate that millionaires aren't paying enough taxes.
  We all understand the politics of that, just like we understand the 
politics of no accelerated depreciation for business airplanes. 
Whenever that was done, it was done to try to create more American jobs 
quicker by a little more demand. I think how that works is that plane 
is depreciated in 5 years instead of 7 to encourage people to go ahead 
and buy a plane and keep people who make planes at work. But what is 
that $3 billion over 10 years? We are borrowing $4 billion today, and 
we try to have this debate as if it is about $3 billion over 10 years. 
We are borrowing $4 billion today, and we want to have this false 
debate about who is not paying their share.
  We are spending too much money is the problem. The problem is not 
that we are not taxing enough. We are spending almost 25 percent of the 
capacity of the country to produce goods and services. Until the 
beginning of 2009, for 40 years the average was 20.6; $1 out of $5 was 
going to the Federal Government, not $1 out of $4.
  I was asked by some reporters yesterday: Why is this so different 
than other times when the debt limit has been increased? You mentioned 
one of them earlier. One of the differences is we have added 35 percent 
to the debt in about 30 months--35 percent to the debt in 30 months.
  Another one is the Federal Government is suffocating the economy by 
spending too much money. There is no money left for people to borrow 
and take a risk and create a job and create an opportunity for somebody 
else.
  On the millionaire tax, 1 percent of all the taxpayers pay 38 percent 
of all the taxes now. Maybe we ought to get to where 1 or 2 percent 
just pay all the taxes. We already have 47 percent of the individuals 
in the country paying no income tax.
  By the way, you value what you pay for. If you don't pay any income 
tax, you don't care about the income tax as much as if you did. So 
there aren't as many people out there fighting excessive taxation 
because they have less of a stake in it. But 1 percent of the people in 
the country already pay 38 percent of the income taxes, and 10 percent 
pay 70 percent. Maybe we just ought to let that 10 percent pay 100 
percent. I guess that would get all the millionaires and billionaires.
  And, oh, I remember the tax. Do you remember the millionaires' tax, 
but only like 155 people would pay or something? It was the alternative 
minimum tax; 155 people were going to pay that millionaire tax, and now 
some huge percentage of all Americans pay it because, eventually, once 
we start down this path, everybody is impacted by higher tax rates.
  The frustration of being here and not doing anything all week--we had 
one vote to compel the Members who didn't come, to come to the Senate, 
and another vote was cloture on a bill that doesn't matter. The 
frustration of your leadership and then that result is pretty 
incredible to me.
  But thanks to both Senators for insisting for weeks before last week 
that we should stay and have a discussion, a debate, a vote on the 
things that matter. I am sorry that we didn't have that, particularly 
based on the intensity on the part of both Senators of insisting that 
we have that kind of debate this week, and we didn't have it.
  Mr. JOHNSON of Wisconsin. I would like to pick up on Senator Blunt's 
point about just how unserious this week has been.
  Just in comparison to business, about 5 years ago I bought a business 
out of bankruptcy. I watched those business owners over the course of 2 
or 3 years struggle to make a go of that business. You would not 
believe the number of hours those people, those hard-working Americans 
put in to save that business. It didn't work. They went into 
reorganization under the bankruptcy laws. I bought that business out of 
bankruptcy. I saw how incredibly hard my team worked to make that 
business survive, and it did survive. These are individuals putting in

[[Page 10522]]

16, 17, 18, 20 hours a day to make a product, to build a good life for 
themselves and their families, to provide employment, jobs.
  This is the American spirit. That is the entrepreneurial spirit. That 
is what Americans do day in and day out, whether they own a business or 
whether they contribute their effort: their labor to make their 
business successful, the one they work for successful. That is what 
Americans do.
  What has this President done? What has this Congress done? What has 
this Senate done?
  In the last 6 months since I have been here, we passed six laws, six 
bills that have become law. Three of those had to do with the 
continuing resolutions of last year's business: funding the government 
for this year. Those were laws that should have been passed 1 year ago, 
but it was left over for us to do that.
  We had two bills to extend the PATRIOT Act. If we take a look at how 
that was even done, it was last minute, rush-rush, very little time for 
debate. We couldn't even get amendments in there.
  Then, of course, the other one is we kind of cleaned up a little bit 
a little part of the health care law that dealt with 1099s, which would 
have been a nightmare. It would have cost billions of dollars to comply 
with and not brought in any revenue. So we finally got that off the 
books, thankfully.
  The other bills we have debated, we spent 16 weeks debating three 
bills. The total dollar amount of those bills is $20 billion. That is 
about \1/2\ percent of what this Federal Government will spend this 
year. So we have spent 16 weeks debating \1/2\ percent of our $3.6-
trillion-a-year budget. That, in my mind, is the definition of being 
not serious.
  Of course, we have said it has been 799--tomorrow it will be 800--
days since we actually passed a budget. This week we spent 15 hours of 
debate. We call it a sense-of-the-Senate resolution? It should be 
called the nonsense of the Senate. That is what has been occurring this 
week, and it is a tragedy. It is a tragedy.
  But, again, that is why I stood up and started to object. I will 
continue to do that until we actually start getting serious, until we 
actually see a plan, a budget that we can start debating.
  Mr. SESSIONS. Well, let me just note that we had a sense-of-the-
Senate resolution on the floor, and we had a cloture vote on it that I 
think everybody voted to go to the bill. That is what the leader wanted 
to do. We go to the bill. But it is really nothing because if it passes 
it has no impact and makes no change whatsoever. It basically says we 
should tax the rich more.
  Well, we can debate these issues, but I will just note that the 
Organization for Economic Cooperation and Development, OECD, which is 
an organization for the development of world businesses has concluded 
that the United States has the most progressive tax system in the 
world. We always thought the Europeans were more hostile to wealth and 
more socialistic than we were, but that is their analysis.
  As Senator Blunt said, how much more do we want them to pay? Maybe 
they should pay more. Let's debate it and let's talk about it. But that 
is not going to fix our problems.
  Senator Johnson was a successful businessman, an accountant. I have 
seen his work. I am so glad he is on the Budget Committee. I guess he 
and Senator Enzi are the only accountants around here, and we are glad 
the Senator is here. I have seen his work.
  He actually adds up numbers and makes spending charts. He showed me 
one this morning, trying to figure out a way to change America.
  But my first question is--the Senator was a successful businessman 
and he had never been a politician before, so why did the Senator run?
  Mr. JOHNSON of Wisconsin. Well, the reason I ran is because we are 
bankrupting the Nation. I love America. We love America. When I watch 
what is happening, and when I saw how broken Washington was, when I saw 
them pass the health care law, from my standpoint that was the straw 
that broke the camel's back.
  Our first child, my daughter Carey, was born with a very serious 
congenital heart defect. Dedicated doctors and surgeons saved her life 
the first day. Then 8 months later, when her heart was the size of a 
plum, another dedicated surgical team of dedicated professionals 
totally reconstructed the upper chamber of her heart. Her heart 
operates backwards now. But she is 28 years old, and she is a nurse 
herself in a neonatal intensive care unit.
  When I heard President Obama say these doctors, that they will take 
out a set of tonsils for a few extra bucks, I found that outrageous. 
Then when this Congress and this President signed the health care law, 
I know the result of that. It is designed to lead to a government 
takeover of our health care system.
  All we have to do is take a look at Canada and Britain. We don't have 
to theorize what that is going to result in. It will lower the quality 
of care. It will result in rationing, and the medical innovation to 
save my daughter's life and millions of others--it really is America 
where medical miracles are created. I think that innovation is going to 
come to a grinding halt.
  So that is just the quality aspect of the health care bill, but it is 
going to destroy our budget.
  I wrote a piece with Douglas Holtz-Eakin, ex-CBO Director. Rather 
than $93 billion a year, when this bill kicks in, as it is designed to 
do, and a large percentage of Americans lose their health care employer 
coverage and get dumped into the exchanges, we are talking about a $\1/
2\ trillion or maybe $900 billion.
  I see we are running out of time, but that is why I ran, because we 
are bankrupting America.
  The ACTING PRESIDENT pro tempore. The Senators have used 30 minutes.
  Mr. SESSIONS. I ask unanimous consent that I be given 1 additional 
minute.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. SESSIONS. Mr. President, I just want to say we have in this 
colloquy Senator Blunt, who was the second ranking Republican leader in 
the House and who has dealt with these issues for many years. We are so 
glad to have him in the Senate--and Senator Johnson, a new Senator, 
passionate and concerned about the future of America, both of them. I 
think the American people should be proud of the service they have 
rendered.
  We have to change. I believe we can, and we are going to keep 
fighting toward that end.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Ohio is 
recognized.
  Mr. BROWN of Ohio. Mr. President, I appreciate the Presiding Officer 
recognizing me. I kind of switched places with him earlier. I was in 
the chair and listened to some comments from a number of Senators on 
the other side of the aisle. I did not come to the floor to talk about 
this, but I just cannot help myself sometimes.
  I heard these comparisons. When they talked about the economy, it all 
started January 20 of 2009, and they compared that day with today. What 
they left out of that picture is when Barack Obama became President, 
this economy was going like this. It was not like: He is President. Now 
things will get better. The 30 days after he was sworn in on January 
20, 2009, we lost 700,000 jobs in this country. The next 30 days we 
lost somewhere in excess of, I believe, 600,000 jobs.
  The point is, what happened for the first several months, almost 
before President Obama could take a breath, before Congress, the House 
and Senate, controlled by Democrats then, could actually put a program 
in place and put policies in place that would respond to this terrible 
economy bequeathed to them and to us by this sort of Republican 
economic policy. The Republican economic policy was tax cuts for the 
rich, two wars not paid for, a giveaway to the drug and insurance 
industry, a bailout to the drug and insurance industry in the name of 
Medicare privatization, privatization/deregulation of Wall Street, and 
tax cuts that

[[Page 10523]]

went overwhelmingly to the richest Americans. That is what got us into 
this.
  For them to say look at the number of jobs today, look at the number 
of jobs in January, 2009--they know that is a specious argument. They 
are disingenuous. They are not especially honest when they make that 
argument.
  The fact is, we have seen in the last 14 months--and I wish it were 
better. I went to Barberton, OH, this week and was at a plant expansion 
with 30 jobs. It is not enough, I wish it were 300. It is an Alcoa 
plant. They are hiring people. They are paying OK wages. I wish they 
were paying better wages. I wish they could hire more people. But we 
are seeing progress.
  In the last 14 months--they forgot to tell us this--we are seeing job 
growth every month, including manufacturing job growth, the lifeblood 
of the economy in my State. We are the third leading manufacturing 
State, only behind the States of Senator Cornyn and Senator Boxer and 
Senator Feinstein in the number of manufacturing jobs and their output.
  The point is, let's be honest when we have this discussion. We know 
our policies are not working as fast as we would like. But we know what 
their policies brought us--21 million private sector jobs created 
during the 8 years of Bill Clinton; then when they put in the Bush 
economic policies: tax cuts for the wealthy, twice; two wars, not 
paying for them; partial privatization of Medicare; deregulation of 
Wall Street--1 million private sector jobs created in 8 years; 21 
million versus 1 million. Tell that story too.
  I am not saying we have every answer--we don't--but we are making 
progress in spite of their saying no to everything we are trying to do.
  We have to look at the future. The biggest problem we have in this 
country is the decline of the middle class and we have to address that. 
That is why I came to the floor, because even though we are in the 
midst of this budget debate as everyone is talking about, the focus has 
to stay on jobs creation. It has to be: How do we create jobs in this 
country?
  One way not to create jobs is what Senator Casey talked about an hour 
or so ago, and that would be three new trade agreements that too many 
people on both sides of the aisle want to foist on the American people.
  This morning, the Senate Finance Committee and House Ways and Means 
Committee were both having what are called mock markups of free-trade 
deals with three countries: South Korea in Asia, Colombia and Panama in 
our hemisphere.
  The Senate Finance committee is including trade adjustment 
assistance. The House does not even care to take care of workers who 
lose their jobs because of these trade agreements. They are expendable. 
They are a bunch of 50-year-olds who do not have much education and, if 
they lose their jobs, who cares? That is what they are saying in the 
House Ways and Means Committee. We will pass this legislation. When 
people lose their jobs, there is nothing we can do to help them. But 
there is, and we have had something called trade adjustment assistance 
for 50 years and it has been bipartisan, until this group of radicals 
who run the House of Representatives decided we don't want trade 
assistance adjustment anymore.
  In the last decade alone, 6 million manufacturing jobs, 55,000 
manufacturing plants have been lost.
  Multinational companies are too easily setting up companies overseas 
and exporting products back into the U.S. market. Is there any time in 
world history where the most compelling business plan for a company is 
shut down what they do in their home country, move production far away 
to another country where they have lower wages, fewer regulations, a 
government that is not exactly free, make those products there, and 
sell them back to the home country? This business plan that so many 
American companies follow is move production overseas where they can 
get cheap labor and weak regulations in a totalitarian government and 
then sell the products back to the home country. That is a business 
plan that far too many American companies have, obviously, followed.
  Manufacturing now accounts for less than 10 percent of employment in 
our country. That is partly because of NAFTA, partly because of the 
CAFTA, partly because of the China permanent normal trade relations. 
They only accelerate our decline and the country pays for it today. The 
public has heard promises of job creation from trade deals before--
every single time: NAFTA would create this many jobs, CAFTA would 
create this many jobs, PNTR would mean more prosperity and jobs for 
Americans.
  The Korean deal is more of the same. The International Trade 
Commission projects the Korean Free Trade Agreement would increase the 
U.S. trade deficit. The Economic Policy Institute estimates the loss of 
at least 150,000 jobs from this agreement. The Korea pact has unusually 
low rules of origin, allowing manufactured goods containing up to 65 
percent of components from China or any other country to obtain the 
benefits of the agreement.
  What happens is a company in Seoul, South Korea--after this trade 
agreement would pass, if it does--would contract with the Chinese; 65 
percent of the product would come from China, be sold into South Korea, 
South Korea puts its value added on it, sends it to the United States 
duty free, tariff free, even though 65 percent of it was made in China.
  Pundits and the editorial boards say agreements such as these are no-
brainers. They say trade adjustment assistance is just a payoff to 
workers for passing more job-killing trade agreements. The Washington 
Post editorial board--always a creative thinker of the future and wrong 
in their predictions on war, wrong in their predictions on trade, wrong 
in their predictions on labor law, but nonetheless the Washington Post 
editorial board called TAA a consolation prize.
  Once again, they get it wrong. Not many editorial writers in the 
Washington Post, frankly, have lost their jobs in trade agreements. 
They don't seem all that interested in people in Steubenville and Lima 
and Zanesville who actually have lost their jobs because of these trade 
agreements which the Washington Post editorial board always supports.
  We need to focus on retraining workers who are displaced because of 
past free-trade deals. But even this historically bipartisan program, 
as I said earlier, is suddenly becoming controversial. It was operated 
through numerous administrations, supported by Republicans and 
Democrats alike, and ensures workers who lose their jobs and financial 
security as a result of globalization have an opportunity to transition 
to new jobs in emerging sectors of the economy. It helps retrain 
workers for new opportunities.
  In the 2010 fiscal year alone, more than 225,000 workers participated 
in the TAA program, receiving training for jobs employers are looking 
to fill. It is common sense. Senator Casey stood on this floor--he in 
that row, I in this row--and asked repeatedly for his colleagues to 
extend this vital job training program. Under the rules of the Senate, 
one of them stands and objects, time and time again. We did get a 6-
week extension, but since mid-February, this part of trade adjustment 
assistance is simply not available to so many people in New Mexico and 
in Ohio and in Pennsylvania and across the country.
  Senator Casey and I introduced the TAA bill last week that would 
extend TAA for 5 years. We paid for it. We know it is no panacea for 
bad trade agreements. It is not the price workers in my State want to 
pay while Congress passes more trade deals. We must stand for workers 
before even considering new trade agreements. We must focus on real job 
creation. A big part of that is standing against China's unfair 
currency regime that they have inflicted on this world trade regimen 
for a number of years.
  With our trade deficit, also comes trading partners manipulating 
their currency to undermine our manufacturers. They have repeatedly 
found ways to circumvent trade laws to gain an unfair advantage. In 
2010, our trade deficit was $634 billion. That means every single day, 
7 days a week, 52 weeks a year--every single day we buy

[[Page 10524]]

more than $1.5 billion more in goods than they sell internationally.
  With China, our trade deficit was $273 billion. That means several 
hundred million dollars every day we purchase from China more than we 
sell to China, every single day.
  President Bush once said that a $1 billion trade surplus or a $1 
billion trade deficit translates into 13,000 jobs. Think about that. If 
we have a trade deficit of $1 billion, according to President Bush--
these are not my numbers--both President Bushes, by and large, 
supported both of these trade agreements--by and large, we lost 13,000 
jobs, mostly manufacturing, in Indiana and Ohio and New Mexico and 
around the country.
  Do the math. If our trade deficit is $200 billion with China, we know 
what that means.
  Ten years ago, our trade deficit in goods with China was $68 billion. 
These geniuses who come up with these trade agreements, supported by 
the editorial boards, supported by Harvard economists, supported by 
Presidents, supported by pundits who are in Washington and probably do 
not get outside of Washington much--we had a $68 billion trade deficit 
with China when the most effective corporate lobbyists in the history 
of the world came to this institution, came to the House and Senate, 
and sold a majority of House and Senate Members that PNTR with China 
was a good idea. We had a $68 billion trade deficit with China then. 
Now it is $273 billion. They told us: We are going to sell more goods. 
We are going to do better with our deals with China when we have this.
  In the last couple minutes, I would point out Senator Snowe and I 
proposed bipartisan currency reform for the Fair Trade Act to ensure 
our trade deficit is not further increased when countries such as China 
manipulate their currency to make their exports less expensive so they 
can break into our market and keep us out of their market. The 
legislation passed overwhelmingly in the House last year. Our bill 
would strengthen countervailing duty laws to consider undervalued 
currency as an unfair trade subsidy in determining duty rates.
  When an Ohio industry such as coated paper in Hamilton, OH, or steel 
in Lorain or aluminum in Sidney, when they petition the International 
Trade Commission for relief against unfair subsidies, they can talk 
about--include in that petition--the charge of currency manipulation. 
The bill sends a signal to our trading partners we are not going to sit 
there while countries gain the unfair advantage over Americans workers 
and businesses. Before pursuing more free-trade agreements, lets focus 
on enforcement and focus on addressing currency manipulation. Let's 
level the playing field so we can fight back and stop this terrible 
hemorrhaging of American manufacturing jobs.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Indiana is 
recognized.
  Mr. COATS. Mr. President, today Congressional leadership on both 
sides of the aisle is meeting with the President to try to break the 
current impasse on the debt talks. As the President said in a press 
conference earlier this week: ``Right now, we've got a unique 
opportunity to do something big.'' I completely agree with that 
statement. I am glad and pleased that, finally, after months of concern 
and months of urging, we are dealing with this impending debt crisis.
  Time is running out. The leadership is now meeting. We will be 
getting reports on what has come from this meeting. I was encouraged by 
initial reports today indicating the President has agreed to address 
the issue of entitlement spending as well as defining the amount of 
spending cuts that are necessary to put together a credible plan that 
move our country into a better financial position.
  I have been discussing the necessity of a comprehensive solution to 
our problem ever since day one of this session and my return to the 
Senate, and I've indicated that the current process of spending way 
beyond our means simply cannot be maintained and sustained and that we 
have to address it-- not after 2012 but we need to address it now. So I 
am encouraged by the talks that are now going on, and that are 
beginning to incorporate the elements of a growing consensus, if not 
almost total consensus, that exists and is necessary for this 
initiative to be successful, for it to be deemed credible, and for it 
to avoid the potentially catastrophic consequences of defaulting on our 
debt and losing our credibility as the place to invest your money for 
the best safety you can get.
  I don't have to go through the math again, but I will just briefly. 
Spending $3.7 trillion a year when you are only taking in $2.2 trillion 
a year is unsustainable and is driving us toward the cliff of 
bankruptcy--an inability to pay our debts. A big driver of that and the 
biggest driver of that debt is clearly the mandatory spending that 
comes with entitlements.
  It is no secret that we have seen the baby boom generation move 
through the economy from birth now to retirement. The programs that 
were put in place and the promises that were made in terms of benefits 
to those beneficiaries are not going to be available if we don't 
address the pending bankruptcy of these programs. Those who have 
analyzed this have basically said: Look, you have to do something now 
to keep these programs from going broke in the future.
  So all of those who say, don't touch my Medicare, don't touch my 
Social Security, don't do anything, they are essentially saying we are 
willing to ride it out for 2 or 3 more years and then see the whole 
thing collapse. Then there are those of us who are saying, let's do 
something sensible and rational now--not taking away any benefits from 
current beneficiaries, by the way, but doing something to preserve 
these programs in the future is absolutely essential. We are trying to 
save Social Security, we are trying to save Medicare, and we are trying 
to do the kinds of things that are necessary with our mandatory 
spending to address the total imbalance in place that is driving these 
programs into insolvency.
  I would hope today that what we hear back from this meeting at the 
White House is a commitment to go forward with a comprehensive approach 
including necessary cuts, the elimination of duplications of programs, 
redundancies, fraud and abuse--things we simply cannot afford anymore--
combined with addressing mandatory spending and entitlements in a 
responsible way, and the mandatory spending, putting the right 
enforcement mechanisms in place so we don't renege on our commitments, 
and also incorporating comprehensive tax reform.
  For months, the focus has been on cutting spending and tax increases. 
I think another growing consensus is that without comprehensive tax 
reform, we are not going to be able to address and solve this problem. 
I believe the administration has also begun to recognize this and 
acknowledge that comprehensive tax reform is necessary.
  Yesterday, Senator Wyden and I sent a letter to President Obama and 
to the congressional leaders who are participating in today's debt 
ceiling talks urging them to include a timeline for comprehensive tax 
reform.
  The bill Senator Wyden and former Senator Gregg put together after 2 
painstaking years of negotiations--which I have joined now in Senator 
Gregg's place after he retired from the Senate, after we made some 
modifications to the original bill--is a bipartisan effort to deal with 
comprehensive tax reform. We need to go after the 10,000 special breaks 
and interests and credits and exceptions that exist and take the 
savings from that to lower rates and make the private sector more 
competitive, which we know will bring about growth and ultimately jobs 
for the American people.
  The President's Commission on Fiscal Responsibility and Reform found 
that resolving the Nation's debt crisis demands comprehensive, 
structural change, including, they said, tax reform. There is no better 
way to raise revenue and reduce the deficit than by growing the economy 
and putting Americans back to work. If done right, tax reform will 
create those good-paying jobs and provide businesses and families with 
the certainty they need to plan for the future.

[[Page 10525]]

  Any revenues raised by closing tax loopholes should be part of a 
comprehensive plan that reduces tax rates for American families and 
businesses and creates jobs. I want to repeat that. The whole purpose 
of this is to take those special interests and exemptions that have 
been incorporated into the Tax Code over a 15-, 20-year period of time, 
which now total 10,000 special exemptions, to take a selective portion 
of that and a significant portion of that and eliminate or reduce those 
to gain the revenues, allowing us to reduce tax rates on American 
families and on American businesses so that those businesses can be 
more competitive and those families will have more discretionary 
spending.
  Our businesses currently rank 35 out of 36 in terms of the highest 
corporate tax rates imposed--some of the highest in the world. We 
compete around the world with those countries that are producing the 
same products, yet their tax rates are significantly lower than ours, 
and that puts us at a competitive disadvantage. We can make the best 
products in the world and we can outsell anybody in the world if we put 
our companies and our businesses on a level playing field. The whole 
structure and purpose behind the Wyden-Coats tax reform bill is to do 
just that--to put us on a competitive basis with our competitors by 
lowering rates and gaining the revenue to pay for our debt.
  We know this won't be easy, and we know it requires Democrats and 
Republicans to work together to take on the special interests that 
currently benefit from the broken tax system. We know that right now 
that seems very difficult and very challenging, but it has been done 
before. We had tax reform in 1986 that stimulated the economy in ways 
no stimulus had ever done before. It brought in significant additional 
revenues to the Treasury and put Americans back to work.
  This is a bipartisan bill--a Democrat from Oregon and a Republican 
from Indiana--have joined forces on this. We want to signal that this 
is something that can be done aside from political gotchas, aside from 
political gain for the 2012 election, and something we can work 
together on that will make a commitment to a substantial portion of the 
necessary action that needs to be taking place to deal with this 
pending debt crisis and deficit crisis that has to be resolved by 
August 2 or close to that. Some say it can't be done in the time that 
is left. Well, we are in extraordinary times, and I think we have to 
set aside the conventional thinking and work toward what can and must 
be done.
  To the extent it can't be fully incorporated into the law, at the 
very least, I believe the package we are ultimately going to be voting 
on needs a rock-hard, firm commitment and instructions to the tax-
writing committees that this must be done and presented to the Congress 
in this session so we can address it and so we eliminate the 
uncertainty on whether we are going to go forward. It needs an 
enforcement backup mechanism so that if Congress doesn't act in a 
timely manner, there will be an automatic process in place that 
presents this to us for a vote.
  We have a unique opportunity to do something big, to quote the 
President again. I commend him for saying that, and I commend him for 
coming forward and saying we will get off this cut-only, tax-only 
stalemate by beginning to address this on a comprehensive basis and put 
in place those elements we all know are necessary to achieve success. 
It will require the House and the Senate and the White House to cast 
aside political posturing in the 2012 elections, to transcend the 
politics, to do what is necessary for the future of America, for the 
future of Americans, to do what is necessary to get our finances and 
our economy moving again and to get people back to work. We need to 
transcend that and do what is right for the future of our country.
  I hope we have taken a positive step in that direction today. I look 
forward to participating, as I know all of us do, in that process and 
hopefully assuring the American people and assuring the world that 
America is not at a stalemate, that America can address a challenge--a 
big challenge--and we can come forward with a sensible solution that 
puts us on the path to prosperity and guarantees a better future for 
our children and grandchildren.
  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.
  The ACTING PRESIDENT pro tempore. The Senator from Colorado is 
recognized.
  Mr. UDALL of Colorado. Mr. 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.
  Mr. UDALL of Colorado. Mr. President, I understand we are debating a 
specific resolution. I ask unanimous consent to speak as in morning 
business for 10 minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                                  NASA

  Mr. UDALL of Colorado. Mr. President, I rise today to recognize 
NASA's STS-135 mission. As the Presiding Officer knows, at 
approximately 11:30 a.m. tomorrow, Space Shuttle Atlantis is scheduled 
to lift off from the Kennedy Space Center in Florida with a crew of 
four on board. The 12-day mission will deliver supplies, logistics, and 
spare parts to the International Space Station. This will be the final 
mission of the space shuttle era that began just over 30 years ago.
  A Senator from Colorado may not seem like the most likely person to 
come to the floor today to speak about the space shuttle, but NASA and 
space exploration actually have quite a bit to do with Colorado, and it 
is something I care deeply about.
  Colorado has one of the three top aerospace economies in the country, 
with a hand in every aspect of space--government, commercial and 
academic, civil and military. We helped develop the space shuttle and 
many of the missions that flew on it, and we are playing a major role 
in the development of the shuttle's successors.
  NASA has been a source of pride for all Americans from its very 
beginnings. We have cheered their triumphs and suffered with them 
during their tragedies. All the while, we have been inspired by their 
mission of exploration.
  The shuttle era is no exception. Ever since the first launch in April 
of 1981, the names of the space shuttles--the Columbia, Challenger, 
Discovery, Atlantis, and Endeavour--have become familiar to even casual 
observers. This is a testament to the vehicle itself and those behind 
it.
  I would like to acknowledge all of those who have flown on the 
shuttle, the thousands of unseen heroes at NASA who support them, and 
the contractors at too many companies to name who make it all possible. 
Flying the shuttle is a true team effort. Everyone who has been a part 
of that team should be proud of what they have accomplished.
  I see my colleague from Florida across the Chamber, and I know he is 
also very aware that this has been a team effort across the board.
  I know I would be remiss at this point if I didn't mention those who 
paid the ultimate price for their service. We will never forget the 
images of the horrible tragedies that befell the shuttle, one occurring 
merely seconds after leaving the pull of Earth's gravity, the other 
just minutes away from being home again. We will always remember the 
crews of the Space Shuttles Challenger and Columbia.
  This milestone in the history of space flight forces us to reflect on 
what we have learned and where we are going. America is now in the 
unenviable position of having no U.S.-derived means of sending humans 
into space, including to vital assets like the International Space 
Station. For the near future, we will have to rely on our international 
partners, namely Russia. But that position will change. It must change, 
I would add. NASA is developing a successor to the shuttle based on 
important work done during the Constellation Program, and the 
burgeoning commercial sector is literally

[[Page 10526]]

changing the way we access space as we speak. These complementary 
development tracks will build a more robust space exploration 
enterprise.
  As the Presiding Officer knows, I have an interest in climbing 
mountains, as does he, and I have had the great good fortune to stand 
on the top of some of the world's highest mountains. I believe it is in 
our nature as humans to explore and understand the world around us, to 
keep stretching to achieve goals just beyond our grasp.
  The shuttle has allowed us to reach farther than many ever dreamed 
possible. But the end of the shuttle era is by no means the end of 
exploration. At its heart, NASA is not about parts, it is about people. 
Even after the shuttle assumes its rightful place in history, legions 
of engineers, scientists, pilots, and other adventurers will carry its 
mission forward into the next phase of exploration. Keeping that spirit 
intact will be a fitting tribute to the space shuttle.
  I wish the crew of STS-135 a smooth and productive journey and, above 
all, a safe return.
  Before I yield the floor, I wish to add an additional note. In 
Colorado, of course, we have 54 mountains that are over 14,000 feet. We 
have countless peaks below that lofty elevation. But among the 100 
highest peaks in Colorado, we have Columbia Point, which is named to 
commemorate the astronauts and the mission that ended tragically. We 
also have Challenger Point. Both peaks are in the top 100, both peaks 
are linked by a high ridge, and in the middle of that high ridge is Kit 
Carson Peak which is a 14,000-foot mountain. I have had the good 
fortune to stand on the summit of both of those peaks, most recently 
Columbia Peak in April, and the view is one that is worthy of us as 
Americans. As we go forward, let's remember the great successes of the 
shuttle program and build on them as we move forward as Americans 
exploring the world and exploring the universe.
  I know my colleague from Florida shares those sentiments. I don't 
know that he is on the floor to speak on this particular topic, but I 
look forward to working with him, given the importance of the space 
industry and the space mission in the great State of Florida.
  With that, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Florida.
  Mr. RUBIO. Mr. President, I ask unanimous consent to be recognized 
for up to 15 minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. RUBIO. Mr. President, I thank my colleague, the distinguished 
Senator from Colorado, as I pick up where he left off on the space 
program.
  Thirty years ago, the United States launched the first space shuttle 
mission from Kennedy Space Center in Florida.
  It marked a new era of American leadership in space and showed, once 
again, that Americans would continue to be committed to being first in 
space and on the cutting edge of scientific progress to improve our 
lives.
  It also showed what free people--committed to discovery, to 
innovation, to improving the lives of their fellow man--can accomplish.
  President Ronald Reagan said it best when he kicked off the space 
station program in 1984 . . . ``We are first; we are the best; and we 
are so because we're free.''
  Over these 30 years, we have been witness to many heroic triumphs in 
space that have served as a testament to America's unparalleled 
ingenuity and imagination.
  Over time, the shuttle program would make household names out of 
some. Sally Ride became the first American woman to travel into space. 
One shuttle alum even serves with us in the Senate today--our 
colleague, Bill Nelson.
  Of course, space exploration has always entailed risk-taking. It has 
always required putting one's life on the line. And because of this, 
the space shuttle program's history also gave us moments of great pain 
as we lost Christa McAuliffe and the Challenger crew in 1986, and the 
Columbia crew in 2003.
  Each time these tragedies forced us to ask ourselves: Is space 
exploration worth it?
  And thank God, time and time again, America answered with an 
emphatic: Yes.
  Today, on this eve of the final space shuttle launch, we celebrate 
the shuttle program's remarkable feats, which exhibited many of the 
qualities that make America exceptional--courage, ingenuity, risk-
taking, and an ability to accomplish what once seemed unthinkable.
  Space exploration speaks volumes about America--who we are as a 
people and a nation.
  When America was born 235 years ago, surely our Founding Fathers 
could not fathom that one day our people would fly among the stars. But 
the truth is, it has always been our destiny.
  In the 19th century, it became our manifest destiny to explore and 
push westward until the American land stretched from sea to shining 
sea. And once we reached as far west as we could, Americans had no 
choice but to gaze up to the sky and settle on the stars as our next 
frontier.
  Almost 42 years ago to the day, Neil Armstrong, Buzz Aldrin and Mike 
Collins made that giant leap for mankind and left their indelible 
footprints on the Moon's surface and on human history. And on that 
night in July of 1969, the whole world witnessed the American miracle 
firsthand.
  Even today, that moment serves as a poignant reminder about the 
limitless capacity that Americans possess in space and every aspect of 
our lives.
  Even as we face a host of domestic and international challenges, 
America possesses a remarkable capacity to meet them by setting 
ambitious goals as President Kennedy did in his Moon speech, 
persevering in the face of setbacks and rising to the occasion to do 
what history demands of us.
  Our space program inspired younger generations of Americans to pursue 
careers in the aerospace industry and other related fields. Satellite 
technologies developed and improved by NASA now connect the world in 
unprecedented ways, support our military's reconnaissance efforts, and 
facilitate travel through GPS devices.
  For others, it got them hooked on math and science, and led them to 
other fields whose innovations make our lives better every day.
  And then there were the lucky few who would actually go on to fly our 
space shuttles.
  For the rest of us who did not pursue careers in science, math and 
engineering, our journeys into space have meant a lot--in different 
ways.
  For many of us, Kennedy Space Center elicits memories as the place 
where imaginations are awakened and where dreams have been born.
  And it is also where many children think fondly to their visits for 
field trips or space camps, and, in my case, of the time my parents 
took me there for my eighth birthday party before we moved to Las 
Vegas.
  But these types of feelings did not just happen in America. The 
impact of our space program is a global phenomenon.
  One needs to look no further than the various foreign currencies in 
the donation box at Washington's National Air and Space Museum to 
understand what our space program means not only for Florida and our 
country but for all of humanity.
  This brings me to my other reason for speaking today.
  When this final shuttle mission draws to a close, many Americans will 
be startled by the realization that we don't have an answer to the 
question: What is next for NASA?
  NASA has no answer. President Obama has no answer. And as we 
transition to the next generation of space exploration, Florida's 
aerospace workers are left with only questions about their future.
  We know that for the next few years, we will have to rely on the 
Russians to get to space.
  Just a few weeks ago, that only cost $50 million an astronaut. Now 
the price tag is up to $63 million per astronaut. We can only imagine 
it will go higher.

[[Page 10527]]

  Whereas America once led the way to the Moon, we now face the 
unacceptable prospect of limited options to simply get a human into 
orbit.
  We know that our commercial space partners are working to fill some 
of the gaps in our human spaceflight capabilities. But we need NASA to 
lead.
  And, as I say this, I fully recognize that our Nation faces a debt 
crisis because politicians in both parties have spent recklessly for 
many decades. It will require Washington to finally live within its 
means and for leaders to make tough choices about what our Nation's 
priorities are. NASA is no exception. It will not be about spending 
more--it will be about spending wisely.
  Tomorrow, Americans will proudly watch as Atlantis takes off for its 
last flight. It will be a poignant opportunity to recall the entire 30-
year history of the shuttle program and all that has been achieved in 
50 years of NASA's existence.
  And it will be another opportunity to thank the thousands of men and 
women in Florida who have made this program possible and who take such 
pride in the shuttle and what it has accomplished.
  For NASA, just like our Nation, is at its best when it is looking 
forward, not looking back.
  Mr. President, may I inquire of the Chair what my remaining time is?
  The ACTING PRESIDENT pro tempore. In postcloture status, the Senator 
has 53 minutes remaining. So 8 minutes of the 15 minutes is remaining.
  Mr. RUBIO. Fifty-three sounded like too much, even for a Senator.
  I briefly wish to use the second half of my time to talk about the 
issue of the day and that is the issue that is being discussed here in 
town about the debt--an important issue. It is happening at a time when 
many Americans from all across the country are traveling here on their 
vacations to show their children and their families how government 
works--or maybe in the case of this issue, how government does not 
work--in any event, how our Republic is trying to work its way through 
this issue, an important one.
  I know that a few moments ago there was a meeting at the White House 
that concluded, and we wait with great anticipation--I see my 
colleague, the Senator from Illinois, has arrived and perhaps he will 
update us here on the floor in a few moments. But we are all interested 
in this issue because it goes well beyond partisanship or party 
politics; it is about the future of our country.
  I think there is growing consensus on some of the outlines of what it 
will take to solve this issue. I think it will take two things, because 
I have heard this terminology we use about a balanced approach. It will 
take two things. First, it will take reductions in spending and it will 
take cuts, but we cannot simply cut our way out of this process. We 
must also grow our way out of this process.
  My point is there is no way we can simply reduce spending enough to 
get America out of the predicament it is facing. We must also grow our 
economy at the same time. And growing our economy leads us to the No. 1 
issue facing our country. For America, for the government, for us here 
in Washington, the national debt is the No. 1 issue on our minds, and 
rightfully so. It is a serious issue. But for the rest of our country, 
the No. 1 issue is joblessness. It is the fact that people are 
struggling to find a job.
  These people did everything that was asked of them. They went to 
school, got a degree, worked hard, and now they have lost their job and 
their homes. If they did find a job, maybe they are making half as much 
and working twice as long. So we have to grow our economy. The logic 
behind it is very straightforward. If we have more people working, we 
have more people paying into our tax system. If we have more people 
paying into our tax system, that is more money available for our 
government to pay down its debt.
  So I want to focus on the growth aspect and what we can do to grow 
our economy and help job creators create jobs. Don't ask the 
politicians, ask the job creators. They will tell us there are two 
things standing in the way of job creation in America. No. 1 is a 
broken Tax Code that is uncertain, complicated, difficult to navigate 
and, in many instances, unaffordable for them. No. 2, it is runaway 
regulations. So any deal that deals with the debt in a serious way has 
to encompass growth policies that involve, in my mind, both regulatory 
reform and tax reform. I hope that is what they are working toward--tax 
reform. Because what we need in America is not more taxes, we need more 
taxpayers.
  The other part of the deal, of course, is going to have to involve 
some spending reductions. That is why I proudly stood with my 
colleagues to point out three things we have to clearly do to bring it 
under control. The first is we have to reduce spending this year. 
Obviously, we can't solve the budget deficit and debt in 1 year, but we 
have to begin to address it this year, so meaningful cuts this year.
  The second thing we need to do is a spending cap that limits the 
amount of money this government can spend in the future or the growth 
in the amount of money the government can spend in the future. Our 
government should not grow faster than our economy.
  Finally, we need some sort of balanced budget amendment.
  To top it all off, we have to save Social Security and Medicare. I 
was encouraged this morning to read that the President is interested in 
this issue. It is important. It is not about balancing the budget on 
the backs of anyone. It is about saving Social Security and Medicare so 
that there will never have to be benefit reductions for current 
beneficiaries, and so that these programs exist for me when I retire 
and for my children when they retire, and so they will never grow 
insolvent.
  With that, 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. FRANKEN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Blumenthal). Without objection, it is so 
ordered.
  Mr. FRANKEN. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRANKEN. Mr. President, I rise today to talk about our debt 
crisis, our short-term debt crisis and our long-term debt crisis. I 
come here today to discuss ways to address them and ways not to address 
them.
  Our most immediate debt crisis is now upon us. In order to maintain 
the full faith and credit of the U.S. Government, Congress will have to 
vote to raise the debt ceiling within a matter of weeks. This is 
something Congress has done as a matter of course many times over the 
years as our national debt has grown.
  Let us be clear about what exactly it means to raise the debt ceiling 
and why it is necessary. As a nation, we have accumulated $14.3 
trillion in debt. This in and of itself is a very bad and dangerous 
thing. That means our national debt is currently 93 percent of our 
gross national product. Again, this is a very bad and dangerous thing. 
We have been in this situation before. Actually, it has been worse. 
After World War II, our national debt was at 121.7 percent of our gross 
national product. We certainly had something to show for it. We had won 
World War II.
  Through the 1940s, 1950s, 1960s, and 1970s, we worked our way to a 
point where our national debt fell to 32.5 percent of GDP in 1981. We 
did this through a combination of growth and some inflation. Our debt 
was in pretty good shape until we hit the 1980s, during which we 
quadrupled our national debt under Presidents Ronald Reagan and George 
H.W. Bush.
  We have hashed over time and again who is to blame for the situation 
we find ourselves in. But let me leave that alone for the moment and 
get back to what it means to raise the debt ceiling. As I said, our 
debt currently stands at $14.3 trillion. I think we can agree on this: 
That number reflects past choices, not current ones.

[[Page 10528]]

  The debt ceiling also stands at $14.3 trillion. We have to raise the 
debt ceiling because we as a nation have certain obligations we must 
meet. We have to pay for the wars we are currently engaged in. We have 
obligations to veterans who have served our Nation. We have obligations 
to have the dedicated men and women at FEMA who have been responding to 
the many floods and fires our Nation has been facing.
  We have obligations to seniors who have paid into Social Security all 
their working lives and have a right to expect a check every month of 
their retirement.
  We have obligations under Medicare, not just to seniors, who again 
have paid in, but to clinics and hospitals and health care providers 
and to those who supply medicine and medical equipment.
  We have contractual obligations of all kinds to many different 
businesses, whether they are building roads or water towers or 
providing IT services to the VA or the Park Service or the Senate. I 
think almost everyone would agree it is good to have guards in our 
Federal prisons, except maybe the prisoners. The list of obligations 
goes on and on, and one of our most fundamental obligations is to pay 
principal and interest to bondholders who have invested in what has 
been for decades and decades considered the safest investment in the 
world: the U.S. Treasury bond.
  Currently, we simply are not taking in enough revenues to meet all 
these obligations, so we must borrow more. Of course, we must pay 
interest on our debt, at an interest rate that is now actually quite 
low.
  The surest way to increase the interest on our debt would be to 
default on our debt obligations. And make no mistake, that is exactly 
what will happen if we fail to raise the debt ceiling. Even an increase 
in interest rates of just 1 percent would add $1.3 trillion to our 
interest payments over the next decade. So, as you can see, defaulting 
on our debt to make a point about the seriousness of our current 
position would, to say the least, be counterproductive. Yet some of my 
colleagues are willing to do just that, and that is irresponsible.
  As to the notion that bondholders could be paid while other 
obligations were postponed, Scott Elmendorf, Chair of the Congressional 
Budget Office, said:

       Defaulting on any government obligation is a dangerous 
     gamble.

  We are not absolutely certain what exactly will happen if we default, 
but we have a pretty good idea. We know it would roil the international 
financial markets, induce rating downgrades of our Treasury notes, 
create fundamental doubts about the creditworthiness of the United 
States, and force us to pay higher interest rates to induce people to 
buy our bonds. It would damage the dollar and the special role of 
Treasury securities in global markets for decades to come--a dangerous 
gamble, one we cannot afford to take.
  Defaulting on our debt would also be, as David Brooks so aptly put 
it, a stain upon our national honor. Are we actually going to become a 
country that cannot be relied on to pay its debts?
  Yet we have Members of the House and Members of this body threatening 
to vote against raising the debt ceiling unless the President and 
Democrats in Congress meet their demands on how to address the deficit 
going forward.
  Are my friends suggesting we act like a deadbeat who buys a new car 
and then, some time down the line, decides: ``You know, I just don't 
feel like making the payments''?
  I think these Members are doing an enormous disservice by holding our 
Nation's economy and, indeed, the entire global economy hostage to 
their demands. Because the U.S. Treasury bond has been the foundation 
of the world financial system, it is not an overstatement to say that 
defaulting on our debt at this fragile point in the global economic 
recovery could throw us into a worldwide depression.
  I am hardly alone in this regard. The U.S. Chamber of Commerce shares 
my alarm. It is no small secret that the Wall Street backers of the 
Republican Party are beseeching their allies in Congress to come to 
their senses.
  Yet Republican leaders know there are also those in their party who 
believe this is their chance. This is their opportunity to exact 
concessions from the White House and Democrats in Congress precisely 
because the situation is so fraught with peril. They know the President 
of the United States cannot play a game of chicken with the full faith 
and credit of the United States of America. And in a game of chicken, 
the irrational and irresponsible player holds a distinct strategic 
advantage over the rational and responsible player.
  So we find ourselves in this place at this time.
  What are the demands?
  Well, Republican leaders here in the Senate are holding the debt 
ceiling hostage so they can end Medicare as we know it. Democrats are 
trying to protect Medicare and ensure its solvency, and the Affordable 
Care Act is already doing that. Not only does the Affordable Care Act 
provide more benefits to Medicare recipients, it also extends the 
solvency of Medicare by 7 years. That is the conclusion of the most 
recent report of the Medicare trustees.
  Of course, the first big idea from our friends on the other side of 
the aisle this Congress was to repeal the Affordable Care Act, and they 
all voted to do that. So please understand that one of their first 
votes this Congress would have had the effect of diminishing the 
solvency of Medicare, shrinking the solvency of Medicare by 7 years.
  Not only that, but according to the Congressional Budget Office, the 
Affordable Care Act will reduce the debt over the next decade by $210 
billion, and over the decade following that by more than $1 trillion. 
So rather than saving money by making our health care system stronger, 
making our delivery of care more efficient, and keeping our 
constituents healthy, Republicans voted to repeal the health reform 
law. So the big Republican contribution to the sustainability of 
Medicare and our national debt was to vote to shorten Medicare's life 
expectancy by 7 years and to add well over $1 trillion to the debt in 
the next two decades.
  There is no doubt that the biggest threat to the sustainability of 
our long-term debt is the cost of health care. That is why so much of 
the Affordable Care Act is designed to address the cost of the delivery 
of medical care.
  Let me give you a couple of examples. First, the value index. The 
value index will direct that health care providers be reimbursed by the 
value of the care they provide rather than by the volume--the quality 
of the care rather than the quantity of care. In Minnesota, for 
instance, we do health care a lot better than most other States. We 
provide higher quality care at a lower cost than almost any other 
State. There is room for improvement in Minnesota, of course. As a 
health care economist told me: In Minnesota, we get an A, but that is 
because we grade on a curve.
  In Texas, they get reimbursed 50 percent more per patient in Medicare 
than we do in Minnesota and yet we have better outcomes.
  Why? Well, we have a different health care culture in Minnesota. We 
tend to do more coordinated, fully integrated care. We tend to see 
patients as people who we want to keep healthy and out of the hospital. 
In Texas, patients are more often viewed as profit centers. There are 
some excellent, high-value centers of health care in Texas, such as 
Baylor University. Then, there are some egregiously low-value ones, 
like some in McAllen, TX. And, by and large, Texas doctors order more 
procedures than Minnesota doctors so they can bill for more procedures.
  But the idea here isn't to pit Minnesota against Texas. The idea is 
to incentivize low-value States to do health care more like high-value 
States. Imagine if we could bring down the cost of health care in Texas 
by one-third. Imagine the savings to Medicare and Medicaid.
  One more example. Senator Lugar and I wrote a provision into the bill 
called the Diabetes Prevention Program. It is based on a CDC program 
piloted in Indianapolis and in St. Paul.

[[Page 10529]]

They took folks that had been diagnosed with ``prediabetes'' and gave 
them 16 weeks of nutritional training and 16 weeks of physical exercise 
at the YMCA, all at a cost of only about $300 per person.
  The number of people with prediabetes who later developed full-blown 
type 2 diabetes was reduced by almost 60 percent--60 percent! Caring 
for chronic disease is the most expensive piece of our health care 
system in this country. One of the most common chronic illnesses is 
diabetes. It costs our Nation $218 billion a year to treat diabetes.
  A couple weeks after the Affordable Care Act passed, I brought the 
Under Secretary of Health and Human Services into my office to meet 
with diabetes experts from the CDC and with United Health Group, the 
country's largest insurance company. The goal of the meeting was to get 
HHS on board to bring the piloted Diabetes Prevention Program up to 
scale nationwide. The executive from United Health said she would 
definitely reimburse their policy holders for going through the 16-week 
program. She said, ``You know why? Because for every dollar we spend, 
we'll save four dollars.''
  The value index and the Diabetes Prevention Program are but two of 
the many programs in the Affordable Care Act that have been written 
into the law. Jonathan Gruber, the MIT professor who helped put 
together the health reform system in Massachusetts when Mitt Romney was 
Governor there, has said of the Affordable Care Act, ``It's really hard 
to figure out how to bend the cost curve, but I can't think of a thing 
to try that they didn't try . . . You couldn't have done better than 
they are doing.''
  Since then, in the House, Representative Paul Ryan and the 
Republicans in Congress have taken an entirely different approach. 
Instead of putting in the long, hard hours of consulting with health 
care providers, health care economists, patient groups, hospitals, 
rural health groups, and medical researchers to actually try to build 
on protocols that have been proven to bring down the cost of delivering 
quality medicine, Representative Ryan decided just to slash the funding 
of Medicare, give the money left over to seniors, and let them fend for 
themselves to buy their own health care from insurance companies.
  Now, we know there was no functional market for health insurance for 
folks 65 and over before Medicare and Medicaid started in 1965. It is 
doubtful that there would be one now. Under the Republican plan, 
seniors would essentially get a voucher for a significantly lower 
amount than their Medicare is worth now. Remember that the cost to 
Medicare for administering its program is less than 2 percent. 
Insurance companies, on the other hand, spend around 11 percent on 
administration. The CBO estimates that under the Ryan plan, out-of-
pocket cost for health care for each senior will more than double to 
over $12,500 a year.
  This is not Medicare as we know it. It is not Medicare. So, 
understand this: the Republican plan to end Medicare would make huge 
cuts in Medicare benefits and put insurance companies in charge of 
seniors' health care. This would double the out-of-pocket costs for 
seniors and toss aside all the new benefits offered by the Affordable 
Care Act.
  There is no question which vision of Medicare holds more hope for 
seniors and which takes a scientific, evidence-based, best practices 
approach to addressing the long-range cost of delivering health care to 
all Americans.
  And yet my colleagues on the other side of the aisle are telling us 
that they are willing to risk throwing the global economy into 
depression if Democrats don't act more responsibly on Medicare.
  Well, ok. Here is an idea. Allow Medicare to negotiate with the 
pharmaceutical companies on drugs for Medicare Part D. The VA does it. 
And guess what. The VA pays an average of 48 percent less than Medicare 
does for the top 10 most prescribed drugs. Now the pharmaceutical 
industry tells us they need us to pay the higher price because they 
need the money for research. But, in fact, they spend more money on 
advertising and marketing than they do on research.
  Almost every other developed country uses its size to negotiate with 
the pharmaceutical companies. Why does the American taxpayer have to be 
the chump who pays full price? I say we negotiate with the 
pharmaceutical companies and bring down the cost to Medicare by as much 
as $24 billion a year, or $240 billion over the next 10 years. That 
could go straight to paying off the debt. There. I got you a $240 
billion cut to Medicare. Now can we please vote to raise the debt 
ceiling and avert a worldwide economic catastrophe?
  If my friends on the other side are really serious about getting our 
deficit under control, couldn't we start by getting rid of a measly $2 
billion a year in taxpayer subsidies to oil companies--the companies 
that are getting record profits because the price of oil is so high? 
Unfortunately, according to my Republican colleagues, this would be a 
tax hike.
  In order for us to agree to balance the budget, everyone has to pay. 
Who is in a better position to give? Exxon or a little girl in 
Minnesota named Evelyn. You see, Evelyn was born with cystic fibrosis. 
When she was 10, her liver failed, and her own toxins started to poison 
her. But Medicaid helped her get the care she needed. That is what this 
is about. Exxon or Evelyn. Frankly, it makes me kind of sad.
  So there are some more billions for deficit reduction. Get rid of the 
subsidies to the five biggest oil companies--$21 billion over the next 
10 years. And you know what? If we are seriously going to address our 
debt crisis, we have to increase revenues.
  Now under the Republican plan, the cuts to end Medicare as we know it 
and to slash Medicaid all go to pay for tax cuts to the wealthiest 
Americans. That's right. The Republican plan cuts taxes on the top 
marginal rates for millionaires and billionaires from 35 percent to 25 
percent.
  Now my Republican friends like to say that tax cuts always produce 
revenue increases. Besides the fact that that is simply not true, it 
also contradicts the other argument Republicans use for not raising 
taxes. Raising taxes, Republicans often argue, would just give the 
government more money to spend. According to that oft-repeated 
Republican argument, cutting taxes will lower revenue and ``starve the 
beast.''
  Here is President Ronald Reagan making this exact point in 1981:

       There were always those who told us that taxes couldn't be 
     cut until spending was reduced. Well, you know, we can 
     lecture our children about extravagance until we run out of 
     voice and breath. Or we can cure their extravagance by simply 
     reducing their allowance.

  In other words, cutting taxes cuts revenues and forces the children, 
in this case, the government, to cut spending.
  So, at the heart of my friends' argument on why we must cut taxes are 
two completely contradictory, mutually exclusive arguments. On the one 
hand, according to my friends, lowering taxes always increases revenues 
and therefore brings down the deficit. On the other hand, they argue, 
lowering taxes decreases revenues. Which is it? Because you can't have 
it both ways.
  I will try to provide some context for my friends. After President 
Reagan cut taxes in 1981, we immediately started amassing enormous 
deficits. They were so bad that President Reagan felt compelled to 
raise taxes in 1982 and then again in 1983. In fact, President Ronald 
Reagan, the supply-side icon, raised taxes 11 times. If President 
Reagan did that today, the Tea Party and, in fact, the entire 
Republican Party would run him out of town on a rail.
  But, you see, President Reagan knew that to raise revenue, you have 
to either raise marginal tax rates, or get rid of tax loopholes for the 
wealthy and for big corporations. Which is what he did repeatedly.
  Even so, our national debt nearly tripled during the Reagan 
Presidency. The national debt continued to grow rapidly during the 
George H. W. Bush administration. In fact, in 1993, he handed President 
Bill Clinton what at

[[Page 10530]]

that point was the largest deficit in history.
  So what did President Clinton do? Well, in his 1993 deficit reduction 
package, he added two new marginal tax rates at the top end--36 percent 
for those making over $180,000 and 39.6 percent for those making over 
$250,000. Every Republican voted against the package. They said that 
raising the top marginal tax rate would cause a recession. Former 
Speaker Newt Gingrich said:

       I believe this will lead to a recession next year. This is 
     the Democrat machine's recession, and each one of them will 
     be held personally accountable.

  Senator Phil Gramm of Texas said:

       The Clinton plan is a one-way ticket to recession. This 
     plan does not reduce the deficit. But it raises taxes and it 
     puts people out of work.

  Representative John Kasich, then ranking member of the House Budget 
Committee, said:

       This plan will not work. If it was to work, I'd have to 
     become a Democrat.

  Well, it worked. Not only did we have an unprecedented expansion of 
our economy for 8 years, creating more than 22 million new net jobs, 
but we balanced the budget and Bill Clinton handed George W. Bush a 
record surplus. I call that ``working.''
  Now President Clinton, and especially the Democrats in Congress, paid 
a political price for the 1993 deficit reduction package. The Democrats 
went down to defeat in 1994, losing control of the House for the first 
time in 40 years. You could say that Democrats took a shellacking.
  Nevertheless, between 1993 and 2001 the Nation created an 
unprecedented number of jobs benefiting every quartile of our economy, 
decreasing the number of Americans in poverty, increasing median 
income, and creating more millionaires than ever--to which my 
colleagues on the other side of the aisle might say, ``Sure, it worked 
in practice. But does it work in theory?''
  President Clinton's deficit reduction plan not only reduced the 
deficit as planned, it eliminated it entirely and gave incoming 
President George W. Bush a record surplus. In fact, when President Bush 
took office, we were on track to completely pay off our national debt 
with $5 trillion of surpluses projected over the next 10 years. In 
other words, we would have zeroed out our national debt this year.
  Five days after President Bush took office--again, after President 
Bush took office--Alan Greenspan testified to the Senate Budget 
Committee that we were in danger of paying off the national debt too 
quickly and entering uncharted territory in which the Federal 
Government would have too much money. The Federal Government, Greenspan 
warned, would have to put its excess money into private equities, 
thereby distorting and decreasing the efficiency of our markets.
  President Bush told the country that a surplus meant that Americans 
were paying too much in taxes. This was our money, he told us, and so 
we all deserved a tax cut. Then after the economy went into recession, 
Bush told us that what we needed was another tax cut to stimulate the 
economy. So, in other words, ``when the economy is going strong, tax 
cuts are in order.'' And ``when the economy is weak, tax cuts are in 
order.'' Combine those with the aforementioned contradictory ``tax cuts 
reduce revenues forcing government to spend less of our money'' and 
``tax cuts always increase revenues'' and you have an exquisitely 
incomprehensible economic theory.
  But that exquisitely incomprehensible theory needed just one more 
element to make it downright dangerous. And that element would be 
provided by Vice President Richard Cheney.
  By late 2002, the surplus President George W. Bush had inherited from 
Bill Clinton was turning once again into huge deficits. According to 
then-Treasury Secretary Paul O'Neill, he tried to warn Vice President 
Cheney that budget deficits were growing at an alarming rate, posing a 
threat to the economy. Vice President Cheney cut O'Neill off, saying, 
``You know, Paul, Reagan proved deficits don't matter.''
  By the end of his Presidency, George W. Bush left President Obama a 
budget deficit projected at $1.2 trillion for fiscal year 2009. 
Meanwhile, President Bush had doubled our national debt.
  What was to blame? Could it have had anything to do with the fact 
that for the first time in history we cut taxes while we were at war?
  Well, not according to the Republican leader. In July of last year 
Senator McConnell said: ``There's no evidence whatsoever that the Bush 
tax cuts actually diminished revenue.''
  But adjusting for inflation, since the Bush tax cuts were enacted, 
revenues have fallen 17 percent. And that is not even taking into 
account growth in our population, which was 9 percent over this period. 
When you add the effect of population growth, revenues declined by 
about 24 percent per capita. I think this clearly constitutes evidence 
that the Bush tax cuts actually diminished revenue.
  So it should be no surprise that reduced revenues are responsible for 
a lot of our deficit, as you can see here. This chart by the Center on 
Budget and Policy Priorities is based on CBO data and shows that the 
Bush tax cuts were responsible for 25 percent of the deficit in 2010. 
And that is only going to grow. By 2019, the tax cuts will account for 
almost 60 percent of our deficit.
  And the fact is that not only did the national debt double during the 
Bush administration, we also had a dismal record of job creation. And 
during the Bush years, for the first time since we started keeping 
records, median income fell in America. And more Americans fell into 
poverty. One in five children in America now lives in poverty. It is 
even higher in rural America.
  There is one group that did very well during the Bush years, and 
continues to do very well: The extremely wealthy.
  We now have in this country the greatest disparity in income and 
wealth that we have had since the 1920s.
  So the one thing that there is no evidence whatsoever of is that 
cutting taxes on the wealthiest Americans can create jobs and keep the 
deficit under control.
  So why would we do it, when the evidence is so stark that the Bush 
tax cuts coincided with a huge spike in both the debt and unemployment?
  Why not look back on what has worked in the past and learn from it?
  As I said earlier, after World War II our debt as a percentage of GDP 
was, in fact, significantly larger than it is today. But what did we 
do? Well, we passed the G.I. bill so that our troops returning from the 
war could go to college.
  Truman started the Marshall plan to help Europe get on its feet.
  And it is not as if we had smooth sailing as far as Defense spending. 
We went to war in Korea, losing nearly 35,000 Americans. After that war 
ended, we found ourselves in an extended Cold War. We built the largest 
infrastructure project in our history, the Interstate Highway System--
it added enormously to our economic development, because now we could 
transport our goods around the country so much more efficiently.
  When the Soviets launched Sputnik into space, we jump-started our 
space program and our investment in science and math education. My 
brother and I were Sputnik kids. He was 11 and I was 6 when it was 
launched. My parents took us into our living room in Minnesota and told 
us that we had to study math and science in order to beat the Soviets. 
I thought that was a big burden to place on an 11-year-old and a 6-
year-old. But we were obedient sons, and so we studied math and 
science. And wouldn't you know it, my parents were right. We beat the 
Soviets.
  The space program created all kinds of dividends in technology and to 
our economic development. I watched a Senate debate last fall in which 
the Republican candidate said that government had never created a job. 
The debate, of course, was broadcast by satellite.
  I think you get the idea. The fact is the investments we made in the 
1940s, 1950s, 1960s, and 1970s in science and technology, in our State 
universities, in infrastructure that was the envy of the world brought 
our debt as a percentage of GDP from 121 percent in 1945 to 33 percent 
in 1980.

[[Page 10531]]

  Erskine Bowles is right. We can't get out of our current debt crisis 
with growth alone. But I will tell you most certainly that we will not 
get out of it without growth.
  And so we have to choose wisely in what we invest in, in when we 
invest, and in how we invest; and in what we cut, and when we cut, and 
how we cut--which we must do--and in how we increase revenues, when we 
increase revenues, and from whom we get those revenues.
  Why not invest in retrofitting our buildings when we have so many in 
the building trades out of work, sitting on the sidelines, and knowing 
that we can recoup that investment in energy savings within 3 to 5 
years? Let's find creative ways of financing that, such as PACE 
financing, which lets families get a loan from their local government 
and pay it back on their property taxes. This is how cities pay for 
streetlights and sidewalks. It adds value to homes; and when the family 
moves, the loan stays with the property. We should also create 
incentives for banks to lend to small businesses for retrofitting 
commercial buildings.
  There is a company in Minnesota called McQuay that makes heating and 
air conditioning systems for commercial buildings. They are actually 
supplying the system for the new World Trade Center, and their systems 
are so energy efficient that they pay for themselves in 3 to 5 years 
through energy savings.
  They have been taking out loans from banks since they are a large 
creditworthy company, but then they give out loans to customers who 
install their systems. It is a win-win, because they are selling more 
units and putting people back to work, and their customers are actually 
making money in the long run through energy savings. McQuay has a good 
model, and we should be figuring out how to encourage others to do the 
same thing.
  Why not cut our Defense spending when $100 billion in cuts have been 
identified by our service chiefs at Secretary Gates' request, and when 
cost overruns on our weapons systems are absurdly high? The GAO 
recently revealed that when you add up the growth in costs of major 
Defense weapons systems over their original estimates, the total is 
over $402 billion.
  Why not raise revenue by increasing taxes on the wealthiest in this 
Nation--those who have benefited the most from the economy in recent 
years--especially when we can look to the recent past and see that 
their tax cuts created virtually no jobs and contributed mightily to 
our deficit?
  Only when the middle class is strong does our economy grow, because 
the middle class has always been the part of our society that creates 
demand. There are just not enough rich people to buy enough stuff. The 
middle class spends its money. But today, companies are sitting on 
trillions of dollars because there is just not enough demand. And that 
is because there is a lot of unemployment and because wages for the 
middle class have gone down over the last decade.
  Creating a middle class is not an end unto itself. A strong middle 
class leads to strong consumer spending, and therefore to a strong 
economy and to national prosperity. The middle class is also where you 
get entrepreneurs and small businesses--it is the engine of our 
economy.
  Why not invest in early childhood education when we know that the 
return on quality early childhood education is up to $16 for every $1 
spent? We know that children who have had quality early childhood 
education are less likely to need special education, less likely to 
repeat grades, they have better health outcomes, and that the girls are 
less likely to get pregnant as teenagers. We know children who have 
quality early childhood education are more likely to graduate from high 
school, more likely to go to college, more likely to get a good job and 
pay taxes, and much less likely to go to prison.
  My friends on the other side say that we must cut the deficit for our 
children's sake, and I agree. But why then are such a disproportionate 
amount of the cuts aimed at programs that help kids? As I said, one of 
every five children in America lives in poverty, and even more in rural 
areas.
  But the Republicans want to cut Head Start and Early Head Start. We 
currently serve about 40 percent of children who qualify for Head Start 
and less than 4 percent of children who qualify for Early Head Start. 
Do we really want to cut that? Do we really want to cut Pell grants? 
The Republican budget slashes Medicaid. About 50 percent of the 
recipients of Medicaid are children. We know we are going to have to 
make shared sacrifices to get the budget under control, but do we 
really think that sick kids should make those sacrifices?
  You know, immediately after this last election, Republican leadership 
said that their No. 1 priority was seeing to it that Barack Obama is a 
one-term President. They didn't say their No. 1 priority was getting 
Americans back to work, or educating our kids, or even balancing the 
budget.
  Their No. 1 priority was winning the next election. But I don't think 
that is what Americans want. The American people want us to get to work 
to solve problems, to improve their lives. We don't have to agree on 
how to do that but they sent us here to work together. If the time 
between elections just becomes about jockeying for the next election, 
then what in the world is the point of getting elected in the first 
place? I thought we were here to work together constructively in the 
interest of the American people.
  Now the Senate Republican leader is saying that raising any new 
revenues is off the table; that he will not vote to raise the debt 
ceiling if part of our compromise on the budget going forward involves 
any tax increase on anyone, no matter how wealthy they are, no matter 
what their income.
  I ask all my colleagues, for the good of the country, to step back 
from the brink, to step back from brinksmanship on this debt ceiling. 
Let's not panic. We are going to be on this planet for a while. Let's 
have some confidence in ourselves to do this in a smart thoughtful way 
so that our children will say, ``Well, they might not have been the 
Greatest Generation, but they were a Pretty Good Generation.''
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. VITTER. Mr. President, I ask unanimous consent that the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. VITTER. I ask unanimous consent that Senator Kirk and I speak in 
succession for up to 15 minutes and that the Democratic side then have 
two speakers.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Illinois.


                        AHMED ABDULKADIR WARSAME

  Mr. KIRK. Mr. President, we have just learned that Ahmed Abdulkadir 
Warsame was arrested by the U.S. military in April. This news has just 
come to us, learning that this man who fought for no country and wore 
no uniform and under an international law is considered an enemy 
combatant and therefore not a prisoner of war or an American civilian 
criminal, has been taken to a U.S. criminal court to be granted full 
U.S. constitutional rights in a prosecution in the civilian courts of 
the United States, located in the Southern District of New York.
  This man was taken outside American territory for attacks outside 
U.S. jurisdiction for acts against non-U.S. citizens. Yet he has been 
charged with a U.S. civilian crime and has been given the full rights 
of an American citizen or a nationalized individual. I think we have 
made a grievous mistake.
  We have made a significant change just this week. We have violated 
the principles set forth by President Lincoln and President Roosevelt, 
who well used military commissions to handle enemy combatants and not 
providing them full U.S. constitutional rights for actions taken 
outside the United States against non-U.S. citizens in the war on 
terror.
  I am very worried this foreign terrorist, who was taken abroad for 
attacks committed abroad, is now going

[[Page 10532]]

to have the full constitutional right to confront his accuser and have 
all information used in his trial exposed. This means that, under the 
new policy, the United States may be forced to reveal intelligence 
information critical in the war on terror, especially against al Qaida, 
al Qaida in the Arabian Peninsula, and Al-Shabaab, when otherwise a 
military commission could have kept that information confidential, 
leading to further success by the United States.
  We should ask at what cost this prosecution will come. The previous 
proposal by the President, which he backed away from, was to bring the 
author of the 9/11 attack, Khalid Shaikh Mohammed, to central New York, 
at a cost of an estimated $75 million to protect the court, the judge, 
the prosecutor, the jury, and their families. The President backed away 
from that Khalid Shaikh Mohammed decision, but apparently he has now 
made that decision again with regard to Ahmed Abdulkadir Warsame.
  My question is this: What threat is now being posed to the people of 
New York? What threat is being posed to the Federal judge? What will 
the prosecutor fear for the rest of his or her life in participating in 
this unnecessary civilian prosecution--and especially for the jurors 
and their families who now will be subject to scrutiny throughout the 
jihadist world by al Qaida in the Arabian Peninsula and Al-Shabaab. Why 
is this unnecessary threat now going to be posed to these Americans?
  That is why 39 Republicans and Democrats joined me in a letter to 
Attorney General Eric Holder, saying this decision was a mistake and 
should not be repeated; that we have now created undue attention to the 
people of New York by al Qaida in the Arabian Peninsula, al Qaida 
itself, and Al-Shabaab.
  Remember, following our successful attack against bin Laden, we now 
estimate that al Qaida in the Arabian Peninsula and Al-Shabaab are the 
most dangerous and heavily armed subsidiaries of al Qaida. Al-Shabaab 
alone has over 8,000 men under training and, as one intelligence expert 
said, some of them at the level of training equivalent to the U.S. Army 
Rangers.
  How are we going to protect the judge in this case for the rest of 
his or her life? How are we going to protect the prosecutor for the 
rest of his or her life? How are we going to protect the jury and their 
families for the rest of their lives because of this mistake made by 
the Attorney General of the United States?
  At what cost will this prosecution come? Will it be paid by the city 
of New York, already heavily strained in finances, a New York State 
famously short of funds, or the Federal Government, which is also short 
of money?
  What happens if Ahmed Abdulkadir Warsame is found innocent? We 
already know many released terrorists have already returned to jihad, 
as he proudly indicates he surely will.
  In the wake of the debate on deficits and debt on a famous criminal 
trial in New York, we may have overlooked a fundamental decision, a 
mistake made by the Attorney General of the United States. The 9/11 
Commission taught us a critical lesson, that terrorism is not a law 
enforcement problem; it is an intelligence and military problem. Well-
established principles under Roosevelt, Lincoln, Bush, and, yes, 
President Obama, using military commissions, should be used instead of 
subjecting the American people to the increased threats, the increased 
costs, and the terrible precedent we have just set in giving an 
international terrorist, for acts committed overseas against 
foreigners, full constitutional rights. I think it is a decision we 
will regret. Many of us may quote the 9/11 Commission report in its 
clear findings in highlighting the error that was made.
  I yield to the gentleman from Louisiana.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. VITTER. Mr. President, I rise again to urge all of us, Democrats 
and Republicans, to come together and put serious deficit reduction 
proposals on the floor for full debate, an open amendment process, a 
constructive debate and votes and action. That is the way we can move 
forward and resolve this greatest threat we face as a country, out-of-
control Washington spending and debt.
  We are making a little bit of progress in that regard. After months 
and months of the distinguished majority leader putting every other 
issue under the Sun on the floor but spending and debt, we finally 
forced this central issue to come and be debated.
  Last week, many of us banded together, conservatives who were pushing 
for this debate, and said: Enough is enough. We should cancel the July 
4 recess, we should block it so we stay and debate the central issue. 
That is what we did, and we successfully did that. Unfortunately, the 
majority leader then proposed that we stay here--yes, because we had 
blocked the recess--but did not put the central issue on the floor and 
moved yet another topic. We said: No; we are staying to get to this 
debate, this important issue, the greatest challenge we face right now 
as a country, and we successfully defeated his move to another topic.
  Finally, with this little bit of progress, we are on the floor at 
least talking about the right issue. But we don't yet have a strong, 
meaningful, underlying proposal to act on. We have a sense-of-the-
Senate resolution. That is a good basis for debate, I suppose. But, of 
course, we need more than that. We need serious proposals to debate and 
amend and vote on and act on. That is the important next step.
  When I made these remarks yesterday, the distinguished Senator from 
New York, Senator Schumer, was in the Chamber and suggested that 
Republicans, including myself, had not gotten behind a serious, 
credible proposal. Specifically, he said: Wait a minute. The Ryan 
budget, which you voted for, doesn't reduce the deficit at all. I said 
at the time that is incorrect, but I didn't have the numbers in front 
of me. In fact, I looked it up, and the Ryan budget does significantly 
reduce the deficit from $1.4 trillion this year to $391 billion at the 
end of 10 years. That is a major reduction.
  As I said to the Senator from New York at the time, my preference 
even ahead of that is the Toomey budget, which we produced on the 
Republican side in the Senate. That reduces the deficit from $1.4 
trillion right now to zero over 10 years. It balances the budget over 
10 years--obviously, major progress.
  Again, going back to the Ryan budget, which Senator Schumer brought 
up, it contains $6.2 trillion in spending reductions compared to 
spending in President Obama's budget. It adds total deficits that are 
$4.4 trillion lower than that in the President's budget. It brings 
total Federal spending to below 20 percent of the economy. The 
President's budget is always above 23 percent in that figure. So it 
puts us on a path to balance. Again, the Toomey budget, my first 
choice, actually achieves that balance within the 10-year budget 
window.
  In contrast to that, I have to say it is very unsettling that the 
distinguished majority leader and the majority in this Chamber have not 
even tried to meet our mandated budget responsibilities. Section 300 of 
the Congressional Budget Act of 1974, which is the Federal law that 
controls the budget process, says that by April 15 of every year, a 
budget resolution is supposed to be passed. We are 83 days and counting 
past that deadline and no serious attempt to even try to meet that 
legal mandate has been made by the majority or by the distinguished 
majority leader. We have had a few budget votes, three Republican 
budget proposals, and President Obama's budget. The Obama budget got 
zero votes on the Senate floor. The majority, the majority leader 
produced no budget proposal. The Finance Committee, led by the 
majority, produced no budget proposal, not even trying to meet our 
responsibility, an actual legal mandate under the law.
  Through the Chair, I would ask Senator Schumer: Where is your 
proposal? Where is your attempt? Yes, we have put forth specific 
proposals that dramatically cut the deficit. When is the majority going 
to even try? Again, 83 days and counting this year past that deadline. 
Of course, last year this body, under the same leadership, produced no 
budget. So we are 448 days and counting in total under the Budget Act. 
In

[[Page 10533]]

that time, by the way, our debt has increased $3.2 trillion.
  That is why we need serious proposals on this Senate floor to debate, 
to amend if necessary, to vote on, to act on. At least we are to the 
topic, but we need serious proposals before us to act on.
  Again, I urge all of my colleagues to embrace a three-tier approach, 
cut and cap and balance: passing a budget resolution which we are 
mandated to do that includes immediate meaningful real cuts--that is 
cut; cap, structural budget reform to cap spending in every major 
category of the budget to ensure we stay on that path to a balanced 
budget; and balance, a requirement in the U.S. Constitution that we 
have a balanced Federal budget through the balanced budget amendment to 
the Constitution. I support that. All Republicans in this body have 
coauthored that. That is the third crucial tier of this three-tier 
approach: cut, cap, and balance.
  I hope we get to consideration of those and other important 
proposals. I hope we not only have a debate around a sense-of-the-
Senate resolution, I hope we have real meaningful proposals on the 
floor, an open amendment process, an open debate and votes and action 
on this most critical issue. I have endorsed specific proposals. I 
mentioned two of them. They dramatically reduce the deficit. I have 
coauthored the balanced budget constitutional amendment that enforces 
discipline, the straitjacket we need. I support the cap concept for the 
medium term to get us on that path. But we need to act on that on the 
floor in a bipartisan way. I urge that as the next necessary step.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SCHUMER. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Sanders). Without objection, it is so 
ordered.
  Mr. SCHUMER. Mr. President, first I thank my good friend and 
colleague from Minnesota, Senator Franken, for leading this debate here 
today, the subject of course being the potential of default by the U.S. 
Government, a subject many of us thought we would never have to 
discuss. I hope people who did not get a chance to see his speech--I am 
sorry, I had hoped to be here but we had the final vote on the free 
trade agreements in the Finance Committee, but I hope people will look 
at the speech. It is a very erudite, thoughtful, and compelling 
document. It is on a subject that deserves that kind of attention, 
which is the danger of default. In our entire history we have never 
defaulted on our debt. America has always kept its promises. But some 
of my colleagues on the other side of the aisle are threatening to make 
us the first generation of Americans that does not pay its debts, that 
does not keep its promise. Earlier this week the President said we 
should reach a deal within 2 weeks in order to avoid roiling the 
financial markets. We Democrats are working in good faith. We are 
committed to making sure our Nation does not fail in meeting its 
obligations. My colleagues and I on this side of the aisle are working 
diligently to find spending cuts, many of which come from programs we 
strongly believe help this country, in order to come to a final 
agreement. We are also identifying tax loopholes to close.
  But I must ask, what exactly are my Republican colleagues doing? They 
are stalling, they are demagoging. They walked out on bipartisan budget 
negotiations and are continuing to insist that we cannot raise a single 
dollar in revenue, no matter how wasteful the tax breaks or how 
generous the subsidy. The shocking truth is that our Republican 
colleagues seem to be willing to tank the economy simply to help out 
the very most privileged, who are already doing well.
  Let's face it, middle-class people, poor people, depend on government 
programs. But if you are wealthy you do not need government spending. 
You don't need help to send your kid to college. You don't need to go 
to a clinic to have your teeth looked at in case they are falling apart 
and you cannot afford high-priced, fancy dentists. But if you are 
wealthy, how do you get breaks? You look into the Tax Code and lobby 
Congress, whether you are a corporation or individual, to get those 
breaks. That is how the high-end folks benefit, in terms of this 
government.
  To say all those are off limits is not class warfare, it is a simple 
fact of life. It is a fact of life that the well-to-do, whether they be 
corporate or individuals, benefit from tax expenditures, whereas 
middle-class and poorer people benefit from spending expenditures. Yet 
our Republican colleagues say one whole side is off limits. That is 
putting politics over the economy.
  In fact, these actions seem to indicate they might be deliberately 
tanking, or want to deliberately tank, the economy to harm the 
President's reelection chances. That is a tough thought. I shudder to 
believe it. But when you look at the evidence, it leads in that 
direction.
  These are not actions of leaders. Forcing the United States into 
default to score political points is playing with fire. You risk 
undermining the future credit of the United States and do enough damage 
to the global economy that it could cause another financial crisis not 
unlike the one we saw in 2008 from which we still have not recovered, 
all to score political points, all to help those, the one segment of 
society which, God bless them, has done very well in the last decade.
  I also want to talk today about a subject that is often ignored in 
debates over the debt ceiling. These debates can seem very abstract and 
the potential consequences very remote. That is why my colleague from 
Minnesota decided to lead a debate in this regard. In fact, the 
consequences would affect every American who wants to take out a 
mortgage; every parent who needs to take out student loans to send 
their kids to college; every American with a credit card. It would even 
affect the price of gasoline and the price of food. The impact of a 
default will not just be felt on Wall Street or in the mythical world 
of bond markets, but in every town, every household in the Nation.
  The consequences will not be short lived. The repercussions of a 
default will stay with us for years or even decades. J.P. Morgan 
estimates that even a technical default, the failure to pay interest on 
our debt for a few days, would result in the cost of U.S. treasuries 
increasing by 50 basis points.
  What does that mean to the average household? Most households do not 
speak in terms of basis points. Mortgage rates are often set at 150 
points above U.S. Treasury. That means 1.5 percent above U.S. 
treasuries. If the rate on treasuries goes up 50 basis points, it goes 
up another half percent. So the cost of a mortgage for a family with a 
30-year fixed rate mortgage worth $172,000, just that alone, that 
little few days where the United States does not pay its debt, costs 
$19,000 to that family.
  The cost of interest on a credit card would also increase. A family 
carrying a modest balance, $3,300, would pay an estimated $250 more in 
interest every year.
  In total, a default or even a near default could end up costing 
American households $10 billion in increased borrowing costs every 
year.
  The same J.P. Morgan study tells us that a 50-percent increase in the 
cost of U.S. treasuries will decrease our GDP by 1 percent. Leading 
economists estimate a 1-percent contraction in the GDP would result in 
640,000 jobs lost. These are jobs we cannot afford to lose.
  In addition, the stock market would also go down significantly, 
costing all Americans who are investing for their retirement or saving 
to send a child to college. The typical American would lose $8,000 to 
$12,000 in his or her retirement account.
  J.P. Morgan also estimates that the value of the dollar would decline 
5 percent to 10 percent as a result of a default.
  There are significant consequences for the future of the dollar if 
this happens. We should all be asking ourselves, what happens if the 
dollar ceases to be the global reserve currency? But even if my 
colleagues

[[Page 10534]]

across the aisle do not want to consider that, they should certainly 
think about the impact of a depreciated dollar on their constituents. 
Higher borrowing costs to the government would also increase the 
deficit, exactly the opposite of what we are trying to do.
  So when they cavalierly say ``let's default because we have a huge 
deficit,'' it is actually an internal contradiction. The defaulting 
will make the deficit worse. According to a J.P. Morgan analysis, the 
deficit would increase by $10 billion a year in the short term, $75 
billion in the long term.
  The worst part is this: All of these costs would be self-inflicted 
wounds. We are fully capable of paying our debt, as we always have. But 
some are threatening to intentionally default. To borrow a phrase from 
the President's economic adviser, Austan Goolsbee, ``This would be the 
first default in history caused entirely by insanity.''
  Let me say this. Every American family has debt, just about. Most of 
us have mortgages. Let's say we have a mortgage on our house, we have a 
house and we are living in it. If all of a sudden we say to our bank I 
am not going to pay my mortgage unless you do A, B, and C--you have 
already signed to pay that mortgage--what happens? You are not living 
up to an agreement you made. Your house is foreclosed upon and you lose 
it.
  The analogy is the same here. For the U.S. Government to default on 
purpose would be cutting off our nose to spite our face, and hurt the 
citizens of this country.
  I say to my Republican colleague, how do you plan to explain this to 
your constituents? Do you think they will believe the political games 
are worth the increased costs? I sincerely doubt it. I want to say to 
my Republican colleagues, because so many of you have trifled with the 
idea of not paying our debts, if, God forbid, it happens--I hope it 
doesn't, for the good of the country, but if it does, you will bear the 
blame. Not a single Democrat I am aware of has said we want to default. 
Many Republicans have said they want to default. So you do not have to 
be Albert Einstein or a Ph.D. in biophysics to know who is risking 
default, who is trifling with default, and who would cause default if, 
God forbid, we cannot come to an agreement.
  Many on our side have said we are willing, if it comes to it, to 
raise the debt ceiling if we cannot come to an agreement because the 
consequences are so horrible. Not the other side--no. They are 
leveraging the default as a means to assert their beliefs, sincerely 
held. That is so wrong. But the good news is that the American people, 
and certainly the people who are following this issue, realize that. As 
we get closer and closer to the day of August 2 they will know who is 
willing to risk default to achieve political goals. They will know it 
is not the people from our side of the aisle. They will know it is the 
people from the other side of the aisle, and that will make problems 
Newt Gingrich faced in 1995--I believe it was when he shut down the 
government--look like child's play. I would urge my colleagues on the 
other side of the aisle to rethink their position. The time has come 
for a little soul searching on the other side of the aisle. You must 
decide if you are willing to create another economic crisis to mollify 
an extreme wing of your party and score political points against the 
President. You must decide if you want to go down in history as the 
first generation of American leaders to renege on promises already made 
by Presidents and Congresses, Democratic and Republican alike. In the 
coming weeks my Republican friends will have to make a very serious 
decision. Are they going to get serious about working with us to find a 
bipartisan solution to our debt crisis or are they going to put 
partisan politics above the good of the country? Are they going to say 
it has to be our way, all the way, 100 percent, no revenues, or we are 
going to force the country to default? Or will they put the good of the 
country and compromise above narrow, ideological, often fear-driven 
politics?
  In conclusion, I am an optimist. I believe my colleagues will come 
around and join us in finding a bipartisan way forward. I don't base 
that on anything that has been said. I wish I could. I base it on my 
innate optimism that Americans, at the end of the day, are practical, 
problem-solving people, not people who look for self-destructive 
solutions. I ask my colleagues to come around, join us in a bipartisan 
solution. We are willing to give some. You should be willing to give 
some, but I can tell you, my friends, time is running out. I can only 
hope, the American people can only hope, you don't wait too long.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. BEGICH. Mr. President, I am on the floor this afternoon to talk 
about the issue not only of the day, the week, the month, the year, it 
is the issue about what to do about the deficit. Everyone around here 
knows that if we fail to raise the debt ceiling by the August 2 
deadline, the United States will default on its loan payments. 
Defaulting could have catastrophic consequences on our economy as we 
attempt to recover from the worst economic recession since the Great 
Depression. Failing to raise the debt limit could send our economy into 
a tailspin with unthinkable results for the American people. With the 
stakes so high, we must ask ourselves: How did we get into this 
position? Or as my constituents back home in Alaska say: How did you 
get into this mess? Over the last decade, both sides of the aisle have 
played a role in this irresponsible spending that resulted in our 
current fiscal crisis. At the beginning of the last decade, we had a 
budget surplus--let me say that again--a budget surplus of $200 
billion, with a projected surplus of $5 trillion for the next 10 years. 
By the time I took office in 2009, not only had our budget surplus 
disappeared, we faced a budget deficit of over $1 trillion.
  The creditworthiness of the United States is in jeopardy. Some of my 
colleagues on the other side of the aisle oppose raising the debt 
ceiling, citing the need to rein in reckless spending. While I support 
broad deficit reduction measures, I strongly disagree with those who 
fail to recognize consequences of failing to raise the debt limit and 
defaulting on our financial obligations. Everyone around here knows 
what will happen if we do not. For the first time ever the 
creditworthiness of the United States would be put in jeopardy. I want 
to step back for a second and remind everyone Congress has enacted 
measures on the Federal debt limit 74 times. So they obviously 
understand what will happen if the American government defaults on its 
payments. The ceiling has been increased by both Democratic and 
Republican administrations and Congress. George W. Bush's first term in 
May of 2003 would increase the limit by $984 billion. In fact, Congress 
raised the debt ceiling seven times during his administration. The 
Senate Republicans provided the votes to raise the debt ceiling in 
2002, 2003, 2004, and 2006. To keep a good credit rating is something 
the American people understand, and they are doing their very best 
during these hard times. I hear this all the time when we are back 
home.
  While the American people understand that defaulting on our loans 
would only make matters worse, some Members of Congress insist on 
playing politics even during this economically uncertain time. If the 
U.S. Government defaults on its financial obligations, it would be the 
first time in history our credit would be downgraded. Let me repeat--
never before have we let our creditworthiness be called into question. 
The consequences are large and somewhat unknown.
  Let me take a little bit from what the Senator from New York talked 
about and expand on that, and that is: How does it affect the 
individual, the person working hard every day, paying their mortgage, 
driving to work, pumping gas in their car, going on a vacation, doing 
everyday things that Americans do in my State of Alaska, especially now 
they are out fishing, enjoying the summer. The kids are out of school, 
and the State fair is getting geared up in another month. What happens? 
Well, first off, if we default on

[[Page 10535]]

our loans that are due, our obligations, some immediate things will 
probably happen.
  First off, individuals who have credit cards will have their rates go 
up, because if you read the fine print of those great credit card bills 
we get every month, which are very small and very detailed, they talk 
about how the rate is structured. The rate is structured around what 
happens in the market. Obviously a lot of people today may have a good 
rate, 9 percent, 10 percent, but average is around 15 percent, 18 
percent. That interest rate will go up. Home mortgage rates--if you 
have an adjustable rate mortgage, it will be adjusted up. If you are a 
small business person--as I have been, and am still today, my wife--
there are many businesses that borrow on a 1-year, 2-year, 3-year loan, 
adjustable rate, maybe monthly, maybe it is an inventory loan because 
it is a seasonable business--all those rates will go up, assuming you 
can get a loan. When you drive your car and pump that gas and fill up 
your tank and you think prices are high now, oil commodities are traded 
in U.S. dollars. So the net effect is going to be that dollar is going 
to have less value, which means the price of the fuel will go up and 
what you pump into your car will increase.
  Mr. President, 75 percent of world markets, transactions across this 
world are done in U.S. dollars. If you impact the creditworthiness of 
the country, the dollar has less credit behind it, which, of course, 
costs money, which means things we import such as fuel to operate our 
cars, energy to heat this building, to turn on these lights, go up. It 
has a real impact to individuals. It is not some global discussion here 
in the halls of Congress. It is not about just debt limit and GDP and 
all these other phrases that people kind of wonder what it means to 
them in their individual life, but it has a direct impact in their 
lives. What happens to their retirement funds? Their funds are invested 
in maybe U.S. Government securities. Well, they are going to see a 
change, a dramatic change. The American people, Alaskans, are already 
struggling. To add this additional burden because we are unable to sit 
down and work together and solve this problem in a cohesive, 
comprehensive way is irresponsible.
  To my friends across the aisle, let me remind you of what President 
Reagan said in 1983 in a letter to then-Senate Majority Leader Howard 
Baker. He said it better than I think any of us could say, and this is 
directly from his letter:

       The full consequences of default--or even the serious 
     prospect of default--by the United States are impossible to 
     predict and awesome to contemplate. Denigration of the full 
     faith and credit of the United States would have substantial 
     effects on the domestic financial markets and on the value of 
     the dollar in exchange markets.
       The Nation can ill afford to allow such a result. The risk, 
     the costs, the disruptions and incalculable damage lead me to 
     but one conclusion: the Senate must pass this legislation 
     before Congress adjourns.

  It is amazing I can take a quote such as this from history and 
transplant it today and it is the same situation.
  At the same time as we deal with this, I feel strongly we must pass a 
deficit reduction measure. I have supported the deficit commission, the 
debt commission, and their efforts. I didn't agree with it all, but I 
agreed the $4 trillion mark should be it. We should try to do our best. 
In order to solve this problem, this challenge--and we all have our 
sides where we are kind of hunkered down. Every time I go back home--
and I was back home this last weekend for my short 48 hours. I spend 
more time on the plane than staying at home at times. But when I get 
home, people say very simply to me, it is a combination. We are going 
to have to reduce the spending. I don't object to that. We are going to 
have to create a more fair tax system, which I don't object to. Along 
with Senator Wyden and Senator Coats, I have introduced tax legislation 
that does that, simplifies individual rates, focuses on a growth agenda 
with our tax policy. It gets rid of the loopholes, tax havens that 
people take advantage of who pay no taxes but enjoy the great bounties 
of our country.
  We also have to invest. We have to invest in a growth agenda. That 
means investing in infrastructure, in education. Because as you reduce 
your budget, which I don't disagree with, and as we create a more fair, 
balanced tax system, we have to do one of the most principled things 
and that is to continue to help grow this economy and we have to invest 
in our infrastructure, and invest in a variety of things that grow our 
economy.
  This is an opportunity for us to put our country on sound financial 
footing by passing a broad deficit reduction measure that includes cost 
savings and increased revenues. When it comes to protecting America's 
economic security and improving fiscal responsibility, the time to act 
is now.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. PORTMAN. I rise today to talk about some of the enormous 
challenges facing our economy, about Washington's failure to address 
those challenges and a way forward. Today there are nearly 23 million 
Americans looking for full-time jobs. This includes people among those 
9 percent of Americans on the unemployment rolls, but also includes a 
lot of Americans who want to work but have given up looking for work or 
are scraping by on part-time jobs when they want a full-time job. What 
makes it more troubling is that, among the Americans being counted in 
that 9 percent, the average length of time on the unemployment rolls is 
now nearly 10 months. That is the longest ever recorded. These folks 
are looking for help, looking to us for leadership and looking for us 
to help get the economy back on track by creating a better environment 
for job creation and economic growth. As we have heard from the two 
previous speakers, the government faces serious, unprecedented 
budgetary challenges. Washington is borrowing nearly 40 cents of every 
dollar it spends. It looks as if we may have another record deficit 
this year, and we will have the highest debt ever. Government spending 
has gone from $25,000 per household to more than $31,000 per household 
in the last 4 years. The national debt has doubled over the 2008 
levels--doubled since 2008. We have hit this $14.3 trillion debt limit, 
and if we do nothing about it, we are going to end up with an economic 
crisis much like Greece is facing today.
  I just listened to the comments of my colleague from New York and my 
friend from Alaska, and they are talking about the fact that interest 
rates might go up unless we vote to extend the debt limit. I am talking 
to a lot of economists and thinking about the impact it will have on 
Ohio if we don't do something about the deficit and debt. When we 
extend the debt limit again, interest rates will go up. The value of 
the dollar will continue to go down. Inflation will go up.
  The point is not that we want to go into default--I hope nobody does 
in this Chamber. Despite what my friend and colleague from New York 
said, there is no Republican interest in defaulting on the debt. No one 
wants to default on the debt. But it is just the same as when we have a 
credit card in our families. Once we max out on the credit card, before 
we try to get a higher line of credit, we ought to look at the 
underlying problem, otherwise we will fall right back into the same 
financial problems. That is what Republicans are saying.
  It is this: If we do not deal with the underlying problem, which is 
this huge fiscal imbalance we just talked about--a $14.3 trillion debt 
that has doubled since 2008--then we are going to find ourselves with a 
financial and economic problem that will result in a spike in interest 
rates and will result in this negative impact on all Americans via car 
loans, mortgages, and student loans.
  So this is why it is so critical over the next few weeks as we work 
through this; That we deal with not just extending the debt limit--I 
guess that is a pretty easy thing to do, to just say let's go borrow 
more; we are already borrowing about 40 cents of every dollar--but we 
have to deal with the underlying problem.
  So what are we doing in the Senate to deal with that underlying 
problem?

[[Page 10536]]

Very little. This week we are debating a meaningless sense-of-the-
Senate resolution. It is what is called a nonbinding resolution. It 
will not create a single job or reform a single part of our tax code. 
It will not save $1 of government spending. It does nothing to address 
the debt limit. It is a distraction, and that is why earlier today I 
voted against proceeding to it. Serious times demand serious work.
  I was pleased when the Senate came together to cancel this week's 
scheduled recess because we should be here. We pledged to return to 
Washington and to confront these economic challenges we talked about 
and the budget problems we face. I supported doing that, but this has 
not been a serious effort.
  By the way, the Senate has not even passed a basic budget for this 
year. There is no budget, which is highly unusual. It also never passed 
a budget last year. So instead of talking about nonbinding resolutions, 
we should be talking about a budget. We should have a budget on the 
floor. We should be debating it. The other side will have their issues, 
and we will have issues to talk about. None of us will necessarily 
agree with one another on the precise provisions of a budget, and that 
is fine. Let's have the debate and end up with a blueprint for our 
spending going forward.
  President Obama talks about getting involved and showing true 
leadership but, to be honest, he hasn't stepped to the plate. The best 
example would be his own budget. He is required by law to submit one 
every year. He did submit a budget. That budget was voted on by this 
Senate. Because we didn't have our own budget, we voted on his budget. 
It was unanimously rejected 97 to 0 partly because, as Democrats will 
say, a few weeks after he submitted the budget, he gave a speech where 
he said: My budget wasn't really adequate to the task. So he rejected 
his own budget, in a sense, but he offered no alternatives, no 
specifics.
  His own budget, by the way, was so unserious that it doubled the debt 
over the next decade, and that is why, again, it was voted down by this 
Senate.
  What is our budget? What do we believe in? We should have that 
debate.
  We need to know what the numbers are; and what vision the President 
has for the next 10 years. That is what the budget is supposed to do. 
And, of course, we need to know what he will do to help grow the 
economy. In my view, getting the budget under control is a matter of 
restraining spending, but it is also a matter of growing the economy. 
If we don't grow the economy--and that will increase revenues, by 
growing the economy--we will not be able to get out of this deep fiscal 
hole we are in with record deficits, record debt, and, again, an 
increasing negative impact on our economy.
  The lack of a true debate is not from a lack of ideas, by the way. 
Senate Republicans have developed a commonsense jobs plan, much of 
which I think should be and can be bipartisan. It includes a lot of 
commonsense ideas. One is to reform the Tax Code. Senator Begich from 
Alaska talked about that earlier. That is to make sure that our Tax 
Code works better for our economy; that it is simpler, that it 
encourages investment and job creation. Economists across the board 
would agree that our current code is inefficient. We should do that as 
a body. That will help develop the economy and jobs and economic 
activity which will increase revenue.
  We need to rein in regulations. When I am home talking to small 
businesses, the first thing they talk to me about is the latest Federal 
regulation. A new one out today from the Environmental Protection 
Agency which is affecting my home State of Ohio is going to cost jobs 
at a time when we need jobs desperately. These are very specific 
proposals. Maybe they are not proposals everyone can agree to. What are 
the other side's proposals? Let's debate this issue. Let's pass 
legislation that forces a cost-benefit analysis of regulations. Let's 
be sure the regulators are using the least burdensome and least costly 
alternatives.
  These are commonsense ideas: creating a competitive workforce to make 
sure we are competitive for the 21st century. This is incredibly 
important. Expanding exports to create more jobs. On energy, being sure 
we have the ability to get away from our dangerous dependence on 
foreign oil by developing more resources right here in this country. 
These are all commonsense proposals we should work on because they 
relate to the very issue we should be talking about this week, which is 
how to deal with our budget imbalance.
  The proposal, by the way, also caps government spending. It says we 
need to have a balance between revenues and expenditures, which is only 
common sense because until we get the fiscal house in order it is going 
to be very difficult to get our economy moving. It is like a wet 
blanket over the economy creating uncertainty and unpredictability.
  On the budget, let's be clear. The long-term problem is from soaring 
spending, not falling revenues. This is from the Congressional Budget 
Office. It is a nonpartisan group. Their job is to give us the data to 
tell us what is going to happen with spending and with revenues. This 
is what they tell us.
  Even if we keep current tax rates for everybody--in other words, 
don't get rid of the so-called Bush tax cuts--revenues are still 
expected to rebound above the historical average of 18 percent of the 
economy. If, in fact, the Bush tax cuts do not get extended, which is 
current law--right now they are expected to end at the end of next 
year--those tax revenues will be well above the historic average. 
Instead of 18 percent, they get up over the next several years to about 
20 percent. Over the last 50 years, it has been about 18 percent. The 
deficit is rising not because of lack of revenue but because spending 
is now at 24.5 to 25 percent of our economy as compared to its 
historical level over the last 50 years of 20.3 percent of the economy.
  What is going to happen? Well, CBO has it right there. It is 
projected to rise on the spending side to 26 percent of the economy 
over the next several years; then 30, then 40, then 50 percent of the 
economy on spending alone. We talked earlier about the fact that we 
have gone from $25,000 per household government spending to $31,000 per 
household in the last 4 years alone. That spending is projected to grow 
and grow. If we don't deal with that spending we will never be able to 
get the budget in balance. That is the top issue. Again, we have to 
face this before we extend the debt limit again. If we don't, there 
will be major economic problems.
  Look at what Standard & Poor's and Moody's and Fitch--the so-called 
credit agencies--are telling us. They are saying: Yes, default would be 
a terrible thing. Let's not default. But they are also saying: If we 
don't deal with the fiscal imbalance, if we don't deal with the record 
deficits and debts, there will be major and negative impacts on the 
economy, and they will be in a position where they may downgrade our 
debt, which means higher interest rates.
  Having tax rates chase spending is not the solution. It will not 
balance the budget. Moreover, it will not spur this sputtering economy 
to grow and to create the jobs we talk about today. It will not work to 
get us back to work. In fact, virtually all economic theories agree 
that tax increases harm economic growth. When we tax something, people 
do less of it. That is why we tax smoking. So if we want economic 
growth, the last thing we should do is to raise taxes on working, raise 
taxes on savings, raise taxes on investment. These are not the ways to 
get the economy moving again. Instead, we should be unleashing American 
entrepreneurs, not putting more taxes on them.
  Some suggest we must choose between creating jobs and reining in 
government. My view is that the opposite is true. Reining in government 
can help create jobs. The less the government spends, the more money 
remains in the private sector for families and entrepreneurs to spend. 
The less the government borrows, the more savings are available for 
businesses to borrow in order to expand, as well as for families to 
borrow for a new home, a new car, or a student loan. Think about it. 
The government borrowing all this

[[Page 10537]]

money is like a big sponge soaking up our savings. Today, we are 
borrowing, again, more than 40 cents of every dollar the government 
spends. That is harming the economy. Reducing the deficit also reduces 
the risk of a debt-induced financial crisis that might otherwise dwarf 
what we have seen happening in Greece today.
  But don't take my word for it. Lots of economists have looked at 
this. There is a great study out there that I encourage people to look 
at. It is done by the economists Ken Rogoff and Carman Reinhart. Rogoff 
and Reinhart do something very simple. They go around the world and 
look at different economies and determine what happens when their debt 
gets too big for their economy. Their view is that when the debt gets 
to 90 percent of the size of a nation's economy, it has a substantial 
negative impact on the economic growth and jobs in that country.
  Their data suggests that when the debt gets to 90 percent of the 
economy, there is a 1-percent reduction in economic growth rates. So 
instead of our economy growing at 1.8 percent in the first quarter, it 
should have grown at 2.8 percent. What does that mean? That 1-percent 
growth would otherwise mean 1 million jobs.
  So if we didn't have this huge debt--and right now it is about 93 
percent of our economy; it will be at 100 percent of the economy this 
year--then we would have more jobs. If we look at what Rogoff and 
Reinhart have said, it means we would have about 1 million more jobs in 
this country. Could we use those jobs? Yes. We need them desperately.
  So there is a connection between this overspending--and this huge gap 
we have between revenues and spending--and our ability to get this 
economy back on track.
  Over 25 years, by the way, annual growth rates 1 percent lower would 
leave the economy nearly one-fourth smaller than it would otherwise be. 
Think about that: a 25-percent reduction in the size of the economy as 
a result of this debt.
  In order to create jobs and growth, we have to balance the budget, 
and we have to reduce that debt that is now over 90 percent of our 
economy. There are two ways to reduce the debt's share of the economy: 
One is to make the debt smaller, and the other is to make the economy 
larger. We know raising taxes will shrink the economy. Instead, we have 
to keep tax rates low to create jobs and expand the economy, and we 
have to reform the Tax Code so it works better.
  Again, economists across the spectrum will tell us we can have a 
better economy if we have a more sensible Tax Code. We must also 
responsibly reduce government spending, of course, to rein in the debt. 
Low tax rates and spending restraint will bring prosperity and 
alleviate this immoral avalanche of debt that we are otherwise leaving 
in the laps of our children and grandchildren.
  I understand some of my colleagues have their own approaches to 
this--to jobs, to the economy, to the budget deficit. That is fine. 
Let's have the debate. There are numerous proposals in Congress to 
reduce spending, balance the budget, and reform entitlements. Instead 
of voting on political nonbinding resolutions as we have done this week 
in the Senate, let's have that debate. We have too many important 
issues. Let's stop fiddling while Rome burns.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, as we discuss the need to bring down the 
deficit, we should acknowledge a few basics. First is cannot achieve 
the deficit reduction we need with spending cuts to nondefense 
discretionary programs alone. They simply aren't large enough to make 
the difference we need, and the damage we would do to American families 
from drastic cuts in those programs is simply too great.
  Second is that in light of those facts and in the interest of basic 
fairness, a balanced solution to deficit spending must include revenues 
as well as spending cuts. If we ask college students relying on Federal 
aid, workers in need of Federal job training, seniors in need of health 
care to sacrifice in the name of deficit reduction, so, too, should 
those who benefit from loopholes and handouts in the Tax Code, 
including loopholes that often benefit only highly profitable 
corporations, one of those huge loopholes that benefits corporations 
that dole out large stock option pay to their executives.
  Current law provides an unwarranted tax subsidy to executive stock 
option compensation thereby increasing the tax burden on working 
families and increasing our deficit. According to the Joint Committee 
on Taxation, closing this loophole would reduce the deficit by about 
$25 billion.
  Today, under tax rules for reporting stock options, corporations 
report stock option expenses on their books when those stock options 
are granted but use another method to claim a different and a typically 
much higher expense on their tax returns when the stock options are 
exercised. The result is, corporations can claim larger tax deductions 
for options on their tax returns than the actual expense they show on 
their books for those same options.
  Stock options are the only type of compensation where the Tax Code 
allows a corporation to deduct more than the expense shown on their 
books. For all other types of compensation--cash, stock, bonuses, and 
others--the tax return deduction equals the book expense. In fact, if 
corporations deducted on their tax returns more than their books showed 
as compensation, it could constitute tax fraud. The sole exception to 
that rule is stock options. It is an exception we can no longer afford.
  The Permanent Subcommittee on Investigations, which I chair, held a 
hearing in June of 2007, when we examined the stock option tax gap in 
detail at nine companies. We found that those nine companies claimed 
tax deductions that were a combined $1 billion greater than the 
expenses shown on their books. Let me repeat, just nine companies, $1 
billion in excess tax deductions.
  We were shocked by that finding, and we asked the IRS to calculate 
the stock option tax gap for the country as a whole. Using actual data 
from tax returns, the IRS found that for the first full year in which 
data was available, U.S. companies claimed an excess of $61 billion in 
stock option tax deductions compared to their book expenses. Since 
then, IRS data shows that the stock option tax gap has persisted for 5 
years. They looked at 2005 to 2009, which was the latest year for which 
data was available, with the size of the excess tax deductions varying 
from $11 billion to $52 billion per year. These excessive deductions 
mean billions of dollars in reduced taxes for corporations wealthy 
enough to provide substantial stock option compensation to their 
already well-paid executives and all at the expense of ordinary 
taxpayers and an increase in the deficit.
  It is a tax loophole that is fueling excessive executive pay, 
increasing the pay gap between millionaires and the middle class, and 
enabling profitable corporations to avoid paying their fair share to 
reduce the deficit.
  I will soon be reintroducing the same legislation I have introduced 
in past years to end this misalignment of the Tax Code.
  The bill would cure the problem simply by requiring the corporate 
stock option tax deduction to equal the stock option expense shown on 
the corporate books. It would not affect the taxes paid by individuals 
who receive the stock options. It would not affect so-called incentive 
stock options which receive favored tax treatment under section 422 of 
the Tax Code and are often used by startup companies.
  In addition, the bill would make stock options pay subject to the 
same $1 million cap on corporate tax deductions that applies to other 
forms of executive pay. Congress established that $1 million cap so 
that taxpayers would not have to subsidize enormous paychecks for 
executives. But the cap can't end that tax subsidy without including 
stock options. Even if included under the cap, stock options could 
still be awarded in excess of $1 million, but not at the expense of 
ordinary taxpayers.

[[Page 10538]]

  I do not know of any Senator who does not want to reduce the budget 
deficit. I do not know of any Senator who believes it is wise to 
subsidize executive paychecks at the expense of working families. But 
as it now stands, the excessive corporate tax deduction for stock 
option pay widens the deficit while increasing the tax burden on 
ordinary taxpayers. By closing this tax gap, by ending the illogical 
treatment of corporate stock options in current law, we can reduce the 
budget deficit and bring much-needed fairness to the Tax Code.
  Mr. President, I ask unanimous consent that I be allowed to proceed 
as in morning business for 8 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Ahmed Warsame

  Mr. LEVIN. Mr. President, the Department of Justice announced earlier 
this week that Ahmed Abdulkadir Warsame, an accused member of the 
terrorist group Al-Shabaab, has been indicted on charges of providing 
material support to Al-Shabaab and al-Qaida in the Arabian Peninsula, 
conspiring to teach and demonstrate the making of explosives, 
possessing firearms and explosives in furtherance of crimes of 
violence, and other violations of Federal law. He will be tried for 
these offenses in Federal court in New York.
  Warsame is a Somali national who was captured in the gulf region in 
late April and taken to a U.S. Navy vessel for detention and 
interrogation. The Department of Defense has stated that the 
interrogation was conducted by an interagency team comprised of U.S. 
military personnel, with assistance from the High-Value Detainee 
Interrogation Group. After the completion of this interrogation and a 
hiatus of several days, Warsame was turned over to a team of FBI 
officials for law enforcement questioning, and in that he waived his 
Miranda rights and continued to talk.
  This case appears to be an example of our national security and law 
enforcement teams working together in the manner we would hope they 
would toward the twin objectives of collecting critical intelligence 
information and ensuring a successful criminal prosecution of the 
detainee.
  Published reports indicate that Warsame was captured by American 
military forces on a boat in international waters between Yemen and 
Somalia after the United States acquired intelligence indicating that a 
significant terrorist figure was on board the vessel. Under these 
circumstances, it was appropriate for the military to detain and 
interrogate Warsame to obtain actionable intelligence. The United 
States is currently engaged in military operations pursuant to the 2001 
Authorization for Use of Military Force. As the Supreme Court held 7 
years ago in the case of Hamdi v. Rumsfeld, the capture and detention 
of both lawful and unlawful combatants is a ``fundamental and accepted 
. . . incident to war.'' I understand these interrogations were 
conducted in a manner fully consistent with the interrogation 
techniques authorized under the Army Field Manual on interrogations.
  Once our national security team determined that the collection of 
actionable intelligence had been completed, a separate decision was 
made, on the basis of the specific facts of this case, as to the best 
forum in which to prosecute Warsame for his alleged crimes.
  The indictment sets forth evidence that Warsame violated a number of 
Federal statutes, including sections of the Criminal Code prohibiting 
trafficking in explosives, use of dangerous weapons, acts of 
international terrorism, providing material support to foreign 
terrorist organizations, and receiving military-type training from 
foreign terrorist organizations--making him a candidate for prosecution 
in a Federal court with jurisdiction over such violations.
  Warsame also appears to have engaged in acts of terrorism and 
material support to terrorism, both of which are crimes under the 
Military Commissions Act, if they are committed ``in the context of and 
associated with hostilities'' against the United States. What has not 
been resolved is whether Warsame meets the jurisdictional threshold in 
the Military Commissions Act of having acted in the context of 
hostilities against the United States and having engaged in or 
materially supported such hostilities.
  The administration's national security team unanimously agreed that 
prosecution in Federal court was the better option and the one most 
likely to lead to a conviction under the facts of this case. Our 
Federal prosecutors and Federal courts have a proven track record in 
prosecuting terrorists. Two years ago, the Justice Department informed 
us that there were 208 inmates in Federal prisons who had been 
sentenced for crimes related to international terrorism and an 
additional 139 inmates who had been sentenced for crimes related to 
domestic terrorism. By contrast, prosecution of the Warsame case before 
a military commission would have raised a difficult jurisdictional 
issue that could have resulted in dismissal or even acquittal.
  Critics of the decision to try Warsame in Federal court apparently 
would prefer that he be tried before a military commission, even though 
he might be less likely to be convicted there due to the jurisdictional 
issue. I disagree with that position. In my view, the most appropriate 
forum for trial should be determined, as it was here, on the basis of 
the nature of the offense, the nature of the evidence, and the 
likelihood of successful prosecution. The executive branch officials 
who made the determination in this case are in a much better position 
to weigh those factors and make that judgment than is the Congress.
  By the way, the approach taken by the administration in this case is 
consistent with the bipartisan detainee provisions included in the 
National Defense Authorization Act, as reported by the Senate Armed 
Services Committee last month.
  Those provisions would authorize military detention for enemy 
belligerents captured in the course of hostilities authorized by the 
2001 Authorization for Use of Military Force. That authority 
appropriately encompasses the detention of an individual like Warsame, 
who is suspected of participation in such hostilities, until such time 
as the military has been able to interrogate the detainee and make an 
appropriate status determination. While we may not have enough evidence 
to prove beyond a reasonable doubt that Warsame participated in 
hostilities against the United States, we undoubtedly had sufficient 
evidence to hold him for the time required to interrogate him and 
obtain the intelligence that our military needs.
  The provisions in the Senate Armed Services Committee-reported bill 
would also expressly authorize the transfer of such a detainee ``for 
trial by an alternative court or competent tribunal having lawful 
jurisdiction.'' Indeed, an amendment to delete this authority was 
defeated in committee by a bipartisan vote of 7 to 19. We decided, in 
other words, to leave it up to executive branch officials to determine 
on a case-by-case basis, as they did here, the most appropriate forum 
for prosecution, whether it be a Federal court or a military 
commission.
  By contrast, the House version of the defense authorization bill 
includes a provision that would expressly prohibit the trial in Federal 
court of any alleged foreign terrorist who might be subject to trial by 
a military commission--even if he is arrested inside the United States. 
This provision may well be unconstitutional, given that article III of 
the U.S. Constitution expressly states that:

       The judicial power shall extend to all Cases, in Law and 
     Equity, arising under this Constitution, the Laws of the 
     United States, and Treaties made, or which shall be made, 
     under their Authority.

  Under the plain language of this provision, Congress would appear to 
lack the authority to exclude the prosecution of violations of the laws 
of the United States in the Federal courts.
  The effort to direct all terrorist cases to military commissions 
could also be highly counterproductive, providing jurisdictional 
arguments that defendants could use to seek the dismissal of charges 
against them. If the House language were adopted, a case in Federal

[[Page 10539]]

court on a terrorism charge would be at risk of being dismissed on the 
grounds that it could only have been brought before a military 
commission, while at the same time, because of the limited jurisdiction 
of military commissions, the military commission might not have 
jurisdiction either. In such a case, it would be impossible to 
prosecute an alleged terrorist in any forum. The critics of the 
Department of Justice decision should end their effort to score 
political points here. The stakes are too high, and if the critics get 
their way, we might not be able to try some terrorists at all--
anywhere.
  Some may contend that holding alleged terrorists in the United States 
for trial could needlessly subject Americans to retaliatory attacks by 
terrorist organizations. There is no basis for that argument. We have 
tried hundreds of alleged terrorists in our Federal courts over the 
last decade. We are currently holding many more--including the 
Christmas Day bomber, who is being held in my hometown of Detroit. So 
far as I know, none of these cases have led to retaliatory attacks by 
terrorist organizations. In any event, we know that al-Qaida and its 
allies are already seeking avenues to attack us on American soil and 
would do so if they could. Moving the location of a trial to Guantanamo 
or some other foreign location is unlikely to deter such an attack.
  Last month, ADM William McRaven--the President's nominee to be 
commander of U.S. Special Operations Command--testified before our 
Armed Services Committee that a suspected enemy belligerent detained 
outside the war zones in Afghanistan and Iraq would likely be put on a 
naval vessel until ``we can prosecute that individual in a U.S. court 
or we can return him to a third party country.'' Admiral McRaven made 
it clear later in his testimony that such an individual could also be 
transferred for trial by a military commission. In other words, we have 
a choice. We should preserve that choice.
  In summary, the Warsame case demonstrates that we do have the 
capacity to detain and interrogate suspected terrorists in military 
custody for the purpose of obtaining actionable intelligence, and then 
to transfer them to an appropriate forum for trial--whether it be a 
Federal court or a military commission. This case demonstrates that we 
do not have to sacrifice actionable intelligence for law enforcement 
purposes, and that we do not have to sacrifice criminal prosecution in 
order to collect intelligence information. And it demonstrates that we 
can pursue both of these objectives without being pushed to what 
Admiral McRaven described as the ``unenviable option'' of having to 
release the detainee.
  The only ``unenviable'' outcome is the one that the critics of the 
Department of Justice decision would lead us to--prohibiting the 
criminal trial of suspected foreign terrorists in Federal court and 
requiring them to be tried by military commissions, even in cases like 
the Warsame case, where a jurisdictional problem might lead a military 
commission to dismiss the case.
  The action of the administration in the Warsame case is sound. The 
prosecutorial discretion they exercised as to the best forum for the 
trial should be preserved and should not be interfered with by the 
Congress.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Bingaman). The Senator from North Dakota.
  Mr. HOEVEN. Mr. President, I rise, along with my fellow colleagues, 
to again address the need to reduce our deficit and our debt. The 
United States is the strongest country in the world--in the history of 
the world--but that will not be the case for long if we do not solve 
our deficit and our debt crisis. It is vital we solve it now for our 
generation, but it is vital we solve it for future generations as well.
  The wealth, the economic activity of this country, is created by the 
private sector, by hard-working men and women, not by the government. 
The government creates the forum, the environment, if you will, that 
fosters or allows economic activity. But the key is, the government 
should not just allow economic activity, the government needs to create 
an environment that truly empowers, that promotes economic activity, 
that encourages private investment, that encourages entrepreneurship, 
business expansion and job growth, innovation--the very entrepreneurial 
activity that has built this country. That is the success of America, 
that is the strength of our country, that is how America has become the 
greatest economic powerhouse in the history of the world. That is why 
our people enjoy the highest standard of living.
  But our current administration believes more government is the 
answer--more spending, more regulation, and more taxes. It is not the 
answer. That is the problem, and it is making the situation worse.
  Let's go through just some of the economic statistics.
  Today, we have 13.9 million--almost 14 million--people unemployed. 
The unemployment rate is over 9 percent. Gas prices, since the current 
administration took office, are up to more than $3.50 a gallon. That is 
almost a 100-percent increase in the cost of gasoline. Our Federal debt 
is closing in on $14.5 trillion. For every man, woman, and child in 
this country, that is almost $50,000 for every single person. We have 
45 million people on food stamps today. Health insurance. In spite of 
the health insurance legislation, health insurance premiums are rising, 
and home values are going down.
  Clearly, we need to get our economy going. We need to get people back 
to work. We need that economic growth and dynamism that has been the 
hallmark of this country.
  Clearly, we need to reduce our deficit and our debt. The reality is, 
we can do it. We absolutely can do it, and we have done it before. But 
we need to begin with a comprehensive plan to reduce the deficit and 
the debt. Any agreement to raise the debt ceiling needs to include a 
comprehensive agreement to reduce the deficit and the debt.
  By a comprehensive agreement, I mean something that includes a 
balanced budget amendment, reduction in spending, and living within our 
means on an ongoing basis. It means reforming entitlement programs to 
save them from bankruptcy, not only to protect our seniors today but to 
make sure those programs are solvent and there for future generations.
  All these things and more can go into a comprehensive plan. But we 
need a comprehensive plan to reduce the deficit, to reduce the debt as 
part of the debt ceiling issue we need to deal with now--not put off 
but deal with now.
  If we think about it, a balanced budget amendment makes sense. Forty-
nine of the fifty States--49 out of 50 States--have either a 
constitutional or a statutory requirement that they balance their 
budget--not just this year but every year. States balance their 
budgets. Cities balance their budgets. Businesses balance their 
budgets. Families balance their budgets, live within their means. Our 
Federal Government needs to do the same. Our Federal Government needs 
that fiscal responsibility, needs that fiscal discipline.
  Also, if we think about it, a balanced budget amendment gets 
everybody involved. It gets everybody involved in Congress. It takes a 
two-thirds majority in both the Senate and the House to pass a balanced 
budget amendment. Then what happens? It goes out to the States. It goes 
out to the 50 States, and three-fourths of the States must ratify that 
balanced budget amendment in order for it to be approved. So we not 
only have everybody at the Federal level working to live within our 
means and balance the budget, but we get all the States involved as 
well.
  This is a challenging problem--no question about it--getting on top 
of these deficits and our long-term debt not only now but for the 
future as well. So let's have everyone involved. A balanced budget 
amendment will do just that.
  Of course, at the same time, we have to reduce our spending both now 
and make sure we continue to live within our means going forward. The 
statistics are very clear. The statistics right now show that this year 
the Federal Government will take in about $2.2 trillion in revenue.

[[Page 10540]]

  So our revenue is about $2.2 trillion, but our expenses are $3.7 
trillion. That is about a $1.5 trillion deficit. This year, actually, 
it will be larger than that number. So you can see that is why our 
Federal debt now is closing in on $14.5 trillion. We are borrowing 40 
cents of every dollar we spend--40 cents of every dollar we spend--and 
every single day our debt goes up $4 billion. That is simply 
unsustainable.
  That is why any vote to increase the debt ceiling must include a 
comprehensive plan to reduce our deficit and our debt. No question, we 
need to control spending, but as we do that, at the same time, in order 
to truly solve the problem, we have to create, as I said at the outset, 
a government environment that not only encourages government investment 
but empowers private investment across our Nation.
  This next chart shows some of the challenges--barriers, if you will--
to doing that. We need legal, tax, and regulatory certainty to 
encourage private investment. A probusiness, progrowth, projobs 
environment is one that creates legal, tax, and regulatory certainty to 
not only encourage but empower private investment.
  One of the ways we do this is by reducing the regulatory burden. We 
have an incredible regulatory burden at the Federal level. We need to 
find ways to reduce that. That is what this chart shows.
  Earlier this year, President Obama issued an Executive order that 
proposes to review regulations that may be outmoded, ineffective, 
insufficient, or excessively burdensome, and also to modify, 
streamline, or even repeal them. Just a week ago, he said again:

       What I have done--and this is unprecedented--is I have said 
     to each agency, look at the regulations that are already on 
     the books, and if they don't make sense, let's get rid of 
     them.

  That is what he said. I absolutely agree with that. Yet, over the 
past 2 years, the administration has issued 502 proposed or enacted 
regulations and is on pace this year to exceed $100 billion in total 
regulatory cost burdens to industry. That is a huge regulatory burden.
  This chart shows the cost of major new regulations in billions of 
dollars over the last 30 years. As you can see, when the cost of 
regulation is low, the economy is strong, and when the cost of 
regulation is high, as it is now, the economy is weak; more important, 
job growth is weak. Look at 2010. In 2010, you see the highest 
regulatory burden, in adjusted dollars, in the last 30 years. How did 
our economy do in 2010?
  Senator Roberts, my colleague from Kansas, myself, and others have 
taken the President up on his pledge to review these regulations. We 
have introduced the Regulatory Responsibility For Our Economy Act, a 
measure that would give teeth to the President's directive. Regulators 
will have to show the benefits of a new rule and show that the benefits 
outweigh its cost. They will have to show that it imposes the least 
burden on society and that it maximizes economic benefits. That is an 
approach which would not only encourage but truly empower private 
investment.
  Let me give you another example of what I am talking about with the 
regulatory burden--again, trying to create that legal and tax certainty 
that stimulates the private investment we need to get this economy 
going, not more government spending. We are spending way beyond our 
means. What I mean is, more private investment that gets this economy 
going, gets people back to work, and generates revenue, which will help 
us, over time, reduce our debt.
  When we talk about onerous regulations, a key area of the economy 
that is incredibly overburdened and where we see a prevention of 
investment because of the regulatory burden is the energy industry.
  My next chart illustrates the long reach of the EPA and how it is 
sidelining and dampening job growth in the energy sector. It shows a 
long, complex obstacle course, if you will, of expensive standards and 
procedures and regulations that are not only being implemented now but 
will go on for the foreseeable future.
  How would you like to be an energy company looking at investing and 
putting hundreds of millions, billions of dollars into new plants and 
investments, whether it is producing oil and gas, whether it is 
biofuels or biomass--you name it--how would you like to make those 
investments on behalf of your shareholders and have some idea what rate 
of return you are going to be able to get and what rules of the road 
you are going to have to follow?
  This is just a small sampling of the regulations that are now coming 
into being and will continue to come into place for the foreseeable 
future. At a time of high oil prices, unrest in the Middle East, and 
sluggish economic growth, we are not only failing to provide Americans 
with affordable energy for their homes and vehicles, but we are 
actually discouraging the very investment that will make it happen, and 
this is just one small example.
  To remedy that, we need new legislation. I know the occupant of the 
chair and others are working on a lot of new legislation that will 
streamline regulations and encourage investment.
  I will give just a couple of examples. One of them I am working on 
with Senator Joe Manchin from West Virginia. He introduced it, and it 
is called the EPA Fair Play Act. It would prohibit rescinding properly 
approved 404 permits. When EPA approves a 404 permit for mining, it 
says you can't arbitrarily withdraw that permit. So a company that has 
invested millions or billions of dollars can't find itself high and dry 
after it has already gotten the proper permit.
  Another example of legislation that we have introduced that would 
make a difference is Defending America's Affordable Energy and Jobs 
Act. The primary sponsor of that is Senator John Barrasso of Wyoming. 
This legislation ensures that Congress makes the call on regulating 
greenhouse gases, not the EPA through regulatory fiat.
  Another example is the Gas Accessibility and Stabilization Act, which 
I am pleased to cosponsor with Senator Roy Blunt of Missouri and 
others, which will simplify the complex rules and regulations that 
govern refining and distribution of fuel throughout the United States.
  There are many other examples I could give as well.
  The point is, with 14 million Americans out of work, we can no longer 
delay. It is not just regulations, it is legal, tax, and regulatory 
certainty that will empower investment by entrepreneurs and companies 
all over this great Nation.
  We don't just have to talk about regulations. Let's talk about trade 
for a minute. Right now, we have three trade agreements pending: the 
United States-South Korea Free Trade Agreement, the free-trade 
agreement with Panama, and another one with Colombia. These agreements 
have been pending since 2007. The benefit of these agreements, for 
example, is that they would generate more than $13 billion a year in 
economic activity for this country and create up to 250,000 American 
jobs. If we fail to act, we will lose on the order of 380,000 jobs to 
the European Union and Canada, which have already approved their trade 
agreements. Why aren't we dealing with those trade agreements now, when 
we have 14 million people out of work, when we have an economy we need 
to get going, and when we have huge deficits and debt, increasing at 
the rate of $4 billion a day?
  Well, the deadline on the debt limit is fast approaching. The time to 
act is now. The simple truth is this: We cannot continue to spend more, 
tax more, and regulate more. It is time to control our spending and 
create an environment that unleashes the entrepreneurial power and 
spirit of the American people. We can do it. In fact, we have done it 
before. We just need the will to act for ourselves today and for the 
benefit of future generations.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. SANDERS. Mr. President, let me begin by referring to the front 
page of today's Washington Post. The headline is ``Obama: Social 
Security on table. Cuts offered in debt talks.''
  Mr. President, I hope very much that headline is wrong because, in 
fact, Social Security, which is perhaps the

[[Page 10541]]

most successful Federal program in the history of our country, has not 
contributed one penny to our deficit or our national debt. The idea of 
lumping Social Security and cuts in Social Security into a discussion 
about our deficit and our national debt is absolutely wrong and unfair 
to the tens of millions of seniors and people with disabilities who 
benefit from that program.
  As you know and as the American people know, Social Security is 
independently funded through the payroll tax. Every worker and every 
employer contributes into that fund. Social Security, today, has a $2.6 
trillion surplus that is projected, in fact, to grow to over $4 
trillion by 2023.
  We, of course, need a vigorous debate about how we deal with the 
deficit crisis and our national debt, but Social Security, 
independently funded, with a $2.6 trillion surplus, having not 
contributed one nickel to the national debt, should not be part of that 
debate.
  I understand there are many people in the Senate--many of my 
Republican colleagues--who do not like Social Security, who do not 
believe in Social Security because, essentially, they do not believe 
the government should be involved in retirement insurance for seniors 
or people with disabilities. I respect their point of view. I very 
strongly disagree with it.
  The real problem they have is that Social Security is enormously 
popular. Poll after poll shows that the American people do not want to 
see Social Security cut, they do not want to see the retirement age 
raised, and they most certainly do not want to see Social Security 
privatized because, in fact, Social Security has succeeded. It has 
accomplished the goals of those people who founded that program in the 
1930s. In the 1930s, about half of America's senior citizens lived in 
poverty. Today, that number, while it is too high, is down to 10 
percent. More important, given the incredible instability in the 
economy we have seen for decades--especially in the last few years--
where millions of people have lost some or all of the retirement 
savings they had invested in Wall Street, over the last 75 years, not 
one American has lost one dime he or she was entitled to in terms of 
Social Security benefits. That is a pretty good record--every American, 
getting every penny that was owed to him or her for 75 years. It is a 
program that has worked. It is a program that is working today. It is a 
program that can pay out every benefit owed to every eligible American 
for the next 25 years. It is a program that should not be cut.
  But more to the point, in terms of President Obama, one of the 
problems we have as a nation is that it is no great secret that many of 
our people are losing faith in government, for a whole lot of reasons. 
But certainly one of the reasons is that politicians say one thing and 
they do something else. They campaign on a certain promise, they give a 
speech, everybody applauds, and 2 years later: Well, I guess I have to 
change my mind; I can't quite do this.
  Let's be clear: When President Obama ran for the Presidency in 2008, 
he was a strong advocate of Social Security. He made it very clear to 
the American people he was not going to cut benefits. Let me quote from 
a speech the President gave--he was then-Senator Barack Obama--on 
September 6, 2008. This is what he said:

       John McCain's campaign has suggested that the best answer 
     for the growing pressures on Social Security might be to cut 
     cost-of-living adjustments or raise the retirement age. Let 
     me be clear: I will not do either.

  ``I will not do either.'' Today's Washington Post: Obama: Social 
Security on table. Cuts offered in debt talks.
  Mr. President, on April 16, 2008, candidate Obama said:

       The alternatives, like raising the retirement age, or 
     cutting benefits, or raising the payroll tax on everybody, 
     including people making less than $97,000 a year----

  And that is now up to $106,000 a year----

     those are not good policy options.

  On November 11, 2007, candidate Obama said:

       I believe that cutting [Social Security] benefits is not 
     the right answer; and that raising the retirement age is not 
     the best option.

  The American people expect the President of the United States to keep 
his word.
  Now, again, I am not privileged to the discussions that may be going 
on right this moment in the White House about some grand national debt 
negotiations. All I can tell you--and it may be accurate, it may not; 
the media has been wrong once or twice in history--is that according to 
today's Washington Post, the President is considering lowering cost-of-
living adjustments for Social Security recipients, even though, by the 
way, Social Security recipients have not received a COLA in the last 2 
years.
  So let's be clear: Today, despite significant inflation on health 
care costs and prescription drugs, the fact that seniors have not 
received a COLA in 2 years, the fact veterans have not received a COLA 
in 2 years, apparently, the President, in negotiating with Republicans, 
is considering lowering COLAs in the future.
  It is important to understand what that means. According to the 
Strengthen Social Security Campaign, which is a coalition of senior 
groups who are working hard to protect Social Security, changing the 
way Social Security cost-of-living adjustments are calculated--as the 
President may be considering--and again, I do not want to make a 
definitive statement. All I am doing is telling you what is on the 
Washington Post's front page today. Is it true? I can't say. But if it 
is true, this would cost senior citizens hundreds of dollars a year in 
lower benefits.
  The Congressional Budget Office estimates that the adoption of the 
so-called ``Chained CPI''--and this is a different formulation. I 
happen to believe, and I have introduced legislation to this effect, 
the current COLAs for seniors are not accurate and are too low because 
they do not, in a realistic way, measure what seniors are purchasing, 
which, to a significant degree has to do with health care and 
prescription drugs. When you are old, you are not primarily buying 
laptop computers or big television sets. You are often spending a lot 
of your money on health care, prescription drugs, and those costs are 
going up. So I think today's COLA is too low and it does not reflect 
the real purchasing needs of seniors.
  According to the CBO, if in fact the government adopted the so-called 
``Chained-CPI''--which is a different formulation that is even lower 
than the current inadequate formulation--annual COLAs under this 
proposal would cut benefits by $112 billion over 10 years.
  Here is the important point for individuals. The Social Security 
Administration Chief Actuary estimates the effects of this change would 
be that beneficiaries who retire at the age of 65 and receive average 
benefits would get $560 less a year at age 75 than they would under 
current law and get $1,000 less a year at age 85.
  People are living longer. Many of our people, God bless them, reach 
75, even reach 85. To say to somebody when they reach 85, and they 
don't have a whole lot of money, that as a result of these cuts they 
will get $1,000 a year less is totally, to my mind, unacceptable and 
not something that should be supported by the President or by any 
Member of the Senate.
  The American people, despite what many of my Republican friends are 
saying, are pretty clear on some basic issues regarding how we address 
the serious problem of our national debt and our deficit. What the 
American people say in poll after poll after poll--and they say it to 
me on the streets in Burlington, VT, or any other place in Vermont that 
I go--is that we must have shared sacrifice; that at a time when 
poverty is increasing in this country, when we have the highest rate of 
childhood poverty in the industrialized world, when millions of workers 
are working longer hours for lower wages, when unemployment is sky 
high, when seniors have not received a COLA in 2 years, when young 
people are finding it hard to get any jobs at all, it is immoral and 
bad economics to do deficit reduction on the backs of those people--of 
working families, of

[[Page 10542]]

children, of the elderly, of the sick, of the poor.
  Overwhelmingly, the American people say that is wrong, especially at 
a time when the wealthiest people have never had it so good and when 
corporate profits are soaring.
  Mr. President, you may have seen an article on the front page of the 
New York Times a few days ago. Last year CEOs of major corporations 
have seen a 23-percent increase in their compensation packages--23 
percent. We are in the midst of a horrendous recession, where real 
wages for American workers are going down, but CEOs are doing great, 
Wall Street is doing great, corporate profits are soaring, and we have 
dozens of corporations that make huge profits and don't pay a nickel in 
taxes.
  We have a military budget that is three times higher than it was in 
1997. So the vast majority of the people say--and they say it in polls 
all over the place--we need to go forward with shared sacrifice. Not as 
the Republicans suggest--cutting programs for the most vulnerable 
people in this country, throwing millions of kids off Medicaid, ending 
Medicare as we know it now, and making it impossible for working class 
families to send their kids to college. That is not what the American 
people are saying.
  A recent survey by Public Policy Polling in swing States asked the 
questions. When voters in Ohio--this is just the other day this came 
out--were asked this spring if they would support or oppose cutting 
spending of Social Security to reduce the national debt, only 16 
percent favored that approach compared to 80 percent who were opposed, 
with similar, identical results, or very close results in States such 
as Missouri, Montana, and Minnesota. That was just out in the papers 
yesterday. Meanwhile, strong majorities, including Republicans, favor 
increased revenue from the wealthiest Americans and most profitable 
corporations being a part of any deficit reduction package.
  So let me conclude by saying that I hope very much President Obama 
does not reach any agreement with the Republicans which includes cuts 
in Social Security. Social Security has not contributed one nickel to 
our national debt. It is a successful program and widely supported by 
the American people who are benefiting from it every single day. More 
to the point, President Obama, when he campaigned for office, made it 
clear when he told the American people if he was elected President he 
would not be cutting Social Security, and the American people expect 
him to keep his word.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, yesterday I spoke about the matter of tax 
expenditures, and I would like to expand on that topic today. They are 
becoming a critical issue in negotiations over the debt ceiling.
  First, Mr. President, I ask unanimous consent that I be permitted to 
finish my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Mr. President, Democrats say they want to eliminate tax 
expenditures. They refer to them as loopholes or spending through the 
Tax Code. This might be a good political argument, but it bears little 
relationship to the understanding of tax expenditures and tax law or 
tax policy.
  Yesterday, I outlined a general definition of tax expenditures. They 
are most definitely not spending through the Tax Code, as President 
Obama so creatively put it, and they are most definitely not, by and 
large, loopholes. Rather, they were intentionally included in the Tax 
Code by Congress in order to realize certain policy goals.
  Tax expenditures are an opportunity for families and businesses to 
keep more of their income. Unfortunately, rather than have a serious 
conversation about tax expenditures and tax policy, President Obama and 
his liberal allies are intent on setting new ground for juvenile public 
discourse.
  Faced with a $14.3 trillion debt--and going up every day--Social 
Security and Medicare Programs that are set for bankruptcy--ruining 
America's seniors--and a legitimate fiscal crisis that poses a clear 
and present danger to the Nation's security and the security of 
America's families and businesses, President Obama is again talking 
about shared sacrifice. Well, I like the term. The only thing is, I 
would prefer to have shared prosperity because all we are going to get 
out of this administration is shared sacrifice, which means everybody 
is going to suffer. I would like to have shared prosperity where 
everybody is lifted.
  The first time we really started hearing about this concept of shared 
sacrifice was in the debate over ObamaCare. For those who are 
unfamiliar with Washington-speak, this is what the President meant by 
shared sacrifice: I am going to raise taxes on families and businesses 
by over $\1/2\ trillion, and I am going to do it by shaking down 
businesses.
  He made them an offer they couldn't refuse: Pay up now or pay up more 
later. So when we started hearing again about shared sacrifice, we knew 
what was coming: more proposals for tax increases. But I have to say I 
remain shocked at how ham-fisted most of these proposals are. They are 
nothing but a series of bad talking points that can be used for the 
President's reelection campaign. These talking points were tired by the 
end of the 1936 Presidential election.
  I would not be surprised to see President Obama dust off Franklin 
Roosevelt's speeches and start railing against economic royalists by 
the end of the debt limit negotiations.
  Sadly, the Senate's leadership has followed suit. After making a big 
to-do about keeping the Senate in session to address the fiscal crisis, 
we are spending this week debating a nonbinding resolution demanding 
higher taxes on millionaires. Really? The Democrats' solution to $14.3 
trillion in debt is to attack corporate jets. Seriously? Three billion 
dollars over ten years. The last time they did that, they wound up with 
their tails between their legs in 1990, and in 1993 had to reverse the 
whole thing because it cost thousands of jobs.
  I never underestimate liberals' lack of respect for the intelligence 
of the American people, but this is a new low. Do they think that 
ordinary Americans are so consumed with class hatred that they will 
respond like Pavlovian dogs to the criticism of corporate jets, and 
forget that it was programmatic liberalism, not bonus depreciation of 
corporate jets or tax benefits to energy companies, that got us into 
this debt crisis?
  This is how the left perceives Republicans. They want to score some 
cheap points against Republicans by going after corporate jets, as 
though all Republicans love corporate jets. I would venture to say that 
an awful lot of corporate jets are owned by very wealthy Democrats. 
What are we going to get next week, a tax on monocles and top hats? 
Maybe we will spend next week debating a nonbinding resolution on the 
need to tax madras blazers for the good of the country.
  Unfortunately, not all of the Democratic proposals are a laughing 
matter. They have been down this road in the past pushing tax increases 
on luxury items such as yachts. Today, the press ridiculed Republicans 
for ``defending the yachting class.'' There is no yachting class in 
this country, unless you count the Democratic party of Martha's 
Vineyard.
  But there is a class of people who build yachts. This is what 
happened to those people the last time the Democrats engaged in class 
warfare of this kind. In the 1990 budget deal, a new luxury excise tax 
was created applying to yachts, aircraft, jewelry, and furs, first 
applying to the 1991 year. The similarities are eerie.
  Faced with soaring deficits, Democrats insisted that revenues be part 
of the equation. And how did this work out? The tax was repealed in 
1993 because, as the Democratic-controlled Senate Finance Committee 
report, as reported by the Budget Committee, explains:

       During the recent recession, the boat, aircraft, jewelry, 
     and fur industries have suffered job losses and increased 
     unemployment. The Committee believes that it is appropriate 
     to eliminate the burden these taxes impose on the interest of 
     fostering economic recovery in those and related industries.


[[Page 10543]]


  Republicans are not defending the yachting class. They are defending 
the people whose jobs will be lost to Democratic class warfare.
  Of course, the left cannot contain themselves to these targeted tax 
increases. Today we read in the paper that the President is eager to 
reform Social Security. Yet it appears he is only willing to do so if 
we let the 2001 and 2003 tax cuts expire, tax cuts which only last 
December the President acknowledged were necessary components of our 
economic recovery.
  I would not be surprised to see the old Democratic hobby horse, an 
increase in the Social Security tax max, make an appearance in the 
Democrats' list of demands.
  These are nonstarters, and everyone understands why. These broad-
based tax increases would be a weight around our economic recovery.
  But the issue of tax expenditures continues to cause confusion and 
must be addressed. Those who advocate limiting or eliminating these tax 
expenditures suggest that they are spending and loopholes that benefit 
wealthy individuals.
  Yesterday, I offered a grown-up definition of what a tax expenditure 
is. Today, I wish to highlight what are in fact the top tax 
expenditures. What we will find is that the tax expenditures that would 
generate the largest amount of revenue are also those that are 
available to the middle class, enabling them to give to their churches 
and synagogues, and to save for a home, for college, and for 
retirement. To get at meaningful deficit reduction, Democrats would 
have to eliminate these expenditures. Is that what they want to do? 
That might be a good question at the President's next press conference. 
Maybe someone could give him a copy of this chart right here, and ask 
which of these tax expenditures he is willing to eliminate in the 
interest of deficit reduction:
  No. 1, exclusion for employer-provided health care. Is he going to 
get rid of that? That is 13 percent of all tax expenditures.
  How about home mortgage interest deductions? Is he going to get rid 
of that? That is 9 percent.
  How about preferential rates for dividends and capital gains? That is 
8 percent.
  Exclusion of Medicare benefits. Are they going to do away with that? 
That is 7 percent.
  Net exclusion of defined benefit pension contributions and earnings. 
Are they going to attack our pensions? That is 6 percent.
  And earned income tax credit. My gosh, that is 5 percent.
  Deduction for State and local taxes, except real property. That is 5 
percent.
  No. 8, net exclusion of defined contribution/earnings. That is 4 
percent.
  How about No. 9, exclusion of capital gains at death? That is 4 
percent.
  And how about No. 10, deductions for charitable contributions? That 
is 4 percent.
  I venture to say hardly any American is going to want to do away with 
all of those in the interest of getting more revenue so the Democrats 
can spend it back here.
  Look at that chart. It is a list of the top 10 tax expenditures. 
Maybe someone can give him a copy of this chart and ask which of these 
tax expenditures he is willing to eliminate in the interest of deficit 
reduction. I encourage all my friends to look at this chart. It is a 
list of the top 10 tax expenditures.
  With the rhetoric coming out of the White House, you might be 
surprised to learn that tax benefits for yachts and corporate jets are 
not in the top two. Not only do they not make the top 10, they don't 
even come close.
  If you take the so-called savings that would come from the corporate 
jet tax approach of the President, it would take us 3,000 years to even 
reach the approximately $800 billion stimulus package. In the context 
of the President's trillion-dollar deficits, they are statistical 
noise.
  So what are the big tax expenditures?
  No. 1 is an issue from the ObamaCare debate. It is the exclusion for 
employer-provided health insurance. The exclusion of employer-provided 
health insurance from income is the single largest tax expenditure, 
representing 13 percent of tax expenditures.
  Yesterday a Member of the other side's leadership pointed out that 
the largest tax expenditure is one for corporations. Boy, is he wrong. 
Here is what he said:

       The biggest single deduction is the employer's exclusion 
     for health care premiums. So employers are able to exclude 
     from income the amount of money they spend for health 
     insurance for their employees. That's the biggest.

  Well, that is an incorrect description of the law that they are 
arguing. Employers always have been allowed, and should be allowed, a 
deduction for the cost of benefits they provide to their employees. 
Employee compensation, including the provision of health insurance to 
one's employees, is a cost of doing business and thus properly 
deductible by the employer so as to accurately measure the income, or 
profit, of the employer. That has never been considered a tax 
expenditure. The exclusion at issue, which is a tax expenditure, refers 
to the employee's tax treatment, not the employer's tax treatment. That 
is, most compensation that an employee receives from his employer is 
includable as taxable income. One of the few exceptions to that general 
rule is that employees do not include in taxable income the value of 
employer-provided health insurance.
  Coming in at No. 2 is the home mortgage interest deduction. This 
expenditure alone accounts for 9 percent of all tax expenditures.
  The third largest? There we have the lower rate on capital gains and 
dividends. Do away with this expenditure, and the rate on capital gains 
and dividends will almost triple in about 18 months. Capital gains and 
dividends represent about 8 percent of all tax expenditures.
  What is No. 4? Here we have an untaxed piece of Medicare benefits. 
Imagine that. I wonder how many folks on the other side realize this or 
even if the President does. When my friends on the other side 
categorically talk about cutting back tax expenditures as the yellow 
brick road to deficit reduction, I wonder if they know that hiding 
behind the curtain is an increase in the aftertax cost of Medicare.
  Do my friends on the other side realize this? A few months ago, a 
liberal group ran an ad showing my friend, the chairman of the House 
Budget Committee, Paul Ryan, pushing an old woman in a wheelchair over 
a cliff. His crime? Recommending policy changes that would prevent the 
inevitable bankruptcy of Medicare.
  I am not going to hold my breath waiting for this same group to pull 
the fire alarm, because the Democrats' talk of eliminating tax 
expenditures might result in seniors getting hit with higher taxes on 
Medicare benefits. But this is what the President and the Democrats are 
talking about. If they are serious about using tax expenditures to 
reduce the deficit, these are the things that will have to be on the 
table. These are the big expenditures. This expenditure is real. You 
can look it up in the handy tax expenditure publication from the 
nonpartisan Joint Committee on Taxation. It is significant, 
representing 7 percent of all tax expenditures, to the exclusion of 
Medicare benefits.
  At No. 5 is the pre-tax treatment for defined benefit pension plan 
contributions and the inside buildup on the accounts. This is a tax 
benefit that reduces the cost for those workers who make the decision 
to save for retirement. This represents 6 percent of all tax 
expenditures.
  What is No. 6? It is the refundable earned income tax credit, the 
EITC. When folks describe tax expenditures as spending through the Tax 
Code, this is one that could properly be labeled that way. Under 
congressional budget rules, this one, for the most part, scores as 
spending. That is not the case with the other tax expenditures on this 
list. Refundable tax credits score as spending because the government 
cuts a check to the taxpayer. With the other tax benefits on this list, 
the taxpayer is receiving a portion of the money back in the form of 
reduced taxes. There are some serious tax hikes there. This tax 
expenditure accounts for 5 percent of tax expenditures.

[[Page 10544]]

  No. 7 is the deduction for State and local taxes. My friends on the 
other side need to be particularly careful with this one. So far, they 
would hit seniors, families who have health insurance through their 
employers, people with mortgages, and anyone who owns stocks and bonds. 
But with this, many Democrats risk alienating every last taxpayer in 
their States. Removing this deduction is going to hit high-tax States 
hard. If you are from a so-called blue State, it is likely that 
constituents are already heavily burdened with State and local taxes. 
Take away this and you will, in effect, drive up the marginal rate of 
your constituents who take their deduction by as much as 35 percent.
  I am convinced that many of the inroads Democrats made between 2006 
and 2008 were due to carefully crafted Trojan horse campaigns. Skillful 
operatives ran Democratic campaigns promising moderate tax and spending 
policies that would be respectful of families and businesses. But once 
that Trojan horse got inside the Capitol, and former Speaker Pelosi and 
President Obama took charge, frustrated liberals spilled out and 
started taxing anything that could move to pay for the largest 
expansion of government since Lyndon Johnson was in office.
  Removing the deduction for State and local taxes might be the final 
act that restores purple America to its traditional red hue. At 5 
percent of all tax expenditures, this would represent a massive tax 
increase, this net exclusion of defined benefit pension contribution. 
And that is No. 7, after State and local taxes, except for real 
property.
  What is No. 8? This is the pre-tax treatment for the contributions 
workers make to their defined contribution plans and the inside buildup 
on the accounts. Many of us know of these retirement plans as 401(k) 
plans. At 4 percent of tax expenditures, this is a significant 
incentive to families to save for retirement.
  No. 9 is a bit more obscure but no less critical for families. It is 
the tax expenditure for the step up in basis at death. We all know the 
saying that nothing is as certain as death and taxes. Well, if this tax 
expenditure were eliminated, this step up in basis at death, this 
saying would take on an even darker meaning. Death could now be taxed 
twice. First, the decedent's estate might get hit with the death tax. 
Then the decedent's heirs would be taxed again on the gain embedded in 
any inherited asset should they decide to sell. This accounts for 4 
percent of tax expenditures.
  We close with No. 10, the tax expenditure and probably the most 
important one to my constituents in Utah. It is the tax benefit for 
donations to charities other than education and health care 
institutions.
  When you make your weekly or yearly donation to your church, you can 
now deduct it for tax purposes. This charitable deduction represents 4 
percent of all tax expenditures. The folks in my State all pay 
tithing--almost all of them. That is 10 percent of their gross income. 
I do it every year. I have to tell you, you would hit a lot of very 
charitable people and a lot of churches with the loss of that one, No. 
10. Yet that is the smallest of the whole 10.
  As the chart shows, these widespread everyday tax policies account 
for almost two-thirds of tax expenditures. We are not talking about 
yachts or corporate jets.
  Now, I have already suggested it, but rolling back many of these 
expenditures would have an immediate adverse impact on American 
families and taxpayers.
  It would also undercut longstanding Federal policies promoting 
saving, home ownership, and charitable giving.
  Let's turn first to retirement security.
  About half of Americans save for retirement. The overwhelming 
bipartisan consensus is that this number is way too low. Ideally, all 
American workers would be saving for retirement.
  More savings means less financial stress on Social Security and 
Medicare. Most importantly, it means retirees can enjoy their 
retirement if they can rely on a nest egg. That is why there has been a 
bipartisan desire to incentivize retirement savings through worker 
participation in retirement plans.
  A time-honored method has been to offer a tax benefit up front in the 
case of the traditional defined benefit plan, traditional defined 
contribution, or traditional IRA. The benefit remains untaxed during 
the individual's working years. It is only taxed when received in 
retirement. By contrast, Roth pension plans and IRAs provide a tax 
benefit on the back end, when a worker retires and begins drawing on 
the account.
  Former Finance Committee Chairman William Roth captured the policy 
rationale best by noting the deliberate tax policy bias toward savings. 
Chairman Roth used to make the point with a rhetorical question. He 
would ask: ``Is there any bad saving?''
  Of course, the answer is no.
  One thing we know for sure. Curtail or eliminate the tax expenditure 
for retirement savings and the after-tax cost of savings will rise. 
Savers will react. It is true that some will continue to save. But it 
is also true they will have less to save if they choose to do so. For 
middle income taxpayers, it will probably mean lower savings rates.
  Is that a good policy to put in place?
  Consider this: According to the Joint Committee on Taxation, for 2009 
over half of households paid no income tax. Forty-nine percent of 
Americans shouldered 100 percent of the income tax burden.
  The half shouldering the income tax burden are also, generally 
speaking, the part of the population making sound personal decisions 
like saving for retirement. That behavior is good in both a micro and 
macro sense. In the micro sense workers are sacrificing current 
consumption for security and a better standard of living in the future. 
In a macro sense, the collective behavior of these citizens stabilizes 
our aging society.
  To encourage this kind of sacrifice, our tax policy provides a 
tangible tax benefit. Take away that tax benefit and, as with raising 
taxes on anything else, you will get less of the behavior. Take away 
the tax benefit, and you will get less saving for retirement. Does that 
make any sense?
  In order to avoid restraining the rapid growth in government 
spending, our friends on the other side would have us send the wrong 
policy signal to the half of our population that saves. They would add 
to the burden of those who are already shouldering the entire burden of 
funding the Federal Government. At the same time, by discouraging 
saving and personal responsibility we would further unleash the 
appetite of those who want us to spend more.
  Take another look at the chart. Add up the tax expenditures from 
defined benefit plans and defined contribution plans. They account for 
10 percent of tax expenditures. Over 5 years, the revenue from these 
expenditures amounts to almost $700 billion. On a per-year average 
basis, it is $140 billion. That is an annual policy shift of $140 
billion in incentives for private savings to $140 billion in incentives 
for growing government spending.
  Do we want a society where more saving is encouraged? Or do we want a 
society where dependency and more government spending are encouraged?
  Do we want to look more like Switzerland or do we want to look like 
Greece?
  The answer to this question is clear to the citizens of this country.
  Unfortunately, not all of their representatives seem to have thought 
through the implications of going after tax expenditures.
  To get at this from another angle, I would like to discuss the impact 
on taxpayers of cutting back some of these tax expenditures that come 
in the form of itemized deductions.
  I am going to examine the effects of cutting back these itemized 
deductions by applying President Obama's budget proposal to cap 
itemized deductions at 28 percent.
  It is clear that some in the White House are pushing this 28 percent 
cap hard in the negotiations over the debt limit.
  As noted before, itemized deductions generally are considered tax 
expenditures. But itemized deductions impact

[[Page 10545]]

a number of basic, longstanding features of American life. Itemized 
deductions include the home mortgage interest deduction, the charitable 
contribution deduction, and the State and local tax deduction. The 
President is proposing to chisel away at these itemized deductions, and 
we should carefully reflect on what that would mean.
  President Obama has proposed repeatedly ``to limit the tax rate at 
which high-income taxpayers can take itemized deductions to 28 
percent.'' It appears that this proposal is designed to lessen the 
benefit to higher income taxpayers of itemized deductions. The Joint 
Committee on Taxation says that this provision would mean the Federal 
Government would collect an additional $293 billion in taxes over 10 
years.
  True to form, this is just another version of the same soak-the-rich 
play that the left has been running for decades. From their 
perspective, it is unfair that higher income individuals get a more 
valuable tax benefit than lower income individuals? But this 
perspective mischaracterizes a critical issue. The 35 percent bracket 
was established by Congress with an understanding that itemized 
deductions would allow a significant tax benefit. Had Congress known 
that higher income taxpayers would be disallowed some of their itemized 
deductions--as the President now proposes--undoubtedly Congress would 
have set that bracket at lower than 35 percent.
  So, taking away some of the benefit of itemized deductions for higher 
income taxpayers, while leaving the high-income tax rates at their 
current levels, upsets the balance struck by prior Congresses. 
Obviously, Congress is allowed to do this, but let's not pretend that 
these expenditures are loopholes or oversights by prior Congresses. The 
President and the Senate's Democratic leadership are free to do this if 
they choose, but they should at least come clean about what they are 
doing. They are significantly raising taxes on the people who are 
already shouldering the lion's share of the Federal income tax burden--
98 percent of them, as a matter of fact.
  Even aside from the staggering character of this tax increase--one 
that would clearly violate President Obama's campaign pledge not to 
raise taxes on middle class Americans the macroeconomic impact of this 
cap is negative at best.
  President Obama's 28 percent cap would reduce the benefit from the 
home mortgage interest deduction. For 5 years now, our Nation has been 
experiencing a bursting of the real estate bubble. Current headlines 
indicate that this trend will continue for a time. Limiting the value 
of the home mortgage interest deduction would apply additional downward 
pressure on home prices--not only for high end homes, but for all 
homes. By repeatedly proposing to limit the benefit of the home 
mortgage interest deduction, is it the President's intent to further 
depress housing prices, or is this mere collateral damage from his 
desire to raise taxes.
  But the damage from this cap does not stop at the housing market. 
President Obama's 28 percent cap would also reduce the benefit from the 
charitable contribution deduction. This would almost surely reduce the 
amount of contributions people would make to churches, synagogues, 
temples, soup kitchens, shelters, universities, and museums. Is that 
the President's intention? Does the President know that these revenues 
might never materialize because the elimination of this deduction will 
step up pressure for direct government assistance for the poor, for 
students, and for the arts?
  Finally, this cap would reduce the benefit of the State and local tax 
deduction. I touched on this point earlier. High-tax States are able to 
soften the blow of their high taxes by pointing out to their citizens 
the Federal deductibility of such taxes. So, my colleagues from high-
tax States might want to talk to their governors about the impact the 
President's proposed cap would have on State and local public finance.
  I want to be clear about something. Our Tax Code is a colossal, awful 
mess. And tax expenditures must be a part of any conversation about tax 
reform. But I want to emphasize that the conversation about tax 
expenditures should happen in a conversation about broad based tax 
reform--reform that flattens the code while lowering rates.
  The conversation about tax expenditures should be a sober one in the 
context of a meaningful discussion about tax policy. Unfortunately, the 
President has chosen instead to target tax expenditures willy nilly 
with little regard for the policy implications of these tax hikes.
  Make no mistake, whatever the President wants to call it--reducing 
spending through the Tax Code, closing loopholes, or making people pay 
their fair share--these are tax increases plain and simple. And they 
are tax increases on the middle class.
  There has been some criticism in recent days about Republicans for 
their commitment to a pledge many of them took against any net tax 
increase.
  I have to admit I am at a loss here.
  Conservative Republicans, convinced that taxes are already high 
enough, promise their taxpaying citizens that they will never support a 
net tax increase.
  They gave their constituents their word, and are sticking to it.
  Meanwhile, President Obama, who promised not to raise taxes on the 
middle class when running for office, vows to break this promise at 
every opportunity.
  And yet it is the conservative Republicans who are somehow lacking 
integrity? Hardly.
  I don't care how many blows I take from sophisticated Washingtonians 
and professional leftists for sticking by my pledge to the people of 
Utah. I will resist any effort by the President to include tax 
increases as part of the deal to increase the debt ceiling. I will do 
so for a number of reasons. First, our Tax Code needs a fundamental 
overhaul. It is a complicated mess that is lacking in fundamental 
fairness. Yet the President's proposal to reduce tax expenditures for 
deficit reduction, is a proposal to maintain a tax code that grows more 
burdensome by the day. The President's proposal essentially robs the 
government of the revenues that it might use later to flatten the Tax 
Code and lower rates.
  More importantly, I oppose the President's proposed tax hikes as a 
matter of principle. Flattening the tax base without any offsetting 
rate reduction is a tax increase.
  My friend, the ranking member on the Senate Budget Committee, Senator 
Sessions captured the point well in an interview the other day. I will 
quote Senator Sessions:

       We have to be honest and recognize that if you are going to 
     eliminate systematically a host of deductions and keep the 
     money or spend it for new programs, then you've raised taxes. 
     . . . It just is unless we've changed the English language.

  The campaign against tax expenditures is a campaign for a tax 
increase.
  It is a tax increase that could send the wrong signal to those 
Americans who sacrifice current consumption and save for retirement. It 
could raise the bar for those Americans who want to experience the 
American dream of home ownership. It would mean the residents of high 
tax States would face even higher State and local taxes. And it could 
mean a cutback back in the volume of charitable giving.
  This is shared sacrifice that the Nation cannot afford.
  I prefer shared prosperity by cutting taxes and giving the small 
businesses and businesses the opportunity to use that money to hire 
people and get people working and get more people paying taxes. I think 
it is abysmal that the bottom 51 percent do not pay income taxes, and 
23 million of them get refundable tax credits from the government that 
are far more than the payroll taxes they might have to pay, which are 
Social Security payments.
  I listened to my colleague from Vermont saying we cannot do anything 
on Social Security, we cannot do this, cannot do that, the poor people 
are going to be hurt. Where are they going to be when Social Security 
is bankrupt? Where are they going to be when Medicare and Medicaid are 
bankrupt? The way we are going, that is where they are going to be.

[[Page 10546]]

  We cannot keep spending like this, and we have to quit playing the 
phony game with tax expenditures.
  All I can say is we have to get with it around here and we have to 
start working together as Democrats and Republicans in the best 
interests of the American people, and that is reforming this awful Tax 
Code, getting taxes down for everybody, and taking care of the poor but 
also expecting everybody to have some skin in the game--except the 
really poor--and help our country pull out of the mess we are in.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BARRASSO. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER (Mr. Franken). Without objection, it is so 
ordered.
  The Senator from Wyoming.
  Mr. BARRASSO. I ask unanimous consent to speak as in morning 
business.
  The PRESIDING OFFICER. Without objection.

                          ____________________