[Congressional Record (Bound Edition), Volume 157 (2011), Part 8]
[Senate]
[Pages 10834-10844]
[From the U.S. Government Publishing Office, www.gpo.gov]




      SHARED SACRIFICE IN RESOLVING THE BUDGET DEFICIT--Continued

  Mr. KIRK. Mr. President, I ask unanimous consent to speak for 2 
minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


       Veterans Affairs and Military Construction Appropriations

  Mr. KIRK. Mr. President, I urge Members of this body to support 
cloture on taking up the debate on the veterans and military affairs 
appropriations bill for next fiscal year. Chairman Johnson and I have 
put together a completely bipartisan bill which was unanimously 
supported by Republicans and Democrats in the Senate Appropriations 
Committee. This bill basically marked its spending level to the level 
approved by the House of Representatives, that passed the subcommittee, 
the full committee, and out on the House floor. The bottom line for its 
budget authority discretionary spending is the bill comes in $1.2 
billion below the President's spending request, $620 million below last

[[Page 10835]]

year's enacted level, and is even $2.6 million below the House. There 
are no earmarks in this bill.
  A few details. The bill does provide $128 billion to support our over 
22 million veterans. That is $182 million in budget authority 
discretionary below the administration's request.
  The bill provides $13.7 billion for military construction. That is 
about $1 billion below the administration's request or $279 million 
below the House bill.
  Our Senate bill cuts or eliminates 24 separate projects, and all of 
those cut decisions were made in coordination with Chairman Levin and 
Ranking Member McCain from the draft Senate Armed Services Committee 
bill so that appropriations and authorization are synched up. We also 
completely denied funding for the building of a new facility to house 
the current Court of Appeals for Veterans Claims.
  The bill also lays the policy groundwork for making further spending 
reductions in outyears for Obama administration potential requests for 
funding in South Korea, Germany, and Bahrain.
  In short, we believe that this bill should move forward, that the 
Appropriations Committee should begin its regular work, and because 
this is a unanimous, bipartisan product from the Senate appropriations 
bill and it marks to the House level, I urge Members to support cloture 
on a vote we expect tomorrow morning.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. CARDIN. Mr. President, I take this time to talk about the pending 
business: the deficit of this country and the looming debt ceiling 
limit that will be exceeded in August if we don't take any action in 
the Congress.
  First, let me talk a little bit about the debt ceiling. There has 
been a lot of talk about the debt ceiling as to what is responsible for 
Congress to do.
  We all know that over the last 50 years or so, the debt ceiling has 
been increased over 80 times. It is done after the fact. That means we 
have already incurred the liability, and the question is whether we 
will pay our bills.
  The decisions we have to make in regard to our fiscal policies need 
to be made at the time we consider the budget, but now we have to pay 
our bills, and raising the debt ceiling is not only a legal 
responsibility that we have to pay our bills, it is also a moral 
responsibility and speaks to whether we are willing to live up to our 
obligations.
  The failure to raise the debt ceiling would be irresponsible. It 
would jeopardize our national security because it would cost taxpayers 
more money, and it would say to the world that U.S. bonds, which are 
the safest in the world, are called into question. I think we all 
should agree we need to make sure we increase the debt ceiling in time 
so we do not cause those adverse effects to our Nation.
  The debt ceiling debate gives us an opportunity to do something about 
the deficit. Our deficit is not sustainable. By that, I mean if we do 
not change course, our debt will be too large as a percentage of our 
economy to be sustainable. We need to deal with spending and we need to 
deal with revenue and bring them into balance.
  The discussions on the debt ceiling could be the opportunity for us 
to develop a credible plan to manage our deficit, and I certainly hope 
that is the case, that we come together with a credible plan to manage 
our deficit. I hope it will be bipartisan, that Democrats and 
Republicans will work together on a plan. It would not be exactly what 
either side wants. In fact, we will both have to make compromises. If 
we do that, if we have a credible plan, I believe it will stimulate our 
economy and clearly help us create more jobs, which is the best we can 
do to help reduce our deficit.
  To start, we have to understand how we got to this point. Ten years 
ago, we had surpluses. Ten short years ago, we had surpluses. We were 
concerned that we might be retiring all of our privately held debt. I 
was proud to have been part of the Congress that voted on the 
legislation that brought our deficits down and gave us a surplus and 
one of the longest periods of economic growth in America's history.
  Then, during the previous administration which inherited that large 
surplus, policies were brought forward to cut taxes, not once but 
twice. Many of those tax cuts went to our wealthiest people. The United 
States went to war in two countries and borrowed money in order to 
pursue those wars--I think the first time in modern history the United 
States went to war and asked the people to sacrifice by cutting taxes. 
The end result was large deficits, and when Barack Obama became 
President, he had huge deficits, unlike George W. Bush, who had huge 
surpluses. When George W. Bush took the oath of office for the 
Presidency, our economy was growing jobs. When Barack Obama became 
President of the United States, we were losing 750,000 jobs a month.
  That is the current situation. The situation we face today is we have 
these deficits we have to deal with. How do we deal with them? We need 
a balanced approach.
  I must tell you that I am proud Senator Conrad, on behalf of the 
Democrats on the Budget Committee, has come forward with a credible 
plan that preserves the priorities of this country to grow and does 
bring our deficit under control. I am proud to be a member of the 
Budget Committee. Working with Senator Conrad, working with my 
Democratic colleagues, we put together the plan Senator Conrad spoke 
about on the floor earlier this week.
  First, the most important aspect of Senator Conrad's budget is that 
it brings down the deficit by $4 trillion over the next 10 years. It 
actually has more deficit reduction than the House-passed so-called 
Ryan plan that the Republicans in the House sent over to us. The Conrad 
plan that the Senate Democrats have come up with will bring about more 
deficit reduction and substantially more deficit reduction than the 
Bowles-Simpson commission had recommended because we are using more 
accurate numbers.
  It would stabilize the debt by 2014. That is a very important point. 
I think what we are all trying to do is manage our deficit and at the 
same time help our economy. That is what the Conrad budget does. It 
stabilizes the debts by 2014, and it starts with reducing domestic 
spending. When we look at spending generally and what has happened, we 
are now spending about 24.1 percent of our GDP. The Conrad budget over 
10 years would bring that down to 22.1 percent--a substantial reduction 
in our spending programs. Let me tell you, 22.1 percent would be the 
same amount of government spending as we were spending during the 
Reagan Presidency. This is not any radical approach to saying we are 
going to spend a lot more money. Instead, we are bringing spending down 
to the level it was when Ronald Reagan was President of the United 
States.
  The budget would also deal with our obligations for mandatory 
spending. We took major steps to do that in the last Congress. The 
passage of the affordable care act helped us to put forward a blueprint 
to manage our health care costs as a nation by providing universal 
coverage, by investing in health information technology, by investing 
in wellness programs, by investing in reducing readmissions to 
hospitals--the list goes on and on. We are getting a handle on health 
care costs. The CBO says to us that the bill we passed in the last 
Congress would reduce Federal spending by over $1 trillion over the 
next 20 years. By reducing health care costs, we reduce Medicare and 
Medicaid future responsibilities. So we have already taken some steps.
  The Conrad budget that the Democrats in the Senate have brought 
forward will build on that to bring about additional savings in 
domestic spending. But the important thing about the budget Senator 
Conrad has brought forward as compared to the Ryan budget, the 
Republican budget that passed the House, is that the Conrad budget 
invests in America's future because it is balanced. We invest in what 
is important for job growth in America. We continue to make education a 
top priority so American families can afford to send their children to 
college, so we invest in improving educational opportunities for all 
people in our Nation.
  The Conrad budget allows us to invest so America can continue to lead

[[Page 10836]]

the world in innovation. That has been where we have created so many 
jobs. In my own State of Maryland, I look at where the job growth is, 
and I see small innovative companies developing ways to protect our 
Nation in cyber security, I see them finding ways to solve our energy 
problems, moving forward with health technology--all in innovation, all 
from the ability to use our creative genius to keep America in the lead 
economically.
  The Conrad budget allows us to continue our investments in NIH in 
basic research. The Ryan budget does not allow us to do that. There are 
significant cutbacks in all those areas.
  The Conrad budget, which the House and Senate Democrats have brought 
forward, allows us to invest in our infrastructure--our roads, our 
bridges, our water systems, our transit systems--so that America can 
truly be competitive in the future, creating more jobs for the people 
in this Nation.
  The budget also deals with our military spending. Let me tell you one 
fact that I think the people of this Nation should understand. America 
spends as much on defense as almost the entire amount spent by all the 
other nations of the world. It is difficult to see how our Nation can 
continue to grow the way we want to with so much of our budget tied up 
in national defense. We need to figure out a better way and one where 
we can save money. Between 1997 and 2011, the defense budget of our 
country grew from $254 billion a year to $688 billion a year. What does 
the Republican budget do? They just increase those numbers dramatically 
over the next year, 5 years, 10 years. The Democratic proposal 
recognizes the reality that we can bring our combat troops home from 
Afghanistan, that we can expect the international community to do more, 
and we can bring about savings on the military side.
  Let me talk about the last major component of the Conrad budget and 
how it differs substantially from the Ryan budget; that is, the area of 
revenues. I know there has been a lot of discussion about revenues. 
What does the Democratic budget do in this regard? It takes our 
revenues to 19.5 percent of our gross domestic product. That is the 
same amount that was raised during the Clinton Presidency when we had 
unprecedented prosperity and job growth in America. How do we get 
there? How do we get the revenues we need in order to be able to bring 
this debt under control? Senator Conrad has given us some direction on 
how we can do that. He has pointed out that shelters and loopholes need 
to be closed. These are inefficiencies in our Tax Code today.
  I have taken the floor on two occasions recently to talk about some 
that I think we should eliminate. One is the ethanol subsidy. We had a 
vote on the floor of the Senate, and the majority of Senators voted in 
favor of eliminating the ethanol subsidy. Why? Because it is not 
needed. Ethanol sales are not dependent upon a Federal tax break. 
Second, it is causing a disruption in the agricultural community. I 
pointed out that the poultry industry in Maryland suffers from the high 
price of corn, costing us jobs. Eliminating the ethanol subsidies is a 
win-win situation. Why not take that money and use it for deficit 
reduction?
  I also pointed out the major gas companies in this country are 
receiving subsidies from the taxpayers. Their profits in the first 3 
months of this year were $34 billion. They certainly don't need the 
help from the taxpayers. The taxpayers have already given them too much 
in the price of gasoline at the pump, which has hurt our economy except 
for the profits of the gasoline companies. So there are tax loopholes, 
and there are shelters that could be closed that amount to a 
substantial amount of Federal expenditure. And, yes, the highest income 
taxpayers, the millionaires and billionaires, is it reasonable or right 
or fair to expect that they should continue to get these lower tax 
rates that were temporarily extended under the Bush administration 
indefinitely when we are trying to figure out ways in which we could 
bring the budget into balance?
  Senator Conrad has made it very clear that there would be no change 
from the current tax rates for those families who have $1 million of 
income or less. I think that is a pretty generous commitment about not 
changing tax rates, particularly during these economic times.
  Let's compare the budgets. The Republican budget, the Ryan budget, 
says: Look, all the savings are going to come out of the spending side 
and, in fact, we are going to have some additional tax cuts--asking 
middle-income families to pay more while our wealthiest enjoy even more 
tax breaks.
  The Democratic budget, submitted by Senator Conrad, says: We are 
going to be balanced. Mr. President, 50 percent of our deficit 
reduction is on the revenue side, but that includes reducing tax 
expenditures, tax spending. We spend money in the Tax Code, $1.4 
trillion a year. I don't understand the difference if we are spending 
more on housing on the Tax Code or spending money on housing on the 
appropriations bill. Both should be subject to the same type of 
scrutiny.
  So why aren't we using a similar standard? Well, we have a chance to 
do that in the Conrad budget--50 percent from revenues, including tax 
spending, 50 percent from the direct spending cuts. That is a balanced 
approach. That is a credible approach. It is an approach that will 
protect our most vulnerable. Our students are protected to make sure we 
continue our commitment to education and to the cost of higher 
education through the Pell grants. Our seniors are protected in that we 
do not do what the Ryan budget would do with Medicare and Medicaid.
  Let me remind you, the budget the Republicans passed in the House 
would change Medicare fundamentally, changing it from a program that 
guarantees benefits to our seniors to a program where seniors would get 
a voucher and have to go out and buy from a private insurance company 
and be at the whim of private insurance companies for adequate 
protection against their health care needs. It is estimated their 
health care costs would grow when fully implemented by $6,000 a year. 
The seniors of Maryland cannot afford an extra $6,000 a year. That will 
be the difference between an individual getting adequate health care or 
not.
  The Conrad budget rejects that type of radical change in our Medicare 
system. The Ryan budget would require the block-granting of Medicaid to 
our States. Our States are already burdened. The chances of them being 
able to maintain their commitment to young people who depend on the 
Medicaid system, our seniors who depend upon it for long-term care, is 
very remote. The Conrad budget protects those programs to make sure we 
live up to our commitments to provide adequate protection to our 
families and seniors.
  Social Security is protected in the Conrad budget because Social 
Security didn't cause the deficit. Social Security should be considered 
outside the budget debates, and I think more and more of the Members 
are now coming to that conclusion.
  Let me mention one other point I think is very important about the 
Democratic budget that Senator Conrad has brought forward. It 
recognizes our Federal workforce. I know my colleague is particularly 
concerned about that representing the State of Virginia. I am 
particularly concerned about that representing the people of Maryland. 
We have a lot of dedicated Federal workers who have devoted their 
careers to helping this Nation by protecting our Nation in their 
service in homeland security or protecting us in regards to how they 
deal with health services or how they deal with our veterans. These are 
dedicated people, and they have already contributed to this deficit 
reduction. Two-year pay freezes have already been implemented. They 
have already done their share in helping us bring our budget into 
balance. The Conrad budget, I am proud to say, says that is enough. 
Let's not jeopardize our Federal workforce by reducing their 
compensation package in addition to the freezes. It shows we can do it 
that way.

[[Page 10837]]

  Take a look at the Ryan budget that the Republicans have sent over. 
It contains major reductions in the compensation packages going forward 
for our Federal workforce. There is a better way. The better way is the 
Conrad budget.
  Quite frankly, we have a choice. We have a choice on whether we are 
going to move forward and how we are going to move forward. I strongly 
support a credible plan to deal with the deficit. As I said, we need to 
get our deficit under control, but we can do it in a way that preserves 
opportunities for all Americans, creates job opportunities that are 
desperately needed for our Nation, and protects America's most 
vulnerable. To me, that is maintaining America's future. That is giving 
us the best hope so our children and grandchildren will enjoy the 
opportunities of this great Nation, and that should be the guiding 
force for our work.
  I certainly hope my colleagues will work together so we can come 
together for the future of this Nation.
  With that, I would suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. BLUNT. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Klobuchar). Without objection, it is so 
ordered.
  Mr. BLUNT. Madam President, conversations continue today about 
exactly how we are going to meet the financial obligations our country 
faces. A fundamental question on hand seems to be do we borrow more and 
spend more or do we make the serious decisions that will get our Nation 
back on sound financial footing.
  Today, our national debt stands at over $14 trillion. Unemployment 
continues to rise, with more than 14 million Americans out of work now, 
and the government continues to spend more money than it collects, or 
that I believe it should collect.
  As the cochairs of the President's own fiscal commission have warned, 
if we fail to take swift action, the United States faces, according to 
them, the most predictable economic crisis in history. A quote 
attributed to many people, including my fellow Missourian Mark Twain, 
would be that it is hard to make predictions, especially when you are 
talking about the future. But the easiest to predict is demographics. 
If you know how many people are here now and have all the other 
demographic information you need, you should be able to figure out what 
the population is going to look like.
  As the population gets older, our programs for seniors will cost 
more. At his news conference yesterday, President Obama was asked about 
Social Security reform. He said, in a statement that I didn't quite 
understand, that Social Security is not the source of our deficit 
problem. Then he went on to say that the reason we do Social Security 
in the debt ceiling plan is to strengthen Social Security, to make sure 
benefits are there for the seniors in the outyears.
  I agree totally. This is the time to deal with Social Security--
particularly the time to deal with it if you are going to deal with 
Social Security in a way that doesn't impact anyone who is retired or 
who is approaching retirement. The President went on to say the 
Republicans want to talk about Social Security as part of a broader 
deal because it is politically difficult to vote on.
  I actually think a lot of Democrats and Republicans want to talk 
about Social Security because we know now is the right time to save it. 
If you are going to save it for future generations, you have to start 
sooner rather than later.
  Our colleague, Senator Baucus, chairman of the Finance Committee, 
said during a hearing in May on deficit reduction and Social Security:

       Addressing our deficits and debt is an economic issue, a 
     national security issue, and a moral issue.

  He went on to say:

       We have a moral obligation to leave this place better than 
     we found it.

  I agree with his quote. If we are going to leave Social Security 
better than we found it, we have to begin to work on it right now. Each 
year, Social Security costs are higher. This year, they are going to be 
3.6 percent higher than last year. That is a 1-year increase--3.6 
percent in 1 year. The workers-to-beneficiary ratio--and we know how 
Social Security works, with people paying in who largely fund the money 
going out today. The people paying in in 2035 will be 2.1 for every 
person working.
  In the current system, there is no way the pages on the floor today 
are going to be able to pay half of whatever the average recipient 
gets. But that is what you would have to do if we don't change the 
system.
  We have to deal with the deficit facing Social Security. I think we 
need to deal with that now, whether it is politically difficult or not; 
otherwise, there won't be a Social Security Program that works for the 
people who are paying in today. Social Security no longer collects what 
it spends. We have a $45 billion deficit, or a shortfall, in 2011, and 
the truth is that we are still cashing in the IOUs to Social Security, 
and we will do that as long as they are there, but eventually those 
IOUs will run out as well.
  Over the next 10 years, it is projected that we will spend $547 
billion more than comes into the Social Security trust fund. According 
to this year's Medicare and Social Security trustees report, Social 
Security is now operating under permanent annual deficit for as long as 
they can calculate. Permanent annual deficits won't work, so what would 
work?
  Today, I want to discuss a plan to put Social Security on a path that 
means our children and grandchildren can have confidence that the 
contributions that come out of their hard-earned paychecks will result 
in benefits when they retire. Ask people you know at work who are in 
their twenties and thirties if they expect to collect Social Security 
benefits. Just under 26 percent of voters under 40 believe it is even 
somewhat likely they will receive all their promised Social Security 
benefits--26 percent believe it is somewhat likely--not absolute but 
somewhat likely.
  And just to give you an idea, 15 percent of people believe Social 
Security will be fine if it is not reformed--15 percent--while 20 
percent of people polled believe aliens exist and live among us. So the 
number of people who believe aliens exist and live among us is higher 
than the number of people who believe Social Security will be fine if 
it is not reformed.
  The last time the Senate and the House made comprehensive changes in 
Social Security was 1983. Well, it is time to do it again. It is time 
to do it again, and we can make changes in the program that will not 
affect those who are approaching retirement, though that will be always 
the charge: They are going to take Social Security from retirees. Well, 
this is a plan that talks about people who are 55 and younger and no 
change for anybody who is 55 or older today.
  So if you are 55 or older, and you hear the discussion about this 
plan, it has nothing to do with you. It will not affect your Social 
Security. So that is the first point. The second point is we would need 
to look at a new cost-of-living index that is based on the costs that 
seniors have. The third point is that we need a new distribution 
formula. If we do those three things, we will have a solvent system for 
at least seven decades.
  In the next 70 years, somebody can look at this to come up with a 
plan to be sure it goes beyond then. But seven decades is about as far 
as we can safely predict anything. This would protect the life of 
Social Security for at least that long as a solvent system.
  Most seniors live on a fixed income, and they feel it when their 
utility bills go up, their health care costs go up, or when their food 
prices go up. The current cost-of-living adjustment, the so-called COLA 
formula--calculated by the Bureau of Labor Statistics, known as the CPI 
or the Consumer Price Index--tracks purchases by working-age 
individuals. Frankly, what working-age individuals buy may be quite

[[Page 10838]]

different from what seniors spend their money on, or at least how most 
seniors spend their money. Many economists believe this causes the CPI 
to misrepresent the inflation that impacts seniors, and seniors deserve 
better.
  For example, the rising cost of education and childcare are heavily 
weighted in the current formula. These costs don't often have the same 
impact on seniors as they do on the working-age population or the 
younger population. But health care costs and utility bills, as an 
example, have more impact on seniors and on the budget of seniors than 
they do on the working-age population.
  My plan directs the Bureau of Labor Statistics to develop a more 
accurate method of calculating COLAs for Social Security recipients. It 
would move to a chain-weighted CPI that accounts for the purchasing 
habits of individuals--not of all ages--who are over 65, and health 
care costs would account for a much larger portion of seniors' spending 
in this type of index. What seniors spend their money on is what we 
would be looking at instead of what everybody who is in the working-age 
population spends their money on.
  This plan will eliminate the program's long-term funding shortfall 
and ensure payments for the next 70 to 75 years. As does the 
President's fiscal commission, my plan would account for the increase 
in life expectancy and would call for an increase in the normal 
retirement age.
  Now, remember, primarily these are for retirees who don't believe 
they are going to benefit from the system anyhow. Most of the people we 
are talking about who will be impacted don't think the system is going 
to be there for them. We are trying to ensure it will be. Over time, 
the retirement age changes to 69 years. That is 1 year younger than the 
proposal of the President's commission, but I think it is an age that 
works, and it looks like it is working as we look through these 
numbers. This means the retirement age will rise slowly for future 
retirees--3 months for each year from 2022 to 2030. Nobody would be 
impacted at all until 2022. The person who was going to retire in 2022 
would retire 3 months later, and that would be added on every year 
until 2030. Likewise, the plan would change early retirement benefits 
from 62 to 64 beginning in 2022. So it only, again, impacts people who 
get to that age in 2022.
  Our current benefit structure is simply not sustainable, and that is 
why my plan would also modify the current benefit structure to ensure 
that seniors who earn at or below the 40th percentile receive exactly 
the same amount of retirement benefits as they would if the program 
continued exactly as it is today, and a new index slightly reduces 
benefits that would occur above the 40th percentile.
  Wealthier future seniors can plan for their retirement years through 
personal savings, through retirement plans, through alternative 
investments, through IRAs, or through employer-sponsored plans. But 
those who are not in that category would continue to get exactly the 
same benefit when they retire they would get at today's retirement age.
  So back to President Obama's comments yesterday. Let's look at a plan 
that does the following, President Obama: Let's look at a plan that has 
no higher rate of contributions, no means test for Social Security 
recipients, no tax on future beneficiaries but slightly lower benefits 
and a slightly longer time to work until retirement. The difference is, 
if you work until retirement, you actually get a benefit.
  This is no longer a topic we can avoid, so let's not miss this 
opportunity. Let's make a promise right now--while we are dealing, 
hopefully, with big issues--to workers paying the bill today that 
Social Security will be there for them when they retire.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. MERKLEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MERKLEY. I rise today to talk about the significant financial 
challenges our Nation faces.
  It will come as a surprise to no one that the topic of greatest 
concern is jobs, jobs in partnership with how we manage our deficit and 
our debt so as to put America on a firm financial footing down the 
road, put American families back on a firm financial footing.
  My mailbox is full from families who have a lot of concerns about the 
Republican plan for cutting programs that serve working Americans. It 
is a host of programs that are affected, but I pulled a couple letters 
to bring with me.
  One is Linda writing from Canby, OR. She is a parent of a disabled 
young adult. She writes:

       My daughter, Nicole, has cerebral palsy and other medical 
     issues. She is dependent on my husband and I for her total 
     24/7 care. Medicaid is essential because it helps her with 
     medical and dental needs and her mobility. If Medicaid is cut 
     or reduced, many of the disabled will be forced to live in 
     nursing homes or institutions, which as we both know would 
     not be cost effective. Please vote against cuts to our 
     Medicaid system.

  Trudy from Keizer, OR, writes a very similar letter about her 
grandson diagnosed with Asperger's.
  The mail goes on and on from citizens who are working-class 
Americans, have fundamental jobs, often with modest to no health care. 
They have children and they have grandchildren who will be profoundly 
affected by the choices we make on health care, the choices we make on 
education, and the choices we make in terms of creating jobs here in 
America. So this debate has enormous import for the success of our 
families, and in the context of that importance, we need to understand 
how we got to the point we are right now. So let's start with a 10-year 
view of what has happened. These statistics might come as a surprise to 
many of you because they are a little bit out of synch with some of the 
rhetoric we hear on the floor of the Senate.
  Over the last 10 years, from 2001 to 2011, we have had a revenue 
decrease of 18 percent. So revenue has decreased by nearly one-fifth.
  On nondefense spending, you will see no bar here either negative or 
positive; the change has been zero over a 10-year period, zero change. 
Those are the programs that affect working America, programs that 
affect unemployment, programs that affect food support, nutritional 
support, Head Start Programs, health care programs, and training 
programs so that people can get better jobs.
  Then over here we have defense spending up 74 percent. Well, that is 
interesting because these three bars tell the story of decisions made 
during the 8 years of the George W. Bush administration.
  Over here on revenue, we have breaks that were granted to the best 
off in our society and that have been fought for vigorously--the 
extension of those breaks--by some of my colleagues across the aisle. 
Breaks for the best off and revenues down over that 10-year period.
  Over here we have the fact that decisions were made for two wars not 
funded by the American people. That is an anomaly in our history. When 
we go to war, we raise the funds to pay for it, but not during the 
irresponsible 8 years of the George W. Bush administration.
  So it is not a surprise that we now have a deficit problem and that 
we now have a debt problem because concrete decisions were made. And 
these are only part of the story. The rest of the story is that 
deregulation of mortgages, leading to a vast tsunami of predatory 
mortgages on working Americans turned into securities that poisoned 
financial houses throughout the United States and, for that matter, 
throughout the globe, also contributed to blowing up the economy and 
driving down the revenue.
  So concrete decisions from those 8 years have placed us where we are.
  How do we address this shortfall? Well, let's start by looking at how 
the Republican budget has been laid out with three principal points. 
The first is to end Medicare as we know it. Well,

[[Page 10839]]

this plan to create a voucher system in lieu of Medicare is one that, 
frankly, terrifies every senior citizen in America and every citizen 
who knows they will be a senior citizen, who knows they have been 
paying for years into a program with administrative costs that are far 
more efficient than the general insurance market. But the goal of the 
Republican plan is to dismantle that efficiency and throw people into 
the highly inefficient private insurance markets with a voucher that 
does not rise proportionately with health care costs. I don't think 
destroying the very successful program to provide Medicare and health 
care for our seniors is where we should be going. The second part of 
the plan is to do roughly $4 trillion in cuts to programs for working 
Americans. The third is to protect all of the programs for the best off 
in our society, the benefits for the best off.
  I think most citizens understand that when we come to a time of 
national challenge financially, everyone should participate. There 
shouldn't be the sacred cows for the very best off while the workers 
are asked to pick up even more of the burden. In fact, let's take a 
look at a chart that displays how this functions.
  The average tax rate in America is 20.7 percent. Let's take the 
richest 400 in America. The top 400, their average tax rate is 18 
percent. Now, why do the richest 400 get the lowest tax rates? That is 
what Americans have a right to know. Why is it that the Republican plan 
is asking to cut programs for working America while protecting the 
bonus benefits for the best off in our society?
  These richest 400 earn over $270 million per year--not collectively; 
that is their average income. Well, wouldn't all of us love to be in a 
situation where we earn even a fraction of $270 million a year.
  And that structure, while reflected here for the top 400, is really a 
structure for the best off of a high array--a 5- to 10-percent array of 
the best earners in America.
  So those three points--end Medicare as we know it, replaced with a 
voucher program, cut programs for working Americans, and protect 
programs for the best off--that is the Republican plan.
  The chair of the Senate Budget Committee came to the floor this week 
with a very different plan, and that plan has the same savings the 
Republican plan has. Let's take a look at that.
  Under this plan, the budget framework includes the same amount of 
deficit reduction as the House Republican plan--in fact, actually a 
little bit more reduction: $4 trillion versus $3.9 trillion. So both 
plans get towards the same objective of fiscal responsibility, but they 
go about it in very different ways.
  First, the Conrad plan tosses away the Republican plan to end 
Medicare as we know it.
  The second thing it does is it puts all spending programs on the 
table. So let's turn to that piece of the structure. Here we have the 
Republican plan, and it is all in direct spending cuts, touching none 
of the programs for the best off that have been carefully embedded in 
the Tax Code.
  Now, every American understands this game: You can fund a project 
with a $10,000 grant or you can give a $10,000 tax credit that is in 
the Tax Code or you can give a tax deduction that is worth $10,000, 
also in the Tax Code--three different ways of accomplishing the very 
same objective. But the Republican plan is to say: Wait. Let's only do 
the first of those three strategies because the second and third 
strategy we have utilized to create the programs for the best off in 
America, and we don't want to touch those. We want to place this burden 
on working Americans.
  Well, the Conrad plan says: That is not right. There needs to be a 
conversation about fairness. We know those best off pay the lowest tax 
rates compared to working Americans, as I just showed in that previous 
chart--just 18 percent. So the Conrad plan says: Let's take 50 percent 
of that effort to close the deficit and do it in direct spending, and 
let's take 50 percent by closing tax loopholes, cutting tax subsidies, 
cutting tax earmarks, and promoting fairness.
  I came to the floor last week to talk about the bluegrass boondoggle. 
Now, that is not a lot of money in terms of the overall challenge we 
face as America--$120 million over 10 years--but to a working American 
$120 million is a lot.
  That was a special provision inserted not for companies but for the 
owners. It was to the individual Tax Code for the richest Americans, 
millionaires and billionaires who own thoroughbreds. They get a special 
break the rest of America doesn't get. There is program after program 
such as that, inserted for the best off. The Conrad plan says all of 
this spending, whether it has been in the appropriations bill or it has 
been in the tax bill, is going to be examined. That is a fundamentally 
fair approach.
  Let's look at that in a little more detail, look at what the Conrad 
budget does in terms of fair rates for the middle class. First, it 
provides the alternative minimum tax protection for the middle class. 
Second, it continues tax reductions for the middle class that we have 
currently. Third, it cancels the bonus breaks for the millionaires and 
billionaires. That is basic rate fairness.
  In addition, it says let's take on those special tax subsidies and 
tax earmarks that my colleagues across the aisle have been so proud of 
inserting into the Tax Code to protect the best off in society. Let's 
examine them and if they do not meet the fundamental test of creating 
employment, contributing to fairness, and being more important than 
other programs compared against each other, then they should be 
eliminated.
  In addition, let's take off on those offshore tax havens. There are 
so many setups in which companies have essentially false addresses in 
the Caribbean so they can transport their profits to a place where they 
pay no taxes. Those tax havens, in combination with abusive tax 
shelters, need to be ended. These are all part of tax fairness and 
taking on this very important challenge we have in terms of our 
national deficit and our debt and taking it on in a manner that 
strengthens the programs that need to be strengthened.
  You will find the Conrad budget, in contrast to the Republican 
budget, says let's invest in education. We are in a knowledge economy 
world. We must invest in education if our economy is going to thrive 
and our children are going to be successful.
  The Conrad budget, in contrast to the Republican budget, says let's 
invest in infrastructure. We are falling behind in terms of supporting 
infrastructure. China is spending 10 to 12 percent a year. Europe is 
spending 5 percent a year. America is spending only 2 percent and that 
is barely enough to repair our existing infrastructure. In fact, 
sometimes those repairs are falling short. I know our county officials 
and city officials will be glad to provide us with a list of how short 
we are.
  The third area is the Conrad budget invests in energy. Why is energy 
so important? Because currently we are spending $1 billion a day, 
sending it overseas, basically as a result of our addiction to oil. 
When you send $1 billion overseas for oil, you do three things. The 
first is you create a danger to our national security because of the 
dependence for our energy on governments in the Middle East and other 
places around the world that do not share our fundamental interests.
  The second is you create jobs overseas spending that money rather 
than creating jobs here in the United States. Let's spend that $1 
billion a day here in the United States of America on red, white, and 
blue American-made renewable energy. Not only does our security improve 
but in addition we create the jobs here in the United States.
  Third, by ending our addiction to oil we contribute to addressing the 
carbon pollution challenge faced around this globe rather than being 
part of the problem ourselves.
  Let's not adopt a budget plan that ends Medicare as we know it and 
replaces it with a voucher program, that savages programs for working 
Americans, and that protects the programs

[[Page 10840]]

for the best off in our society. Let's instead invest in energy, invest 
in education, invest in infrastructure, and obtain the same impact on 
our deficit but do it in a manner that builds our economy and builds 
American families. That is the type of program that Trudy from Keizer, 
OR, wishes to see, Linda from Canby, OR, wishes to see, and workers 
throughout the United States want to see because they know we should 
have a plan that creates jobs and builds the success of our families 
rather than doing the reverse.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Madam President, now you hear the other side of the 
story. It is a privilege for me to come to the floor of the Senate to 
speak on the issue of the bill before us, which is a sense-of-the-
Senate bill, which means basically the Senate is debating something 
that is not shooting with real bullets. In other words, it just 
expresses the sense of the Senate, it does not change any law, so it 
doesn't amount to much.
  As the President and congressional leaders continue to debate how 
best to reduce the deficit, it seems my friends on the other side of 
the aisle and my President continue to demand a tax increase as part of 
any deal. For sure, any discussion of reducing the deficit should 
include a discussion of tax reform, but tax reform is different from 
tax increases. You heard the previous speaker speak about Republican 
plans that deal with reducing expenditures, and that is right, because 
we believe the deficit problem in this country is not because the 
American people are undertaxed, it is because Congress and Washington 
overspend. However, what is being discussed with this bill currently is 
tax increases on targeted groups, supposedly because they can afford 
it. This is not tax reform.
  Professor Vedder of Ohio University has studied tax increases and 
spending for more than two decades. In the late 1980s he coauthored 
with Lowell Galloway, also of Ohio University, a research paper for the 
Congressional Joint Economic Committee. That study found that every new 
dollar of new taxes led to more than $1 of new spending by the 
Congress. It did not reduce the deficit then--you raise a dollar, you 
increase the deficit. I will be a little more specific.
  Working with Stephen Moore of the Wall Street Journal, Professor 
Vedder updated that research last year and came to the same result. 
Specifically, Moore and Vedder found:

       Over the entire post-World War II era, through the year 
     2009, each dollar of new tax revenue was associated with 
     $1.17 in new spending.

  That is like a dog chasing its tail. Very few dogs catch them, so 
when you raise a dollar here, common sense might dictate it goes to the 
bottom line, but it doesn't work out that way. It actually increases 
the deficit because Congress believes we have a new dollar coming in, 
let's spend $1.17.
  History proves tax increases result in spending increases. We know 
that increasing taxes is not going to reduce the deficit. History also 
shows that tax increases do not increase revenues. That is probably 
contrary to most people's common sense, but I have a chart here that I 
think demonstrates this very clearly. I will be somewhat repetitive 
because I want to leave my remarks and go to this chart, and I will 
refer to it again.
  What this chart basically shows is that over a long period of time, 
going back to World War II to the present, all the taxes coming into 
the Federal Government have been roughly 18.2 percent of gross national 
product, but pretty much even-steven across the board. Sometimes it is 
up a little bit, sometimes down a little bit, but for 50 or more years 
it is averaging about 18.2 percent of gross national product.
  What this chart also shows is--contrary to what you believe, that if 
you raise taxes you are going to bring in more revenue, and if you 
reduce taxes you are going to bring in less revenue--that is not true.
  That gets to this issue of taxing the wealthy. It gets to the issue 
of raising taxes on anybody. From World War II until Jack Kennedy, 
President Jack Kennedy, we had 90 percent marginal tax rates. Then from 
President Kennedy to President Reagan, we had 70 percent marginal tax 
rates. Then in the last half of the Reagan administration and up until 
1986 it was reduced to 50 percent, under Reagan's administration. Then 
Reagan had another tax bill and it was reduced to 30 percent. Then of 
course President Bush the dad made this promise in the campaign:

       Read my lips, no new taxes.

  But he didn't keep his promise so the taxes went back up to about 40 
percent for a period of time until you get to a period when Bush the 
son comes into office and the marginal tax rate is reduced to where it 
is now, 35 percent.
  But whether you have high marginal tax rates or low marginal tax 
rates, you get about the same amount of revenue. I am going to be 
repetitive on that point but it is very important that you understand 
that.
  History shows that tax increases do not increase revenues. The chart 
here shows that revenue as a percentage of gross domestic product 
hovers around 20 percent as far back as post-World War II. I said in my 
off-the-cuff remarks it averaged out about 18.2 percent.
  This chart also shows where you have high and low marginal tax rates 
over those same years. During the last years of World War II, we had a 
94-percent tax rate. Then from 1950 through 1963, it was 90 percent, as 
this chart shows, and under President Kennedy--and I want to emphasize 
that he was a Democrat--he was smart enough to reduce marginal tax 
rates to incentivize entrepreneurship. He reduced the marginal tax 
rates to 70 percent. They stayed around 70 percent until President 
Reagan brought it down to 50 percent.
  Let me say at this point, I gave President Reagan credit for it, but 
I was a brandnew Member of the Senate Finance Committee in 1981 and we 
had some very brave Democrats on that committee who believed that 70 
percent was too high and it was going to promote entrepreneurship more 
if you reduced it to 50 percent. President Reagan gets credit for it. I 
don't think any Republican on the Senate Finance Committee could take 
credit for it because we would have been accused, as we have just been 
accused, of wanting to reduce taxes on wealthy people, so thank God 
there were a lot of smart, intellectually honest Democrats on the 
Senate Finance Committee in 1981, who said the tax ought to be reduced 
to 50 percent. Well, then it went down to 30 percent when we reduced 
marginal tax rates further during the Reagan administration. Then, as I 
said before, the first President Bush reneged on his promise to not 
raise taxes, and the marginal tax rates went back up to 40 percent and 
stayed there until the tax relief enacted under the second President 
Bush. During all of these tax increases and decreases, the amount of 
revenue as a percentage of GDP stayed roughly flat, with a 50-year 
average of 18.2 percent.
  So everybody thinks that if you raise the marginal tax rates, you are 
going to bring in more revenue--seemingly common sense but not true 
because the taxpayers, the workers in America, the investors in this 
country that create jobs are smarter than we are, but we don't think 
they are smarter than we are. And we have had 93 percent marginal tax 
rates, 70 percent, 50 percent, 30 percent, back to 40 percent, now 35 
percent. Regardless of that rate, we get roughly the same amount of 
revenue. Higher tax rates just provide incentives for taxpayers to 
invest and earn money in ways that result in the least amount of taxes 
paid or you might say it this way: Some people just say to themselves 
that they are not going to work hard because why should I work so darn 
hard if I am going to send the money to Washington for people in 
Congress to spend and waste? In other words, taxpayers have decided 
they are going to give us politicians in Washington just so much money 
to spend, and it comes out about right here.
  We ought to have some principles of taxation that we abide by, and I 
abide by this principle that 18 percent of the gross domestic product 
of our country is good enough for the government to collect and to 
spend. That leaves 82 percent in the pockets of taxpayers for

[[Page 10841]]

them to decide how to spend. When you send money to Washington with 535 
of us deciding how to spend it, it doesn't do as much economic good or 
turn over as much in the economy and create jobs as it would if it was 
left in the pockets of the 130-some million taxpayers individually to 
decide how to spend it.
  This benchmark of 18 percent of gross domestic product is good, and 
it has been consistent throughout recent history. It is a principle we 
should keep in mind while we debate Tax Code changes.
  This level of taxation--another reason I say it is justified is it 
has not been harmful to the economy, as higher tax rates such as we 
find in Europe are harmful to the economy--much higher tax rates than 
we have in this country--and it seems to be a level of taxation that 
there has not been a great deal of revolt by the taxpayers of America 
against.
  There is another principle I would like to have you keep in mind; 
that is, What is the purpose of tax law? Those who support bills such 
as the one we have here currently debated, this meaningless bill, 
assume that the key objective for our Federal Government through the 
Federal income tax laws should be to ensure that income is distributed 
equally throughout the country as opposed to government taxing for the 
purposes of government but not for the purposes of the redistribution 
of wealth. In other words, the authors of this bill believe the Federal 
Government is the best judge of how your income should be spent.
  Bills such as the one we are considering today assume--I say it for a 
second time--assume that 535 Members of Congress know how to best spend 
the resources of this country, and presently that is about 18 percent, 
but that is not enough. Well, actually, they are spending more than 18 
percent because the expenditures of this country add up to about 25 
percent of the gross national product from the Federal Government 
because we borrow 42 cents out of every dollar we are spending today.
  It assumes that government creates wealth and should therefore spread 
it around the way they do in Europe. In fact, government doesn't create 
wealth; government consumes wealth. Only workers and investors, 
laborers, and people who provide capital and, in turn, people who use 
their brain to invent and create, is what creates wealth. Yet, as 
history shows, there is evidence that tax increases lead to more 
spending--and I quoted Professor Vedder--and that revenues as a 
percentage of gross domestic product pretty much stay the same 
regardless, even if the marginal tax rates are very, very high.
  It would be one thing for me to vote for a tax increase if it went to 
the bottom line: reducing the deficit. It is quite another thing to 
vote for a tax increase that just allows more spending and raises the 
deficit instead of getting the deficit down.
  The resolution before us now in the Senate requires us to concede 
``that any agreement to reduce the deficit should require that those 
earning more than $1,000,000 per year make a meaningful contribution to 
the deficit reduction effort.'' The bill does not state that such a 
``meaningful contribution'' would be accomplished through tax 
increases, but how else would the authors of this bill and the 
taxpayers intend to or make such a contribution?
  Let me make clear that I do not support this bill and will vote no on 
its adoption. However, I think it is a good thing we are debating such 
an issue. It is clear that those who support this bill believe those 
earning more than $1 million per year are not paying their fair share. 
Note, however, that just last year, these very same people believed 
that a single person who earned $200,000 or a married couple who earned 
$250,000 weren't paying their fair share.
  In evaluating whether people are paying their fair share, experts 
frequently look at whether the proposal retains or improves the 
progressivity of our tax system.
  Critics of lower tax rates continue to attempt to use distribution 
tables to show that tax relief proposals disproportionately benefit 
upper income taxpayers. We keep hearing that the rich are getting 
richer while the poor are getting poorer, don't we? Almost every day. 
This is not an intellectually honest statement, as it implies--what 
does it imply? It implies that those who are poor seem to stay poor and 
that those who are rich seem to stay rich. So I want to dispute that 
position.
  In 2007, the Department of Treasury published a report entitled 
``Income Mobility in the United States From 1996 to 2005.'' The key 
findings of this study include the following:

       There was considerable income mobility of individuals in 
     the U.S. economy during the period 1996 through 2005 as over 
     half of taxpayers moved to a different income quintile over 
     this period.
       Roughly half the taxpayers who began at the bottom income 
     quintile in 1996 moved up to a higher income group by the 
     year 2005.
       Among those with the very highest incomes in 1996--the top 
     1/100 of 1 percent--only 25 percent remained in the group in 
     2005.

  One in four 10 years later. So the poor aren't always poor and the 
rich aren't always rich.

       Moreover, the median real income of these taxpayers 
     actually declined over this period.
       The degree of mobility among income groups is unchanged 
     from the prior decade (1987 through 1996).

  So I used the group 1996 through 2005, and I am comparing it with the 
group 1987 through 1996, so I want to repeat that the degree of 
mobility among income groups was unchanged over a 20-year period of 
time.
  Continuing to quote:

       Economic growth resulted in rising incomes for most 
     taxpayers over the period of 1996 through 2005. Median income 
     of all taxpayers increased by 24 percent after adjusting for 
     inflation. The real incomes of two-thirds of all taxpayers 
     increased over this period. In addition, the median incomes 
     of those initially in the lower income groups increased more 
     than the median income of those initially in the higher 
     income group.

  Therefore, whoever is saying that once rich, Americans stay rich, and 
once poor, they stay poor, is purely mistaken because America is a 
country and land of opportunity.
  Now, I want to say that the Internal Revenue Service data supports 
the analysis I just gave. I was done quoting at that point.
  A study of 400 tax returns with the highest income reported over 14 
years--and I don't know whether these are the same 400 taxpayers my 
friend on the other side just referred to in his speech, but a study of 
400 tax returns with the highest incomes reported over 14 years, from 
the year 1992 to the year 2006, shows that in any given year, on 
average, about 40 percent of the returns that were filed were not in 
the top 400 in any of the other 14 years. I got the impression that the 
top 400 taxpayers in the previous speech were maybe always the same 
people, but 40 percent were not in that group.
  The so-called shared sacrifice bill before the Senate now does not 
acknowledge these trends; hence, I think it is intellectually 
dishonest. It presupposes that anyone making more than $1 million 
should be contributing more to reduce a deficit that they likely did 
not create in the first place. We created it.
  The bill assumes that the folks in this income category have always 
made more than $1 million, that they haven't paid their dues on their 
way up the ladder of success and, as a result, should pay a penalty for 
their current success even if they are on the way down the ladder. The 
bill also assumes these folks will continue earning what they are 
earning now.
  As I just noted, however, the Treasury report and the IRS tax data 
contradict this position.
  I welcome this data on this important matter for one simple reason: 
It sheds light on what America really is all about, what this great 
country is all about--vast opportunities. Of course, as I just said in 
these statistics, but you can see it in a lot of different ways as 
well, we are a country of great economic mobility. This country is 
built by people from all over the world. Our country truly provides 
unique opportunities for everyone. These opportunities include better 
education, health care, financial security, and probably a lot of other 
things. But, most importantly, our country provides people with a 
freedom to obtain

[[Page 10842]]

the necessary skills to climb the economic ladder and live better 
lives. We are a free nation. We are a mobile nation. We are a nation of 
hard-working, innovative, skilled, and resilient people who like to 
take risks when necessary in order to succeed. We have an obligation as 
lawmakers to incorporate these fundamental principles into our tax 
system.
  On another matter in this debate, we have also heard much about 
``closing loopholes.'' Well, that sounds good. I don't want to tell you 
how I believe that ought to be done. There are things that are legal, 
and there are things that are not legal. There are things that are 
legal and there are things that aren't legal. Let me say if there are, 
in fact, loopholes to be closed, I would support closing them.
  During my tenure as chairman and then ranking member of the Finance 
Committee, I worked with colleagues from both sides of the aisle to cut 
off tax cheats at the pass. The American Jobs Creation Act signed into 
law in October of 2004 included a sweeping package to end tax avoidance 
abuses such as corporations claiming tax deductions for taxpayer-funded 
infrastructure such as subways, sewers, and bridge leases; corporate 
and individual expatriation to escape taxes; and Enron-generated tax 
evasion schemes. We closed them.
  One of the tax avoidance provisions the jobs bill shut down was so-
called corporate inversions. Average workers in America can't pull up 
stakes and move to Bermuda or set up a fancy tax shelter to avoid 
paying taxes. Companies that do this make a sucker out of workers and 
companies that stay here in this great country and pay their fair share 
of taxes. So that was closed. Corporate inversions, we called that.
  We also closed loopholes used by individual taxpayers. The jobs bill 
contained a provision that restricted the deduction for donations of 
used vehicles to actual sales price. Prior to that fix, individuals 
were claiming inflated fair market values before they gave their car to 
a nonprofit organization.
  Then in the Pension Protection Act, which was signed into law in 
August of 2006, I championed reforms to deductions for gifts of 
``fractional interests'' in art as well as donations to charities that 
were controlled by the donor. Because if you give money away, it ought 
to be given away. A person should not be able to control it after they 
give it away. The same way with art. In both cases, individuals were 
taking huge deductions for donations without providing equivalent 
benefits to the charities to which they donated.
  In addition to ensuring income and deductions are properly reported, 
I also supported giving the Internal Revenue Service more tools to go 
after tax cheats. The jobs bill contained provisions that required 
taxpayers to disclose to the IRS their participation in tax shelters 
and increased penalties for participating in such tax shelters as well 
as not disclosing such participation to the IRS.
  I also authored the updates to the tax whistleblower provisions 
included in the Tax Relief and Health Care Act which was signed into 
law in December of 2006. There was a whistleblower statute long before 
that, but because of the low dollar threshold, it encouraged neighbors 
to blow the whistle on their neighbors. So the 2006 changes I 
championed increased the awards for those blowing the whistle on the 
big fish--individuals and businesses engaged in large-dollar tax 
cheating through complex financial transactions.
  I don't know why it took the IRS so long to get this law under way 
because they have had plenty of whistleblowers come forward, but we 
have only had one time so far--I think we will get a lot of others 
now--but we have only had one time so far under this provision, which 
was instituted in April of this year, and we recovered $20 million for 
taxpayers that otherwise would have been lost to fraud--from one 
company.
  These are just a few examples of my support for provisions to stop 
abuses of the Tax Code to make sure everyone pays their fair share. If 
and when we get around to considering comprehensive tax reform, I look 
forward to shutting down any other abuses that exist. But first we need 
to be clear on what a loophole is.
  Itemized deductions are just that: itemized deductions. They are not 
loopholes. Similarly, deductions and tax credits that enable a 
corporation to zero out its tax liability are not loopholes. For 
instance, if a person had a loss last year, they can carry it forward 
to this year. The question of whether deductions and credits should be 
limited is a question that should be answered not to raise revenue but 
in the context of comprehensive tax reform. Eliminating deductions and 
credits for certain taxpayers should be subject to extensive review and 
extensive debate. Taxpayers should not be targeted for tax increases 
for political sport, as this resolution before us does.
  I wish to finish by summing up in three points, very quickly. First, 
according to this chart, tax increases don't--well, not according to 
this chart. That is the second point I will make. First, tax increases 
don't reduce deficits and they don't increase revenue as a percentage 
of GDP.
  Secondly, we ought to have some principles of taxation. First of all, 
this chart shows that we get about the same amount of revenue coming in 
over a 50-year period of time--about 18.2 percent of gross national 
product. We have high marginal tax rates, really low marginal tax 
rates, but it still brings in about the same amount of revenue.
  Second, we ought to have some principles of taxation that we abide 
by. Limiting revenues to the historical average of 18 percent of GDP 
should be one, while ensuring income equality should not be one. In 
other words, we raise revenue for the purpose of funding the functions 
of government, not to redistribute wealth.
  Last but not least, it is right to consider tax reform when 
discussing deficit reduction. However, the proposals put forth so far, 
including the current bill, are political proposals--not reform 
proposals. Tax reform requires Presidential leadership, and we are just 
now seeing that. I mean, we are not seeing it on tax reform, but we are 
finally seeing it on deficit reduction. But I don't think it is going 
to last very long.
  Madam President, I yield the floor, and I suggest the absence of a 
quorum.
  The ACTING PRESIDENT pro tempore. Will the Senator withhold his 
request?
  Mr. GRASSLEY. Yes.
  The ACTING PRESIDENT pro tempore. The Senator from Florida.
  Mr. NELSON of Florida. Madam President, I ask unanimous consent to 
speak as in morning business.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                         florida's citrus crop

  Mr. NELSON of Florida. Madam President, I will speak on this bill 
before us tomorrow and matters about the budget, the deficit, and how 
it ought to be solved, and it has to be solved. I will reserve comments 
on that until tomorrow.
  In the meantime, what I wish to point out to the Senate is that we 
had a very significant benefit to not only the Florida citrus industry 
but to the worldwide citrus industry, because there is a bacterial 
disease and, of all things, it is called citrus greening. Well, it is 
anything but that, because what it does is it kills a citrus tree 
within 5 years. It has infected every grove in Florida.
  When I say the worldwide citrus industry is being threatened, I mean 
just that. This strain of bacteria came somewhere from Asia and has 
been imported not only into the United States but into a lot of other 
countries that have moderate climates, warm climates, humid climates. 
There is another version that came from a different part of the world 
that is not as virulent. But what happens is this bacteria that has now 
been brought into this country--it is in Brazil as well, another major 
citrus-producing country--and it is carried by a little insect called a 
psyllid.
  The little psyllid carrying this bacteria bites into the tree, the 
bacteria gets into the sap, and it will kill the tree in 5 years, and 
there is no known cure. Well, if it is going to kill a tree in 5 years, 
we can see the potential for

[[Page 10843]]

the destruction of what we have come to think of as standard fare--that 
we are going to have orange juice on our breakfast table, and that 
those who enjoy the mild elixirs and mix certain elixirs with orange 
juice--called maybe mimosas, whatever--that this is going to be a thing 
of the past if we don't get serious about finding a cure for this 
disease.
  The reason it is so extraordinarily lethal for the United States and 
for the State of Florida is the fact that since every grove has been 
affected, and since almost all of our orange juice that we consume in 
domestic consumption in the United States--I say almost all; the 
biggest percentage comes from Florida, and some of it, a little bit, 
from California; mostly the juice that is added to Florida juice comes 
from Brazil, but when there is a bumper crop in Florida, they don't 
have to ship it in, in refrigerated ships from Brazil--we are going to 
have a whole way of life, a whole tradition, we are going to have 
domestic consumption that is threatened if we don't come up with a 
cure.
  The Florida citrus industry, to its credit, has been taxing itself--
the growers--to produce a stream of revenue that will allow it to 
continue the research to try to find a cure. We have gotten some 
limited amount also from the U.S. Department of Agriculture, and 
supplementing all of that with back at the time when we could make a 
specific appropriations request, otherwise called an earmark, this 
Senator certainly was asking for appropriations to help find a cure to 
this dread disease. We haven't found the cure, and we have to have a 
stream of revenue to keep this going.
  Since it is so difficult to pass anything around here these days--
even the citrus trust fund I filed last year, we had a whole bunch of 
cosponsors. But this year, of course, we are all wound around the axle 
here on passing anything if it has to do with the budget. So what I did 
was go to the U.S. Department of Agriculture and I asked for help. We 
have to have some help immediately. Fortunately, the administration--
and I talked to the Chief of Staff of the White House about how dire 
this situation is. We can't wait. So they announced yesterday they are 
releasing $2 million immediately that will go into the USDA Research 
Station at Fort Pierce, FL, for the remainder of this fiscal year. In 
the next fiscal year, assuming the competitive grants fund is funded by 
the Congress for the Department of Agriculture--which we have to assume 
is going to continue--the USDA has set aside an amount of $5 million in 
the next fiscal year, starting October 1, that will go directly into 
this research, and they have agreed to set aside in the following 2 
years $2 million, $2 million in each of those years, so that we have a 
steady stream of funding of $11 million for research specifically for 
citrus greening.
  California may have this bacteria. If Texas doesn't have it, it is 
just a matter of days or months, and the same with the citrus that is 
grown in Arizona. Of course, in a country such as Brazil, it is to 
their credit some of the citrus growers in Brazil have actually 
contributed money to our U.S. research institutions trying to find a 
cure, because Brazil has the same problem. They have it in a lot of 
their groves. The big difference between the Brazilian citrus industry 
and the United States is that they have more land, so they can mow down 
and burn a citrus grove and go over and clear new land that is 
unaffected and go on and start a new grove.
  You don't have that luxury. We don't have it in any of our citrus-
growing States in the Sun Belt, and certainly we don't have the luxury 
in Florida to go out and find new land to plant new citrus groves.
  This is a very significant departure and a welcome new announcement 
by the U.S. Department of Agriculture that they will be sending $11 
million over the next 3 years specifically dedicated to finding a cure 
for citrus greening before it is too late.
  Citrus growers can prolong the life of a grove by doing certain 
spraying and so forth, but at the end of the day the tree is going to 
die, and they are not going to produce any oranges for orange juice and 
no grapefruit for the grapefruit we enjoy.
  Just so the rest of the Senate will understand, this industry is part 
of us as Floridians. We have, even on our license tags in Florida, an 
orange. We have an industry that has been a mainstay of our economy for 
years and years. Of course, because of the forward thinking, the 
Florida Citrus Commission, in the late forties, fifties, and sixties 
made orange juice become a wanted and acceptable commodity on most 
every American breakfast table. And it is threatened. It is up to us to 
do something about it.
  I was particularly thankful to the administration that they would 
come up with the $2 million immediately because, in addition to the 
growers taxing themselves on a per citrus box produced assessment, they 
were counting on the State of Florida to produce a $2 million 
appropriation to go into a $15 million research fund, and this year, lo 
and behold, the Governor of Florida vetoed that in the appropriations 
bill. So the replacement of that vetoed item by the Governor, with this 
Federal money from USDA, considered an emergency allocation, is 
welcome, timely, and it is much appreciated by all of the aficionados 
across America that enjoy orange juice as a staple in their diet.
  I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. NELSON of Florida. Madam President, I ask unanimous consent that 
the order for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                          Space Shuttle Launch

  Mr. NELSON of Florida. Madam President, let me just say that with the 
last space shuttle launching last Friday--and it was a beautiful 
launch--of course, the expertise of the finest launch team anywhere in 
the world was very evident. When they got down to T-minus 31 they saw 
an indication on the controls that there had not been a retraction of 
one of the arms, which is a servicing arm, but they were ready for 
that, and as it turned out, it was a faulty sensor. Of course, the way 
they checked is they have cameras all over the launch tower. So they 
turned the cameras on and trained them over there and saw that it had, 
in fact, retracted and was pulled into a safe position. So with only 53 
seconds left in the launch window--the window being that they had to 
launch the shuttle at that time so that it, once in orbit, could catch 
up with the space station, which was its destination, with 53 seconds 
to go, the count continued then, starting at T minus 31 and went down 
to a flawless launch and flawless flight, as they are now docked with 
the space station, and as they are now transferring this 20,000 pounds 
of cargo and equipment and supplies that will keep the International 
Space Station supplied for the next year.
  I don't think people realize how big the International Space Station 
is. It is 120 yards long. If you sat on the 50-yard line of a football 
stadium and looked from the end of one end zone all the way to the 
other, that is how big the International Space Station is that we have 
built with another 15 national partners. Primarily, our partner in 
building it was Russia. Of course, you remember that the iteration 
before the International Space Station was originally the Soviet space 
station that became the Russian space station called MIR, which we used 
to fly our astronauts with the space shuttle to the Russian space 
station. So the Russians have been our partners.
  Remember, when we have been down--for example, after the destruction 
of the space shuttle Columbia in early 2003, for over 2 years we would 
not fly the space shuttle as we went through and made the corrections 
that had caused the destruction of Columbia and the loss of seven 
astronauts. We relied on the Russians to get us to and from the space 
station.
  The sad thing is that the new rockets that we are building to go to 
and from the space station--there is one version of those rockets that, 
in fact, is going

[[Page 10844]]

to fly later this year, rendezvous and dock with the space station and 
deliver cargo. But it has not been human rated. To do that, we have to 
go through and put in all the redundancies for safety, all of the 
escape mechanisms on the capsule, and once that is done this will be a 
rocket that will be much safer than the space shuttle--as a matter of 
fact, we can save the crew even from--if they had an explosion on the 
pad, the crew can safely eject in the escape rocket with the capsule 
parachuting to safety, all the way, 8\1/2\ minutes to orbit--if they 
had a malfunction.
  Contrast that with the space shuttle. When we saw Atlantis lift off, 
for the first 2 minutes there is no escape. You are married to those 
big solid rockets. If there is a failure then, there is no way out for 
the crew, and, as we saw, that was how Challenger, 25 years ago, was 
destroyed. They had a malfunction in one of the rockets. It caused the 
whole thing to explode--one of the solid rockets--within the first 2 
minutes of flight.
  We are going to have a much safer way to get to and from the space 
station. The sad thing, however, is that the rocket for humans is not 
ready. It is going to take about another 3 years. Therefore, it is sad 
that with all of that finest launch team in the world at the Kennedy 
Space Center, a good part of them are having to be laid off. That 
employment will ramp up over the next several years as we build and 
launch those kinds of rockets.
  There is another set of human-rated rockets. I am talking about the 
manned space program now, not the unmanned. This year we are going to 
Jupiter. Later on we are getting ready to launch a Volkswagen-size 
rover that will go to the surface of Mars.
  Do you know what those little rovers have done over the last number 
of years? They have gone, like the energizer bunny, all over the 
surface. This one is going to be the size of a Volkswagen. So we have 
these kinds of mixes going on, but the human space program--the next 
big one to get NASA out of the Earth's orbit is the rocket that we are 
developing, a monster rocket. The capsule contract has already been 
let, and we are now going on in the process of--pursuant to the NASA 
law we passed last year--proceeding with the design and building of 
this rocket, which will take us, on the goal set by the President, to 
Mars with interim stations along the way. He has suggested an 
asteroid--to rendezvous and land with an asteroid by 2025. We have a 
vigorous space program going ahead.
  Senator Hutchison, who has been a wonderful partner in helping set 
NASA policy in all of this, and I are going to have something to say 
about this in the next few days because we think there is a holdup in 
the Office of Management and Budget with regard to the rocket design 
and the architecture for the big rocket. We are wondering why this 
delay keeps occurring. But we will talk about that in the later 
session.
  With that, I yield the floor.
  Mr. RUBIO. Madam President, had I been present to vote on the motion 
to proceed to consider S. 1323, I would have voted no.
  There is broad consensus in Washington that a ``balanced approach'' 
between spending cuts, controls, and increased revenue is the only 
possible way to reduce our $14.3 trillion national debt and avert a 
Greek-style debt crisis. I share this perspective.
  As the ongoing debt negotiations advance, Members of Congress should 
evaluate the components of a debt package through one question: Will 
this make it harder or easier for the American people to create jobs? 
For my part, I have never met a job creator in Florida that has told me 
they are waiting for Congress to pass another tax hike before they 
start growing their business.
  Unfortunately, as evident by S. 1323, some in Washington believe 
higher revenues in a debt package should come from massive tax 
increases, even at a time when the unemployment rate is 9.2 percent and 
25 million Americans are unemployed or underemployed. I vehemently 
disagree with this approach and will oppose a net tax increase on the 
economy that makes its way into a debt reduction deal.
  To be clear, new revenues are an essential component of debt 
reduction. We can't simply cut our way out of this debt; we also need 
to grow our way out of it. The best way to do this is by increasing the 
number of taxpayers gainfully employed in our economy and by easing 
burdensome regulations, not by raising taxes.
  We can generate lasting economic growth and trillions in new revenues 
for the Federal Government through pro-growth tax reform. Senator Pat 
Toomey has a budget proposal that lowers top marginal tax rates to 25 
percent in a revenue-neutral way and eliminates loopholes and 
deductions, resulting in $1.5 trillion of additional real growth over 
the next decade and millions of new private-sector jobs, according to 
the Heritage Foundation. His budget recognizes that tax cuts and an 
overhaul of our 70,000 page Tax Code will create jobs and generate 
trillions in new revenue.
  Net tax increases are poor economic policy. Will raising taxes on 
manufacturers make it easier for them to hire new workers? Will raising 
taxes on American energy companies make it easier to create jobs? Will 
raising taxes on the businesses that Democrats refer to as 
``millionaires'' allow those businesses to expand? Across the board, 
the answer is no. Instead, these tax increases will kill jobs in every 
district, State, and industry in the country. Regardless of the 
rhetoric coming from Washington politicians, these taxes will also have 
a mathematically insignificant effect on deficit reduction.
  I proudly support a ``balanced approach'' in the context of debt 
reduction that grows the economy and boosts tax revenues in the 
process, but when presented with the option of choking our weak economy 
with yet another tax increase, I will oppose it. Our country needs new 
taxpayers, not new taxes.

                          ____________________