[Congressional Record (Bound Edition), Volume 158 (2012), Part 12]
[Senate]
[Pages 17074-17075]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE FISCAL CLIFF

  Ms. KLOBUCHAR. Mr. President, I rise today to urge a fiscal 
compromise that will allow us to avoid negative and very real 
consequences of the approaching fiscal cliff. Every day that passes 
without a deal only increases uncertainty in the markets and puts the 
brakes on potential economic activity. Failure to bring the national 
debt under control threatens our country's future.
  In the weeks following the election, the message was clear from the 
people of this country. They want the people in this Capitol, they want 
people in Washington to come together to find reasonable, balanced 
solutions to our Nation's problems.
  We need to show the country we are serious about working together to 
address our fiscal challenges--reducing the cost of borrowing and 
strengthening our financial outlook. The sooner we can agree on a long-
term, balanced deficit reduction package, the better for our economy 
and the better for our country. It is time to put political differences 
aside to work on an agenda that strengthens our economy, promotes 
fiscal responsibility, and increases global competitiveness.
  I have always said that we need to make things in America, that we 
need to invent again, and that we need to export to the world. We are 
starting to do that again. I see it all over our State, where 
fortunately our unemployment rate is better than a lot of other States. 
It is about 5.8 percent, but we can do even better. One of the keys to 
doing better is not only focusing on exports, on education, it is also 
bringing down this debt in a balanced way, in a way that will not 
suddenly jar our economy and put us over the edge but in a way that in 
the long term means businesses, the people of the world can look at it, 
the businesses can look at it and say: They are serious about this. 
They are doing this in a measured, balanced way, but they are going to 
get this done.
  If we refuse to have an honest conversation, if we insist on using 
the debate only for a vehicle for political rhetoric, we will not just 
be doing ourselves a disservice, we will be cheating our children and 
grandchildren out of knowing the America we grew up in, the America in 
Minnesota, where one smalltown businessperson can start a business and 
grow and grow and grow and employ their kids and their grandkids, where 
a farmer can build a farm that employs people throughout the town, 
where someone in New Mexico can get an idea for wind energy or solar 
energy and start a new business. That is what this America is about.
  In 2011 we came together and put in place discretionary spending caps 
that will reduce our debt by over $1 trillion in the coming decade. We 
also agreed to find another $1 trillion in savings before December 31 
of this year.
  While significant spending cuts are a necessary part of a balanced 
solution, any plan to responsibly lower the deficit cannot come from 
cuts alone. Revenue must also be part of the solution. I have 
appreciated that several of our colleagues on the other side of the 
aisle have acknowledged this, that revenue must be part of the 
solution. Now we have to put words into action.
  I think the most common refrain I hear from the business community at 
home when we discuss what it will take to spur investment and create 
jobs--what they talk about is certainty. They need certainty. They need 
certainty if they are a farmer. We need to include the farm bill in 
this package so they know what they need to get for their crop 
insurance. They need certainty if they are a businessperson and 
deciding whether they should invest in new equipment, and they need to 
know exactly what the tax consequences and other consequences of that 
investment will be.
  So on the revenue side, in addition to the cuts I just discussed, 
what does that mean on the revenue side?
  First, it means extending the tax cuts for middle-class America. In 
Minnesota, 2 million families and small businesses will see their 
Federal income taxes increase by an average of $1,600 unless the 
middle-class tax cuts are extended. This means a lot for a family 
trying to decide whether they can afford a student loan to send their 
kid to college this fall or a business owner looking to invest in their 
company. It means a lot.
  Second, this means returning to the Clinton tax levels for people 
making over $250,000 a year. Let's go back to that time. Under those 
rates, the economy created nearly 23 million jobs. Small businesses 
generated jobs at twice the rate during the Clinton years than they did 
under the years of the Bush tax rates.
  But we do not have to look as far back as the 1990s to see the impact 
of

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extending tax cuts for 98 percent of all Americans versus extending 
them for those making over $250,000. At a recent Joint Economic 
Committee hearing, I pointed out that extending tax cuts to households 
making under $250,000 would increase real GDP by 1.3 percent and 
increase employment by 1.6 million in the fourth quarter of 2013. By 
comparison, expanding the tax cut extension to include taxpayers making 
over $250,000 per year would only add an additional one-tenth of 1 
percent to GDP. That is very little bang for the buck than what you get 
by extending them for the middle class. So that is one of the reasons 
why we are so focused on looking at this in terms of extending those 
tax cuts for people making under $250,000 and then going to the Clinton 
levels for people making over $250,000.
  What is the other reason? The other reason is pretty obvious. That is 
what I started with. We have to bring our debt down. When you look at 
how much this would save just by going back to the Clinton levels for 
people making over $250,000, it would save nearly $700 billion over the 
next 10 years, and when interest payments are included, that number 
could easily exceed $1 trillion.
  How many times have we heard economists say that we should look at 
the neighborhood of $4 trillion in reduction in debt over 10 years to 
give the world confidence in our country? So that is $1 trillion of it 
right there simply by going back to the Clinton tax levels for people 
making over $250,000.
  You have another $2 trillion--$1 trillion of which we already agreed 
to--that you can do in spending cuts. I believe the other $1 trillion 
you can get by closing loopholes and making some changes that will not 
be on the backs of the middle class and seniors and veterans in this 
country--things such as the oil subsidies, such as looking at the home 
mortgage deduction, which is incredibly important, but perhaps we could 
limit it to $500,000 of the value of a home. So if you buy a $1 million 
home, that is great, you get a home deduction for up to $500,000 of the 
value of the home. Those are a couple examples.
  That is the last part we are most likely not going to get to in the 
next 2 weeks, which is closing loopholes and ending subsidies, but 
right now we have to look at the Bush tax cuts and what we can do to 
extend them for the middle class and then get $1 trillion in debt 
reduction, with a downpayment on that debt reduction going into next 
year, as well as the spending cuts we need to make. The downpayment on 
deficit reduction would send a strong signal that Washington is serious 
about getting our Nation's fiscal house in order.
  Finally, in addition to the spending cuts and revenue measures I 
spelled out, in order to ensure that our country remains competitive, 
we must move toward tax reform. One of the ways we can ensure business 
growth and more jobs is to create incentives to invest here in the 
United States and spur innovation, and that is by simplifying the Tax 
Code, by closing some of these loopholes I discussed, and by reducing 
some of the business rates and paying for reducing those business rates 
by closing those loopholes and ending some of the tax subsidies.
  We know that is not going to be an easy task, but I believe we are up 
to it because Americans are up to it. They are up to it every single 
day when they go to work, when they make it sometimes in a very 
difficult situation, with one, two, three jobs, having difficult profit 
margins. They make that decision every day, and the least we can do in 
this Chamber and in Washington, DC, and in the House of Representatives 
is to get this done.
  It is time we get serious about advancing a deal that is both fair 
and achievable. If we are committed to our country and not to rigid 
ideologies, we will get this done. None of us want to see our economy 
crippled. We have finally seen it stabilize, and in States such as mine 
we are beginning to see it grow again.
  We just found out we had a huge increase in November home sales in 
Minnesota. There are positive signs across our country. But the way we 
get this in the direction we want to go, which is moving forward in a 
strong way, not just a stable way, moving forward to make sure we bring 
down our debt in a balanced way--we do not want to see things go 
backwards; Democrats do not want that, and Republicans do not want 
that--it is time for us to work together to show the American people 
that Washington is not broken, that, instead, we are willing to put 
aside our politics to do what is right for America.
  I yield the floor.
  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.
  Mr. UDALL of New Mexico. Mr. President, I ask unanimous consent that 
the order for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Udall of Colorado.) Without objection, it 
is so ordered.

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