[Congressional Record (Bound Edition), Volume 158 (2012), Part 13]
[Senate]
[Pages 18500-18501]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE FISCAL CLIFF

  Mr. HARKIN. Mr. President, over the last few decades, the real 
middle-class families in America--and when I say ``real middle class'' 
I mean those who are making $40,000, $50,000, $70,000, not $400,000 a 
year--have seen their jobs become more insecure and their wages 
stagnate. In fact, their income adjusted for inflation is less now than 
it was in the late 1990s. Their savings and pensions have shrunk or 
disappeared.
  The cost of education has soared at the same time as the wealthiest 
Americans and large corporations grow ever richer and pay less and less 
in taxes. For example, just take dividends. Prior to 2003, dividends 
were always taxed as ordinary income. Now they are taxed at a less rate 
than the capital gains rate. Income of hedge fund managers is taxed at 
a lower rate than middle-class families--the so-called carried interest 
rule.
  The share of our Nation's wealth going to corporate profits has been 
rising as the share going to wages and salaries is declining. This has 
led bit by bit, Tax Code change by Tax Code change, pension cuts by 
pension cuts, job outsourcing by job outsourcing to an economy that is 
out of balance, that threatens the very fabric of our society. That is 
because the gap between the rich and the real middle class grows ever 
wider. That is because our economy is driven from the middle out and 
not from the top down.
  Our economy is driven by middle-class families with good jobs and 
money in their pockets to spend. So our first goal must be to put 
Americans back to work and to get our economy moving, to rebuild the 
real middle class now.
  The average American across our land tonight--today--probably thinks 
what we are about here is just that, to solve our country's most 
pressing problem--creating new jobs, laying the foundation for future 
economic growth and, thus, reducing our deficits in the long term. But 
instead we are here tied in knots to avert a manufactured fiscal cliff 
which could have been avoided 6 months ago by the House passing S. 3412 
to avert the tax hikes on 98 percent of Americans.
  As I have said repeatedly, I will evaluate any such fiscal cliff 
legislation on how these proposed policies affect working families and 
the real middle class--again, the real middle class being those making 
$30,000, $50,000, $60,000, $70,000 a year. So I am disappointed to say, 
in my opinion, this legislation we are about to vote on falls short.
  First, it does not address the No. 1 priority: creating good middle-
class jobs now. Unemployment remains way too high. This bill should 
include direct assistance on job creation makers; for example, our 
infrastructure, education, and job retraining. How many jobs we see out 
there going wanting because people aren't trained for those jobs; yet 
we don't have enough money to put into job retraining. The legislation 
before us neglects our most pressing concern at the present time, and 
that is the lack of jobs and the lack of qualified people to fill those 
jobs.
  Secondly, this proposal does not generate the revenue necessary for 
the country to meet its needs for everything from education to job 
training, infrastructure, and research and development. The idea that 
people earning $300,000 to $400,000 a year could not pay the taxes they 
paid in the 1990s when the economy was booming is just plain absurd. 
But that is what we are being told; that people who make $300,000 or 
$400,000 simply cannot pay the same taxes they would have been paying 
in the Clinton years.
  Furthermore, these wealthiest Americans made a lot of money in the 
last decade. So what do we do? Now we are raising the estate tax 
exemption to $5 million. It was $1 million under the Clinton tax years. 
Now the few who are really wealthy, who made a lot of money, and who 
have accumulated this wealth, we now have raised the estate tax so they 
can pass it on without any of that gain ever being taxed because the 
heirs now get it with what they call a stepped-up basis. So none of 
that is taxed.

[[Page 18501]]

  So what we see, then, are the few who are wealthy getting more and 
more wealthy. So wealth becomes even more concentrated under this 
system.
  Now, some will say: What is the problem? You want to protect the 
middle class. They are in this bill. How can you object if some higher 
income individuals are protected as well? Well, I point out these are 
not unrelated matters. With government investments and government 
spending dropping, being squeezed every year by my conservative friends 
on the other side of the aisle, and with deficits remaining high, every 
dollar of sacrifice the wealthy forego is a sacrifice we will later be 
asking of real middle-class, modest-income Americans. Every dollar the 
top 2 percent of taxpayers do not pay under this deal, we will 
eventually ask folks of modest means to forego--to forego on Social 
Security or Medicare or Medicaid or Head Start benefits or other items 
that benefit the real middle class.
  I believe it is gravely shortsighted to look at these issues in 
isolation from each other, especially since the Republicans have made 
crystal clear that they intend to seek mandatory spending cuts just 2 
months from now using the debt limit as leverage.
  No. 3. Why in this deal do we make the tax benefits for the rich 
permanent while the progressive tax benefits we put in place in 2009 to 
help people of modest means--why are those temporary? For example, the 
estate taxes that benefit the wealthiest are made permanent. The 
earned-income tax credit that affects the lower income, that is 
temporary. The income tax rates that are set now are going to be made 
permanent to benefit higher income individuals, but the child tax 
credit is made temporary. The AMT fix is made permanent, but the 
American opportunity tax credit for modest families to be able to 
afford to send their kids to college is made temporary.
  In this deal we are about to vote on, logic is turned on its head. We 
provide permanent benefits to those who need it the least, and yet this 
deal sunsets the modest assistance to middle-class families--again, I 
repeat, middle class, real middle class; not $400,000-a-year middle 
class, I mean the real middle class.
  I think it is quite telling that earlier this last evening, Grover 
Norquist said he is for this bill, but our former Secretary of Labor 
Bob Reich is opposed.
  So maybe now I guess we are all believers in trickle-down economics. 
Not I. I guess we now redefine the middle class as those making 
$400,000 a year when, in fact, that represents the top 1 percent of 
income earners in America, not the middle class. So I guess that we now 
accept as normal practice in reaching bipartisan deals that the most 
vulnerable in our country, such as those who are out of work and who 
depend on unemployment benefits, can be held hostage as a bargaining 
tool for more tax breaks for the richest among us.
  I am not saying that everything in this deal is bad. There are some 
good parts. But I repeat, I am concerned about this constant drift, bit 
by bit, deal by deal, toward more deficits, less job creation, more 
unfairness, less economic justice--a society where the gap grows wider 
between the few who have much and the many who have too little.
  Mr. President, for these reasons, I must in conscience vote no on 
this bill.
  The PRESIDENT pro tempore. The majority leader.

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