[Congressional Record (Bound Edition), Volume 158 (2012), Part 6]
[Senate]
[Pages 7485-7490]
[From the U.S. Government Publishing Office, www.gpo.gov]




   FOOD AND DRUG ADMINISTRATION SAFETY AND INNOVATION ACT--MOTION TO 
                                PROCEED

  Mr. REID. Mr. President, I now move to Calendar No. 400, S. 3187.
  The ACTING PRESIDENT pro tempore. The clerk will report the motion.
  The legislative clerk read as follows:

       Motion to proceed to Calendar No. 400, S. 3187, a bill to 
     amend the Federal Food, Drug, and Cosmetic Act to revise and 
     extend the user-fee programs for prescription drugs and 
     medical devices, to establish user-fee programs for generic 
     drugs and biosimilars, and for other purposes.


                                Schedule

  Mr. REID. Mr. President, we are now on the motion to proceed to the 
FDA user fees bill. At 4:30 the Senate will proceed to executive 
session to consider the nomination of Paul Watford to be U.S. Circuit 
Judge for the Ninth Circuit. At 5:30 there will be a cloture vote on 
the Watford nomination. If we are able to confirm his nomination, we 
should expect a second vote on the motion to proceed to the FDA user 
fees legislation.


                        Obstructionism Repeated

  Mr. President, this week the Senate must complete work on legislation 
that will enact crucial reforms that will prevent drug shortages and 
bring lifesaving medicines to market more quickly. Senators Harkin and 
Enzi, a Democrat and a Republican, worked very hard to bring this 
legislation to the floor. I am cautiously optimistic that the spirit of 
bipartisanship will continue because Democrats cannot pass this 
legislation without the cooperation of our Republican colleagues. I 
certainly hope they will allow us to advance this bill this evening 
without additional delay caused by another filibuster. I would like 
Senators from both parties to be free to offer relevant amendments to 
improve a worthy bill, but before we can get to work on this 
legislation in earnest, I urge my Republican colleagues to stop their 
filibuster. Americans living with cancer and other life-threatening 
illnesses are watching closely to see whether the Senate is capable of 
moving to quick action to ease shortages of crucial medicines or 
whether we will once more be paralyzed by Republican obstructionism.
  Americans have seen that obstruction time and time again this 
Congress. They are frustrated with the slow pace of Senate action to 
reauthorize the Violence Against Women Act, Iran sanctions, and on 
legislation to stop interest rates from doubling on student loans. 
Earlier this month Republicans blocked an attempt to keep higher 
education affordable for 7 million students. But Democrats have not 
given up. I hope our Republican colleagues will come to their senses 
and allow us to prevent this crisis that affects 7 million young men 
and women before it is too late.
  Republican obstruction and infighting has also stalled critical new 
sanctions on Iran. For 2 months Democrats have worked to resolve 
Republican objections to this bipartisan measure which passed out of 
the Banking Committee unanimously. The stakes couldn't be higher. 
Sanctions are a key tool to stopping Iran from obtaining a nuclear 
weapon, threatening Israel, and jeopardizing U.S. national security. We 
cannot afford more delays to putting stronger sanctions in place. I 
hope my Republican colleagues will see how important it is to advance 
these important measures and prevent Iran from obtaining a nuclear 
weapon.
  Republicans have also needlessly blocked progress on reauthorization 
of the Violence Against Women Act. This helps law enforcement 
effectively combat and prosecute domestic crimes against women. 
Although both Chambers have passed a version of this legislation, House 
Republicans have refused to go to conference with the Senate. Their 
excuse--a hypertechnical budget issue called a blue slip--isn't much of 
a figleaf to hide their blatant obstruction. The truth is that they are 
looking

[[Page 7486]]

for any excuse to stall or kill this worthy legislation, but American 
women have not been fooled. If Republicans really want to give police 
the tools they need to prosecute domestic abusers, they will drop this 
facade. If Republicans really care about protecting women and families, 
they will abandon these hypertechnical objections and join us in 
conference.
  There are differences between the House and Senate bills that could 
be worked out easily. American women and families are counting on our 
action. But in this Congress it seems the Republicans are more 
interested in inaction than action; they are more interested in 
blocking worthy legislation for partisan gain than in working together. 
Their infighting and partisan games have stopped reauthorization of the 
Violence Against Women Act, Iran sanctions, and the student loan fix--
stopped them right in their tracks. These are just a few of their ways 
of stopping legislation, a few important measures they have stopped 
over the past few weeks. But the FDA bill, which will prevent drug 
shortages and make lifesaving medicines available more quickly, must 
not become another victim of this partisanship. I hope Republicans 
seize this opportunity to be cooperative rather than be combative.
  Mr. President, would you announce the business of the day?


                       Reservation of Leader Time

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
leadership time is reserved.
  The motion to proceed is now pending.
  Mr. REID. Mr. President, 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. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                           Order of Procedure

  Mr. REID. Mr. President, I ask unanimous consent that the cloture 
votes which were scheduled this afternoon on Watford be vitiated, all 
of the provisions of that order remain in effect.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. REID. Mr. President, 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.
  Ms. MIKULSKI. Mr. President, I ask unanimous consent that the call of 
the quorum be rescinded.
  The PRESIDING OFFICER (Mr. Coons). The Senator from Maryland.
  Ms. MIKULSKI. Mr. President, I come to the floor to lend my voice to 
asking my colleagues to vote for the motion to proceed to the FDA 
Safety and Innovation Act. Like the Presiding Officer, who is from 
Delaware, where its excellent private sector and public sector have 
been the hallmark of innovation, I represent a State that is absolutely 
critical to the innovation economy.
  Those of us from Maryland know life science innovation is one of the 
important economic engines in our economy both today and in the future. 
We are the home to flagship government agencies such as the National 
Institutes of Health, the FDA, and iconic internationally branded 
universities that do research and move it into clinical practice at 
Johns Hopkins and the University of Maryland. There are also lots of 
thriving biotech companies and some medical devices. So for us life 
science is part of the lifeblood of the Maryland economy, and it is 
also part of the lifeblood of the American economy.
  Think of what we do. We come up with new biological products, new 
pharmaceuticals, new medical devices that not only save and improve 
lives but also enable them to help people in our own country. Because 
they are FDA approved--the gold standard for safety and efficacy--they 
can sell these products around the world, often to countries that will 
never be able to afford an FDA.
  We have worked very closely on a bipartisan basis to be able to 
create the legislative framework called PDUFA, the Pharmaceutical Drug 
User Fee Act, and there will be a lot of other UFAs, user fees, in 
this. As I said, we have worked together on a bipartisan basis to bring 
this legislation to the floor.
  I note on the Senate floor at this moment is the ranking member of 
the Health, Education, Labor, and Pensions Committee, the Senator from 
Wyoming, Mr. Enzi, who has been a leader in fashioning legislation 
where we can continue the mission of what we want at FDA: safety and 
efficacy, moving drugs into clinical practice, regulations that are 
sensible, regulate but not strangulate the innovation economy or the 
potential for saving and improving lives. The bill before us is 
integral to achieving this shared goal.
  This is not new legislation. PDUFA was enacted in 1992. At that time 
we were almost facing a crisis in our country. There was an unduly long 
wait for patients to have access to new medicines and technologies. For 
FDA, it often took 2 or 3 years to review a drug application. Materials 
were submitted manually in a very costly fashion. It cost manufacturers 
to the tune of almost $10 million a month.
  So we decided to come together in the era when Bill Clinton said big 
government was over--not to make government to be bigger but for 
government to be smaller--and we came up with a public-private 
partnership called the PDUFA, the pharmaceutical user fee legislation. 
PDUFA supports drug review, so that those who make the products pay a 
fee to be able to have their drugs reviewed. They also expect their 
government to reduce the time it takes to move reviews expeditiously 
yet safely.
  Let's be clear: This is a public-private partnership. For FDA, as it 
looks at its--remember, FDA has two jobs, which are food safety and 
then the safety of drugs and medical devices. More than 60 percent of 
funding for drugs and medical devices comes from industry fees--$712 
million. The remainder comes from Federal appropriations--$473 million. 
So the private sector carries a big part of this responsibility. The 
kind of staffing, expertise, and modernization we have at FDA could not 
have happened without this public-private partnership. It has been a 
success.
  More than 1,500 new medicines or technologies have been approved 
since 1992 for everything from the dread ``C'' words such as cancer or 
cardiovascular disease, to infectious disease, to the dread ``A'' words 
such as Alzheimer's, which we are working on, and others. It has 
allowed the FDA to have more scientists and staff, and for that it is 
giving value to the private sector to be able to decrease review times. 
We reduced review times from 2 years in 1992 to 1.1 years today.
  We had excellent hearings. They were very civil, very content rich. 
But I also launched a listening tour in Maryland where I went out to 
the major biotech companies and heard from over 25 different companies 
about what they thought we needed to do. I asked them where their 
government helped them and where their government hurt them, where 
should their government get out of the way, and where did they need a 
more muscular government, meaning moving things ahead. They had great 
ideas. It was fantastic.
  What I heard was we have to reauthorize PDUFA quickly, and we must 
make the improvements to the programs. We need to improve the drug 
review process; we need to increase communication in order to speed the 
drug review process. We have made sure we have increased a number of 
mandatory performance requirements between FDA and the life science 
product sponsors. I say life science because it is bio, it is pharma, 
it is medical devices, and some things that are both. PDUFA V, which 
this is--it is the fifth time--allows us to use biomarkers to decrease 
development time by helping to demonstrate therapeutic benefit more 
quickly. It requires FDA to develop a dedicated program for drug 
development and training of staff.
  We face a turnover, and there are a lot of reasons for that which I 
will

[[Page 7487]]

come back to. But we want to make sure those young people who are so 
smart in science know how to work to have the science evaluated in a 
timely way. This is absolutely critical.
  We have also incentivized the development of drugs for rare diseases. 
Particularly for parents of children with very unique and poignant, 
heart-breaking diseases, we would require FDA to develop guidance 
related to advancing and facilitating increased outreach to patient 
representatives, not only to the industry but to those who represent 
the patient advocacy groups. Again, we seek to develop training and 
certificate programs within FDA on how to review drugs for rare 
diseases.
  I could go through the many benefits of PDUFA. We have done also in 
here MDUFA, the medical device act, and we do generic PDUFA. So there 
are several bills in this bill. But we have to act. There has to be a 
sense of urgency. This is a different bill than many others. If we 
don't reauthorize many other bills, they keep on going, but with the 
PDUFAs and the other user fee legislation, they actually will be 
sunsetted if we do not pass them by October. One might say, Well, we 
will wait until October. We will deal with it on the cliff.
  We can't do that, because of the impact on both the people in the 
private sector and those in the public sector. Failure to reauthorize 
in a timely manner would have catastrophic effects on FDA's ability to 
carry out its important role. If the user fee agreement expires, 
patients, public health, and industry will suffer. This isn't Senator 
Barb speaking, this is what our leading business and public health 
advocates are telling us. If we don't reauthorize, the user fees 
sunset, so that means U.S. pharmaceutical industries, which support 4 
million jobs, would be adversely affected. There would be no FDA to 
work with.
  In 2010, Maryland private life science companies supported over 
25,000 jobs. These companies are true innovators. On average, it takes 
a new medicine 10 to 15 years to develop. If we fail to reauthorize 
PDUFA, which ensures an efficient, consistent, and predictable 
regulatory environment, our private sector will lose out. We are going 
to lose out to Europe and we are going to lose out to China. China is 
stealing our patents as we speak. It will have a terrible consequence 
on patients as tens of millions of them rely on drugs and biologics and 
medical devices.
  We know we have legislation that works, we have a legislative 
framework that works and now we need to get to work. If we do not pass 
this bill, and reauthorize these major programs, what will happen is we 
will need to send out RIF notices. We won't do it, but Dr. Mary 
Hamburg, the FDA CEO, the Commissioner, will have to, starting in July 
and August, send out RIF notices to 4,000 Federal employees at FDA, 
from the Ph.D. and the M.D. to the important lab techs and others who 
keep FDA going. This is no fooling around, I say to my colleagues. This 
isn't: Let's wait for the cliff. We will come to the brink if we do not 
reauthorize. Think about the role of FDA. If one thinks one is going to 
lose their job, that is what they are going to be preoccupied with. 
They are not going to be occupied with looking at these clinical trials 
and moving their advances forward.
  We have worked so hard on this legislation. The private sector has 
worked hard to find a sensible center, and so has Dr. Mary Hamburg and 
her team. Our committee has worked so well. We can do this. We have to 
have the will. If we want to stay ahead in the global economy, it has 
to include passing this legislation.
  Everybody talks about stopping China. I don't know what China is 
going to do, but I know we can stop ourselves if we don't pass 
legislation that promotes innovation in our country and private sector 
jobs in a partnership with government.
  I conclude by urging my colleagues to vote for the motion to proceed.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I thank the Senator from Maryland, Ms. 
Mikulski, for her passion and understanding and intense work on this 
particular bill. Of course, she extends her passion and intense work on 
any bill she is involved in. I am so pleased this bill has gone to 
committee and has had the time for the committee to work on it. We have 
a very bipartisan approach on the bill and a very reasonable way to do 
it.
  I rise to support S. 3187, the Food and Drug Administration Safety 
and Innovation Act of 2012, and I appreciate Senator Mikulski making 
the opening statement. This bill will reauthorize FDA's drug and 
medical device user fee programs, authorize new user fees for generic 
drugs and biosimilars, and make a small number of targeted bipartisan 
policy reforms at the same time.
  This legislation represents over a full year of work by the HELP 
Committee. Fridays have been dedicated to coming up with solutions on 
this for over a year, and it has paid off. It reflects the information 
we have learned from hundreds of meetings with patients, with 
advocates, with stakeholders, with outside experts, and with the FDA. 
More importantly, it reflects both the ideas and the feedback we have 
gotten from every member of the HELP Committee and a lot of people 
outside the HELP Committee. The HELP Committee approved this bill by a 
voice vote on April 25 and reported the bill out of committee on May 7.
  This bill will make important changes to how FDA does business. 
Thanks to the efforts of Senators Burr and Coburn, the bill now 
includes new requirements that will make FDA more accountable and 
transparent. A fundamental principle of effective management is that 
one has to be able to measure performance if one wants to improve it. 
The ideas of Senators Burr and Coburn will help provide those 
measurements and, as a result, Americans are going to get better access 
to safe, innovative medical devices and medicines.
  The bill will also modernize how the FDA inspects foreign facilities 
to better account for the global nature of drug manufacturing. It will 
allow FDA to prioritize and target riskier oversized facilities, which 
will help prevent the recurrence of the problems with drugs such as 
heparin.
  It will also improve how FDA regulates medical devices. For the past 
several years, FDA premarket review of medical devices has involved 
significant delay and unpredictability. This has threatened American 
manufacturing jobs which have started to migrate overseas because of 
the unfavorable regulatory environment here in the United States. It 
has also threatened patient access to new therapies. I believe this 
bill will reverse those trends.
  The bill reflects the concerns I have heard in my meetings with 
committee members regarding the current shortages of vital and 
lifesaving drugs. Senators Blumenthal, Roberts, Casey, Alexander, 
Bennet, and Hatch should be thanked for all the work they put into the 
drug shortage proposal. The new notification and coordination 
requirements are important steps that will help prevent future drug 
shortages.
  The bill also enjoys broad support. We have received numerous letters 
of support from industry, patient groups, consumer groups, and a whole 
raft of other stakeholders.
  We also worked to guarantee that any mandatory spending generated by 
the bill would be fully offset. Over the past several weeks, we have 
developed offsets to pay for those provisions that produce mandatory 
spending. As a matter of fact, according to the Congressional Budget 
Office, this bill will reduce the Federal deficit.
  Chairman Harkin and I have worked very hard to make this bill as 
bipartisan and uncontroversial as possible. We tried to avoid 
controversy because we understand this bill needs to get done. If we 
don't reauthorize the drug and device user fee programs before they 
expire this fall, the FDA will be forced to lay off 2,000 to 4,000 key 
employees. This will cause FDA's review of new drugs and devices to 
grind to a halt. This, in turn, will threaten biomedical industry jobs, 
patient access to new medical therapies, and America's global 
leadership in biomedical

[[Page 7488]]

innovation. We are talking about 4 million jobs overall and 2,000 to 
4,000 that will have to be chopped off because the money runs out when 
this bill expires, the previous bill expires, so it is critical that we 
get that done.
  Another important thing with those 2,000 to 4,000 people who will 
have to be laid off at FDA is those are key technicians, scientists, 
informed people who have been working on this for a long time. If we 
lose this, they will still have jobs, it just will not be where we can 
get drugs on the market faster, devices on the market faster, generic 
drugs out faster, and all of the other things this bill covers.
  So in conclusion, I would like to thank Chairman Harkin and all the 
other members of the HELP Committee, FDA, industry, and many other 
groups for working with us on this important legislation.
  I particularly want to point out the cooperation Senator Harkin has 
provided, the leadership he has provided on the bill, and the way his 
staff members and mine have worked together for at least a year in 
regular meetings with all members of the committee. So I think a lot of 
the controversy that could come up with a bill like this has been taken 
care of. I am hoping it has so we can get this done expeditiously.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              The Economy

  Mr. KYL. Mr. President, what I would like to talk about this 
afternoon is a bit about the President's economic record. I am sure 
Americans have noticed the President barely mentions this economic 
record when he is out on the campaign trail, and I can well understand 
why. It is not a very impressive record, especially if you are a 
taxpayer or a business owner.
  Our national debt creeps closer to $16 trillion each day. It is now 
more than $5 trillion more than it was when the President took office. 
It now adds up to about $50,000 per person in the United States, and 
that is exclusive of interest payments. By way of contrast, the median 
yearly household income--in other words, all the people in the house--
is less than $50,000. It is $49,445.
  Unemployment recently dropped, but it did so for the simple reason 
that fewer people are searching for work.
  The President's signature legislative items--the stimulus bill, 
ObamaCare, and Dodd-Frank--have not only been unhelpful in boosting 
growth, but they have left a trail of crushing debt, uncertainty, and 
new regulations in their wake. I want to make a few points about each 
of those bills because I think they paint a fair picture of the 
President's economic record.
  First, let me talk about the stimulus. We have not forgotten about 
the stimulus, even though I suspect the President might like to--$1.2 
trillion. It, obviously, failed to achieve the promised results. An 
Associated Press reporter wrote shortly before it was signed into law:

       They call it ``stimulus'' legislation, but the economic 
     measures racing through Congress would devote tens of 
     billions of dollars to causes that have little to do with 
     jolting the country out of recession.

  Of course, that is exactly what happened. It seemed more designed to 
shower taxpayer dollars on certain favored constituencies and pet 
interests than to actually jump-start the economy. Much of it was 
simply wasteful Washington spending. Many investors must have asked 
themselves why they should put their money to risk on new job-creating 
ventures when they have to compete with well-connected firms that can 
simply wring taxpayer-provided stimulus dollars out of Congress or the 
Obama administration.
  A Washington Post poll released just last week showed that 48 percent 
of Americans have an unfavorable view of the stimulus--and this was, 
after all, the President's signature effort to spur the economy.
  Indeed, as Jeffrey Anderson notes in a recent issue of the Weekly 
Standard magazine, the administration does seem to be downplaying the 
law. Not only has the stimulus failed to create robust growth, the 
costs have become more outrageous. He writes:

       It has now been five months since the Administration last 
     put out a report card on [the stimulus.]. . . . the December 
     report marked the sixth straight quarterly report showing 
     that stimulus's cost per job is rising: In reports spanning 
     January 2010 to December 2011, the stimulus's cost per job 
     more than doubled, rising from $146,000 (in January 2010) to 
     $317,000 (in December 2011). With each passing quarter, the 
     stimulus has become an even worse deal for taxpayers.

  So this is the administration's own report card on the stimulus, 
concluding in the last report, $317,000 per job. Think about that for a 
moment. To create each job, the taxpayers shell out $317,000.
  Numbers like these remind me of a quip from writer Christopher 
Buckley. He said writing political satire these days can be difficult 
because it has to compete with reality--$317,000 for one job under the 
President's stimulus.
  Well, second, ObamaCare. The $2.6 trillion bill is not aging very 
well. Since its passage, the act has imposed an estimated $14.9 billion 
in private sector burdens, approximately $7 billion in costs to the 
States, and 58.6 million annual paperwork hours, according to a weekly 
regulatory report.
  The April Kaiser health tracking poll showed that more Americans have 
an unfavorable view of the law than favorable. It is 43 to 42 percent. 
More than half of Americans oppose its central provision, the so-called 
individual mandate. All told, the new taxes in ObamaCare would add up 
to $\1/2\ trillion over 10 years. Many of these taxes will coincide 
with the biggest tax increase in history--the one scheduled for the end 
of this year. So at the very time the income tax rates are scheduled to 
go up, the new taxes from ObamaCare will hit--$\1/2\ trillion worth of 
new taxes over the next 10 years.
  Finally, there is the Dodd-Frank financial regulatory reform bill. 
When it comes to financial regulatory reform, I think most Americans 
believe there should be two simple goals: preventing new crises from 
happening and making sure the taxpayers are not on the hook for Wall 
Street's mistakes.
  Well, the Dodd-Frank bill did not achieve either goal. It is a 
complex web of regulations that institutionalized ``too big to fail'' 
and has served to increase uncertainty, increase moral hazard, and 
increase economic distortions, all the while adding 52.9 million 
paperwork hours since its passage.
  So, as I said, President Obama does not seem to be running for 
reelection on this record of the stimulus package, ObamaCare, or Dodd-
Frank regulatory reform. Instead, he is going to be sending--or maybe 
he has already sent it--to Congress a to-do list, things he would like 
for Congress to do, most of which are tax credits and other very short-
term proposals that are not likely to have a big effect on jobs or 
growth because the business sector is not impressed with a one-time-
only, short-term proposition. It wants to know that when it invests 
money, that investment is going to be for the long term. Apparently, he 
is going to campaign on this most recent list when he goes out to Iowa 
later this week.
  Well, this happens to be Small Business Week, and one would think the 
President would turn to something that businesses have actually said 
they would like to do; that is, to prevent this tax tsunami coming at 
the end of this year--as I mentioned, the biggest tax increase in the 
history of the country, which automatically would take effect on 
January 1 of next year, unless Congress does something about it and the 
President can sign the legislation.
  The NFIB, the National Federation of Independent Business, recently 
released a list of the top five uncertainties in the Tax Code that they 
say would harm small businesses. Let me just mention three of these 
uncertainties.
  One is the pending increase in marginal tax rates, which will 
devastate the estimated 75 percent of small businesses that file as 
individuals. Every one of the five tax rates in the IRS Code will be 
increased as of January 1. Since most of the businesses now pay--
especially small businesses--as individuals--so-called passthrough 
entities--these rate increases directly will impact small businesses.

[[Page 7489]]

  Secondly, they are concerned about the death tax. That is going to 
ensnare 900 times more small business owners and 2,200 times more 
family farmers if the rate increases to 55 percent and the exemption 
falls to $1 million, as is scheduled to occur on January 1.
  Third is the alternative minimum tax which will hit 27 million more 
Americans--including many small businesses--if it is not patched or 
repealed. Well, small business cannot afford this, what has been called 
``taxmageddon'' and its devastating consequences.
  I would hope, instead of this to-do list the President is sending us, 
he would take up the cause of preventing this big tax increase at the 
end of the year and help the small businesses and families that need 
that help.
  Finally, I ask unanimous consent to have printed in the Record at the 
conclusion of my remarks a piece in National Review Online by Larry 
Kudlow dated May 17 called ``Extend the Bush Tax Cuts Now.''
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. KYL. In this piece, Larry Kudlow, a noted economist, notes that 
with respect to this ``taxmageddon''--the increase in everybody's taxes 
at the end of this year--it is the uncertainty of it all that is 
preventing the investment by business which would create the jobs we 
would all like to see. I would just like to quote three paragraphs and 
a couple sentences in a fourth. He says:

       The uncertainty over the Bush tax cuts already has caused a 
     number of business leaders to threaten a hiring freeze and a 
     dampening of investment until they can figure out the after-
     tax cost of capital and rate of return on investment. Hiring 
     has slowed noticeably in recent months. And a number of Wall 
     Street economists are marking down the anemic recovery even 
     more, suggesting that the 3 percent growth at the end of last 
     year, which faltered to 2 percent growth in the first 
     quarter, could be even less in the period ahead.

  Then he goes on to say:

       A bunch of CEOs have even formed their own march on 
     Washington. Eighteen of them just wrote to Treasury man 
     Timothy Geithner, begging him to oppose tax-rate hikes on 
     dividends--

  Which would go from 15 to 45 percent--

     and capital gains (from 15 to near 30 percent. . . .)
       ``Equity capital is the life blood of investment and job 
     creation for U.S. companies.''

  That is what these CEOs wrote in the letter to Treasury Secretary 
Geithner.
  Kudlow goes on to say:

       And they argued that the administration's tax-hike plans 
     would do great harm to American competitiveness and capital 
     formation.

  Then he quotes the Ernst & Young firm to say this:

       . . . the top U.S. integrated tax rate on corporate profits 
     and dividends is on course to hit 68.6 percent, significantly 
     higher than all other OECD countries--

  Those are the developed countries of the world--

     as well as Brazil, Russia, India, and China. Capital gains 
     would rise to 56.7 percent.

  In other words, he is pointing out that not only would these higher 
tax rates hurt the small businesses and the families because of the 
individual tax rate, marginal rate increases, but raising the dividends 
and capital gains taxes would be even more detrimental because we are 
asking companies in America to compete with firms all over the world, 
and their rate would be much higher with this tax increase than the 
rate in all of the other developed countries, as well as countries such 
as Brazil, Russia, India, and China. How can American businesses 
compete in that situation?
  Then, finally, Kudlow notes the effect of all of this uncertainty on 
what matters most to most Americans; that is, the fact that they cannot 
get work. He says:

       Bizarrely, some 25 million people have vanished from the 
     labor force--from unemployment, underemployment, or simply 
     dropping out all together. And half of U.S. households are 
     now on some form of federal-transfer-payment assistance. So 
     as we pay so many people not to work, we're sapping the 
     vitality of the economy.

  This is absolutely true. With half of the people in the country on 
some form of Federal assistance, with 25 million people having just 
vanished from the labor force not even looking for work anymore, 
businesses sitting on the sidelines because they cannot calculate what 
kind of return on investment they could get because of the potential 
for the huge tax increase that is going to occur on January 1, it is no 
wonder we cannot move forward with an economic recovery.
  So I would just say to President Obama that providing long-term tax 
rate certainty would go a long way toward establishing a sound economy 
in this country, putting Americans back to work, and, ironically, 
establishing a better record on which the President could run. A year 
and a half ago, the President actually proposed--and I think Congress 
was very happy to go along with--a continuation of the existing tax 
rates because, as he said at the time, not to do so would be very 
damaging to the economy. I would submit it is equally damaging for that 
to happen at the end of this year.
  So I would ask the President, help give the American people and 
American businesses the certainty they need to invest, to create jobs, 
to advance our economic growth, and create prosperity for our future.

                               Exhibit 1

                  [From National Review, May 17, 2012]

                      Extend the Bush Tax Cuts Now

                           (By Larry Kudlow)

       House Speaker John Boehner is playing a heroic role right 
     now. In his efforts to prevent the Bush tax cuts from 
     expiring, Boehner is aggressively taking on President Obama's 
     leadership ineptitude on the economy. In essence, Boehner is 
     pushing a Republican policy to wrap up a debt-limitation bill 
     and extend the Bush tax cuts in one fell swoop before the 
     election--and before all the last-minute, crisis-oriented, 
     political machinations that would come in a lame-duck 
     Congress, threatening another credit downgrade and leading to 
     a business-hiring freeze and plunging stock market, all of 
     which happened last year.
       Tax-cut certainty is so vital right now because the anemic 
     economic recovery may be moving towards deflation. That's the 
     message of a gold price that has collapsed by near 20 
     percent, falling from around $1,900 an ounce to the mid-
     $1,500s. With a risk-averse economy at home, and with the 
     Greek and European financial crises abroad, the demand for 
     dollars seems to exceed the dollar supply printed by the Fed. 
     This could be solved by more quantitative easing. But a 
     better approach for a system already oversupplied with unused 
     liquidity would be the extension of tax-rate growth 
     incentives, not more monetary pump-priming.
       The uncertainty over the Bush tax cuts already has caused a 
     number of business leaders to threaten a hiring freeze and a 
     dampening of investment until they can figure out the after-
     tax cost of capital and rate of return on investment. Hiring 
     has slowed noticeably in recent months. And a number of Wall 
     Street economists are marking down the anemic recovery even 
     more, suggesting that the 3 percent growth at the end of last 
     year, which faltered to 2 percent growth in the first 
     quarter, could be even less in the period ahead.
       A bunch of CEOs have even formed their own march on 
     Washington. Eighteen of them just wrote to Treasury man 
     Timothy Geithner, begging him to oppose tax-rate hikes on 
     dividends (from 15 to 45 percent) and capital gains (from 15 
     to near 30 percent, taking the ``Buffett Rule'' into 
     account). ``Equity capital is the life blood of investment 
     and job creation for U.S. companies,'' they wrote. And they 
     argued that the administration's tax-hike plans would do 
     great harm to American competitiveness and capital formation.
       According to accounting firm Ernst & Young, the top U.S. 
     integrated tax rate on corporate profits and dividends is on 
     course to hit 68.6 percent, significantly higher than all 
     other OECD countries, as well as Brazil, Russia, India, and 
     China. Capital gains would rise to 56.7 percent.
       And Speaker Boehner knows this. So he's begun a valiant 
     fight to get supply-side tax reform at the top of the 
     congressional agenda well before the election. Similarly, 
     House budget chairman Paul Ryan is suggesting at least a six-
     month extension of the Bush tax cuts, so as not to disrupt 
     business. (By the way, the Ryan tax-and-spending-reform 
     budget got 41 votes in the Senate, while Obama's budget got 
     none.)
       In a recent interview, former top Obama economic adviser 
     Larry Summers told me the U.S. recovery is going ``ahead of 
     schedule.'' Really? But former Obama economist Austan 
     Goolsbee gives a more realistic assessment by referring to a 
     subpar 2 percent forecast that is way too slow to spark 
     faster job creation.
       Bizarrely, some 25 million people have vanished from the 
     labor force--from unemployment, underemployment, or simply 
     dropping out all together. And half of U.S. households are 
     now on some form of federal-transfer-

[[Page 7490]]

     payment assistance. So as we pay so many people not to work, 
     we're sapping the vitality of the economy.
       Mitt Romney recently gave a fine speech, blasting Obama's 
     profligate spend-and-borrow policies. He described ``a 
     prairie fire of debt sweeping across Iowa and the nation,'' 
     and he tied our newfound debt to the ``tepid recovery.''
       But lower spending alone, while important, is not going to 
     solve the economic-growth problem. Yes, moving spending to 20 
     percent of GDP from 24 percent will free up private 
     resources. But lower tax-rate incentives on the extra dollar 
     earned and invested is a more powerful economic-growth tool. 
     Romney should push his 20 percent tax-rate-reduction plan. 
     That would add liquidity to fight deflation, and would 
     provide new economic-growth incentives.
       As for John Boehner's goal of an early extension of the 
     Bush tax cuts, it's going to be an uphill climb. Democrats 
     want to raise taxes, not cut them. But at least the GOP will 
     have a coherent growth-and-jobs message. They can tell the 
     public how important it is to avoid falling off the massive 
     tax cliff which looms ahead. Deflationary fears can ease. And 
     they can make it plain to voters that the GOP has a growth 
     message in these perilous economic times, while the Obama 
     Democrats do not.

     

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