[Congressional Record Volume 157, Number 99 (Wednesday, July 6, 2011)]
[Senate]
[Pages S4348-S4382]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]




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

  The PRESIDING OFFICER. Under the previous order, the time until 6 
p.m. will be equally divided and controlled between the two leaders or 
their designees, with Senators permitted to speak therein for up to 10 
minutes each.
  The Senator from California.
  Mrs. BOXER. Mr. President, I want to make note of the fact that this 
is the first time since the Watergate scandal the Senate has canceled 
its Fourth of July recess, and the reason is so that we can continue 
working on this issue of reducing our deficit and our debt, and--from 
my point of view, and I know I speak for many--doing it in a way that 
doesn't savage our senior citizens, our children, our families, our 
environment, and our economic growth, but doing it in a way that is 
fair, doing it in a way that is fair so that we don't wind up with 
people such as Warren Buffett or Donald Trump paying less of an 
effective tax rate than their secretaries or a nurse or a firefighter. 
That is why we are here. That is why I am here.
  I want to apologize to my constituents in California. I had to cancel 
several events that were scheduled, but we will do those things 
certainly at another time. It is critical to end the current standoff, 
and that, it seems to me, means sticking to three principles: First, we 
must agree great nations do not default on their debt. Both sides need 
to compromise so that doesn't happen. Nobody gets everything they want 
in a compromise. I speak as a Senator, a former House Member, a former 
county supervisor, a mother, a grandmother, and a daughter. The fact is 
you don't get everything you want if

[[Page S4349]]

you truly are negotiating and compromising. You don't take your marbles 
and go home, and you don't take your little teddy bear and leave. You 
stick with it and understand that in true compromise everyone gives 
just a little bit.
  Now, let's look at the government as it is today--as the people 
wanted it. The people decided they wanted a Democratic President, and 
we have one in President Obama. They decided they wanted a Republican 
House of Representatives, and they have that. They decided they wanted 
a Democratic Senate, and they have that. So we have the three arms, and 
two-thirds of them are controlled by Democrats and one by Republicans.
  If I then said, because of this, I want two-thirds of what Democrats 
want, I might have a leg to stand on. But I am not even saying that. I 
am saying let's meet each other halfway. That is fair. That is very 
fair. And I think most Americans of independent mind would think so.
  This is not a parliamentary system. In the parliamentary systems we 
see around the world, the ruling party gets everything they want and 
the others get to talk and maybe somehow work themselves into the 
equation. So first and foremost, we need to compromise.
  Second, we need to take a lesson from history and follow what worked 
the last time we balanced the budget in the mid-1990s--the early to 
mid-1990s. Believe me, we did it. With President Clinton, we did it. We 
passed a budget that some of my friends on the Republican side said 
would be a disaster; that it would never balance. It did. As a matter 
of fact, it produced surpluses. We passed a budget without one 
Republican vote, and it laid out the plan that some of my Republican 
friends said would put us into a depression. We went into the longest 
period of sustained economic growth and 23 to 24 million jobs were 
created.
  So we know how to do this because, guess what. We did it before. We 
had a plan that cut unnecessary spending, and it asked the upper income 
people--the very wealthiest among us--to pay a fair share, and it 
created all those jobs and we had surpluses.
  Our friends on the other side say: Don't talk to us about that. We 
don't want to talk about it. But we have to talk about it because 
otherwise we are going to do what the Republicans did to the seniors in 
their House budget, which is to end Medicare as we know it and to put 
the burden of all this on their backs and on the backs of the middle 
class.
  So, first, we need to compromise; second, we need to do what works--
cut the things you don't need, invest in the things that will create 
the jobs, and ask the wealthy to pay their fair share.
  Third, we have to put our country ahead of politics. Let me read from 
a couple of very interesting recent editorial comments. Actually, they 
were yesterday. This is from USA Today.

       GOP rigidity on taxes threatens debt deal.

  Let me repeat that:

       GOP rigidity on taxes threatens debt deal. . . . if the GOP 
     walkout is anything more than a negotiating tactic, it is 
     breathtakingly irresponsible, considering the risks of 
     default. . . . the Nation has used trillions of dollars in 
     borrowed money to finance two wars, Medicare's prescription 
     drug program and President George W. Bush's broad tax cuts--
     all initiated with the GOP controlling both the White House 
     and the Congress. Now Republicans have belatedly decided that 
     borrowing is bad, too, but they dogmatically resist even the 
     most sensible and painless tax hikes.

  This says it all. This, again, is from USA Today.
  Then there is a David Brooks article--a leading Republican 
columnist--which says:

       If the debt ceiling talks fail, independent voters will see 
     that Democrats were willing to compromise but Republicans 
     were not. If responsible Republicans don't take control, 
     independents will conclude that Republican fanaticism caused 
     this default. They will conclude that Republicans are not fit 
     to govern. And they will be right.

  Again, this is written by a leading Republican--well, actually, I 
would call him a leading intellect in the Republican Party.
  So we see that people on the outside are noticing what is happening. 
You cannot take your marbles and go home when the full faith and credit 
of the United States of America is at stake.
  A lot of people think raising the debt ceiling is so we can do more 
spending in the future. No, no. Raising the debt ceiling is to take 
care of the debts that were incurred in the past--two wars, unpaid for; 
a huge tax cut to the millionaires and billionaires, unpaid for; a 
prescription drug benefit, unpaid for. While my Republican friends 
said, no; Medicare could not negotiate for lower prescription drug 
prices. So the cost of it is just going through the roof.
  So if we don't put revenues on the table, if we don't talk about 
closing those tax loopholes that benefit millionaires and billionaires, 
all the cuts go to the middle class. All we have to do is look at the 
Ryan budget that passed the House to understand what is going to happen 
if we don't do this.
  Now, the Republicans had this budget, and they gave it a name over in 
the House: ``The Path to Prosperity: Restoring America's Promise.'' 
Well, I took some liberty and wrote my own title. I think their budget 
is ``The Path to Poverty: Breaking America's Promise'' because that is 
what that budget does.
  The Republican budget would end Medicare as we know it. A 65-year-old 
who becomes eligible for Medicare would pay more than $12,000 in health 
care costs the first year the plan goes into effect--twice as much as 
what they pay under current law. Imagine a senior citizen--a grandma or 
great-grandma--who maybe lives off Social Security, who is paying 
$6,000 for health care, is suddenly paying $12,000. We might as well 
tell her to forget it. She is going to have to get down on her knees 
and pray she doesn't get sick.
  But that wasn't enough to pay for the tax cuts for their rich 
friends, so their budget cuts Medicaid by 49 percent by 2030. By the 
way, a lot of that is paying for nursing homes for the poorest of the 
poor.
  The Republican budget would cut education grant awards by one-half, 
so that 1.4 million students would lose access to financial aid. That 
is what this country has been about--giving hope to our young people, 
and hope means an education. So Pell grants, cut in half.
  They say over and over: Washington doesn't have a tax problem, we 
have a spending problem. Well, let's take a look at that. If we look at 
nondefense discretionary over the years, what we find when we add in 
inflation is that it hasn't grown at all, while the military spending 
has gone up 74 percent. So, clearly, we have a roadmap just in terms of 
fairness that shows we can get to where we have to get.
  Let's not keep cutting what we have already cut. Let's cut the waste, 
let's cut the fraud, let's cut the abuse, and let's cut these tax 
expenditures.
  Mr. President, I ask unanimous consent for an additional 5 minutes, 
and then I will yield to my friend.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. I thank the Chair.
  So defense spending, they may look at it, but they are not happy 
about it even though it has gone up 74 percent over the last 10 years.
  Now, again, we should look at Warren Buffett. Warren Buffett made the 
point that he paid only a 17.7 percent tax on his $46 million in 
earnings while his receptionist paid 30 percent on her wages. Imagine, 
in 2008, the 400 richest income-tax filers paid an effective rate of 
about 18 percent.
  Take ExxonMobil: They paid an effective rate of 18 percent on $7 
billion, whereas the average family making a combined $100,000 had a 
higher effective rate. Let's give tax breaks to the middle class, not 
to the wealthiest who have everything and more and whose children's 
children's children's children will be fine. This is America. This 
isn't prerevolutionary France, where the King had everything. If there 
was a family supported by two teachers, and they made $106,000, they 
had a higher tax rate than ExxonMobil. But, still, if we look around 
the country at Republican legislators and governors, they are going 
after the teachers--who are so wealthy--while the people who are making 
the millions and the billions they give more and more to. I don't 
understand it. It is trickle down, I guess. Somehow somebody will spend 
something at the very top, and it will trickle down. That is all fine, 
but they have enough to trickle down already, so we don't have to add 
to it.
  A family supported by a truckdriver and a dental hygienist who made a 
combined income of $107,000 had a higher tax rate than ExxonMobil.

[[Page S4350]]

  The tax break for corporate jets is $3 billion over 10 years. 
Subsidies to the biggest five oil companies are costing us $21 billion 
over 10 years.
  So what I am saying is, we don't have to balance the budget on the 
backs of the senior citizens who need their Medicare or on the students 
who need their Pell grants. We don't need to do that.
  I am the chairman of the Environment and Public Works Committee. The 
House budget, which I say breaks America's promise, is so bad on 
transportation, it cuts 36 percent across the board. Thousands and 
thousands of construction workers, whether they are in Utah or 
California or Maryland--or you name your town, your city--will be cut. 
This is an area where there has been so much unemployment because of 
the housing crisis that we could fill 20 Super Bowl stadiums with 
unemployed construction workers--2 million. That is how many there are.
  So look at what President Clinton did. He increased taxes on the 
wealthiest and created tax incentives for small businesses. He invested 
in education, retirement savings, research and development, and the 
Republicans fought us tooth and nail. As a matter of fact, Senator 
Grassley said at the time:

       I really do not think it takes a rocket scientist to know 
     this will cost jobs.

  That is what he said created 24 million jobs--23 million on the low 
side--and surpluses of $236 billion.
  Let me conclude by saying this is a tough time in our history. We are 
at the precipice for the first time in my lifetime of hearing threats 
of defaulting on the full faith and credit of America. When we lift the 
debt ceiling, we do it in order to pay for the debts that were 
incurred. Sadly for us, after having a surplus under Bill Clinton, the 
policies of George W. Bush caused us to go into deep holes and deficit 
and debt. We were on the way to a great place, but never forget when 
George W. Bush came out and said these surpluses we are running belong 
to the American people. What he meant was the rich people because that 
is who got the lion's share of that. So we can keep the tax rates low 
for the middle class, we can make sure the wealthy pay their fair 
share, we can come to the table and negotiate with an open heart and an 
open mind and knowing well that we will not get everything each of us 
wants.
  I will close by reading a quote from Ronald Reagan. President Reagan 
wrote the following:

       The full consequences of a default--or even the serious 
     prospect of default--are impossible to predict and awesome to 
     contemplate. Denigration of the full faith and credit of the 
     United States would have substantial effects on the domestic 
     financial markets and on the value of the dollar in exchange 
     markets. The Nation can ill afford to allow such a result.

  President Reagan was right. It is time to stop playing politics with 
this, the greatest country that gave us everything we have ever hoped 
for.
  I say to Americans, call the Senate. Ask for a fair budget plan, with 
the parties meeting each other halfway.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. HATCH. Mr. President, I ask unanimous consent that I be permitted 
to speak.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Mr. President, it is nice to hear asking for a fair budget 
plan. We haven't had a budget from this administration now in almost 
800 days. They have control of the Senate. Yet we haven't seen a budget 
from this administration.
  I get a little tired of the Obama approach toward shared sacrifice. 
Shared sacrifice is something. It sounds good. But I would prefer the 
Republican approach to shared prosperity, and that is what I think we 
are all about.
  When we talk about what shared sacrifice is, think about this. It is 
pretty irrefutable that the bottom 51 percent of all wage earners of 
all households do not pay income taxes. The top 1 percent of the so-
called wealthy pay 38 percent of all income taxes; the top 10 percent 
are paying 70 percent of all income tax; the top 50 percent pay 
somewhere near 90 percent of all income taxes; 51 percent don't pay 
anything.
  But Democrats say, well, they pay payroll taxes. Everybody does that 
because that is Social Security, and they pay about one-third of what 
they are going to take out over the years in Social Security. On 
ObamaCare, a family of four earning over $80,000 a year gets subsidies. 
Think about that. And that is what we call the poor? We wonder why the 
money doesn't go far enough? When are we going to wake up and realize 
that the other side just spends and spends and spends. They want to tax 
and tax and tax so they can spend some more. My gosh. When are we going 
to wake up in this country and realize they are spending us into 
oblivion?
  I hear how they are so caring for the poor and so forth. The poor 
need jobs, and they also need to share some of the responsibility. We 
don't want the very poor people who are in poverty to pay income 
taxes--but 51 percent of all households? That is going up, by the way, 
because of our friend down in the White House and his allies.
  I wish I didn't like him so much. I would like to be able to let go 
here. I like him personally, and I want him to be successful, but he is 
not going to be successful by just taxing the daylights out of 
everybody around here.
  This Congress is currently engaged in as consequential a political 
debate as this Nation has seen in decades. Whether and what we raise 
the Nation's debt ceiling is a question that has consumed the markets 
in the Nation.
  I serve the people of Utah and I hear about this issue every day and 
the sustainability of a government that has grown far beyond any 
reasonable or constitutional limit and the cost of paying for all this 
government is foremost on the minds of tax-paying citizens who will be 
left holding the bag, even when President Obama is back in Hyde Park 
and Members of Congress no longer serve. The decision to spend less is 
only for a moment, but the debt incurred to pay for these government 
programs lasts forever. Fifty-one percent of all households don't pay 
income taxes.
  The Democrats say: Well, they pay payroll taxes. Yes, they do--
everybody does because that is Social Security--and 23 million of them 
get refundable tax credits that are more than they pay in payroll 
taxes.
  I wish I could report to my constituents that Washington is serious 
about addressing this spending problem. Unfortunately, in the last 
week, we seem to have hit a new low. President Obama's contribution 
last week was a press conference temper tantrum, where he offered 
policy proposals that might appeal to his leftwing base but will do 
nothing to avoid our coming national bankruptcy.
  Not to be outdone, Democratic leadership in the Senate has offered a 
nonbinding resolution designed solely to score some cheap political 
points that will jazz up the activist left through demagogic class 
warfare against individuals with high incomes. He is going to raise $3 
billion over 10 years by taxing jet planes. It would take 1,000 years 
to reach what we have as a deficit for this year just from that one tax 
to jack up enough money to pay for just the deficit this year.
  Facing a full-blown debt crisis, this is how the Senate Democrats, 
following the President's lead, have chosen to spend this week, 
debating a nonbinding resolution. Episodes such as this leave me 
convinced the only real solution to our Nation's spending problem is a 
balanced budget constitutional amendment. Only a specific 
constitutional restraint will force Congress to make the tough 
decisions necessary to restrain the size of government, restore the 
integrity of the States, and protect the liberties of the American 
citizens and taxpayers.
  To demonstrate my commitment to restoring constitutional limits on 
the Federal Government, I have signed the cut, cap, and balance pledge. 
Along with a growing number of my colleagues in the Senate, Members of 
the House, grassroots groups, and Presidential candidates, I have 
committed myself to cutting spending, capping spending, and passing a 
balanced budget constitutional amendment as a condition for any debt 
limit increase.
  As this debate over how best to address our growing debt and annual 
deficits continues, I wish to address a technical but critical matter 
in these negotiations. I am talking about tax expenditures. I am 
ranking member on the Senate Finance Committee and I know a little bit 
about these. Over the next few days I am going to discuss

[[Page S4351]]

this matter of tax expenditures and debt. Today, I am going to talk in 
general about what a tax expenditure is and what a tax expenditure is 
not. I will next turn to the tax policy areas implicated by current tax 
expenditures.
  For instance, home ownership is favored in our tax base with a tax 
expenditure. There is a deduction for home mortgage interest, a 
deduction for real property taxes, and an exclusion for income from 
home sales. These are tax expenditures.
  The Tax Code also encourages charitable contributions. Charitable 
deductions are available to citizens when they give to a nonprofit 
crisis pregnancy center, when they put money in the basket at church or 
when they give to their alma mater, just to mention a few charitable 
donations.
  In a third speech, I will attempt to shed some light on a widespread 
misconception about tax expenditures. That misconception is that tax 
expenditures disproportionately benefit high income taxpayers. But 
let's not get ahead of ourselves.
  My remarks are remarks about what a tax expenditure 
is. Unfortunately, my remarks are also largely about Democrats' plans 
to increase taxes. President Obama and his liberal allies are calling 
for a balanced approach on a revenue piece to deficit reduction. They 
want shared sacrifice. I want shared prosperity.

  We hear this from the press all the time. New revenues need to be a 
part of any deal to reduce the deficit. These are simply code words for 
a tax hike. I guarantee this. If we raise taxes, my friends on the 
other side will spend every dime of it. That is how they have kept 
themselves in power. Yet claiming they are helping the poor. Are 51 
percent of our households so poor they can't participate in saving this 
country?
  It is clear the professional left is insisting that President Obama 
include tax increases in any negotiated agreement to raise the debt 
ceiling. Threading this tax hike needle through an electorate resistant 
to giving the government more money to spend is no easy task. Although 
his campaign team talks a big game about the popularity of tax 
increases, the President's own words suggest otherwise.
  Last week, in a shameful display of class warfare, the President did 
specifically call for some tax increases on the rich. That includes 
800,000 small businesses, by the way, where 70 percent of the jobs come 
from. But that is the exception that proves the rule. By and large, the 
President avoids the effectual truth of his mission to get rid of tax 
expenditures--massive tax increases on the middle-class American 
families, to whom he promised immunity from tax increases when he was 
running for President. Instead, he and other members of the party of 
tax increases refer to tax expenditures as spending through the Tax 
Code. How seriously should we take his rhetoric?
  When the President said he wanted to address the Nation's debt by 
reducing spending through the Tax Code, it proved too much for even Jon 
Stewart. This is Stewart's analysis of the President's contention that 
we could reduce the deficit by attacking spending through the Tax Code:

       You manage to talk about a tax hike as a spending 
     reduction. Can we afford that and the royalty checks you are 
     going to have to send to George Orwell? That's the weirdest 
     way of ``just say tax hike.'' That's like saying, I am not 
     going on a diet. I'm going to add the calories to my excluded 
     food intake.

  That was Jon Stewart. He hit the nail on the head. For sure it is 
easy to make fun. But what the President is trying to do with tax 
expenditures is no laughing matter.
  Liberals talk about tax expenditures as though they were just getting 
rid of wasteful spending. First, as a legal matter, tax expenditures 
are not expended. Outlays are checks cut from the Treasury Department 
and are defined as spending under the Congressional Budget Act. Yet 
most tax expenditures only lose revenue and do not include an outlay 
portion. Tax expenditures that only lose revenue contain no spending as 
defined by the Congressional Budget Act and as scored by the official 
scorekeepers for Congress, the Joint Committee on Taxation and the 
Congressional Budget Office.
  Second, as a policy matter, when it comes to tax expenditures, one 
person's loophole is another person's opportunity to save for college 
and retirement, finance a home, and tithe to your church.
  Here is the bottom line. Taking away or reducing tax expenditures is 
a tax increase, unless a tax cut of an equal or greater amount is 
enacted.
  One crucial myth I would like to dispel is that tax expenditures are 
spending. This chart, ``Revenue Loss Does Not Equal Spending,'' the 
Federal Government cannot spend money it never touched and never 
possessed.
  What tax expenditures do is let taxpayers keep more of their own 
money. The American people are the ones who earn their money through 
their ideas, their risks, and their labor. Whether we are talking about 
a successful business owner or a part-time worker just starting out, 
the money they earn is theirs. It is their money, and only by their 
consent is the government permitted to take some of it in taxation to 
pay for certain public goods.
  But Democrats have a different view. It is this view--one that is 
fundamentally at odds with our classical liberal Constitution and our 
Founders' respect for property rights--that contributes to the 
confusion over tax expenditures.
  Liberals think that all of the money that you earn belongs to the 
government. You have no independent right to the fruit of your own 
labors, because only by dint of big government are you ever able to 
make something of yourself. This view is foreign to most Americans--
Republicans or Democrats. It is a view that Alexander Hamilton and 
Benjamin Franklin and Abraham Lincoln would take issue with. But this 
is the political philosophy of the modern left.
  So when you hear tax hike proponents come to the Senate floor and say 
we are giving these businesses and individuals all this money in tax 
expenditures, they are incorrectly assuming that the government has 
that money to give in the first place. The government does not have 
this money to give. That money belongs first to the people that earn 
it--those businesses and individuals who are the American taxpayers.
  There are critical differences between spending and tax expenditures. 
For one thing, the government never touches the money that a taxpayer 
keeps due to benefitting from a tax expenditure; whereas, with spending 
the government actually collects money from taxpayers and then spends 
it.
  Here is a more telling difference. Reducing or eliminating a tax 
expenditure without lowering rates enough to reach a revenue neutral 
level will cause the size of the Federal Government to grow, while 
reducing or eliminating spending causes the size of the Federal 
Government to shrink.
  I am open to looking at eliminating or reducing some tax expenditures 
as part of comprehensive tax reform but only if tax rates are lowered 
enough to reach a revenue neutral level. Alternatively, reduction or 
elimination of tax expenditures could be balanced with new tax cuts 
that are of equal or greater value to the revenue generated by the 
eliminated expenditures. But if tax expenditures are reduced or 
eliminated without tax rates being lowered enough to reach a revenue 
neutral level, that is a tax increase, plain and simple.
  We have made clear that as a matter of law and political theory, tax 
expenditures are not spending.
  Now let's turn to an examination of what they are.
  Fortunately, we have definitions available.
  The Joint Committee on Taxation generally defines tax expenditures as 
deliberate departures from generally accepted concepts of net income, 
usually by way of special exemptions, deductions, credits or 
exclusions. Therefore, tax expenditures generally arise for individual 
income taxes and corporate income taxes.
  The Treasury Department differs from the Joint Committee on Taxation 
slightly in how it defines a tax expenditure. For example, the Joint 
Committee on Taxation labels deferral as a tax expenditure but Treasury 
does not. But whichever definition one uses, it is clear that the 
President and the liberal proponents of tax increases are using their 
own politically motivated dictionary.
  Tax expenditures have been erroneously described by many as 
loopholes. This is deliberately inaccurate.

[[Page S4352]]

A loophole is something that Congress did not intend and would 
generally shut down, at least going forward, once it learned of the 
loophole. Tax expenditures, by contrast, were generally placed by 
Congress into the tax code deliberately. For example, the largest tax 
expenditure is the exclusion for employer-provided health insurance and 
benefits. The second-largest tax expenditure is the home mortgage 
interest deduction. We all know why they are there, and they are there 
for good reason.
  Tax expenditures are not loopholes. We are not talking here about 
some fancy tax scheme that a lawyer or accountant has discovered and 
now promotes to his clients as a way to game the system. These are 
broad-based tax incentives that benefit many Americans. The deduction 
for charitable contributions is not some loophole. It was a deliberate 
inclusion in the code that acknowledges the need for religious citizens 
to contribute to their churches.
  Even some of the smaller dollar tax expenditures were designed by 
Congress to go to particular industries or types of taxpayers--for 
example, the tax expenditure to encourage the purchase of corporate 
jets that Democrats included in the stimulus and that the President is 
now criticizing.
  Whether you agree with these particular tax expenditures or not, an 
honest debate requires recognition that they were designed by Congress 
with economic or social goals in mind and are not inadvertent 
loopholes.
  As a matter of law, policy and constitutional government, I 
fundamentally disagree with those who are pushing these tax increases 
as part of a deal to raise the debt ceiling.
  Our problem is spending that has grown out of control, not a lack of 
revenue.
  According to CBO's June 2011 long term budget outlook, taxes are 
already heading higher than they have historically been. From 1971 to 
2010, revenues as a percentage of GDP have averaged 18 percent. Since 
the post-World War II era, from 1946 to 2010, revenues have averaged 
17.7 percent of GDP.
  Yet CBO also projects that revenues as a percentage of GDP will 
exceed 20 percent by 2021. Even if all the bipartisan tax relief 
contained in the 2001 and 2003 tax acts is extended, revenues as a 
percent of GDP will increase to 18.4 percent.
  So I ask the question: With taxes already going higher than where 
they have historically been, should we raise them even more?
  For me, the answer is no.
  I know that most Utahns would agree, I believe most people in this 
country would agree, and I suspect that even most Democrats would as 
well. They certainly would if President Obama and the liberals who pose 
as advocates for the middle class came clean about just how high taxes 
on working families would have to go to pay for the hard core left's 
preferred level of government. The numbers do not lie.
  The deficit is a symptom of out-of-control spending that has grown 
dramatically in recent years and is reaching crisis levels.
  It is not a result of too little in taxes. Democrats can close all 
the loopholes they want, and it still won't balance the books.
  And the Democrats who are talking about the need to close loopholes 
and eliminate spending through the Tax Code need to be asked which 
middle class tax relief they want to get rid of as part of their 
deficit reduction plan.
  Do they want to get rid of the charitable deduction or maybe the 
mortgage interest deduction?
  Maybe they want to go after people's 401(k)s or IRAs or 529s.
  What is it going to be?
  Let me say something here. I am very concerned about where we are 
going. We have risen this year to 25.3 percent of GDP in spending. The 
last time we hit that figure was in 1945 at the height of the Second 
World War, when the government was taking over almost everything to 
keep us from losing that war. It is certainly over 23 percent right 
now. What is it going to be?
  At a press event tantrum last week, the President answered absolutely 
none of these questions. He needs to. He needs to get serious about 
cutting spending.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. HATCH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Mr. President, I ask unanimous consent that the division 
of time under the quorum call be divided equally.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BOOZMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOOZMAN. Mr. President, it has been almost 800 days since the 
Senate Democratic majority produced a budget. I do not expect one to 
appear from the majority today, but at least the Democratic majority 
canceled the Fourth of July recess to work toward an agreement to deal 
with our budgetary crisis. With the possibility of default looming, our 
caucus, led by Senator Sessions, has been pushing the Democratic 
majority to keep the Chamber working over the recent recesses. After 
refusing past calls to remain in session, the Democratic majority 
finally recognized that we cannot sort this out if we are not here to 
focus on it. I, for one, am glad the Democratic majority listened.
  The American people deserve an honest and open conversation about the 
very difficult situation we are in. More importantly, they deserve a 
commitment that we will work in good faith to end this impasse. 
Unfortunately, I am not sure we will get that from the Democratic 
majority or the President. We are in session this week specifically to 
deal with the budget ceiling crisis, and the only vote the majority 
leader had scheduled from the outset was a resolution on the Libya 
conflict. I say ``had'' because the Democratic majority rightly 
canceled that vote after intense pressure from our side to keep the 
Senate focused on the debt ceiling issue.
  President Obama has been absent from this debate for months. Only 
recently he started showing up to tell Americans that his solution to 
the crisis is raising taxes instead of cutting spending. Meanwhile, we 
have inched closer and closer toward defaulting on our obligations.
  It is interesting that we are here today specifically to work out a 
solution to our financial crisis 1 week after scenes of Athens on fire 
as a result of rioting over Greece's own debt crisis dominated the 
airwaves. One week after passing tough austerity measures to secure 
further financial aid--the very same measures that sparked the 
rioting--the Greek Government is far from out of the woods. Standard & 
Poor's says the proposals for restructuring Greek debt would 
effectively constitute a default instead of helping the country avoid 
one.
  I mention all of this not to generate fear but, rather, to shed light 
on the gravity of our situation. We could very well end up like Greece 
if we do not handle this crisis properly. This is the last thing we 
want to experience in our great country, and that is why we need to 
reform our fiscal policy in the way that we have done business in the 
past. There is too much at stake not to take action now. We are at the 
point where our Nation can no longer borrow money. The IMF has harsh 
words for our soaring budget deficits, and credit rating agencies such 
as Moody's and S&P have threatened to downgrade our government's AAA 
rating.
  President Obama likes to blame our economic mess on the previous 
administration, but the reality is that over the past 2 years, our debt 
has increased 35 percent under his watch. That is not the previous 
administration's fault, nor is it their fault that the annual deficit 
is now three times greater than the highest deficit during the Bush 
years. If American families ran their households like Washington runs 
its budget, the utilities would be shut off and the collection agencies 
would be knocking on their doors. If they maxed

[[Page S4353]]

out a credit card, they wouldn't have the luxury of telling someone 
else to pay their bills. Yet this is what the President is demanding by 
sticking to tax increase proposals.

  I said this last week, but since the President continues to push tax 
increases as the answer, I will say it again: President Obama, take tax 
hikes off the table. We got into this mess by excessively spending. We 
can't fix the problem unless we stop excessively spending.
  The White House remains focused on tax hikes. If we look at their 
agenda, we can see why. The big-ticket items they have already passed, 
specifically the President's stimulus and health care bills, have put 
our country on the path of unprecedented levels of spending that will 
keep us in the red for my lifetime, my children's lives, and well 
beyond. The administration's refusal to cut excessive spending, much of 
which the Nation never asked for, will put us on the course for a 
Greek-like catastrophe. Without action, annual interest payments on the 
national debt alone will exceed 40 percent of GDP by 2080.
  So with that in mind, the President is working behind closed doors 
with his allies in Congress to figure out ways to raise revenue. As we 
all know, revenue is a Washington euphemism for taxes. Instead of 
further exasperating our economy by raising taxes and putting us in a 
position that will affect our recovery and our Nation's future, the 
solution must be tailored to the problem. Washington does not have a 
revenue problem; we have a spending problem. Any proposal that does not 
start in that truth should be taken off the table.
  If the White House-engineered agreement for raising the debt ceiling 
does not include significant cuts and a spending cap mechanism, such as 
a balanced budget amendment, to prevent us from having to raise it 
again, then I can assure you they will not get my vote. Anything short 
of that is irresponsible. I know I am not alone in these demands. Many 
of my colleagues feel just as strongly and will not back down either. 
The President and the Senate Democratic majority need to understand we 
are committed to these principles because millions of Americans feel 
exactly the same as we do. We are here to do the people's work. Let's 
listen to them instead of trying to tell the people what is best for 
them.
  I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BROWN of Ohio. I ask unanimous consent that the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent to speak as 
in morning business for up to 10 minutes.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.


                         Collective Bargaining

  Mr. BROWN of Ohio. Mr. President, we just went through the July 4 
weekend celebrating our independence on July 4, 1776. On July 5, 76 
years ago, something else happened that was very important in our 
country and very symbolic of what we stand for as a nation. I heard the 
Presiding Officer from Maryland talk a moment ago about the values we 
hold as a nation and how important it is to convey those values in 
everything we do in this body.
  What happened on July 5, 1935, was President Roosevelt signed 
something called the National Labor Relations Act, and we know what 
came out of the National Labor Relations Act and the other reforms of 
that era, in addition to Social Security and the CCC and some other 
things, was the concept and the implementation of collective 
bargaining. Collective bargaining is a right the American people have 
to join voluntarily in a collective bargaining unit--generally a labor 
union--and negotiate on behalf of hundreds or thousands of fellow 
workers for wages, health care, pensions, vacation days, and other 
things.
  I mentioned that because just late last week something remarkable 
happened in my State of Ohio. In Columbus, in response to the State 
legislature taking away those collective bargaining rights and a 
radical departure from 75 years of collective bargaining, national 
private sector success, and 30 years of Ohio collective bargaining for 
public employees' success, the legislature passed a radical act earlier 
this year to take away those collective bargaining rights for public 
employees. We know it is a direct assault on the middle class. We know 
it will mean a declining and shrinking middle class. We know the 
biggest threat to this country today, to our economy, to our country, 
and to our country's families is that the middle class is shrinking and 
the middle class is declining. I call them radicals because it is a 
direct hit, a direct violation of what we stand for as a nation: the 
right to organize and bargain collectively and voluntarily.
  We have seen these public employees--and who knows what is next--have 
those rights taken away. We know what will be next: prevailing wage, 
the right to work--all the kinds of things that procorporate 
conservative politicians have tried to do for some years. We basically 
had a consensus in this country. We had a consensus on Medicare, a 
consensus around minimum wage, a consensus about safe drinking water 
and clean air, a consensus about collective bargaining rights on which 
80 percent, 90 percent of the country agreed. We had disagreements 
around the edges on the environment or safe drinking water, Medicare, 
but by and large there was a consensus on what we did here. What we saw 
earlier this year in Ohio was an assault directly on those values. They 
are going after collective bargaining rights.
  In another piece of legislation they are going after voter rights. In 
another piece of legislation they are going after women's rights. In 
Washington they are going after Medicare.
  Let me go back to collective bargaining. What happened last week is 
something remarkable. In Ohio, unlike many States, after a bill passes 
and becomes law and is signed by the Governor, there are 90 days to 
gather signatures. I believe in Ohio's case 250,000 signatures are 
needed to place on the ballot a referendum. In other words, if this 
goes on the ballot, the voters have a chance to repeal that bill.
  When the radicals in the legislature took away collective bargaining 
rights and the Republican Governor signed it, a group of Ohio citizens 
put on the ballot a repeal of taking away collective bargaining rights. 
They needed about 250,000 signatures. You know how many they had? They 
submitted last week 1.3 million signatures. Mr. President, 1.3 million 
people signed saying: We want this to go on the ballot to repeal this 
radical measure of the State legislature Republicans. No Democrats in 
either House voted for this to repeal what they were doing. That's 1.3 
million signatures.
  In fact, they brought a truckload of boxes of signatures. In the 
Office of the Secretary of State they had to send in a structural 
engineer, literally, to make sure the floor--I think it is on the 14th 
floor--could support the weight of these 1.3 million signatures.
  I note Senator Cardin and Senator Whitehouse, when they come to the 
floor, oftentimes talk about the overreach, the radical nature of what 
conservative far-right politicians are doing in this country right now. 
The overreach, going after bargaining rights, going after Medicare, 
going after minimum wage, putting tax breaks--tax breaks are really 
earmarks for the rich in the Tax Code--all of these kinds of things 
they are trying to do are unravelling so much of what we fought for as 
a nation for so many years.
  The good news in Ohio this week: 1.3 million people said they have 
had enough. We are not going to stand for this. We are not going to 
tolerate this radical overreach that Governor Kasich and legislators 
are doing in Columbus and House Republicans and far too many Members of 
the Senate are doing in this body. That is good news. I think we move 
forward from there.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Merkley). The Senator from Maryland is 
recognized.
  Mr. CARDIN. Mr. President, let me thank the senior Senator from Ohio, 
Mr. Brown, for his leadership for working families. We were colleagues 
in the House of Representatives and there was no more effective voice 
on behalf of working families than Congressman Brown, now Senator 
Brown. I just want to thank him for bringing these issues to our 
attention.
  He is absolutely right, there has been an all-out assault on the 
dignity of

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working families in this country at all levels. I will talk a little 
bit about the budget deliberations because I believe here, also, we 
find an assault on the middle-income families. As President Kennedy 
said, ``to govern is to choose.'' We have never had a clearer choice of 
two different visions of America.
  I wish to talk a little bit about that because I know we are all 
working hard to reach a fair compromise, and I am one of those who 
believe the final agreement will not be what the Democrats want or what 
the Republicans want. We will have to do a compromise. But I think the 
people of this Nation need to know the types of choices we are making 
here in Washington.
  I see the Republicans--and I have heard some of the speeches that 
were recently given on the floor--are really trying to protect the very 
wealthy, the millionaires. In the Republican budget, millionaires would 
get another $200,000 of tax cuts, where at the same time that budget 
would cost our seniors, who live on fixed incomes, an extra $6,000 a 
year in health care costs if their plan on Medicare were to become law.
  Those are the types of choices we are being asked to make here, being 
asked to continue the gas subsidies--the tax subsidies for the five 
biggest oil companies in this country. That is what the Republican 
budget would protect. They would protect those tax breaks. Let me 
remind you that those five companies in the last decade made $1 
trillion in profits, that during the time we saw escalating gas prices 
here and our economy being hurt by it, people could not afford to fill 
up their gas tanks. Yet at the same time those five oil companies had 
record profits. So we say: Let's take away the government subsidies. 
Yet the choice for our Republican friends is to say: No, we can't do 
that. Instead, they look at cutting nutrition programs and Pell grants 
to make it more expensive for children to be able to go to college or 
nutrition programs to try to have a healthier America.
  Well, what we are pushing for is a balanced approach in how we deal 
with this budget deficit. We could talk a long time about how we got 
here, the policies of the previous administration. Just 10 years ago, 
we had these large surpluses. The previous administration cut taxes not 
once but twice, the second time using the credit card in order to pay 
for those tax cuts, went to war not in one country but in two countries 
and used the credit card in order to pay for those wars, and are 
wondering why we have all this debt today.
  Well, it is our responsibility to take care of this deficit because 
this deficit is affecting the strength of America. We know we need to 
have a balanced approach in order to do it. I, along with the Presiding 
Officer, am a member of the Budget Committee. We are working hard on 
the Budget Committee to come up with a way we can deal with it.The 
Democrats on that committee are united that there is a better way than 
the Republican budget that came over from the House of Representatives.
  Let me talk a little bit about whether this is class warfare. I have 
heard that mentioned many times. This might surprise you. I might agree 
with my Republican friends. I think the Republican budget is an attack 
on class. The Center on Budget and Policy Priorities said the 
Republican budget ``would produce the largest redistribution of income 
from the bottom to the top in modern U.S. history.'' We are asking the 
poor and working families to contribute so the wealthy can get more tax 
breaks. That is just wrong.
  What we want to see is a balanced approach, an approach that says: 
Look, this deficit is very serious. We have to ask and save money 
wherever we can to balance the Federal budget. It starts by looking at 
our domestic spending. We have been willing to say: Look, for programs 
that are not high-priority programs, we have to cut back on them. 
Programs that are not working we are going to have to eliminate. Let's 
get rid of duplicate programs.
  We say we are prepared to do that. But you also have to look at the 
nondomestic programs--our military programs and security programs. We 
know we are in the process now of bringing our combat troops home from 
Afghanistan. That can produce savings. Let's use that to reduce the 
budget deficit. There are ways we can get this deficit down.
  I was listening to one of my colleagues on the other side of the 
aisle talk about the so-called tax expenditures. Let me put this in 
context for one moment. Our Tax Code spends about $1.4 trillion a year 
in special provisions to give special breaks to different taxpayers. I 
think none of us are saying all of those should be eliminated. What we 
are saying is, when you find tax loopholes, when you find shelters, 
when you find tax havens, let's get rid of them.
  I have taken to the floor to talk about two areas where I think there 
is broad consensus. The ethanol subsidy--we do not need it any longer. 
It is questionable whether we ever needed it. The industry will do just 
fine without the subsidy. But let me tell you what the subsidy causes. 
It causes my poultry farmers in Maryland to pay a lot more for their 
corn, costing jobs in Maryland. So there is a tax subsidy we can get 
rid of. We had a vote on the floor, and it was quite obvious that the 
overwhelming majority agrees with that. Why can't we use that for 
deficit reduction?
  We talked about the gas industry. Why are we giving them subsidies? 
There is no need for them. So we can take those tax shelters, we can 
take those tax havens, and we can take those loopholes and use that.
  And, yes, I think there is a question as to why millionaires are 
going to continue to get a tax cut that was meant to be temporary in 
nature when we need as much revenue as we can get to pay off our bills. 
I think there is an issue here as to whether that is fair. How do we 
tell students they have to pay more for college, how do we tell 
families that fewer will be able to go to Head Start, how do we tell 
our seniors they have to pay more and yet we tell the millionaires they 
are going to get additional tax cuts? That is not fair, and it does not 
make good sense for our economy.
  There is a better way. I know my colleague from Rhode Island will 
speak next. He also serves on the Budget Committee. We Democrats have a 
better way of doing this. We know how we can reduce the budget deficit 
by even more than the Simpson-Bowles deficit commission proposed, where 
we can bring in the deficit and bring it under control to make it a 
reasonable amount of our economy rather than uncontrolled, as it is 
today. We can do that by bringing in not just domestic spending but 
also our defense spending in order to reduce spending more in this 
country.
  We can do that, and we can do it in a way that protects the integrity 
of Medicare. We do not want our seniors at the risk of private 
insurance companies. We do not want private insurance companies telling 
our seniors when they can get care and when they cannot. We tried that 
before we created Medicare, and we know the problems that were created 
by that. So in our budget, we want to protect the integrity of Social 
Security and Medicare and the programs that are critically important to 
our seniors.
  We will close the tax loopholes. We will eliminate shelters. We will 
make sure everybody is part of the solution. We can do it in a way that 
will help build this great Nation.
  Let me tell you what our objectives are, quite frankly. Our 
objectives are to manage our deficit, bring it down, bring it under 
control in a real way, to protect those who are most vulnerable in our 
country, and to invest in America's future so we can create more jobs, 
so we can continue to build our roads and our bridges, our water 
systems, so we can continue to invest in education, and, yes, so we can 
protect our Federal workforce and pay them decent salaries and 
compensation benefits. We can do all that. But if we are going to get 
the job done, Democrats and Republicans have to be honest in their 
debate and their compromise. It will not be what one side wants. We are 
going to have to compromise for the good of the American people.
  I took the time today to share with the people of Maryland and the 
Nation where I believe our vision should be in regard to the budget of 
this Nation. I hope we are able to achieve those objectives because I 
really do believe our children's and grandchildren's future depends on 
us getting this right. If we work together, we can pass a budget that 
is in the best interests of the American people and will allow our 
economy to grow to create jobs, which

[[Page S4355]]

is the best answer to deal with our deficit.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, I am honored to follow my 
distinguished colleague from Maryland in this discussion about our 
priorities as we address the debt limit we are approaching. I think 
Leader Reid was wise to choose to cancel the scheduled Fourth of July 
recess so we could continue to work toward an agreement to prevent 
defaulting by the United States on our government debt and the 
financial consequences that would ensue here in America and around the 
world.
  As we negotiate an end to this debt limit standoff, we also, 
obviously, have to address our looming budget deficits and our looming 
debt, which threaten to cripple our potential for economic growth in 
years to come. Where we are on this, of course, is that President 
Clinton put our budget on course to permanent surpluses. We would be a 
debt-free nation right now if the predictions the nonpartisan 
Congressional Budget Office had put in place when President Clinton 
left office had been kept. In fact, there were changes. President Bush 
and a Republican Congress squandered away those surpluses with 
unnecessary tax cuts and unwise spending increases. Our multitrillion-
dollar deficits have resulted. We must now fix the budget and bring it 
back into balance.
  So where are we in this standoff? Well, we need to cut spending. 
Democrats and Republicans agree on that. We need to protect ordinary 
families who enjoy ordinary levels of income from tax increases. 
Democrats and Republicans agree on that. The disagreement is whether we 
also need to raise some revenues in other areas to help balance the 
budget, areas such as oil and gas and ethanol subsidies, closing 
corporate tax loopholes, and putting an end to high-income tax-dodge 
schemes.
  On that front, I rise in support of Leader Reid's resolution calling 
for a deficit reduction package that includes a ``more meaningful 
contribution'' from millionaires and billionaires.
  The Republicans are threatening that they would rather let this 
government default on its obligations than to what they call ``raise 
revenues'' by requiring the wealthy to pay their fair share. Just last 
week, Senate Republican leader Mitch McConnell called on President 
Obama to take any raised revenues ``off the table'' and to balance the 
budget solely on spending cuts that affect the middle class and lower 
income families. In an opinion piece on cnn.com, Senator McConnell 
proclaimed that ``tax hikes can't pass the Congress.''
  Well, let's pull the curtain back and take a little glimpse behind it 
as to whom the Republicans are fighting so hard to protect.
  As shown in this picture I have in the Chamber, here is a building in 
New York City on Park Avenue, the Helmsley Building. Because this 
building is large enough to have its very own ZIP Code, we know from 
actual IRS information--not projections, not guesses, not conclusions 
drawn from rates; from actual paid-in IRS information--that the wealthy 
and successful individuals and corporations that call this building 
home paid a 14.7-percent total Federal tax rate in the last year they 
have done the calculation, 2007. That is lower than the actual tax 
rate, on average, of the New York City janitor or doorman or security 
guard who would work in this building. It is upside down. The people 
who serve the occupants of this building pay a higher tax rate than the 
occupants of this majestic building. The tax gimmicks that let those 
occupants pay a lower rate than the people who take care of the doors 
and the cleaning and the security for them--that is what the 
Republicans are fighting to protect.
  This problem is not just a fluke in the Helmsley Building. Each year, 
the Internal Revenue Service publishes a report that adds up all the 
taxes paid by the 400 highest income earning Americans. I spoke earlier 
this year--several times, actually--on last year's report, which 
included data from 2007, like the same year as for the Helmsley 
Building. In that year, these super-high-income earners, making, on 
average, $\1/3\ billion, approximately--billion with a ``b''--paid a 
lower tax rate in 2007--the 400 of them did, on average--than an 
average hospital orderly who is a single payer pushing a cart down the 
halls of a Rhode Island hospital at night.
  In May, the IRS published updated data on the top 400 income earners 
for 2008. Let's take a look at the status of the top 400 earners in 
that more recent year. Well, they are down from $\1/3\ billion, on 
average, to over $\1/4\ billion each. Certainly we can applaud that 
kind of success in America. That is definitely the American dream come 
true. But, on average, they paid an average tax rate of 18.2 percent. 
That is what they actually paid. That is what they put into the IRS. 
Once you get through all the tax dodges, all the different schemes, all 
the different deductions, all the different rates, when you actually 
put the pen to the paper at the bottom line, it is 18.2 percent.
  We spent a lot of time around here debating whether the top income 
tax rate should be 35 percent or 39.6 percent. Folks, that is not what 
they are paying. The Tax Code is so filled with special provisions that 
tend to exclusively or disproportionately benefit the wealthy that the 
highest 400 income earners, earning more than $\1/4\ billion in 1 year, 
paid an average tax rate of 18.2 percent.
  This means that the 400 highest earning individuals in the Nation, in 
2008, paid the same effective tax rate as a truckdriver in Rhode 
Island. According to the Bureau of Labor Statistics, on average, an 
ordinary truckdriver earns $40,200, which is about the place in the Tax 
Code, on the way up, where you first hit paying 18.2 percent of your 
income in taxes.
  So what the Republicans are asking as part of the debt limit 
compromise is that we cut employment and job training support now, at a 
time of record joblessness, while they continue to fight to make sure 
that people making a quarter of a billion dollars a year pay lower 
Federal tax rates than average middle-class families.
  Here is another building that has a little story to tell. This is a 
building called Ugland House. It is over in the Cayman Islands. This 
building does not look like much. It is pretty nondescript. But over 
18,000 corporations claim to be doing business out of this building--
18,000 out of that little building. Clearly what is going on is that 
those corporations are hiding through shell companies, phony corporate 
identities that they and wealthy taxpayers use to hide assets and play 
tax games with the IRS.
  This kind of mischief down in the Cayman Islands and elsewhere 
through these tax dodges is estimated to cost us as much as $100 
billion every year. As part of a debt limit compromise, the Republicans 
are asking us to cut America's investments in science, cut America's 
investments in technology at the same time they are fighting to protect 
corporations that hide in offshore tax havens so that the honest 
American taxpayer has to pick up the burden for them. That is what they 
are fighting for when you pull back the curtain.
  When all is said and done, everyone, Democrat and Republican, agrees 
that there needs to be cuts. And everyone, Republican and Democrat, 
agrees there should be no tax increases on ordinary middle-class 
families. Those concerns are not at issue. Where is the dispute? What 
is the blockade? Again, pull back the curtain and you will see that the 
Republicans are willing to let us as a nation default for the first 
time in our history on our debt, which would devastate our economy, all 
to defend tax rates for millionaires and billionaires that are lower 
than those paid by regular hardworking Americans; all to defend 
offshore tax havens that are used to evade taxes while ordinary 
families are expected to pay their taxes; all to defend corporate and 
special interest tax loopholes, earmarks for the wealthy and well-
connected. That is where they have chosen to stand their ground. That 
is where they have chosen to pick a fight.
  As our Nation rushes toward the August 2 deadline and the agreement 
deadline before August 2 when we must have something in place in order 
to get the President's signature on a bill by August 2--as we rush 
toward that, as the world's economy and America's economy are imperiled 
by the threat of our debt limit not being lifted, what are they 
fighting for? That is what they are fighting for, for the 
superprivileged, for the super well-connected, for the tax dodges they 
take

[[Page S4356]]

advantage of, and for the lower rates the superrich pay compared to the 
rest of all of us. Those are the interests that Republicans are 
protecting when they reject any revenue increases to bring down our 
unsustainable deficit. They say it is tax increases they are against. 
Well, the answer to that should be Americans asking the question back: 
Tax increases for who? Because if it is tax increases for the guy who 
is making a quarter of a billion dollars, and is paying a lower tax 
rate than a truckdriver, that is okay with me. That is a tax dodge we 
can get rid of. If it is a tax increase for a company that is going to 
hide in this building in the Cayman Islands to shelter its incomes so 
that Rhode Island corporations and Oregon corporations, American 
corporations have to make up the difference--American taxpayers have to 
make up the difference, and they cannot hide their income down there 
any longer, that is a tax increase I can live with. I do not think that 
is what ordinary Americans have in mind when they say we do not want 
tax increases. They mean we do not want our rates to go up. But 
ordinary Americans know that our Tax Code is filled, riddled with 
gimmicks and tricks and loopholes and deductions that have been put in 
it over the years by lobbyists. They are earmarks, they just happen to 
be earmarks in the Tax Code. They spend America's money through the Tax 
Code just as much as if it were an appropriation.
  But what is the big difference? The big difference is it takes being 
a very wealthy individual or a very big corporation to be able to take 
advantage of those tricks, to be able to hire a lobbyist who can build 
that trick into the Tax Code, and to have the revenues and the 
resources to be able to maneuver through the Tax Code in that way. 
Ordinary Americans do not do that.
  You can ask pretty much anybody in Rhode Island, show them the 
thousands of pages of the Internal Revenue Code and ask them: Who has a 
special provision in it for you? Nobody does. They are regular 
Americans. They pay regular taxes. They do things the way they are 
supposed to be done. The gimmicks and the tricks are all at the upper 
end, and it is time to clean house, particularly now when we so badly 
need the revenues to balance our budget.
  It is simply inexcusable that our tax system permits billionaires to 
pay lower tax rates than truckdrivers, that it allows the wealthy to 
avoid taxes by hiding assets in phony offshore corporations. Even if we 
had no budget deficit, just being fair, honoring the principle of 
equality would demand that we address these inexcusable discrepancies 
that favor the wealthy and the well-connected. Our budget crisis, 
however, brings real urgency to the problem. So as we continue to work 
to avoid a debt default by the United States of America and to bring 
down our budget deficits and to reduce our crippling national debt, I 
hope Senator McConnell and the Republican Conference will revisit the 
potential to significantly cut the deficit by addressing tax loopholes, 
tax gimmicks and, frankly, outright injustice to the ordinary American 
taxpayer that they are now defending here in the Senate.
  I see the distinguished Senator from Alabama arriving.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I understand that President Obama has 
summoned certain congressional leaders to the White House tomorrow to 
discuss spending, debt and deficits, and the debt limit we now operate 
under. The President has summoned congressional leaders to the White 
House on at least eight different occasions in recent weeks to discuss 
budget and debt issues, not including the private talks involving Vice 
President Biden.
  Yet with only weeks to go before the debt limit deadline--we are told 
August 2--secret discussions have failed to produce any grand bargain. 
Talk is not an action. I do think that is a problem the President has. 
He thinks making a speech or having an announcement is something that 
actually involves changing course in America and it has some effect, 
when it is pretty clear it does not.
  We have had lots of talks and we have heard lots of speeches, so I 
think we should stop paying attention to these private talks, from 
which no details emerge and no public discussion is heard. We are 
getting much too close to the point at which it will be too late to 
involve the public and allow Congress to fulfill its constitutional 
duty on spending and taxes.
  In remarks yesterday, the President said, ``To truly solve our debt 
problem, we need to take on spending and domestic programs and defense 
programs and entitlement programs.'' Well, I agree. Yet the only plan 
he has put forward proposed increases in his spending for next year in 
the budget he submitted. He submitted a budget earlier this year. He 
made a speech backing away from it a little bit but not a lot, because 
his speech, when we carefully tried to study it, did not do much to 
change what the trajectory is in his budget.
  But this is what the budget calls for next year that we are supposed 
to be working on now and are not. This budget proposes to increase 
spending in 2012, beginning October 1, 2012--well, the inflation rate 
is projected to be 1.3 percent. It may be a little higher than that. 
Defense called for a 4.3-percent increase in spending. The Energy 
Department called for an 8.9-percent increase in spending, that big 
bureaucracy that is trying to make sure we block production of American 
energy. It proposes for the State Department a 9.3-percent increase in 
spending, and the Education Department a 13-percent increase in 
spending, at a time this country is in incredibly difficult straits. We 
are having double-digit increases.
  Then in the Transportation Department, he proposes a 62.4-percent 
increase. Do we really need to have high-speed rail within walking 
distance of 80 percent of all Americans? We do not have the money to do 
that. Most of the high-speed rails are not working--are not paying for 
themselves around the world. They can work in certain highly congested 
areas in good locations, perhaps. This idea that we are going to have a 
massive national interlocking system of maybe $700 billion of high-
speed rail is not realistic in the short term. But his budget called 
for a 62-percent increase.
  We asked where the money would come from. They said it is a tax.
  What kind of tax?
  Well, it is not a gas tax.
  So I called it the ``not gas tax tax.'' What tax then do you propose, 
Mr. Secretary, before the Budget Committee?
  Well, we will talk with Congress about that.
  Well, the Congressional Budget Office, which is required to analyze 
expenditures against revenues, said that is not a proposal of revenue, 
and they scored that as all expenditures without any revenue, because 
we are not going to pass a big tax to increase this kind of spending. 
Give me a break. If we do, we ought to use some of the money to pay 
down the debt, not continue to surge spending in this fashion.
  I wish again to point out that President Bush in his last year in 
office had the largest deficit I believe the country had had in recent 
modern times. The largest he had was $450 billion. That was large. It 
was roundly criticized. It included a lot of the TARP money that they 
threw in at the last minute.
  But what about President Obama's first year? That was $1.2 trillion 
in deficit. The second year: $1.3 billion. And this year, it is 
projected around $1.5 trillion, going into 2011, ending September 30. 
Then September 12, he has got these kinds of increases. What kind of 
responsible behavior is that? For the President of the United States to 
say that we need to truly solve our deficit problems, we need to take 
on spending in domestic programs and defense programs and entitlement 
programs, and this is what we get as a proposal, to increase spending 
at double-digit rates, basically. I mean what is this? There is no 
proposal whatsoever to deal with entitlements. Those long-term 
unsustainable programs threaten the future of our country economically. 
Indeed, we are in more trouble right now than a lot of people realize 
from our debt situation.
  So the only plan the President put forward, as I said, is increasing 
these expenditures and not confronting entitlement programs at all. And 
when the House Members passed a far-reaching, historic, honest, fact-
based budget that would have actually changed the debt trajectory of 
our country over a period

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of years, it was considered to be tough, but even it did not balance 
within 10 years.
  We are in a deep hole. It is hard to balance this budget. The House 
proposed that and they laid out a plan, after 10 years, altering 
Medicare so that it would help put Medicare back on a sound basis. All 
of it was slammed by the President of the United States. He even had a 
speech at the White House and invited Congressman Ryan, who is the 
brilliant chairman of the House Budget Committee, and had him sit right 
in front of him, and then he slammed his bill. Congressman Ryan had 
courage and integrity and he produced an honest budget that would have 
made a difference for America. Would we have agreed with everything in 
it? Of course not. But he didn't deserve to be hammered by the 
President of the United States.
  To begin to change the debt trajectory we are on, we need to cut at 
least $6 trillion of spending over 10 years. That is not enough, but we 
need to do that. If we do that, it will make a huge difference. Just 
$1.5 trillion or $2 trillion in cuts will not be enough. It will not be 
enough. The President's budget, which he submitted in December--the 
only budget we have gotten from the Democratic side--would increase the 
debt by $13 trillion, and $2 trillion in spending cuts is not enough.
  We are long past the point when the President needs to share his 
vision with the country and admit that he cannot keep up this spending 
rate. His budget was a failure to confront the reality that we don't 
have the money to keep up unsustainable spending.
  According to Bloomberg News, Democratic officials claim that a deal 
will have to be reached between July 15 and July 22 ``in order to write 
a bill and comply with congressional rules requiring advance 
publication before consideration.'' In other words, we have as little 
as 3 days to see the legislation.
  I have proposed legislation that says we ought to have 7 days to 
consider this historic piece of legislation that would raise the debt 
ceiling. We want to see how much change in spending the bill would 
mandate. In other words, if we are going to raise the debt ceiling, 
because we have limited how much debt America can approve--Congress 
has--and to keep borrowing--we are borrowing 40 cents of every dollar 
we spend--if we keep borrowing, we have to raise it. What we, and the 
American people, are saying is we don't like raising it, but if we do, 
you better show us that you have changed your ways and you are not 
continuing this reckless spending, when we don't have the money.
  Every bit of that increase is borrowed. We can't continue that. I 
truly believe that Congress needs to assert its role, step up and 
accept responsibility for the crisis we are in and begin to develop the 
procedures openly and publicly and get us out of this fix.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.
  Ms. KLOBUCHAR. Mr. President, I rise today to speak about the 
daunting fiscal challenges our country faces and the urgent need for 
comprehensive bipartisan action to address our Nation's debt.
  As we debate the path to securing our country's fiscal future, Greece 
is battling to keep from defaulting on its bonds. It is in the news. 
There are legitimate concerns that a default in Greece would send shock 
waves through the world financial markets, with an impact potentially 
as devastating as the 2008 collapse of Lehman Brothers.
  To avert bankruptcy, Greece has enacted austerity measures so drastic 
that violent rioting has broken out in its streets. Despite these 
measures, and despite the aid of other European countries, many 
economists believe Greece will eventually succumb to its rising debt 
burden and default. Standard & Poors warned Monday that even with the 
planned bailout by European banks, Greece's credit rating could be 
still downgraded to ``selective default.'' While better than a full-
blown default, this will almost certainly roil the markets and cut off 
Greece's access to credit.
  Alarmingly, Standard & Poor's gave a similar warning to the United 
States last week. In a statement to Reuters, Standard & Poors said it 
would drop the United States triple A rating to ``selective default'' 
if the Treasury Department misses its repayment on $30 billion in 
maturing bills on August 4.
  Although our long-term fiscal challenges are serious, they are not 
what caused Standard & Poor's to issue this warning at this very 
moment. Instead, what caused the warning was a growing concern that the 
Congress would fail to come together to pass a bipartisan deal on the 
debt ceiling--something Congress has done without incident almost 100 
times since the limit was established.
  We must get serious about tackling the deficit and putting our 
country back on sound fiscal ground. But the problem we are facing now 
is not only a crisis of the dollars and the cents, it is also a crisis 
of the divide and the deadlock.
  We know what we need to do in order to avoid default and bring down 
the deficit. We have all the tools and information necessary to do it 
and avoid a situation such as we are seeing in Greece. Yet instead of 
working together to craft a fair and responsible path forward, some 
have chosen to draw lines in the sand and take the debt limit--and our 
Nation's economy--hostage.
  Addressing our country's fiscal challenges is something I have taken 
seriously. Since coming to the Senate, I have worked to reform the way 
Congress conducts its own business--reducing the budget of Congress, 
fighting for appropriations project reform, and working to restore the 
pay-as-you-go rule. I was one of a handful of Senators who fought for 
the creation of the fiscal commission, and I have supported efforts 
from both Republicans and Democrats to responsibly reduce the deficit.
  While I believe we have reached a defining moment as a country which 
should not be wasted, I also know we can't afford to play Russian 
roulette with our economy.
  What our country needs is for Congress to come together and build 
consensus around a comprehensive long-term deficit reduction package 
that will put us on the track to prosperity.
  Ever since the economic downturn, families across the country have 
huddled around the kitchen table, making tough choices about what they 
hold most dear and what they can learn to live without. They expect and 
deserve their leaders to do the same. The American people are counting 
on us to put politics aside, pull together, not pull apart, and agree 
on a plan to live within our means and make America strong for the long 
haul.
  If we are going to succeed in this challenge, we will ultimately have 
to accept things that we don't necessarily agree with. It is the only 
way to develop a plan that is both balanced and comprehensive.
  We already know much of what will need to be done. Our failure to act 
has not been because we lack solutions, but because too often Congress 
has lacked the political will to get behind a consensus proposal. After 
months of debate, it is clear what sort of plan is needed to garner the 
support necessary to get us across the finish line.
  First, a solution should match the scale of the problem. I want to 
see one that produces around $4 trillion in deficit reduction over the 
next decade.
  Second, it should include a mix of revenue with realistic spending 
cuts. One example we are seeing right now is biofuels. The biofuels 
industry has been willing to put a big chunk of change on the table, 
right in the middle of the year, as we are working with Senators Thune 
and Feinstein on an agreement in which it would be a template, where 
one industry says, OK, we understand that we have a big problem, and we 
are willing to put money upfront for the debt. We are willing to look 
at what we need to do in the long term to have a secure energy policy, 
but also help with the debt and end this subsidy. We want to see oil do 
the same thing. We want to see a lot of these loopholes closed, a lot 
of these subsidies end, and do it in a smart way. The budget Senator 
Conrad has been working on with the Budget Committee is an example of a 
mix of those revenues and spending cuts. That is what we have to look 
at.

  Third, we must be able to achieve bipartisan support with a proposal, 
which is why I continue to support the work that has been done by the 
Gang of 6.
  It is time we get serious about advancing a plan that is both fair 
and

[[Page S4358]]

achievable. On August 2, the borrowing authority of the United States 
will be exhausted. No one benefits if we are unable to reach an 
agreement by this deadline. Every day that passes without a deal only 
increases uncertainty in the markets and puts the brakes on economic 
activity. Failure to bring the national debt under control threatens 
America's future, but the danger of default threatens our economy 
today.
  The way I see it, we have two options. We can either set a precedent 
of holding our debt hostage to political maneuvering, raising the cost 
of borrowing and increasing the deficit, or we can show the world that 
we are serious about addressing our fiscal challenges, reducing the 
cost of borrowing and strengthening our financial outlook. I believe 
the choice is clear.
  The sooner we can agree on a long-term package, the better for our 
economy and our country. I hope we can put partisan differences aside 
to work on an agenda that strengthens our economy, promotes fiscal 
responsibility, and increases global competitiveness, because if we 
refuse to have an honest conversation about this, if we insist on using 
the debate as a vehicle for rhetoric only, 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 deficit 
isn't going to fix itself. We all know that. We all know we can't close 
our eyes, click our heels, and wish the debt would go away.
  In their report, the National Commission on Fiscal Responsibility 
wrote that ``every modest sacrifice we refuse to make today only forces 
far greater sacrifices of hope and opportunity upon the next 
generation.'' They are right. The longer we wait, the more wrenching 
the choices become. Look at Greece. Who will be making those painful 
choices? Our children and our children's children.
  None of us wants to see interest rates soar by playing Russian 
roulette with our economy. Democrats don't want it, Republicans don't 
want it. So what are we waiting for? It is time for Congress to step 
forward and show some leadership. It is time for us to work together to 
show the American people that Washington isn't broken, and that instead 
we are willing to put aside politics to do what we were elected to do--
to do what is right for America.
  This is our challenge, and it will be a hard challenge to meet. But I 
am confident we can come together to make these tough choices, to do 
what is right for our economy, and to renew the American promise of 
progress and opportunity for generations to come.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. ENZI. Mr. President, I rise to talk about the debt crisis our 
Nation is facing and how we can come together to fix it. We do talk 
about how we are putting this debt on our children and grandchildren. 
The time is on us right now. The bill is coming due.
  We are facing the most predictable crisis in our Nation's history 
with our current financial situation. It is a problem we can all see 
and that we can all acknowledge must be fixed. Of course, acting is not 
as easy as talking. If it were that easy, we would not be so far in 
debt.
  For some time, we have been talking about reining in spending and 
making sure that our grandchildren aren't saddled with the enormous 
debt our country is facing. Now we are facing the reality of reaching 
the debt ceiling--a cap that has increased to $14 trillion--that is 
trillion, with 12 zeros--more than $2 trillion over the previous debt 
limit of $12 trillion--a little over a year ago, in February of 2010.
  We have raised the debt ceiling 74 times since 1962, and we have 
raised the limit 10 times since 2001. Listen to this. In the last 4 
years, we have raised the debt ceiling five times. It is accelerating.
  What does this tell us about our spending habits? The numbers don't 
lie. It tells us we have had to raise the debt ceiling to keep up with 
increased Federal spending. It tells us we have forgotten entirely how 
to live within our means, and that we need to make serious decisions 
about cutting Federal spending. We need to make those decisions now.
  We have all been talking about it. Republicans have come to the 
Senate floor and talked about the country's financial future. They have 
talked about our debt, projections for the future, and agreed that this 
path is unsustainable.
  Republican and Democratic administrations and Congresses for decades 
have continually increased Federal spending. No one party holds all the 
blame for the situation we are in, but clearly the road we are 
traveling on is leading to a crisis.
  Last week, the President held a press conference where he lectured 
Republican Members of Congress. He told us we need to stay in 
Washington to get things done. After listening to his press conference, 
we invited the President to meet with Senate Republicans. We hoped to 
explain to the President that the political reality makes it so that a 
bill containing tax increases cannot pass the House or the Senate. 
After lecturing us about the need to be in Washington and the need to 
get our work done, one would assume the President would take us up on 
our offer to meet. Instead, his spokesperson said meeting with Senate 
Republicans was ``not a conversation worth having.'' Rather than 
staying in Washington to work on the debt and deficit, the President 
chose to fly to a fundraiser in Philadelphia.
  Republicans have been engaged in efforts to fix the debt and deficit 
since the election last fall. House Republicans passed a serious budget 
that would cut $6.2 trillion over the next decade--not enough but 
substantial. After demagoging the Ryan budget as an effort to kill 
Medicare and push grandma off the cliff, Senate Democrats have yet to 
bring any budget to the floor.
  I heard just a few minutes ago that one is being considered, but it 
is being considered in a very partisan way, and I don't know if we will 
get to see it before it comes to the floor. But we have gone 800 days 
without passing any sort of budget. Even though the media reported that 
Senate Democrats have reached a budget agreement, they still haven't 
brought the budget to the floor or shared it with Republicans. Why? I 
can only assume it is because it includes trillions of dollars in tax 
increases that would be unpalatable to the majority of Americans.
  The President presented a budget and we voted on that budget. In 
fact, it was voted on 0 to 97. The President couldn't get a single vote 
for his budget. I didn't see that in many headlines, but it happened. 
Check on it.
  While Democrats continue to ignore the problem, Republicans look for 
solutions. All 47 Senate Republicans have signed on as cosponsors of a 
constitutional amendment to balance the budget. Senator Toomey and 
Senator Paul put forward their own budget efforts that would balance 
the budget. I have introduced legislation that creates 2-year budgeting 
and other legislation that would reduce spending by 1 percent each year 
for 7 years until we balance the budget. If Congress can't reduce 
spending by a single percentage point each year, it basically has given 
up and decided to leave this huge and growing pile of debt to tower 
over our children and our grandchildren and us, casting a grand shadow 
over their future and ours.
  I remember a hearing we had in the Finance Committee and pretty much 
what everybody said was: Quit digging. You are in a big hole, quit 
digging. Phil Gramm talked on taxes and said: Don't penalize America 
with a tax every time Congress fails to do its job, which is to balance 
the budget, to spend reasonably. Failure on Congress's part doesn't 
warrant taxing Americans.
  So where do we go from here? Republicans are ready to work, but we 
need Democrats to work with us. We need the President to take a 
realistic look at the situation and realize that tax increases are not 
the answer because the votes aren't there to pass a tax increase. We 
need to come up with a solution to the budget crisis we face and we 
need to do it now.
  If we are serious about fixing the problem--and I believe many of us 
are--we have to come to the table willing to work. We have to stop 
pointing fingers. We have to stop playing political games. We have to 
stop demagoging ideas that are proposed. We need the President to step 
to the plate and explain to the American people the problem we face if 
we don't get our debt and deficit under control and

[[Page S4359]]

then give the solutions, not just tax raises.
  The President is the only person in the Nation who has the bully 
pulpit necessary to teach the American people what happens if we don't 
get a budget and don't get timely appropriations. The President talked 
about some of the taxes he would increase. The deficit commission 
suggested those taxes could be used, but they suggested they should be 
used to lower company rates so we can compete internationally, which 
would increase revenues. They didn't suggest they should be used to pay 
for new programs, and they are not even being suggested to reduce the 
deficit.
  Rather than taking the lead in selling the plan, the President has 
tried to stay above the fray and instead spent his time criticizing 
Republicans who have come up with a variety of plans. That isn't 
productive, it isn't helpful, and it will not lead to a deal. We need 
to end the finger-pointing and show the plan. Show us the plan. 
Bipartisanship is not about compromise, it is about what we leave out 
or finding an alternate way to accomplish a mutually agreeable way.
  I know it works. I have seen it happen. The late Senator Ted Kennedy 
and I were able to put this theory into practice when we worked 
together on the Health, Education, Labor, and Pensions Committee. He 
and I came from opposite sides on most issues, but we chose to focus 
our time and energy on what we knew we could get done. It amazed 
people, but we sure got results. All in all, when Senator Kennedy and I 
led the HELP Committee, we got 35 bills reported out of committee and 
27 signed into law.
  These kinds of results are possible today, but we have to get to 
work. We can't keep raising the debt ceiling. We can't tax more every 
time we have a good idea. We have to address the spending problem in 
Washington, and we have to figure out some solutions to correct our 
long-term budget outlook. These aren't easy issues to address, but we 
have been sent to do a job, and that job includes rolling up our 
sleeves and finding a way out of the mess.
  We are here through this July recess, but we are still not doing 
anything that is proactive or productive. The Democrats are in the 
Senate majority. They control the floor. Yesterday, we did a nothing 
vote to see if everybody was back. We will not vote until tomorrow now, 
and it is just a political ploy put up by the leader. It is messaging, 
and messaging will not pay the bills. Let's get something done in this 
session.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. Hagan). The Senator from Massachusetts.
  Mr. KERRY. Madam President, what is the order at this point?
  The PRESIDING OFFICER. The Senate is on the motion to proceed to S. 
1323 until 6 o'clock, with Senators permitted to speak for 10 minutes.
  Mr. KERRY. Madam President, I ask unanimous consent that I be able to 
proceed for 30 minutes.
  The PRESIDING OFFICER. Is there objection?
  Hearing no objection, it is so ordered.
  Mr. KERRY. I thank the Chair.
  Madam President, I listened to my colleague just now and I have 
listened to colleagues over the last weeks and there are a lot of 
crocodile tears being shed on the floor of the Senate about why we are 
not doing something, all of which completely ignores the fact that 
everything we try to do, the folks on that side of the aisle make us 
take longer and longer and longer than we have ever taken before 
because they push every single procedural objection possible. Even the 
most routine thing we try to do on the floor of the Senate requires 60 
votes or requires a motion to proceed. The most perfunctory, simple 
thing requires us to go through every procedural hoop and parliamentary 
process because they have persistently pursued a strategy aimed at 
gridlock.
  The idea is to make Americans see the dysfunction and then blame it 
on the party in power and run against them. It is the most cynical, 
craven, and dangerous policy I have ever seen in the 27 years I have 
been in the Senate, and I regret it for our country.
  There is a reason Democrats are standing, as a matter of principle, 
against the Ryan budget and against the proposals our Republican 
friends keep proposing. That is because they are the only party who 
have consistently stood and said: We are not going to consider 
everything. We are just going to give you a tiny, little menu, and you 
have to balance the budget out of spending cuts only. That is all that 
is in their budget. The only thing in their budget is spending cuts. 
Twelve percent of the entire budget is all they have put on the table 
in order to try to do something responsible about the deficit of our 
country.

  We, on the other hand, have consistently said: We will put everything 
on the table--everything--Medicare, Medicaid, reforms--not benefits. We 
are not going to cut the benefits on people because we don't have to in 
order to deal with this problem, but we can reform them. We can 
certainly be more effective and efficient, and we are prepared to do 
that. There are a lot of other things we are prepared to do--defense 
spending, wars, and a whole series of things.
  Last week, one of our newest colleagues made a very interesting and I 
thought revealing observation. The Senator from Delaware, Chris Coons, 
who balanced budgets in county government, who took cases all the way 
to the Supreme Court, who has seen decisions made in the business world 
as well as in the nonprofit world and who is an enormously capable 
person but new to the Senate, made the observation that some people are 
actually looking into the language of the 14th amendment and the debt 
limit in order to learn whether ``there might be some way to save us 
from ourselves.''
  That observation brought home to me how absurd this place must look 
right now, not just to a new Senator who came here with hopes of 
getting the business of our Nation done but to the average American, to 
people who invest in the extraordinary mythology that surrounds this 
great institution we are all a part of--the greatest deliberative body 
in the world. We can laugh at that one today. There is an absence of 
deliberation--a great absence of deliberation--and I think a lot of 
people are alarmed by the dysfunction they see with respect to this 
great institution.
  It is extraordinary when we have to look at the language of the 
Constitution to find possible ways to do what Congress and the Senate 
are supposed to do on their own--take tough votes, look at the tough 
issues, make tough decisions but, most importantly, do it in the 
interest of the United States, not in the interest of either party or 
of some ideology.
  Here we are, less than 5 weeks from August 2, the day the U.S. 
Government will default on its obligations for the first time in its 
history, and Washington is still playing the same old political game--a 
dangerous game of chicken--with enormous consequences for our economy 
and our future in every respect--economic, social, and national 
security.
  I hear this in my travels. Senator McCain and I were in Egypt 
recently, and we had people turning to us and saying: Hey, how about 
you guys? Can you get your act together before you are telling 
everybody else what they ought to be doing with respect to their 
future?
  You are promoting democracy. How is your democracy doing back there 
in the United States? Working out all right, right now?
  Washington is stuck, and it is stuck because we have a few ideologues 
and some people outside of the U.S. Senate who cower our fellow 
colleagues with threats of primaries. People are going to run against 
them if they move off of the orthodoxy of extremism. The result is that 
nothing is happening. Fear has gripped the Senators who raised their 
right hand and said: I swear to uphold the Constitution of the United 
States.
  Well, everyone here I think acknowledges that defaulting on our 
obligations would be disastrous for our country. Everyone here 
simultaneously says they don't want the default to happen. But here we 
are with a small minority holding the debt limit hostage to an 
ideological agenda, saying they will not consider an approach that most 
observers consider indispensable and reasonable in reaching an 
equitable solution to our crisis.
  Frankly, the consequences of not doing something are not far off in 
the future. Every day that we are here not getting this decision made, 
we are

[[Page S4360]]

weakening our economy and we are making our government and, through it, 
our country look helpless and adrift. The fact is that it is already 
having consequences with respect to business decisions. Capital is 
holding back. Businesspeople are reluctant to invest, uncertain of what 
the budget of the United States is going to look like, uncertain of 
what kinds of signals we are going to send to the marketplace. 
Certainty. I keep hearing colleagues say we have to send certainty. But 
when they look at this chaotic debate, what kind of certainty could any 
businessperson possibly take from what is not happening in Washington 
today?
  Our friends on the other side of the aisle say they want to create 
jobs, but Moody's chief economist, Mark Zandi, has said that hiring is 
only going to resume if we can get our act together and settle this 
debate, and the sooner, the better. At the beginning of the month, 
Moody's announced that it might downgrade our country's credit rating 
if Congress isn't able to come to an agreement by the middle of July. 
That is a week away. If that happens, I promise you our economic 
recovery is going to halt in its tracks. Maybe some people want that. I 
hope not. But today investors are looking at the scene here in 
Congress, and they are wondering if we are ever going to get it 
together. And the longer we wait to get serious, the higher the 
interest rates are going to move. That hurts everyone in America. 
Everyone who owns a home or runs a small business is going to be 
squeezed while Congress is in this ideological standoff.
  I read David Brooks' column this morning in the New York Times, a 
brilliant column talking about the unreasonableness of taking things 
off the table in this discussion.
  Recently, 235 economists, including 6 Nobel Prize winners, sent a 
letter to congressional leadership urging them to raise the debt limit 
immediately. Not doing so, they said, could have a substantial, 
negative impact on economic growth at a time when the economy looks a 
bit shaky, and, at worst case, it could push the United States back 
into recession. So are we going to listen to 235 economists, including 
6 Nobel Prize winners, or are we going to be driven by this extremist 
position that does not allow for reasonable discussion about what ought 
to be on the table?
  I think this is a dangerous and irresponsible moment in our country. 
Not raising the debt limit would result in a crisis potentially far 
more severe than the financial crisis of 2008 and 2009. The 
consequences would include any number of things, from increases in 
State and local government borrowing costs, increases in corporate 
borrowing costs, including mortgage interest, declines in equity prices 
and home values, declines in 401(k)s and other retirement savings, 
reductions in the willingness of investors here and around the world to 
invest in the United States, and job losses on a significant scale.
  Now, as I have said, I don't believe that is going to happen. But the 
question is, Are we going to get a deal that hurts America or helps 
America? If we eat America's seed corn in this deal--by that, I mean 
don't invest in America's infrastructure, don't invest in education, 
don't invest in the research and development that is so critical to the 
creation of new jobs--if all we do is what the other folks in the House 
said we ought to do by just looking at 12 percent of the budget and 
cutting spending, if that is all we do, we will eat America's seed 
corn, and the next generation will pay the price. Without investing in 
our future, we could face an economic downslide unlike anything we have 
seen in recent memory.
  In 1983, President Reagan wrote:

       Denigration of the full faith and credit of the United 
     States would have substantial effects on the domestic 
     financial markets and on the value of the dollar in exchange 
     markets. The Nation can ill afford such a result.

  Nearly 30 years later, we are facing that kind of incalculable 
damage.
  The fact is, Chairman Bernanke and Secretary Geithner have already 
used extraordinary measures to try to keep the Nation from default and 
keep the economy moving.
  Already, Treasury Secretary Geithner has used extraordinary measures 
to keep our Nation from default. And, these measures have bought us 
some time to deal with congressional negotiations, but it happens that 
some Republicans have proven themselves willing to sacrifice our 
Nation's economy in a misguided attempt to score political points. I 
know they will protest and say ``we're just trying to solve our debt 
crisis,'' but the truth is there is more than one way to do that not 
just their way and particularly not when that way can have disastrous 
consequences on the economy.
  Federal Reserve Chairman Ben Bernanke says failing to raise the debt 
ceiling on time could cause ``severe disruptions'' in the markets. He 
said:

       We should avoid unnecessary actions or threats that risk 
     shaking the confidence of investors in the ability and 
     willingness of the U.S. government to pay its bills.

  As of this moment, no one knows for sure how much time our financial 
markets will give Congress to come up with a solution before severe 
disruptions could occur. According to a J.P. Morgan analysis, the delay 
in raising the debt ceiling is likely to negatively impact markets, as 
investors undertake risk management actions in preparation for a 
potential Treasury default.
  These effects could include immediate liquidity shortages as 
borrowers attempt to raise additional cash and increase the tenor of 
their borrowings, large auction concessions especially if Treasury were 
to postpone an auction, increases in open volatility that cover the 
June/July period, and general weaker demand for Treasury securities. As 
time goes on, failure to raise the debt ceiling could touch off a mini-
financial panic, perhaps throwing the fragile economy back into 
recession.
  If you don't believe me about moments like this, just look at our 
history and you don't have to look far. Just look back 3 years to 
September 2008, when Congress initially voted down Treasury Secretary 
Paulson's $700 billion plan to provide assistance to financial 
institutions. Investor confidence was brutally shaken and the Standard 
& Poor's 500-stock index plunged 8.8 percent that day.
  If we do not act and act very soon indeed those who lend us resources 
will eventually demand higher interest rates. Government borrowing will 
crowd out private investment. A larger share of our Federal budget will 
be devoted to interest payments instead of productive investments like 
education, national security, and programs for our elderly and most 
vulnerable. Higher borrowing costs for American households and 
businesses will discourage future private investment, lowering our 
capital stock, reducing our economic growth and depressing our standard 
of living.
  Mr. President, this isn't half as complicated as some have chosen to 
make it. We are not as far apart as this debate would imply. We can all 
agree that deficits are too high. We can all agree that we shouldn't be 
borrowing 40 cents on every dollar that we spend. We even agree that we 
need $4 trillion in deficit reduction to put us on a sustainable path.

  But in the end, this budget debate can't just be about just cutting 
spending which is all the Republicans have offered. Our future is at 
stake--literally. Everyone says that job creation and investments in 
infrastructure, clean energy, and medical research are essential. We 
need to give the economy the tools to recover. As Ben Bernanke affirmed 
just the other day, we can't just cut our way to jobs and recovery. The 
Americans who sent us here understand that and want investment in our 
future.
  I believe there are better choices that we face. This is not half as 
complicated as some have chosen to make it. In fact, I don't think we 
are as far apart in this debate, when you talk to a lot of our 
reasonable colleagues on the other side of the aisle, as some want to 
imply. Everybody can agree deficits are too high. We can all agree we 
shouldn't be borrowing 40 cents on every dollar we spend. We can all 
agree we need about $4 trillion in deficit reduction to put us on a 
sustainable path. But in the end, this budget debate cannot be just 
about cutting spending, even though it must include cutting spending.
  Everyone has said that job creation and investments in clean energy, 
infrastructure, and medical research are essential, and I think we need 
to do the things that would make our economy move. Let me give an 
example of this. In America today, we are living off of the investments 
our parents and our

[[Page S4361]]

grandparents made. The Interstate Highway System didn't just sprout up 
one day; it was a government program investing taxpayer dollars in 
building a nationwide road system that helped America to grow and be 
unparalleled in its strength compared to any other nation in the world. 
That was a President Eisenhower program.
  The truth is that today we are falling further and further behind 
other nations in terms of our investment in the infrastructure of the 
future. The United States is spending less than 2 percent of its GDP on 
infrastructure. Compare that. China is spending 9 percent of GDP on 
infrastructure. Europe is spending 5 percent of GDP on infrastructure. 
They have trains and airports and other things that work and get people 
where they want to go faster than our trains.
  We are looking at a country now that has about a $2.2 trillion 
deficit in the infrastructure of our Nation. We have 69,000-plus 
bridges that are structurally deficient. We need to invest in them so 
they don't fall down like the bridge in Minnesota. We need to invest in 
our airport structures so we don't have airport delays or potential of 
collisions in our aircraft.
  According to one study, $1 billion in investment in infrastructure 
results in 18,000 jobs. So at a time when America is begging for more 
jobs, why would we not be investing in infrastructure in this country? 
You go to Germany or Brazil, and they are investing huge amounts in 
their future, and right now both countries are threatening to leave the 
United States behind with respect to alternative and clean energy 
investments of the future.
  Millions of Americans know we can do a lot better. Frankly, in the 
1980s you couldn't find three more ideologically different people than 
Tip O'Neill, Bob Dole, and Ronald Reagan, but they put politics aside 
and they saved Social Security. And they didn't capitulate. They 
compromised. They found common ground. They did it because they knew 
America's future was more important than either party.
  I often hear my colleagues on the other side of the aisle only 
talking about the spending problems of the country.
  Madam President, may I ask how much time I have used?
  The PRESIDING OFFICER. The Senator has used 14 minutes.
  Mr. KERRY. I thank the Chair.
  I often hear my colleagues talking about the spending problem. What 
they forget about is we had a surplus we created in the 1990s by making 
the tough decisions. We invested in the future of our country, and we 
created 23 million new jobs. And in the 1990s, when we balanced the 
budget--let's not forget that. Some of us were here and made those 
tough votes, and we balanced the budget, and we created 23 million 
jobs. Every income level in America went up--every single income 
level--and we did it at a time when the total relationship of spending-
to-GDP was exactly where many of us believe we ought to take it today, 
somewhere around 21 or 22 percent.
  The fact is that it was President Bush's tax cuts for the wealthiest 
Americans that we couldn't afford and a war that he refused to pay for 
in Afghanistan and then Iraq--both wars totaling approximately $2 
trillion. The tax cuts and the wars account for approximately $7 
trillion in deficits in 2009 and going forward.
  The facts are clear. The tax cuts President Bush put in place 
contributed to the deficit, and the revenues have to be addressed if we 
are going to go forward and deal with this. Federal revenues today--the 
money the government takes in--is at its lowest level since 1950. We 
have had a 60-percent reduction in revenue and a 60-percent increase in 
expenditures, and right now we are at the lowest level of revenue taken 
in that we have been at since the 1950s, and they are only about 14 
percent of the total GDP. The fact is that the last five times we 
balanced the budget, those revenues were about 19 or 20 percent of GDP. 
So here we are at 14 percent, we have balanced the budget five times 
previously, and the revenues were at about 19.5 to 20 percent of GDP. 
Doesn't that tell us something?
  There is another problem we have. It is right here on my desk. We 
have a Tax Code. The Tax Code has 8 volumes, over 72,500 pages. This is 
the Internal Revenue Code, 4,052 pages. I would ask any American, do 
you have your own page in this Tax Code? How many Americans have their 
own page in this Tax Code? Well, I have got news for you: 72,500 
entities--a lot of businesses--have found a way to get their little 
break in the Tax Code.
  Last month, the Senate, by a vote of 73 to 27, sent a clear signal 
that we ought to start looking at some of these subsidies. This entire 
Tax Code is riddled with special deals which lobbyists have worked 
against the interests of average Americans in most cases. Let me give 
you a couple of examples.
  Section 168 in this Code has a special rule for racehorse 
depreciation. How many folks in America are worried about their 
racehorse today and the depreciation on it? But they have a provision 
in here that allows the depreciation of racehorses to go from 7 years 
to 3 years, and the difference of 7 years to 3 years costs the average 
American money. The average American is supporting that because it is a 
foregone revenue. We are giving away the revenue, and we are giving it 
back to somebody who doesn't fundamentally need it.
  The Tax Code includes a definition of 3-year property. Get this: any 
horse other than a racehorse which is more than 12 years old at the 
time it is placed in service. I mean, who writes this stuff? Where does 
this come from? Not only is that a waste of taxpayer money, it makes 
the Tax Code more complex, and it requires more regulations and more 
confusion.
  A lot of tax lawyers love these eight volumes, but the average 
American ought to be furious at these volumes because these volumes are 
stealing America's opportunities in a host of other choices we could be 
making, such as education, investment in energy, energy independence, 
taking care of our veterans--doing a whole bunch of things that are 
substitutes for some of the choices that are made.
  Let me give a couple of other examples. Here is a provision. It is 
included in one of the regulations.

       On April 2000, E acquires a horse to be used in E 
     thoroughbred racing. On October 1, 2003, F buys the horse 
     from E and will use the horse in F's horse breeding business. 
     The use of the horse by E in its racing business prevents the 
     original use of the horse from commencing with F. Thus F's 
     purchase price of the horse does not qualify for the 
     additional first year depreciation deduction.

  How ridiculous can it get that we are getting into specific cases 
like that which run contrary to the common sense of average Americans? 
One has to be able to afford a lobbyist to be on one of these pages.
  Last year, more than $3.5 billion was spent on lobbying in 
Washington, DC. There are more than 13,000 lobbyists trying to 
influence the legislation in Washington. Believe me, it works. Look at 
the last 50 years.
  Back in 2004 we passed a bill which the New York Times described as 
including ``goodies for almost every kind of corporation'' and that 
``perhaps the most amazing provision might be called the foreign 
gambler relief act.''
  Under prior law, if a person is lucky and they win big at the horse 
or dog track, their winnings are subject to a withholding tax. It is 
kind of logical. But now foreigners do not have to pay tax on their 
winnings. They found a lobbyist and they got it in the Tax Code and we 
passed it somehow.
  Section 872 of the Tax Code excludes from gross income, ``income 
derived from wagering transactions in certain parimutuel pools.'' It 
specifically says, ``gross income derived by a nonresident alien 
individual from a legal wagering transaction initiated outside the 
United States in a parimutuel pool with respect to a live horse race or 
dog race in the United States.''
  Until I read this I was not absolutely certain what a parimutuel pool 
was, but I do know a provision like that does not get in here without 
lobbying. It comes at the expense of a lot of other choices because the 
problem is all these breaks--whether it is subsidies for oil or 
subsidies for gas exploration--which made sense 60 and 70 years ago, 
but here we are with record profits coming into these companies, $35 
billion of profit just for the last quarter, 3 months. Yet they get a 
break. That break comes at the expense of average folks having the 
school they deserve, having the road they want to ride on properly, and 
having decent public transportation. Those are the choices and those 
are some of the things for which we are fighting.

[[Page S4362]]

  Not only are lobbyists arguing for tax breaks, highly skilled tax 
lawyers have a history of finding looping holes for corporations to 
exploit. We use to have a provision in the Tax Code which was finally 
eliminated that provided a tax credit for synthetic fuels for coal. I 
found this process questionable and one company admitted it was 
profitable just because of this tax credit. Some firms getting this 
credit were simply spraying newly mined coal with diesel fuel or some 
other substance. We need to work together to find these type of 
provisions and remove them.
  If there is a loophole, someone will find a way through it. I think 
we all remember how one oil company was getting a tax credit for co-
processing animal fat with biodiesel from biomass. We shut that one 
down but other loopholes have opened.
  Last year, we thought that we had seen the end of the ``black liquor 
boondoggle.'' Paper mills were using a mixture of diesel fuel and a 
byproduct of the pulping process as an energy source for the mill. The 
intended purpose of this credit is to produce motor fuels from biomass. 
These companies were getting a windfall that was never intended. I am 
now hearing that some companies are still finding a way to benefit from 
black liquor. I have also heard that some are trying to benefit from 
this same credit for alternative fuels by adding cow waste and other 
waste to diesel fuel. This was not the intended purpose of this 
provision. In past Congresses, I have introduced line-item veto 
legislation which included tax benefits. These are abuses that we can 
all agree to end.
  For years, we have been trying to repeal subsidies for major oil 
companies. Just last month, we failed to eliminate $2 billion a year in 
tax incentives for oil companies. These incentives are no longer 
needed. We needed to jointly review the Tax Code and remove the 
deadwood. Some subsidies are no longer needed. And some are completely 
necessary. The Tax Code has become riddled with special interests. Over 
the past 25 years, Congress has introduced billions of dollars of worth 
of special tax breaks, loopholes and subsidies into the Tax Code--
making total tax expenditures now exceed $1 trillion.
  With the future of our country at stake we have to decide if we want 
to care for our elderly and educate our children or provide tax breaks 
for those who do not need them. Would we rather invest infrastructure 
or allow race horse owners a shorter period to depreciate their horse?
  As we consider legislation to increase our debt limit, our colleagues 
in the minority refuse to even discuss eliminating any of the tax 
expenditures that these lobbyists have helped enact into law. Not one 
permanent tax expenditures. I guess they prefer to increase the 
spending cuts that hurt low and moderate-income families.
  I think we need to review the $1 trillion in expenditures and decide 
what is really needed instead of slashing programs which will weaken 
our economy. It is time for us in Congress to stop falling prey to 
corporate lobbyists and stand up for our future. To reduce the deficit 
we need to make hard choices and we should not be afraid of saying 
``no.'' If we do not start eliminating tax expenditures, we will not be 
able to reduce the deficit without gutting Medicare or Medicaid.
  We hear a lot about the Ryan budget, but make no mistake: the House 
passed budget does not eliminate the deficit. It just makes a series of 
spending cuts to provide tax cuts to those at the very top even greater 
than the existing 2001/2003 tax cuts.
  And Chairman Ryan may call his budget the ``Path to Prosperity,'' but 
that is not where its path would take our seniors. At least two-thirds 
of the over $4 trillion in budget cuts come from programs serving those 
of modest means. To be clear, the House budget is not about reducing 
the debt. It is about putting in place Republican priorities--
increasing tax cuts for the wealthy and slashing social programs that 
people depend on.
  We should examine all spending and not leave defense spending off the 
table. For example, we should be cutting programs like the Medium 
Extended Air Defense System, MEADS, which had a budget request of $406 
million for fiscal year 2012 but the Pentagon said was running over 
schedule and running over cost. Or the F-22 raptor fighter jet, which 
in 2009 we were able to cut $1,750,000,000 in procurement funds of a 
plane that was costing too much money and wasn't appropriate for the 
21st century wars we are engaged in. We should aggressively go after 
fraud and abuse, eliminate erroneous payments to health providers, and 
better coordinate health care for people who receive both Medicare and 
Medicaid. These dual eligible beneficiaries account for only 15 percent 
of Medicaid enrollment but constitute nearly 40 percent of Medicaid 
spending.
  Instead of digging more ideological trenches, we should look at the 
last time we actually achieved a path to fiscal stability. The 
bipartisan 1990 budget agreement included discretionary caps and 
revenue increases. It was a real compromise that looked at both sides 
of our budget equation. And in January of 2001, the Congressional 
Budget Office projected that the debt would be erased by 2006 and that 
by 2011, there would be a $2.3 trillion surplus.
  Yet somehow, in the years since this real bipartisan success, too 
many people in this building seem to have forgotten that there are two 
sides of the budget ledger.
  Just look at the balanced budget amendment House and Senate 
Republican leaders proposed. It caps Federal spending in any fiscal 
year at a completely unrealistic 18 percent of GDP. It wouldn't just 
result in unthinkable cuts to Social Security, Medicare, and Medicaid; 
it would also impose arbitrary limits on the Federal Government's 
ability to respond to the recession. So the recession could be deepened 
by increasing the number of unemployed, decreasing business investment, 
and withholding services needed to jump-start the economy. And yet this 
same proposal would require a two-thirds vote to increase revenues, 
making it nearly impossible to eliminate wasteful tax loopholes or 
unnecessary tax giveaways.

  So let's be realistic. We need to set ourselves on a course to rein 
in deficits and debt. No one disputes it. To do this, the budget 
negotiations should include a budget enforcement mechanism--and it 
can't result in a sequestration of spending only; if a budget 
enforcement mechanism only focuses on spending cuts, we are only 
addressing part of the problem. It would slash essential programs while 
ignoring revenues. That is simply not a responsible long-term budget 
solution, and it would never get bipartisan support.
  For an enforcement mechanism to work, both sides should not want the 
trigger to occur. We shouldn't be hoping for automatic spending tax 
cuts or increased revenues. A tough budget enforcement mechanism will 
force us to make difficult choices, both substantively and politically.
  It is time to end the polarization over how to resolve our budget 
crisis. We can't hide behind global spending caps, unrealistic 
constitutional amendments, or pledges vowing opposition to tax 
increases. The cuts that would be required to meet the spending targets 
of a cap would have to be as drastic as or even worse than proposals 
included in the House-passed budget resolution.
  Spending for Social Security, Medicare, and Medicaid are driven by 
factors beyond the programs' control. Under spending caps, their 
percentage cuts would be bigger than the percentage cut in 
discretionary programs and they would be subject to automatic large 
cuts.
  We need to think hard about what is fair in America. The only tax 
President Obama or we Democrats have talked about is on the wealthiest 
people. Millionaires. People who earn more than $1 million a year. That 
is about 7,000-plus lucky families and individuals in the United 
States. All we are doing is talking about asking those who benefit 
enormously from the strength of our economy and the strength of our 
military and all the things we need to do--we are just asking them is 
it too much to go from 36.9 percent up to 39.6 percent, which is where 
they were in the year 2000, before President Bush gave them a tax cut 
we could not pay for.
  It is not as if they have done badly these last 10 years. The fact 
is, more wealth has been accumulated in the hands of the smallest part 
of America, the top 1 percent, than at any time in America's history. 
The wealthy are far wealthier than when we had no income tax and when 
we had the great names

[[Page S4363]]

of the 1920s and 1930s and the industrial revolution: Pierponts, 
Morgans, Carnegies, Mellons, Rockefellers, and so forth. They are much 
wealthier today. Yet they are paying far less of their share than at 
any time in modern history.
  Here we are with a deficit problem. They are talking about cutting 
Medicaid. They are talking about cutting Medicare. They are talking 
about cutting education loans, making it more expensive for kids to go 
to college--the one thing we desperately need in order to compete with 
the rest of the world, people who have a college education. I do not 
hear anybody in America saying make it harder for my kid to go to 
college, but that is what they are doing in their budget. That is 
exactly what they are doing. But they stand up adamantly and say: No 
way will we allow people earning more than $1 million a year to pay 
anything additional into the system. It is just wrong. It is morally 
wrong. It is repugnant in this country we are condoning the 
institutionalization of a larger and larger gap between the haves and 
the have-nots, between the people who have already gotten their brass 
rings and the people who are trying to reach it. That is not the 
American story. I believe we need to fight to have a balanced approach.
  President Obama and the Democratic proposals I have seen and we have 
talked about--and I hope people will hear more about in the next days--
give a tax cut to about 98 percent of America. The only people we are 
talking about asking to kick in and give us some more revenue are 
people earning the most.
  If a person is earning $500,000 a year, they would not pay any 
additional tax on their first $250,000. On the next $250,000 all they 
would pay is $12,000 of additional tax. Let me ask--no, I will say I 
know this. There is not one business person, there is not one 
millionaire for whom $12,000 will change one consumer purchase, one 
decision of investment--not one. All this talk about how it will slow 
down the economy or hurt America is just bunk. It is not true.
  We need to have a real discussion. We need to have a real effort that 
I think matches the greatness of this institution with this moment. 
This can be the world's greatest deliberative body, but we need to put 
all of these issues on the table. We need to debate them openly. We 
need to have the courage of our convictions and vote up or down and do 
what is needed to put our country on track because right now we are 
losing countless investment opportunities, countless job opportunities. 
If we do not make the right choices we are going to have a very 
difficult time living up to the promise all of us hope to live up to in 
our time in this office.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. Madam President, I ask unanimous consent for 15 minutes 
to address this body as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Madam President, it is well known to all Americans who 
have observed, and certainly the media and certainly Members of this 
body, the Congress, that the debt limit talks are bogged down. There 
has been little if any progress, certainly not any perceptible to the 
American people. We are in a gridlock, a gridlock that is not favored 
by many Americans. In fact, I continue to hear from my constituents the 
call: Why can't you all sit down and work this out? Why can't we not be 
faced with a shutdown of the government and the loss of the important 
services that the Federal Government gives to the American people--most 
of which they have earned and all of which they deserve?
  Here we are with the President of the United States demanding that 
there be tax increases and the Republicans, certainly many of them, are 
insisting on a balanced budget amendment which cannot pass the Congress 
of the United States.
  On the one hand, President Obama and my friends on the other side of 
the aisle insist on tax increases and argue somewhat inflammatory and 
populist issues such as corporate jets, carried interest for private 
equity, oil and gas. Those are hard to defend.
  At the same time it is very clear that the American people spoke and 
administered what the President of the United States called a 
``shellacking'' last November. They want us to stop mortgaging our 
children's and our grandchildren's future and get the spending under 
control. I have yet to meet a constituent who wants their taxes 
increased.
  We are in a gridlock. There will be a meeting tomorrow on the debt 
crisis again, this time between the President and leaders of Congress. 
We all hope it will succeed, but it is my view the way to break this 
gridlock is to agree to certain tax increases and closing loopholes, 
but only in return for an overall reduction of the corporate tax rate. 
That way, Republicans can say we have not raised taxes overall, and the 
administration and the Democrats can say they eliminated loopholes and 
indeed made the taxation of Americans more fair.
  It is time we got serious. The debt, as we all know, is $50,000 for 
every man, woman, and child living in America today. That is why we 
have seen the rise of the Tea Party and the fiscal conservatives. I 
hope these negotiations can be made visible to the American public by 
C-SPAN so they can see what is being discussed.
  As I said, the debt stands at $14.5 trillion. We cannot continue to 
sit idly by while saddling future generations of Americans with the 
burden. So if we are serious about our commitment to reduce our debt 
and eliminate the deficit, then Congress needs to start making some 
serious decisions, and we need to start now.
  I would like to remind my colleagues, particularly in light of the 
impassioned speech I just listened to from my friend from 
Massachusetts, here is what President Obama's thoughts on the debt 
limit were in 2006 when he was a Member of this body. I quote him from 
a speech he made on the floor of this Senate:

       The fact we are here today to debate raising America's debt 
     limit is a sign of leadership failure. It is a sign that the 
     U.S. Government cannot pay its own bills. It is a sign that 
     we now depend on ongoing financial assistance from foreign 
     countries to finance our Government's reckless fiscal 
     policies. . . . Increasing America's debt weakens us 
     domestically and internationally. Leadership means that ``the 
     buck stops here.'' Instead, Washington is shifting the burden 
     of bad choices today onto the backs of our children and 
     grandchildren. America has a debt problem and a failure of 
     leadership. Americans deserve better.

  Then-Senator Barack Obama on the floor of this Senate.
  I guess it shows on some issues with then-Senator Barack Obama it is 
not where one stands, it is where one sits. I could not agree more with 
what then-Senator Obama said in 2006. Americans do deserve better. We 
are in this mess today because of a serious lack of leadership. It is 
not the fault of just one of the political parties; it is the fault of 
both parties. Year after year of uncontrolled spending by both 
Republicans and Democrats has brought us to the brink of bankruptcy. 
The point at which we will begin to default on our obligations is now 
just weeks away, and it is shameful. It should be inconceivable that 
the greatest Nation in the history of the world should face such 
crippling debt while its leaders engage in such partisan bickering 
instead of solving this problem.
  I would like to bring to the attention of my colleagues the lead 
editorial in today's Wall Street Journal, which I believe holds the 
answer to this stalemate.
  Madam President, I ask unanimous consent that today's editorial in 
the Wall Street Journal entitled ``A Debt-Limit Breakout'' be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, July 5, 2011]

                         A Debt-Limit Breakout

       The debt-limit talks in Washington are bogged down in the 
     hedgerows, with some Republicans insisting on a balanced 
     budget amendment that can't pass Congress and President Obama 
     insisting on tax increases that Republicans oppose. What this 
     debate needs is a breakout strategy--to wit, Republicans 
     should answer Mr. Obama's tax call by accepting his business 
     tax increases in return for a lower corporate tax rate.
       We've long favored such a reform, and last year so did the 
     Simpson-Bowles deficit commission and the White House 
     economic advisory council headed by Paul Volcker. But the 
     cause has now acquired no less a convert than Bill Clinton. 
     Speaking Saturday at something called the Aspen Ideas 
     Festival, the former President admitted that he had once 
     raised tax rates on corporations.

[[Page S4364]]

       ``It made sense when I did it. It doesn't make sense 
     anymore. We've got an uncompetitive rate,'' he said. ``We tax 
     at 35% of income, although we only take about 23%. So we 
     should cut the rate to 25%, or whatever's competitive, and 
     eliminate a lot of the deductions so that we still get a fair 
     amount, and there's not so much variance in what the 
     corporations pay.''
       We opposed Mr. Clinton's tax increases, not least because 
     corporations don't pay taxes so much as they serve as a 
     collecting agent. But on the rest of Mr. Clinton's riff, 
     Milton Friedman and Robert Mundell couldn't have put it 
     better, though perhaps they'd think that 25% is still too 
     high.
       We'd prefer 15% ourselves, but Mr. Clinton is exactly right 
     on the failure of the 35% rate (39% on average including the 
     states) to capture that share of corporate income in 
     government revenue. We wrote earlier this year about 
     Whirlpool, which had an effective tax rate of zero due to its 
     many write-offs. Everyone knows the notorious case of GE.
       The average effective corporate rate varies by industry but 
     is far less than the 35% rate, and the injustice is that some 
     pay much less than others if they can afford lobbyists to 
     write loopholes or they invest in politically correct 
     purposes. Anyone not in thrall of class-war symbolism 
     understands that the U.S. corporate tax code provides the 
     worst of both worlds: It makes U.S. companies less 
     competitive even as it is raises much less revenue than 
     advertised. Mr. Obama and Treasury Secretary Tim Geithner 
     have acknowledged this in the past, the President as recently 
     as this year's State of the Union address.
       As for the debt-limit politics, this is also a winner. 
     Democrats and Republicans say they've agreed privately on 
     sizable spending cuts over a 10-year budget window. No doubt 
     some of those cuts are less real than others, and future 
     Congresses could rewrite any enforcement provisions passed 
     this year. But Republicans still have an incentive to set 
     spending on a downward path, and Mr. Obama has an incentive 
     to show he is no longer a hostage of Nancy Pelosi as he runs 
     for re-election.
       The political sticking point is Mr. Obama's desire for some 
     Republican buy-in on raising revenues. His political left is 
     still sore that he agreed to extend the Bush tax rates 
     through 2012. Thus he's pounding Republicans to agree to 
     eliminate certain business tax deductions that political 
     advisers David Axelrod and David Plouffe have told him will 
     be hard for Republicans to defend. Corporate jets. Carried 
     interest for private equity. Oil and gas. Even LIFO 
     accounting, which few understand but can be made to sound 
     nefarious.
       Whatever their individual merits, each of these would be a 
     tax increase on business, and Republicans campaigned last 
     year on not raising taxes. But the politics is different if 
     they can offset these revenue raisers with lower tax rates. 
     That would let Republicans honestly claim they didn't support 
     a net tax increase, even as Mr. Obama could say he raised 
     revenue.
       Our own guess is that such a reform would raise far more 
     money than the official scorers would predict, since it would 
     lead to a more efficient allocation of capital and less tax 
     evasion. This would also promote economic growth, breaking 
     out of the austerity mentality driven by debt reduction. If 
     Mr. Obama really is worried that lower federal spending will 
     hurt the economy, then this tax reform is also his best 
     growth policy.
       In offering his grand bargain on Saturday, Mr. Clinton 
     included the caveat of ``how can they do that by August 2?'' 
     Mr. Geithner says that is the date when he can no longer 
     finagle federal finances to escape a potential default on the 
     debt, or must at least cut some federal spending, to avoid 
     breaching the $14.3 trillion debt limit.
       But where there's political self-interest there's always a 
     way. Both sides could agree to a short-term debt-limit 
     reprieve of a month or two with some spending cuts that 
     everyone agrees on. That would give them more time to cut a 
     larger deal that includes corporate tax reform.
       Think about it. On the current path both sides are headed 
     at best for a de minimis deal that makes everyone look bad, 
     at worst for a major political crack-up. Perhaps Mr. Obama 
     wants a crack-up to portray Republicans as extreme. But 
     Republicans should at least call his bluff and answer his 
     demands for fewer business tax deductions by saying yes--in 
     return for lower tax rates.

  Mr. McCAIN. I quote from it:

       The debt-limit talks in Washington are bogged down in the 
     hedgerows, with some Republicans insisting on a balanced 
     budget amendment that can't pass Congress and President Obama 
     insisting on tax increases that Republicans oppose. What this 
     debate needs is a breakout strategy--to wit, Republicans 
     should answer Mr. Obama's tax call by accepting his business 
     tax increases in return for a lower corporate tax rate.

  The Wall Street Journal goes on to say:

       We've long favored such a reform, and last year so did the 
     Simpson-Bowles deficit commission and the White House 
     economic advisory council headed by Paul Volcker. But the 
     cause has now acquired no less a convert than Bill Clinton. 
     Speaking Saturday at something called the Aspen Ideas 
     Festival, the former President admitted that he had once 
     raised tax rates on corporations.
       ``It made sense when I did it. It doesn't make sense 
     anymore. We've got an uncompetitive rate,'' he said. ``We tax 
     at 35% of income, although we only take about 23%. So we 
     should cut the rate to 25%, or whatever's competitive, and 
     eliminate a lot of the deductions so that we still get a fair 
     amount, and there's not so much variance in what the 
     corporations pay.''

  The editorial goes on to say:

       Anyone not in thrall of class-war symbolism understands 
     that the U.S. corporate tax code provides the worst of both 
     worlds: It makes U.S. companies less competitive even as it 
     raises much less revenue than advertised. Mr. Obama and 
     Treasury Secretary Tim Geithner have acknowledged this in the 
     past, the President as recently as this year's State of the 
     Union address.
       As for the debt-limit politics, this is also a winner. 
     Democrats and Republicans say they've agreed privately on 
     sizable spending cuts over a 10-year budget window. No doubt 
     some of those cuts are less real than others, and future 
     Congresses could rewrite any enforcement provisions passed 
     this year. But Republicans still have an incentive to set 
     spending on a downward path, and Mr. Obama has an incentive 
     to show he is no longer a hostage of Nancy Pelosi as he runs 
     for re-election.
       The political sticking point is Mr. Obama's desire for some 
     Republican buy-in on raising revenues. His political left is 
     still sore that he agreed to extend the Bush tax rates 
     through 2012. Thus he's pounding Republicans to agree to 
     eliminate certain business tax deductions that political 
     advisers David Axelrod and David Plouffe have told him will 
     be hard for Republicans to defend. Corporate jets. Carried 
     interest for private equity. Oil and gas. Even LIFO 
     accounting, which few understand but can be made to sound 
     nefarious.
       Whatever their individual merits, each of those would be a 
     tax increase on business, and Republicans campaigned last 
     year on not raising taxes. But the politics is different if 
     they can offset these revenue raisers with lower tax rates. 
     That would let Republicans honestly claim they didn't support 
     a net tax increase, even as Mr. Obama could say he raised 
     revenue.
       Our own guess is that such a reform would raise far more 
     money than the official scorers would predict, since it would 
     lead to a more efficient allocation of capital and less tax 
     evasion. This would also promote economic growth, breaking 
     out of the austerity mentality driven by debt reduction. If 
     Mr. Obama really is worried that lower federal spending will 
     hurt the economy, then this tax reform is also his best 
     growth policy.

  The Journal argues that we can offset the costs to businesses of 
closing loopholes and eliminating subsidies with a cut in the corporate 
tax rate. I completely agree. We should be openminded when considering 
what should be eliminated. For instance, the distorting effect of 
subsidies is clearly evident in the energy sector. We should eliminate 
these subsidies, lower the corporate tax rate, and allow the 
marketplace to pick winners and losers, not the government.
  The ethanol tax is a perfect example. This year the ethanol tax 
credit cost taxpayers almost $6 billion in addition to the $41.2 
billion we have already spent in subsidies on ethanol since 1980.
  A recent CRS, Congressional Research Service, report indicates that 
tax credits and subsidies for solar, wind, and geothermal power will 
cost $8.6 billion from 2008 to 2012. For the oil and gas industry, the 
eight tax breaks recommended for elimination by President Obama would 
eliminate $43.6 billion in spending over 10 years. The largest among 
these tax breaks is the section 199 manufacturing tax subsidies that 
will cost approximately $18 billion over 10 years. We should eliminate 
the section 199 tax subsidies for all industries to avoid arbitrarily 
picking winners and losers. Why should we value manufacturing over 
other service providers?
  Additionally, we should eliminate all agricultural subsidies, 
including sugar programs, end corporate welfare, and end tax breaks for 
corporations for things such as corporate jets. We need to put aside 
the rhetoric of corporate jets, which is just a poll-tested political 
phrase concocted behind one-way mirrors. Everyone knows eliminating all 
tax breaks on corporate jets would not amount to any real progress, but 
if we seriously looked at curbing corporate subsidies, such as the 
ethanol subsidy I just mentioned, then all Americans would benefit.
  I feel the need to provide my colleagues with some straight talk. As 
the Journal notes, some of my Republican colleagues are ``insisting on 
a balanced budget amendment that can't pass Congress.'' Let me be 
clear--I am an avid supporter of a balanced budget amendment to the 
Constitution. Since 1983, I have introduced or cosponsored more than a 
dozen bills or amendments calling for a balanced budget amendment, and 
I have had the privilege of

[[Page S4365]]

voting in favor of a balanced budget amendment to the Constitution no 
less than 13 times in my Congressional career. I applaud my colleagues 
for their tireless dedication to this cause. But our reality today 
dictates that we do not have the votes in this body to enact such a 
measure. Perhaps that will change after next year. I hope so. But for 
our purposes today, in order to avoid what could be disastrous 
consequences for our markets, our economy as a whole, and our standing 
in the world, I encourage my colleagues to lay aside, at least 
temporarily, their insistence that amending the Constitution be a 
condition of their support for a solution to this terrible problem.
  The Wall Street Journal editorial ends with this:

       Think about it. On the current path both sides are headed 
     at best for a de minimis deal that makes everyone look bad, 
     at worst for a major political crack-up. Perhaps Mr. Obama 
     wants a crack-up to portray Republicans as extreme.

  As my colleague from Massachusetts just did.

       But Republicans should at least call his bluff and answer 
     his demands for fewer business tax deductions by saying yes--
     in return for lower tax rates.

  I couldn't agree more with the Wall Street Journal. This debate 
desperately needs a breakout strategy. I am pleased to see that 
President Clinton has joined the Wall Street Journal in embracing a 
commonsense solution to this problem. I hope President Obama will 
follow former President Clinton's lead and the example set by the great 
Ronald Reagan and put aside politics, work with the Congress on this 
matter, and accept a compromise that will allow us to responsibly deal 
with our debt while creating jobs and spurring economic growth.
  I would like to point out again:

       The average effective corporate rate varies by industry but 
     is far less than the 35 percent rate, and the injustice is 
     that some pay much less than others if they can afford 
     lobbyists to write loopholes or they invest in politically 
     correct purposes. Anyone not in thrall of class-war symbolism 
     understands that the U.S. corporate tax code provides the 
     worst of both worlds: It makes U.S. companies less 
     competitive even as it raises much less revenue than 
     advertised.

  So the fact is, the corporate Tax Code needs to be reformed anyway, 
and we need to cut it to 25 percent. It is either the first or the 
second highest tax rate in the world. Yet somehow major corporations 
such as Whirlpool and GE end up paying no taxes, but yet small 
businesspeople who can't afford a lobbyist here in Washington end up 
paying the 35-percent rates if they are incorporated. It is time we 
tell the American people who are frustrated by our lack of leadership, 
by our failure to come together. It is time to end the rhetoric, 
fulfill the commitment we made to the American people last November who 
resoundingly sent the message that they want the spending cut and the 
mortgaging of our children's future stopped. This is a reasonable 
proposal that I believe, with spending cuts, can be a breakthrough that 
we can proudly return to our constituents and say we are taking care of 
them, not the special interests and not hide-bound ideology.
  I yield the floor.
  Mr. UDALL of Colorado. Madam President.
  The PRESIDING OFFICER. The Senator from Colorado is recognized.
  Mr. UDALL of Colorado. I ask unanimous consent that the time of the 
debate of the previous order be extended until 7 p.m., with all the 
provisions of the previous order remaining in effect.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. UDALL of Colorado. I ask unanimous consent I be able to speak for 
15 minutes as in morning business and that Senator Coons be allowed to 
speak as in morning business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. UDALL of Colorado. Madam President, I believe we may be in a 
situation where we are exchanging speeches one side and the other. May 
I withdraw my unanimous consent request for Senator Coons?
  The PRESIDING OFFICER. The consent is vitiated.
  Mr. UDALL of Colorado. Madam President, I came to the floor to 
deliver a speech on the debt ceiling and all the activity surrounding 
the need to increase our debt ceiling, but I took the time to listen to 
Senator McCain while I was here, and I have to say I agree with Senator 
McCain. We need a breakout strategy. We need cooler heads to prevail, 
and I think many, if not all, of us can agree our tax system is overly 
complex. It ought to be simplified. We ought to lower rates. We ought 
to end the loopholes and the subsidies and the deductions and let the 
free market reign. I look forward to working with the Senator from 
Arizona as we, hopefully--and hope sometimes is a strategy--but we get 
a broad agreement, we go big. We deal with our debt, we strengthen our 
entitlement programs, we reduce spending, and find ways to generate 
more revenues.
  I thank the Senator from Arizona for his comments.
  I rise, as I just implied, because I think the fiscal challenges that 
confront us demand a bipartisan solution. Both parties approach the 
issues before us from very different points of view, but time is truly 
running out on our Nation's structural deficits and our long-term debt 
and the need for us to address those. I want leaders in both parties to 
show genuine commitment to action. How about if we set aside our 
talking points so we can get some work done. If any other Members 
believe the solution to our deficit and debt demands comprehensive and 
bipartisan solution such as the fiscal commission or the Gang of 6, I 
would invite them to come down to the floor and let our colleagues know 
we are clearly racing toward a crisis that seems like we can't let go 
of the partisanship and the political posturing that creates gridlock 
in the Capital City of Washington. It sure strikes me as childish. I 
think it strikes many Americans and Coloradans as that way as well.
  We are more broadly having this debate because the time is upon us to 
decide the economic future of our country. Yes, we have to raise the 
national debt, but this is about our economic future, and this is the 
country we inherited by our children and grandchildren. Quite simply, 
we are not going to win the global economic race of this 21st century 
unless we start taking action now to improve our economy, grow American 
jobs, and get our debt under control. With these challenges, as large 
as they are facing us, this is the time to set aside our political 
differences and challenge ourselves to put our country first.
  A few basic facts focus the attention. Our national debt is $14 
trillion and it is growing. Today, each citizen's share of that debt is 
over $46,000 per individual. If we remain on this path, which is 
irresponsible, there is no question about that. The Government 
Accountability Office projects that by 2050, our Nation could owe more 
interest on our debt than the Federal Government raises in taxes in a 
given year, and our sky-rocketing debt is not only spooking 
international markets, but it is a serious threat to our national 
security. Listen to Secretary of Defense Gates or Chairman of the Joint 
Chiefs Admiral Mullen, they will make that point in a compelling 
fashion. Look, we got here in ways that are not simple. But 
unquestionably two unpaid-for wars, two rounds of massive tax cuts, 
unpaid-for prescription drug benefits, and drastic rescue measures 
needed to address the most serious economic downturn since the Great 
Depression have all contributed to the current situation.
  The solutions are even more difficult. While we may disagree about 
the path forward, I think we all know in our hearts that we cannot get 
to a solution unless we all agree to come to the negotiating table 
willing to compromise to ensure that our country, the United States--
the largest economy in the world--can honor our bills and begin to pay 
down our debts. That is the challenge, that is the problem, that is the 
opportunity, as I see it, that brings us to the Senate floor today.
  We began this year with serious and, I believe, earnest conversations 
about this in not one but two groups of lawmakers in the House and 
Senate. Yet, despite all the talk and a lot of hard work, rather than 
nearing an agreement, we seem to be coming to an impasse. In the last 
few weeks, the state of negotiations seems to have fallen apart, with 
key players choosing to walk away rather than compromise. We hit the 
same roadblock that always inhibits action when things get tough: 
Politics get in the way.

[[Page S4366]]

  In fact, it seems as if everybody in the world except the Congress 
seems to know time is running out. Think back to April. Standard & 
Poor's cut the U.S. ratings outlook to ``negative'' due to the 
uncertainty over budget deficits and the debt ceiling. This month, 
Moody's piled on, warning that it too may downgrade the U.S. ratings 
outlook to ``negative'' as early as July--it is July 6--because of 
concern over gridlock in Washington.
  I have to say the American people are running out of patience as 
well. Back home in Colorado, people are wondering what in the world we 
are doing in Washington. I was not up for reelection in 2010, but I was 
listening to what the voters were saying. They clearly said to us they 
want us focused on jobs, the economy, and the debt. And they want us to 
work together.
  Consider the direction I got recently from Curt, who is a constituent 
in Arvada, CO. He wrote:

       I am counting on you to put the interests of everyday 
     Americans above party politics and join your legislative 
     colleagues on both sides of the aisle in finding sensible 
     solutions to our long-term national debt problem.

  Many more Coloradans have sent me similar messages. I got one from a 
Boy Scout, David, in Evergreen, CO, whose words were stronger than 
mine. He said:

       I think the United States government should stop spending 
     unnecessary money. We should first focus on what is 
     necessary. . . . It is amazing how much money our country 
     owes. It is constantly going up! I just looked at information 
     about the United States debt clock, and I think this debt is 
     way too high. People in the federal government in Washington 
     D.C., are spending money as if they had all the money in the 
     world.

  David, if you are listening, I agree.
  No question, Americans want quality roads, a safety net for the sick 
and elderly, and strong investments in education and research that will 
spur innovation and good-paying jobs. But we need to commit to ensuring 
we have the financial stability to pay for them.
  For too long, the American people have collectively been told by us 
here in Washington that they can have more of everything they want 
without us fully paying for it. But to preserve a promising future for 
our children--for Curt's children, for David--we are going to need to 
face up to some hard truths.
  Fifty years ago, my father, former Arizona Congressman Mo Udall, 
supported what should only seem natural: tying spending directly to 
revenues. Let me give you a couple examples. If we want to give oil 
companies $1 billion in tax subsidies, then let's raise taxes by $1 
billion to pay for them. The same thing, though, goes for overseas 
conflicts, agricultural subsidies, infrastructure, and, yes, even 
entitlements.
  Coloradans from across my home State have told me they want to see 
their leaders try using some common sense--the kind of common sense 
Americans use when they are faced with the hard job of balancing their 
own budgets when money is tight.
  As a Senator, I have successfully led the fight to end wasteful 
earmark spending, proposed measures to cut redundant government 
programs, demanded line-item veto authority for the President, and, 
yes, pushed--and I see my colleagues from the other side of the aisle 
here--for a very sensible balanced budget amendment to our U.S. 
Constitution. But these measures only serve as tools to get Washington 
to clean up its act, and that is not enough. We need to suck up our 
courage and actually make the tough budgeting decisions.
  If we are going to get anywhere, we have to realize we all have skin 
in the game and we have to check ultimatums at the door--especially on 
issues such as Social Security and taxes. The challenge facing us is so 
great we cannot afford to let partisanship or electioneering get in the 
way--and both parties are guilty.
  For example, we cannot seriously address debt reduction without 
looking at Social Security. If we do nothing, by 2036, Social Security 
benefits will have to be cut by 20 percent. Congress will undoubtedly 
be under enormous pressure to fill in that hole in lieu of telling 
seniors their benefit checks would be reduced. To say Social Security--
when you look at it that way--must be divorced from deficit reduction, 
as many Democrats do, is to ignore the problem.
  In a similar vein, it is unrealistic to maintain, as my Republican 
colleagues do, that raising revenues cannot be a part of the deficit 
and debt reduction equation. We should all be honest enough to admit a 
simple fact: No amount of spending cuts alone will reduce our deficits 
without unreasonably harming Social Security and Medicare. For some to 
say that revenues should not be part of the deficit reduction picture 
is either a sign that they are not serious about getting our debt 
situation under control or they are being disingenuous about the 
dangerous implications spending cuts alone would have on our hard-
working constituents who rely on these important programs.
  What is so agonizing about the last 6 months is that we have a 
bipartisan solution in front of us, one that I know--I don't just 
believe but I know--would responsibly reduce our debt while also 
allowing the economy to grow and protect our middle class.
  In December 2009, I know the Presiding Officer and I, along with a 
number of other Senators, pushed for the creation of the President's 
National Commission on Fiscal Responsibility and Reform, which was then 
chaired by Erskine Bowles, a North Carolinian, and Alan Simpson, a 
Wyoming resident. They did an exhaustive study of what it would take to 
get our debt under control, and last year they delivered a report on 
how to reduce the debt by over $4 trillion in the next decade and bend 
the curve back to a much more sustainable Federal budget situation. 
They comprehensively addressed all of the issues that must be on the 
table; namely, spending cuts, reasonable entitlement reform, and some 
new revenues. The plan has already received bipartisan support, 
including from Senators of each party who were members of the 
commission. Rather than arguing, we could be acting on these 
recommendations. And, look, if we do not want to follow those exact 
recommendations, let's all at least agree that everything must be on 
the table in these ongoing debt discussions.
  Many of us here simply want to roll up our sleeves and get to work. I 
see some of my colleagues on the other side of the aisle. I know they 
share that sentiment, even if our leaderships in both parties are 
demanding that we be quiet. But I think we can all focus our attention 
on a sensible, bipartisan plan, work together, and pass it into law 
before our national credit rating is downgraded and we damage our 
chances of winning the global economic race.
  The Presiding Officer knows, my colleagues know, I am not a 
particularly dramatic person. But I have to tell you, I believe that 
nothing less than the fate of the U.S. economy hangs in the balance, 
and I am certainly willing to stay here day and night, weekends and 
holidays, in Washington, DC, to help put a plan in motion.
  Madam President, thank you for your attention.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. COONS. Madam President, I rise to follow the comments of my 
colleague from Colorado, and I appreciate the forbearance of my 
colleagues from Florida and New Hampshire.
  I simply want to follow on the comments of the Senator from Colorado 
in emphasizing the sense of urgency, the sense of frustration and of 
deep concern I know many of us feel in the Senate of the United States.
  On the Fourth of July, as I went up and down the State of Delaware to 
different parades and picnics and gatherings, I had the opportunity to 
meet with and talk to thousands of Delawareans. Over and over, I would 
go up to men who were wearing hats that showed they served, whether in 
the Korean war, the Vietnam war, the Second World War, and I thanked 
them for their service. Repeatedly, I would hear the same thing back: 
We have done our job. We hope you will do yours.
  When I was elected in 2010 to serve in the Senate, I heard the same 
message from the folks across Delaware that I just heard Senator Udall 
reflect from the people of Colorado: Help the private sector create 
good jobs, deal with the deficit and debt, and do it in a bipartisan 
and responsible way.
  I am gravely concerned we are on the verge of the most predictable 
financial crisis in modern American history as we slowly grind toward 
the predicted default on America's mortgage on August 2.

[[Page S4367]]

  Treasury Secretary Tim Geithner has warned us since the beginning of 
this year with a letter he sent to us on January 6, with repeated 
testimony in front of various committees of the Senate. We have gone 
well past the May 16 deadline, and the Department of the Treasury is 
now using extraordinary measures to prevent us from defaulting on 
America's commitments.
  I have heard other analogies used, but they are mistaken. This is not 
about cutting up the credit cards or ending the blank check for our 
current President. This is about whether we will continue to meet the 
commitments America has already made, whether we will continue to make 
the payments that were already committed to for our troops in the 
field, for contractors who are providing military supplies and 
equipment, for our Federal workforce, and for all the different 
programs and benefits the Senator who spoke before me mentioned: 
Medicare, Medicaid, Social Security, and others.
  We cannot afford the consequences of default. One study says we would 
lose 640,000 jobs--more than a half a million additional Americans 
needlessly thrown out of work because of a foolish game of chicken. The 
cost to home mortgages, to car loans, the daily cost of living, 
including for food and gas, would go up needlessly if we simply fail to 
uphold the tradition of meeting our commitments as a nation.
  I am here to say today that we cannot afford to have America become a 
bad investment. The best thing we can do going forward is to restore 
certainty to our markets, to put some confidence back in the American 
economy, to make certain the international community continues to 
regard us as the safest and best investment in the world. The way to do 
that is to come together in a bipartisan way around a big deal, around 
$4 trillion in savings, at least.
  The Senator from Colorado went into some detail as to the bipartisan 
Debt and Deficit Commission, chaired by Erskine Bowles and Alan 
Simpson, the Democratic former Chief of Staff and the Republican former 
Senator from Wyoming, with the 11 members of that commission, including 
Members of this body, currently serving Senators, Republican and 
Democrat, who came together around a plan that would make $4 trillion 
in savings over the next decade.
  I think we should do no less than that. I think the plan we should be 
working on in detail now should include all four major areas where we 
have to have savings: reductions in discretionary domestic spending, 
reform to our entitlement programs, reductions in Pentagon spending, 
and increases in Federal revenue through tax reform. All four of these 
have to be on the table. In my view, our values ask no less than that.
  As we work through a recovery, we need to continue to invest in 
education, in infrastructure, in innovation. But we also need to 
responsibly put together a bipartisan path that will take on the sacred 
cows of this institution and of America's Tax Code.
  Three weeks ago, we had more than 70 Senators cast votes to end the 
$6 billion in needless annual ethanol subsidies. I hope that was an 
opening door toward a recognition that on both sides of the aisle and 
in both Chambers of this Congress we need to be willing to make the 
tough votes even though they will upset treasured constituencies, even 
though they will end up causing us potential political harm, to reduce 
reckless Federal spending, whether through the Tax Code or through 
unsustainable Federal programs.
  In the end, I simply wanted to come to the floor today and add my 
voice to that of many of my colleagues on both sides of the aisle who 
are expressing our grave concern. As the clock ticks away and as the 
hours left to August 2 shrink, we need to come together.
  What Americans have done for generations is sacrificed. What 
legislators need to do now is compromise. There are in front of us 
reasonable, solid, bipartisan proposals that have been available to us 
since March and that this body and our leadership need to be willing to 
make responsible compromises to make happen.
  With that, I yield the floor.
  The PRESIDING OFFICER (Mr. Whitehouse.) The Senator from New 
Hampshire.
  Ms. AYOTTE. Mr. President, I ask unanimous consent that I be 
permitted to enter into a colloquy with my Republican colleague Senator 
Rubio for up to 20 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. AYOTTE. Mr. President, it is an honor to be here with my esteemed 
colleague from Florida, Senator Marco Rubio. My husband Joe and I are 
blessed to be the parents of two wonderful children, our daughter Kate, 
who is 6 years old, and our son Jacob, who is 3 years old.
  This Fourth of July we walked together as a family in the parade in 
Wolfeboro, NH. As I watched my children in the parade hand out candy to 
other New Hampshire children while they were standing with their 
parents, it reminded me again of why I am here and how concerned I am 
about the future of our country for Kate and Jacob and for all of our 
children.
  As parents, we all want to provide our children with a brighter and 
at least the same if not greater opportunities we have all had in the 
greatest country on Earth. That is the American dream, that a young 
woman like me from a middle-class family can have the opportunity to 
serve in this Chamber; that someone like Senator Rubio, the son of 
Cuban immigrants, could serve as a Senator from Florida, a leader of 
our great country who has come here to address our challenges.
  I am fearful that we are the first generation that will not pass on 
the American dream to the next generation. With the accumulation of $14 
trillion in debt, we are borrowing 40 cents on the dollar to fund our 
government. Half of our debt we have borrowed from other countries, 
including the country of China, a country that does not share our 
values. I am concerned with the amount of debt we have accumulated, 
that if we do not address this debt crisis right here and now, we are 
ensuring our children will have less opportunities than we have all 
had.
  We have seen what is happening in Greece. If we do not address our 
debt, with real, substantive legislative proposals, ideas we have 
already proposed in this Chamber, Members of both side of the aisle--
the balanced budget amendment, spending cap legislation, how about a 
real budget resolution that reduces spending and puts forth a 
responsible fiscal plan for this country--we will be setting up our 
children to pay for our failure to act today with either massive tax 
increases or the value of our dollar will be diminished and everything 
they own will be worth less and everything that we own, and it will 
diminish their economic opportunities in this great country.
  I know Senator Rubio is the father of four young children. What is it 
the Senator is most concerned about with respect to the future of our 
great country?
  Mr. RUBIO. Well, first I want to thank the Senator from New Hampshire 
for allowing me the opportunity to do this together because it is 
important. She brings a tremendous amount of credibility to this 
discussion. She is not just a mother and a Senator, but she is also a 
small business owner who has run a small business, been there on the 
front lines with her husband running a small business, who recently got 
off the campaign trail, as I did, and heard from job creators all 
across the State as to what they are talking about, and we are going to 
get back to that in a moment.
  But as the Senator rightfully outlined, I am the father of four young 
children, four children whom I think deserve to inherit a country that 
is as great as the one my parents and their generation left us, and 
that is what we are debating here at the end of the day.
  If you look at the numbers, they are absolutely startling. I think 
these numbers have been said before, but you cannot say them enough--
$14.3 trillion of debt. Trillion is not a number or a figure I have 
ever used in my life until I got to Washington. I do not know where 
else in the world that applies other than in the Congress, the term 
trillion--$14.3 trillion is our debt.
  Our kids already owe $46,000. My oldest is only 11 and already owes 
$46,000. Our total debt is about to reach the size of our entire 
economy. That is kind of the framework in which we are operating when 
we discuss this.
  I actually think we are closer to some sort of an agreement than a 
lot of people realize. I have heard the term

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thrown around in the last couple of days, ``a balanced approach'' to 
dealing with it. And I think there is agreement that there has to be a 
balanced approach. I certainly have always said you cannot simply cut 
your way out of this problem. You have to have a combination of cuts 
and growth, growth in revenues to government. I think the debate is--
the debate is--how do you accomplish these two things. I am not going 
to focus so much on the cut part of it today. I want to focus on the 
revenue part of it, because that is the part the President and some of 
my colleagues here have focused on over the last days, this idea of 
getting more revenue, or this new term ``revenue enhancers'' which is 
Washington talk for more money to the government.
  According to the President, for some in his party--most in his party, 
I should say--the idea is simple. They think there is a bunch of people 
out there in America who are making a lot of money, more money than 
maybe they should be making, and they need to pay more in taxes; if 
these people pay more in taxes, then all of these problems will get a 
lot easier to deal with. That is kind of the viewpoint they bring to 
this debate.
  I know tomorrow we will be voting here on the floor on something the 
majority leader has offered, something called a sense of the Senate, 
which people watching at home are probably wondering what that is 
about. Well, that basically means what is on the Senate's mind.
  The sense of the Senate we are going to be voting on tomorrow is 
basically that you have a bunch of people in this country who make over 
$1 million, and that these people need to do more to help with the 
debt. That is basically the sense of the Senate that there is going to 
be a vote on tomorrow. It is very interesting. So I looked at it, 
because ultimately this is a serious issue. So let's explore this with 
an open mind. Let's not be doctrinaire. Let's not be blindly 
ideological. Let's look at this from a commonsense perspective, this 
idea that if all of these millionaires and billionaires paid more 
taxes, these problems will be solved. Let's analyze it, because this is 
all about math.
  Here is the fact. The fact is it does not solve the problem. First of 
all, if you taxed these people at 100 percent--basically next year you 
said: Look, every penny you make next year the government is going to 
take from you--it still does not solve the debt.
  Not only does that not solve the debt problem, but I looked at a host 
of other--there are some great publications that came out today from 
the Joint Economic Committee. Our colleague Senator DeMint is the 
chairman. It kind of outlines some of the tax increases being proposed 
by our colleagues in the Democratic Party and the President to solve 
the debt problem.
  You add them all up, you add all of these things up--the jet 
airplanes, the oil companies, all the other things they have talked 
about. You put them all together in one big batch, and you know what it 
does? It basically deals with 9 days and 23 hours worth of deficit 
spending--9 days and 23 hours--it does not even get to 10 days of 
deficit spending. That is how much it solves.
  So all of this talk about going after people who make all of this 
money, it buys you 9 days and 23 hours. Let's round it off. Let's give 
them the benefit of the doubt. It buys them 10 days of deficit spending 
reduction. That is what all of this rounds up to.
  Here is the bottom line. These tax increases they are talking about, 
these so-called revenue enhancers, do not solve the problem. So what do 
we do then? Because clearly we have to do two things. One, we have to 
hold the line on spending. If you keep digging yourself in the hole, 
the hole is going to bury you. But the other thing is, how do you start 
generating revenue for government so it can start paying down this 
debt. That is what the debate should be about.
  We already know these taxes they are talking do not work. So here is 
what works. Here is what I would suggest works, in a balanced 
approach--using the President's terminology. Let's stop talking about 
new taxes and start talking about creating new taxpayers, which 
basically means jobs.
  Here in Washington, this debt is the No. 1 issue on everyone's mind, 
and rightfully so. It is a major issue. But everywhere else in the real 
world, the No. 1 issue on people's minds is jobs. And I will tell you 
every other problem facing America--the mortgage crisis, home 
foreclosure crisis, this debt problem--all of these issues get easier 
to deal with as people are gainfully employed across America. The 
impact that unemployment is having across this country is devastating. 
We hear about unemployment in facts and figures. They give us numbers: 
Oh, X percent people are unemployed. Well, there are stories behind 
every one of those people.
  Do you know who a lot of these people are who are unemployed in 
America? They are people who have done everything they have been asked 
to do and they have done it right. Maybe they served their country 
overseas. Maybe they went to college and got a degree and now came back 
home. Maybe they worked for 10 or 20 years and did a good job at work. 
And now you know what, they cannot find a job, or maybe they were lucky 
enough to find a job after losing their original job, but it pays them 
half as much and they work twice as long. That is the real face of 
unemployment in America, of people who are hurting.
  Our job here is to do everything we can to make it easier for them to 
find a job, not harder. I think that is what we have to do when it 
comes to a balanced approach and when we talk about revenue. We do not 
need new taxes. We need new taxpayers, people who are gainfully 
employed making money and paying into the tax system. Then we need a 
government that has the discipline to take that additional revenue and 
use to it pay down the debt and never grow it again. That is what we 
should be focused on. That is what we are not focused on.
  So you look at all of those taxes that are being proposed. Here is 
what I say: I say we should analyze every single one of them through 
the lens of job creation, issue No. 1 in America. I want to know which 
one of these taxes they are proposing will create jobs. I want to know 
how many jobs are going to be created by the plane tax. How many jobs 
are going to be created by the oil company tax that I heard so much 
about? How many jobs are created by going after the millionaires and 
billionaires that the President talked about? I want to know how many 
jobs do they create.
  Because I will tell you--and I am going to turn it over to Senator 
Ayotte in a second, because I am interested in her perspective of this 
as a job creator, as a spouse of a job creator who runs a small 
business, as someone like me who just came off the campaign trail.
  Let me tell you something. I traveled the State of Florida for 2 
years campaigning. I have never met a job creator who told me they were 
waiting for the next tax increase before they started growing their 
business. I never met a single job creator who has ever said to me: I 
cannot wait until government raises taxes again so I can go out and 
create a job. I am curious to know if they say that in New Hampshire, 
because they do not say that in Florida.
  So my view on all this is, I want to know how many jobs these tax 
increases the President proposes will create, because if they are not 
creating jobs and they are not creating new taxpayers, they are not 
solving the problem.
  I do not know what the Senator's perspective is on that.
  Ms. AYOTTE. Mr. President, I could not agree more with what my 
colleague from Florida has said, that we need to create a positive 
climate to create jobs. But one thing we do know is that does not 
happen by more spending in Washington. The recent report that came out 
about the President's stimulus package has shown that it cost $278,000 
per job created by that stimulus package. Yet we had to borrow so much 
money, nearly $1 trillion to create a limited number of jobs that cost 
us $278,000 a job.
  I do come from a small business family. My husband started a 
landscaping and snow-plowing business. I worked with him to start that 
business. New Hampshire is a small business State. As I campaigned up 
and down our State, I talked to so many small business owners. I never 
had a small business owner tell me they were being taxed too little, 
please tax me more.
  What I did hear was too many burdensome regulations from Washington

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were coming down and making it difficult for our small businesses to 
thrive and grow. Frankly, some of the taxes coming down from Washington 
were making it difficult. In the health care bill, there was a tax on 
medical device companies. New Hampshire has nearly 50 of those 
companies. And what I heard from those companies--and I have heard that 
even more recently--is the tax in that health care bill on medical 
device companies is going to take away significant amounts of their 
research and development budget to create new products that will 
improve the quality of our health care and save lives.
  So with the actions we are taking in Washington, we need to create a 
positive climate for our small businesses, not thinking that we create 
the jobs here in Washington. We know that it is those small businesses 
and the hard-working entrepreneurs and those who have a great idea in 
this country in the private sector who create those jobs. They do not 
need more taxes and burdens from Washington. What we need to do is 
frankly get out of their way and allow them to thrive and grow and to 
create jobs for all of our children going forward.
  I do not know if the Senator heard from businesses in Florida about 
the regulatory concerns and burdens from Washington hurting economic 
growth in the private sector.
  Mr. RUBIO. Well, the truth is that throughout the campaign and even 
now, that is what I hear all of the time from people, that these 
regulations are making it harder, not easier, for them to create jobs. 
That, combined with the uncertainty of the Tax Code--they do not know 
what the taxes are going to be next year. But they read the newspaper, 
they listen to the news, and every time they hear talk about this tax 
increase stuff, it scares job creators. They make this decision: Oh, 
wait. You know what, maybe this is not the year to hire people, because 
we still do not know how much it is going to cost to hire people.
  The other great phrase here--both Senator Ayotte and I have only been 
here a few months so I think we are still learning the language of 
Washington; I hope it never becomes part of my permanent vocabulary, 
but one of the things I have been hearing recently is this notion of 
everything should be on the table, which is funny because everything is 
not on the table according to the President and others.
  For example, there is no serious discussion of a spending cap. I 
would love to have a vote. Why do we not have a vote on the balanced 
budget amendment? Why is that not on the table? Why is a balanced 
budget amendment not on the table? Why are we not voting on that 
tomorrow? Because a balanced budget amendment basically says you cannot 
spend money you do not have, which makes all of the sense in the world 
for the rest of the people who live in the real world. But, apparently, 
that doesn't apply here, and the results are these problems we face. I 
think something should be off the table. Bad ideas should be off the 
table. If something is a bad idea, it should not be on the table. It is 
a bad idea to pass things that will make it harder to hire people. How 
much higher do you want unemployment to be?

  Here is what I think we have to ask ourselves: These tax increases 
Senator Ayotte pointed out, along with the regulations that kill job 
creation in America--these do not raise enough money to do anything 
significant about the debt. They don't create jobs; in fact, they kill 
them. How could the tax increases they are outlining be part of the 
solution? Why is it being offered? These are smart people. They know 
the math. The answer lies in the politics of this, which is clear.
  This appears to be an effort to save face. Everybody here knows there 
will have to be spending reductions at some level because we have a 
spending problem. It is the reason we are in this mess today. It is not 
because we don't pay enough taxes. We spend more money--a lot more 
money--than we have.
  It appears to me that the President and others in his party are 
positioning and looking for some pound of flesh in return for these 
cuts so they can go to their political base and say: We got something 
out of this. We went after the people who make all this money--the 
greedy billionaires and millionaires and the oil companies--even though 
it has nothing to do with the debt.
  That is the only explanation for why this is even on the table. I 
think anything that kills jobs should be off the table. I think 
anything that hurts the ability of the job creators to grow their 
business should be off the table. I think anything that helps increase 
the unemployment rate should be off the table. I think that is what 
should be off the table--anything that hurts our ability to grow our 
economy.
  Things that force this government, once and for all, to put itself 
back on the path of sanity should be on the table. Sanity means we stop 
having a government that spends money it doesn't have.
  I will turn it back over to Senator Ayotte to close. I thank her for 
this opportunity. I thought it was important to bring these points to 
the floor.
  Ms. AYOTTE. I thank Senator Rubio for his leadership on this issue 
and for the important issues he has raised today because he is 
absolutely right that class warfare is unproductive.
  The proposals the President has made are not serious in terms of how 
much revenue they would even address--not even 10 days' of our debt. 
Unfortunately, right now, the leader of the Senate has brought forward 
a resolution, a nonbinding sense of the Senate, that does nothing to 
address the spending in Washington, and we are spending over 24 percent 
of our GDP, or our economy, right now. Historically, we have spent 
about 20 percent of our GDP. Our spending is way out of line from where 
we have been over the 40-year historical level. Common sense tells us, 
why not a balanced budget amendment? Why aren't we addressing that 
instead of a nonbinding resolution that, again, will have no effect--
will not reduce our deficit, will not help create any jobs, and will 
not help our economy thrive? We should be addressing real legislation--
a balanced budget amendment.
  I could not agree more with my colleague from Florida about living 
within our means. Families sit around their kitchen tables and make the 
tough decisions. They see the revenue coming in and the expenditures 
going out. Washington should do the same. Spending caps will ensure 
that we put handcuffs on Congress to make sure we are not spending this 
drastic 24 percent of our GDP and putting ourselves on a more 
responsible spending path going forward, and a budget resolution.
  It has been nearly 2 years since the Senate has passed a budget. No 
business would run without a budget. Families make budgets. Here in the 
Senate, what we should be bringing to the floor is a real budget 
resolution that the parties can debate to put ourselves on a 
responsible fiscal path going forward rather than voting on a sense of 
the Senate that will, again, not have any impact and the full force of 
law.
  With this August 2 deadline, it is time for real legislative 
proposals and solutions. We have put some ideas out there--a balanced 
budget amendment, a spending cap amendment, a real budget resolution. I 
hope my colleagues on the other side of the aisle will come forward so 
we can work on this fiscal crisis here and now so that my children and 
Senator Rubio's children and all of our children and grandchildren will 
have greater opportunities in the greatest country on Earth.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Mrs. MURRAY. Mr. President, there is no question that we are at a 
point where we have to take substantial and painful steps to get our 
Nation's fiscal house in order. That is why we are rightfully working 
to tighten our Nation's belt at a time when American families are doing 
the same.
  I am here to talk about one major difference in the way Republicans 
have proposed to go about addressing our budget and the way American 
families, who understand shared sacrifice and equal burden, have done 
it. I will point out one glaring omission in the Republicans' plan amid 
all their tough talk about fiscal responsibility.
  I am here to ask Republicans why they are asking everyone to 
sacrifice except those who can afford it the most?
  I am here to ask them why they are willing to risk not only 
defaulting on our Nation's debt but also the health care and benefits 
our veterans rely on,

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pay for our troops, Social Security benefits, and the Medicare system 
our seniors are counting on--all to defend tax breaks for oil and gas 
companies, sweetheart deals for corporations, and the most generous tax 
rates wealthy Americans have enjoyed in 60 years.
  Sometimes it is hard for me to listen to some of my Republican 
colleagues talk at length about their newfound fiscal sensibilities on 
the Senate floor and in the press. It is difficult because, like many 
of them, I was here in 2000. I remember when President Clinton left 
office. We were on a course to completely pay down the $5.6 trillion 
debt by 2012. I remember the projection of surpluses. I remember the 
efforts by many of us to safeguard that funding for our seniors and to 
pay down that debt. But I can also remember at that time many 
Republicans could not wait to get their hands on the Nation's credit 
card. When they did--when President Bush took office--they spent 
lavishly.
  A lot of that spending went to some of our Nation's wealthiest 
individuals and companies. Throughout the Bush years--and particularly 
in the Bush tax cuts of 2001 and 2003--trillions of dollars in tax 
breaks went to the very wealthiest Americans.
  There were capital gains tax rollbacks, tax breaks designed to 
benefit corporate giants, and a new tax bracket that provided wealthy 
Americans the lowest tax rates they have enjoyed since World War II. 
These tax breaks were all unpaid for, all handed out to those who could 
most afford to pay, and they were all put on the Nation's credit card.
  Now that that credit card bill has come due, guess who will not be 
asked to pay their fair share? Unfortunately, under the Republican 
plan, it is the wealthy companies and individuals who have benefited 
the most from their spending. It is corporations such as ExxonMobil 
that despite reporting a profit of over $10 billion in the first 
quarter of this year--at the same time, by the way, that gas prices for 
families across this country are rising--they are being protected from 
a rollback of tax subsidies for oil and gas giants.
  It is corporate CEOs who are lobbying against closing the tax 
loophole that they enjoy for private jets and yachts. It is companies 
that all too often ship American jobs overseas but still enjoy offshore 
tax havens.
  Guess who has drawn a line in the sand to protect these corporations 
and wealthy individuals? It is the very same Republicans who were so 
quick to break out the Nation's credit card when we were running a 
surplus, the same Republicans who have repeatedly pledged to block any 
new revenue--even as we have met them far beyond halfway in these 
negotiations.
  Finally, guess who it is who is left to pick up the credit card tab 
under the Republican plan? Unfortunately, it is everybody else. It is 
seniors who, under the Republican budget, will lose access to Medicare 
as we know it; it is students who will be asked to pay more even as 
tuition rises; it is family farmers and those who can't afford health 
care for their children; it is the middle-class families who have found 
themselves living paycheck to paycheck.
  If Republicans get their way, it will be everybody but those who can 
afford it most who will be left to sacrifice alone.
  Unfortunately, the Republican approach is something that has become 
all too common in the aftermath of this recession.
  While the effect of this recession is being felt profoundly by 
working families in lost jobs, lower wages, and less financial security 
than ever before, the very wealthiest Americans seem to be doing pretty 
darn fine.
  On Sunday I picked up the New York Times and noticed they ran an 
article that showed that the salaries of CEOs at America's largest 
companies grew by an average of 23 percent over last year's mark. 
However, the same article noted that over the past year, the pay for 
average workers had declined. It didn't even mention the thousands of 
layoffs at the same companies where those bonuses have skyrocketed.
  Unfortunately, that is the same economic theory that Republicans are 
bringing to the budget negotiations. For those who can't afford it, 
their budget provides all the perks, none of the sacrifices; all of the 
tax breaks, none of the revenues; all of the benefits, none of the 
pain.
  It doesn't have to be this way. We can have a plan that works for 
middle-class families and invests in our Nation's future, a plan that 
balances tough but necessary spending cuts with new revenues that 
ensure corporations and wealthy Americans are also paying their fair 
share; that restores fairness to this process by making sure that in 
these difficult times we are not balancing our budget solely on the 
backs of seniors and students and middle-class families; and, most 
importantly, a plan that recognizes that, yes, we have a budget deficit 
and we need to address that, but we also have an infrastructure 
deficit, and we have an education and a skills deficit and, most 
importantly, we have a jobs deficit.
  The only way that we will address those deficits is to invest in 
education, energy, and infrastructure--areas that will produce jobs 
both now and in the future.
  Workers who lost their jobs through no fault of their own don't just 
want to hear about cuts, cuts, cuts. They want to hear about how we are 
going to create jobs. A small business owner who had to shut her doors 
when the recession hit and customers stopped coming in doesn't want to 
hear about debt ceilings. She wants to hear about how we are going to 
get the economy back on track.
  It cannot just be about slashing; it also has to be about investing 
in jobs and workers in America. That is what we should be working 
together toward.
  I understand that time is not on our side in this debate. The truth 
is, Republicans aren't merely offering their ``everybody pays except 
the rich'' philosophy up for debate; they are holding our Nation's 
economy hostage with it.
  By refusing to accept new revenues from corporate tax loopholes and 
tying that refusal to the Nation's debt limit, they are rolling the 
dice on default. In fact, in my 18 years on the Senate Budget 
Committee, I have never seen anything like what Republicans are willing 
to risk in these budget negotiations and who they are willing to risk 
it all for.
  Last week, the Bipartisan Policy Center put out a report authored by 
a former Bush Treasury official about what would happen if Republicans 
continued to play chicken with default and the administration was 
forced to make desperate spending decisions in August. The scenarios 
were worse than grim.
  Potentially at risk are the benefits and health care we owe our 
veterans, loans for struggling small businesses, food stamps for people 
who are struggling to buy groceries, Social Security checks for our 
seniors, unemployment benefits for millions of workers who are 
desperately seeking jobs, and even Active-Duty pay for our military. 
Yet by rejecting revenues in this deal, and by not asking everybody to 
sacrifice, and by dealing in ultimatums rather than compromise, 
Republicans are willing to put all these Americans at risk; and they 
are willing to risk it all in order to go to the mat to protect 
millions of dollars in tax breaks for the wealthiest few.
  They are willing to chance loans for Main Street businesses in order 
to defend offshore tax breaks for multinational companies. They are 
willing to jeopardize troop pay in order to stand up for hedge fund 
managers. They are willing to gamble default on tax breaks for horse 
tracks.
  I believe that is a bet we all lose.
  Mr. President, we were elected to work for all Americans, not just 
the privileged few at the top. It is time for our Republican colleagues 
to come to the table with flexibility. It is time for compromise. It is 
time for common sense. And it is time to ask everyone to sacrifice to 
meet a challenge we all face together.

  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I have heard a lot of talk on the Senate 
floor, including from the last speaker, and certainly from the 
President of the United States about shared sacrifice. The White House 
spin is that the Democrats in the negotiations about extending the debt 
ceiling have conceded hundreds of billions of dollars in savings and 
Republicans have conceded nothing and therefore Republicans need to be 
willing to raise taxes. That is the mantra. That is the spin.
  But there are two things wrong with this spin: First, it is wrong as 
a matter

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of fact, as I will point out, and second, it would result in very bad 
policy. As Senator Rubio said a moment ago, the only thing that should 
be off the table is bad policy, and certainly anything that would hurt 
our economy and job creation at this time is bad policy.
  First with regard to the assertion from some in the White House that 
Democrats have made all the concessions and so it is the Republicans' 
turn--the last speaker, as a matter of fact, said, and I will quote her 
directly, ``Everybody pays except the rich.'' Well, I would like to 
point out why that is absolutely not the case.
  The negotiations Vice President Biden has presided over have talked 
about two different kinds of savings: on the discretionary side, which 
is the budget we deal with every year, and on the mandatory side, which 
is spending programs such as Medicare, Medicaid, some of TRICARE, some 
veterans' benefits, Social Security, and things of that sort.
  If the savings the White House has attempted to portray as all coming 
from Democratic concessions refers to the discretionary part of this 
pie, then I would simply say that is a false statement because we 
haven't discussed it. What we have talked about is setting a top-line 
budget number--a so-called 302(a) number in budget parlance--and that 
is what the Members of the House and Senate would then have to spend. 
But there has been no discussion of where those savings come from, so 
it simply would be wrong to say there has been any kind of negotiation 
about where those savings come from and the Democrats have made all of 
the concessions. There have been no concessions made by either side, as 
a matter of fact.
  If it is the mandatory side we are talking about, it is true we have 
had a lot of discussion about savings that can result from changes in 
the way we operate some of these mandatory programs. Now, we are not 
talking about any major reform of Medicare or anything of that sort, 
but if I can just sort of characterize something in a very loose way as 
waste, fraud, and abuse, there are a lot of savings that can occur in 
various programs, and there are even some revenue increases that can 
result from increased fees and that sort of thing that do result in 
some additional savings overall on the mandatory side.
  In terms of the revenue increases, I would point out that between 
$153 billion and over $200 billion of the money on that side of the 
ledger actually comes from increased revenues. So when the White House 
says: Well, revenues have to be on the table, the fact is that revenues 
have been on the table. We have been talking about increased revenues. 
We are not talking about increasing taxes. But if the government sells 
something and gets money from it, that is revenue. If there is a user 
fee of some kind and we want to raise that to keep up with the times, 
that is revenue. And if you add up all of the revenues we have agreed 
to, we Republicans have agreed to between $150 billion and $200 
billion. So it is simply false to suggest that we haven't been willing 
to talk about revenues and that all of the concessions have been on the 
Democratic side.
  We have also had some spending reductions or less rate in the growth 
of spending in some of these mandatory programs on the table for 
discussion, and about 60 percent of those, in my calculation, are 
concessions Republicans have made, and about 40 percent are concessions 
Democrats have made. My Democratic counterparts would probably argue it 
is somewhat different, from their point of view, but the fact is both 
sides have made concessions. And even if you concede they are 50-50, 
the fact is, therefore, Republicans have made as many concessions in 
these negotiations as have our Democratic colleagues.
  By the way, one reason we have both been willing to make concessions 
is we agree we are in a dire circumstance here, and we sometimes have 
to get out of what we call our comfort zone and agree to what in 
ordinary times we would never agree to but we realize now we have to 
make some changes. So we are willing to make concessions that 
ordinarily we wouldn't, and we have, and so have the Democrats. The net 
result, as I said, I think it is 60-40 on our side, plus all the 
revenues we have conceded. But if somebody on the other side said: No, 
it is 50-50, or something on that order, I wouldn't argue. But the fact 
is, it is false and misleading for the White House to suggest that all 
of the concessions have been made by the Democrats and none have been 
made by Republicans. That is simply factually incorrect.
  The second thing that is wrong with this spin is that, as Senator 
Rubio said, bad ideas should be off the table, and it is a bad idea to 
raise taxes on an economy that is already sick. I mean, the last thing 
we should be doing is raising taxes, as a result of which job creation 
would be inhibited. It is the worst medicine for a sick economy.
  I asked one of my Democratic colleagues why, since we shouldn't be 
raising taxes at this point in time, there was such an insistence on 
his side. His response was: Well, you have to understand, with us, it 
is kind of theological. Well, maybe it is theological, but I would 
argue that ideology here has a place to the extent that it is backed up 
by reality, but ideology that is not backed up by reality has no place 
in these negotiations. And raising taxes just for the sake of raising 
taxes, so that somebody can say to their constituency: Well, we did it, 
we were able to raise taxes, is not a sound way to approach the 
problem.
  Thomas Sowell, one of the most erudite observers of the American 
scene, wrote, in National Review Online on July 5, a piece he titled 
``Politics vs. Reality.'' It goes to this point.
  Mr. President, I ask unanimous consent to have printed in the Record 
this article at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. KYL. The whole point here about raising taxes is this should not 
be about shared sacrifice. It shouldn't be about sacrifice at all. We 
are not talking about austerity. We should be talking about 
prosperity--in other words, the conditions by which everyone can do 
well, and specifically, how we can create jobs, how we can put 
Americans back to work, and how our economy can grow.
  As I said, the worst medicine for a sick economy is raising taxes, 
and that is why Republicans oppose tax hikes and not because, for 
example, I have some interest in protecting some Hollywood movie 
millionaire. I don't. The person is probably not in my political party. 
What I have an interest in is protecting America's small businesses so 
they do not go broke and so they do not have to close up shop because 
higher taxes were imposed on them. That is exactly what the President's 
own Small Business Administration Office of Advocacy said would happen 
with one of the taxes they propose to raise; that is, repealing LIFO, 
which is an accounting term meaning last in, first out. The SBA Office 
of Advocacy said repealing LIFO ``would result in a tax increase for 
small businesses that could ultimately force many small businesses to 
close.'' That is from the President's own Office of Advocacy for the 
SBA. That is what I oppose--putting small businesses out of business 
just because of some theological attachment to raising taxes.
  Accountants have talked for a long time about what the best method of 
accounting is. The IRS has always said LIFO is perfectly acceptable, 
and about 36 percent of American businesses--primarily retailers and 
manufacturers--use this accounting technique. It would be fine if we 
decide to say: Well, we are going to go to a different technique. What 
would be wrong is to retroactively impose a tax on people who have been 
using this accounting method as though they have been doing something 
wrong. They haven't. The IRS has always said LIFO is fine. But it is 
all about revenue. We need more money to spend, so we are going to 
retroactively tax 36 percent of American businesses that use this 
accounting method. That is wrong, and that is why the Small Business 
Administration Office of Advocacy has said this could put many small 
businesses out of business. It is why we shouldn't be considering it.

  What are the other taxes they propose? Well, one of them is to cap 
itemized deductions, so you would only be able to deduct either 28 
percent or maybe up to 35 percent of your income. Obviously the first 
effect of this is to make it much more difficult for Americans to 
contribute to charity, to buy

[[Page S4372]]

homes because they wouldn't have the advantage of the mortgage interest 
deduction, or to pay medical expenses, and so on. As the Wall Street 
Journal has editorialized, this is just a backdoor way of raising 
marginal tax rates without actually appearing to do so.
  But the biggest problem with this capping of deductions is not that 
it is going to hurt the millionaires. They are either going to be 
caught by the AMT or their income is so high they are even going to be 
paying above AMT rates notwithstanding these limits on deductions. The 
real people this hurts are the small business owners who pay in the 
higher bracket. We know that 50 percent of small business income falls 
in the top two brackets. Businesses have deductions that are the 
ordinary and necessary part of doing business. All businesses are 
allowed to take them, both corporate and noncorporate. Why would we 
eliminate the ability of small businesses to take the same kinds of 
deductions corporations can take by capping the amount of deductions 
that could be taken in income reported in the top two brackets?
  The final point about this is we know that efforts to tax 
millionaires and billionaires always end up taxing a lot more people 
than that. According to the IRS, in 2008 there were only about 319,000 
tax returns that showed an income of $1 million or more, but the number 
of returns falling in the top two brackets--the ones affected by this 
proposal of the Democrats--numbered more than 3.6 million people. These 
would be the people who are affected by this proposed increase in 
taxes.
  I would just parenthetically note two others. The last millionaire 
tax was the alternative minimum tax. It was created in 1969 and 
targeted against 155 millionaires. Guess how many people it will apply 
to this year. It will apply to 34.4 million Americans. So when you aim 
for the millionaires, you end up getting everybody else.
  The third tax the Democrats talk about raising is the old favorite: 
Big Oil. This is so targeted, it only hits five companies in the whole 
world, five American companies. Never mind that we are punishing 
American businesses--American oil companies--that are in the same 
business as other companies all over the world that are not being 
punished. No, we are going to attack American businesses that, by the 
way, employ 9.2 million Americans. We are going to say they have to pay 
higher taxes than other businesses just like them.
  There are three particular tax provisions.
  Other businesses get to take an R&D tax credit--research and 
development. Aren't we all for research and development? Yes, but not 
in the oil and gas industry. And where might they put that research and 
development money? Well, for example, into ensuring that when they sink 
a well deep in the Gulf of Mexico, it will be environmentally safe. 
Nope, you can't deduct that. All other businesses will be able to but 
not you. What sense does that make? It is bad policy.
  How about the usual and necessary business expense, the deduction for 
writeoffs for business investment? All other companies get to deduct 
that, but we would say to the oil companies: You don't get that same 
deduction.
  Perhaps most perniciously, we are trying to compete with foreign 
businesses, so we would say to Americans who earn income abroad: You 
can deduct against the taxes you would owe here the taxes you pay over 
there. All of the other world nations get to do that. They would take 
that away from these particular kinds of companies.
  So this is discriminatory, it is job killing but, most of all, it 
impacts American consumers directly because every dollar of increased 
taxes is going to find its way into the price we pay at the gas station 
when we buy gas. Now, whom does that hurt, therefore? Does it hurt some 
millionaires and billionaires? Who owns the oil companies? Well, a lot 
of pensions do, a lot of retired teachers and firefighters and so on.
  People have to think this through. You are not hitting millionaires 
and billionaires. I know it sounds like good rhetoric, but when you are 
hitting American businesses that try to compete around the world and 
that develop a product we would like not to have to pay four bucks a 
gallon for, the last thing you want to do is to play politics by 
saying: Well, for those particular folks, we are going to raise their 
taxes.
  I remember the last time we raised taxes on another millionaire kind 
of outfit, the yachts. It was a luxury tax that we opposed back in 
1990, and it seemed like a good idea, just like this tax they were 
talking about imposing on airplanes. They didn't actually talk about 
that in our meeting, so I don't know exactly what it is. But they say 
it would raise $3 billion over 10 years, which pays for hardly a 
fraction of the $14 trillion debt we have. Nonetheless, they want to go 
after private airplanes.
  I don't know how many people work in the private airplane 
manufacturing business. But it was interesting that in 1990 when the 
luxury boat tax was passed, there were 7,600 jobs lost in the boating 
industry. Very quickly the people who made the boats, a lot of them up 
in Massachusetts, decided this wasn't such a hot idea and so they 
repealed the tax in 1993. By the way, it lost revenue because of the 
unemployment benefits and lost income tax revenue had to be developed 
in order to offset the loss in business.
  The point of all of this is that when the administration and others 
talk about shared sacrifice, of making some kind of rich business or 
rich person pay taxes, you have to think through what the effect is on 
the American economy and on job creation. The reason Republicans oppose 
these is not because we love the person who pays the tax so much as we 
wish for American jobs to be created, or at least not have more jobs 
lost. And the people who are proposing these tax cuts seem to be 
absolutely oblivious to the effect their proposals would have on hard-
working Americans.
  My colleague from Washington State a moment ago said, and I will 
quote her again: Everybody pays except the rich under Republicans' idea 
of how things ought to be.
  I think I pointed out that is not true. But in case anybody needs a 
reminder of who pays income taxes in the country: The top 1 percent 
pays 38 percent of all income taxes. The top 10 percent pays 70 
percent. The bottom 40 percent pays no personal income tax.
  So is it true that everybody pays except the rich? No. The rich pay 
by far and away most of the taxes paid in this country, and a lot of 
people believe that is as it should be. We have a progressive system. 
The rich can afford to pay more, and so we expect more from them. But 
let's not demagog the issue and suggest that isn't true. It is true. 
The rich do pay more, and we have decided in this country that they 
should. But how much more do you want them to pay? Ninety percent? 
Ninety-five percent? How about 100 percent? How much revenue do you 
think we could get from somebody if we said he is going to have to pay 
100 percent of what he earns in income taxes? We know there are two 
rates at which you generate exactly zero revenue: zero and 100.
  So when we talk about shared sacrifice, let's put this into 
perspective and let's realize we are not talking about sacrifice in the 
sense of trying to hurt people or austerity so much as we are talking 
about prosperity. And you don't create more prosperity with job-killing 
taxes.
  I want to add one other thing for the record here. There are two 
publications that note areas in which we could save hundreds of 
billions of dollars if we were willing to discuss them. When we talk 
about things that are on the table or off the table, here are two 
things our Democratic friends have said are not on the table: We will 
not talk about fraud in the unemployment insurance system or fraud in 
Medicare and Medicaid. According to these two articles, which I will 
ask to be put in the Record, there are tens of billions of dollars in 
each where we could save the taxpayers money, money that is being paid 
out now to either downright crooks or being paid inappropriately to 
people who don't qualify.
  Since 1986, the GAO has published at least 158 reports about Medicare 
and Medicaid fraud, for example. In 1993, Attorney General Janet Reno 
declared health care fraud America's No. 2 crime problem, right behind 
violent crime. These are off the table, some of our Democratic friends 
say. Well, we think this is a way in which we can save money without 
requiring others to have to sacrifice.
  Mr. President, I ask unanimous consent to have printed in the Record 
the

[[Page S4373]]

piece by Michael Cannon in the National Review On Line dated July 4, 
and the piece by Paul Davidson from USA Today dated July 5 at the 
conclusion of my remarks.
  The PRESIDING OFFICER (Mr. Bennet). Without objection, it is so 
ordered.
  (See exhibit 2.)
  Mr. KYL. I appreciate my colleagues' indulgence here.
  Mr. President, the bottom line is that when we talk about shared 
sacrifice, we need to appreciate that in the negotiations that have 
been occurring Republicans have made a lot of concessions, and that the 
reason we oppose the concession of raising taxes is not because we have 
some ideological attachment to somebody who makes a lot of money but, 
rather, because we have an ideological attachment to the American 
worker who needs a job or who needs his or her job protected. From what 
we understand, the taxes that have been proposed by our Democratic 
colleagues would all be job killers. At the time our economy is in the 
unhealthy state it is, the worst medicine is job-killing taxes.
  Mr. WHITEHOUSE. Would the Senator yield for a question?
  Mr. KYL. Mr. President, I would be happy to yield. I am also happy to 
conclude. I think we are rotating between Democrat and Republican.
  Mr. WHITEHOUSE. I don't want to step on your colleagues' time.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. One of the things I have been tracking is the share 
of wealth, income, and taxes at various percentages toward the top. The 
Senator was good enough to mention that the top 1 percent pays about 28 
percent of the taxes, the top 5 percent pays a little over 44 percent 
of the taxes, and the top 10 percent pays 55.4 percent of the taxes.
  But I think in order to get a complete picture, it is also important 
to note that the top 1 percent controls 24 percent of the income, the 
top 5 percent controls 39 percent of the income, and the top 10 percent 
controls 50 percent of the income. If you go to wealth, the top 1 
percent controls 33.8 percent of the wealth, the top 5 percent controls 
60.4 percent of the wealth, and the top 10 percent controls 71.5 
percent of the Nation's wealth.
  So if you are in the top 10 percent and you control 71.5 percent of 
the Nation's wealth, it doesn't seem to be unreasonable that you should 
be paying 55 percent of the Nation's taxes, particularly if you are 
taxing based on dollars and not on just number of people.
  I don't know if those numbers are wrong. We got them from the Federal 
Reserve Board, from the IRS, and from the Congressional Budget Office. 
I think they are accurate. It would appear to show that at the very 
high end, although these individuals are paying considerable taxes 
toward our Nation's economy, they are paying considerably less than the 
amount of wealth they control and not much more than the amount of 
income they control. In a graduated system of progressive taxation, 
which we are supposed to have, that is not surprising. In fact, what is 
surprising is that the top 24 percent of the income only pays 28.3 of 
the taxes.
  Mr. KYL. Mr. President, I am not sure where the question is in there. 
But what I would say in response is, with all due respect to my 
colleague, his numbers are absolutely wrong. I don't have at my 
fingertips the precise figures, but I can tell you this--by the way, I 
don't also know what you mean by ``in charge of wealth.'' In terms of 
who owns wealth or income, the people in the upper brackets pay far 
more in taxes than the percentage of wealth as a percent of the 
economy, and I would be happy to supply those figures to my colleague. 
And there is a difference between income taxes and all other taxes as 
well, and that chart doesn't suggest which is which.
  I would be happy, though, to demonstrate to my colleague that whether 
you are talking about income taxes or all taxes, the upper income level 
pays far and away the higher percentage than those in the lower 
portion, and in taxes they pay more than the percentage of wealth that 
they create or that they earn.
  The bottom line is that I think anybody making the argument that 
there is not shared contribution to the revenues of the country by the 
upper income would be making a false argument. I know that is not the 
argument my colleague is making, because he agrees with the progressive 
income tax system and has pointed out that it is progressive even by 
the numbers you have.
  But let's do this, because I respect my colleague. I will get the 
numbers I rely upon, you get the numbers you think you rely upon and 
the sources of each, and you and I can agree to come to the floor at an 
appropriate time convenient to us both, and then we can both have the 
data at our fingertips from which we can make our respective arguments.
  Mr. WHITEHOUSE. I would be delighted to do that. And I might actually 
throw in the data from the IRS that shows that the top 400 income 
earners in the country in the most recent period that they have 
actually gone back and done the calculation paid 18.2 percent total 
taxes, which is less than I think the average American, certainly the 
average middle-class American family pays. So there is this reversal at 
the high end where people actually end up paying less.
  Indeed, in one building in New York, the payment for the most recent 
year was 14.7 percent from the occupants, whereas janitors and doormen 
and security guards are paying up in the 20-percent ranges. It is not 
progressive in that sense. It is regressive at the high ends, according 
to those things. So let's get the information together, and we will 
have that discussion.
  Mr. KYL. Sure. And on that last point, it makes a larger point. When 
Congress tries to get the millionaires and the billionaires, those are 
the very people who can adjust their way of earning and of giving and 
of living so that they end up paying less in taxes. That is why it 
doesn't much matter what the rate of taxes is at the upper income. They 
are never going to pay more than a certain percentage, because they can 
afford the lawyers and the accountants to make sure that they don't pay 
more. It is the people in the middle income who can't do that, and they 
end up paying up what the IRS says they owe, and they can't adjust 
their way of living and giving in order to pay less in the way of 
taxes. Whatever deductions they get, they get, and they are going to 
have to live with those.
  When we try to hit the upper income with higher rates, it generally 
doesn't work. That is another reason why we think it is an ineffective 
way.
  Mr. WHITEHOUSE. That is why I think the loopholes need to be closed, 
and I thank the distinguished Senator for the colloquy.

                               Exhibit 1

            [From the National Review Online, July 5, 2011]

                          Politics vs. Reality

                           (By Thomas Sowell)

       It is hard to understand politics if you are hung up on 
     reality. Politicians leave reality to others. What matters in 
     politics is what you can get the voters to believe, whether 
     it bears any resemblance to reality or not.
       Not only among politicians, but also among much of the 
     media, and even among some of the public, the quest is not 
     for truth about reality but for talking points that fit a 
     vision or advance an agenda. Some seem to see it as a 
     personal contest about who is best at fencing with words.
       The current controversy over whether to deal with our 
     massive national debt by cutting spending, or whether instead 
     to raise tax rates on ``the rich,'' is a classic example of 
     talking points versus reality.
       Most of those who favor simply raising tax rates on ``the 
     rich''--or who say that we cannot afford to allow the Bush 
     ``tax cuts for the rich'' to continue--show not the slightest 
     interest in the history of what has actually happened when 
     tax rates were raised to high levels on ``the rich,'' as 
     compared with what has actually happened when there have been 
     ``tax cuts for the rich.''
       As far as such people are concerned, those questions have 
     already been settled by their talking points. Why confuse the 
     issue by digging into empirical evidence about what has 
     actually happened when one policy or the other was followed?
       The political battles about whether to have high tax rates 
     on people in high income brackets or to instead have ``tax 
     cuts for the rich'' have been fought out in at least four 
     different administrations in the 20th century--under 
     Presidents Calvin Coolidge, John F. Kennedy, Ronald Reagan, 
     and George W. Bush.
       The empirical facts are there, but they mean nothing if 
     people don't look at them, and instead rely on talking 
     points.
       The first time this political battle was fought, during the 
     Coolidge administration,

[[Page S4374]]

     the tax-cutters won. The data show that ``the rich'' supplied 
     less tax revenue to the government when the top income tax 
     rate was 73 percent in 1921 than they supplied after the 
     income tax rate was reduced to 24 percent in 1925.
       Because high tax rates can easily be avoided, both then and 
     now, ``the rich'' were much less affected by high tax rates 
     than was the economy and the people who were looking for 
     jobs. After the Coolidge tax cuts, the increased economic 
     activity led to unemployment rates that ranged from a high of 
     4.2 percent to a low of 1.8 percent.
       But that is only a fact about reality--and, for many, 
     reality lacks the appeal of talking points.
       The same preference for talking points, and the same lack 
     of interest in digging into the facts about realities, 
     prevails today in discussions of whether to have a 
     government-controlled medical system.
       Since there are various countries, such as Canada and 
     Britain, that have the kind of government-controlled medical 
     systems that some Americans advocate, you might think that 
     there would be great interest in the quality of medical care 
     in these countries.
       The data are readily available as to how many weeks or 
     months people have to wait to see a primary-care physician in 
     such countries, and how many additional weeks or months they 
     have to wait after they are referred to a surgeon or other 
     specialist. There are data on how often their governments 
     allow patients to receive the latest pharmaceutical drugs, as 
     compared with how often Americans use such advanced 
     medications.
       But supporters of government medical care show virtually no 
     interest in such realities. Their big talking point is that 
     the life expectancy in the United States is not as long as in 
     those other countries. End of discussion, as far as they are 
     concerned.
       They have no interest in the reality that medical care has 
     much less effect on death rates from homicide, obesity, and 
     narcotics addiction than it has on death rates from cancer or 
     other conditions that doctors can do something about. 
     Americans survive various cancers better than people anywhere 
     else. Americans also get to see doctors much sooner for 
     medical treatment in general.
       Talking points trump reality in political discussions of 
     many other issues, from gun control to rent control. Reality 
     simply does not have the pizzazz of clever talking points.

                               Exhibit 2

            [From the National Review Online, July 4, 2011]

                          Entitlement Bandits

                         (By Michael F. Cannon)

       The budget blueprint crafted by Paul Ryan, passed by the 
     House of Representatives, and voted down by the Senate would 
     essentially give Medicare enrollees a voucher to purchase 
     private coverage, and would change the federal government's 
     contribution to each state's Medicaid program from an 
     unlimited ``matching'' grant to a fixed ``block'' grant. 
     These reforms deserve to come back from defeat, because the 
     only alternatives for saving Medicare or Medicaid would 
     either dramatically raise tax rates or have the government 
     ration care to the elderly and disabled. What may be less 
     widely appreciated, however, is that the Ryan proposal is our 
     only hope of reducing the crushing levels of fraud in 
     Medicare and Medicaid.
       The three most salient characteristics of Medicare and 
     Medicaid fraud are: It's brazen, it's ubiquitous, and it's 
     other people's money, so nobody cares.
       Consider some of the fraud schemes discovered in recent 
     years. In Brooklyn, a dentist billed taxpayers for nearly 
     1,000 procedures in a single day. A Houston doctor with a 
     criminal record took her Medicare billings from zero to $11.6 
     million in one year; federal agents shut down her clinic but 
     did not charge her with a crime. A high-school dropout, armed 
     with only a laptop computer, submitted more than 140,000 
     bogus Medicare claims, collecting $105 million. A health plan 
     settled a Medicaid-fraud case in Florida for $138 million. 
     The giant hospital chain Columbia/HCA paid $1.7 billion in 
     fines and pled guilty to more than a dozen felonies related 
     to bribing doctors to help it tap Medicare funds and 
     exaggerating the amount of care delivered to Medicare 
     patients. In New York, Medicaid spending on the human-growth 
     hormone Serostim leapt from $7 million to $50 million in 
     2001; but it turned out that drug traffickers were getting 
     the drug prescribed as a treatment for AIDS wasting syndrome, 
     then selling it to bodybuilders. And a study of ten states 
     uncovered $27 million in Medicare payments to dead patients.
       These anecdotes barely scratch the surface. Judging by 
     official estimates, Medicare and Medicaid lose at least $87 
     billion per year to fraudulent and otherwise improper 
     payments, and about 10.5 percent of Medicare spending and 8.4 
     percent of Medicaid spending was improper in 2009. Fraud 
     experts say the official numbers are too low. ``Loss rates 
     due to fraud and abuse could be 10 percent, or 20 percent, or 
     even 30 percent in some segments,'' explained Malcolm 
     Sparrow, a mathematician, Harvard professor, and former 
     police inspector, in congressional testimony. ``The 
     overpayment-rate studies the government has relied on. . 
     .have been sadly lacking in rigor, and have therefore 
     produced comfortingly low and quite misleading estimates.'' 
     In 2005, the New York Times reported that ``James Mehmet, who 
     retired in 2001 as chief state investigator of Medicaid fraud 
     and abuse in New York City, said he and his colleagues 
     believed that at least 10 percent of state Medicaid dollars 
     were spent on fraudulent claims, while 20 or 30 percent more 
     were siphoned off by what they termed abuse, meaning 
     unnecessary spending that might not be criminal.'' And even 
     these experts ignore other, perfectly legal ways of 
     exploiting Medicare and Medicaid, such as when a senior hides 
     and otherwise adjusts his finances so as to appear eligible 
     for Medicaid, or when a state abuses the fact that the 
     federal government matches state Medicaid outlays.
       Government watchdogs are well aware of the problem. Every 
     year since 1990, the U.S. Government Accountability Office 
     has released a list of federal programs it considers at a 
     high risk for fraud. Medicare appeared on the very first list 
     and has remained there for 22 straight years. Medicaid 
     assumed its perch eight years ago.
       How can there possibly be so much fraud in Medicare and 
     Medicaid that even the ``comfortingly low'' estimates have 
     ten zeros? How can this much fraud persist decade after 
     decade? How can it be that no one has even tried to measure 
     the problem accurately, much less take it seriously? The 
     answers are in the nature of the beast. Medicare and 
     Medicaid, the two great pillars of Pres. Lyndon Johnson's 
     ``Great Society'' agenda, are monuments to the left-wing 
     ideals of coerced charity and centralized economic planning. 
     The staggering levels of fraud in these programs can be 
     explained by the fact that the politicians, bureaucrats, 
     patients, and health-care providers who administer and 
     participate in them are spending other people's money--and 
     nobody spends other people's money as carefully as he spends 
     his own. What's more, Medicare and Medicaid are spending 
     other people's money in vast quantities. Medicare, for 
     example, is the largest purchaser of medical goods and 
     services in the world. It will spend $572 billion in 2011. 
     Each year, it pays 1.2 billion claims to 1.2 million health-
     care providers on behalf of 47 million enrollees.
       For providers, Medicare is like an ATM: So long as they 
     punch in the right numbers, out comes the cash. To get an 
     idea of the potential for fraud, imagine 1.2 million 
     providers punching 1,000 codes each into their own personal 
     ATMs. Now imagine trying to monitor all those ATMs.
       For example, if a medical-equipment supplier punches in a 
     code for a power wheelchair, how can the government be sure 
     the company didn't actually provide a manual wheelchair and 
     pocket the difference? About $400 million of the 
     aforementioned fines paid by Columbia/HCA hospitals were for 
     a similar practice, known as ``upcoding.''
       And how does the government know that providers are 
     withdrawing no more than the law allows? Medicaid sets the 
     prices it pays for prescription drugs based on the ``average 
     wholesale price.'' But as the Congressional Budget Office has 
     explained, the average wholesale price ``is based on 
     information provided by the manufacturers. Like the sticker 
     price on a car, it is a price that few purchasers actually 
     pay.'' Pharmaceutical companies often inflate the average 
     wholesale price so they can charge Medicaid more. Teva 
     Pharmaceuticals recently paid $27 million to settle 
     allegations that it had overcharged Florida's Medicaid 
     program by inflating its average wholesale prices, and the 
     Department of Justice has accused Wyeth of doing the same. 
     Merck recently settled a similar case.
       Most ominously, how does the government know that people 
     punching numbers into the ATMs are health-care providers at 
     all? In his testimony, Malcolm Sparrow explained how a 
     hypothetical criminal can make a quick million: ``In order to 
     bill Medicare, Billy doesn't need to see any patients. He 
     only needs a computer, some billing software to help match 
     diagnoses to procedures, and some lists. He buys on the black 
     market lists of Medicare or Medicaid patient IDs.'' With this 
     information in hand, Billy strides right up to the ATM, or 
     several at a time, and starts punching in numbers. ``The rule 
     for criminals is simple: If you want to steal from Medicare, 
     or Medicaid, or any other health-care-insurance program, 
     learn to bill your lies correctly. Then, for the most part, 
     your claims will be paid in full and on time, without a 
     hiccup, by a computer, and with no human involvement at 
     all.'' These schemes are sophisticated, so Billy might hire 
     people within Medicare and at his bank to help him avoid 
     detection.
       Last year, the feds indicted 44 members of an Armenian 
     crime syndicate for operating a sprawling Medicare-fraud 
     scheme. The syndicate had set up 118 phony clinics and billed 
     Medicare for $35 million. They transferred at least some of 
     their booty overseas. Who knows what LBJ's Great Society is 
     funding?
       And there are other forms of fraud. An entire cottage 
     industry of elder-law attorneys has emerged, for instance, to 
     help well-to-do seniors appear poor on paper so that Medicaid 
     will pay their nursing-home bills. Medicaid even encourages 
     the elderly to get sham divorces for the same reason. It's 
     all perfectly legal. It's still fraud.
       Medicaid's matching-grant system also invites fraud. When a 
     high-income state such as New York spends an additional 
     dollar on its Medicaid program, it receives a matching dollar 
     from the federal government--that is, from taxpayers in other 
     states. Low-income states can receive as much as $3 for every 
     additional dollar they devote to Medicaid, and without limit. 
     If they're clever, states can get this money without putting 
     any of their own on the line. In a ``provider tax'' scam, a

[[Page S4375]]

     state passes a law to increase Medicaid payments to 
     hospitals, which triggers matching money from the federal 
     government. Yet in the very same law, the state increases 
     taxes on hospitals. If the tax recoups the state's original 
     outlay, the state has obtained new federal Medicaid funds at 
     no cost. If the tax recoups more than the original outlay, 
     the state can use federal Medicaid dollars to pay for bridges 
     to nowhere. As Vermont began preparations for its Obamacare-
     sanctioned single-payer system this year, it used a provider-
     tax scam to bilk taxpayers in other states out of $5.2 
     million. In his book Stop Paying the Crooks, consultant Jim 
     Frogue chronicles more than half a dozen ways that states 
     game Medicaid's matching-grant system to defraud the federal 
     government.
       Since 1986, the GAO has published at least 158 reports 
     about Medicare and Medicaid fraud, and there have been 
     similar reports by the HHS inspector general and other 
     government agencies. In 1993, Attorney General Janet Reno 
     declared health-care fraud America's No 2 crime problem, 
     after violent crime. Since then, Congress has enacted 194 
     pages of statutes to combat fraud in these programs, and 
     countless pages of regulations.
       Yet federal and state anti-fraud efforts remain uniformly 
     lame. Medicare does almost nothing to detect or fight fraud 
     until the fraudulent payments are already out the door, a 
     strategy experts deride as ``pay and chase.'' Even then, 
     Medicare reviews fewer than 5 percent of all claims filed. 
     Congress doesn't integrate Medicare's myriad databases, which 
     might help prevent fraud, nor does it regularly review the 
     efficacy of most of the anti-fraud spending it authorizes. 
     Many of the abuses noted above, such as those of the Brooklyn 
     dentist, were discovered not by the government but by curious 
     reporters poking through Medicaid records. The amateurs at 
     the New York Times found ``numerous indications of [Medicaid] 
     fraud and abuse that the state had never looked into,'' but 
     ``only a thin, overburdened security force standing between 
     [New York's] enormous program and the unending attempts to 
     steal from it.
       The federal government's approach to fraud is sometimes so 
     inept as to be counterproductive. Sparrow testified that a 
     defect in the strategy of Billy, our hypothetical criminal, 
     is that he doesn't know which providers and patients on his 
     stolen lists are ``dead, deported, or incarcerated.'' But 
     Medicare's anti-fraud protocols help him solve this problem. 
     When Medicare catches those claims, it sends Billy a notice 
     that they have been rejected. ``From Billy's viewpoint,'' 
     Sparrow explained, ``life could not be better. Medicare helps 
     him `scrub' his lists, making his fake billing scam more 
     robust and less detectable over time; and meanwhile Medicare 
     pays all his other claims without blinking an eye or becoming 
     the least bit suspicious.''
       Efforts to prevent fraud typically fail because they impose 
     costs on legitimate beneficiaries and providers, who, as 
     voters and campaign donors respectively, have immense sway 
     over politicians. At a recent congressional hearing, the 
     Department of Health and Human Services' deputy inspector 
     general, Gerald T. Roy, recommended that Congress beef up 
     efforts to prevent illegitimate providers and suppliers from 
     enrolling in Medicare. But even if Congress took Roy's 
     advice, it would rescind the new requirements in a heartbeat 
     when legitimate doctors--who are already threatening to leave 
     Medicare over its low payment rates--threatened to bolt 
     because of the additional administrative costs (paperwork, 
     site visits, etc.).
       Politicians routinely subvert anti-fraud measures to 
     protect their constituents. When the federal government began 
     poking around a Buffalo school district that billed Medicaid 
     for speech therapy for 4,434 kids, the New York Times 
     reported, ``the Justice Department suspended its civil 
     inquiry after complaints from Senator Charles E. Schumer, 
     Democrat of New York, and other politicians.'' Medicare 
     officials, no doubt expressing a sentiment shared by members 
     of Congress, admit they avoid aggressive anti-fraud measures 
     that might reduce access to treatment for seniors.
       It's not just the politicians. The Legal Aid Society is 
     pushing back against a federal lawsuit charging that New York 
     City overbilled Medicaid. Even conservatives fight anti-fraud 
     measures, albeit in the name of preventing frivolous 
     litigation, when they oppose expanding whistle-blower 
     lawsuits, where private citizens who help the government win 
     a case get to keep some of the penalty.
       Sparrow argued that when Medicare receives ``obviously 
     implausible claims,'' such as from a dead doctor, ``the 
     system should bite back. . . . A proper fraud response would 
     do whatever was necessary to rip open and expose the business 
     practices that produce such fictitious claims. Relevant 
     methods include surveillance, arrest, or dawn raids.'' Also: 
     ``All other claims from the same source should immediately be 
     put on hold.''
       Some of the implausible claims will be honest mistakes, 
     such as when a clerk mistakenly punches the wrong patient 
     number into the ATM. And sometimes the SWAT team will get the 
     address wrong, or will take action that looks like overkill, 
     as when the Department of Education raided a California home 
     because it suspected one of the occupants of financial-aid 
     fraud. How many times would federal agents have to march a 
     handcuffed doctor past a stunned waiting room full of 
     Medicare enrollees before Congress prohibited those measures?
       ``It seems extraordinary,'' Sparrow said, that the HHS 
     Office of Inspector General recommends ``weak and inadequate 
     response[s] . . . to false claims and fake billings'' and 
     that Medicare ``fail[s] . . . to properly distinguish between 
     the imperatives of process management and the imperatives of 
     crime control.'' Extraordinary? How could it be any other 
     way? Anti-fraud efforts will always be inadequate when 
     politicians spend other people's money. Apologists for 
     Medicare and Medicaid will retort that fraud against private 
     health plans is prevalent as well, but this only drives home 
     the point: Since employers purchase health insurance for 90 
     percent of insured non-elderly Americans, workers care less 
     about health-care fraud, and have a lower tolerance for anti-
     fraud measures, than they would if they paid the fraud-laden 
     premiums themselves.
       The fact that Medicare and Medicaid spend other people's 
     money is why the number of fraud investigators in New York's 
     Medicaid program can fall by 50 percent even as spending on 
     the program more than triples. That is why, as Sparrow 
     explained in an interview with The Nation, ``The stories are 
     legion of people getting a Medicare explanation of benefits 
     statement saying, `We've paid for this operation you had in 
     Colorado,' when those people have never been in Colorado. And 
     when you complain [to Medicare] about it, nobody seems to 
     care.''
       The Ryan plan offers the only serious hope of reducing 
     fraud in Medicare and Medicaid. Its Medicare reforms, 
     especially if they were expanded later, would make it easier 
     for the federal government to police the program, and its 
     Medicaid reforms would increase each state's incentive to 
     curb fraud.
       To see how the Ryan plan would reduce Medicare fraud, 
     imagine that the proposal really were what its critics claim 
     it is: a full-blown voucher program, with each enrollee 
     receiving a chunk of cash to spend on medical care, apply 
     toward health-insurance premiums, or save for the future. 
     Instead of processing 1.2 billion claims, Medicare would hand 
     out just 50 million vouchers, with sick and low-income 
     enrollees receiving larger ones. The number of transactions 
     Medicare would have to monitor each year would fall by more 
     than 1 billion.
       Social Security offers reason to believe that a program 
     engaging in fewer (and more uniform) transactions could 
     dramatically reduce fraud and other improper payments. As a 
     Medicare-voucher program would, Social Security adjusts the 
     checks it sends to enrollees according to such variables as 
     lifetime earnings and disability status. The Social Security 
     Administration estimates that overpayments account for just 
     0.37 percent of Social Security spending. Overpayments are 
     higher in the Supplemental Security Income (SSI) program 
     (8.4 percent), a much smaller, means-tested program also 
     administered by the Social Security Administration. But 
     total overpayments across both programs still come to less 
     than 1 percent of outlays.
       In reality, the Ryan ``voucher'' is much closer to the 
     current Medicare Advantage program, through which one in four 
     Medicare enrollees selects a private health plan and the 
     government makes risk-adjusted payments directly to insurers. 
     Skeptics will rightly note that, judging by the official 
     improper-payment rates, Medicare Advantage (14.1 percent) is 
     in the same ballpark as traditional Medicare (10.5 percent). 
     Therefore, the Ryan plan should be seen not as a solution to 
     Medicare fraud in itself, but as a step toward a vastly 
     simplified, Social Security-like program in which the task of 
     policing fraud is less daunting.
       The Ryan plan would also vastly increase the states' 
     incentive to curb Medicaid fraud. Just as a state that 
     increases funding for Medicaid gets matching federal funds, a 
     state that reduces Medicaid fraud gets to keep only (at most) 
     half of the money saved. As much as 75 percent of recovered 
     funds revert back to the federal government. In a report for 
     the left-wing Center for American Progress, former Obama 
     adviser Marsha Simon noted that ``states are required to 
     repay the federal share . . . of any payment errors 
     identified, even if the money is never collected.'' The fact 
     that Albany splits New York's 50 percent share of the 
     spending with municipal governments may explain why the 
     Empire State is such a hot spot for fraud: No level of 
     government is responsible for a large enough share of the 
     cost to do anything about it. The result is that states' 
     fraud-prevention efforts are only a tiny fraction of what 
     Washington spends to fight Medicare fraud.
       Ryan would replace Medicaid's federal matching grants with 
     a system of block grants. Under a block-grant system, states 
     would keep 100 percent of the money they saved by eliminating 
     fraud. In many states, the incentive to prevent fraud would 
     quadruple or more. Block grants performed beautifully when 
     Congress used them to reform welfare in 1996. They can do so 
     again.
       The Ryan plan would not reduce Medicare and Medicaid fraud 
     to tolerable levels, but neither would any plan that retains 
     a role for government in providing medical care to the 
     elderly and disabled. What the Ryan plan would do is reduce 
     how much the fraudsters--many of whom sport congressional 
     lapel pins--fleece the American taxpayer. And that is no 
     small thing.

[[Page S4376]]

     
                                  ____
                     [From USA Today, July 5, 2011]

                 Jobless-Benefits Fraud Is on the Rise

                           (By Paul Davidson)

       State and federal regulators are cracking down on waste and 
     fraud in the unemployment-insurance system, abuses that have 
     hit record levels as unemployment claims surge in a weak 
     economy.
       In the 12 months through March, the overpayment rate was 
     11.6 percent--more than $1 for every $9 paid out. Labor 
     Department figures show.
       That's up from the 12 months ending in June 2010, when a 
     record $16.5 billion, or 10.6 percent of the $156 billion in 
     unemployment benefits disbursed to Americans, should not have 
     been paid, according to the department.
       The overpayment rate was 9.6 percent in fiscal 2009 and 9.2 
     percent in 2008.
       Officials partly blame soaring unemployment, which forced 
     state officials to use fraud-prevention workers to help 
     handle an unprecedented wave of claims.
       ``They were using every person they could find,'' said Gay 
     Gilbert, Labor's unemployment-insurance administrator.
       Lawmakers say excess payments could go to legitimate 
     jobless claims and help keep state unemployment trust funds 
     solvent. About 9.3 million Americans receive benefits.
       The main reason for overpayments is that some workers 
     continue to receive unemployment checks even after they land 
     a new job.
       Another problem is that many employers fail to adequately 
     provide state officials the reason an employee left the 
     company so the worker's eligibility can be determined. Also, 
     some workers receive benefits even when they don't comply 
     with state job-search requirements.
       How state and federal officials are trying to reduce 
     overpayments:
       A national directory of new hires lets states identify 
     workers still receiving benefits even after they get a new 
     job.
       By the end of the year, all states must use the directory. 
     Labor officials also plan to provide funds so overtaxed 
     states can more frequently follow up and collect overpayments 
     from scofflaws.
       A new computer system makes it easier for employers to 
     report why workers left their jobs. Only a few states use it, 
     but the Labor Department is providing funds to encourage 
     wider adoption.
       New rules let states recover improperly paid benefits from 
     U.S. income-tax refunds.

  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. CHAMBLISS. It scared me for a minute, I thought we were almost 
engaging in a debate on the Senate floor. This could get interesting 
here.
  I have great respect for both my colleagues who were making comments, 
and it will be an interesting discussion on the floor when they both 
have their respective numbers and we will look forward to that.
  I want to say to my colleague from Arizona that what he says is 
exactly right. Raising taxes in tough economic times is a very 
difficult thing to do and is not stimulative of the economy. The way we 
need to see revenues increased--and I don't think there is any 
disagreement from anybody in the Senate or in the House that the 14.5 
percent of GDP we are now seeing in revenues has got to be increased. 
But the way we need to increase it is enacting policies, whether they 
be tax policies or spending policies or otherwise, that will truly grow 
the economy, and we can do that with the right kind of policies that 
will not only in the short term stimulate the economy and show an 
increase in revenues, but will also have the same impact on the other 
side of the ledger, which is reducing spending.
  We are now at an all-time high since World War II on the spending 
side, we are at an all-time low on the revenue side, and that is what 
has gotten us into this terrible fiscal problem we have today.
  I concur with what the Senator from Arizona said, and I look forward 
to continuing to dialog with him as well as the Senator from Rhode 
Island about what needs to be done to get this gap closed.
  Mr. President, I rise tonight to discuss the need for the American 
government to fundamentally change the way it conducts business. 
Congress and the President can no longer fail to make significant 
meaningful changes to our fiscal path. We must act now to ensure the 
safety and security of our Nation.
  There is a mutual understanding from all involved in the ongoing 
debate that the current fiscal path our country is on will lead us to 
ruin. It is simply unthinkable to believe that we can continue to run 
deficits in excess of $1 trillion, on top of $14.3 trillion in 
accumulated debt, and remain the leader of the global economy. It is 
well known that the Federal Government will soon risk a potentially 
catastrophic default on its credit obligations. Clearly, any increase 
in the debt ceiling must come with substantial policy reforms and 
commitments that future spending and deficits are being addressed 
appropriately. Against this backdrop, we are being provided with a 
unique opportunity to review the underlying causes of our current path 
and potential effects we face.
  Last week, the Congressional Budget Office released its long-term 
budget outlook. Their release shows debt increasing to approximately 
200 percent of GDP by 2035, unless drastic and immediate changes are 
made.
  Economists have told me that a debt equaling 90 percent of GDP is the 
tipping point, and that after that it is impossible to turn the 
situation around.
  Under the same CBO scenario, interest costs alone in 2035 would reach 
9 percent of GDP, and 9 percent of GDP is more than the United States 
currently spends on both Social Security and Medicare.
  This body spends a considerable amount of time deliberating on 
matters of national security and, indeed, that is extremely important 
work. We must stay vigilant that any threats to this country are 
swiftly dealt with. However, ADM Mike Mullen, the Chairman of the Joint 
Chiefs, has said emphatically over and over again that our debt is the 
single greatest threat to our national security.
  Admiral Mullen is not alone. The cochairs of the President's own 
fiscal commission warned him of the need for swift action. Mr. Bowles 
and Mr. Simpson continue to speak almost daily of the importance of 
addressing our fiscal situation and continue to make impassioned pleas 
that this situation must be corrected and must be done so in the short 
term.
  It is during these hard times that most Americans look to their 
elected representatives and the Chief Executive of the United States 
for guidance on these issues. The American people have waited for 
leadership on this issue and have demanded fiscal discipline. It is 
reprehensible that an issue of this magnitude and significance is 
subject to the partisan bickering and gamesmanship that often rears its 
head in politics. This is an issue that will determine the fate of our 
country. It deserves careful, serious, thoughtful deliberation and not 
political theater.
  Not long ago the Senate held a series of votes on budget resolutions 
that everyone knew were destined to fail. The American people expect 
and deserve an honest budget debate and a honest budget process. While 
I am glad the President is now engaging in this debate, he, too, has 
not been forthcoming in helping to decide America's budget fate. He has 
not given those in his party instructions or guidance on how to address 
our fiscal situation, nor has he given the Congress as a whole a 
relevant plan. It would be reprehensible for these White House 
negotiations that are now underway to produce a last-minute proposal 
that leaves Congress no time to review the merits of the legislation or 
the immediate and lasting effects to the American people.
  I have been on record many times before stating everything must be on 
the table when it comes to solving our debt problems, and I seriously 
mean that. We see daily the effects of oppressive debt on countries 
such as Greece and the fear and panic it creates for the citizens of 
that country. We must take the steps now to ensure we do not fall off 
the precipice, and that means looking at all of our options.
  We must reduce discretionary spending, reform entitlements, simplify 
the individual and corporate code, and lower tax rates. This is a 
proven path to prosperity because the solution is based on both 
spending reduction and economic growth.
  We have a model for this. The model is what Tip O'Neill and Ronald 
Reagan did in 1986. We saw an economy stimulated at a time when it 
really needed it by the elimination of tax expenditures and the 
lowering of tax rates--particularly on the corporate side. It is 
important on both the personal and corporate, but if we are truly going 
to expand our tax base and see revenues increase, then we need to put 
the corporations in this country that manufacture the finest quality of 
products of anybody in the world on the same level playing field as 
their competitors across the globe.

[[Page S4377]]

  So it is of critical importance that we reform our Tax Code, make it 
simpler and more fair, and, particularly from a corporate level, make 
it more competitive from a worldwide perspective.
  We must cut Federal spending in any way we can. Our current levels of 
discretionary and mandatory spending simply cannot be sustained. But we 
cannot solve our problems simply by reducing spending. We have to 
reform entitlements. We have to look at those issues that are very 
difficult for a lot of us to deal with, and we have to make some hard 
and tough decisions. The unfortunate part about this is we do not have 
a lot of time to do it.
  I do not know the window. The window may be 6 months, it may be 12 
months, it may be 2 years. No economist will give an exact definite 
prediction of how long this window continues. But we do know we were 
not able to predict the financial crisis that occurred in 2008. As Mr. 
Bowles has said time and time again, this is one crisis we can predict, 
so now is the time for policymakers in Washington to act.
  It is job creation that will ultimately be the benefit to Americans 
once a strong and balanced Federal budget is in place. Slower economic 
growth results in dramatic job loss. Christina Romer, the former Chair 
of the White House Council of Economic Advisers, equated 1 percentage 
point of GDP with 1 million jobs annually.
  We cannot allow the American people to suffer by not providing the 
economic basis for recovery and growth. A balanced Federal budget that 
is free of excessive debt will lead to a healthy economy and long-term 
sustainable job creation activities.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. Mr. President, I rise today deeply concerned that our 
Republican colleagues, in their ideological haze, have lost sight of 
the facts and the real people at home whose lives will be affected by 
the choices we make. They are lost in an ideological haze, a political 
dust storm that is distorting the facts and confusing process and 
policy with political propaganda.
  As the conservative columnist David Brooks has said, ``A normal 
Republican Party would seize the opportunity to put the country on a 
sound fiscal footing.'' He calls it ``the mother of no-brainers.'' But 
it is true, as many have said, that this Republican Party is not your 
grandfather's Republican Party. It is not even Ronald Reagan's 
Republican Party. This Republican Party is so far to the right that it 
cannot even see the center, where ideologies converge and good 
governance begins. This Republican Party sees the processes governing 
as one-sided--their side and no other.
  Today, those on the far right wave the Constitution that established 
a form of government to protect us from tyranny yet see any form of 
compromise as defeat and the only clear victory is total surrender to 
their position.
  Here we are, working to try to ensure that reason prevails. We have 
offered the largest spending cuts in a generation, asking that those 
cuts be accompanied by closing tax loopholes and ending tax giveaways 
and unreasonable subsidies to those who need them the least. But 
because almost every Republican has signed Grover Norquist's Americans 
for Tax Reform pledge to never ever raise any tax, and because they 
define closing tax loopholes as a tax increase even when the recipients 
themselves have said they do not need those tax breaks, we are forced 
into this position, hoping that logical, moderate voices on the other 
side will rise up, demanding that we do what is right for the American 
people.
  In my view, ending subsidies to big oil companies does not fall under 
that pledge. Only in Washington would Republicans call ending $21 
billion in tax breaks for big oil companies that will make $144 billion 
in profits a tax increase. It is not. It is not a tax increase; it is a 
measure of fairness. It is exactly what we need to do under the 
circumstances, and it is a reasonable offer by those of us on this side 
of the aisle.
  Our job, in a representative democracy, is to represent the values of 
those who sent us here to do what is right for them, not wave a pledge 
and conveniently interpret the elimination of oil subsidies for 
multibillion-dollar profitable corporations or ethanol subsidies to the 
tune of $2 billion as a tax increase. That is nonsense. We are offering 
a reasonable compromise, as that conservative columnist David Brooks 
says, ``the mother of no-brainers.''
  Even USA Today said in their editorial:

       Compromise is an essential part of democracy, but 
     negotiating with Republicans over taxes has become as futile 
     as trying to bargain with the Taliban over whether girls 
     should be allowed to attend school.

  That is a pretty stark comparison, I admit, and I may not have gone 
that far. But, frankly, our Republican brethren seem to hold to their 
ideology almost as religiously. They see all things in black and white. 
They act as though they believe those who disagree with that ideology 
are unpatriotic or heretics, and that the only truth is their truth. 
What they have forgotten is that negotiating with those with whom we 
disagree and reaching a compromise is what good governance is all 
about.
  There is another falsehood. Spending is not a Democratic value, as 
our friends on the other side of the aisle would have us believe, but a 
Republican reality. It was the reckless spending of Republicans 
combined with a reckless tax policy and an ideology that let Wall 
Street run wild, turning a free market into a free-for-all market, that 
brought us to where we are today.
  Let's remember, it was not long ago that the budget was, in fact, 
balanced during another Democratic administration when we had budget 
surpluses as far out as the eye could see. The day President Clinton 
left office he handed the incoming President a $236 billion surplus 
with a projected surplus of $5.6 trillion over the following 10 years.
  When President Bush left office he had turned a $236 billion budget 
surplus into a $1.3 trillion budget deficit with projected shortfalls 
of $8 trillion over the next decade. He handed the new President an 
economy that was headed off the cliff into a near depression.
  We have spent $786 billion, unpaid for, on President Bush's ill-
advised, wrongheaded war of choice in Iraq because of some false 
allegations of weapons of mass destruction, a political experiment that 
distracted us from a war of necessity in Afghanistan, keeping us there 
far longer than necessary at an additional cost of $430 billion, unpaid 
for. The total cost for both wars, unpaid for, was $1.2 trillion.
  The Republican Party that will not now agree to one penny in revenue 
and demands only more spending cuts has fought to make tax breaks for 
the wealthy permanent that would cost this Nation another $5 trillion. 
They have favored big business and Wall Street in a Tax Code that has 
resulted in major multibillion-dollar corporations paying no taxes--
yes, no taxes at all.
  In fact, a detailed Government Accountability Office study of 
corporate income taxes from 1998 to 2005 showed that 55 percent of 
large U.S. corporations reported no tax liability for at least 1 of 
those 8 years. Yet those same Republicans will look us in the eye in 
defense of their defenseless position and tell us that most individuals 
do not pay taxes either. What they will not say is that those 
individuals who do not pay taxes do not pay taxes for a reason: They do 
not earn enough to pay income tax, and many of them are among the 
poorest of the poor. Only in Washington could such an indefensible 
position be accepted as defensible and logical.
  Only in Washington could Republicans support policies that benefit 
the wealthiest at the expense of the middle class. Only in Washington 
could Republicans tell a construction worker in New Jersey, who has cut 
his budget to the bone and needs to work another job to pay the bills, 
that we do not need to end tax loopholes and tax breaks to help pay the 
Nation's bills; that we only have to cut more spending and give more 
money to the top 1 percent of the wealthiest in the country who control 
45 percent of all of the wealth in America and that they will create 
more jobs--notwithstanding the fact that 12 years of tax cuts for the 
wealthiest created virtually no jobs at all. When Ronald Reagan and 
Bill Clinton increased the revenue side of the equation, it brought the 
greatest economic progress in the last half century.

[[Page S4378]]

But our Republican colleagues do not let the facts get in the way of 
their ideology.

  The fact is, if Joe the construction worker in New Jersey cut his 
budget and his spending and has made the difficult choices about what 
he can afford and what he can't and still can't meet the bills he has 
to pay with the money he earns, then he has to get a second job or work 
more hours or find a way to increase his income. Yet our Republican 
colleagues will look that construction worker in the eye and tell him 
he doesn't need to earn more, he needs to cut more and then cut again. 
Cut to the bone, if necessary, but never, never do what needs to be 
done to increase the revenue side. Only in Washington does such an 
argument seem reasonable. Only in this Republican Party does such an 
absurd argument try to make sense.
  Never before has America waged two wars at the same time, struggled 
to invest in our infrastructure to create new jobs--and done so at a 
time of decreased revenue--and not seen the need at least to discuss 
the idea of closing tax loopholes and tax breaks for Big Oil and 
multibillion-dollar corporations. Never before has any party claimed we 
can do all of that and at the same time balance the budget on the backs 
of seniors, students, middle-class families, and not even consider the 
shared sacrifice--a sacrifice that would end tax breaks for 
multibillion-dollar corporations that in many cases don't even pay 
taxes. Never before has such illogic passed for logic. But our 
Republican colleagues will not take yes for an answer. We have said yes 
to spending cuts, more spending cuts than we have seen in a generation. 
Now they must say yes to common sense, fair increases in revenue, and 
choose good governance over political ideology.
  David Brooks, the conservative columnist to whom I referred, said, 
``The members of this movement talk blandly of default and are willing 
to stain their Nation's honor,'' meaning that the country will not meet 
its obligations. We teach our children that you have to meet your 
obligations, but this movement tells the country you don't have to meet 
your obligations.
  He goes on to say:

       If debt ceiling talks fail, independent voters will see 
     that Democrats were willing to compromise but Republicans 
     were not. If responsible Republicans don't take control, 
     independents will conclude that Republican fanaticism caused 
     this default. They will conclude that Republicans are not fit 
     to govern.

  I would very rarely agree with Mr. Brooks, but I would agree his 
observations in this case are absolutely right. This is about not only 
standing up for the Nation's honor, it is about standing up for the 
Nation's obligations. It is about standing up to make sure there is a 
fair and shared sacrifice, not just on the backs of middle-class 
working families in this country and those who have the least among us. 
That is the choice Republicans would have us make. It is a wrong choice 
for the Nation, and I hope we get to some sense of reality in this 
Chamber that can help us move forward, have the Nation be upheld in its 
obligations both here and abroad and not start a ripple effect that 
will cause an enormous consequence to this Nation's economy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. BARRASSO. I ask unanimous consent to speak for up to 10 minutes, 
followed by Senator Inhofe for up to 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BARRASSO. We heard the Senator from Georgia talk about the 
upcoming predictable crisis, and our Nation faces an Olympic crisis 
right now, and it is a predictable crisis.
  Back in 2006, then-Senator Obama called raising the debt ceiling ``a 
sign of leadership failure.'' So why 5 years later is it now-President 
Obama who is asking us to raise the debt ceiling, and why is he doing 
it with no plan on how to pay back the new debt we continue to 
accumulate?
  In his press conference last week, the President called on this party 
to ``go ahead and make the tough choices.'' When it comes to cutting 
spending, his allies in Congress refuse to make any choices. The 
President has attacked this body for not getting a deal done on time. 
Yet he declined to meet with Republicans about these very issues and 
about our ideas. According to the White House Press Secretary--the 
Press Secretary said this was ``not a conversation worthing having.'' 
Well, he has finally agreed to meet tomorrow with leaders from both 
parties.
  The White House and Congress have a choice: Do we want America to be 
broke or do we want America to be balanced? Facts are stubborn things, 
and the numbers do not lie. Our debt is swallowing our economy whole. 
Every day Washington borrows $4.1 billion more--borrowed over $4.1 
billion yesterday, $4.1 billion today, and it will borrow $4.1 billion 
again tomorrow. That is over $2 million a minute, every minute. In a 
single day, Washington borrows enough to buy tens of thousands of new 
homes. In a single hour, Washington borrows enough to buy 2 million 
barrels of oil. In a single minute, Washington borrows enough to send 
53 students a year to the most expensive colleges in America. In a 
single second, Washington borrows enough to buy two new Ford Mustang 
cars. Washington did all of that yesterday, and it will do it all 
today, and it will do it all tomorrow.
  Well, of every dollar Washington spends, 41 cents of it is borrowed. 
Much of it is borrowed from China. Every American child born today, 
born tomorrow, and born the next day is born with a debt of over 
$45,000. Next year, of every dollar Washington spends, 68 cents will go 
for Social Security, Medicare, Medicaid, and interest on the debt 
alone.
  If those numbers don't sound scary yet, they will. Interest on our 
debt cost $196 billion last year. It costs nearly $23 million an hour. 
It costs over $370,000 a minute, every minute. It costs $6,000 a 
second, every second, interest alone on our debt. In the time it takes 
to give this speech, as well as my colleague's previous speech and the 
speech coming up after that, in those 10 minutes, Washington will have 
spent millions of dollars on interest payments alone.
  The President has railed against tax breaks for private jets. He did 
it in a press conference last week. He mentioned it six times. What he 
didn't tell you is that every $100 of the huge deficit of this year 
alone--of every $100, only two cents of that $100 would be dealt with 
with the tax he proposes and holds out as the No. 1 thing. What about 
the other $99.98? What the President won't tell you is that the 
interest on our debt costs enough to buy over 100 private jets every 
day--for the interest we pay on the debt alone. His party wants to end 
tax breaks for yachts. Yet the interest on our debt would buy over 50 
luxury yachts every hour. Most Americans are feeling severe pain at the 
pump. Yet Washington could buy nearly 2,000 gallons of gas at current 
prices every second with the money we spend on interest on our debt.
  If we, as a nation, continue down this path, Washington will spend 
all of what it takes in on Medicare, Medicaid, Social Security, and 
interest on this colossal debt. Everything else, from defense to 
education, will be paid for on a budget of borrowed money. So where is 
the money going to come from? How will we ever pay it back? A lot of it 
will come from other countries, countries that do not always have 
America's best interest at heart.
  Debt isn't just a disaster for the distant future; our debt is so 
unsustainable and irresponsible that even our military leaders have 
condemned it. ADM Mike Mullen, Chairman of the Joint Chiefs of Staff, 
has said the biggest threat to our national security is our debt. The 
debt is the threat. We do not and we should not take the biggest threat 
to our national security lightly.
  The amount of debt we owe right now today is so high that it is 
hurting our employment at home. Experts continue to tell us that our 
debt is costing us millions of jobs. Meanwhile, the Weekly Standard 
reports that every ``stimulus job'' costs over $\1/4\ million. In other 
words, the White House could have just cut a check of $100,000 for 
every American who got a job through the stimulus, and taxpayers still 
would have come out ahead by $427 billion. Spending like this cannot 
create jobs because by nature it makes it harder for the private sector 
to grow, and no growth means no jobs. Because of this, it is harder for 
American families to

[[Page S4379]]

buy gas, groceries, cars, and homes, to pay tuition for their kids to 
go to college, and it is harder to create jobs for those kids who will 
be graduating this year and next year and every year until we get this 
spending under control.

  Everyone seems to claim they understand that the situation is 
irresponsible and unsustainable. Two years ago, back in February of 
2009, the President called experts to the White House. He called them 
in for what he called a fiscal responsibility summit. In his opening 
remarks, here is what the President had to say:

       Contrary to the prevailing wisdom in Washington these past 
     few years, we cannot simply spend as we please, and defer the 
     consequences to the next budget, the next administration, or 
     the next generation.

  Well, I agreed with the President. He was right. So my question to 
the President is, What have you done about it?
  One thing he has done is to call together a debt commission. Late 
last year, the debt commission released their report on America's 
fiscal situation, and the findings were sobering. According to the 
report, they said the problem was real; the solution will be painful; 
there is no easy way out; everything must be on the table. You know 
what else they said. They said Washington must lead.
  Washington has not led. Instead, the administration has offered 
nothing but empty promises. As the White House makes promise after 
promise and speech after speech with no action to back it up, it is 
clearer than ever that in Washington spoken promises have become broken 
promises.
  This administration's allies in Congress have no plan other than 
raising taxes. While they claim to have already accepted the idea of 
cutting trillions of dollars from the budget, I have yet to hear the 
Democratic leadership endorse any spending cuts. Where is their plan to 
cut wasteful Washington spending? So far, they have only talked about 
tax increases that will kill jobs and hurt our economy. Raising taxes 
will only make matters worse.
  The fundamental difference in this fight is more than just practical, 
it is also philosophical. We can argue over whether raising taxes on 
this or on that industry will lower the debt or just raise the costs 
for the American people.
  Let me make this very simple. I am not interested in raising taxes to 
expand and sustain the size and scope of our Federal Government. I want 
less government, less costly government, and that means I am not 
interested in ferreting out new ways to tax people or businesses. I am 
looking for ways to cut spending to shrink the size of government. I 
want to dramatically reshape government, spend less, do less, and put 
power back into the private sector. That is how you raise revenue--you 
slash government, you put people back to work. Washington's persistent 
push to put our fiscal crisis off until tomorrow is unacceptable and 
must end now.
  So I come to the floor and say, as someone from Wyoming, where we 
live within our means, where we balance our budget every year, it is 
time for this body, this Congress, and this President to sign into law 
a balanced budget amendment to the Constitution. That is an amendment 
which would force Washington to live within its means.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, just one comment on the subject at hand, 
and then I want to talk about something completely different that is 
very significant happening today.
  I listened to the Senator from New Jersey down here. He kept talking 
about only in Washington what can happen, only in Washington. Yet never 
was anything said about cutting spending. It was all about passing tax 
increases, and that is what we will be faced with tomorrow.
  (The remarks of Mr. Inhofe pertaining to the introduction of S. 1335 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  The PRESIDING OFFICER (Mr. Begich). The Senator from Colorado.
  Mr. BENNET. Mr. President, I ask unanimous consent that the time for 
debate be extended until 7:30 p.m., with all of the provisions of the 
previous order remaining in effect.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BENNET. Mr. President, I wasn't going to come to the floor today, 
but I was in the chair and I have been hearing some of the debate that 
is going on about this debt ceiling and I decided that, once again, I 
needed to stand and remind people what this vote is about when we get 
to it. The Presiding Officer has heard me talk about this before.
  Our failure to lift the debt ceiling is not like the United States 
cutting up its credit card and saying we are not spending money 
anymore. It is exactly like a household at home, back in Colorado, 
saying we overspent, we weren't careful, and we are not going to pay 
the cable bill this month even though we owe it or we are not going to 
pay our mortgage this month even though we owe it. Those are the kinds 
of things that in the real world lead in worst cases to bankruptcy but 
in a lousy case can lead to interest rates going up because the bank 
says we are not going to let people pay a lower interest rate for their 
mortgage because they are not a good credit risk. That is exactly what 
is going to happen to the United States of America if we renege on the 
full faith and credit of the United States.
  That is why I was so pleased to see an editorial today in the Wall 
Street Journal called ``A Debt-Limit Breakout.'' The Journal observed 
that:

       What this debate needs is a breakout strategy--to wit, 
     Republicans should answer Mr. Obama's tax call by accepting 
     his business tax increases in return for a lower corporate 
     tax rate.

  The Journal goes on to observe directly--and by the way, I said this 
for 2\1/2\ years, the last 2\1/2\ years in Colorado--``. . . the U.S. 
corporate Tax Code provides the worst of both worlds: It makes U.S. 
companies less competitive'' because we have one of the highest rates, 
if not the highest rate, in the world, ``even as it raises much less 
revenue than advertised.'' Because there are so many special interest 
loopholes that even though we have this high rate we are projecting, we 
are not, as the Presiding Officer knows, collecting the revenue we 
need.
  Finally, the Journal says:

       Think about it.

  Talking about these negotiations.

       On the current path both sides are headed at best for a de 
     minimis deal that makes everyone look bad, at worst for a 
     major political crack-up.

  I think the Journal has it exactly right, and I think both of those 
outcomes are unacceptable to the people of Colorado and should be 
unacceptable to the Members of this body. A de minimis deal that 
somehow gets us through this but doesn't actually address the 
fundamental structural issues we face is unacceptable, and a political 
crackup is absolutely unacceptable as well not because of the political 
fate of anybody in this Chamber, but because of what is going to happen 
to our economy if our interest resets because we have failed to deal 
with this debt ceiling issue.
  I have spent a lot of time in the capital markets and I know that 
once those interest rates reset, they will be reset for the rest of my 
life. I am so worried the posturing and the politicking that has been 
going on in this Chamber is going to put us in a place where we 
actually run out of time to do the right thing.
  I wanted to come down here today to say thank you to two Republicans 
who came out today. One is Senator John McCain from Arizona who came 
out with this Wall Street Journal editorial--and, by the way, I ask 
unanimous consent that the Journal article I have been referring to be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, July 5, 2011]

                    Editorial: A Debt-Limit Breakout

       The debt-limit talks in Washington are bogged down in the 
     hedgerows, with some Republicans insisting on a balanced 
     budget amendment that can't pass Congress President Obama 
     insisting on tax increases that Republicans oppose.
       We've long favored such a reform, and last year so did the 
     Simpson-Bowles deficit commission and the White House 
     economic advisory council headed by Paul Volcker. But the 
     cause has now acquired no less a convert than Bill Clinton. 
     Speaking Saturday at something called the Aspen Ideas 
     Festival,

[[Page S4380]]

     the former President admitted that he had once raised tax 
     rates on corporations.
       ``It made sense when I did it. It doesn't make sense 
     anymore. We've got an uncompetitive rate,'' he said. ``We tax 
     at 35% of income, although we only take about 23%. So we 
     should cut the rate to 25%, or whatever's competitive, and 
     eliminate a lot of the deductions so that we still get a fair 
     amount, and there's not so much variance in what the 
     corporations pay.''
       We opposed Mr. Clinton's tax increases, not least because 
     corporations don't pay taxes so much as they serve as a 
     collecting agent. But on the rest of Mr. Clinton's riff, 
     Milton Friedman and Robert Mundell couldn't have put it 
     better, though perhaps they'd think that 25% is still too 
     high.
       We'd prefer 15% ourselves, but Mr. Clinton is exactly right 
     on the failure of the 35% rate (39% on average including the 
     states) to capture that share of corporate income in 
     government revenue. We wrote earlier this year about 
     Whirlpool, which had an effective tax rate of zero due to its 
     many write-offs. Everyone knows the notorious case of GE.
       The average effective corporate rate varies by industry but 
     is far less than the 35% rate, and the injustice is that some 
     pay much less than others if they can afford lobbyists to 
     write loopholes or they invest in politically correct 
     purposes. Anyone not in thrall of class-war symbolism 
     understands that the U.S. tax code provides the worst of both 
     worlds: It makes U.S. companies less competitive even as it 
     raises much less revenue than advertised. Mr. Obama and 
     Treasury Secretary Tim Geithner have acknowledged this in the 
     past, the President as recently as this year's State of the 
     Union address.
       As for the debt-limit politics, this is also a winner. 
     Democrats and Republicans say they've agreed privately on 
     sizable spending cuts over a 10-year budget window. No doubt 
     some of those cuts are less real than others, and future 
     Congresses could rewrite any enforcement provisions passed 
     this year. But Republicans still have an incentive to set 
     spending on a downward path, and Mr. Obama has an incentive 
     to show he is no longer a hostage of Nancy Pelosi as he runs 
     for re-election.
       The political sticking point is Mr. Obama's desire for some 
     Republican buy-in on raising revenues. His political left is 
     still sore that he agreed to extend the Bush tax rates 
     through 2012. Thus he's pounding Republicans to agree to 
     eliminate certain business tax deductions that political 
     advisers David Axelrod and David Plouffe have told him will 
     be hard for Republicans to defend. Corporate jets. Carried 
     interest for private equity. Oil and gas. Even LIFO 
     accounting, which few understand but can be made to sound 
     nefarious.
       Whatever their individual merits, each of these would be a 
     tax increase on business, and Republicans campaigned last 
     year on not raising taxes. But the politics is different if 
     they can offset these revenue raisers with lower tax rates. 
     That would let Republicans honestly claim they didn't support 
     a net tax increase, even as Mr. Obama could say he raised 
     revenue.
       Our own guess is that such a reform would raise far more 
     money than the official scorers would predict, since it would 
     lead to a more efficient allocation of capital and less tax 
     evasion. This would also promote economic growth, breaking 
     out of the austerity mentality driven by debt reduction. If 
     Mr. Obama really is worried that lower federal spending will 
     hurt the economy, then this tax reform is also his best 
     growth policy.
       In offering his grand bargain on Saturday, Mr. Clinton 
     included the caveat of ``how can they do that by August 2?'' 
     Mr. Geithner says that is the date when he can no longer 
     finagle federal finances to escape a potential default on the 
     debt, or must at least cut some federal spending, to avoid 
     breaching the $14.3 trillion debt limit.
       But where there's political self-interest there's always a 
     way. Both sides could agree to a short-term debt-limit 
     reprieve of a month or two with some spending cuts that 
     everyone agrees on. That would give them more time to cut a 
     larger deal that includes corporate tax reform.
       Think about it. On the current path both sides are headed 
     at best for a de minimis deal that makes everyone look bad, 
     at worst for a major political crack-up. Perhaps Mr. Obama 
     wants a crack-up to portray Republicans as extreme. But 
     Republicans should at least call his bluff and answer his 
     demands for fewer business tax deductions by saying yes--in 
     return for lower tax rates.

  Mr. BENNET. Senator John McCain came out and said we might not like 
everything in here, but it makes a great deal of sense and we need a 
game changer to deal with this debt debate we are having right now. I 
wish to applaud him for that. When someone comes to the Senate they say 
a person can have two mentors, one is a Democrat and one is a 
Republican, but one has to ask the person if they will do it. I asked 
Senator McCain if he wouldn't mind being my Republican mentor and he 
thought about it a little bit, he came out on the floor and he said, I 
will take you to lunch. Even though he didn't exactly support me in my 
last campaign, he has given me a lot of advice over the last number of 
months. To see him out here today saying, you know what, we may need to 
think differently about this, gave me some hope that maybe we are not 
going to run out of time.
  The other person I wish to thank is Senator Chambliss from Georgia 
who was speaking when I was sitting in the chair and said that 
everything needs to be on the table. This isn't a time to draw bright 
lines. It is a time to pull ourselves together, roll up our sleeves and 
do what is right. We have the outlines of a plan from the deficit and 
debt commission. I don't love everything in it--no one would love 
everything in it--but we have to find a way to compromise and come 
together for the benefit of our kids and for our grandkids, and I think 
importantly, in the short term, to give American business the 
confidence it needs to invest again in this economy.
  There is $2.3 trillion of cash sitting on the balance sheets of our 
Nation's businesses. There may be a lot of reasons for that, but I know 
one is they are uncertain about our ability to straighten out the 
fiscal quagmire we face.
  We have spent a lot of time on this, but we haven't made a lot of 
progress and we are running out of time. So I urge all of my colleagues 
to come to the floor in the spirit of people who want to work across 
the aisle, who are not interested in drawing these bright lines, and 
come to a big deal--not a small deal--one that gets to the $4.5 
trillion that the deficit commission recommended or in that direction 
generally, and gives us the chance to feel as though we have done 
something useful for our kids, one that will give us the chance to feel 
patriotic, that we actually have honored the legacy of our parents and 
grandparents, and that we have passed along more opportunity to the 
next generation. I want the Presiding Officer to know, and I know he 
feels the same way, that we will work with anybody on the other side of 
the aisle to try to get this done.
  Thank you, Mr. President. I yield the floor.
  Mr. MORAN. Mr. President, I ask to speak for up to 15 minutes.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mr. MORAN. Mr. President, it is appropriate that we are here on this 
July 4 holiday week. I joined a number of my colleagues last week who 
made it clear it was important for us to be here. Raising the debt 
ceiling is a significant issue we face, and while I am pleased to see 
the discussion ongoing on the Senate floor today, we do need actions 
that speak louder than our words. I say that knowing I am coming here 
to talk about an issue that we have attempted to bring to the attention 
of my colleagues in the Senate now for a long time.
  We have a looming financial crisis. All the Democratic leadership was 
capable of bringing up on the Senate floor this week was a sense of the 
Senate that wealthy Americans should pay their fair share of something.
  I suppose we will have a discussion about that, which has begun and 
will continue for the next few days. But I believe Americans deserve 
leadership in our Nation's Capital to confront the real fiscal 
challenges--not just this desire to kick the can down the road and 
ignore the crisis we face.
  In my view, our President and the Senate leadership have failed to 
lead. They have failed to adopt the President's own Deficit Reduction 
Commission report. The President has not proposed the results of that 
report. They have failed to pass a budget in over 2 years. They have 
failed to introduce a budget even in our committee this year, and the 
President's budget that he did propose this year is woefully inadequate 
in addressing the fiscal crisis, the deficits we face.
  Crafting a budget is one of the basic responsibilities of Congress, 
but it has not happened. No country, business, or family can operate 
responsibly without a budget. I serve on the Appropriations Committee. 
I would love to have a budget that set the guidelines for us to begin 
the process of determining how much money we should spend, what things 
might be increased, decreased, or eliminated. Without a budget, the 
appropriations process continues to falter and, in fact, it would not 
be surprising that once again we end up with either an omnibus spending 
bill or a continuing resolution.
  The President and Senate Democrats have said they are serious about 
dealing with our Nation's debt crisis, but

[[Page S4381]]

actions will speak louder than words. The truth is the President's 
budget and the policies of this administration have made our problems 
worse.
  During the last 2 years, the government has spent more than $7.3 
trillion and increased the Nation's debt in just 2 years by more than 
$3.2 trillion. The President is missing and the Senate is 
dysfunctional. The struggling economy we are experiencing and the 
financial collapse around the corner is the most expected economic 
crisis in our lifetime. Yet nothing is being done to stop it.
  The cochairs of the President's own Fiscal Commission have said the 
same thing and have warned that if we fail to take swift and serious 
action, the U.S. faces ``the most predictable economic crisis in its 
history.'' They predict such an event could occur in 2 years or less.
  It is time to move past empty rhetoric and get serious about 
confronting the debt crisis. Delaying difficult decisions and simply 
increasing the debt ceiling once again without making any changes to 
the way Washington spends taxpayer dollars should not be an option. We 
cannot afford business as usual.
  The President's solution is to raise revenues to balance the budget. 
But does anyone really believe that increased taxes will be used to pay 
down the debt or will it just be used for even more spending? History 
shows that money raised in Washington, DC, results in more spending in 
Washington, DC.
  When families struggle to pay the bills, they do not simply ask for a 
pay raise; they cut their spending. The revenue increases we need are 
not tax increases but increased revenues that come from a growing 
economy.
  The last time we had a balanced budget was at the end of President 
Clinton's term. Yes, there was some spending restraint, and Republicans 
and Democrats could not get along well enough to agree to spend a bunch 
of money, but the real reason the budget was balanced was that people 
were working and paying their taxes. We need a growing economy once 
again to balance the budget.
  Increasing taxes reduces the chances of economic growth and the 
ability to create more and better jobs. If we increase taxes, we reduce 
the chance of economic growth and we reduce the chance of more and 
better paying jobs.
  In Kansas, for example, the President proposes we increase taxes on 
those who own a business plane. Airplanes are a pretty important 
component of our State's economy, and this proposal would have a 
devastating impact upon the Wichita economy, which has already suffered 
the loss of thousands of jobs under declining business in this country.
  Now is not the time to penalize a U.S. industry that produces the 
best quality airplanes in the world. The U.S. and North America ship a 
significant amount of business jets worldwide, more than any other 
region in the world. But because of the recession, nearly every 
aircraft manufacturer has had to cut jobs, some up to 50 percent of 
their workforce.
  We see this in Kansas day in and day out, and yet the proposal is to 
make it more expensive to own an aircraft. This does not punish the 
owners of aircraft. It punishes the people who work every day to make 
an airplane.
  To turn our economy around and put people back to work, Congress and 
the Obama administration should be implementing policies that encourage 
job creation, not diminish the chances; rein in burdensome government 
regulations; replace our convoluted Tax Code with one that is fair, 
simple, and certain; open foreign markets for American manufactured 
goods and agricultural products; and develop a comprehensive energy 
policy. Yet none of these are being done by this Senate.
  Spending more has failed to stimulate our economy. Instead, we should 
cut government spending to reduce our deficit, cap spending so it does 
not continue to eat up more and more of our gross domestic product, and 
balance our budget so we do not get back in this mess once again.
  First, it is time to cut government spending and change the way 
Washington, DC, spends taxpayer dollars. Mr. President, 40 cents of 
every dollar our Federal Government is spending is borrowed. One 
hundred percent of our tax revenue is spent on mandatory spending and 
interest payments on the debt. Everything else--defense, homeland 
security, energy, education--is borrowed. This year we will collect 
$2.2 trillion and spend $3.7 trillion--a $1.5 trillion deficit.
  CBO, the Congressional Budget Office, now projects that debt held by 
the public will exceed 100 percent of gross domestic product by 2021 
under current policies. This is a 10-percent increase in debt relative 
to CBO's projections of only a year ago.
  The debate over government spending is often seen as one that is 
philosophical or partisan bickering that always goes on in Washington, 
DC. And certainly I have heard, all of my adult life, the conversations 
that go on in Washington, DC, and on the talk shows, and in the 
newspapers, that talk about Republicans and Democrats arguing about 
balancing the budget and how much money we can spend, but the reality 
is this time it is different, and our failure to act will have dramatic 
consequences on the daily lives of Americans.
  This is about whether Americans can find a job, can make their 
payments on their homes and automobiles, whether their kids have a 
bright future and can pursue the American dream. This is not a 
philosophical discussion for Washington, DC. This has real consequences 
for every American family.
  We are not, unfortunately, immune from the laws of economics that 
face every nation. The failure to get our financial house in order and 
borrowing under control will lead to increased inflation, higher 
interest rates, fewer jobs, and a lower standard of living for every 
American. Our creditors may one day decide we are no longer 
creditworthy, and we will suffer the same consequences that other 
countries are now suffering that followed that path. We should learn 
from them.
  Secondly, it is time to cap discretionary spending this year and 
next. We must demand enforceable statutory caps to return Federal 
spending to 18 percent of gross domestic product, where it has been for 
almost all of the past 60 years. Current Federal spending is now nearly 
25 percent of gross domestic product and remains on track to be high 
over the course of the next 10 years.
  Third, we must pass a balanced budget amendment. This amendment to 
the U.S. Constitution is the best way to discipline government 
officials. This amendment would require the President to submit and 
Congress to pass a balanced budget each and every year, cap Federal 
spending at no more than 18 percent of gross domestic product, and 
require a two-thirds vote of the House and the Senate to raise taxes.
  Nothing here is unreasonable. Cut spending, cap the percentage of 
spending to GDP, and pass a balanced budget amendment. When did it 
become radical or even irresponsible to live within our means? We know 
what is going to happen if we do not act, and it would be immoral for 
us to look the other way or to kick the can down the road because the 
politics of these issues are too difficult to deal with.
  Officials from the Obama administration warn that the failure of 
Congress to raise the legal debt limit would risk default. But the 
bigger economic threat that confronts our country are the consequences 
of allowing our country's pattern of spending and borrowing to continue 
without a serious plan to reduce that debt. Our out-of-control debt is 
slowing our economic growth and threatening the prosperity of future 
generations who will have to pay for our irresponsibility.
  Our government is not on the verge of a financial meltdown because 
Republicans will not vote to raise the debt ceiling. We are at the 
point of financial collapse because Republicans and Democrats have 
spent money we do not have for way too long. We must use the leverage 
that raising the debt ceiling now presents to force elected officials 
to do something they otherwise would not do: curb spending, grow the 
economy, and balance the budget.
  If we fail to respond, if we fail to act as we should, if we let this 
issue one more time pass for somebody else to solve because it is so 
difficult, we will reduce the opportunities the next generation of 
Americans have to pursue the American dream.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

[[Page S4382]]

  The bill clerk proceeded to call the roll.
  Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LAUTENBERG. Mr. President, we are here trying to figure out where 
America goes in the near future, but also where it goes in the long 
term because the decisions we make here are going to have a long 
lasting effect.
  What we hear and the American people are witnessing over TV is the 
Republicans are playing with fire, and millions of Americans are in 
danger of getting scorched. It reminds us some of those who played the 
fiddle while Rome burned. The Republicans are willing to allow our 
country to go into default rather than ask the wealthiest among us to 
pay their fair share.
  The Republican side of the Capitol is clear. They say: Don't ask our 
millionaire friends to contribute anything more to keep our ship of 
state afloat. Yes, the ride is going to be bumpier for everyone, but 
that is life. Why shouldn't the middle class pay something, they ask. 
After all, there are so many of them.
  In fact, a Republican Senator was on the floor this afternoon saying 
the wealthy are overburdened. It is not easy, I guess, to pick out a 
new car every year, maybe make sure your reservations for your trip 
abroad are made, and renovations for the house are in order. Life gets 
complicated if you are rich. These decisions do not come easy.
  The Senator who spoke this afternoon complained that the poor and the 
middle class--and I quote him here--``need to share some of the 
responsibility.''
  So there it is. It is the poor and the middle class who need to 
sacrifice once again, but not the wealthy. The fat cats sit purring on 
the front deck while middle-class workers are breaking their backs.
  Middle-class workers should not have to explain to their kids why 
they cannot afford to help them get a college education. Democrats know 
the way to keep our country strong is to educate every young person 
capable of learning.
  Now, what is the real cost of millionaire protection? This risk is an 
economic calamity for middle-class families across the country if we 
make a mistake here as we deal with the raising of the debt ceiling, as 
we deal with the problems of the budget.
  It is time to stop protecting millionaires when so much is needed 
from everyone who can help this country regain its footing. If the 
Republicans force default on our debt, it could mean tens of millions 
of Americans might not receive their Social Security checks. Retirees 
and disabled Americans on fixed incomes depend on Social Security for 
survival.
  But Social Security is only the beginning. If the Republicans insist 
on pushing the government into default, the men and women who wear our 
country's uniforms may not even get their paychecks. Right now there 
are 140,000 brave Americans risking death and injury in Afghanistan and 
Iraq. Do we reduce our responsibility to them because Republicans do 
not want to burden millionaires?
  Additionally, payments to doctors under Medicare and Medicaid could 
be suspended. Where do the seniors and needy Americans turn then in the 
event of an urgent medical problem?
  At a time when nearly 14 million Americans are out of work and 
struggling to keep food on the table, unemployment benefits could 
lapse. We are talking about the possibility of people without incomes, 
people unable to sustain their basic needs. In addition to destroying 
the safety net for ordinary Americans, a default crisis would likely 
threaten America's position as the economic giant of the world, as we 
see the possibility of widespread panic on Wall Street and the damage 
to the credit markets that could lead to the loss of millions of jobs 
across the country.
  The question has to be answered: Why are the Republicans willing to 
walk on this economic tightrope to win favor among wealthy 
contributors? It is because they do not sufficiently value the human 
infrastructure that enabled the millionaires to make their millions. 
They are insisting on protecting tax breaks for millionaires and 
billionaires.
  They want to keep subsidizing big oil companies to the tune of $4 
billion a year in tax breaks. I look at what our leader, the majority 
leader, has proposed. I am proud to be a cosponsor of a commonsense 
resolution introduced by Senator Reid.
  The resolution says: Americans who earn $1 million or more a year 
should pick up the shovel and help their country dig its way out of the 
disaster instead of just playing politics.
  The American people see through the Republican games of protecting 
the rich, while middle-class families lose jobs, homes, and the belief 
that their children have a chance of success that their forebears 
dreamt about. In poll after poll, survey after survey, they say we 
should ask the very wealthy to pay more to reduce the deficit. Yet the 
Republicans refuse to close outrageous tax loopholes for oil companies 
that are rolling in profits. We cannot ask them to sacrifice.
  Look at what the CEOs of these companies are being paid. ExxonMobil, 
they made over $11 billion in a quarter. The CEO made, in 2010, $29 
million. ConocoPhillips, their CEO made $18 million in 2010. Chevron, 
the CEO was paid $16 million in 2010.
  The facts are clear and so are the Republican priorities. They do not 
want the giant corporations and the wealthy to lose their lucrative tax 
loopholes. The Republicans want to end Medicare as we know it, forcing 
seniors to pick up an extra $6,000 a year for their health care. The 
question has to be asked: Why are the Republicans trying to slow the 
economic recovery? Why run the risk of financial collapse just 3 years 
after the last one? Do they believe destroying the economy now will 
help them during next year's election? What a terrible thought that is. 
We heard the minority leader say his No. 1 priority is stopping this 
President from winning another term.
  Our No. 1 priority ought not to be to destroy lives for political 
gain. It ought to be about restoring our economy, restoring jobs, 
making sure all Americans can share in what this great country has to 
offer.
  The question lurks: What is it that propels this unyielding refusal 
to ask those who make $1 million a year or more to participate some in 
restoring our economic viability? The bottom line is, avoiding a 
default crisis requires all to participate or we could witness the 
failure of a nation that has survived for more than 200 years--200 
years as a beacon of freedom, liberty, and democracy--with great risk 
of substantial failure in the future if we do not raise the debt 
ceiling.
  The Democrats feel the need to protect the basic values that have 
made this dream heard only in America, over centuries, a reality. Going 
forward into the future, we have to continue to protect the values we 
treasure in our society.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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