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THAT LONG TO PROPERLY EVALUATE
MR. PRESIDENT, I SEE THE
MAJORITY LEADER HERE.
IT'S ALWAYS A PLEASURE TO WORK
WITH HIM, AND I WOULD YIELD THE
FLOOR.
MR. PRESIDENT, I WOULD
SAY BEFORE MY FRIEND LEAVES THE
FLOOR, HIS LEADER, MY FRIEND,
THE SENIOR SENATOR FROM
KENTUCKY, AND I ARE REPRESENTING
THE SENATE ALONG WITH SENATOR
KYL AND SENATOR DURBIN AT THE
WHITE HOUSE.
WE'VE BEEN THERE MANY, MANY DAYS
NOW.
AND WE UNDERSTAND, ALL OF US
THERE, DEMOCRATS AND REPUBLICANS
REPUBLICANS, THE SIGNIFICANT
ADVERSE NEXT HUGE DEBT HAS ON
OUR COUNTRY.
EVERYONE THERE IS TRYING TO
ARRIVE AT A POINT WHERE WE DO
SOMETHING ABOUT THAT.
WE'RE NOT THERE YET.
IT'S DIFFICULT TO DO.
WE UNDERSTAND IT'S GOING TO TAKE
A MIX OF -- WE BELIEVE A MIX OF
SPENDING CUTS AND SOME WAY TO
GENERATE SOME MORE REVENUE.
WE'RE WORKING OUR BEST TO GET
MY FRIEND IS RIGHT, THE DEBT IS
A DRAG ON THE ECONOMY.
THERE'S NO QUESTION ABOUT THAT.
AND ONCE WE'RE ABLE TO RAISE THE
DEBT LIMIT, I THINK YOU'RE GOING
TO SEE SOME ENERGY ON THIS
ECONOMY THAT WE HAVEN'T SEEN IN
SOME TIME.
BUT WE'RE NOT THERE YET.
I WISH I COULD REPORT TO MY
FRIEND FROM ALABAMA AND THE REST
OF THE SENATE AND THE COUNTRY
THAT WE HAVE COMPLETED OUR
NEGOTIATIONS BUT WE'RE NOT.
WE'RE GOING TO GO BACK AGAIN
TOMORROW.
THE PRESIDENT SAID 3:45 AND I
SAID A.M. OR PSM, P.M., AND IT'S 3:45
P.M. TOMORROW WE'LL BE BACK
TRYING TO MOVE FORWARD ON THIS.
MY FRIEND FROM ALABAMA HAS AN
IMPORTANT RESPONSIBILITY AS
BEING THE PERSON WHO'S THE
RANKING MEMBER NOW OF THE MOST
IMPORTANT BUDGET COMMITTEE AND
I'M SURE HE'S LEARNED A LOT,
HAVING TAKEN THIS ASSIGNMENT,
THAT HE DIDN'T KNOW BEFORE.
THAT'S THE WAY IT IS WITH
EVERYONE IN THE SENATE.
I LEARNED A GREAT -- I'VE
LEARNED A GREAT DEAL WORKING
THROUGH THE C.R., THE DIFFERENT
ITERATIONS OF THAT AND NOW ON
THIS WORK WE'RE DOING TRYING TO
ARRIVE AT A DEBT REDUCTION
PACKAGE ALONG WITH RAISING THE
LOT.
SO I'VE GOT A LOT MORE TO LEARN.
I APPRECIATE MY FRIEND'S
INTENSITY OF THINGS HE BELIEVES
IN, WHETHER IT'S THIS OR AS THE
PERSON RUNNING THE JUDICIARY
COMMITTEE FOR THE REPUBLICANS,
HE'S ALWAYS VERY INTENSE.
HE AND I DON'T ALWAYS AGREE BUT
WE AGREE A LOT MORE THAN PEOPLE
BUT THE ONE THING NO ONE CAN
EVER TAKE AWAY FROM THE JUNIOR
SENATOR FROM ALABAMA IS THE
SERIOUSNESS OF HIS BEING A
UNITED STATES SENATOR.
MR. PRESIDENT, I ASK CONSENT
THAT WE NOW PROCEED TO S. RES.
231.
THE CLERK
WILL REPORT.
S. RES. 231,
DESIGNATING SEPTEMBER 2011 AS
NATIONAL CHILD AWARENESS MONTH
AND SO FORTH.
IS THERE
OBJECTION TO PROCEEDING TO THE
MEASURE?
WITHOUTWITHOUT OBJECTION.
REID: I ASK UNANIMOUS
CONSENT THE RESOLUTION BE AGREED
TO, THE PREAMBLE BE AGREED TO,
THE NOTION RECONSIDER BE LAID ON
THE TABLE.
OBJECTION.
MR. PRESIDENT, I NOW
ASK THAT WHEN WE COMPLETE OUR
BUSINESS TODAY WE ADJOURN UNTIL
FOLLOWING THE PRAYER AND THE
PLEDGE, THE JOURNAL OF
PROCEEDINGS BE APPROVED TO DATE,
THE MORNING HOUR BE DEEMED
EXPIRED, THE TIME FOR THE TWO
LEADERS BE RESERVED FOR THEIR
USE LATER IN THE DAY.
FOLLOWING ANY LEADER REMARKS,
THE SENATE PROCEED TO A PERIOD
OF MORNING BUSINESS FOR UP TO
ONE HOUR WITH SENATORS PERMITTED
TO SPEAK FOR UP TO TEN MINUTES
EACH DURING THAT TIME.
THE TIME WILL BE EQUALLY DIVIDED
AND CONTROLLED BETWEEN THE TWO
LEADERS OR THEIR DESIGNEES WITH
THE MAJORITY CONTROLLING THE
FIRST HALF, REPUBLICANS
CONTROLLING THE FINAL HALF.
FOLLOWING MORNING BUSINESS, THE
SENATE RESUME CONSIDERATION OF
S. 1323, WHICH IS A BILL TO
EXPRESS THE SENSE OF THE SENATE
ON SHARED SACRIFICE IN RESOLVING
THE BUDGET DEFICIT ISSUE.
I ASK THAT THE FILING DEADLINE
FOR ALL FIRST-DEGREE AMENDMENTS
TO S. 1323 BE 12:00 P.M.
TOMORROW.
FINALLY, THAT THE SENATE RECESS
FROM 12:30 P.M. TO 2:15 P.M. TO
MEETINGS.
WITHOUT
OBJECTION.
MR. PRESIDENT, I FILED
CLOTURE ON S. 1323, WHICH IS ON
THE SENSE OF THE SENATE BILL
REGARDING SHARED SACRIFICE AND
ON THE MOTION TO PROCEED TO H.R.
2055, THE MILITARY CONSTRUCTION
CONSTRUCTION-V.A. BILL.
THAT'S AN APPROPRIATION BILL.
IT'S AN IMPORTANT BILL.
UNLESS AN AGREEMENT IS REACHED,
THERE WILL BE UP TO TWO ROLL
CALL VOTES WEDNESDAY MORNING ON
THESE ISSUES.
SO, MR. PRESIDENT, IF THERE'S NO
FURTHER BUSINESS TO COME BEFORE
THIS BODY, I ASK THAT IT ADJOURN
UNDER THE PREVIOUS ORDER.
THE
SENATE STANDS ADJOURNED UNTIL
10:00 A.M. TOMORROW MORNING.
CONGRESSIONAL NEGOTIATORS MET
WITH PRESIDENT OBAMA TO WORK ON
A DEBT AND DEFICIT REDUCTION
AGREEMENT.
RIGHT AFTER THE BUDGET COMMITTEE
CHAIRMAN KENT CONRAD CAME TO THE
SENATE FLOOR TO DESCRIBE THE
DEMOCRATS' PLAN.THE PRESING
THIS IS ALMOST AN HOUR.CONRADSK
ISCHEMIC MR. PRESIDENT, FALLING
IN THE REMARKS THE SENATE WILL
RESUME THE MOTION TO PROCEED TO
S1323, TO EXPRESS THE SHAREDHARED SACFICE
SACRIFICE IN RESOLVING THE
THET D
BUDGET DEFICIT WITH THE TIME DIV
UNTIL 5:30 EQUALLY DIVIDED AS TO THEIR
THE TWO LEADERS AND THE WILL B
DESIGNEES AND 5:30 THERE WILL BE TO
A ROLL CALL VOTE ON THE MOTION
TO PROCEED TO TEST 1323.
MR. PRESIDENT, YOU UNDERSTAND
THAT 1340 IS AT THE DESK DO FORIDING OICER:
A SECOND READING.HE SECOND
THE CLERK WILL READ THE BILL
FOR A SECOND TIME. BL
TO CUT AND BALANCE THE F
FEDERAL BUDGET.
RESPT TO
PROCEEDINGS WITH RESPECT TO THEE PRESIDINFICER:
BILL.
THE OBJECTION IS HEARD.
IT WILL BE PLACED UNDER THE
CALENDAR OF THE PROVISIONS OF
RULE 14.
BY THANK THE CHAIR.MIDST OF
MR. PRESIDENT, WE ARE IN THE
MIDST OF A DEFINING DEBATE ON
THE BUDGET OF THE UNITED STATES.
ALL OF US UNDERSTAND WE HAVE A T
THREAT LOOMING OVER THIS COUNTRYE
THAT IS AS SIGNIFICANT OF
ANYTHING WE FACED IN MANY YEARS. SENE
MR. PRESIDENT, DEMOCRATIC
MEMBERS OF THE BUDGET COMMITTEE
HAVE WORKED FOR WEEKS TO DEVISE
A BLUEPRINT OF THE THING HAS
MERIT AND DESERVES TO BE PART OF
THE DEBATE. HERE
SO MR. PRESIDENT, I'M HERE TODAY OF
TO OUTLINE THE KEY ELEMENTS OFNK IT'
THE BLUEPRINT.
FIRST OF ALL THINK IT IS
CRITICALLY IMPORTANT WE ALL
UNDERSTAND THAT WE ARE AS A THA
NATION BORROWING 40 CENTS OF
EVERY DOLLAR THAT WE SPEND AND
THAT IS NOT SUSTAINABLE
CIRCUMSTANCE.
THE WOULD LOWER THE CHAIRMAN OF
THE JOINT CHIEFS OF STAFF HAS DEBT
INDICATED THAT THE NATIONAL DEBTATIONAL SECUR
IS OUR BIGGEST NATIONAL SECURITY
THREAT. SAYING
THE TOP MILITARY MAN IN OUR MOST
COUNTRY SAYING THE DEATH THREAT
IS THE MOST SERIOUS NATIONAL
SECURITY THREAT.WELL, BECAUSE H
WHY DOES HE SEEER THAT?FACTS.
BECAUSE HERE ARE THE FACTS.EBT
DEBT OF THE UNITED STATES AND
ALL OF THE DEBT THAT LEO IS NOW
APPROACHING 100 PER CENT OF OUR HIG
GROSS DOMESTIC PRODUCT, THEHE
HIGHEST LEVEL SINCE AFTER WORLD
WAR II.
THIS CHART SHOWS A THRESHOLD OF
90%, GROSS DEBT AT 90%.
WHY DID WE DRAW THAT LINE ON THEHEN
BECAUSE THE BEST EVIDENCE WE
HAVE TELLS US WHEN YOU CROSS THENY
90% THRESHOLD ON THE DEBT OF ANY T
NATION, YOU ARE IN THE DANGER
ZONE, YOU ARE IN THE RED ZONE. ENOMIST
THE DISTINGUISHED ECONOMISTS KNETH
WROTE A BOOK GROWTH IN A TIME OF OF
DEBT.
HERE IS THE CONCLUSION. IS THERE
WE EXAMINE THE EXPERIENCE OF 44
COUNTRIES STANDING UP TO TWONTURIES O DATA
COUNTRIES OF DATA ON THEEBT, INFLA
GOVERNMENT OF, INFLATION AND MAIN FDING I
GROWTH.
OUR MAIN FINDING IS THAT ACROSS
THE ADVANCED COUNTRIES AND MARKE
EMERGING MARKETS HIGH DEBT TO
GDP LEVELS 90% AND ABOVE ARE
MRPRESIDEN
OUTCOMES.FACT ALL O
MR. PRESIDENT, THIS IS A FACTTO
ALL OF OUR COLLEAGUES NEED TO
KNOW. YOU
WHEN GROSS THAT GOES OVER 90% OF
YOUR GROSS DOMESTIC PRODUCT FROM
YOUR ECONOMIC PROSPECTS AREAT M
DIMINISHED. CATED,
THAT MEANS FEWER JOBS CREATED, ECO
MR. PR
NATION THAT IS AT RISK.E.
MR. PRESIDENT, THAT'S WHERE WE OICE
LOOK AT WHAT THE CONGRESSIONAL
BUDGET OFFICE SAYS IS WHERE WE TRAJE
ARE HEADED.
ON THE CURRENT TRAJECTORY, WE
ARE HEADED FOR A DEBT THAT WILLOF
GO TO 200% OF THE GROSS DOMESTIC COUNTRY.
PRODUCT OF THE COUNTRY AND THIS PUBLI
IS OF THE GROSS DEBT, THIS IS
THE PUBLICLY HELD DEBT WHICH ISDEBT.
SMALLER THAN THE GROSS DEBT SO
THIS CHART NOW LOOKS AT THE A
PUBLICLY HELD DEBT AND SAYS IT FOR
IS HEADED FOR 200% OF GDP. ON
MR. PRESIDENT, WE CANNOT STAY ON
THIS COURSE.
IT IS CRITICALLY IMPORTANT THAT
WE CHANGE DIRECTION.
FOR EVERY ONE PERCENTAGE POINT
OF INTEREST THAT WE PAY,R
$1.3 TRILLION IS ADDED TO THE
DEBT.OUT
FOR THOSE WHO SAY DON'T WORRY
ABOUT THE DEBT LIMIT LET'S WILL
REMIND THEM THAT WHAT WILL OCCUR
IF THE UNITED STATES REFUSES TO
PAY THE BILLS THAT IT'S ALREADY WIL
INCURRED IS THAT THE INTEREST
RATES WILL GO UP.
THOSE THAT HAVE LOANED US MONEYENTS
IF WE REMAIN, OUR COMMITMENT TO THE
PAY THEM WILL THEN INSIST ON
HIGHER INTEREST RATES ALL
BORROWERS WILL INSIST ON THE
HIGH INTEREST RATES AND FOR
EVERY 1% INCREASE IN INTEREST,
WE WILL PAY $1.3 TRILLION MORE WHO
ON OUR DEBT.
SO THOSE WHO THINK SOMEHOW BYIT
NOT EXTENDING THE DEBT LIMIT WE
ARE GOING TO HELP ON THE DEBT,
THE OPPOSITE IS TRUE.
THE DEBT WILL INCREASE AND
INCREASE DRAMATICALLY.
MR. PRESIDENT, HERE ARE THE THE
FACTS WITH RESPECT TO THENDING
RELATIONSHIP BETWEEN SPENDING
AND REVENUE OVER THE LAST 60
YEARS IN THIS COUNTRY.
LINE.
THE RED LINE IS THE SPENDING
LINE, THE GREEN LINE IS THE THIS
REVENUE LINE, AND WHAT THIS
SHOWS VERY CLEARLY IS THAT HIG
SPENDING IS THE HIGHEST IT'S
BEEN AS A SHARE OF GDP AND 60 SPE
YEARS.
YES, WE HAVE A SPENDING PROBLEM
BUT IT IS ENOT EXCLUSIVELY A SOME
SPENDING PROBLEM AS SOME OF SURTOR
ON THIS FLOOR BECAUSE REVENUE AS IS THE
A SHARE OF GDP IS THE LOWEST IT
HAS BEEN IN 60 YEARS.
TO DENY THAT FACT IS TO DENY THE
REQUIRED T
SIGNIFICANT ELEMENT OF A
COMPROMISE REQUIRED TO SOLVE
THIS PROBLEM.
MR. PRESIDENT, SPENDING IS THE THE
HIGHEST IT'S BEEN IN 60 YEARS
AND REVENUE IS THE LOWEST IT HAS IN 60
BEEN IN 60 YEARS AS A SHARE OF
OUR NATIONAL INCOME.
BOTH HAVE TO BE ADDRESSED IF WE
NOT
FOR THOSE WHO SAY IT'S NOT A
REVENUE PROBLEM, YES IT IS. THA
THIS IS AN ARTICLE THAT APPEARED
SUNDAY MAY 1ST IN THEPLUS
"WASHINGTON POST" AND ON THE WAY
TO A SURPLUS, A
12 TRILLION-DOLLAR U.S. DETOUR.D
REMEMBER, IN 2001 WE WERE TOLD OFF
WE WERE ON THE WAY TO PAY OFF
THE DEBT OF THE UNITED STATES.YORI
THIS ARTICLE IN "THE WASHINGTON1
POST" ON MAY 1ST INDICATED THEAYING
FUNDAMENTAL REASONS THAT INSTEAD
OF PAYING OFF THE DEBT WE HAVE A
DEBT THAT IS MUSHROOMING.AYS
THIS ONE PARAGRAPH SAYS IT ALL.ULPRIT
THE BIGGEST CULPRIT BY FAR HASAX
BEEN AN EROSION OF TAX REVENUE AND
TRIGGERED LARGELY BY TWO
RECESSIONS AND ROUNDS OF TAX
CUTS TOGETHER.HE
THE ECONOMY AND THE TAX BILLS
ENACTED UNDER FORMER PRESIDENT
GEORGE W. BUSH AND TO A LESSER
EXTENT BY PRESIDENT OBAMA WIPED
REVENUE.
THAT'S NEARLY HALF OF THE SWI
$12.7 TRILLION SWING FROM THE
PROJECTED SURPLUS TO A REALSTAND A
FEDERAL TAX COLLECTIONS NOW
STAND AT THEIR LOWEST LEVEL AS A
YEARS.
THE POINT THAT I JUST MADE.
DE
SO MR. PRESIDENT, WHEN DEMOCRATS
ON THE SENATE BUDGET COMMITTEES
APPROACH THIS PROBLEM, WE LOOKED
AT IT AND AND HISTORICAL GET
P IERSPECTIVES.
PROBLEM?
HALF OF IT IS ON THE REVENUE
SIDE, AND SO WE CHOSE TO DEAL
WITH A SOLUTION THAT DEALS ON
BOTH SIDES OF THE LEDGER YES TO
CUT SPENDING ABSOLUTELY.
THAT MUST BE DONE.LSO
BUT WE ALSO CUT THE SO-CALLED REA
TAX EXPENDITURES THAT ARE REALLY
JUST SPENDING BY ANOTHER NAME.SIONS,
OF LOOPHOLES, EXCLUSIONS,
DEDUCTIONS, TAX PREFERENCES, TAX
IN T
STEVENS THATHE RIGHTFULLY BELONGSLE AVOID W
IN THE TREASURY. OWE T
PEOPLE AVOIDING WHAT THEY
LEGITIMATELY OWE TO THE UNITED
STATES BY ENGAGING IN ABUSIVE
TAX SHELTERS T AND SAVINGS WE WILL
GET INTO THE SPECIFICS OF THAT.DIFF
REPUBLICANS CHOSE A DIFFERENTF
THEY WANT TO FOCUS ON HAVE THEHE
PROBLEM.E OF THE
THEY ONLY WANT TO FOCUS ON THEATION.
SPENDING SIDE OF THE EQUATION.
THEY DON'T WANT TO TOUCH THE
REVENUE SIDE OF THE EQUATION.THAT
REALITY.
THAT RUNS FAWAY FROM THE HIGH IN
REALITY OF HOW DID WE GET INTO
THIS SITUATION, AND AGAIN, WE
DING T
GOT THERE BY YES, SPENDING THATN 60
IS HIGHER THAN IT HAS BEEN IN 60
YEARS AS A SHARE OF NATIONAL
INCOME, BUT ALSO REVENUE WAS
LOWER THAN IT HAS BEEN ANY TIME
IN 60 YEARS.
MR. PRESIDENT, IF WE AREF WE'RE
TRUTHFUL WITH OURSELVES WE HAVEHAVE TO DP
TO DEAEEL WITH BOTH SIDES OF THIS THE
EQUATION. TT
MR. PRESIDENT, THE PLAN THAT THE
SENATE DEMOCRATS ON THE BUDGETITTEE HAV
COMMITTEE HAVE AGREED ON LOOKSWORK T
AT A BUDGET FRAMEWORK THAT AUNT
INCLUDES ROUGHLY THE SAME AMOUNT
OF DEFICIT REDUCTION AS THE
HOUSE REPUBLICAN PLAN.
IN FACT, WE HAVE MORE DEFICIT
REDUCTION THAN DID THEY. I
WAS $3.9 BILLION OF DEFICIT
OUR PLANAS $4 TRILLION.DIFFER IS
MR. PRESIDENT, THE ACTUAL
DIFFERENCE IS ABOUT $50 BILLION ROUING,
BUT BECAUSE OF ROUNDING, IT
TURNS OUT IT'S WORTH
$4 TRILLION, THE ACTUALBOUT
DIFFERENCE IS ABOUT $50 BILLION
MORE IN DEFICIT REDUCTION.
THE PLAN WORKED BY DEMOCRATS ONMORE
THE BUDGET COMMITTEE.
SO MR. PRESIDENT, THIS IS WHAT
HAPPENS TO THE DEFICIT AS A
SHARE OF GDP UNDER THE FRAMEWORK SEE,
THAT WE ARE OFFERING.HE
YOU CAN SEE THIS YEAR THE
DO
DOMESTIC PRODUCT.WE BRING
WE BRING IT DOWN VERY STEADILY
UNTIL WE GET DOWN TO 1.3% IN THE
TENT HERE AND LOWER DEFICITS ASDEFICI
A SHARE OF GDP THAN THE HOUSE THANK THE
REPUBLICAN PLAN.
LE
LET ME REPEAT THAT.CRATS
THE SENATE DEMOCRATS ON THETTEE
BUDGET COMMITTEE, OUR PLAN THE
REDUCES THE DEFICIT BY THE TENTH THE
YEAR, BY MORE THAN THE AN
REPUBLICANS IN TOTAL AND IN THE A
TENTH YEAR WE HAVE A LOWER
DEFICIT IN DOLLAR TERMS AND A OF
LOWER DEFICIT AS A SHARE OF GDP.S TO
MR. PRESIDENT, THIS IS WHAT
HAPPENS TO THE DEBT ITSELF, THE OUT
GROSS DEBT AS YOU CAN SEE IT
PEEKS OUT AT 100% IN 2011 AND
THEN WE BRING IT DOWN GRADUALLY
TH
2021. O
THE KEY IS INSTEAD OF HAVING THE
DEBT LINE GOING UP AND AWAYOUNTRY
BURYING THE COUNTRY UNDER A
MOUNTAINOU OF DEBT, WE STABILIZE
THE DEBT AND BEGIN TO BRING IT
DOWN. ABSOL
SOMETHING EVERY SERIOUS
ECONOMIST HAS SAID IS ESSENTIAL.
IN TERMS OF SPENDING, I INDICATENG I
THE CURRENTS SPENDING IS THERE
HIGHEST IT HAS BEEN AS A SHARE
OF GDP IN 60 YEARS. FROM
OUR PLAN TAKES THAT DOWN FROM TO
24% OF GDP TO 23 AND FREEZES IT
FOR THE REST OF THIS DECADE.L
SOME WILL SAY THERE GO THE
DEMOCRATS AGAIN SPENDING TOOI WOULD
MUCH MONEY. S TO
I WOULD SAY TO THEM IF WE CANG DO
GET SPENDING DOWN FOR THE LEVELS DURIN
DURING THE RONALD REAGANDMINISTRATIO
ADMINISTRATION, WOULD THAT BE
DOING.
UNDER THE PLAN OF SENATE BUDGET
COMMITTEE WE GET SPENDING TO THE
EXACT SAME LEVEL PERTAINED
DURING THE ADMINISTRATION OF
RONALD REAGAN.SPEN
DURING RONALD REAGAN'S DEFENSE
EIGHT YEARS SPENDING AVERAGED
22.1% OFG. GDP.
THAT IS PRECISELY WHAT OURGET
SPENDING EQUALS IN THE BUDGET H
FRAMEWORK I OUTLINEDER HERE TODAY.
MR. PRESIDENT, WE INCLUDE EVERY
PART OF THE FEDERAL BUDGET
INCLUDING THE DEFENSE BUDGET. FISCOMM
JUST AS THE FISCAL COMMISSION
DID AND AS EVERY OTHER
BIPARTISAN DEFICIT REDUCTION
PLAN HAS INCLUDED, WE LOOK TO,
DEFENSE SPENDING BECAUSE NO PART
OF THE BUDGET CAN BE OFF THE OF
TABLE IN TERMS OF AAY,
DEFICIT-REDUCTION PLAN. SEPAR
I DID SAY SEPARATELY SOCIAL
CURITY
SECURITY WOULD DEAL WITH
SEPARATELY BECAUSE SOCIAL
SECURITY NEED NOT BE, SHOULD NOT
PLAN.
SAVINGS IN SOCIAL SECURITY OUGHTURPOSE
TO BE FOR THE PURPOSE OF
EXPANDING THE SOLVENCY OF SOCIAL
SECURITY.F
BUT IN TERMS OF THE SPENDING
THAT IS CONSIDERED ON BUDGET, B
THE DEFENSE HAS TO BE INCLUDED
IN ANY SAVINGS.
LOOK WHAT'S HAPPENED SINCE 1997. A
SPENDING ONND DEFENSE AND THE WAR
IS GONE FROM TO UNDER
$54 BILLION A YEAR TO
688 BILLION A YEAR.
IT IS A KEY REASON SPENDING HAS FISCA
EXPLODEDL.
BEFORE THE FISCAL COMMISSION
SOME OF THE DEFENSE ANALYSTS, ANALYSTS
THE INBEST DEFENSE ANALYSTS IN THED
COUNTRY CAME BEFORE US AND TOLDF
US 51% OF ALL FEDERAL EMPLOYEESP.
ARE AT THE DEPARTMENT OF DEFENSE
ALL FEDERAL EMPLOYEES ARE AT THE
DEPARTMENT OF DEFENSE AND THAT
DOESN'T COUNT THE CONTRACTORSN'T
PLANAS, CONTRACTORS OR THEIR AND
THEIR RESPONSE WAS SENATOR, WE
CAN'T TELL YOU.
SECURITY
SECURITY OR? CLEARANCES?
NO, SENATOR, WE DON'T KNOW.HAT'S
I SAID WHAT'S THE RANGE?HOW MAN
ABOUT HOW MANY CONTRACTORS AREHE DEP
THERE WORKING IN THE DEPARTMENT
OF DEFENSE? 1
THE ANSWER WAS SENATOR, ONE 9
TO 9 MILLION, BETWEEN 1 MILLION
TO 9 MILLION.RIGHT.
WE CAN'T TELL YOU WHICH IS A S
I MEAN, WE'VE GOT A SERIOUSRTMENT OFEFENSE
PROBLEM OF CONTRACTORS WORKINGENSE
FOR THE DEPARTMENT OF DEFENSE YOU H
AND THE DEFENSE CAN'T EVEN TELL
YOU HOW MANY CONTRACTORS THEY'VE
GOT WORKING FOR THEM.
MR. PRESIDENT, WE'VE GOT A
PROBLEM.
THE PREVIOUS SECRETARY OF
DEFENSE, SECRETARY GATES SAID
THE BUDGET OF THE PENTAGON DOUBL
ALMOST DOUBLED AND SHE'S RIGHT
ABOUT THAT, OUR CHART SHOWS
THAT, BUT OUR CAPABILITY DIDN'T MON
PARTICULARLY EXPAND.INFRAS
A LOT OF THE MONEY WENT INTO
INFRASTRUCTURE AND OVERHEAD ANDULTURE THA
FRANKLY I THINK A CULTURE THAT
HAD AN OPEN CHECKBOOK.
MR. PRESIDENT, A LOT OF THE
WENT INTO INFRASTRUCTURE
AND OVERHEAD AND FRANKLY A C
CULTURE THAT HAD AN OPENE CAN'T
CHECKBOOK.AN OPE
MR. PRESIDENT, WE CAN'T AFFORD
FRD,
WE'VE GOT TO GO AFTER WASTE
WE'VE
DEPARTMENT AND G GO OVER CONTRIB
INFRASTRUCTURE SPENDING THAT
DOESN'TIM CONTRIBUTE TO IMPROVINGO
THE DEFENSE.
WE'VE GOT TO GO AFTER OVERHEAD
COSTS THAT HAVE RUN AMOK.AID THIS
THIS ABOUT DEFENSE.
THERE'S A LOT OF SAVINGS YOU CAN.. THERE'S A
GET IN DEFENSE AND WASTE OVER
THERE FOR SURE, YET WHEN THEYTHEIR
CAME UP WITH THEIR PLAN, THEYG DEFENSE
CONTINUED THE PATH OF INCREASING YEAR W
DEFENSE SPENDING YEAR OVER YEARS THE PLANHAT TH
WITHOUT ANYEY DISCIPLINE.
THIS IS THE PLAN THEY OUTLINEDEAR.
THE $7 BILLION A YEAR AND THAT
WAR FUNDING. PLA
MR. PRESIDENT, AND OUR PLAN, WECOMMISSI CALLE
HAVE DONE WITH THE FISCAL
COMMISSION CALLED FOR.
WE HAVE ACHIEVED THE SAME
SE
SISKEL COMMISSION, $886 BILLIONITY
OUT OF THE SECURITY FUNCTION.OUSLY DEFEE
THAT INCLUDES DEFENSE.
OBVIOUSLY DEFENSE IS MOST OF SURITY
SECURITY.
BUT IN THE SECURITY CATEGORY
COME ALSO FALLS HOMELAND
SECURITY COME ALSO IS INCLUDEDS
IN VETERANS' SPENDING, VETERANS
SPENDING BY THE WAY IS ONE PLACE
IS
WE DON'T CUT A NICKEL.
VETERANS DESERVE TO HAVE THE
PROMISES THAT WE HAVE MADE TO
THEM KEPT, AND UNDER OUR BUDGET
DOLLAR
EVERY DOLLAR THAT HAS BEENO TO THE
PROMISED TO THE VETERANS WILL GO
TO THEM. DSN'T
MR. PRESIDENT, THAT DOESN'T MEAN OUT OF
WE CAN'T SAVE MONEY OUT OF THE
THE
COMMISSION WHICH BY THE WAY ISARTISAN
THE ONLY BIPARTISAN PLAN THAT
HAS COME FROM ANYWHERE, FIVE
DEMOCRATS, FIVE REPUBLICANS, ONE PLAN
INDEPENDENT AND ENDORSE THE PLAN
WITH $886 BILLION OF SAVINGS THE
OVER TEN YEARS OUT OF THE
SECURITY FUNCTION, AND THETTEE D
BUDGET COMMITTEE DEMOCRATS ADOPT
THAT FINDING.
MR. PRESIDENT, THE BUDGET
DEMOCRATS AREN'T DANCING ALSO S
HAS A GOVERNMENT WIDE SAVINGS.
MEMBERS OF CONGRESS PAY FORREEZE
THREE YEARS.GE
WE'VE TSPRAISED THE LEGISLATIVE
BRANCH AND WHITE HOUSE BUDGETS
FOR THREE YEARS AND CIVILIAN PAYTHAT IS ALR
FOR TWO YEARS. ADO,
THAT HAS ALREADY BEEN ADOPTED,
BUT WE INCLUDE THAT IN OUR
WE'VE REDUCED THE FEDERAL
VEHICLE FLEET BY 20% BECAUSE FIND
FRANKLY IN OUR INVESTIGATIONS WE
FIND IN THIS AREA THAT THERE HAS
BEEN AN EXPLOSION OF THE PEOPLES
IN THE FEDERAL FLEET, AND I
THINK ALL OF US HAVE SEEN IT
WITH OUR OWN EYES THIS IS
SOMETHING THAT HAS TO BE TAKEN 20%.
ON THE FEDERAL AGENCIES BUY 20%.1
WE REDUCE FEDERAL PRINTING COSTS
BY A BILLION DOLLARS BY 2015 AND
THE NUMBER OF CONTRACTORS WEMR. PRES
PREVIOUSLY DESCRIBED.
THE HOUSE REPUBLICAN PLAN ON
REVENUE IS REALLY ALMOST
IMPOSSIBLE TO BELIEVE. IN WHIC
IN A CIRCUMSTANCE IN WHICH WE
HAD RECORD DEBT AND A
CIRCUMSTANCE IN WHICH THE COUNTRYS
REVENUE OF THIS COUNTRY IS THE Y
LOWEST IT HAS BEEN IN 60 YEARS
WHAT IS PART OF THEIR ANSWER?D C
CUT TAXES FOR THE VERY
WEALTHIEST AMONG US AND ANOTHER ARE THE
TRILLION DOLLARS FOR THOSE WHOTUNATE
ARE THE MOST FORTUNATE AMONG US.IRCUMSTA
I'M NOT MAKING THIS UP TO LEADT,
TO A CIRCUMSTANCE IN WHICH WE HAD I
HAVE RECORD DEBT, THE LOWEST,
REVENUE WE'VE HAD IN 60 YEARS V
AND CUT TAXES FOR THE WEALTHIEST
BY ANOTHER TRILLION DOLLARS BY
EXTENDING THE TOP CUTS BY
$5 MILLION STATE TAX EXEMPTION.
THEY ACTUALLY CUT REVENUE
BASELINE.
IT LET MECTUA REPEAT THAT.
THEY ACTUALLY CUT THEIR PLAN FORTHE CONGRONAL B
$.2 TRILLIONUD BELOW THE
CONGRESSIONAL BUDGET OFFICE
BASELINE.
MR. PRESIDENT, THAT IS
IT W
MAYBE WE CAN START TO UNDERSTAND
IT WHEN WE LOOK AT WHAT A FORMER
ECONOMIC ADVISER SAID ABOUT THE
HOUSE REPUBLICAN PLAN. S
MR. BARTLETT SAID THIS
REDISTRIBUTION OF INCOME ROLLIN
INCOME OF HOUSE REPUBLICAN PLAN
IS A MONSTROSITY.
THE RICH WOULD RECEIVE HUGE TAX
CUTS WHILE THE SOCIAL SAFETY NET
WOULD BE SHREDDED TO PAY FOR
AND I'VE EVEN AS AN OPENING BID
TO BEGINAT WITH THE DEMOCRATS, THE
SERIOUSLY.
IT IS LESS OF A WISH LIST THAN A
WORL
FAIRY TALE DISCONNECTED FROM
THEIR REAL-WORLD BACKED UP BY
MAKE-BELIEVE NUMBERS AND ON
REASONABLE ASSUMPTIONS.
ROLLIN AND'S PLAN HE SENT EVEN
AN ACT OF COURAGE IT'S JUST
PANDERING TO A TEAM PARTY.
AN ACT OF COURAGE WOULD HAVE
THAT
SERIOUS BUDGET ANALYSTS NOTE
THAT REVENUES HAVE TO RISE TO OF
GABOUT 19% OF GROSS DOMESTIC
PRODUCT TO STABILIZE THE DEBT.
REVENUE TODAY IS 14.5% OF GDP,
YEARS.
IF WE LOOK AT THE LAST FIVE
TIMES THE BUDGET HAS BEEN 50
BALANCED IN THE LAST 50 YEARS,
OF
TO BE CLOSE TO 20% OF GDP.
THERE WERE 19.7% IN 1969, 19.9
IN 1998, 19.8 IN 1999 FROM 20.6 2000,
IN THE YEAR 2000, AND 19.5 IN
THAT'S T THIME LAST FIVE TIMES THE
BUDGET HAS BEEN BALANCED.
EACH OF THOSE TIMES REVENUE WAS
CLOSE TO 20% OF GDP.
NOW IT IS 14.5.
WE SERIOUSLY ARGUE WHEN YOU CAN
SOLVE THIS PROBLEM JUST ON THE
SPENDING SIDE OF THE EQUATION IS
NOT BEING SERIOUS. THAT
MR. PRESIDENT, THE FRAMEWORK
THAT WE OFFER TODAY HAS REVENUE
AT 19.5% OF GDP, ALMOST
DURING THE
EQUIVALENT TO WHAT IT WAS IN THE
CLINTON YEARS WHEN WE HAVE AND IN CT
BALANCED BUDGETS AND IN FACTPAY OTHER
STOPPED USING SOCIAL SECURITY
MONEY TO PAY OF YOUR BILLS. YEARS
DURING THE CLINTON YEARS, G.D.P
REVENUE AVERAGED 19.4% GDP.
UNDER OUR PLAN, IT AVERAGES OF
SO THE REVENUE IS CLEARLY NOTTHER
OUT OF LINE COMPARED TO THE
OTHER TIMES WE BALANCE THE
BUDGET ANDCT IN FACT DURING THE LON
CLINTON YEARS WHEN WE HAVE THE
LONGEST ECONOMIC EXPANSION INR O
THEUR NATION'S HISTORY FOR THE
COLLEAGUES WHO SAY YOU CAN'T YOU'L
TOUCH REVENUE OR YOU'LL KILL THE
ECONOMY AND JOB CREATION.
HOW ABOUT THE HISTORIC RECORD?
THE HISTORIC RECORD SHOWSS WHEN YOHAD
CLEARLY DURING THE CLINTON YEARS
WHEN YOU HADTH REVENUE AT THE SAME TBHEF TS
LEVEL AS WE HAVE IN THIS PLAN
YOU HAVE THE LONGEST ECONOMIC
EXPANSION IN THIS NATION'S
32 OF TH
HISTORY, 39 QUARTERS, 42 DURINGE
THE CLINTON YEARS.
OF THE LONGEST UNINTERRUPTEDF
PERIOD OF ECONOMIC GROWTH IN
THIS NATION'S HISTORY REVENUE AT
THE SAME LEVEL WE ARE TALKING
ABOUT IN THIS PLAN.
MR. PRESIDENT, FACTS ARE
STUBBORN THINGS.
A PREVIOUS PRESIDENT SAID THAT.
HE WAS RIGHT. IS
THE FACT IS WE HAVE THE LONGEST
PERIOD OF UNINTERRUPTED GROWTH
IN OUR ECONOMY DURING THE
TURKOMAN WHICH REVENUE IS AT THE
LEVEL THAT WE ARE PROPOSING INS A FAC
THIS BUDGET.MR. PR
THAT IS A FACT. FRAMEWO
MR. PRESIDENT, THE PROPOSALS IN
THE BUDGETRK FRAMEWORK ALSO SEEKWE HAV
TO BRING US TAX FAIRNESS.
A TAX REFORM THAT SIMPLIFIESOO
THIS TAX REFORM LOOPHOLE,
PROTECTS THE MIDDLE CLASS,
IMPROVES THE FAIRNESS OF THEIN
CODE, PROMOTES ECONOMIC GROWTH
IN U.S. COMPETITIVENESS BECAUSE
WE LOWER THE CORPORATE RATE FROM
45% TO 29% TO MAKE AMERICA MORE
COMPETITIVE AND WE PAY FOR IT BY
CLOSING THE CORPORATE LOOPHOLES.AX
WE ALSO ADDRESS THE TAX CAP,AVS
OFFSHORE TAX HAVENS AND ABUSIVEHAT
TAX SHELTERS AND IN SURE THE
CORPORATIONS PAY THEIR FAIRF
SHARE. PROPOL
MR. PRESIDENT THE SPECIFICS OF
THE REVENUE PROPOSAL OR ELSE
THE TAX CUTS, THE SO-CALLED
BUSHEHR TAX CUTS ARE EXTENDED UP
FOR SINGLES EARNING UP TOR
$500,000 A YEAR AND COUPLES DOLLA
EARNING UP TO A MILLION DOLLARS
SO MR. PRESIDENT, 99% OF THE
AMERICAN PEOPLE WILL SEE NOTE
RATE INCREASE.
NONE.
99% OF THE AMERICAN PEOPLE WILLREAS
SEE NO RATE INCREASE. ARE
1% WILL AND THOSE ARE THOSE
SUFFICIENTLY FORTUNATE TO BE A MILON DOL
RUNNING OVER A MILLION DOLLARS A I
YEAR, THE TOP 1% IN THE COUNTRY
AND WE ASK THEM TO GO BACK TO WIT
THE RATE OF HTHE CLINTON ERA FOR
THE TOP RATE OF 39.6%, A CAP 2
GAINS AT 20%, DIVIDENDS AT 20%.
THOSE ARE THE RATES THAT PERTAINOUR NATION'
WHEN WE HAD THE LONGEST ECONOMIC
EXPANSION IN THE NATION'S
KILLHEY'VE
THOSE WHO SAY IT'S A JOB KILLER
THEY'VE GOT TO COME UP HERE AND
EXPLAIN HOW THAT CAN BE SENSED
HISTORY SHOWS SOMETHING THEIR
DIFFERENT THAN THEIR CLAIM. PROVIDE
MR. PRESIDENT, WE ALSO PROVIDEUM TAX
FOR AN ALTERNATIVE MINIMUM TAX
RELIEF.
THAT COSTS $1.5 TRILLION.REASE
THAT'S NOT A TAX INCREASE. LOWERING
WE ARE LOWERING THE TAXES THAT
MINIMU
WOULD BE IMPOSED BY THE
ALTERNATIVE MINIMUM TAX THAT IS INCREINGLY
INCREASINGLY GOBBLING UP MIDDLE
CLASS TAX PAYERS AND WE AREHAPPENING
PREVENTING THAT FROM HAPPENING.
IT COSTS $1.5 TRILLION TO FIX SO
WE ARE REPLACING THAT REVENUE A
WITH OF THEIR REVENUE.SE
I DON'T CONSIDER THAT A TAX
INCREASE.REVE
THAT IS SUBSTITUTINGNU A REVENUE
FOR REVENUE WE ARE SUBTRACTING
TO PREVENT MIDDLE CLASS PEOPLE
FROM BEEN CAUGHT UP IN THE
ALTERNATIVE MINIMUM TAX.
WE ALSO REFORM THE ESTATE TAX
GOING BACK TO 2009 LEVELS AT
$3.5 MILLION A PERSON, 7 MILLION
A COUPLE THAT MEANS OVER 99 PER
CENT OF ESTATES WOULD BE
COMPLETELY EXEMPT.
THAT IS A FAIR PLAN. $2 TRIL
WE ALSO ASSUME THAT $2 TRILLION
OF ADDITIONAL FUNDS FROM TAX T
LOOPS CUTTING TAX SUBSIDIES,NESS
PROMOTING TAX FAIRNESS THAT ISHATAX
WE ASSUME THE TAX
FOR INDIVIDUALS ARE REDUCED NINE
TO 17% ON THE TAX SHELTERS THAT
ARE CLOSED. I
AND WE ASSUME AS I INDICATEDIS
EARLIER THAT THE CORPORATE RATE
IS LOWERED TO 29% OFFSET BYEXPENDITES AND
REDUCING THE CORPORATE TAX LOOPHOL
EXPENDITURES AND CLOSING
CORPORATE TAX LOOPHOLES SPECIFICIE
POLICIES TO BE DETERMINED BY THE
FINANCE COMMITTEE AS THEY ALWAYS A
ARE.
MR. PRESIDENT, LET ME INDICATE
WHEN I INDICATE THERE IS A RANGE%
FOR REDUCING TAX EXPENDITURES
FROM NINE TO 17% DEPENDING ON
HOW MUCH SAVINGS WE GET OUT OF
THE TAX HAVENS, HERE'S THE MATH. Y
OVER THE NEXT TEN YEARS THE TAXR TAX
PREFERENCES OR TAX EXPENDITURES
AS THE SOMETIMES CALLED WILL
COST THE TREASURY $14 TRILLION.OOPHOL
LET ME REPEAT THAT.
THE LOOPHOLE, THE EXCLUSIONS,THE
THE PREFERENCES IN THE TAX CODE
WILL COST THE TREASURY
YEARS.
ON TOP OF THAT, OFFSHORE TAX
HAVENS AND ABUSIVE TAX SHELTERSNOTHER
WILL COST ANOTHER $1.4 TRILLION.MITTEE ON
SUBCOMMITTEE ON INVESTIGATIONS.
SOTH MR. PRESIDENT, IF WE RECOVER, TO
NOTHING FROM TAX HAVENS TO REACH'D
THE REVENUE NUMBERS YOU WOULD
HAVE TO REDUCE TAX EXPENDITURES
ON THE
BUT ON THE OTHER HAND, IF YOU
AN
RECOVER 80% OF TAX HAVEN LOSSES
AND SHELTER LOSSES, THE HAVE
REDUCTION IN THE TAX
EXPENDITURES WOULD ONLY HAVE TO
BE 9%. IF YOU
17% REDUCTION IN TAX NO
EXPENDITURES IF YOU GET NO
SAVINGS FROM TAX HAVENS AND TAX
SHELTERS, 9% REDUCTION IN THE
TAX EXPENDITURES IF YOU RECOVER
80% OF THE LOSSES FROM TAX S
HAVENS AND TAX SHELTERS.
PROBABLY THE REALISTIC
EXPECTATION OF TO BE SOMEWHERE
IN BETWEEN THOSE EXTREMES.
MR. PRESIDENT, IF CBO SCORED THE
COMMIT
PROPOSAL BTEY THE SENATE BUDGET
COMMITTEE DEMOCRATS THEY WOULD
NOT SAY THERE IS ANY TAX
INCREASE HERE AT ALL.
LET ME REPEAT THAT.
IF THE CONGRESSIONAL BUDGET
OFFICE SCORED THIS PROPOSAL AND
THEY WOULD SAY THERE'S A
765 BILLION-DOLLAR TAX CUT OVER THAT
TEN YEARS.HERE'S
HOW CAN THAT BE?
HOW CAN I SAY THERE'S
$2 TRILLION OF ADDITIONAL THE
REVENUE OVER TEN YEARS AND THE
CONGRESSIONAL BUDGET OFFICE SAYSN BY
IF THEY EVALUATED THIS PLAN BY A
THE SENATE BUDGET COMMITTEE
DEMOCRATS THEY WOULD SAY THERE'S
A 765 BILLION-DOLLAR CUT THE
REASON IS SIMPLE TO READ IN OURS
PLAN, WE EXTEND ALL OF THE
MIDDLE CLASS TAX CUTS.Y
IN ADDITION, WE ACTUALLY BROUGHT
IN THE MIDDLE CL
*** TAX CUTS SO
THAT NOBODY IS AFFECTED BY A
RATE INCREASE UNLESS A COUPLE
YEAR.
MINIMUM
WE ALSO T PROVIDE THE ALTERNATIVE
MINIMUM TAX RELIEF TO PREVENT
MILLIONS OF MIDDLE CLASS PEOPLE
FROM BEING AFFECTED BY THAT.
AS I INDICATED EARLIER, THATHE
COST $1.5 TRILLION OVER THE NEXT
TEN YEARS TO SHIELD OF MIDDLE PROVIDE
CLASS TAXPAYERS AND SIR, WE
PROVIDE A STATE TAX REFORM AT 99%
2009 LEVELS SO THAT 99% OF THE SHIEL
ESTATES ARE COMPLETELY SHIELDED
OR COMPLETELY EXEMPT.
MR. PRESIDENT, AGAIN, WHEN THEIR
REPUBLICAN COLLEAGUES SAY, AND
SOME OF THEM DO, YOU CAN'T HAVE ON
EARNING OVER A MILLION DOLLARS
WILL TELL IF THE ECONOMY.
HOW ABOUT LOOKING AT THE FACTS? THE
HOW ABOUT LOOKING OUT OF THEHOW
HISTORIC RECORD WHATLLY
.. BEFORE?
BECAUSE WHEN WE LOOK AT HISTORY,
WE FIND QUITE A DIFFERENT ANSWER
THAN OUR FRIENDS ON THE OTHER
SIDE ARE PROVIDING.
WHAT WE FIND IS, THE LAST TIME
THE TOP RATE FOR THOSE EARNING A
MILLION DOLLARS WAS 39.6%, WE
EXPERIENCED THE LONGEST PERIOD
OF UNINTERRUPTED ECONOMIC GROWTH
IN THE HISTORY OF THE UNITED
STATES.
THAT IS A FACT.
WE HAD 39 QUARTERS OF ECONOMIC
GROWTH FROM 1991-2000.
FOR 32 OF THOSE QUARTERS, BILL
CLINTON WAS THE PRESIDENT OF THE
UNITED STATES.
AND WE HAD A TOP RATE OF 39.6%
ON THOSE COUPLES EARNING OVER A
MILLION DOLLARS A YEAR.
MR. PRESIDENT, OUR FRIENDS ON
THE OTHER SIDE SAY YOU'LL KILL
JOBS.
YOU KNOW, IT'S FASCINATING.
I REMEMBER THIS DEBATE WHEN WE
PASSED DEFICIT REDUCTION UNDER
PRESIDENT CLINTON, AND THE
FRIEND ON THE OTHER SIDE SAID
THE EXACT SAME THING THEN.
I REMEMBER I WAS SEATED HERE
LISTENING TO THE REPUBLICAN
LEADER THEN CLAIM THAT IF WE
PASSED THE CLINTON PLAN TO GET
THE DEFICIT DOWN AND BALANCE THE
BUDGET, WE COULD CRATER THE
ECONOMY.
THOSE WERE THE EXACT WORDS THAT
OUR FRIENDS ON THE OTHER SIDE
USED AT THAT TIME, THAT IF YOU
RAISED RATES ON THE WEALTHIEST
AMONG US, IT WOULD CRATER THE
WHAT HAPPENED?
NOT ONLY DID WE NOT CRATER THE
ECONOMY, WE HAD THE LONGEST
PERIOD OF ECONOMIC EXPANSION IN
OUR NATION'S HISTORY AND 24
MILLION JOBS CREATED -- THE BEST
RECORD EVER.
THAT'S THE FACTS.
THAT'S WHAT REALLY HAPPENED, NOT
SOME FAIRY TALE HERE ABOUT WHAT
IF YOU GET THE COUNTRY BACK ON
TRACK, IF YOU MOVE TOWARDS
BALANCING THE BUDGET, IF YOU
MOVE TOWARDS GETTING THE DEBT
DOWN BECAUSE THAT IS, IN FACT,
WHAT HAPPENED DURING THE CLINTON
YEARS.
YES, WE HAVE A HIGH RATE OF 6%
ON THOSE MAKING MORE THAN A
MILLION DOLLARS, BUT IT DIDN'T
CRATER THE ECONOMY, NO, THE
ECONOMY GREW.
THE LONGEST ECONOMIC EXPANSION
IN THIS NATION'S HISTORY, AND
MR. PRESIDENT, 24 MILLION JOBS
WERE CREATED DURING THAT
PERIOD.
THE BEST RECORD EVER.
MR. PRESIDENT, LET'S JUST LOOK
AGAIN AT HISTORY.
THE LAST FIVE TIMES ECONOMIC
GROWTH WAS ABOVE 4% IN THIS
COUNTRY, THE TOP TAX RATE WAS
39.6% ON THOSE EARNING OVER A
MILLION DOLLARS.
FACTS, FACTS ARE STUBBORN
THINGS.
GROWTH RATE, 4.1%.
1997, TOP RATE WAS 39.6%,
ECONOMIC GROWTH WAS 4.5%.
1988, 4.4% ECONOMIC GROWTH,
1999, 4.8% ECONOMIC GROWTH.
2000, 4.1% ECONOMIC GROWTH --
THE STRONGEST ECONOMIC GROWTH
GOING BACK DECADES IN EVERY YEAR
THE TOP RATE ON PEOPLE EARNING
OVER A MILLION DOLLARS WAS
39.6%, PRECISELY WHAT WE'RE
PROPOSING IN THIS PLAN.
MR. PRESIDENT, I THINK IT IS
UNDISPUTED BY SERIOUS ECONOMISTS
BY WHATEVER PHILOSOPHICAL
STRIPES THAT THESE TAX
IN.
WE ARE NOW SPENDING $1.1
TRILLION A YEAR ON TAX
EXPENDITURES.
SOME OF THE MOST CONSERVATIVE
ECONOMISTS IN THE COUNTRY SAY
THAT'S SPENDING BY A DIFFERENT
MR. PRESIDENT, HERE'S MARTIN
FELLSTEIN, CHAIRMAN OF THE
ECONOMIC ADVISERS UNDER
PRESIDENT REAGAN, AND HE'S WROTE
A COLUMN ABOUT THE TAX
NATIONAL DEBT.
HE SAID, "CUTTING TAX
EXPENDITURES IS REALLY THE BEST
WAY TO REDUCE GOVERNMENT
SPENDING.
IT'S CALLED REVENUE, BUT IT'S
REALLY SPENDING.
ELIMINATING TAX EXPENDITURES
DOES NOT INCREASE MARGINAL TAX
RATES OR REDUCE THE REWARD FOR
SAVING AND INVESTMENT AND RISK
TAKING AND IT ALSO INCREASE Z
OVERYAWL EFFICIENCY BY REDUCING
DISTORTING PRIVATE DECISIONS AND
CONSOLIDATING THE LARGE NUMBER
OF OVERLAPPING TAX BASED
SUBSIDIES AND GREATLY SIMPLIFIES
TAX FILING.
IN SHORT, CUTTING TAX
EXPENDITURE IS NOT AT ALL LIKE
OTHER WAYS OF RAISING REVENUE."
THIS IS FROM THE HEAD OF THE
ECONOMIC ADVISERS UNDER
PRESIDENT REAGAN SAYING WE OUGHT
TO CUT TAX EXPENDTURES.
THAT'S EXACTLY WHAT THE SENATE
DEMOCRATIC BUDGET PLAN DOES.
WE CUT TAX EXTENDTURES 9%-17%,
DEPENDING ON HOW MUCH WE'RE ABLE
TO SAVE FROM CLOSING OFF THESE
OFFSHORE TAX SAVINGS AND THE
ABUSIVE TAX SHELTERS.
IF WE GET NO SAVINGS FROM TAX
HAVENS AND SHELTERS, WE HAVE TO
REDUCE TAX EXPENDITURES 17%.
IF WE REDUCE TAX HAVENS AND
OTHER LOOPHOLES, THE OFFSHORE
LOOPHOLES, THE ABUSIVE TAX
SHELTERS BY 80%, THEN WE WOULD
BE ABLE TO REDUCE TAX
EXPENDITURES BY 9%.
MR. PRESIDENT, BACK TO MARTIN
WHO SAID WE OUGHT TO GO AFTER
THE TAX EXPENDITURES, IT'S ALSO
ALAN GREENSPAN.
HE SAID, "I THINK REPUBLICANS
OUGHT TO IDENTIFY A VERY
SIGNIFICANT AMOUNT OF SO-CALLED
TAX EXPENDITURES WHICH, IN FACT,
THEY ARE EXPENDTURES.
THEY ARE OUTLAYS, AND MANY ARE
SUBSIDIES, AND SUBSIDIES ARE NOT
THE TYPE OF THING YOU WANT FOR
AN EFFICIENT MARKET SYSTEM.
THERE ARE A LOT OF THEM."
NOW, MR. PRESIDENT, THAT'S WHAT
WE'RE PROPOSING.
LET'S GO AFTER THESE SUBSIDIES,
THESE PREFERENCES AND EXCLUSIONS
AND AFTER THE OFFSHORE TAX
SHELTERS.
LET'S SHUT THEM DOWN.
IF THERE'S DOUBT ABOUT WHERE THE
MONEY IS GOING, HERE IT IS.
26.5% OF TAX EXPENDITURES GO TO
THE TOP 1% IN THIS COUNTRY.
26.5% OF ALL TAX EXPENDITURES GO
TO THE TOP 1% SO WHEN WE'RE
SAYING YOU MAY HAVE TO REDUCE
TAX EXPENDITURES 17%, YOU COULD
DO IT ALL JUST WITH THE TOP 1%
OF THOSE EARNING OVER $1.1
MILLION A YEAR BECAUSE THAT'S
WHERE THE BENEFIT IS GOING.
LET ME SHOW YOU IN ANOTHER WAY.
THE TOP 1% IN DOLLAR TERMS, THE
VALUE ON AVERAGE OF TAX
EXPENDITURES FOR THOSE WHO ARE
IN THE TOP 1% IN THIS COUNTRY
EARNING $1.1 A YEAR GET A
BENEFIT ON AVERAGE EVERY YEAR OF
TAX EXPENDITURES OF $205,000.
FOR THOSE WHO ARE IN THE MIDDLE
CLASS, THOSE EARNING $39,000 A
YEAR, THEIR AVERAGE BENEFIT IS
YOU CAN SEE THAT THE TOP 1% HAVE
A BENEFIT FROM TAX EXPENDITURES
THAT IS 66 TIMES WHAT PEOPLE IN
THE MIDDLE GET.
MR. PRESIDENT, IT IS NOT UNFAIR
TO GO TO THOSE WHO HAVE HAD THE
GREATEST BENEFIT FROM THE
NATIONAL ECONOMY OVER THE LAST
TWO DECADES AND SAY TO THEM WE
NEED YOU TO HELP A LITTLE BIT
MORE, TO GET OUT OF THIS RUT,
THIS DEBT RUT THAT WE'RE IN, AND
YOU KNOW WHAT?
THAT'S NOT UNFAIR BECAUSE THEY
HAVE HAD THE GREATEST BENEFIT
OVER THE LAST 15 YEARS, AND
HERE'S SOMETHING THAT SHOWS IT I
THINK CONCLUSIVELY.
THIS IS THE EFFECTIVE TAX RATE
FOR THE 400 WEALTHIEST TAXPAYERS
IN AMERICA.
IN 1992, IT WAS ABOUT 27%.
IN 1995, THE TAX RATE OF THE
WEALTHIEST 400 WAS 30%, 29.9% TO
BE EXACT.
LOOK WHAT'S HAPPENED SINCE
THE EFFECTIVE TAX RATE FOR THE
WEALTHIEST 400 TAXPAYERS IN
AMERICA HAS GONE TO 16.6%.
THEY HAD THEIR TAX RATES CUT
ALMOST IN HALF, OKAY?
ANYBODY ELSE HAD THEIR TAXES CUT
IN HALF?
I DON'T THINK SO.
THE PEOPLE WHO'VE HAD THEIR
TAXES CUT IN HALF ARE THE
WEALTHIEST AMONG US.
IT'S NOT UNREASONABLE TO GO BACK
TO THEM AND SAY, HEY, WAIT A
MINUTE, WE GOT TO GO BACK TO
WHAT THE TAX RATES WERE HERE,
NOT BACK TO AN EFFECTIVE RATE OF
30%, BUT THE TOP RATE THAT WE
HAD IN THE CLINTON YEARS WITH
THE LARGEST ECONOMIC AND LONGEST
ECONOMIC EXPANSION IN THE
NATION'S HISTORY.
THAT SEEMS REASONABLE.
MR. PRESIDENT, WE ALSO KNOW THAT
IT'S NOT JUST ON THE INDIVIDUAL
SIDE, BUT ON THE CORPORATE SIDE
AS WELL.
THIS IS A LITTLE FIVE STORY
BUILDING DOWN IN THE CAYMAN
ISLANDS, 18,857 COMPANIES SAY
THEY'RE DOING BUSINESS OUT OF
THIS LITTLE BUILDING.
ANYBODY BELIEVE THAT?
ANYBODY BELIEVE 18,857 COMPANIES
ARE DOING BUSINESS OUT OF THIS
LITTLE FIVE-STORY BUILDING DOWN
IN THE CAYMAN ISLANDS?
I'D SAY THAT'S THE MOST
WORLD.
CAN YOU IMAGINE A LITTLE
FIVE-STORY BUILDING, 18, 857
COMPANIES SAY THEY'RE GOING
BUSINESS OUT OF THERE.
THEY GOT MAYBE 100 EMPLOYEES IN
THAT BUILDING.
THOSE ARE THE MOST EFFICIENT
PEOPLE IN THE ENTIRE WORLD.
UNBELIEVABLE WHAT THEY'RE
DOING.
YOU KNOW WHAT?
THEY'RE NOT DOING BUSINESS.
THEY ARE DOING MONKEY BUSINESS.
BECAUSE WHAT THEY'RE DOING IS
CHEATING ALL THE REST OF US WHO
PAY WHAT WE OWE.
WHY ARE THEY DOWN IN THE CAYMAN
ISLANDS, 18857 COMPANIES CALLING
THAT BUILDING HOME?
BECAUSE THERE'S NO TAXES DOWN IN
THE CAYMAN ISLANDS, AND THEY ARE
SHOWING THEIR PROFITS IN
SUBSIDIARIES THAT THEY SAY ARE
OPERATING OUT OF THAT LITTLE
BUILDING SO THEY CAN AVOID
PAYING TAXES THAT THE VAST
MAJORITY OF US PAY RIGHT HERE IN
THE UNITED STATES.
THAT'S OUTRAGEOUS.
THAT'S UNFAIR.
OUR REPUBLICAN FRIENDS SAY, OH,
YOU CAN'T TOUCH THAT, IT'S A TAX
REALLY?
THAT'S A TAX INCREASE?
I DON'T THINK SO.
MR. PRESIDENT, OFFSHORE TAX
HAVEN ABUSE IS PRORIFFLATING.
IF ANYBODY DOUBTS IT, GO GOOGLE
OFFSHORE TAX HAVEN AND SEE WHAT
HAPPENS.
SEE WHAT HAPPENS IF YOU GOOGLE
"OFFSHORE TAX HAVENS."
THE EXPERTS HERE ON THE
SUBCOMMITTEE OF INVESTIGATIONS
SAY THIS, "EXPERTS HAVE
ESTIMATED THAT THE TOTAL LOSS TO
THE TREASURY FROM OFFSHORE TAX
EVASION ALONE APPROACHES $100
BILLION PER YEAR INCLUDING
$40-$70 BILLION FROM
INDIVIDUALS, ANOTHER $30 BILLION
FROM CORPORATIONS ENGAGING IN
OFFSHORE TAX EVASION.
ABUSIVE TAX SHELTERS ADDS TENS
OF BILLIONS MORE."
MR. PRESIDENT, THE DEMOCRATS ON
THE BUDGET COMMITTEE SAID WE'VE
HAD IT.
WE'RE GOING TO GO AFTER THOSE
WE'RE GOING TO INSIST THEY PAY
THEIR FAIR SHARE LIKE THE VAST
MAJORITY OF AMERICANS ALREADY
DO.
WE'RE COMING AFTER YOU.
YOU HAVE A TAX HAVEN?
WE'RE COMING AFTER YOU.
YOU HAVE AN ABUSIVE TAX
WE'RE COMING AFTER YOU BECAUSE
IT'S NOT FAIR TO THE REST OF US
WHO PAY WHAT WE OWE.
MR. PRESIDENT, THERE ARE
CRITICAL PRIORITIES THAT
SHOULDN'T BE CUT.
ONE IS EDUCATION.
EDUCATION IS THE FOUNDATION FOR
FUTURE ECONOMIC STRENGTH, AND AN
EDUCATED POPULATION IS A KEY
SOURCE OF ECONOMIC GROWTH, BROAD
ACCESS TO EDUCATIONAL IS BY AND
LARGE A MAJOR FACTOR IN THE
EDUCATIONAL DOMINANCE IN THE
20TH CENTURY AND IN THE CREATION
OF A BROAD MIDDLE CLASS.
INDEED, THE AMERICAN DREAM OF
UPWARD MOBILITY BOTH WITHIN AND
ACROSS JEN RAILSES --
GENERATIONS HAS BEEN TIED TO
ACCESS TO EDUCATION.
THAT'S FROM HARVARD BUSINESS,
THE FUTURE OF INEQUALITY, THE
OTHER REASON EDUCATION MATTERS
SO MUCH.
MR. PRESIDENT, WHEN WE SEE WHAT
OUR FRIENDS. ON THE OTHER SIDE
ARE DOING, THEY ARE CUTTING
EDUCATION 15%.
WE DON'T BELIEVE THAT THAT'S THE
THE COUNTRY.
YES, OVERALL, SPENDING'S GOT TO
WE DO CUT SPENDING ALMOST $2
TRILLION IN THE DEMOCRATIC
BLUEPRINT, WELCOME $2 TRILLION
ALMOST $2 TRILLION, BUT NOT
EDUCATION.
MR. PRESIDENT, ANOTHER KEY
PRIORITY IS ENERGY.
WE ALL KNOW WHAT'S HAPPENED TO
GAS PRICES.
THEY SOARED FROM $1.81 A GALLON
IN 2008 TO OVER $3.50 A GALLON
ON JULY 4TH.
I JUST PAID $3.77.
WE ALL KNOW WHAT'S HAPPENED TO
GAS PRICES, AND MANY OF US
BELIEVE A KEY PRIORITY IS TO
REDUCE OUR DEPENDENCE ON FOREIGN
ENERGY.
HOUSE REPUBLICANS HAVE A
DIFFERENT IDEA.
THEY CUT THE PROGRAMS TO REDUCE
OUR DEPENDENCE ON FOREIGN ENERGY
BY 57%.
WE REJECT THAT PROPOSAL.
WE DON'T THINK IT'S IN THE
MR. PRESIDENT, INFRASTRUCTURE,
ROADS, BRIDGES, AIRPORTS,9, AIRPORTS, RAIL.
HERE'S WHAT THE U.S. CHAMBER OF
INFRASTRUCTURE SPENDING.
IF WE DON'T CHANGE COURSE OVER
THE NEXT FIVE YEARS, THE ECONOMY
COULD FOREGO AS MUCH AS $336
BILLION IN LOST ECONOMIC GROWTH
AS TRANSPORTATION NETWORKS
CONTINUE TO DETERIORATE.
I'M WELL AWARE OF THE FISCAL
CONSTRAINTS FACING THIS CONGRESS
AND THE NATION, BUT WE MUST
AVOID CUTTING OFF OUR NOSE TO
SPITE OUR FACE.
WITHOUT PROPER INVESTMENT AND
ATTENTION TO OUR INFRASTRUCTURE,
THE UNITED STATES ECONOMIC
STABILITY, POTENTIAL FOR JOB
GROWTH, GLOBAL COMPETITIVENESS
AND QUALITY OF LIFE ARE ALL AT
RISK.
THAT FROM THOMAS DONOHUE, THEPR
THE PRESIDENT AND CEO OF THE
U.S. CHAMBER OF COMMERCE.
MR. PRESIDENT, REPUBLICANS IN
THE HOUSE WERE NOT LISTENING
BECAUSE THEY PROPOSE CUTTING
TRANSPORTATION FUNDING IN THEIR
BUDGET BY 30%.
WE REJECT THAT CUT AS WELL.
MR. PRESIDENT, IT DOES NOT MAKE
SENSE TO CUT EDUCATION, TO CUT
DOES NOT MAKE SENSE.
IT WILL ONLY WEAKEN OUR
POSITION, AND ON HEALTH CARE,
THE HOUSE REPUBLICAN PLAN ENDS
MEDICARE AS WE KNOW IT, REPLACES
IT WITH A VOUCHER SYSTEM, BLOCKS
MEDICAID, SHIFTS COSTS ON
SENIORS, CHILDREN, AND DISABLED
IN THE INDIVIDUAL STATES.
IT ENDS THE COULDN'T CYCLICAL
NATURE OF THE MEDICAID PROGRAM
AND DEFUNDS HEALTH CARE REFORM
INCREASING THE NUMBER OF
UNENSURED BY AT LEAST 34 MILLION
PEOPLE IN THIS COUNTRY.
MR. PRESIDENT, THE HOUSE
SAVES MEDICARE.
I DON'T THINK SO.
I THINK IT KILLS MEDICARE.
WHY DO I SAY THAT?
BECAUSE UNDER TRADITIONAL
MEDICARE, NOW THE BEEP FISHERY
BENEFICIARY PAYS 25%, SOMEONE
WHO IS ELIGIBLE FOR MEDICARE
PAYS 25% OF THE BILL.
UNDER THE HOUSE REPUBLICAN BILL,
THEY WOULD PAY 68% OF THE BILL.
THEIR --
STANDS THINGS ON THEIR HEAD.
INSTEAD OF PEOPLE HAVING
MEDICARE AS A SOCIAL SAFETY NET
WHEN THEY GET TO THEIR SENIOR
YEARS, THEY WOULD HAVE IT PULLED
OUT FROM UNDER THEM.
NOW, MR. PRESIDENT, WE HAVE
REJECTED THE HOUSE GOP APPROACH,
AND WOULD REMIND OUR COLLEAGUES
THAT WE'VE HAD LARGE HEALTH CARE
SAVINGS THAT WERE ALREADY
ENACTED LAST YEAR IN HEALTH CARE
REFORM.
THE CONGRESSIONAL BUDGET OFFICE
SAYS THAT WILL SAVE IN THE
SECOND TEN YEARS 1.3 TRILLION
DOLLARS.
YES, EVERYTHING'S GOT TO BE ON
THE TABLE, BUT WE JUST TOOK A
BIG RUN AT GETTING OUR HEALTH
CARE COSTS BACK IN LINE.
$1.3 TRILLION IN DEFICIT SAVINGS
ACCORDING TO CBO.
MR. PRESIDENT, IN CONCLUSION,
THE OVERALL -- THE OVERVIEW OF
THE BUDGET FRAME WORK THAT WE'RE
OFFERING OUR COLLEAGUES FOR
THEIR CONSIDERATION PROVIDES $4
TRILLION IN DEFICIT REDUCTION
OVER TEN YEARS.
IT'S ACTUALLY $5 TRILLION IF
MEASURED ON THE SAME BASIS AS
THE FISCAL COMMISSION.
WE HAVE ADOPTED WHAT WE THINK IS
A MORE PLAUSIBLE BASELINE IN
LIGHT OF THINGS THAT HAPPENED SO
FAR THIS YEAR.
STABILIZE THE DEBT BY 2014, CUT
THE DEFICIT TO 2.5% OF GDP BY
2015 AND 1.3% BY 2021.
WE HAVE TAX REFORM THAT
SIMPLIFIES THE CODE, CLOSES
LOOPHOLES, GOES AFTER OFFSHORE
TAX HAVENS AND ABUSIVE TAX
SHELTERS AND RESTORES FAIRNESS,
REJECTS THE PLAN TO REJECT
MEDICARE AS WE KNOW IT, PROTECT
EDUCATION, ENERGY,
INFRASTRUCTURE INVESTMENTS, HAVE
BALANCED DEAF SILT AND DEFICIT
REDUCTION PLAN CUTTING SPEND I
BY ABOUT $2 TRILLION.
PROVIDING ADDITION NAME --
REVENUE BY ABOUT $2 TRILLION,
AND LET ME CONCLUDE AS I BEGAN
BY SAYING OUR REVENUE PLAN WOULD
BE SCORED BY THE CONGRESSIONAL
BUDGET OFFICE AS BEING A $765
BILLION TAX CUT BECAUSE WE ARE
REPLACING REVENUE LOST BY
EXTENDING OTHER TAX CUTS.
WE'RE EXTENDING ALL THE MIDDLE
CLASS TAX CUTS AND EXPANDING
MIDDLE CLASS TAX CUTS UP TO
THOSE EARNING UP TO $100 MILLION
A YEAR, AND WE ARE FIXING THE
ALTERNATIVE MINIMUM TAX.
THAT COSTS $1.5 BILLION OVER TEN
YEARS.
I DON'T CONSIDER THAT IS TAX
INCREASE AT ALL BECAUSE YOU ARE
REDUCING REVENUE THAT WOULD
OTHERWISE COME INTO THE TREASURY
UNDER THE ALTERNATIVE MINIMUM
TAX THAT I THINK ALMOST ALL OF
US THINK IS UNFAIR AND REPLACING
IT WITH REVENUE BY REDUCING TAX
EXPENDITURES THAT EVEN THE MOST
CONSERVATIVE ECONOMISTS IN THE
COUNTRY SAY NEEDS TO BE DONE.
MR. PRESIDENT, THAT IS THE
BLUEPRINT THAT SENATE BUDGET
COMMITTEE LAYS BEFORE THE
WE ARE UNDER NO ILLUSIONS HERE,
AND WE KNOW THAT THIS IS A YEAR
NOT BEING FOLLOWED.
WE UNDERSTAND THAT THERE IS A
LEADERSHIP NEGOTIATION AT THE
HIGHEST LEVEL SO WE UNDERSTAND
THIS IS NOT GOING TO BE DEALT
WITH IN THE NORMAL COURSE OF
WE UNDERSTAND THERE'S A
LEADERSHIP NEGOTIATION, BUT WE
BELIEVE THERE'S SOME IDEAS IN
THIS PACKAGE THAT DESERVE
CONSIDERATION AS THOSE
NEGOTIATIONS GO FORWARD.
MR. PRESIDENT, I THANK MY
COLLEAGUES FOR THEIR CURTESY AND
THEIR PATIENTS, AND I LOOK
FORWARD TO THIS CONTINUING
DEBATE AS WE TAKE ON THE DEBT
THREAT THAT LOOMS OVER OUR
I THANK THE CHAIR AND YIELD THE
FLOOR.
SENATOR KENT CONRAD FROM
EARLIER TODAY LAYING OUT THE
DEMOCRAT'S PLAN.
THE SENATE GAVELED OUT AN HOUR