EMERGENCY SUPPLEMENTAL APPROPRIATIONS FOR IRAQ AND AFGHANISTAN SECURITY AND RECONSTRUCTION, 2004
AMENDMENT NO. 1796, AS MODIFIED
Mr. BIDEN. Mr. President, I am prepared to enter into a time agreement. In the meantime, rather than waste time, let me begin to discuss my amendment.
We had a debate yesterday, an opening debate about whether we should be moving forward with this legislation for $87 billion to fund the war. Again, for those who may be listening, I want to state where I, as they say in the vernacular, come from on this score.
I have been one among many, from Senator Reed, former West Point graduate, an Army officer, a U.S. Senator, to John McCain, to Chuck Hagel, on both sides of the aisle, among those who have said that our biggest problem is we have not, quite frankly, devoted sufficient resources in a timely way to winning the peace in Iraq. So I began from the premise that there is no doubt we have to spend billions of more dollars. There is no doubt we have to keep in Iraq tens of thousands of American troops for some time. As a matter of fact, I said that as long ago as July of 2002.
I approach this thing from the perspective of one who thinks we must do more. I have several basic problems with the approach we are taking. I know the Presiding Officer and I had a very brief conversation about this. He made reference yesterday to me, that I was somewhat exercised in my presentation yesterday. I was. I am, because I think there is such a gigantic opportunity here to enhance the security interests of the United States.
So, again, the reason I bother to say this is, I think there are two serious problems with the approach the President is taking now relative to this $87 billion. One is, I think that after examinationand I will have several more amendments before this debate is overI think there is some padding in this reconstruction money.
I am one who believes you cannot bring security to Iraq without bringing basic services to Iraq. I think there is a direct and immediate correlation. Those who say you can separate support for the military and reconstruction money either have not been to Iraq or don't think we should be in Iraq or, with all due respect, don't understand the dynamics.
The degree to which clean water doesn't flow, the degree to which young women are being raped in the streets, the degree to which police officers are afraid to go to their stations and do their job, the degree to which the electric lights do not go on, the degree to which the oil pipelines are blown up, there is a direct correlation between that and the danger posed to our troops, the danger posed to our being able to preserve the peace or bring about or win the peace. So I don't make that dichotomy between reconstruction moneys and moneys relating to "supporting our troops."
Reconstruction money will support our troops. It supports our troops. My disagreement with the President is thatI am not talking about past disagreements and mistakes made or not made, in my view, just from this moment onI think if you look at the reconstruction funds, some of it ismaybe not intentionallyinflated.
For example, there is a provision in there for x number of pickup trucks. We were not talking about Humvees or military vehicles. They need pickup trucks. The government needs them for basic, mundane purposes. Well, in the authorization here, we are going to pay $32,000 for a pickup truck. I can take them to a nice Chrysler plant in my State and get them for $18,000.
We are also talking about building prison cells. I spent some time, along with my friend, Senator Lugar, and my friend, Senator Hagel, out at the police training academy in Baghdad, and we talked toI might add, we have a first-class team there. These are serious guys. These guys know their way around. They have been in Bosnia, Kosovo, and Afghanistan, and they understand this. There is money in here that comes to $50,000 per prison cell. We need to build prisons. There are no functioning prisons in Iraq. We have to build them.
By the way, the guy running our prison operation there, when asked how long it would take if he had all the resources he needed, he said it would take a couple years to get a prison system up and running.
But that is not the point. We are going to pay $55,000 per bed in an Iraqi prison. We pay half that here in the United States of America. We are in a country, I might add, where the building specs and requirements are less than they are here. So I think we have to be responsible and take a look at the details of this.
So my first concern is about whether or not the money is being efficaciously allocated. That is a responsibility of oversight that we have. That is our job. We can do it in a timely way and we will get this finished within a week or so and get it done.
That is the first concern I have, in a practical sense, on what we are going to do on the floor.
The second concern is my monumental concern. My friend from Utahand we say that lightly, but he really is my frienda conservative Republicanand for those of you who think none of us get along around here, we have very different views, but we are close friends. I can say to him that my biggest problem is how we pay for this. That is what I want to talk about right now because that is the second significant element of my concern on the immediate question before us: Do we appropriate or authorize to be appropriated $87 billion or do we appropriate $87 billion for this effort? I want to speak to that. That is what my amendment is about. That is what is before the Senate now.
At the outset, the first fellow with whom I spoke about this, the guy whose brainchild it was, along with me, is my friend from Massachusetts, John Kerry. As a matter of fact, immediately after my floating this idea on one of the national shows"Meet The Press," or whatever it wasI immediately got a call from Senator Kerry saying he had been thinking along the same lines and could we work together to do this. This is a joint effort, and we are joined by Senator Feinstein, who feels strongly about it, and a number of others.
I wish to acknowledge at the front end here how we got to this point. I wish to explain the modification I sent to the desk and go into the details of why I think this is an important and necessary and responsible amendment. Again, remember, this is not coming from a guy who didn't support the war, who won't support the funding; it is coming from a guy who thinks we are going to have to come up with this $87 billion, but we are going to have to come up with billions more. I wish the President would be as straightforward. This is a downpayment; this isn't the end of the road.
Now, initially, I had an amendment because I didn't have the detailed numbers from the Joint Tax Committee, the Finance Committee, and from outside experts, such as Brookings and Citizens For Fair Taxation and the like, because it takes a while to run these numbers. So, initially, we had put in an amendment that said we would authorizewhich is constitutionalor direct the head of the IRS to find this $87 billion from a specific category of taxpayers. We now have hard numbers. The hard numbers are very straightforward.
In order to pay now for the $87 billion we are about to appropriate, we are proposing that the tax rate for the wealthiest Americans, which has dropped this year from above 39 percent down to 35 percentand I am not arguing about thatand in order to find $87 billion to pay for this, we would have to go back under our formula to that roughly 1 percent of the taxpayersactually, the top bracket is less than 1 percent of the taxpayersand say to them your tax rate is going to go back up in the years 2005, 2006, 2007, 2008, 2009, and 2010 to 38.2 percent. So that is what I sent up to the desk. It was a detail that wasn't in my original amendment because we didn't have it from Joint Tax. We didn't have it laid out. So that is a brief explanation of the modification.
Now, let's go back and review the bidding here if we can. First, we can pay for this supplemental several ways. One, we can pay for it, as the President has suggested, by increasing the deficit. If this is added to the projected deficit for 2004, the deficit for 2004 will rise to $567 billion for that one yearnext year. If we do not add it to the deficit, the projected deficit at this moment would be down, obviously, around $480 billionstill a gigantic amount but $87 billion less. The reason I am so opposed to doing that is on equitable grounds and grounds of economic recovery. On equitable groundsand I know this sounds a little political the way I am going to say this, but it is factually accurateon equitable grounds, we, the grownups in this Chamberand the average age here is probably roughly 50, I would saywe are going to be asking these young pages walking down the aisle to pay this bill. Literally, we are going to ask them to pay. We are not going to pay. If we can't do it my way, they pay. The PresidentI quoted him yesterdayin his last State of the Union Address said we are not going to pass on these debts and problemsat the end, I will actually give an exact quotebasically he said we are not going to pass these responsibilities to fight terror and to pay for it on to other generations. That is exactly what we are doing here.
For those of you who think that may not be a very compelling argument and those of you who voted for the tax cut because you wanted to spur economic recoverya legitimate argument; I disagree with the way it is formulated and voted against it but a legitimate argumentlook at what is happening now: As the deficit has been projected to be 480, or thereaboutsand the Presiding Officer and my friend from Utah and my two colleagues from California and Massachusetts know more about this than I dowhat has happened? Long-term rates have already begun to rise. What does the market say? Why are long-term interest rates rising? Because of the projected deficits. That is a fact. They are already rising.
I respectfully suggest that taking $87 billion out of a 10-year tax cut of $1.8 trillion has no impactnoneon economic recovery, particularly since it is taken out over a 6-year period in small increments beginning in 2005. But if you are worried about the impact on the economy and the ability to sustain a recovery, you better be looking at the debt.
I would argue that from a principle of equity, as well as sound economic principles related to the recovery, adding this $87 billion to the already gargantuan projected deficitand it will be higher, by the way, because that does not even count prescription drugs, that does not count the other initiatives the President says we are going to do and Democrats say they want to do, it does not even count those programs yet, so we know it is going to be a heck of a lot higherbut to add $87 billion on top of that can do nothing but jeopardize a long-term recovery.
The second way we can pay for this, which is very popularand I am sort of the skunk at the family picnic on this on my side of the aisleis to let the Iraqis pay for it. Some are saying the Iraqis have the second largest oil reserves in the world.
Some of my Republican friends are proposing this as well.
For example, we have a flooded home. We have a very competent county executive dealing with this, and he says if we can pay for Iraq, the Federal Government can pay for this. That is really compelling. I tell you what, I am kind of glad I am not running this year because I am going to oppose it. To the average person and the above average person, this just seems fair.
We hear people saying on the floor: If they had gold reserves of X amount, we would indemnify ourselves; they have gold in the ground, black gold. That is a very compelling case, except, as my mother would sayGod love her, and she is probably listening, so, mom, forgive me if I get it wrongshe always used to say when I was young: Joey, don't bite your nose off to spite your face. If we do that, we will be, figuratively speaking, biting our nose off to spite our face.
Why? There are other countries around the worldin the Arab world, the European world, Russia, other countriesthat are owed almost $200 billion by Iraq, some say as high as $300 billion. Some of that is direct loan payments; some is indemnification for the damage done by Saddam when he invaded Kuwait, and so on.
What are we doing? We can either choose the World War I model or the World War II model for a defeated nation. After World War I, we said: Germany, this is all your fault. We want you to have a democracy, but, by the way, in the meantime, pay off all these reparations, making it virtually impossiblehow many of us in grade school and college saw that one cartoon that was in every single history book: A German lady in a babushka carrying a wheelbarrow of deutsche marks to the butcher shop.
I bet every one of you can remember that. It was in every textbook in America. Why? It produced a little guy named Hitler
to prey upon all of the anger, all of the prejudice, all the furor of the German people.
Who thinks we can possibly establish a democracy in a country which, I might add, has no history of any democratic institutions and was never a country until 1919who thinks we can establish a democracy there saying, by the way, start off, folks, but before you do anything, before you spend that $35 billion to redo your oil fields, before you spend the money to do this or that, pay off the $200 billion, $300 billion in debt?
The President has been dead right. The President has been saying and the Secretary of State has been saying we have to convince these other nations to forgive that debt and write it off, as we did. Write it off.
On top of that, what did the President say at the United Nations? Not well enough, in my view, with all due respect, but what did he say? He said: United Nations, this is the world's problem. This is your problem. Send money and send troops.
Every one of us here are hoping that Powell is very successful with a thing called the donors conference that is coming up this month. We are going to be sitting down with other nations of the world and saying: By the way, can you guys ante in?
We have roughly in the whole region close to 200,000 troops, and we have already spent $78 billion, and we are going to spend another $87 billion. Can you kick in some money to rebuild this country? Oh, and by the way, we want you to forgive the debt you are owed. We want you to kick in money. We are not going to indemnify any of your money, but, by the way, the $20 billion we put in for reconstruction, we have a claim against Iraqi oil.
We are all intelligent people in this Chamber. We may be able to indemnify this money, but we will have no Iraq to collect it from. There will be nobody to collect it from because if this debt is not forgiven and if more people do not get in the game, there is not going to be peace in Iraq. It is not going to happen, and that is what I meant when I said, as unpopular as it is, my dear old mommom, if you are listening, you are rightwe are about to bite our nose off to spite our face. That is the second way we can do it, and I think it is a disaster to do it that way.
There is a third way we can pay for this $87 billion. We can say a very uncharacteristic thing around here: We are going to pay for it, and we are going to pay for it now. We are not going to use our credit card; we are going to do it now.
As Don Rumsfeld said, yes, this is a lot of money, but, yes, we have the ability to pay for it, and he is dead right. Old Don,
I want to take a little bit of your money to pay for it. You are a 1 percenter, and God bless you, let's pay for it.
OK, how do we pay for it? We can cut more programs.
As some have suggested, we can make college loans more expensive. That saves the Government money. We can do as some have suggested and cut across the board the income tax break we gave everybody. But guess what. Poor folks and middle-class folks are already paying for Iraq. It is their kids who are in Iraq. It is their kids in the National Guard. It is their kids in the Regular Army. It is their kids who are already there.
Guess who is getting hurt most by this unemployed recovery. Middle-class and poor folks. I think the middle-class folks need a tax break, and so I think it would be unequitable and unfair to go back now and say, by the way, you middle-class folks, you pay; you poor folks, you pay. We have already decided the poor folks cannot get an earned income tax credit for their kids, a child tax credit, which is a travesty. But now we are going to raise their taxes slightly or reduce the tax cut?
So it seems to me there is a group of people who are as patriotic as the poorest among us, the wealthy people. The thing I do not like about politics is we all have a tendency to slip intoand I can honestly say I have never done this in 33 years of holding officeclass warfare. The idea that because someone is a multimillionaire they are not as patriotic as somebody who is making 25,000 bucks a year is a lie. The wealthiest among us are as patriotic as any other group of people in America.
I come from Delaware, a relatively wealthy State. I tried in two fora in my State, and this is literally true, among some of the wealthiest people in my Statein my State we can get them all together pretty quickly. I am not being facetious about that. I mean that sincerely. I asked the question at one gatheringboth were social gatherings. The first was a group of about 35 or 40 people, and I do not know this for a fact, but I think all of them were clearly in the top 1 percent tax bracket. The way the conversation started was they said to me: You know, Joe, what is going on in Iraq? What about this?
What about that? It was a cocktail party at the home of a partner in a major law firm. It was on a Sunday evening.
I said: Let me ask you all a question. My friend from California knows when two people ask a question and you start to answer it, it ends up with four people there and then 10 people there, and all of a sudden you have a mini-press conference and there are 20 people. That is what happened at this cocktail party on someone's patio.
I said: Let me ask you this question: would anybody here object if the President, when he addressed the Nation about the $87 billion, had saidand I want to ask the wealthiest among you, the top 1 percent of the taxpayers in Americagive up
1 year of the 10 years of your tax cut in order to help prosecute this war against terror and sustain the peace in Iraq, would any one of you object to that?
Obviously, that is a little peer pressure I put on them, but not a single person said they would object. Beyond that, it started a discussion. I just sat there and listened. They said, of course, that is the right thing to do. Of course, we should do this. Of course, of course, of course.
Then I tried it again at one of the most upscale country clubs in my State. I was playing in a charitable golf tournament, and there was the same thing.
I think the President and many of my colleagues underestimate the American character. I truly believe they underestimate Americans. I do not know of any wealthy American who, given the realistic options we have to pay for this, would say, hey, look, if I am going to give up 1 year of the $690 billion the 1 percent is going to get, I want that guy making 25 percent of what I make, I want that guy making 10 percent of what I make to give up one year, too.
Do any of my colleagues believe that is what they would say? I do not believe it. And this is not politics. This is not my playing a game. I do not believe it. This is something that not only is the right thing to do, the people whom you are asking to do it believe it is the right thing to do.
I stated on the floor before and I said at home, I would ask any wealthy Delawarean in my State, which we will get to the numbers, who makes $400,000 in gross income, to call me at my office and tell me they are not willing to give up $2,100 a year for 6 years of their tax cut, because that is what it comes to. I am inviting them to call me. I promise I will report to my colleagues all those who call me.
The point is, these are patriotic Americans. They know we have our hands full. They know the deal. So that is the third way we can do this.
How does it practically work, and then I am going to yield to my friend from Massachusetts.
Mr. BENNETT. Will the Senator yield?
Mr. BIDEN. I will be delighted to.
Mr. BENNETT. I am listening with great interest. I agree with much of what the Senator said, but before the Senator from Massachusetts gives a major speech I would like the opportunity to engage in a colloquy.
Mr. BIDEN. Sure, but first let me make one last point so we have the facts out.
Mr. BENNETT. I would ask the Senator to make his point and then I would appreciate it if we could do that.
Mr. BIDEN. I would be happy to.
Let me be straight about exactly what this amendment would do. People whose tax bracket up until this year was 39.6 percent, having had it drop down to 35 percentso there is no false advertising here, the Biden-Kerry-Feinstein-Chafee, et cetera, amendment would raise, beginning in 2005, their tax bracket back up to 38.2 percent, still a percentage point and a half less than it was a year ago but 2 point something percent higher than it is today. That is what it would do.
By the way, I will tell my colleagues who these folks are. People who pay at the top rate have an average incomewell, it is unfair to average. As Samuel Clemens, or rather Mark Twain, said, all generalizations are false, including this one. So I want to be completely straight about this. The average income in that top 1 percent is $1 million a year. At a minimum, people who would be affected by this have to have an income, before standard deductions and exemptions, of over $400,000 in gross income. Others will fall into this category if their taxable income after deductions is over $312,000. But that is after; that is net. That is taxable income. OK.
So we have the picture where peoplethe way I am told by the Joint Tax Committee, by Brookings and others, we may find an exception to this, but there is nobody making $400,000 a year gross who does not have standard deductions and exemptions. By the way, this does not impact on their capital gains, which is taxed at a different rate. This does not impact on the dividend exemptions or change the rate at all. That is still theirs. We do not touch that at all. This is just a straight tax of those who now fall within the 35 percent bracket.
So I am told by all the expertsand this is not my expertise. To the extent I have one, I think it is more on the Constitution and foreign policy, and I am not suggesting I have one, but it is surely not here. I have tried to get the best information from as many sources. So we are talking about the incomes of people in the top bracket who areby the way, if one is in the top bracket now they are in the less than 1 percent bracket, they are about .7 of 1 percent of the income earners in America.
One percent is slightly bigger than those who fall within the 35-percent tax bracket right now. But if you overlap, as Dr. Green tells it, if you overlap the two circles, they are almost exactly the same. There is some variation, but I can only go by the numbers provided by the IRS, and the models provided by them, and by our Joint Tax Committee.
So the bottom line is this: The people in the top 1 percentslightly more, by the way, than the people in the 35-percent tax bracket nowthose people, over the period of this entire tax cut, will receive $688.9 billion in tax reduction from what they were paying before the tax cut. What this does is it takes $87 billion of that amount, leaving them with a present and future tax cut of $600 billion, as opposed to $688.9 billion.
This is to put it in perspective. Fully 80 percent of their fellow Americans, in the first four quintilesyou know how they divide this up. They divide it up into the first, second, third, fourth, and the fifth is the 1 percent. In other words, all other Americans, the 99 percent of the other Americans who pay taxes get a cumulative tax cut, in the firstthey will get cumulative tax cuts of $599 billion. All right? So you have the top 1 percent who will still get $600 billion, which will be $1 billion more than every other American combined will get in a tax cut.
Let me be precise. I may have misspoken. That is not true. The first fourthan 80 percent of the American people will get.
Now, again, this is not an attack on the tax cut. I didn't like the tax cut, and I won't talk about that. But what Senator Kerry and I are trying to do takes away less than 5 percent of the $1.8 trillion in tax cuts that this tax cut bill provides. Again, it is not an attack on those at the highest income. It still leaves them $600 billion in tax cuts.
There is a lot more for me to say, but I will yield now to my friend from Utah for that colloquy.
Mr. BENNETT. I thank the Senator from Delaware not only for his courtesy and friendship, which is reciprocated and, as he has said on the Senate floor, is genuine and real, but I thank him for the clear manner in which he has described this whole situation. I agree absolutely with the overall conclusion that he has come to with respect to loans versus grants. I am running this year, and I am going to have to defend the grant situation, but I am perfectly willing to do so for all the reasons which the Senator from Delaware has outlined.
But there are a few comments I would like to make in the spirit of our friendship and the seriousness with which the Senator from Delaware has approached this issueat random. The Senator from Delaware is often at random so he can understand.
The references to the Marshall plan and the difference between World War I and World War II are accurate, but I would like to just add one factoid.
Mr. BIDEN. If the Senator will yield, I want to make it clear I did not reference the Marshall plan. I referenced the philosophy. I think we have overworked the Marshall plan analogy.
Mr. BENNETT. I agree with the Senator we have overworked it and I want to back away from it with this fact. The country that received the most money in the Marshall plan was Great Britain. It was not rebuilding destroyed countries, destroyed by virtue of our actions in the war. It was rebuilding Europe that was exhausted by the struggle that really began in the First World War and never ended. I think that is the appropriate analogy here.
I do not view Iraq as a defeated nation. I view Iraq as a victorious nation that has won a struggle of almost four decades in length with our help.
Mr. BIDEN. If the Senator will yield, I agree with that premise. I am not making the case they are a defeated nation.
Mr. BENNETT. The Senator used the phrase "defeated nation." I think it is, in fact, a victorious nation but an exhausted one by virtue of the 40-year struggle. The grant we are talking about here is essential to come back from that 40-year experience.
The second random point: I listened to the Senator's comments about the deficit. All I know, both before I came here and in the relatively brief period of time I have been here, is that no matter what figure we use with respect to the deficit in the future, it is wrong. I don't know whether it is too high, and I don't know whether it is too low, but I do know one thing for sure, it is wrong.
Mr. BIDEN. Will the Senator yield on that point? The Senator will agree, though, that whatever it is will be $87 billion higher if we don't pay for it.
Mr. BENNETT. No. No. I will not because the deficit is a function of the vitality of the economy. If the economy is stronger than the computers at CBO are currently saying it is, the deficit could disappear and we could have the whole $87
I am not saying that we will because I don't know.
Mr. BIDEN. If the Senator will yield on that point, if the Senator thinks there is any possibility of the entire deficit disappearing through economic growth in the next several years, then I think he and I should have a talk now because the Senate physician is down the hall here and we ought to go have a little visit with him. I know he doesn't seriously mean that.
Mr. BENNETT. I think the possibility is extremely, extremely small.
Mr. BIDEN. I believe in miracles, too. I am a Catholic. I believe in miracles.
Mr. BENNETT. I do, however, know that over 50 percent of the shortfall in the projected surplus that we were talking about at the time we started, in 2001, is due not to the tax cut and not to increased spending but to the downturn in the economy. If the economy should come back to be as strong as it was beforeand there are signs that it is recovering nicely nowthat 50 percent could be recovered.
So, no, I agree that we will not remove the deficit, but I think it is an inaccurate statement to say it will be exactly the $87 billion.
We do that around here and it frustrates me as a former businessman. It frustrates me as a legislator. We are constantly taking the latest numbers from CBO and assuming that they are cast in stone. Then 3 months later, when we get the next set of numbers that completely contradict the earlier ones, we say: Oh, these are the true numbers, and we go on and on. I am not arguing with the Senator's general direction, but I wanted to be a little careful in the specificity with which he outlines this.
Let me get to the heart of the issue that I have with the proposal the Senator is making. I hope I can do this without being too arcane, and I hope I can do it quickly because I recognize I am on the Senator's time and I again thank him for his courtesy.
Mr. BIDEN. May I ask, there is no time agreement right now; is that correct?
The PRESIDING OFFICER (Ms. MURKOWSKI). That is correct.
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Mr. BIDEN. Mr. President, will the Senator yield?
Mr. BENNETT. I would be happy to.
Mr. BIDEN. We are trying to get this agreement. As a practical matter, this will come out of my time. I think the Senator has made his point.
Let me make a macroeconomic point and let some of my other colleagues respond as well. With regard to the small businesses, small business owners can still happen to be among the top 1 percent income earners. Only 2 percent of the small business owners fall into that bracket, a number which includes a lot of people who have passive participation with investment income in small business. These are not hands-on, mom-and-pop businesses. If you look at the sole proprietorships, those of hands-on owners, less than 2 percent are paying the 35 percent bracket. Therefore, 98 percent of the small business owners will not be affected by this proposal, as I understand from staff.
I will get back to this in our discussion. But I want to yield to my friend from Massachusetts because we are about to enter into a time agreement. I didn't realize we were running the time before the agreement is made. At any rate, I will reserve the remainder of the time while we are trying to work this out.
To respond to my friend, I understand his point. The bottom line is no matter how you cut it, this is affecting an incredibly small number of people for an incredibly important undertaking and the alternatives are worse by a long shot, in my view, that any negative impact in any sector in any way would come from this amendment.
I yield the floor.
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Mr. BIDEN. I meant to state earlierand I know my colleague from California is about to speakthat the Senator from California was way ahead of me and way ahead of my friend from Massachusetts in one very important respect. She and Senator Chafee, long before I made this proposal, suggested that, quite frankly, the entire top 1 percent of the tax break be rolled back, not just $87 billion, to pay for this and for other things to reduce the deficit. It was my intention to speak to that. Then I entered into what was an exchange with my friend from Utah, and I did not. I want to make clear what a central role she and Senator Chafee have played in making the fundamental point that all Americans should participate in making sure we win the peace and not saddle the next generation. That is unconscionable.
I yield the floor and thank my colleague.
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Mr. BIDEN. Mr. President, I yield myself as much time as I may consume. Senator Grassley is leaving. I wanted to grab him.
I do enjoy the sarcasm of my friend from Oklahoma, who speaks on this floor about 40 times as much as I do, if he goes and checks the RECORD. Always elucidating, if I might add, always elucidating.
I say to my friend, the chairman of the Finance Committee, I understand the points he is making. But he is aware, in terms of small businesses, that a small business owner would still have to be in the top 1-percent income bracket, the 35-percent bracket, to be affected? And, of all the small businesses in America, only 2 percent fall in that bracket? Only 2 percent of the 100 percent of the small businesses in America fall in the bracket.
To further make a point, I understand his point that this is the engine of our economy, small businesses. There is no question about that. There is no question, though, as welllet's say a small business owner is making $400,000 in gross income. The effect of the additional tax he would pay from the tax reduction he has gotten down to now would be $2,140 a year. Is my friend suggesting we are going to constrain and strangle business in America when 2 percent of the small businesses, roughly 5,000, who make $400,000 gross income and above, are going to have to pay $2,100 a year more, that that is going to constrain the growth of small business? Is that what he is saying? Is that going to prevent them from being able to invest or to be able to grow?
Mr. GRASSLEY. I am saying it is unfair to tax small business that is not incorporated at a higher rate than the tax on Fortune 500s, No. 1.
Number 2, this may only be 2 percent of the employers, but they are the people who create the jobs.
Mr. BIDEN. I couldn't agree more.
Mr. GRASSLEY. I have worked at packing plants; I worked at the Waterloo Register Company. I never had one poor person provide the job for me. I always had somebody who makes a lot more money than I do provide the jobs for me. We don't want to choke that off in America.
Mr. BIDEN. I thank my colleague for his response. He is always courteous. I just respectfully suggest that taking 2 percent of the small businesses in America, having them have to pay slightly more than they would have paid with this tax cut that is in place nowwhich, again, if they are making $400,000 in gross income, that means about $2,100 more they will payis a heck of a lot more preferable than asking middle-class taxpayers and asking small businessmen who make $50,000 a year, and mechanics who make $35,000 a year, and schoolteachers who make $40,000 a year, to have to pay more.
I find it fascinating that for those who do not like my proposal to deal with the top 1 percent, I have not heard any
alternative offered. Are they suggesting we should repeal part of the tax cut or delay part of the tax cut for everybody? No, they make no alternative offer. The alternative offer they make is we are going to add it to the deficit, so the pages can pay.
I am going to start calling this the page-pay bill. The pages will pay.
I see my friend from Oklahoma, whom I always enjoy hearing, and he was seeking the floor earlier, so I reserve the remainder of my time and await the eloquent words of my friend from Oklahoma as to why this is not a good idea. I am sure he has very many ideas as to why this is not a good idea.
I yield the floor. I reserve the remainder of my time.
BREAK IN TRANSCRIPT
Mr. BIDEN. Mr. President, I expected toand I did heara vigorous defense of the tax cuts today. And I expected to hear that anyone who supports my proposal to pay for this $87 billion supplemental is someone who is hostile to wealth and success. I did not hear much of that. I heard a little bit of that. And I expected to hear that I am really putting regular folks into the category with Park Avenue wealthy people. I expected to hear that.
Well, think of it this way: If someone today came to the floor and proposed a $600 billion tax cut for the top 1 percent of the American taxpayersassume the tax cut had not passed. Just picture this: Someone walked on the floor today, as we are about to vote on an $87 billion supplemental, and said: I propose a $600 billion tax cut between now and the year 2010 for the top 1 percent of the American taxpayersand did it, again, at this moment, when we will have a $500-plus billion deficit for next year, and expanding national security demands, not decreasing national security demands, well beyond Iraq, and expanding homeland security needs, not diminishing homeland security needs, and while the House of Representatives and the Senate are in conference about to report back, I assume, a multibillion-dollar relief bill as we need for prescription drugs.
If someone came forward today and said, I have an idea; let's diminish the tax burden of the top 1 percent of the U.S. taxpayersthat is, people making an average of $1 million a yearlet's reduce their taxes by $600 billion, what do you think would happen? Would anyone seriously on this floor say, that is a good idea now, that is a great idea, let's go ahead and do that?
How about if they came to the floor and said, Let's not make it $600 billion, let's cut their taxes $689.1 billion, roughly.
Would anybody here vote for that today? Would anybody honestly vote for that today?
Today we hear that $600 billion in tax cuts for the wealthy is not enough. Why do I say that? My proposal only says, instead of giving the wealthiest Americans, that is people making a gross income of about $400,000 a year, a net income after all the deductions and everything of about $312,000 a year, you don't even get into this game unless you fall in that category, and people who are making $1 million a year on average, all I am saying is, give them $600 billion, not $690 billion, and don't even touch them until 2005. Have them pay this out in additional taxes, instead of getting 690 get 6 over a 6-year period, beginning in 2005 basically. That is all I am saying.
Today we are told by those who oppose this that, no, we can't afford to do anything except give them a $688.9 billion limit or the sky will fall, small business will shutter their windows, and the recovery of capitalism, as we know it, will grind to a halt.
Give me a break. I have yet to hear a single economistthis has been floating around now out there, this idea of mine, for the past couple weekssay this is going to have any impact on the recovery. In fact, the opposite is going to happen. If we add another $87 billion to the deficit, interest rates will go higher. That is going to short circuit a recovery, not paying out over a 6-year period an additional $87 billion that is not going into their pockets.
Again, I keep coming back to this point. Even wealthy Americans don't oppose this. A Wall Street Journal poll asked the question, If Congress approves President Bush's request for $87 billion in Iraq and Afghanistan, how would you prefer that
Congress pay for it? Scrap the Medicare drug benefits bill?
Seven percent of Americans, obviously those with Medicare benefits and drug coverage, said, yes, that is a good idea; pay for it by not passing the prescription drug proposal. Twelve percent said to borrow the money. Add to the deficit; go out and borrow it. Make the pages pay. Borrow for it. Twelve percent said that. Twenty-five percent said some other way or they were not sure. A full 56 percent said, cancel, not 13 percent of the tax cut for the wealthiestI think that is the numberbut cancel all of the tax cut for the wealthiest Americans. They want to take it all away.
I am not doing that. I am saying, keep $600 billion. Just don't take $688.9 billion.
Look, I have been here a long while. It is fascinating to me. I keep getting the same lesson taught to me. The American people are always way ahead of us. The $87 billion in additional revenue we are seeking with this amendment is less than eight-tenths of 1 percent of our $11 trillion economy.
I challenge any of my colleagues to tell me they honestly believe this is going to slow up this jobless recovery. It won't even have any affect until the recovery is a year and a half underway. Fewer than 1 percent of the wealthiest Americans will even be affected by this change. Keep in mind, this is like my saying to my grandchildrenI have three granddaughterswe are going to go to the ice cream store and, look, pop only has 12 bucks with him. I can only afford three double-dip ice cream cones. I can't afford three triple-dip ice cream cones. So you are only going to get two dips instead of three. It is not like saying: Look, kids, I was going to feed you tonight but you are not going to get to eat. We were going to have hamburgers and french fries and a salad, but all I am going to give you is a salad. Or you can't eat at all.
We are not taking away anything. We are just not giving as much.
Again, small business, fewer than 2 percent of small businesses, that is, sole proprietors, the real mom-and-pop small businesses, will even be affected by this. Ninety-eight percent will not be affected.
This is a small, tiny nick in a huge tax cut. It asks for a contribution from those who have the clearest ability to contributenot because we want to punish them. This isn't about being punitive. It is because they have the clearest capability.
Again, take my granddaughters out. Assume my son was not doing better than I amhe is but assume he isn'tand the kids want an ice cream cone. Why shouldn't pop pay? I have the money to pay for it. It is not going to affect me at all. But if all he had in his whole pocket was 10 bucks for the week, why should he pay when I have 300 bucks in my pocket? This just isn't fair.
Again, I repeat, I don't know any wealthy Americans making $1 million a year who say, look, I don't want to do this. It is going to hurt me. I am not going to be able to make it. This is going to put a crimp in my style.
Again, let me give you a number. If you have an income of $400,000 a yearremember, the average income of the people in this bracket is almost a million dollars, 980-some-thousand dollars a year. Let's just put that in perspective. If, in fact, you are making $400,000 a year and your tax rate is going to go, from 2005 to 2010, back up from 35 to 38.2, what is the effect on your pocket? You pay the difference between 312, which gets you into the category, and 400, at a higher rate. That is $68,000, roughly. You have to get to 380-something. How much more taxes does it mean that you pay? Roughly, $2,100 more a year.
Are you telling me the people making $400,000 a year are not willing to kick in $2,100 a year for 5 years beginning in the year 2005or for 6 years beginning in 2005 to win the peace in Iraq? Boy, do we underestimate these folks. These are loyal, patriotic Americans. They would be ready to do a lot more if we needed them to do it. But $2,100, if you make a million dollars? I asked my staff to do a back-of-the-envelope calculation. Let's say the poor guy who has no deductions"poor" guythe rookie who signs a contract for $1.150 million. Guess what. After standard deductions because of the loopholes and the other things the wealthiest among us in this country have, he has a real taxable income of a million dollars. How much more is he going to have to pay? Roughly $22,000. That is going to kill him, right? Does that mean you don't have a gold-plated toilet seat? What does it mean?
Again, I am not hearing any of these wealthy folks complain. I am hearing everybody complain in their name, but I don't hear any of them complain. Let me tell you, I have been doing this a long time. Few times have I ever stood on the floor, with CNN watching, saying if there is anybody who is making over $400,000 a year who is not willing to pay $2,100 more to win the war, call me. No one is calling me. I don't get this.
I don't think these folks who will be affected by this tax change will begrudge one nickel of this $87 billion. So I say to my colleagues, if we don't do this now, pay for this installment in the war now, taking a small part of the tax cut, when we have
a national security emergency supplemental request from the President, when the deficit is skyrocketing to over half a trillion dollars a year, are there no circumstances ever when it will be right to reconsider less than 5 percent of the biggest tax cut in history?
My time is almost up. It seems to me we are at a place where responsibility dictates that we be rational and not ideological, we pay now instead of just putting this on the tab for the pages on the Senate floor, that we don't ask our children to pay for our security, and we pay for our security and our children's security.
This, to me, is the most inexplicable opposition to anything I have ever been involved with on the floor of the Senate.
I believe my time has expired. I urge my colleagues to vote for the Biden-Kerry amendment. I thank the Chair and yield the floor.