Big Oil Subsidies

Floor Speech

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Mr. UDALL of Colorado. Mr. President, I want to acknowledge the leadership of my colleague from Colorado, particularly underlining the salient points he made during his remarks. I think most important to note about Colorado is it is a third Republican, a third Democratic, and a third Independent in our political and electoral makeup. I think it drives us to find bipartisan solutions and bipartisan ground. That is why we came to the floor this afternoon. It was in the hope that our colleagues from both sides of the aisle would join us in the discussion about how we move forward, not just on lifting the debt ceiling, for the reasons Senator Bennet outlined, but for the reasons that we think are as follows:

We will lay a new foundation for our 21st century economy, we will send a message to the markets and the business community that we are serious about dealing with our annual deficits and our long-term debt. In effect, in doing such we will inject a healthy dose of confidence into our country, into our markets, and into our business community. Taking those steps will be a way of moving forward, as the Senator said.

I ask unanimous consent to enter into a colloquy with my colleague Senator Bennet.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. BENNET. One of the things Senator Udall said reminded me of a conversation I had a number of months ago with somebody who is in the capital markets and who watches everything going on down here pretty closely, but quizzically. He cannot figure out what in the world we are doing. I saw him, I think maybe it was in February, sometime in that timeframe. I asked him, as I always do: What are you doing? He is one of the smartest investors I know.

He said: I am buying gold.

I said: Why are you buying gold?

He said: I don't have any confidence that you guys are going to be able to work this out and get our deficit and debt under control.

First, think how unproductive that is. I am not telling anybody to buy or sell gold, but it doesn't create jobs in this economy. We want people investing in companies so they can grow and hire people and create jobs.

Anyway, I saw him again about 6 weeks ago. We started talking about the debt ceiling conversation.

He said: It is beyond the realm of my comprehension that you guys would fail to lift the debt ceiling.

Here is a guy cynical enough about the way this place works who is saying he is buying gold, but it is even beyond his comprehensive that we could fail to lift the debt ceiling. The reason is, he actually understands what the facts are around this.

I think we will lift the debt ceiling. I certainly hope we will. But the more important point is what the Senator has been working on for all these many months, which is coming to a comprehensive plan that actually addresses the underlying problem of our debt and deficit.

I thank the Senator.

Mr. UDALL of Colorado. My colleague and I hosted the Colorado Capital Conference a few weeks ago. We had Coloradans from all sections of the State, all walks of life. We had the three main political points of view represented: Democrats, Independents, Republicans. They remarked to Senator Bennet and to me, as well as hearing from a broad range of our colleagues who were gracious enough to take time to speak to our constituents and answer questions, that we all had identified the problem and we all had identified the solution, which was a comprehensive plan that we implemented together. We are here again on the floor this afternoon to call on all of our colleagues to join us in working together, finding that common ground, because there is a lot at stake but there is enormous opportunity.

My colleague was a successful businessman in one of his previous lives, but he may want to comment on the capital conference as well.

Mr. BENNET. It is clear to me, if this decision were left up to 100 Coloradans, we would scratch our head and we would probably argue out some things. But I think it would probably take about a day for us to come to a set of solutions that would solve the problem or at least move us down the road, and we would feel pretty patriotic about what we had done; that we had done something useful for our kids at the end of this process, if we are able to deliver something like that. I think that is how we ought to feel. There are too many days around this place where I feel like we have lost sight of all that. In that conversation the Senator talked about--Al Simpson was such a big part of, Gary Hart was there, Alice Rivlin, and a number of people--it was abundantly clear, blindingly obvious to the people in that room that we couldn't approach this problem by drawing bright lines and saying: No, we cannot touch this or, no, we cannot touch that.

They knew everybody was going to have to give a little bit in order to make this work. Unfortunately, some of that line drawing is what we are seeing around here that we have to find a way to get past.

Mr. UDALL of Colorado. If the Senator would yield, I would comment on two elements my colleague just alluded to. Let's talk about Social Security. There are those in our party who have said keep your hands off Social Security. I know what a strong and important program Social Security has been. It has allowed me and my wife to raise our children. My parents were treated with dignity in their latter years. They also had the assurances of Medicare. If we think because Social Security on paper is solvent, we ought to think again because there is $3 trillion owed to the Social Security trust fund by the Federal Government, and, yes, Social Security isn't responsible for that shortfall because we have taken those dollars and put them in the general fund, but that $3 trillion is going to have to come from somewhere. There are some commonsense fixes we can put in place that will protect and serve and strengthen Social Security.

On the other hand, we hear in the Chamber tax revenues, I should say more appropriately, are off the table. Every economist and every observer points out we cannot get there from here, there being a balanced Federal budget, without additional revenues. Why can't we start, as the Bowles-Simpson commission proposed, eliminating many of the subsidies and loopholes and special deals in our Tax Code that total something over $1 trillion. That is a great place to start. If we follow that with tax reforms, lowering rates for corporations and businesses, that is an even bigger step we can take. There is a broad agreement in the Chamber--certainly in our conversations with people across the country who represent their States here--those are commonsense steps forward.

Mr. BENNET. I completely agree, and why wouldn't we want to look at our Tax Code and our regulatory code. I hear about that from the other side, and I share their view. I have been in government. Listen, I was a school superintendent for almost 4 years. If one thinks I don't understand what it is like to be on the receiving end of well-intentioned legislation from Washington, DC, that by the time it gets to a school or classroom, makes no sense at all, believe me, I lived it every single day. So why wouldn't we look at our Tax Code and our regulatory code and ask ourselves: Are these things more or less likely to drive innovation in the United States? Are these aspects more or less likely to grow our economy and to create jobs? It is clear we have the highest corporate tax rate in the world now. It used to be second, but Japan either changed theirs or is about to change theirs. That is sending a very uncompetitive message to the world.

On the other hand, we have so many loopholes, so many special interest loopholes that underlie the Tax Code, we are not actually getting the revenue we would be suggesting as high rates. So in a way, this isn't a partisan issue, but it is the worst of all possible worlds because we are sending out an anticompetitive message to the world that says we are closed for business, and we have a whole bunch of loopholes that may or may not--and I suspect in many cases do not--drive innovation in this country.

In fact, most of them are looking backward into the 20th century. They may have made sense in the middle of the 20th century, but they don't necessarily make sense to build new industries here, to develop things such as a new energy economy that is so important to our State which, by the way, would help lead us toward energy independence from the Persian Gulf. There is no reason to think all these things that have been written down are written in stone, and, frankly, our job is to make sure it is working better for people. So I think the debt and deficit commission made some excellent recommendations on that side.

The other side is on personal income tax. What they said there was, we can actually lower rates and raise more revenue. Why? Because there are so many deductions that are part of the code, and only 30 percent of the people in this country itemize, get the benefit of those deductions. We can imagine a world where everybody gets the benefit of a lower rate but we are able to have revenue to drive us forward. We can get there. The thing on the debt and deficit commission is, Tom Coburn, who is one of the most conservative Members of this body--I don't think he would mind my saying that--and Dick Durbin, one of the most liberal Members of this body, both voted for that deficit and debt commission report. That is almost good enough for me.

Mr. UDALL of Colorado. I was proud of the Senate when five of the six Senators on the Commission voted for the Bowles-Simpson recommendations, not without some concerns, not without an interest in working to fill in and flesh out the plan, but five of the six Senators from across the political spectrum said this is a very good starting point.

Mr. BENNET. I see we are joined by Senator Coons from Delaware, and I am going to stop, but along that line, just to give people who are here in the Chamber or might be watching some optimism, just 2 weeks ago we took a vote on one subsidy, an ethanol subsidy, and I think it was Senator Coburn and Senator Feinstein who put it on the floor, a Democrat and Republican, and it had like 73 votes. I get in trouble with my kids. It wasn't ``like'' 73 votes, it was 73 votes to end that subsidy.

By the way, there were around 40 Democrats and 30-some Republicans who supported that. We need more of that around here. I think it would--if we keep working at it and keep chipping away at it, in the end, we will be able to see common sense will prevail over politics.

Mr. UDALL of Colorado. Mr. President, Senator Coons would like to share his thoughts.

Mr. COONS. Mr. President, the two Senators from Colorado have inspired me to come to the floor and join them in a colloquy about the challenges facing our country. I say to the Senators from Colorado, I am pleased and impressed with their leadership and have greatly enjoyed serving with them to date.

I agree that the vote on one of our tax expenditures on the ethanol subsidy was an encouraging and inspiring moment because we saw both Democrats and Republicans from all over the country casting a vote to end a tax expenditure or subsidy that, many would argue, has outlived its usefulness in the current marketplace.

In my home State, we recently saw the bankruptcy of our second largest poultry company, and they have communicated to me their grave concern about the ethanol subsidy. There are lots of folks on both sides of that particular debate. I think the larger point that is important for us to get to is certainty in the markets. I spent a number of years in the private sector in business before running for and being elected to office, and I know the mantra Senator Bennet is well familiar with, Senator Udall is well familiar with, both parties are well familiar with, is certainty is what the markets look for. Certainty is also what our people look for. We have alarmed them, concerned them by not being able to reach a broad, bipartisan, responsible plan that lays out a framework for how it is we are going to address both the Nation's record deficits and record debt. Our debt today, as we know, is roughly $14 trillion. Our deficit has hit an alltime record, and we are working on borrowed time. I have heard some suggest we need to better understand the situation we are in. The situation we are in, I believe, is that we are about to risk defaulting on America's mortgage. We have made commitments as a nation. We have expended ourselves at home and abroad in a lot of different ways, and I am worried we are on the verge of failing to meet our commitments. Just as America's households hesitate before ever defaulting on their mortgage, I think we, as a nation, as a people, have to hesitate, have to think deeply about the consequences of it.

I asked the folks who work with me on economic policy to quantify it. They looked at a number of different studies around the country and gave me chilling numbers. Should we fail to meet the August 2 deadline that Secretary Geithner has repeatedly, since January, in writing and testimony, suggested to us is the absolute last date by which we can reach a bipartisan compromise and a path forward, we will lose hundreds of thousands of jobs. One study said 640,000 jobs. The markets may lose as much as 10 percent of their value, which would mean a loss of almost $1 trillion of market equity value. That means pension funds, personal savings, 401(k)s would take an enormous hit. The average homeowner would see an increase in costs, whether it is their credit cards or mortgages or car loans. It is easy to think this is an abstract argument. But in reality, I think the problem we are causing, the lack of confidence in the markets, could

have a sudden, sharp, grinding effect on our economic world, and that is because investors act more like animals than they do like machines. When spooked, they act the way herds do and they run off in a certain direction. My concern is, as a country, we are so used to having a AAA bond rating, to being the world's reserve currency, to being the gold standard in security. I am gravely concerned that intransigence, an unwillingness to come to a reasonable compromise is putting us at real risk of spooking the markets, of harming the average American homeowner, and putting our rating at risk as a country.

At the end of the day, so far in my short 6 months here, I have observed some things about how Washington works that worry me. If I could offer a metaphor, it seems to me there are a lot of sacred cows here. It seems to me the trillions of dollars we spend in our Tax Code through tax loopholes and special tax provisions and the trillions we spend through direct spending are broken up into these sacred cows, and I feel as if I have gone into dairy. I feel as if I am surrounded by a whole herd of sacred cows, and what we need is a deliberate and clear bipartisan effort to thin the herd, to make some tough choices.

As I know Senator Bennet said previously, I wish to commend the hard work of the Gang of 6, the so-called Gang of 6, the bipartisan group who came up with processes and a path forward. The Bowles-Simpson commission presented to those of us on the Budget Committee, presented to this body in writing, a proposal. There are paths forward. There are ways to make these tough choices. I hope before the time runs out, this body will embrace these proposals, make the tough choices and the sacrifices we need to come to the center and lay out a path. I, frankly, don't think we have until August 2. If we are going to put at risk the markets by injecting uncertainty, frankly, the timeline may be more like the middle of July. It is my hope the Senators from Colorado will be joined by Senators from both sides of this body and both sides of this Capitol in crafting a responsible bipartisan solution.

Mr. UDALL of Colorado. Mr. President, the Senator, in effect, is saying that rather than this being a problem, although it is, this is an enormous opportunity for the country to chart a new course. If we agree to do it first and foremost as Americans----

The PRESIDING OFFICER. The Senators have spoken collectively for 30 minutes.

Mr. UDALL of Colorado. We thank the Chair for that notification. We look forward to next week continuing this conversation.

I wish to thank my colleague for joining me and Senator Bennet in this discussion this afternoon.

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