Mr. COBURN. Madam President, our country is at a crossroads. Anybody who is watching Europe will find that they have been very slow to address the real underlying problems of debt and deficits there. They have a much more difficult time than what we should because they have a monetary union without a political union. We have a monetary and political union.
The fact is that over the next 10 years we are going to have a debt--including borrowing money for student loans, borrowing money to pay back Social Security, what has been stolen--we are going to have a true debt of about $27 trillion to $28 trillion. It is absolutely unsustainable. It won't happen--according to Ben Bernanke--because his statement is, the world will not loan us the money.
What is going on in Europe today? What is going on in Europe today is the markets are punishing the countries that have excessive debt-to-GDP ratios. We sit at 100 percent debt to GDP.
We see what has happened just in the last 2 weeks to bond rates for Italy. The differential between an Italian bond rate and a German bond rate is now about 430 basis points, a 4.3 differential for the same length maturity bond for Italy versus Germany. What is the difference? Germany is living within the confines of its economic capability. Italy didn't. How does that apply to us? It applies to us in that we are not and what will happen to us if we don't make the difficult changes that are necessary.
There has been a lot of rhetoric on both sides of the aisle and there has been rhetoric from the President in terms of us looking at who pays what in terms of taxes in this country. But nobody is looking at what we are doing with our Tax Code that enables those who are the wealthy in this country to pay less taxes. So I had my staff put together a list of the subsidies for the wealthy in this country, because the answer isn't just to raise taxes; part of the answer is to quit subsidizing these behaviors.
We came up with a piece that we put out called ``Subsidies for the Rich and Famous.'' It is a report that looked at every government program. We looked at everything we do. What we found is every year, for people having adjusted gross incomes above $1 million, we give $28 billion worth of benefits in the Tax Code or through our programs. I will tell my colleagues that if we wanted--I am one of those who thinks we ought to reform our Tax Code, we ought to lower the rates, we ought to make it where it actually increases productivity in this country, creates capital investment. But one of the first steps in doing that is to make sure our Tax Code and our safety net programs are for those who truly need it and not for those who don't.
We went through the total tax breaks of $113.7 billion over the last 4 years. Mortgage interest: $27.7 billion in tax breaks to people who are making more than $1 million a year. That is a lot of dough.
Rental expenses. The writeoff of rental expenses for those making more--we are not talking businesses. None of these are business deductions. These are personal deductions for the very wealthy in this country who are making more than $1 million adjusted gross income a year. We allow them to write off $64.3 billion in rental expenses.
Gambling losses. We allowed the rich and famous to reduce their taxes by $21 billion because we allow them to gamble, and if they lose money, they get to write it off. So we are subsidizing the loss. We are subsidizing their gambling losses.
Canceled debt, debt writeoffs, debt forgiveness. We have allowed $128 billion in terms of writeoffs for those people making more than $1 million adjusted gross income.
Business entertainment--and this is not through business, though, not run through a business; this is personal deductions for business entertainment--$607 billion.
Electric vehicle. What are we seeing? Who are the people taking advantage of our messing in the economy and creating an incentive for somebody to buy an electric vehicle? The vast majority are the people who don't need the writeoff in the first place. What we have is $12.5 million last year alone in tax credits for the very wealthy to take a $7,500 or $8,500 tax credit for buying an electric car.
Childcare, nanny care for the very wealthy last year: $18 million.
Renewable energy tax credits for the very wealthy: $75.6 million.
The whole point of putting this report out is we are schizophrenic with our Tax Code. We have it upside down. When people talk about how they want millionaires to pay more--they are paying plenty. The top 1 percent pays 38 percent, the top 20 percent pays 80 percent of all of the taxes in this country. But if we want to start getting at this, the way we do it is start taking away the things that reduce their tax burden that don't make sense, that aren't smart, and that don't help those who need the true safety net in our country. These people aren't dependent on these. They will do fine without them. The whole purpose for most of these programs was to create and sustain a safety net for those who are less fortunate.
When we allow $113.7 billion in tax breaks for the wealthy over 4 years, what could we do with that money? Well, we could run a NASA that is twice as big. We could not borrow $113 billion because the interest rates on that are significant; another $4 billion or $5 billion a year in interest that we wouldn't have to borrow. We wouldn't have to make some defense cuts that are going to have to come. We could maybe put more money into Medicare prevention and disease prevention rather than what we have done. There are all sorts of things we could do.
The point behind the report is that most Americans don't realize how we are subsidizing through tax credits the very wealthy in this country. I don't have any real problem with them taking the tax credits. We put it out there. The real question we ought to be asking is why are we doing all of this in the first place. Does the economy itself in a free market not allocate resources better than we can do? How many Chevy Volts have been sold this year? The answer is 5,000. So 5,000 times $7,500 is what we paid in tax credits to have the Chevy Volt sold because everybody who bought it got a $7,500 tax credit. If it is a viable product, then let people buy it. If it is not, they won't. Yet who are the people who bought most of the Chevy Volts? People making significantly more than the average American.
If we are going to play in the Tax Code, what we ought to do is play on a very level playing field. If we want to create incentives, then we ought to create incentives that actually will do something for the economy rather than benefit those who make the most money in the economy.
I would say what this spells is a case for us to totally reform our Tax Code. Most people don't realize this is one of the side effects. That is not to say there are not some good side effects. But the fact is when we are running $1.3 trillion deficits, do we want to be subsidizing the rich and famous in this country with our programs? I would say no.
When Medicare Part B started, 50 percent of the cost of Medicare Part B was to be borne by the Medicare recipient. We are at 25 percent now. There was never any thought--and, remember, nobody ever paid anything for that. In other words, that is all borrowed money to do that. Nobody ever contributed into a Part B fund. They contributed into a Part A fund which, by the way, will be bankrupt in 4 1/2 years. What about those on Part D? Nobody ever paid a penny, and we have $13 trillion in unfunded liability in Part D. Why should the very wealthy get subsidized drugs in this country? Why should they get subsidized Part D? In other words, we ought to ask ourselves a question.
Think about Social Security. Why is Canada's Social Security system not in trouble? Because Canada looks at how much income a person is making every year, and at certain levels a person gets half of their Social Security because they obviously don't need it because their income is up there, and at a certain other level they get none of it. Why? Because it is based on a means-testing mechanism that says this program is designed to be an underpinning for those who need it. We have gone completely the other way.
My point is we have all this discussion about what we should do. We are wringing our hands. The first thing to do is to fix the Tax Code and the best way to fix it is to say 3 months from now it is going away, and have Finance and Ways and Means Committee in the House come together with a new Tax Code that fixes all of this. Everybody in Washington says that can't be done. Nobody outside of Washington says it can't be done, but we say it can't be done. It can be done. It needs to be done.
If we want a healthy future, we need to reform our Tax Code to generate greater investment, greater job opportunity. We need to lower the rates, and we need to eliminate things such as these that don't truly help the economy, but help those who were smart enough to figure out how to play the game, who are the wealthiest in this country. I am proud of them. I want them to be more successful. But in these difficult times, we need to ask them to contribute more. We need to not have these kinds of programs in our Tax Code that actually subsidize those who need no subsidy.
With that, I yield the floor and note the absence of a quorum.
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