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Public Statements

Payroll Tax Extension

Floor Speech

By:
Date:
Location: Washington, DC

Mr. McCONNELL. Mr. President, yesterday, Republicans, led by Senator Heller, introduced what we believe is a much smarter approach to extending the temporary payroll tax cut than the one proposed by Democrats involving permanent tax hikes on job creators.

Similar to Democrats, we think struggling American workers should continue to get this temporary relief for another year. There is no reason folks should suffer even more than they already are from the President's failure to turn this jobs crisis around. But there is also no reason we should pay for that relief by raising taxes on the very employers we are counting on to help jolt this economy back to life. We would not be helping anybody by making it less likely that small businesses actually start hiring people again. Senator Heller's proposal would achieve the same result, the same relief, without a gratuitous hit on job creators. Even better, our plan protects Social Security and reduces the Federal deficit by more than $111 billion.

How do we do it? Consistent with the recommendations of the bipartisan Simpson-Bowles Commission, our payroll tax plan would institute a 3-year pay freeze on Federal civilian employees, including Members of Congress. It would also reduce the Federal workforce gradually by 10 percent, not by firing anybody but by only hiring one replacement for every three Federal employees who leave Federal service until a 10-percent reduction that the Simpson-Bowles Commission recommended is reached. So over this period, only hire one worker for every three who leave until it achieved a 10-percent reduction in the Federal workforce. This is a recommendation in the Simpson-Bowles Commission.

Our bill would also save money by means testing Medicare benefits for millionaires and billionaires. What does that mean? One of the things the economic downturn of the past few years has revealed is that a lot of people out there are getting a pretty good deal from the government at every level, all on the taxpayers' dime. Let me give you an example. Yesterday, a CBS affiliate in Philadelphia reported that a former Philadelphia school superintendent who got a nearly $1 million buyout in August is now putting in for unemployment benefits. The lady was shown the door, given $905,000 not to finish her 5-year contract with the school district, and on top of that she now wants the taxpayers to subsidize her unemployment benefits to the tune of about $30,000 a year. Our proposal helps minimize this kind of thing.

What we are saying is, anybody who makes more than $1 million a year should not get an unemployment check on top of it, paid for with tax dollars of folks struggling just to make ends meet. No more unemployment checks or food stamps for millionaires. No more unemployment checks or food stamps for millionaires. We don't think these folks would mind having to pay the full freight on their Medicare premiums either. Millions of seniors need help covering their monthly Medicare premiums; Warren Buffett is not one of them.

Here is another way we think folks such as Warren Buffett can offset the relief we are giving working Americans through our proposal of a temporary extension of payroll tax cuts, which would also incorporate legislation from Senator Thune, that would allow people who want to voluntarily help pay down the Federal debt to do so on their tax return. There would actually be a new line right on Warren Buffett's tax returns enabling him or anybody else, for that matter, to give as much as they want. That way those who want to go that route can feel they are contributing in a way they want to contribute, and small business owners who want to help our economic and fiscal situation by growing their businesses and creating jobs can do that too without Washington dictating one way or the other.

This is the kind of balanced plan Americans are looking for. It is focused on helping middle-class Americans without asking them to fund benefits for the wealthiest among us, and it does so without hamstringing the economy--as the Democrats would--with a permanent tax on job creators. Bear in mind what they are doing here is ``paying for a temporary payroll tax relief with a permanent tax increase on job creators.'' It also helps rein in the bureaucracy in Washington.

Millions of Americans have had to go without or to live with less over the past few years. Yet all they see here is that Washington just keeps getting bigger and bigger and richer. It is about time Washington took the hit for a change. We think this is a plan that those who are fed up with Washington and Wall Street can embrace but, as I have said before, we are never going to turn this economy around as long as we are focused on these temporary measures.

Yesterday, I outlined our vision for a tax-reform plan that restores basic fairness, helps put businesses on a level playing field, and puts our tax rates in line with our competitors overseas. That is the kind of thing that will get this economy charging again and we will continue to press for it. Meanwhile, we will also continue to point out what this administration is doing to prevent job creation right now.


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